10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2006.
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number: 000-24643

DIGITAL RIVER, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	41-1901640
(State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization)	Identification No.)

9625 WEST 76TH STREET
EDEN PRAIRIE, MINNESOTA 55344
(Address of principal executive offices)

(952) 253-1234
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each Exchange on which registered:

Common Stock $0.01 par value Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by checkmark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicated by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Exchange Act Rule 12b-2)

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o     No þ

As of June 30, 2006, there were 39,767,881 shares of Digital River, Inc. common stock, issued and outstanding. As of such date, based on the closing sales price as quoted by The NASDAQ Stock Market, 38,772,546 shares of common stock, having an aggregate market value of approximately $1,566,023,000 were held by non-affiliates. For purposes of the above statement only, all directors and executive officers of the registrant are assumed to be affiliates.

The number of shares of common stock outstanding at February 1, 2007 was 40,460,874 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Certain sections of the Registrant’s definitive Proxy Statement for the 2007 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K to the extent stated herein.

TABLE OF CONTENTS

PART I
	Item 1.	Business	6
	Item 1A.	Risk Factors	16
	Item 1B.	Unresolved Staff Comments	29
	Item 2.	Properties	29
	Item 3.	Legal Proceedings	29
	Item 4.	Submission of Matters to a Vote of Security Holders	30
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	31
	Item 6.	Selected Financial Data	33
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
	Item 7A.	Qualitative and Quantitative Disclosures about Market Risk	56
	Item 8.	Financial Statements and Supplementary Data	58
	Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	58
	Item 9A.	Controls and Procedures	58
	Item 9B.	Other Information	61
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	62
	Item 11.	Executive Compensation	62
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	62
	Item 14.	Principal Accountant Fees and Services	62
PART IV
	Item 15.	Exhibits and Financial Statement Schedules	63
Amended and Restated Symantec Online Store Agreement
Computation of Ratio of Earnings to Fixed Charges
Subsidiaries
Consent of Independent Registered Public Accounting Firm
Certification
Certification
Certification

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The Business section and other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements that involve risks and uncertainties. Many of the forward-looking statements are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations. “Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled “Risk Factors” under Part I, Item 1A of this Form 10-K. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Explanatory Note

In this Form 10-K, we are restating our consolidated balance sheet as of December 31, 2005, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the years ended December 31, 2005 and December 31, 2004, and each of the quarters in 2005.

This Form 10-K also reflects the restatement of “Selected Consolidated Financial Data” in Item 6 for the years ended December 31, 2005, 2004, 2003, and 2002, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 for the years ended December 31, 2005, and December 31, 2004.

Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q affected by the restatements have not been amended and should not be relied upon.

On February 6, 2007, we announced the substantial completion of an internal investigation into our historical stock option granting practices. Since that date, we have completed one additional witness interview, which did not alter the results of the investigation. The investigation uncovered irregularities related to the issuance of certain stock option grants made between 1998 and 2005. A Special Committee of the Board oversaw the investigation. The Special Committee authorized the General Counsel and Chief Financial Officer (who joined Digital River in January 2006 and February 2005, respectively) to conduct the investigation, with the assistance of outside counsel and forensic experts.

In particular, as a result of the internal investigation, the Special Committee concluded, and the Audit Committee and Board of Directors agree, that we used incorrect measurement dates for financial accounting purposes for certain stock option grants in prior periods. Therefore, we have recorded additional non-cash stock-based compensation expense and related tax effect with regard to certain past stock option grants, and we are restating previously filed financial statements in this Form 10-K. These adjustments, after-tax, amounted to $9.4 million, spread out over the nine year period from 1998 through 2006. The full year adjustment to 2006 was recorded in the fourth quarter of 2006 due to its insignificance.

The Special Committee investigation examined each stock option grant from August 1998 through December 2006 (the “relevant period”), a total of 69 distinct grant dates. These grants include all of the options granted since our initial public offering in August 1998. In all cases, the investigation considered the particular facts and circumstances surrounding each grant date, including all available documentation, relevant email archives, and interviews with present and former directors, officers, employees, and advisors.

Based on the totality of the evidence and the applicable law, the Special Committee found that no officer or director engaged in any wrongdoing for personal enrichment. The Special Committee also concluded that no director or member of the committee charged with awarding stock options to employees (the Stock Option Committee) knowingly failed to comply with the relevant accounting principles.

The Special Committee’s analysis determined that eighteen grant dates, representing three million shares, were not the proper measurement dates for the related options. Specifically, the Special Committee’s investigation identified certain non-officer employee grants for which the Stock Option Committee, with the

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involvement of our finance staff, selected grant dates in order to obtain favorable exercise prices. This did not occur with respect to any grants to directors or members of the Stock Option Committee, and thus did not result in any financial benefit to those individuals. Additionally, the Special Committee determined that on certain occasions, the Stock Option Committee unknowingly exceeded its authority in granting stock options to Section 16 officers, which options should have been granted by the Board of Directors. In each of these instances, the Board ratified the grants at a subsequent meeting. The Special Committee also discovered a small number of instances where option grant dates preceded employee hire dates; such instances are attributable to either administrative error or a practice of pricing options for certain employees as of the employment offer date. Finally, the Special Committee identified six occasions where we did not properly expense option grants to consultants.

More generally, the internal investigation revealed weaknesses in our internal controls and record-keeping related to stock options during the relevant period. In particular, we lacked appropriate systems to ensure adequate communication between our accounting and human resources departments pertaining to the option grant process. Thus, the accounting personnel did not consistently receive accurate information necessary to determine appropriate measurement dates. Moreover, we failed to prepare adequate minutes of meetings of the Compensation Committee and Stock Option Committee.

Beginning in January 2003, we strengthened our internal controls and made significant improvements to our stock option granting practices. The Special Committee did not identify any measurement date issues associated with stock option grants since January 2003, with the exception of three dates, each of which apparently resulted from errors in internal processes rather than any intentional backdating.

During the relevant period, we granted 1,306 employees, consultants, officers and directors options to acquire approximately 16.8 million shares of our common stock. These option grants, awarded on 69 distinct grant dates, consisted of one or more of the following types of grants: (i) grants to directors; (ii) grants to Section 16 officers; (iii) follow-on grants to employees; (iv) grants to new hires; (v) grants to employees receiving promotions; and (vi) grants to consultants.

Grants to Directors.  During the relevant period, we appropriately awarded grants to directors during Board of Directors or Compensation Committee meetings. The Special Committee discovered no problems associated with director grants, with the exception of one grant to one director on February 13, 2003. Due to a clerical error, the original paperwork for the February 13, 2003 Board of Director grants was misdated, which was corrected in 2003 with the exception of one former director who had already exercised his option. We subsequently corrected this error for all but one director. We should have recorded a charge related to the grant price and recorded an additional charge for a subsequent vesting acceleration. These charges make up less than $10,000 of the total $9.4 million after-tax restatement.

Grants to Section 16 Officers.  During the relevant period, the Stock Option Committee awarded 540,000 stock options to nine Section 16 officers on four different specified grant dates. After a review of the corporate record, the Special Committee determined that the Stock Option Committee was not vested with the authority to award stock options to Section 16 officers. Outside counsel conducted interviews with the Stock Option Committee members and certain Compensation Committee members and determined that the committee members believed the Stock Option Committee possessed the authority to make the grants. This is corroborated by subsequent Board ratification of the grants. However, because the requisite authority did not exist, the measurement dates for these grants have been adjusted to the Board ratification date, and the charges under APB 25 make up $1.0 million of the total $9.4 million after-tax restatement.

Grants to Employees and Consultants (inclusive of follow-on, new hire, and promotion grants).  During the relevant period, stock option grants to non-Section 16 employees and consultants were generally awarded by the Stock Option Committee. Stock Option Committee documentation with respect to such grants is in many instances inadequate, particularly from 1998 through 2002. Based on interviews and a review of all available documentation, including relevant email archives, the Special Committee determined that employee and consultant grants on sixteen grant dates may not have been measured on the correct date. Consistent with accounting literature and recent guidance from the Securities and Exchange Commission (“SEC”), we employed one of three methods to assign the correct measurement date: (i) the date of a relevant email, if the

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content of the email indicates action by the Stock Option Committee; (ii) beginning in 2003, the last trading day of the month of the grant in accordance with our policy adopted in early 2003; or (iii) the date a grant was ratified by the Board of Directors if no other relevant documentation existed.

Based on the findings of the Special Committee, after accounting for forfeitures, we calculated stock-based compensation expense (under APB 25 for 1998 through 2005 and under SFAS 123(R) for 2006) of approximately $11.9 million over the respective awards’ vesting terms for the periods from 1998 through 2006. We recorded $85,000, after-tax, of stock-based compensation in the 2006 financial statements related to the foregoing options. Due to its insignificance, the full year amount was recorded in the fourth quarter of 2006. In addition, the Company included unrecorded charges related to option grants to consultants not expensed in the relevant periods under EITF 96-18 ($427,862) and charges of ($70,008) related to option grants to employees prior to their dates of hire.

The incremental impact from recognizing stock-based compensation expense resulting from the investigation of past stock option grants is as follows (dollars in thousands):

	Pre-Tax		After Tax
	Expense		Expense
Fiscal Year	(Income)		(Income)
1998	$	172	$	172
1999		3,211		3,211
2000		2,238		2,238
2001		2,114		2,114
2002		1,679		1,679
2003		1,241		1,241
Total 1998-2003 impact		10,655		10,655
2004		817		817
2005		293		(2,169	)
2006		135		85
Total	$	11,900	$	9,388

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PART I

ITEM 1.   BUSINESS.

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements set forth or incorporated by reference in this Form 10-K, as well as in our Annual Report to Stockholders for the year ended December 31, 2006, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “anticipates,” “expects,” “intends,” “estimates,” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements, or industry results, expressed or implied by such forward-looking statements. Such factors are set forth under “Risk Factors” under Item 1A in this Form 10-K. We expressly disclaim any obligation to update or publicly release any revision to these forward-looking statements after the date of this Form 10-K.

Overview

We provide outsourced e-commerce solutions globally to a wide variety of companies primarily in the software and high-tech products markets. We were incorporated in 1994 and began building and operating online stores for our clients in 1996. We offer our clients a broad range of services that enable them to quickly and cost effectively establish an online sales channel capability and to subsequently manage and grow online sales on a global basis. Our offerings help our clients mitigate risk and grow their online revenues. Our services include design, development and hosting of online stores, store merchandising and optimization, order management, fraud prevention screening, export controls and management, tax compliance and management, digital product delivery via download, physical product fulfillment, multi-lingual customer service, online marketing including e-mail marketing, management of paid search programs, website optimization, web analytics, and reporting.

Our products and services allow our clients to focus on promoting and marketing their brands while leveraging the investments we have made in technology and infrastructure that facilitate the purchase of products from their online stores. When shoppers visit the store on one of our clients’ websites, they are seamlessly transferred to our e-commerce platform. Once on our platform, shoppers can browse for products and make purchases online. After a purchase is made, we either deliver the product digitally via download over the Internet or transmit instructions to a third party for physical fulfillment. We also process the buyer’s payment, including collection and remittance of applicable taxes, and can provide customer service in multiple languages to handle order-related questions. We believe we are an example of an emerging trend known as “Software as a Service” (SaaS). We have invested substantial resources to develop our e-commerce software platform and we provide access and use of it to our clients as a service as opposed to selling the software to be operated on their own in-house computer hardware.

In addition to the services we provide that facilitate the completion of an online transaction, we also offer services designed to increase traffic to our clients’ online stores and to improve the sales effectiveness of those stores. Our services include paid search advertising, search engine optimization, affiliate marketing, store optimization, and e-mail optimization. All of our services are designed to help our clients acquire customers more effectively, sell to those customers more often and more efficiently, and increase the lifetime value of each customer.

Our clients include many of the largest software and high-tech products companies and major retailers of these products, including Allume Systems, Inc., Autodesk, Inc., CompUSA, Inc. Computer Associates, Canon Inc., Hewlett Packard Company, Lexmark, Inc., Microsoft Corporation, OfficeMax Incorporated., Nuance Communications Inc, Symantec Corporation, and Trend Micro, Inc.

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General information about us can be found at www.digitalriver.com under the “Company/Investor Relations” link. Our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments or exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after we file them with the Securities and Exchange Commission.

Industry Background

Growth of the Internet and E-Commerce.  E-Commerce sales continue to grow at a rapid rate. The U.S. Commerce Department reported that e-commerce sales in the fourth quarter of 2006 rose 24.6% compared to the fourth quarter of 2005, continuing a series of strong quarterly growth reports. We believe there are a number of factors that are contributing to the growth of e-commerce: (i) adoption of the Internet continues to increase globally; (ii) broadband technology is increasingly being used to deliver Internet service enabling the delivery of richer content as well as larger files to a wider array of users; (iii) Internet users are increasingly comfortable with the process of buying products online; (iv) the functionality of online stores continues to improve, a greater range of payment options are available, and special offers and shipping discounts are making online shopping more attractive; (v) businesses are placing more emphasis on their online stores as they can reach a larger audience at a comparatively lower cost than the methods used to drive traffic to traditional bricks-and-mortar retail stores; and (vi) concerns about conflicts between online and traditional sales channels are continuing to subside. As a result of these growth drivers, online businesses have begun to build large, global customer bases that can be reached cost-effectively, potentially resulting in higher sales and profitability.

Growing Interest in Direct Sales of Products to Consumers.  Increasingly, companies are selling their products directly to consumers via online sales channels. This is due to increased competition for shelf space in the traditional retail channels as well as recognition that direct sales can be more profitable as well as provides information about the consumer purchasing a product that is not easily obtained when a product is sold through traditional channels. Many companies have begun to use classic direct marketing techniques and approaches to selling their products in order to develop a long term relationship with consumers that can result in a higher lifetime value for each customer acquired.

Opportunities for Outsourced E-Commerce.  We believe there are advantages to outsourced e-commerce that will continue to make it an attractive alternative to building and maintaining this capability in-house. These advantages include: (i) eliminating the substantial up-front and ongoing costs of computer hardware, network infrastructure, specialized application software and training and support costs; (ii) reducing the time it takes to get online stores live and productive; (iii) shifting the ongoing technology, financial, regulatory and compliance risks to a proven service provider; (iv) leveraging the direct marketing expertise of an e-commerce service provider to accelerate growth of an online business; and (v) allowing businesses to focus on their specific core competencies.

We believe the market for outsourced e-commerce will continue to grow rapidly. The Internet is inherently global. Once an online store is established, it is immediately accessible to Internet users around the world. Web pages must be presented and customer service inquires handled in diverse languages, and a variety of currencies and payment options must be accepted. The appropriate taxes must be collected and paid, payment fraud risk mitigated, fulfillment provided, and assurances made that products are not shipped to banned locations. These and other requirements of a global e-commerce system make it an expensive and potentially risky undertaking for any business. These factors also make a comprehensive outsourced offering, such as that provided by Digital River, an attractive alternative.

Shift from Physical to Electronic Delivery of Software.  Consumers have grown increasingly comfortable with the electronic delivery of digital products, such as software, music, and video. This shift from physical to electronic delivery is being driven by benefits to both buyers and sellers of these products. For buyers, downloaded products are immediately available for use and a wider variety of products are available than can be found in most retail stores. For sellers, electronic delivery eliminates inventory-stocking requirements, shipping, handling, storage and inventory-carrying costs as well as the risk of product obsolescence.

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The Digital River Solution

Our solution combines a robust e-commerce technology platform and a suite of services to help businesses worldwide grow their online revenues and avoid the costs and risks of running a global e-commerce operation in-house. We offer a comprehensive e-commerce solution that operates seamlessly as part of a client’s website. We provide services that facilitate e-commerce transactions and services that help drive traffic to our clients’ online stores and demand for their products. Our services include design, development and hosting of online stores, store merchandising, order management, fraud prevention, export controls, tax compliance and management, digital product delivery via download, physical product fulfillment, multi-lingual customer service, online marketing services including e-mail marketing, management of paid search programs, web analytics and, reporting. We also provide our clients with increased product visibility and sales opportunities through our large network of online channel partners, including retailers and affiliates. We generate a substantial majority of our revenue on a revenue-share basis, meaning that we are paid a percentage of the selling price of each product sold at a clients’ online store that is being managed by Digital River

Benefits to Clients

Reduced Total Cost of Ownership and Risk

Utilizing the Digital River solution, businesses can dramatically reduce or eliminate upfront and ongoing hardware, software, maintenance and support costs associated with developing, customizing, deploying, maintaining and upgrading an in-house e-commerce solution. They can have a global e-commerce presence without assuming the costs and risks of developing it themselves and take immediate advantage of the investments we continually make in our e-commerce systems and associated services. In addition, we help mitigate the risks of doing e-commerce globally, including risks associated with payment fraud, tax compliance, regulatory compliance and export and denied parties compliance. Our ongoing investments in the latest technologies and e-commerce functionality help ensure that our clients maintain pace with industry advances.

Revenue Growth

We can assist our clients in growing their businesses by (i) facilitating the acquisition of new customers, improving the retention of existing customers, and increasing the lifetime value of each customer; (ii) extending their businesses into international markets; and (iii) expanding the visibility and sales of their products through new online sales channels. We have developed substantial expertise in online marketing and merchandising which we apply to help our clients increase traffic to their online stores, and improve order close ratios, average order sizes and repeat purchases, all of which result in higher revenues for our clients’ businesses and a greater revenue share for Digital River.

We provide the technology and services required to establish, grow and support international sales, both for U.S-based clients seeking to reach customers overseas, and non-U.S.-based clients looking to access the U.S. and other markets. Our technology platform enables transactions to be completed in numerous currencies using a variety of payment options. In addition, we provide localized online content and offer customer service in a variety of languages, extending our clients’ reach beyond their home markets.

Through our large online marketplace, which we call Digital River oneNetwork^tm (described in more detail in the section titled “Strategy”), we provide our clients access to new online sales channels which can help grow their online businesses. Clients can offer any part of their product catalogs to our network of online channel partners, including online retailers and affiliates. This increases the exposure these products receive and can result in higher sales volumes. Our channel partners benefit because we eliminate the need for each of them to manage hundreds of relationships with product developers while increasing the depth and breadth of products they can sell, all without requiring the management of physical product inventory.

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Deployment Speed

Businesses can reduce the time required to develop an e-commerce presence by utilizing our outsourced business model. Typically, a new client can have an online store live in a matter of days or weeks compared with months or longer if they decide to build, test and deploy the e-commerce capability in-house. Once they are operational on our platform, most clients can utilize our remote control toolset to make real-time changes to their online store, allowing them to address issues and take advantage of opportunities without technical assistance.

Focus on Core Competency

By utilizing our outsourced e-commerce services, businesses can focus on developing, marketing and selling their products rather than devoting time and resources to building and maintaining an e-commerce infrastructure. Management can focus on what they know best while ensuring they have access to the latest technologies, tools and expertise for running a successful e-commerce operation.

Benefits to Buyers

Our solution emphasizes convenience as it enables products to be purchased online at any time from anywhere in the world via a connection to the Internet. In the case of software and digital products, buyers can immediately download their purchase and begin using it in a matter of minutes. Sophisticated search technology allows shoppers to browse our entire catalog to find the products they are looking for quickly and easily. Our extended download service, which guarantees replacement of products accidentally destroyed through computer error or malfunction, and our 24/7 customer service provided on behalf of our clients, offer shoppers additional assurance that their e-commerce experience will be a positive one. Our CD2Go service gives buyers the ability to obtain, for a fee, a copy on CD of the product they have purchased and downloaded, providing additional assurances to buyers.

Strategy

Our objective is to be the global leader in outsourced e-commerce services for software and digital products developers, high-tech product manufacturers and related online retailers. Our strategy for achieving this objective includes the following key components:

Attract New Clients and Expand Relationships with Existing Clients.  We have focused our efforts on securing new clients and expanding our relationships with existing clients primarily in the software, digital products, high-tech products, and consumer electronics markets. Our clients include software publishers, other digital content providers, high-tech product manufacturers, and online channel partners such as retailers. In 2006, we entered into more than 230 new contracts with new and existing clients.

We believe we can attract new clients and gain additional business with existing clients by expanding the range of services we offer. This includes services to enhance the e-commerce transaction as well as additional online marketing services. We believe that by expanding the size and breadth of the catalog of products we offer, we will attract additional online retailers and affiliates seeking to offer their customers a wide range of quality products. As of February 1, 2007, we were providing e-commerce services for more than 44,000 software and digital products publishers, high-tech products manufacturers, online retailers and affiliates.

We believe we have amassed the largest catalog of digital software titles available anywhere online, and we offer these titles to online retailers and affiliates. We generate revenue when web traffic is directed to a site for which we provide e-commerce services and a purchase transaction occurs. We will continue to expand the content available in our catalog, which we believe will make that catalog increasingly attractive to online retailers, affiliates and other online channel partners. We believe the Digital River oneNetwork is a unique marketplace and provides opportunities to grow our revenues and strengthen our relationships with clients and partners.

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Expand International Sales.  We believe there is a substantial opportunity to grow our business by enabling our clients to expand their sales through international online stores. Internet adoption and broadband deployment continue to increase rapidly in the European and Asia Pacific regions. We have seen significant growth in sales for clients that have created international online stores and we intend to continue to enhance our technology platform, payment options and localized service offerings to increase sales in international markets.

Provide Clients with Strategic Marketing Services.  We proactively develop and deliver new products and services, called strategic marketing services that are designed to help our clients improve customer acquisition and retention and maximize the lifetime value of customers. These services currently include paid search advertising, search engine optimization, affiliate marketing, store optimization, and e-mail marketing and optimization. In general, we manage these programs for our clients and have achieved significant increases in client revenue, return-on-investment or both, compared to what clients experienced when running these programs and supporting technologies in-house. We intend to continue to develop and/or acquire new value-added strategic marketing services and technologies to create additional sources of revenue for our clients and for Digital River.

Maintain Technology Leadership.  We believe our technology platform and infrastructure afford us a competitive advantage in the market for outsourced e-commerce solutions. We intend to continue to invest in and enhance our platform to improve scalability, reliability, security and performance as well as reduce costs. By leveraging our fixed cost structure, we can improve our ability to provide low-cost, high-value services while continuing to deploy the latest technologies. Additionally, we plan to continue investing to enable our clients to further penetrate international markets, enhance their relationships with their customers, better manage the return-on-investment across all their online marketing activities, and successfully adopt new selling models such as subscriptions, “software-as-a-service,” “try-before-you-buy” and volume licensing.

Continue to Seek Strategic Acquisitions.  Historically, we have been an active acquirer of businesses, and we expect to continue actively pursuing acquisitions that further our business strategy. Some of the strategic factors we consider when evaluating an acquisition opportunity include: expanding our base of clients, improving the breadth and depth of our product offering, improving the catalog of content, extending our strategic marketing and other services offerings, expanding our geographic reach and diversifying our revenue stream into complementary or adjacent market segments.

Expand the Digital River oneNetwork Marketplace.  We have developed a global marketplace we call Digital River oneNetwork which enables our clients to efficiently offer their products to a broad range of online retailers and affiliates. Affiliates are entities (individuals, organizations, companies, etc.) that generate online traffic to specific websites. On those websites, there are links, advertisements and other offers to sell various products and services. If a visitor clicks one of the links or advertisements and subsequently makes a purchase, the affiliate receives a commission in the form of a fixed fee or a percentage of the selling price of the product(s) purchased. Affiliates are an increasingly important source of website traffic as they can target specific types of Internet users.

Services

We provide a broad range of services to our clients, including design, development and hosting of online stores,, merchandising, order management, fraud prevention screening, denied parties screening, export controls, tax compliance and management, digital and physical product fulfillment, multi-lingual customer service, online marketing services including email marketing and paid search program management, and analytics and reporting. Most of these offerings can be managed through client-facing, remote control self-service tools that are easily used by business users without specialized training. Since clients utilize our centralized system and processes, we can consistently offer best practices across our entire client base.

Store Design, Development and Hosting.  We offer our clients website design services utilizing our experience and expertise to create efficient and effective online stores. Our e-commerce solutions can be deployed quickly and implemented in a variety of ways from fully-functioning shopping carts through

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completely merchandised online stores. The online stores we operate for our clients match their branding and website design to provide a seamless experience for shoppers. When a shopper navigates from a client’s website (operated by them) to its store (operated by us), the transition is seamless and the customer is unaware they are then being served by our technology platform. We manage the order process through payment processing, fraud screening, and fulfillment (either digital or physical) and notify the buyer via e-mail once the transaction is completed. Transaction information is captured and stored in our database systems, an increasingly valuable source of information used to create highly targeted merchandising programs, e-mail marketing campaigns, product offers and test marketing programs.

For many of our clients, the solution we provide is critical to their businesses and therefore we operate data centers that perform and scale for continuous e-commerce operation in a high-demand environment. We operate multiple data centers globally, which feature fully redundant high-speed connections to the Internet, server capacity to handle unpredictable spikes in traffic and transactions, 24/7 security and monitoring, back-up electric generators and dedicated power supplies.

Store Merchandising.  Our technology platforms support a wide range of merchandising activities. This enables our clients to effectively execute promotions, up-sell, and cross-sell activities and to feature specific products and services during any phase of the shopping process. From the home page of our clients’ online stores through the checkout and “thank you” pages, our solution allows clients to deliver targeted offers designed to increase order close ratios and average order sizes.

Order Management and Fraud Screening.  We manage all phases of a shopper’s order on our clients’ e-commerce stores. We process payment transactions for orders placed through our technology platform and support a wide variety of payment types, including credit cards, wire transfers, purchase orders, money orders, direct debit cards and many other payment types popular both in the United States and around the world. As part of the payment process, we ensure that the correct taxes are displayed, collected, remitted and reported.

The fraud screening component of our platform uses both rules-based and heuristic scoring methods which use observations of known fraudulent activities to make a determination regarding the validity of the order, buyer and payment information. As the order is entered, hundreds of data reviews can be processed in real time. We also provide denied-parties screening and export controls, which are designed to ensure persons and/or organizations appearing on government denied-parties lists are blocked from making purchases through our system. Once a transaction is approved and the digital product has been delivered via download or the physical product(s) has been shipped, we submit the transaction for payment.

Digital and Physical Fulfillment Services.  We provide both digital and physical fulfillment services to our clients. Digital delivery eliminates or reduces many of the costs associated with the distribution of physical products, including packaging, shipping, warehousing, handling, and inventory-carrying and management costs. We offer our clients a broad array of electronic delivery capabilities that enable delivery of digital products directly to customers’ computers via the Internet. Delivery is completed when a copy of the purchased digital product is made from a master stored on our technology platform and then securely downloaded to the purchaser. Optionally, buyers can, for an additional fee, request that a CD be created and shipped as a backup for their order. Our digital distribution model reduces costs, resulting in potentially higher margins for our software and digital products publishing clients. In addition, our model helps to address the shrinking supply of shelf space in retail stores, which limits the number of software titles available for sale.

In addition to electronic fulfillment via download, we offer physical distribution services to our clients as well. We have contracted with third-party fulfillment agents that maintain inventories of physical products for shipment to buyers. These products are held by the fulfillment agent on consignment from our clients. We provide notification of product shipment to the buyer as well as shipment tracking, order status, and inventory information. We also provide a service called “Physical on Demand” (POD), which utilizes robotic systems to create a client-branded product CD and packaging materials after a POD order has been placed. This eliminates the requirement for inventory to be stored in a warehouse as physical product is created only when needed. We believe physical fulfillment services are important to providing a complete e-commerce solution to our clients, particularly in the high-tech products market where digital fulfillment is not possible.

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Customer Service.  At our client’s option and for an additional fee, we provide telephone, online chat and e-mail customer support for products sold through our platforms. We provide assistance to buyers regarding ordering and delivery questions on a 24/7 basis and in more than ten different languages. We continue to invest in technology and infrastructure to provide fast and efficient responses to customer inquiries as well as provide online self-help options. We provide extended download services for digital products for an additional fee, which enables buyers to download the products they have purchased more than once in the event of a computer failure or other unexpected problem.

Advanced Reporting and Analytics.  We capture and store detailed information about visitor traffic to and sales in the online stores we manage for our clients and this information is stored in our database systems where it is available for analysis and reporting. We provide clients access to a large collection of standard and customizable reports as well as our web analytics technology. This enables our clients to track and analyze sales, products, transactions, customer behavior and the results of marketing campaigns so they can optimize their marketing efforts to increase traffic, order close ratios and average order values.

Strategic Marketing Services.  We offer a wide range of strategic marketing services designed to increase customer acquisition, improve customer retention and enhance the lifetime value of each customer to our clients. Through a combination of web analytics, analytics-based statistical testing, optimization and proven direct marketing practices, our team of strategic marketing experts develops, delivers and manages programs such as paid search advertising, search engine optimization, affiliate marketing, store optimization and e-mail optimization on behalf of our clients. We generally charge an incremental percentage of the selling price of merchandise for sales driven by our strategic marketing services activities. We believe our ability to capture and analyze integrated traffic and e-commerce sales data enhances the value of our strategic marketing services as we can precisely determine the effectiveness of specific marketing activities, website changes, and other actions taken by our clients.

Clients

We serve two distinct groups of clients: (1) software, product developers and high tech product manufacturers; and (2) online channel partners including retailers and affiliates. We believe that the breadth of our catalog of products is a competitive advantage in selling e-commerce services to online channel partners as they can access a huge volume of products to sell without negotiating contract terms with every product provider. At the same time, we believe the breadth of our channel partner group is attractive to product developers and manufacturers as it gives them access to broad distribution through a single source.

Sales and Marketing

We sell products and services primarily to consumers through the Internet. We sell and market our services for clients through a direct sales force located in offices in the United States, Europe and Asia Pacific. These offices include staff dedicated to pre-sales, sales and sales support activities. Our client sales organization sells to executives within software companies, product manufacturers, and online channel partners who are looking to create or expand their e-commerce businesses. During the sales process, our sales staff delivers demonstrations, presentations, collateral material, return-on-investment analyses, proposals and contracts.

We also design, implement and manage marketing and merchandising programs to help our clients drive traffic to their online stores and increase order close ratios, average order values and repeat purchases at those stores. Our strategic e-marketing team delivers a range of marketing and merchandising programs such as paid search advertising, search engine optimization, affiliate marketing, site and store optimization, e-mail marketing and optimization and site merchandising, which includes promotions, cross-sells and up-sells. This team combines their marketing domain expertise with our suite of technology, including reporting, analytics, optimization and e-mail to drive increased sales for our clients.

We market our products and services directly to clients and prospective clients. We focus our efforts on generating awareness of our brand and capabilities, establishing our position as a global leader in e-commerce outsourcing, generating leads in our target markets, and providing sales tools for our direct sales force. We

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conduct a variety of highly integrated marketing programs to achieve these objectives in an efficient and effective manner. We currently market our products and services to clients and prospects via direct marketing, print and electronic advertising, trade shows and events, public relations, media events and speaking engagements.

Technology

We deliver our outsourced e-commerce solutions on several platforms, each of which has been architected to solve our clients multi-faceted e-commerce needs. The following is a brief description of the technology standards utilized by the family of Digital River commerce platforms:

Architecture.  Our platforms are highly scalable and designed to handle tens of thousands of individual e-commerce stores and millions of products available for sale within those stores. These platforms consist of Digital River developed proprietary software applications running on multiple pods of Sun Microsystems and Dell servers that serve dynamic web pages using Oracle, SQL server and MySQL databases, and .net Microsoft IIS and Oracle 9iAS application servers. We use Akamai, Limelight and Mirror Image’s worldwide caching technology to enable our platform engines to serve web pages with consistent load times around the world. Our platforms are designed to support growth by adding servers, CPUs, memory and bandwidth without substantial changes to the software applications. We believe this level of scalability is a competitive advantage. The application software is written in modular layers, enabling us to quickly respond to industry changes, payment processing changes, changes to international requirements for taxes and export screening, banking procedures, encryption technologies, and new and emerging web technologies, including AJAX, Web Services, DHTML, and web Caches.

The platforms include search capabilities that allow shoppers to search for items across millions of products and thousands of categories based on specific product characteristics or specifications while maintaining page response times acceptable to the user. We use sophisticated database indexing combined with a dynamic cache system to provide flexibility and speed. The platforms have been designed to index, retrieve and manipulate all transaction data that flows through the system, including detailed commerce transactions and end-user interaction data. This enables us to create proprietary market profiles of each shopper and groups of shoppers that can then be used to create merchandising campaigns that are better targeted and more successful. We also use our platforms internally for fraud detection and prevention, management of physical shipping, return authorizations, backorder processing, and transaction auditing and reporting.

E-Commerce System Maintenance.  Our platforms have a centralized maintenance management system that we use to build and manage our clients’ e-commerce systems. Changes that affect all of our clients’ e-commerce sites or groups of e-commerce sites can be made centrally, dramatically reducing maintenance time and complexity. Most of our clients’ e-commerce sites include a central store and many have additional web pages where highly targeted traffic is routed. Clients also may choose to link specific locations on their e-commerce stores to detailed product or category information within their stores to more effectively address a shopper’s specific areas of interest.

Security.  We have security systems in place to control access to our internal systems and commerce data. Log-ins and passwords are required for all systems with additional levels of log-in, password and IP security in place to control access on an individual basis. Access only is granted to commerce areas for which an individual is responsible. Multiple levels of firewalls prevent unauthorized access from the outside or access to confidential data from the inside. Our security system does not allow direct access to any client or customer data. We license certain encryption and authentication technology from third parties to provide secure transmission of confidential information such as credit card data. The security system is designed not to interfere with the end-user’s experience on our clients’ e-commerce sites.

Data Center Operations.  Continuous data center operations are crucial to our success. We currently maintain major data center operations in six facilities; in California and Minnesota, USA; and in Germany and Ireland. All major data center locations are currently processing transactions and serving downloads.

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All data centers currently utilize multiple levels of redundant systems, including load balancers managing traffic volumes across web and application server farms, database servers, and enterprise disk storage arrays. For the majority of these systems, we have automatic failover procedures in place such that when a fault is detected, a process automatically takes that portion of the system offline and processing continues on the remaining redundant portions of the system, or in an alternate datacenter. In the event of an electrical power failure, we have redundant power generators and uninterruptible power supplies that protect our facilities. Fire suppression systems are present in each data center.

Our network software constantly monitors our clients’ e-commerce sites and internal system functions, and notifies systems engineers if any unexpected conditions arise. We lease multiple lines from diverse Internet service providers and maintain a policy of adding additional capacity if more than 40 percent of our capacity is consistently utilized. Accordingly, if one line fails, the other lines are able to assume the traffic load of the failed line. We also utilize content distribution networks operated by our vendors to serve appropriate types of traffic; currently, the majority of our image traffic and a substantial portion of our download traffic is served via the Akamai, Limelight and Mirror Image networks.

Product Research and Development

Our primary product research and development strategy is to continually enhance the technology and feature set of our commerce platforms and related technologies. To this end, we continually have numerous development projects in process, including ongoing enhancement of our commerce platforms, improvements in our remote control capabilities, enhanced international support, advanced product distribution capabilities, and new marketing technologies. Product research and development expenses were $32.3 million, $20.7 million, and $14.3 million, in 2006, 2005, and 2004 respectively.

We believe that the functionality and capabilities of our commerce platforms are a competitive advantage and that we must continue to invest in them to maintain our competitive position. The Internet and e-commerce, in particular, are subject to rapid technological change, changes in user and client requirements and expectations, new technologies and evolving industry standards. To remain successful, we must continually adapt to these and other changes. We rely on internally developed, acquired and licensed technologies to maintain the technological sufficiency of our commerce platforms.

Competition

The market for e-commerce solutions is highly competitive. We compete with e-commerce solutions that our customers develop themselves or contract with third parties to develop. We also compete with other outsourced e-commerce providers. The competition we encounter includes:

•  In-house development of e-commerce capabilities using tools or applications from companies such as Art Technology Group, Inc. and IBM Corporation;

•  E-Commerce capabilities custom-developed by companies such as IBM Global Services, and Accenture, Inc.;

•  Other providers of outsourced e-commerce solutions, such as GSI Commerce, Inc., Macrovision Corporation, and asknet Inc;

•  Providers of technologies, services or products that support a portion of the e-commerce process, such as payment processing, including CyberSource Corporation and PayPal Corp.;

•  Companies that offer various online marketing services, technologies and products, including ValueClick, Inc. and aQuantive, Inc.;

•  High-traffic branded websites that generate a substantial portion of their revenue from e-commerce and may offer or provide to others the means to offer products for sale, such as Amazon.com, Inc.; and

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•  Web hosting, web services and infrastructure companies that offer portions of our solution and are seeking to expand the range of their offerings, such as Network Solutions, LLC, Akamai Technologies, Inc., Yahoo! Inc., eBay Inc. and Hostopia.com, Inc.

We believe that the principal competitive factors in our market are the breadth of consumer products and services offered, the number of clients and online channel partnerships, brand recognition, system reliability and scalability, price, customer service, ease of use, speed to market, convenience, and quality of delivery. Some of the companies described above are clients or potential clients, but they may choose to compete with us by adopting a similar business model.

Intellectual Property

We believe the protection of our trademarks, copyrights, trade secrets and other intellectual property is critical to our success. We rely on patent, copyright and trademark enforcement, contractual restrictions, and service mark and trade secret laws to protect our proprietary rights. We have entered into confidentiality and invention assignment agreements with our employees and contractors, and nondisclosure agreements with certain parties with whom we conduct business in order to limit access to and disclosure of our proprietary information. We also seek to protect our proprietary position by filing U.S. and foreign patent applications related to our proprietary technology, inventions and improvements that are important to our business. We currently have fourteen U.S patents issued with eight to seventeen years remaining prior to expiration. We also have over forty U.S. and foreign patent applications pending. We pursue the registration of our trademarks and service marks in the U.S. and internationally. We have a number of registered trademarks in the U.S., European Union and other countries.

Employees

As of January 28, 2007, we employed 1,086 people. We also employ independent contractors and other temporary employees. None of our employees are represented by a labor union, and we consider our employee relations to be good. Competition for qualified personnel in our industry is intense. We believe that our future success will continue to depend, in part, on our continued ability to attract, hire and retain qualified personnel.

Executive Officers

The following table sets forth information regarding our executive officers at February 1, 2007:

Name	Age		Position
Joel A. Ronning		50	Chief Executive Officer
Thomas M. Donnelly		42	Chief Financial Officer

Mr. Ronning founded Digital River in February 1994 and has been our Chief Executive Officer and a director since that time. From February 2001 through February 2004, Mr. Ronning also was a member of the Office of the President. From February 1994 to July 1998, Mr. Ronning served as President of Digital River. From May 1995 to December 1999, Mr. Ronning served as Chairman of the Board of Directors of Tech Squared, Inc., a direct catalog marketer of software and hardware products. From May 1995 to July 1998, Mr. Ronning served as Chief Executive Officer, Chief Financial Officer and Secretary of Tech Squared. From May 1995 to August 1996, Mr. Ronning also served as President of Tech Squared. Mr. Ronning founded MacUSA, Inc., formerly a wholly-owned subsidiary of Tech Squared, and served as a director of MacUSA, Inc. from April 1990 to December 1999. From April 1990 to July 1998, Mr. Ronning also served as the Chief Executive Officer of MacUSA, Inc.

Mr. Donnelly joined Digital River in February 2005 as Vice President of Finance and Treasurer and was named Chief Financial Officer and Secretary in July 2005. From March 1997 to May 2004, he held various positions, including President, Chief Operating Officer and Chief Financial Officer with Net Perceptions, Inc., a developer of software systems used to improve the effectiveness of various customer interaction systems. From March 1995 to March 1997, Mr. Donnelly served as a financial and management consultant in the capacity of chief financial officer or corporate controller for various public and private companies and

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partnerships. Prior to 1995, Mr. Donnelly served as an investment analyst for Marshall Financial Group, a merchant banking company, Chief Financial Officer of Medical Documentation Systems, Inc., a medical software company, and Controller of Staats International, Inc., a defense subcontractor.

ITEM 1A.   RISK FACTORS

The risks described below are not the only ones facing our company. Additional risks not presently known to us or that we currently deem immaterial also may impair our business operations. Our business, financial condition or results of operations could be materially adversely affected by any of these risks and the value of our common stock could decline due to any of these risks. This annual report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this report.

A loss of any client that accounts for a large portion of our revenue would cause our revenue to decline.

Sales of products for one software publisher client, Symantec Corporation, accounted for approximately 30.2% of our revenue in 2006. In addition, revenues derived from proprietary Digital River services sold to Symantec end-users and sales of Symantec products through our oneNetwork retail and affiliate channel together accounted for approximately 16.6% of total Digital River revenue. In addition, a limited number of other software and physical goods clients contribute a large portion of our annual revenue. Contracts with our clients are generally one or two years in length. If any one of these key contracts is not renewed or otherwise terminates, or if revenues from these clients decline for any other reason (such as competitive developments), our revenue would decline and our ability to sustain profitability would be impaired. If our contract with Symantec is not renewed or otherwise terminated, or if revenues from Symantec and Symantec-related services decline for any other reason, our revenue and our ability to sustain profitability could be materially adversely impaired. It is important to our ongoing success that we maintain our key client relationships and, at the same time, develop new client relationships.

We have a limited profitable operating history.

Our limited profitable operating history, which we first achieved in the quarter ended September 30, 2002, makes it difficult to evaluate our ability to sustain profitability in the future. The success of our business model depends upon our success in generating sufficient transaction and service fees from the use of our e-commerce solutions by existing and future clients. Accordingly, we must maintain our existing relationships and develop new relationships with software publishers, online retailers and physical goods clients. To achieve this goal, we intend to continue to expend significant financial and management resources on the development of additional services, sales and marketing, improved technology and expanded operations. If we are unable to maintain existing, and develop new, client relationships, we will not generate a profitable return on our investments and we will be unable to gain meaningful market share to justify those investments. Further, we may be unable to sustain profitability if our revenues decrease or increase at a slower rate than expected, or if operating expenses exceed our expectations and cannot be adjusted to compensate for lower than expected revenues.

Failure to properly manage and sustain our expansion efforts could strain our management and other resources.

Through acquisitions and organic growth, we are rapidly and significantly expanding our operations, both domestically and internationally. We will continue to expand further to pursue growth of our service offerings and customer base. This expansion increases the complexity of our business and places a significant strain on our management, operations, technical performance, financial resources, and internal financial control and reporting functions, and there can be no assurance that we will be able to manage it effectively. Our personnel, systems, procedures and controls may not be adequate to effectively manage our future operations, especially as we employ personnel in multiple domestic and international locations. We may not be able to hire, train, retain and manage the personnel required to address our growth. Failure to effectively manage our growth

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opportunities could damage our reputation, limit our future growth, negatively affect our operating results and harm our business.

We intend to continue to expand our international operations and these efforts may not be successful in generating additional revenue.

We sell products and services to end-users outside the United States and we intend to continue expanding our international presence. In 2006, our sales to international consumers represented approximately 41% of our total sales. Expansion into international markets, particularly the European and Asia-Pacific regions, requires significant resources that we may fail to recover by generating additional revenue. Conducting business outside of the United States is subject to risks, including:

•  Changes in regulatory requirements and tariffs;

•  Uncertainty of application of local commercial, tax, privacy and other laws and regulations;

•  Reduced protection of intellectual property rights;

•  Difficulties in physical distribution for international sales;

•  Higher incidences of credit card fraud and difficulties in accounts receivable collection;

•  The burden and cost of complying with a variety of foreign laws;

•  The possibility of unionization of our workforce outside the United States, particularly in Europe; and

•  Political or economic constraints on international trade or instability.

These risks have grown with the acquisitions of element 5 AG (now Digital River GmbH) and SWReg, which have substantial operations outside the U.S. and with our expansion into the Asia-Pacific region.

We may be unable to successfully and cost-effectively market, sell and distribute our services in foreign markets. This may be more difficult or take longer than anticipated especially due to international challenges, such as language barriers, currency exchange issues and the fact that the Internet infrastructure in foreign countries may be less advanced than the U.S. Internet infrastructure. If we are unable to successfully expand our international operations, or manage this expansion, our operating results and financial condition could be harmed.

Our operating results are subject to fluctuations in demand for products and services offered by us or our clients.

Our quarterly and annual operating results are subject to fluctuations in demand for the products or services offered by us or our clients, such as anti-virus software and anti-spyware software. In particular, sales of anti-virus software represented a significant portion of our revenues in recent years and in 2006, and continue to be very important to our business. Demand for anti-virus software is subject to the unpredictable introduction of significant computer viruses. On May 31, 2006, Microsoft Corporation introduced products to protect businesses and consumers from computer viruses and other security risks. To the extent that Microsoft or others successfully introduce products or services not sold through our platform that are competitive with products and services sold by current Digital River clients (including anti-virus products and services), our revenues could be materially adversely affected.

New obligations to collect or pay transaction taxes could substantially increase the cost to us of doing business.

Currently, we collect sales, use, value added tax (VAT) or other similar transaction taxes with respect to electronic software download and physical delivery of products in tax jurisdictions where we believe we have taxable presences. The application of transaction taxes to interstate and international sales over the Internet is complex and evolving. We already are required to collect and remit VAT in the European Union, for example. Local, state or international jurisdictions may seek to impose transaction tax collection obligations on

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companies like ours that engage in e-commerce, and they may seek to impose taxes retroactively on past transactions that we believed were exempt from transaction tax liability. A successful assertion by one or more tax jurisdictions that we should collect or were obligated to collect transaction taxes on the products we sell could harm our results of operations.

We could be liable for fraudulent, improper or illegal uses of our platforms.

In recent years revenues from our “remote control” platforms have grown as a percentage of our overall business, and we plan to continue to emphasize our self service e-commerce solutions. These platforms typically have an automated structure that allows customers to use our e-commerce services without significant participation from Digital River personnel. Despite our efforts to detect and contractually prohibit the sale of inappropriate and illegal goods and services, the remote control nature of these platforms makes it more likely that transactions involving the sale of unlawful goods or services or the violation of the proprietary rights of others may occur before we become aware of them. Furthermore, unscrupulous individuals may offer illegal products for sale via such platforms under innocuous names, further frustrating attempts to prevent inappropriate use of our services. Failure to detect inappropriate or illegal uses of our platforms by third parties could expose us to a number of risks, including fines, increased fees or termination of services by payment processors or credit card associations, risks of lawsuits, and civil and criminal penalties.

Loss of our credit card acceptance privileges would seriously hamper our ability to process the sale of merchandise.

The payment by end-users for the purchase of digital goods that we process is typically made by credit card or similar payment method. As a result, we must rely on banks or payment processors to process transactions, and must pay a fee for this service. From time to time, credit card associations may increase the interchange fees that they charge for each transaction using one of their cards. Any such increased fees will increase our operating costs and reduce our profit margins. We also are required by our processors to comply with credit card association operating rules, and we have agreed to reimburse our processors for any fines they are assessed by credit card associations as a result of processing payments for us. The credit card associations and their member banks set and interpret the credit card rules. Visa, MasterCard, American Express, or Discover could adopt new operating rules or re-interpret existing rules that we or our processors might find difficult to follow. We have had payment processing agreements with certain of our payment processors terminated due to violations of their rules, and although we have been able to successfully migrate to new processors, such migrations require significant attention from our personnel, and often result in higher fees and customer dissatisfaction. Any disputes or problems associated with our payment processors could impair our ability to give customers the option of using credit cards to fund their payments. If we were unable to accept credit cards, our business would be seriously damaged. We also could be subject to fines or increased fees from MasterCard and Visa if we fail to detect that merchants are engaging in activities that are illegal or activities that are considered “high risk,” primarily the sale of certain types of digital content. We may be required to expend significant capital and other resources to monitor these activities.

Our failure to attract and retain software and digital products publishers, manufacturers, online retailers and online channel partners as clients would cause our revenue and operating profits to decline.

We generate revenue by providing outsourced services to a wide variety of companies, primarily in the software and high-tech products markets. If we cannot develop and maintain satisfactory relationships with software and digital products publishers, manufacturers, online retailers and online channel partners on acceptable commercial terms, we will likely experience a decline in revenue and operating profit. We also depend on our software and digital publisher clients creating and supporting software and digital products that end-users will purchase. If we are unable to obtain sufficient quantities of software and digital products for any reason, or if the quality of service provided by these software and digital products publishers falls below a satisfactory level, we could also experience a decline in revenue, operating profit and end-user satisfaction, and our reputation could be harmed. Our contracts with our software and digital products publisher clients are generally one to two years in duration, with an automatic renewal provision for additional one-year periods,

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unless we are provided with a written notice at least 90 days before the end of the contract. As is common in our industry, we have no material long-term or exclusive contracts or arrangements with any software or digital products publishers that guarantee the availability of software or digital products. Software and digital products publishers that currently supply software or digital products to us may not continue to do so and we may be unable to establish new relationships with software or digital product publishers to supplement or replace existing relationships.

The matters relating to the investigation by the Special Committee of the Board of Directors and the restatement of our consolidated financial statements may result in additional litigation and governmental enforcement actions.

On February 6, 2007, we announced that an internal review had discovered irregularities related to the issuance of certain stock option grants primarily made between 1998 and 2002. As described in the Explanatory Note immediately preceding Part I, Item 1, and in Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements in this Form 10-K, as a result of the internal review, the Special Committee concluded, and the Audit Committee and Board of Directors agree, that we used incorrect measurement dates for financial accounting purposes for certain stock option grants in prior periods. Therefore, we have recorded additional non-cash stock-based compensation expense and related tax effect with regard to certain past stock option grants, and we are restating previously filed financial statements in this Form 10-K. The full year adjustment to 2006 was recorded in the fourth quarter of 2006 due to its insignificance.

Activities related to our internal review of historical stock option practices have required us to incur substantial expenses for legal, accounting, tax and other professional services, have diverted management’s attention from our business, and could in the future harm our business, financial condition, results of operations and cash flows.

While we believe we have made appropriate judgments in determining the correct measurement dates for our stock option grants, the SEC may disagree with the manner in which we have accounted for and reported, or not reported, the financial impact. Accordingly, there is a risk we may have to further restate our prior financial statements, amend prior filings with the SEC, or take other actions not currently contemplated.

Our past stock option granting practices and the restatement of prior financial statements have exposed us to greater risks associated with litigation, regulatory proceedings and government enforcement actions. As described in Part II, Item 1, “Legal Proceedings”, several derivative complaints had been filed in federal court against our directors and certain of our executive officers pertaining to allegations relating to stock option grants. On December 18, 2006, the SEC initiated an informal inquiry into our historical stock option practices. We have provided the results of our internal review together with supporting documentation to the SEC. We intend to continue to fully cooperate with the SEC’s inquiry. No assurance can be given regarding the outcomes from litigation, regulatory proceedings or government enforcement actions relating to our past stock option practices. The resolution of these matters will be time consuming, expensive, and may distract management from the conduct of our business. Furthermore, if we are subject to adverse findings in litigation, regulatory proceedings or government enforcement actions, we could be required to pay damages or penalties or have other remedies imposed, which could harm our business, financial condition, results of operations and cash flows.

Implementing our acquisition strategy could result in dilution and operating difficulties leading to a decline in revenue and operating profit.

We have acquired, and intend to continue engaging in strategic acquisitions of businesses, technologies, services and products. Since December 2005, we have acquired three businesses, Commerce5, Inc. (now DR globalTech, Inc.), Direct Response Technologies, Inc. (now DR Marketing Solutions, Inc.) and MindVision, Inc. The process of integrating an acquired business, technology, service or product into our business and operations may result in unforeseen operating difficulties and expenditures. Integration of an acquired business also may disrupt our ongoing business, distract management and make it difficult to maintain

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standards, controls and procedures. Moreover, the anticipated benefits of any acquisition may not be realized. If a significant number of clients of the acquired businesses cease doing business with us, we would experience lost revenue and operating profit, and any synergies from the acquisition may be lost. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities, amortization of intangible assets or impairment of goodwill.

We may need to raise additional capital to achieve our business objectives, which could result in dilution to existing investors or increase our debt obligations.

We require substantial working capital to fund our business. In January 2005, we filed a registration statement to increase our available shelf registration amount from approximately $55 million to $255 million. Of this amount, approximately $173 million was utilized to issue common stock in March 2006, leaving approximately $82 million available for future use. In addition, we filed an acquisition shelf for up to approximately 1.5 million shares. In February 2006, we filed a shelf registration that would allow us to sell an undetermined amount of equity or debt securities in accordance with the recently approved rules applying to “well-known seasoned issuers.” If additional funds are raised through the issuance of equity securities, the percentage ownership of our stockholders will be reduced and these equity securities may have rights, preferences or privileges senior to those of our common stock. In June 2004, we issued 1.25% convertible notes which require us to make interest payments and will require us to pay principal when the notes become due in 2024 or in the event of acceleration under certain circumstances, unless the notes are converted into our common stock prior to that. We may not have sufficient capital to service this or any future debt securities that we may issue, and the conversion of the notes into our common stock may result in further dilution to our stockholders. Our capital requirements depend on several factors, including the rate of market acceptance of our products, the ability to expand our client base, the growth of sales and marketing, and opportunities for acquisitions of other businesses. We have had significant operating losses and negative cash flow from operations since inception. Additional financing may not be available when needed, on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may be unable to develop or enhance our services, take advantage of future opportunities or respond to competitive pressures, which would harm our operating results and adversely affect our ability to sustain profitability.

Our operating results have fluctuated in the past and are likely to continue to do so, which could cause the price of our common stock to be volatile.

Our quarterly and annual operating results have fluctuated significantly in the past and are likely to continue to do so in the future due to a variety of factors, some of which are outside our control. As a result, we believe that quarter-to-quarter and year-to-year comparisons of our revenue and operating results are not necessarily meaningful, and that these comparisons may not be accurate indicators of future performance. If our annual or quarterly operating results fail to meet the guidance we provide to securities analysts and investors or otherwise fail to meet their expectations, the trading price of our common stock will likely decline. Some of the factors that have or may contribute to fluctuations in our quarterly and annual operating results include:

•  The addition of new clients or loss of current clients;

•  The introduction by us of new websites, web stores or services that may require a substantial investment of our resources;

•  The introduction by others of competitive websites, web stores or services or products;

•  Our ability to continue to upgrade and develop our systems and infrastructure to meet emerging market needs and remain competitive in our service offerings;

•  Economic conditions, particularly those affecting e-commerce;

•  Client decisions to delay new product launches or to invest in e-commerce initiatives;

•  The performance of our newly acquired assets or companies;

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•  Slower than anticipated growth of the online market as a vehicle for the purchase of software products;

•  The cost of compliance with U.S. and foreign regulations relating to our business; and

•  Our ability to retain and attract personnel commensurate with our business needs.

In addition, revenue generated by our software and digital commerce services is likely to fluctuate on a seasonal basis that is typical for the software publishing market in general. We believe that our first and fourth quarters are generally seasonally stronger than our second and third quarters due to the timing of new product introductions, which generally do not occur in the summer months, the holiday selling period, and the post-holiday retail season.

Our operating expenses are based on our expectations of future revenue. These expenses are relatively fixed in the short-term. If our revenue for a quarter falls below our expectations and we are unable to quickly reduce spending in response, our operating results for that quarter would be harmed. In addition, the operating results of companies in the electronic commerce industry have, in the past, experienced significant quarter-to-quarter fluctuations that may adversely affect our stock price.

Security breaches could hinder our ability to securely transmit confidential information.

A significant barrier to e-commerce and communications is the secure transmission of confidential information over public networks. Any compromise or elimination of our security could be costly to remedy, damage our reputation and expose us to liability, and dissuade existing and new clients from using our services. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary for secure transmission of confidential information, such as end-user credit card numbers. A party who circumvents our security measures could misappropriate proprietary information or interrupt our operations.

We may be required to expend significant capital and other resources to protect against security breaches or address problems caused by breaches. Concerns over the security of the Internet and other online transactions and the privacy of users could deter people from using the Internet to conduct transactions that involve transmitting confidential information, thereby inhibiting the growth of our business. To the extent that our activities or those of third-party contractors involve the storage and transmission of proprietary information, such as credit card numbers, security breaches could damage our reputation and expose us to a risk of loss, fines or litigation and possible liability. Our security measures may not prevent security breaches, and failure to prevent security breaches could lead to a loss of existing clients and also deter potential clients away from our services.

Claims of infringement of other parties’ intellectual property rights could require us to expend significant resources, enter into unfavorable licenses or require us to change our business plans.

From time-to-time we are named as a defendant in lawsuits claiming that we have, in some way, violated the intellectual property rights of others. We have been notified of several potential patent disputes, and expect that we will increasingly be subject to patent infringement claims as our services expand in scope and complexity. Any assertions or prosecutions of claims like these could require us to expend significant financial and managerial resources. The defense of any claims, with or without merit, could be time-consuming, result in costly litigation and diversion of technical and management personnel, cause product enhancement delays or require that we develop non-infringing technology or enter into royalty or licensing agreements. Royalty or licensing agreements, if required, may be unavailable on terms acceptable to us or at all. In the event of a successful claim of infringement against us and our failure or inability to develop non-infringing technology or license the infringed or similar technology on a timely basis, we may be unable to pursue our current business plan. We expect that we will increasingly be subject to patent infringement claims as our services expand in scope and complexity, and our results of operation and financial condition could be materially adversely affected.

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Claims against us related to the software products that we deliver electronically and the tangible goods that we deliver physically could require us to expend significant resources.

We may become more vulnerable to third party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts. Claims may be made against us for negligence, copyright or trademark infringement, products liability or other theories based on the nature and content of software products or tangible goods that we deliver electronically and physically. Because we did not create these products, we are generally not in a position to know the quality or nature of the content of these products. Although we carry general liability insurance and require that our customers indemnify us against end-user claims, our insurance and indemnification measures may not cover potential claims of this type, may not adequately cover all costs incurred in defense of potential claims, or may not reimburse us for all liability that may be imposed. Any costs or imposition of liability that are not covered by insurance or indemnification measures could be expensive and time-consuming to address, distract management and delay product deliveries, even if we are ultimately successful in the defense of these claims.

The growth of the market for our services depends on the development and maintenance of the Internet infrastructure.

Our business is based on highly reliable Internet delivery of services. The success of our business therefore depends on the development and maintenance of a sound Internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity and security, as well as timely development of complementary products, such as routers, for providing reliable Internet access and services. Our ability to increase the speed and scope of our services is limited by, and depends upon, the speed and reliability of both the Internet and our clients’ internal networks. Consequently, as Internet usage increases, the growth of the market for our services depends upon improvements made to the Internet as well as to individual clients’ networking infrastructures to alleviate overloading and congestion. In addition, any delays in the adoption of new standards and protocols required to govern increased levels of Internet activity or increased governmental regulation may have a detrimental effect on the Internet infrastructure.

Because the e-commerce industry is highly competitive and has low barriers to entry, we may be unable to compete effectively.

The market for e-commerce solutions is extremely competitive and we may find ourselves unable to compete effectively. Because there are relatively low barriers to entry in the e-commerce market, we expect continued intense competition as current competitors expand their product offerings and new competitors enter the market. In addition, our clients may become competitors in the future. Increased competition is likely to result in price reductions, reduced margins, longer sales cycles and a decrease or loss of our market share, any of which could negatively impact our revenue and earnings. We face competition from the following sources:

•  In-house development of e-commerce capabilities using tools or applications from companies, such as Art Technology Group, Inc. and IBM Corporation;

•  E-Commerce capabilities custom-developed by companies, such as IBM Global Services and Accenture, Inc.;

•  Other providers of outsourced e-commerce solutions, such as GSI Commerce, Inc., Macrovision Corporation, and asknet Inc.;

•  Companies that provide technologies, services or products that support a portion of the e-commerce process, such as payment processing, including CyberSource Corporation and PayPal Corp.;

•  Companies that offer various online marketing services, technologies and products, including ValueClick, Inc. and aQuantive, Inc.;

•  High-traffic, branded websites that generate a substantial portion of their revenue from e-commerce and may offer or provide to others the means to offer their products for sale, such as Amazon.com, Inc.; and

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•  Web hosting, web services and infrastructure companies that offer portions of our solution and are seeking to expand the range of their offering, such as Network Solutions, LLC, Akamai Technologies, Inc., Yahoo! Inc., eBay Inc. and Hostopia.com Inc.

We believe that the principal competitive factors for a participant in our market are the breadth of products and services offered, the number of clients and online channel partnerships a participant has, brand recognition, system reliability and scalability, price, customer service, ease of use, speed to market, convenience and quality of delivery. The online channel partners and the other companies described above may compete directly with us by adopting a similar business model. Moreover, while some of these companies also are clients or potential clients of ours, they may compete with our e-commerce outsourcing solution to the extent that they develop e-commerce systems or acquire such systems from other software vendors or service providers.

Many of our competitors have, and new potential competitors may have, more experience developing Internet-based software and e-commerce solutions, larger technical staffs, larger customer bases, more established distribution channels and customer relationships, greater brand recognition and greater financial, marketing and other resources than we have. In addition, competitors may be able to develop services that are superior to our services, achieve greater customer acceptance or have significantly improved functionality as compared to our existing and future products and services. Our competitors may be able to respond more quickly to technological developments and changes in customers’ needs. Our inability to compete successfully against current and future competitors could cause our revenue and earnings to decline.

Changes in government regulation could limit our Internet activities or result in additional costs of doing business over the Internet.

We are subject to the same international, federal, state and local laws as other companies conducting business over the Internet. Today, there are relatively few laws specifically directed towards conducting business over the Internet. The adoption or modification of laws related to the Internet could harm our business, operating results and financial condition by increasing our costs and administrative burdens. Due to the increasing popularity and use of the Internet, many laws and regulations relating to the Internet are being debated at the international, federal and state levels. These laws and regulations could cover issues such as:

•  User privacy with respect to adults and minors;

•  Our ability to collect and/or share necessary information that allows us to conduct business on the Internet;

•  Export compliance;

•  Pricing and taxation;

•  Fraud;

•  Advertising;

•  Intellectual property rights;

•  Information security; and

•  Quality of products and services.

Applicability to the Internet of existing laws governing issues, such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy also could harm our operating results and substantially increase the cost to us of doing business. For example, numerous state legislatures have proposed that tax rules for Internet retailing and catalog sales correspond to enacted tax rules for sales from physical stores. Any requirement that we collect sales tax for each online purchase and remit the tax to the appropriate state authority would be a significant administrative burden to us, and would likely depress online sales. This and any other change in laws applicable to the Internet also might require significant management resources to respond appropriately. The vast majority of these laws was adopted prior to the

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advent of the Internet, and do not contemplate or address the unique issues raised thereby. Those laws that do reference the Internet, such as the Digital Millennium Copyright Act, are only beginning to be interpreted by the courts, and their applicability and reach are therefore uncertain.

Failure to develop our technology to accommodate increased traffic could reduce demand for our services and impair the growth of our business.

We periodically enhance and expand our technology and transaction-processing systems, network infrastructure and other technologies to accommodate increases in the volume of traffic on our technology platforms. Any inability to add software and hardware or to develop and upgrade existing technology, transaction-processing systems or network infrastructure to manage increased traffic on this platform may cause unanticipated systems disruptions, slower response times and degradation in client services, including impaired quality and speed of order fulfillment. Failure to manage increased traffic could harm our reputation and significantly reduce demand for our services, which would impair the growth of our business. We may be unable to improve and increase the capacity of our network infrastructure sufficiently or anticipate and react to expected increases in the use of the platform to handle increased volume. Further, additional network capacity may not be available from third-party suppliers when we need it. Our network and our suppliers’ networks may be unable to maintain an acceptable data transmission capability, especially if demands on the platform increase.

To remain competitive, we must continue to enhance and improve the responsiveness, functionality and features of our e-commerce platforms and the underlying network infrastructure. If we incur significant costs without adequate results, or are unable to adapt rapidly to technological changes, we may fail to achieve our business plan. The Internet and the e-commerce industry are characterized by rapid technological changes, changes in user and client requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render our technology and systems obsolete. To be successful, we must adapt to rapid technological changes by licensing and internally developing leading technologies to enhance our existing services, developing new products, services and technologies that address the increasingly sophisticated and varied needs of our clients, and responding to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The development of our proprietary technologies involves significant technical and business risks. We may fail to use new technologies effectively or fail to adapt our proprietary technology and systems to client requirements or emerging industry standards.

System failures could reduce the attractiveness of our service offerings.

We provide commerce, marketing and delivery services to our clients and end-users through our proprietary technology transaction processing and client management systems. These systems also maintain an electronic inventory of products and gather consumer marketing information. The satisfactory performance, reliability and availability of the technology and the underlying network infrastructure are critical to our operations, level of client service, reputation and ability to attract and retain clients. We have experienced periodic interruptions, affecting all or a portion of our systems, which we believe will continue to occur from time-to-time. Any systems damage or interruption that impairs our ability to accept and fill client orders could result in an immediate loss of revenue to us, and could cause some clients to purchase services offered by our competitors. In addition, frequent systems failures could harm our reputation.

Although we maintain system redundancies in multiple physical locations, our systems and operations are vulnerable to damage or interruption from:

•  Fire, flood and other natural disasters;

•  Operator negligence, improper operation by, or supervision of, employees, physical and electronic break-ins, misappropriation, computer viruses and similar events; and

•  Power loss, computer systems failures, and Internet and telecommunications failure.

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We may not carry sufficient business interruption insurance to fully compensate us for losses that may occur.

We may become liable to clients who are dissatisfied with our services.

We design, develop, implement and manage e-commerce solutions that are crucial to the operation of our clients’ businesses. Defects in the solutions we develop could result in delayed or lost revenue, adverse end-user reaction, and/or negative publicity, which could require expensive corrections. As a result, clients who experience these adverse consequences either directly or indirectly by using our services could bring claims against us for substantial damages. Any claims asserted could exceed the level of any insurance coverage that may be available to us. The successful assertion of one or more large claims that are uninsured, that exceed insurance coverage or that result in changes to insurance policies, including future premium increases that could adversely affect our operating results or financial condition.

We depend on key personnel.

Our future success significantly depends on the continued services and performance of our senior management. Our performance also depends on our ability to retain and motivate our key technical employees who are skilled in maintaining our proprietary technology platforms. The loss of the services of any of our executive officers or key employees could harm our business if we are unable to effectively replace that officer or employee, or if that person should decide to join a competitor or otherwise directly or indirectly compete with us. Further, we may need to incur additional operating expenses and divert other management time in order to search for a replacement.

Our future success depends on our ability to continue to identify, attract, hire, train, retain and motivate highly skilled personnel. Competition for these personnel is intense, particularly in the Internet industry. We may be unable to successfully attract, assimilate or retain sufficiently qualified personnel. In making employment decisions, particularly in the Internet and high-technology industries, job candidates often consider the value of stock option grants they are to receive in connection with their employment. Fluctuations in our stock price may make it more difficult to retain and motivate employees. Consequently, potential employees may perceive our equity incentives as less attractive and current employees whose equity incentives are no longer attractively priced may choose not to remain with our organization. In that case, our ability to attract employees will be adversely affected. As a result, our ability to use stock options as equity incentives will be adversely affected, which will make it more difficult to compete for and attract qualified personnel. Finally, should our stock price substantially decline, the retention value of stock options may weaken and employees who hold such options may choose not to remain with our organization.

Protecting our intellectual property is critical to our success.

We regard the protection of our trademarks, copyrights, trade secrets and other intellectual property as critical to our success. We rely on a combination of patent, copyright, trademark, service mark and trade secret laws and contractual restrictions to protect our proprietary rights. We have entered into confidentiality and invention assignment agreements with our employees and contractors, and nondisclosure agreements with parties with whom we conduct business, in order to limit access to and disclosure of our proprietary information. These contractual arrangements and the other steps taken by us to protect our intellectual property may not prevent misappropriation of our technology or deter independent third-party development of similar technologies. We also seek to protect our proprietary position by filing U.S. patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. Proprietary rights relating to our technologies will be protected from unauthorized use by third parties only to the extent they are covered by valid and enforceable patents or are effectively maintained as trade secrets. We pursue the registration of our trademarks and service marks in the U.S. and internationally. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which our services are made available online.

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The steps we have taken to protect our proprietary rights may be inadequate and third parties may infringe or misappropriate our trade secrets, trademarks and similar proprietary rights. Any significant failure on our part to protect our intellectual property could make it easier for our competitors to offer similar services and thereby adversely affect our market opportunities. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. Litigation could result in substantial costs and diversion of management and technical resources.

Our clients’ sales cycles are lengthy, which may cause us to incur substantial expenses and expend management time without generating corresponding consumer revenue, which would impair our cash flow.

We market our services directly to software publishers, online retailers and other prospective customers outside of the software industry. These relationships are typically complex and take time to finalize. Due to operating procedures in many organizations, a significant amount of time may pass between selection of our products and services by key decision-makers and the signing of a contract. The period between the initial client sales call and the signing of a contract with significant sales potential is difficult to predict and typically ranges from six to twelve months. If at the end of a sales effort a prospective client does not purchase our products or services, we may have incurred substantial expenses and expended management time that cannot be recovered and that will not generate corresponding revenue. As a result, our cash flow and our ability to fund expenditures incurred during the sales cycle may be impaired.

The listing of our network addresses on anti-SPAM lists could harm our ability to service our clients and deliver goods over the Internet.

Certain privacy and anti-email proponents have engaged in a practice of gathering, and publicly listing, network addresses that they believe have been involved in sending unwanted, unsolicited emails commonly known as SPAM. In response to user complaints about SPAM, Internet service providers have from time-to-time blocked such network addresses from sending emails to their users. If our network addresses mistakenly end up on these SPAM lists, our ability to provide services for our clients and consummate the sales of digital and physical goods over the Internet could be harmed.

We are subject to regulations relating to consumer privacy.

We collect and maintain end-user data for our clients, which subjects us to increasing international, federal and state regulations related to online privacy and the use of personal user information. Congress has enacted anti-SPAM legislation with which we must comply when providing email campaigns for our clients. Legislation and regulations are pending in various domestic and international governmental bodies that address online privacy protections. Several governments have proposed, and some have enacted, legislation that would limit the use of personal user information or require online services to establish privacy policies. In addition, the U.S. Federal Trade Commission, or FTC, has urged Congress to adopt legislation regarding the collection and use of personal identifying information obtained from individuals when accessing websites. In the past, the emphasis has been on information obtained from minors. Focus has now shifted to include online privacy protection for minors and adults.

Even in the absence of laws requiring companies to establish these procedures, the FTC has settled several proceedings resulting in consent decrees in which Internet companies have been required to establish programs regarding the manner in which personal information is collected from users and provided to third parties. We could become a party to a similar enforcement proceeding. These regulatory and enforcement efforts could limit our collection of and/or ability to share with our clients demographic and personal information from end-users, which could adversely affect our ability to comprehensively serve our clients.

The European Union has adopted a privacy directive that regulates the collection and use of information that identifies an individual person. These regulations may inhibit or prohibit the collection and sharing of personal information in ways that could harm our clients or us. The globalization of Internet commerce may

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be harmed by these and similar regulations because the European Union privacy directive prohibits transmission of personal information outside the European Union. The United States and the European Union have negotiated an agreement providing a “safe harbor” for those companies who agree to comply with the principles set forth by the U.S. Department of Commerce and agreed to by the European Union. Failure to comply with these principles may result in fines, private lawsuits and enforcement actions. These enforcement actions can include interruption or shutdown of operations relating to the collection and sharing of information pertaining to citizens of the European Union.

Compliance with future laws imposed on e-commerce may substantially increase our costs of doing business or otherwise adversely affect our ability to offer our services.

Because our services are accessible worldwide, and we facilitate sales of products to end-users worldwide, international jurisdictions may claim that we are required to comply with their laws. Laws regulating Internet companies outside of the United States may be less favorable than those in the United States, giving greater rights to consumers, content owners and users. Compliance may be more costly or may require us to change our business practices or restrict our service offerings relative to those provided in the United States. Any failure to comply with foreign laws could subject us to penalties ranging from fines to bans on our ability to offer our services.

As our services are available over the Internet in multiple states and foreign countries, these jurisdictions may claim that we are required to qualify to do business as a foreign corporation in each state or foreign country. We and/or our subsidiaries are qualified to do business only in certain states. Failure to qualify as a foreign corporation in a required jurisdiction could subject us to taxes and penalties and could result in our inability to enforce contracts in these jurisdictions.

In addition, we are subject to United States laws governing the conduct of business with other countries, such as export control laws, which prohibit or restrict the export of goods, services and technology to designated countries, denied persons or denied entities from the United States. Violation of these laws could result in fines or other actions by regulatory agencies and result in increased costs of doing business and reduced profits. In addition, any significant changes in these laws, particularly an expansion in export control laws, will increase our costs of compliance and may further restrict our overseas client base.

We are exposed to foreign currency exchange risk.

Sales outside the United States accounted for approximately 41% of our total sales in 2006. The results of operations of, and certain of our intercompany balances associated with, our internationally focused websites are exposed to foreign exchange rate fluctuations. Upon translation, net sales and other operating results from our international operations may differ materially from expectations, and we may record significant gains or losses on the remeasurement of intercompany balances. If the U.S. dollar weakens against foreign currencies, the translation of these foreign-currency-denominated transactions will result in increased net revenues and operating expenses. Similarly, our net revenues and operating expenses will decrease if the U.S. dollar strengthens against foreign currencies. As we have expanded our international operations, our exposure to exchange rate fluctuations has become more pronounced. We may enter into short-term currency forward contracts to offset the foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. The use of such hedging activities may not offset more than a portion of the adverse financial impact resulting from unfavorable movements in foreign exchange rates. See Item 7A of Part II, for information demonstrating the effect on our consolidated statements of operations from changes in exchange rates versus the U.S. dollar.

Changes in our tax rates could affect our future results.

Our future effective tax rates could be favorably or unfavorably affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws or their interpretation. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our

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provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our results of operations and financial condition.

Developments in accounting standards may cause us to increase our recorded expenses, which in turn would jeopardize our ability to demonstrate sustained profitability.

In January 2002, we adopted Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (SFAS No. 142). The statement generally establishes that goodwill and intangible assets with indefinite lives are not amortized, but are to be tested on an annual basis for impairment and, if impaired, are recorded as an impairment charge in income from operations. As of December 31, 2006, we had goodwill with an indefinite life of $243.8 million from our acquisitions. If our goodwill is determined for any reason to be impaired, the subsequent accounting of the impaired portion as an expense would lower our earnings and jeopardize our ability to demonstrate sustained profitability. On January 1, 2006, we adopted SFAS 123(R) which requires the measurement and recognition of compensation expense for all stock-based compensation based on estimated fair values. Our operating results for 2006 contain, and our operating results for future periods will contain, a charge for stock-based compensation related to stock options, restricted stock grants and employee stock purchases. As a result of our adoption of SFAS 123(R), our earnings for 2006 were lower than they would have been had we not been required to adopt SFAS 123(R). This will continue to be the case for future periods.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and the NASDAQ Stock Market rules, have required an increased amount of management attention and external resources. We intend to invest all reasonably necessary resources to comply with evolving corporate governance and public disclosure standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Internet-related stock prices are especially volatile and this volatility may depress our stock price or cause it to fluctuate significantly.

The stock market and the trading prices of Internet-related companies in particular, have been notably volatile. This volatility is likely to continue in the short-term and is not necessarily related to the operating performance of affected companies. This broad market and industry volatility could significantly reduce the price of our common stock at any time, without regard to our operating performance. Factors that could cause our stock price in particular to fluctuate include, but are not limited to:

•  Actual or anticipated variations in quarterly operating results;

•  Announcements of technological innovations;

•  The ability to sign new clients and the retention of existing clients;

•  New products or services that we offer;

•  Competitive developments, including new products or services, or new relationships by our competitors;

•  Changes that affect our clients or the viability of their product lines;

•  Changes in financial estimates by securities analysts;

•  Conditions or trends in the Internet and online commerce industries;

•  Global unrest and terrorist activities;

•  Changes in the economic performance and/or market valuations of other Internet or online e-commerce companies;

•  Required changes in generally accepted accounting principles and disclosures;

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•  Our announcement of significant acquisitions, strategic partnerships, joint ventures or capital commitments or results of operations or other developments related to those acquisitions;

•  Additions or departures of key personnel; and

•  Sales or other transactions involving our common stock or our convertible notes.

In addition, our stock price may be impacted by the short sales and actions of other parties who may disseminate misleading information about us in an effort to profit from fluctuations in our stock price.

Provisions of our charter documents, other agreements and Delaware law may inhibit potential acquisition bids for us.

Certain provisions of our amended and restated certificate of incorporation, bylaws, other agreements and Delaware law could make it more difficult for a third party to acquire us, even if a change in control would be beneficial to our stockholders.

ITEM 1B.   UNRESOLVED STAFF COMMENTS

None.

ITEM 2.   PROPERTIES

The following table summarizes the various facilities that we lease for our business operations:

		Square
Description of Use	Primary Locations	Footage(1)		Lease Expirations
Corporate Office Facilities	Minnesota		133,000		From 2007 to 2008
Other U.S. Office Facilities	California, Colorado, Illinois, Nebraska, Ohio, Pennsylvania, Utah		62,139		From 2007 to 2011
Non-U.S. Office Facilities	Germany, Ireland, Japan, Korea, Luxembourg, Taiwan, United Kingdom		65,266		From 2007 to 2026
Off Site U.S. Data Centers	California, Minnesota		693		From 2007 to 2008
Off Site non U.S. Data Centers	China, Germany, Ireland, United Kingdom		282		From 2007 to 2008

(1) Includes sub-leased space.

We believe our properties are suitable and adequate for our present needs, and we periodically evaluate whether additional facilities are necessary.

ITEM 3.   LEGAL PROCEEDINGS

DDR Holdings, LLC has brought a claim against us and several other defendants regarding US Patents No. 6,629,135 and 6,993,572, which are owned by DDR Holdings. These patents claim e-commerce outsourcing systems and methods relating to the provision of outsourced e-commerce support pages having a common look and feel with a host’s website. The case was filed in the U.S. District Court for the Eastern District of Texas on January 31, 2006. The complaint seeks injunctive relief, declaratory relief, damages and attorneys’ fees. We have denied infringement of any valid claim of the patents-in-suit, and have asserted counter-claims which seek a judicial declaration that the patents are invalid and not infringed. We intend to vigorously defend ourselves in this matter. On September 22, 2006, DDR Holdings filed an application for reexamination of its patents based upon the prior art produced by us and the other defendants in the case. As part of that application, DDR Holdings asserted that this prior art raised a substantial question as to the patentability of the inventions claimed in the patents. DDR Holdings has also moved to stay its litigation pending a decision on the reexamination application. We intend to vigorously defend ourselves in this matter.

NetRatings, Inc. has brought a claim against us regarding US Patents Nos. 5,675,510, 6,115,680, 6,108,637, 6,138,155 and 6,763,386, which are owned by NetRatings. These patents claim web analytic and reporting

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systems. The case was filed in the U.S. District Court for the District of Minnesota on October 5, 2006. The complaint seeks injunctive relief, declaratory relief, damages and attorney’s fees. We have answered this complaint and are in the early stages of discovery. We intend to vigorously defend ourselves in this matter.

Voice Signal Technologies, Inc. (“VST”) has brought a claim against us and several other defendants regarding US Patent No. 5,855,000, which is owned by VST. This patent claim is on the use of general purpose dictation for personal computers and mobile devices. The case was filed in the U.S. District Court for the Western District of Pennsylvania on November 8, 2006. This complaint relates to our resale of a product from one of our software publisher clients. Under the terms of the contract that we have with this client, the client will defend and indemnify us for intellectual property claims. In accordance with the terms of that contract, this client is assuming the defense of this matter.

On October 31, 2006, a party identifying itself as a shareholder of the Company filed a derivative shareholder suit against us and certain of our current and former officers and directors in the U.S. District Court for the District of Minnesota. The action made general allegations regarding our purported stock option practices and on that basis asserted claims for violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder, Sections 14(a) and 20(a) of the Exchange Act, breach of the fiduciary duties of loyalty and good faith, an accounting, unjust enrichment and rescission. On November 17, 2006, we filed a motion to dismiss the action in its entirety. On December 22, 2006, rather than opposing this motion to dismiss, plaintiff filed a motion for voluntary dismissal of the case. On January 3, 2007, the Court entered an order granting plaintiff’s motion for voluntary dismissal without prejudice. On February 6, 2007, this shareholder filed a complaint in the Court of Chancery of the State of Delaware. The complaint seeks an order pursuant to Section 220 of the Delaware General Corporation Law permitting plaintiff to inspect and make copies and extracts of certain of our books and records. We intend to vigorously defend ourselves in this matter.

On November 21, 2006, a separate plaintiff filed a derivative shareholder suit against us and certain of our current and former officers and directors in the U.S. District Court for the District of Minnesota substantially similar to the complaint filed against us on October 31, 2006. On January 11, 2007, plaintiff filed a motion for voluntary dismissal of the case. On January 17, 2007, the Court entered an order granting plaintiff’s motion for voluntary dismissal without prejudice.

In December 2006, we announced that we had received an informal inquiry from the SEC relating to our stock option grant practices. We have cooperated with the SEC regarding this matter and intend to continue to do so.

We are subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the final outcome of these matters is currently not determinable, we believe there is no litigation pending against us that is likely to have, individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operation or cash flows. Because of the uncertainty inherent in litigation, it is possible that unfavorable resolutions of these lawsuits, proceedings and claims could exceed the amount we have currently reserved for these matters.

Third parties have from time-to-time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We have been notified of several potential patent disputes, and expect that we will increasingly be subject to patent infringement claims as our services expand in scope and complexity. We have in the past been forced to litigate such claims. We also may become more vulnerable to third-party claims as laws, such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts and as we expand geographically into jurisdictions where the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or less favorable. These claims, whether meritorious or not, could be time-consuming and costly to resolve, cause service upgrade delays, require expensive changes in our methods of doing business, or could require us to enter into costly royalty or licensing agreements.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

Our common stock is traded on The NASDAQ Stock Market under the symbol “DRIV.” The following table sets forth, for the periods indicated, the high and low sale price per share of our common stock on that market. These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.

	High		Low
2005
First Quarter	$	41.82	$	28.16
Second Quarter	$	33.73	$	22.43
Third Quarter	$	41.75	$	31.30
Fourth Quarter	$	39.39	$	23.64
2006
First Quarter	$	46.08	$	29.27
Second Quarter	$	48.00	$	37.00
Third Quarter	$	53.21	$	37.90
Fourth Quarter	$	60.99	$	48.20

Holders

As of February 1, 2007, there were approximately 390 holders of record of our common stock. On February 1, 2007, the last sale price reported on The NASDAQ Stock Market for our common stock was $50.14 per share.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. We intend to retain any future earnings to support operations and to finance the growth and development of our business and do not anticipate paying cash dividends for the foreseeable future.

Issuer Purchases of Equity Securities

In April 2005, our Board of Directors authorized a new share repurchase program of up to $50.0 million of our outstanding shares of common stock. This new program superseded and replaced the $5.0 million share repurchase program adopted in 2001. Under the new program, the shares may be repurchased in the open market or in privately negotiated transactions. Repurchases are at our discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. No time limit was set for the completion of the repurchase program.

There were no common stock repurchases in the fourth quarter of 2006.

Securities Authorized for Issuance under Equity Compensation Plans

The information required in the table of Securities Authorized for Issuance under Equity Compensation Plans is incorporated by reference to our Proxy Statement in connection with our 2007 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

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Securities Performance Measurement Comparison¹

The SEC requires a comparison on an indexed basis of cumulative total stockholder return for the Company, a relevant broad equity market index and a published industry line-of-business index. The following graph shows a total stockholder return of an investment of $100 in cash on December 31, 2001 for (i) the Company’s Common Stock; (ii) the CRSP Total Return Index for the Nasdaq Stock Market (U.S. companies) (the “Nasdaq Composite Index”); and (iii) the RDG Technology Composite Index. The RDG Technology Composite Index is composed of approximately 500 technology companies in the semiconductor, electronics, medical and related technology industries. Historic stock price performance is not necessarily indicative of future stock price performance. All values assume reinvestment of the full amount of all dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Digital River, Inc., The NASDAQ Composite Index
And The RDG Technology Composite Index

* $100 invested on 12/31/01 in stock or index-including reinvestment of dividends.

Fiscal year ending December 31.

¹ This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

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ITEM 6.   SELECTED FINANCIAL DATA

The consolidated financial information below has been restated as set forth in this Form 10-K. The data as of and for the years ended December 31, 2005, 2004, 2003 and 2002 have been restated as set forth in this Form 10-K, but such restated data have not been audited and are derived from the Company’s books and records. The information set forth below is not necessarily indicative of results of future operations, and should be read in conjunction with Item 7, “Management’s Discussion and Analysis-Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included in Item 8 of this Form 10-K to fully understand factors that may affect the comparability of the information presented below. The information presented in the following tables has been adjusted to reflect the restatement of our financial results, which is more fully described in Management’s Discussion and Analysis-Restatement of Consolidated Financial Statements and in Note 2 to Consolidated Financial Statements of this Form 10-K.

We have not amended any other previously-filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by this restatement. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report on Form 10-K, and the financial statements and related financial information contained in previously-filed reports should no longer be relied upon.

	December 31,
	2006		2005			2004									2003									2002
						As									As									As
			As			Previously						As			Previously						As			Previously						As
			Restated(1)			Reported			Adjustments			Restated(1)			Reported			Adjustments			Restated(1)			Reported			Adjustments			Restated(1)
	(In thousands)
Balance Sheet Data:
Cash and cash equivalents	$	390,243	$	131,770		$	127,734		$	—		$	127,734		$	72,885		$	—		$	72,885		$	40,801		$	—		$	40,801
Short-term investments		235,699		220,569			164,402			—			164,402			59,037			—			59,037			—			—			—
Working capital		497,887		244,647			198,747			—			198,747			85,011			—			85,011			14,498			—			14,498
Total assets		1,006,263		669,549			504,521			—			504,521			189,658			—			189,658			96,534			—			96,534
Long-term obligations		196,345		195,022			195,000			—			195,000			—			—			—			—			—			—
Retained earnings/ (accumulated deficit)		44,989		(15,627	)		(51,164	)		(11,472	)		(62,636	)		(86,488	)		(10,655	)		(97,143	)		(103,624	)		(9,414	)		(113,038	)
Total stockholders’ equity	$	603,759	$	305,551		$	192,769		$	—		$	192,769		$	131,852		$	—		$	131,852		$	57,186		$	—		$	57,186

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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	Year Ended December 31,
	2006		2005		2004		2003		2002
			As Restated(1)		As Restated(1)		As Restated(2)		As Restated(2)
	(In thousands, except per share data)
Statement of Operations Data:
Revenue	$	307,632	$	220,408	$	154,130	$	101,201	$	77,783
Costs and expenses (exclusive of depreciation and amortization expense shown separately below)
Direct cost of services		7,709		5,063		5,167		3,857		2,717
Network and infrastructure		29,250		19,817		15,164		12,295		11,455
Sales and marketing		113,462		69,371		52,083		37,685		33,061
Product research and development		32,341		20,690		14,293		10,263		11,929
General and administrative		34,158		21,484		17,006		9,389		9,469
Depreciation and amortization		10,983		8,833		8,203		7,275		6,009
Amortization of acquisition related intangibles		12,134		8,730		8,269		5,380		5,738
Total costs and expenses		240,037		153,988		120,185		86,144		80,378
Income (loss) from operations		67,595		66,420		33,945		15,057		(2,595	)
Other income, net		21,887		4,967		1,641		838		406
Income (loss) before income tax expense		89,482		71,387		35,586		15,895		(2,189	)
Income tax expense		28,672		14,875		1,079		—		—
Net income (loss)	$	60,810	$	56,512	$	34,507	$	15,895	$	(2,189	)
Net income (loss) per share — basic	$	1.58	$	1.64	$	1.07	$	0.54	$	(0.08	)
Net income (loss) per share — diluted	$	1.40	$	1.41	$	0.94	$	0.48	$	(0.08	)
Shares used in per-share calculation — basic		38,593		34,536		32,328		29,398		26,791
Shares used in per-share calculation — diluted		44,642		41,448		38,532		33,051		26,791

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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(2) The Selected Financial Data for 2003 and 2002 has been restated to reflect adjustments related to stock based compensation expense and the associated tax impact as further described in the “Explanatory Note” immediately preceding Part I, Item 1 of the Form 10-K. As a result of these adjustments, net income was reduced by $1,241 and $1,679 for the years ended December 31, 2003 and 2002, respectively as follows:

	2003							2002
	As Previously					As		As Previously						As
	Reported		Adjustments			Restated(1)		Reported			Adjustments			Restated(1)
Statement of Operations Data:
Revenue	$	101,201	$	—		$	101,201	$	77,783		$	—		$	77,783
Costs and expenses (exclusive of depreciation and amortization expense shown separately below)
Direct cost of services		3,585		272			3,857		2,357			360			2,717
Network and infrastructure		12,253		42			12,295		11,405			50			11,455
Sales and marketing		37,220		465			37,685		32,437			624			33,061
Product research and development		9,962		301			10,263		11,454			475			11,929
General and administrative		9,228		161			9,389		9,299			170			9,469
Depreciation and amortization		7,275		—			7,275		6,009			—			6,009
Amortization of acquisition related intangibles		5,380		—			5,380		5,738			—			5,738
Total costs and expenses		84,903		1,241			86,144		78,699			1,679			80,378
Income (loss) from operations		16,298		(1,241	)		15,057		(916	)		(1,679	)		(2,595	)
Other income, net		838		—			838		406			—			406
Income (loss) before income tax expense		17,136		(1,241	)		15,895		(510	)		(1,679	)		(2,189	)
Income tax expense		—		—			—		—			—			—
Net income (loss)	$	17,136	$	(1,241	)	$	15,895	$	(510	)	$	(1,679	)	$	(2,189	)
Net income (loss) per share — basic	$	0.58	$	(0.04	)	$	0.54	$	(0.02	)	$	(0.06	)	$	(0.08	)
Net income (loss) per share — diluted	$	0.52	$	(0.04	)	$	0.48	$	(0.02	)	$	(0.06	)	$	(0.08	)
Shares used in per-share calculation — basic		29,398		29,398			29,398		26,791			26,791			26,791
Shares used in per-share calculation — diluted		33,051		33,051			33,051		26,791			26,791			26,791

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The discussion in this Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Additional factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “Risk Factors,” included elsewhere in this Annual Report. When used in this document, the words “believes,” “expects,” “anticipates,” “intends,” “plans,” and similar expressions, are intended to identify certain of these forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document.

The following information has been adjusted to reflect the restatement of our financial results, which is more fully described in the “Explanatory Note” immediately preceding Part I Item 1 and in Note 2, “Restatement of Consolidated Financial Statements” in Notes to Consolidated Financial Statements of this Form 10-K.

Overview

We provide outsourced e-commerce solutions globally to a wide variety of companies primarily in the software and high-tech products markets. We offer our clients a broad range of services that enable them to effectively build, manage, and grow online sales on a global basis. We focus on helping our clients mitigate risk and grow their revenues. Our services include online store design, development, and hosting, store merchandising and optimization, order management, fraud prevention screening, export controls and management, tax management, digital product delivery via download, physical product fulfillment, multi-lingual customer service, e-mail marketing, website optimization, web analytics and reporting.

Acquisitions and Comparability of Results

We acquired SWReg in March 2005, Commerce5, Inc. (now DR globalTech, Inc.) in December 2005, Direct Response Technologies, Inc. (now DR Marketing Solutions, Inc.) in January 2006 and MindVision, Inc. in June 2006. The results of these acquisitions must be factored into any comparison of our 2006 results to the results for 2005 or 2004. See Note 5 of our consolidated financial statements for the year ended December 31, 2006, for pro forma financial information as if these entities had been acquired on January 1, 2005.

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies that we believe are the most critical in fully understanding and evaluating our reported financial results are the following:

Revenue Recognition.  We recognize revenue from services rendered once all the following criteria for revenue recognition have been met: (1) pervasive evidence of an agreement exists; (2) the services have been rendered; (3) the fee is fixed and determinable and not subject to refund or adjustment; and (4) collection of the amounts due is reasonably assured.

We evaluate the criteria outlined in Emerging Issues Task Force, (“EITF”) Issues No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent, in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as net revenue. We act as the merchant of record on most of the transactions processed and have contractual relationships with our

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clients, which obligate us to pay to the client a specified percentage of each sale. We derive our revenue primarily from transaction fees based on a percentage of the products sale price and fees from services rendered associated with the e-commerce and other services provided to our clients and end customers. Our revenue is recorded as net as generally our clients are subject to inventory risks and control customers’ product choices. Clients do not have the right to take possession of the software applications used in the delivery of services.

We also provide customers with various proprietary software backup services. We recognize revenue for these backup services upon delivery or based upon historical usage within the contract period of the digital backup services when this information is available. Digital backup services are recognized straight-line over the life of the backup service when historical usage information is unavailable. Shipping revenues are recorded net of any associated costs.

We also, to a lesser extent, provide fee-based client services, which include website design, custom development and integration, analytical marketing and email marketing services. If we receive payments for fee-based services in advance of delivery, these amounts are deferred and recognized over the service period.

Provisions for doubtful accounts and transaction losses and authorized credits are made at the time of revenue recognition based upon our historical experience. The provision for doubtful accounts and transaction losses are recorded as charges to operating expense, while the provision for authorized credits is recognized as a reduction of net revenues.

Allowance for Doubtful Accounts.  We must make estimates and assumptions that can affect the amount of assets and liabilities and the amounts of revenues and expenses we report in any financial reporting period. We use estimates in determining our allowance for doubtful accounts, which are based on our historical experience and current trends. We must estimate the collectability of our billed accounts receivable. We analyze accounts receivable and consider our historical bad debt experience, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. We must make significant judgments and estimates in connection with the allowance in any accounting period. There may be material differences in our operating results for any period if we change our estimates or if the estimates are not accurate. Credit Card Chargeback Reserve. We use estimates based on historical experience and current trends to determine accrued chargeback expenses. Significant management judgments are used and estimates made in connection with the accrued expenses in any accounting period. There may be material differences in our operating results for any period if we change our estimates or if the estimates are not accurate.

Goodwill, Intangibles and Other Long-Lived Assets.  We depreciate property, plant and equipment; amortize certain intangibles and certain other long-lived assets with definite lives over their useful lives. Useful lives are based on our estimates of the period of time over which the assets will generate revenue or benefit our business. We review assets with definite lives for impairment whenever events or changes in circumstances indicate that the value we are carrying on our financial statements for an asset may not be recoverable. Our evaluation considers non-financial data such as changes in the operating environment and business strategy, competitive information, market trends and operating performance. If there are indications that impairment may be necessary, we use an undiscounted cash flow analysis to determine the impairment amount, if any. Assets with indefinite lives are reviewed for impairment annually (or more frequently if there are indications that an impairment may be necessary) utilizing the two-step approach prescribed in Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets.” There have been no impairments of goodwill and other intangible assets for the years 2006, 2005 and 2004.

Income Taxes and Deferred Taxes.  Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We record deferred tax assets for favorable tax attributes, including tax loss carryforwards. We currently have significant U.S. tax loss carryforwards resulting from the tax deduction for exercise of stock options and acquired operating tax loss carryforwards, and a lesser

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amount of acquired foreign operating tax loss carryforwards. The benefit of the loss carryforwards from exercise of stock options was recognized as additional paid in capital when the deferred tax asset valuation allowance was reversed in the fourth quarter of 2005. The benefit of the acquired tax loss carryforwards has been reserved by a valuation allowance pursuant to United States generally accepted accounting principles. These valuation reserves of the deferred tax asset will be reversed if and when it is more likely than not that the deferred tax asset will be realized. We evaluate the need for a valuation allowance of the deferred tax asset on a quarterly basis. If the benefit of these acquired tax loss carryforwards is recognized, we will not recognize the benefit in the statement of income. Rather, the benefit will be recognized as a reduction to goodwill.

We may face challenges from domestic and foreign tax authorities regarding the amount of tax due. These challenges may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various tax filing positions, we record reserves for probable exposures. Based on our evaluation of our tax position, we believe the amounts related to these tax exposures are appropriately accrued. To the extent we were to favorably resolve matters for which accruals have been established or be required to pay amounts in excess of the aforementioned reserves, our effective tax rate in a given financial statement period may be impacted.

No provision has been made for federal income taxes on approximately $25.8 million of our foreign subsidiaries undistributed earnings since we plan to indefinitely reinvest all such earnings. If these earnings were distributed to the U.S. in the form of dividends or otherwise, we would be subject to U.S. income taxes on such earnings. The amount of U.S. income taxes would be subject to adjustment for foreign tax credits and for the impact of the step-up in the basis of assets resulting from a Section 338 election made at the time of acquisition. If these earnings were to be distributed, the income tax liability would be approximately $4.9 million.

Stock-Based Compensation Expense.  On January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which requires the measurement and recognition of compensation expense for all share-based payments made to employees and directors including stock options, restricted stock grants and employee stock purchases made through our Employee Stock Purchase Plan based on estimated fair values. SFAS 123(R) supersedes our previous accounting under Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees,” for periods beginning in 2006.

Prior to the adoption of SFAS 123(R), we had elected to apply the disclosure-only provision of SFAS No. 123, “Accounting for Stock-Based Compensation” as amended by SFAS No. 148. Accordingly, we accounted for stock-based compensation using the intrinsic value method prescribed in APB 25 and related interpretations. Compensation expense for stock options was measured as the excess, if any, of the fair value of our common stock at the date of grant over the stock option exercise price.

We have adopted SFAS 123(R) using the modified prospective transition method under which prior periods are not revised. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. Stock-based compensation expense recognized in our Consolidated Statement of Operations for 2006 includes compensation expense for share-based awards granted prior to, but not yet vested, as of December 31, 2005 as well as compensation expense for the share-based payment awards granted subsequent to December 31, 2005. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of our common stock on the date of grant. Compensation expense for all share-based payment awards are recognized using the straight-line amortization method over the vesting period. Stock-based compensation expense of $13.9 million was charged to operating expenses during 2006. The related tax benefit of $4.9 million resulted in a net after-tax stock-based compensation expense of $9.0 million for 2006.

As stock-based compensation expense recognized in our Consolidated Statement of Operations for 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS 123(R)

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requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our pro forma information required under SFAS 123, for periods prior to 2006, accounted for forfeitures as they occurred. In March 2005 the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (“SAB 107”), which provides supplemental implementation guidance for SFAS 123(R). We have applied the provision of SAB 107 in our adoption of SFAS 123(R).

SFAS 123(R) also requires the benefits of tax deductions in excess of recognized stock-based compensation expense be reported as a financing cash flow, rather than an operating cash flow as required prior to adoption of SFAS 123(R) in our Consolidated Statement of Cash Flows. On November 10, 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. FAS 123(R)-3 “Transition Election Related to Accounting for Tax Effects of Share-based Payment Awards.” We have elected not to adopt the alternative transition method provided in the FASB Staff Position for calculating the tax effects of stock-based compensation pursuant to SFAS 123(R).

As a result of adopting Statement 123(R) on January 1, 2006, our income before income taxes and net income for the twelve months ended December 31, 2006 were $13.9 million and $9.0 million lower, respectively, than if we had continued to account for share-based compensation under APB25. Basic and diluted earnings per share for the twelve months ended December 31, 2006 were $0.23 and $0.20 lower, respectively, than if we had continued to account for share-based compensation under APB 25.

See Note 6 in the Consolidated Financial Statements in this Form 10-K for further information regarding the impact of our adoption of SFAS 123(R) and the assumptions we use to calculate the fair value of share-based compensation.

Results of Operations

The following table presents certain items from our consolidated statements of operations as a percentage of total revenue for the years indicated.

	2006			2005			2004
				As Restated(1)			As Restated(1)
Revenue		100.0	%		100.0	%		100.0	%
Costs and expenses:
Direct cost of services		2.5			2.3			3.4
Network and infrastructure		9.5			9.0			9.8
Sales and marketing		36.9			31.5			33.8
Product research and development		10.5			9.4			9.3
General and administrative		11.1			9.7			11.0
Depreciation and amortization		3.6			4.0			5.3
Amortization of acquisition-related costs		3.9			4.0			5.4
Total costs and expenses		78.0			69.9			78.0
Income from operations		22.0			30.1			22.0
Other income, net		7.1			2.3			1.1
Income before income tax expense		29.1			32.4			23.1
Income tax expense		9.3			6.8			0.7
Net income		19.8	%		25.6	%		22.4	%

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

Revenue.  Our revenue increased to $307.6 million in 2006 from $220.4 million in 2005 and $154.1 million in 2004. The revenue increases were primarily attributable to higher online sales activity across our client base, growth in the number of software publishers and online retailer clients we served, increased sales from

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international sites, expanded strategic marketing activities with a larger number of clients, and acquisitions. Sales of security software products for PCs represent the largest contributor to our revenues. Acquisitions made during each of 2006, 2005 and 2004 generated approximately 3.5%, 2.0% and 16.1% of our total revenue for those years, respectively. International sales represented approximately 41%, 39% and 31% of revenue in the years ended December 31, 2006, 2005 and 2004, respectively. That growth is attributable to a larger number of international stores being operated for our clients as well as the European outsourced e-commerce providers we acquired in 2004 and 2005. Sales of products for one software publisher client, Symantec Corporation, accounted for approximately 30.2% of our revenue in 2006, 29.7% in 2005 and 27.2% in 2004. In addition, revenues derived from proprietary Digital River services sold to Symantec end-users and dealer network sales of Symantec products amounted to approximately 16.6% of our total revenue in 2006, 14.4% in 2005 and 10.8% in 2004.

Direct Cost of Services.  Our direct cost of services line item primarily includes the personnel costs and costs related to product fulfillment, physical on demand, our proprietary back-up CD production and client-specific related costs. Direct cost of service expense was $7.7 million, $5.1 million, and $5.2 million, in 2006, 2005 and 2004, respectively. The increase in 2006 compared with 2005 resulted primarily from (i) personnel added to serve new clients, and to handle increased transaction volumes, (ii) recent acquisitions and (iii) stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). The cost remained flat in 2005 compared with 2004 as we were able to leverage our installed infrastructure to support the higher level of revenue.

We currently believe that direct costs of services will increase in absolute dollars in 2007 compared to 2006 as we continue to expand our worldwide fulfillment capacity in order to meet anticipated shipment volumes from sales.

Network and Infrastructure.  Our network and infrastructure expense line item primarily includes the personnel costs and related expenses to operate and maintain our technology platforms, customer service, data communication and data center operations. Network and infrastructure expense was $29.3 million in 2006, up from $19.8 million and $15.2 million in 2005 and 2004, respectively. The increase in 2006 from 2005, and in 2005 from 2004, resulted primarily from personnel added to support our revenue growth as well as those gained through acquisition of other businesses, and costs related to operating new international data centers. Expenses in 2006 were also higher due to stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R).

We currently believe that network and infrastructure expenses will increase in absolute dollars in 2007 compared to 2006 as we continue to expand our worldwide customer service capacity, and as we expand the number of operating global data centers, expected increased network usage, which will drive higher Internet connection charges.

Sales and Marketing.  Our sales and marketing expense line item primarily includes personnel costs and related expenses, advertising, promotional and product marketing expenses, credit card transaction and other payment processing fees, credit card chargebacks and bad debt expense. Sales and marketing expense increased to $113.5 million in 2006, from $69.4 million and $52.1 million in 2005 and 2004, respectively. As a percentage of revenue, sales and marketing expense increased to 36.9% in 2006 from 31.5% in 2005. The increase in 2006 from 2005 resulted primarily from credit card fees directly associated with the increase in revenue and additional sales, the addition of new international payment methods, personnel and related expenses to support our global growth initiatives, costs from recent acquisitions, and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). During 2006, we continued to expand our presence in global markets, the consumer electronics market, our strategic marketing services programs, and our oneNetwork affiliate program. We also expanded our relationships with two of our major partners, Symantec and Microsoft. The increase in 2005 from 2004 resulted primarily from increases in credit card transaction fees. During 2005, sales and marketing expense decreased as a percentage of revenue to 31.5% from 33.8% in 2004, primarily due to our revenue growing faster than these expenses.

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We currently believe that sales and marketing expenses will increase in absolute dollars in 2007 compared to 2006, as we continue to grow and expand our reach to clients, and continue to offer increased levels of strategic marketing services.

Product Research and Development.  Our product research and development expense line item includes the costs of personnel and related expenses associated with developing and enhancing our technology platforms and related systems. Product research and development expense was $32.3 million in 2006, compared to $20.7 million and $14.3 million in 2005 and 2004, respectively. The increase in 2006 from 2005 resulted primarily from increases in personnel related expenses to support our growth initiatives, costs from recent acquisitions, development related to our expanded relationship with Microsoft and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAF 123(R). During 2006, we continued to advance our remote-control technology, as well as the international and e-marketing capabilities. We capitalized $0.1 million of software development costs related to those efforts during 2006. The increase in 2005 from 2004 resulted primarily from increases in personnel related expenses. We capitalized approximately $0.4 million of software development costs during 2005. As a percentage of revenue, product research and development expense increased to 10.5% in 2006 from 9.4% in 2005 and 9.3% in 2004.

We currently believe that product research and development expenses will increase in absolute dollars in 2007 compared to 2006, as a result of continued investments in product development required to remain competitive.

General and Administrative.  Our general and administrative expense line item primarily includes the costs of executive, accounting, and administrative personnel and related expenses, insurance expense, and professional fees for legal, tax and audit services. General and administrative expense increased to $34.2 million in 2006 from $21.5 million in 2005 and $17.0 million in 2004. The increase in 2006 from 2005 resulted primarily from the addition of personnel and facilities to support our global expansion, such as our offices in Ireland and Luxembourg, as well as those gained through acquisition of other businesses, from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R), and costs incurred for activities related to our internal review of historical stock option practices. The increase in 2005 from 2004 resulted primarily from the addition of personnel and facilities to support our growth as well as those gained through acquisitions of other businesses. As a percentage of revenue, general and administrative expense increased to 11.1% in 2006 from 9.7% in 2005. As a percentage of revenue, general and administrative expense declined to 9.7% in 2005 from 11.0% in 2004 due to our ability to spread administrative costs over the higher revenue base.

We currently believe that general and administrative expenses will increase in absolute dollars in 2007 compared to 2006, as we continue to invest in our infrastructure to support our continued organic growth. We may also incur additional expenses to resolve matters related to our historical stock option practices.

Depreciation and Amortization.  Our depreciation and amortization expense line item includes the depreciation of computer equipment and office furniture and the amortization of purchased and internally developed software, leasehold improvements made to our leased facilities, and debt financing costs. Computer equipment, software and furniture are depreciated under the straight-line method using three to seven years lives, and leasehold improvements are amortized over the shorter of the life of the asset or the remaining length of the lease. Depreciation and amortization expense increased to $11.0 million in 2006 from $8.8 million in 2005 and $8.2 million in 2004. The increased expenses in 2006 and 2005 resulted primarily from increases in our assets, as gross capitalized property and equipment increased to $56.4 million on December 31, 2006, from $52.0 million and $41.1million on December 31, 2005 and 2004, respectively. We currently believe that depreciation and amortization expenses will increase in absolute dollars in 2007 compared to 2006 as we continue to expand our worldwide customer support capacity and expand the number of operating global data centers.

Amortization of Acquisition Related Intangibles.  Our amortization of acquisition-related intangibles line item consists of the amortization of intangible assets recorded from our 14 acquisitions in the past four years. Amortization of acquisition related intangibles increased to $12.1 million in 2006 from $8.7 million in 2005

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and $8.3 million in 2004. The increase in 2006 from 2005 and 2004 reflects the increased amortization of 2006 acquisitions partially offset by full amortization of certain past acquisitions. We complete our annual goodwill impairment test using a two-step approach in the fourth quarter of each year. Our assessment has indicated that there is no impairment of goodwill for the years ended December 31, 2006, 2005 and 2004. We have purchased, and expect to continue purchasing, assets or businesses, which may include the purchase of intangible assets.

Income from Operations.  Our income from operations in 2006 was $67.6 million, up from $66.4 million in 2005 and $33.9 million in 2004. As a percentage of revenue, income from operations was 22.0% in 2006, 30.1% in 2005 and 22.0% in 2004. Income from operations decreased during 2006 from 2005 as a percentage of revenue as expenses grew faster than revenues primarily due to higher spending on global growth initiatives and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). The increase in income from operations in 2005 from 2004 resulted primarily from growth in revenue while our cost of revenue and operating expenses grew at a slower rate.

Other Income, Net.  Our other income, net line item is the total of interest income on our cash, cash equivalents, and short-term investments, interest expense on our debt and foreign currency transaction gains and losses. Interest income was $22.8 million, $9.7 million and $3.2 million in 2006, 2005 and 2004, respectively. The increases in interest income were primarily due to higher cash balances. Interest expense was $2.5 million in 2006 compared with $2.5 million in 2005 and $1.5 million in 2004. Our gain from foreign currency remeasurement was $1.5 million in 2006 compared to a loss of $2.2 million in 2005. Gains or losses were immaterial in 2004.

Income Taxes.  In 2006, our tax expense was $28.7 million, made up of approximately $39.4 million of current tax expense and $10.8 million of deferred tax benefit. In 2005, our tax expense was $14.9 million, made up of approximately $26.1 million of current tax expense and $11.2 million of deferred tax benefit. In 2004, our tax expense was $1.1 million, made up of international current tax expense.

In 2006, we recorded tax expense at a rate that reflects the estimated impact of current year changes in foreign operations. We have established new locations in Shannon, Ireland and Luxembourg. We transferred existing non-U.S. operations to these locations and expanded these operations in order to more effectively manage current international activity and facilitate further international growth. We commenced business operations in these locations on April 1, 2006. These operating changes generally reduce our effective tax rate compared to prior years.

As of December 31, 2006, we had net U.S. tax loss carryforwards of approximately $61.6 million and foreign tax loss carryforwards of $1.3 million. The U.S. amount consists of $30.0 million of deductions resulting from exercise of stock options and $31.6 million of acquired net operating losses. The U.S. tax loss carryforwards expire in the years 2020 through 2025.

In prior years, there was uncertainty of future realization of the deferred tax assets resulting from temporary differences and from tax loss carryforwards from operations and stock option deductions, therefore a valuation allowance equal to the deferred tax assets was recorded. At December 31, 2005, we evaluated our deferred tax assets related to tax loss carryforwards from stock option deductions and other items and concluded it was more likely than not that the deferred tax assets would be realized, and accordingly the valuation allowance was reversed.

In accordance with SFAS 123(R), which we adopted January 1, 2006, tax savings from expected future deductions based on the expense attributable to our stock option plans are reflected in the U.S. tax provisions for 2006 and 2005. They were not reflected in the provision for 2004.

We also have evaluated our deferred tax assets related to acquired operating losses and we believe a full valuation allowance for these assets is required as it is not more likely than not that the deferred tax assets will be realized. This valuation allowance is due to anticipated limitations on acquired losses, including limitations under Section 382 of the Internal Revenue Code. Any future release of this valuation allowance will reduce goodwill.

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Comprehensive Income.  Comprehensive income includes revenues, expenses, gains and losses that are excluded from net earnings under GAAP. Items of comprehensive income are unrealized gains and losses on short term investments and foreign currency translation adjustments which are added to net income to compute comprehensive income. Comprehensive income is net of income tax benefits or expense.

In 2006, comprehensive income included $13.5 million recorded for unrealized foreign exchange gains on the revaluation of investments in foreign subsidiaries; and $0.6 million net of $0.2 million tax expense for unrealized investment gains. In 2005, comprehensive income included $1.3 million recorded for unrealized foreign exchange losses on the revaluation of investments in foreign subsidiaries; and $0.8 million net of $0.5 million tax benefit for unrealized investment losses. In 2004, comprehensive income included $0.1 million recorded for unrealized foreign exchange losses on the revaluation of investments in foreign subsidiaries, and $0.3 million for unrealized investment losses. There was no tax benefit for comprehensive income in 2004 as we had no tax expense.

Quarterly Results of Operations

The following discussion of results of operations that originally appeared in our Forms 10-Q filed for 2006 have been adjusted to reflect the restatement of our quarterly financial results for 2005, which is more fully described in the “Explanatory Note” immediately preceding Part I Item 1 and in Note 2, “Restatement of Consolidated Financial Statements” in Notes to Consolidated Financial Statements of this Form 10-K.

Quarterly Period Ended September 30, 2006

The following table sets forth certain items from our condensed consolidated statements of operations as a percentage of total revenue for the periods indicated.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
				As Restated(1)						As Restated(1)
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of Revenue (exclusive of depreciation and amortization expense shown separately below):
Direct cost of services		2.5			2.0			2.5			2.3
Network and infrastructure		10.3			9.4			9.6			8.9
Sales and marketing		37.8			31.4			37.0			30.7
Product research and development		11.1			9.9			10.4			9.4
General and administrative		10.7			10.0			10.9			10.2
Depreciation and amortization		3.9			4.3			3.4			4.3
Amortization of acquisition-related costs		4.4			3.9			4.1			4.2
Total costs and expenses		80.7			70.9			77.9			70.0
Income from operations		19.3			29.1			22.1			30.0
Other income/(expense), net		7.7			2.8			6.7			2.2
Income before income tax expense		27.0			31.9			28.8			32.2
Income tax expense		7.4			8.7			9.0			8.0
Net income		19.6	%		23.2	%		19.8	%		24.2	%

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

REVENUE.  Our revenue increased to $75.3 million for the three months ended September 30, 2006 from $53.2 million for the same period in the prior year, an increase of $22.2 million, or 41.7%. For the nine months ended September 30, 2006, revenue totaled $224.6 million, an increase of $65.8 million, or 41.4%,

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from revenue of $158.9 million in the same period of the prior year. The increase was primarily attributable to higher online sales activity across our client base, increased sales from international sites, expanded strategic marketing activities with a larger number of clients, and acquisitions made during 2005 and 2006.

International sales were approximately 39% and 39% of total sales in the three month period ended September 30, 2006 and 2005, respectively, and approximately 40% and 38% of total sales for the nine month period ended September 30, 2006 and 2005, respectively. The year-to-date growth is attributable to a larger number of international stores being operated for our clients as well as the European outsourced e-commerce providers we acquired in 2004 and 2005.

DIRECT COST OF SERVICES.  Our direct cost of services line item primarily includes the personnel costs and costs related to product fulfillment, physical on demand, our proprietary back-up CD production and client-specific dedicated costs. Direct cost of service expense was $1.9 million for the three months ended September 30, 2006, up from $1.1 million for the same period in the prior year. For the nine months ended September 30, 2006, direct cost of service expense was $5.7 million, up from $3.6 million for the same period of the prior year. The increase resulted primarily from (i) personnel added to serve new clients, and to handle increased transaction volumes, (ii) recent acquisitions and (iii) stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that direct cost of services will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide fulfillment capacity in order to meet anticipated shipment volumes from sales, and expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

NETWORK AND INFRASTRUCTURE.  Our network and infrastructure expense line item primarily includes the personnel costs and related expenses to operate and maintain our technology platforms, customer service, data communication and data center operations. Network and infrastructure expense was $7.8 million for the three months ended September 30, 2006, up from $5.0 million for the same period in the prior year. For the nine months ended September 30, 2006, network and infrastructure expense was $21.5 million, up from $14.2 million for the same period in the prior year. The increases resulted primarily from personnel added to support our revenue growth as well as those gained through acquisition of other businesses, costs related to operating new international data centers and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that network and infrastructure expenses will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide customer service capacity, as we expand the number of operating global data centers, expected increased network usage, which will drive higher Internet connection charges, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of the adoption of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

SALES AND MARKETING.  Our sales and marketing expense line item primarily includes personnel costs and related expenses, advertising, promotional and product marketing expenses, credit card transaction and other payment processing fees, credit card chargebacks and bad debt expense. Sales and marketing expense increased to $28.5 million for the three months ended September 30, 2006 from $16.7 million for the same period in the prior year, an increase of $11.7 million, or 70.0%. Sales and marketing expense increased to $83.0 million for the nine months ended September 30, 2006 from $48.9 million for the same period in the prior year, an increase of $34.1 million, or 69.7%. The increases primarily resulted from credit card fees directly associated with the increase in revenue and additional sales, the addition of new international payment methods, personnel and related expenses to support our global growth initiatives, costs from recent acquisitions, and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, sales and marketing expense was 37.8% and 37.0% in the three months and nine months ended September 30, 2006, compared to 31.4% and 30.7% for the same periods in the prior year. During the first nine months of 2006, we continued to expand our presence in global markets, the consumer electronics market, our strategic marketing services programs, and our oneNetwork affiliate program. We also expanded our relationships with two of our major partners,

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Symantec and Microsoft. We currently believe that sales and marketing expenses will increase in absolute dollars in 2006 compared to 2005, as we continue to grow and expand our reach to clients, as we continue to offer increased levels of strategic marketing services, as we incur costs for acquisitions completed in 2005 and 2006, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

PRODUCT RESEARCH AND DEVELOPMENT.  Our product research and development expense line item includes the costs of personnel and related expenses associated with developing and enhancing our technology platforms and related systems. Product research and development expense increased to $8.3 million and $23.4 million, respectively, for the three and nine months ended September 30, 2006 from $5.2 million and $14.9 million for the same periods in the prior year, an increase of $3.1 million, or 59.0%, and $8.5 million, or 57.2%, respectively. The increases were primarily driven by increases in personnel-related expenses to support our growth initiatives, costs from recent acquisitions, development related to our expanded relationship with Microsoft and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). During the first nine months of 2006, we continued to advance our remote-control technology, as well as the international and e-marketing capabilities. We capitalized approximately $0.0 million and $0.4 million of software development costs related to these efforts in the nine months ended September 30, 2006 and 2005, respectively. We did not capitalize any material costs related to software development during the nine months ended September 30, 2006 and do not expect to capitalize any such costs for the balance of 2006. As a percentage of revenue, product research and development expense was 11.1% and 10.4% in the three and nine months ended September 30, 2006, compared to 9.9% and 9.4% for the same periods in the prior year. We currently believe that product research and development expenses will increase in absolute dollars in 2006 compared to 2005, as a result of (i) continued investments in product development required to remain competitive, (ii) costs from acquisitions completed in 2005 and 2006, and (iii) recording expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

GENERAL AND ADMINISTRATIVE.  Our general and administrative expense line item primarily includes the costs of executive, accounting, and administrative personnel and related expenses, insurance expense, and professional fees for legal, tax and audit services. General and administrative expenses increased to $8.1 million and $24.6 million, respectively, for the three and nine months ended September 30, 2006 from $5.3 million and $16.2 million for the same periods in the prior year, an increase of $2.8 million, or 52.1%, and $8.3 million, or 51.4%, respectively. The increase resulted primarily from the addition of personnel and facilities to support our global expansion, such as our offices in Ireland and Luxembourg, as well as those gained through acquisition of other businesses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, general and administrative expense was 10.7% and 10.9% for the three and nine months ended September 30, 2006, compared to 10.0% and 10.2% for the same periods in the prior year. We currently believe that general and administrative expenses will increase in absolute dollars in 2006 compared to 2005, as we (i) continue to invest in our infrastructure to support our continued organic growth, (ii) incur costs from acquisitions completed in 2005 and 2006 and (iii) record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

AMORTIZATION OF ACQUISITION-RELATED INTANGIBLES.  Our amortization of acquisition-related intangibles line item consists of amortization of intangible assets recorded from 13 of our acquisitions during the past four years. Amortization of acquisition-related intangible assets was $3.3 million and $9.2 million, respectively, for the three and nine months ended September 30, 2006 compared to $2.1 million and $6.6 million for the same periods in the prior year. The increase was due to additional amortizable assets acquired throughout 2005 and the first half of 2006. We have purchased, and expect to continue purchasing, assets or businesses, which may include the purchase of intangible assets.

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OTHER INCOME, NET.  Our other income, net line item is the total of interest income on our cash, cash equivalents and short-term investments, interest expense on our debt and foreign currency transaction gains and losses. Interest income was $6.4 million and $15.6 million, respectively, for the three and nine months ended September 30, 2006 compared to $2.7 million and $6.8 million for the same periods in the prior year. Interest expense was $0.6 million and $1.9 million, respectively, for the three and nine months ended September 30, 2006 compared to $0.6 million and $1.8 million for the same periods in the prior year. Gains from foreign currency remeasurement were $0.0 million and $1.4 million, respectively, for the three and nine months ended September 30, 2006 compared to losses of $0.6 million and $1.4 million for the same periods in the prior year. Gains and losses from the sale of investments were immaterial for the three and nine months ended September 30, 2006 and 2005.

INCOME TAXES.  For the three months ended September 30, 2006 and 2005, our tax expense was $5.6 million and $4.7 million, respectively. For the three months ended September 30, 2006, our tax expense consisted of approximately $5.1 million of U.S. tax expense and $0.5 million of foreign tax expense. For the nine months ended September 30, 2006 and 2005, our tax expense was $20.3 million and $12.8 million, respectively. For the nine months ended September 30, 2006, our tax expense consisted of approximately $18.5 million of U.S. tax expense and $1.8 million of foreign tax expense.

During the three months ended September 30, 2006, we recorded tax expense at a rate that reflected the estimated impact of current year changes in foreign operations. We established new locations in Shannon, Ireland and Luxembourg. We transferred existing non-U.S. operations to these locations and expanded these operations in order to more effectively manage current international activity and facilitate further international growth. We commenced business operations in these locations on April 1, 2006. These operating changes generally reduce our effective tax rate compared to prior years.

During the quarter, we recorded, as a discrete item, the tax benefit of research and development tax credits as a result of a study completed during the quarter. The net effect of this benefit reduced our tax expense in the third quarter by approximately $1.2 million. The research and development credit related to federal and state tax credits generated prior to 2006. Current year federal tax credits are dependent upon federal legislation to extend this benefit.

As of September 30, 2006, we had net U.S. tax loss carryforwards of approximately $66 million and foreign tax loss carryforwards of $3 million. The U.S. amount consisted of approximately $24 million of deductions resulting from exercise of stock options and $42 million of acquired net operating losses. The tax loss carryforwards from exercise of stock options expire in the years 2020 through 2024. The acquired net operating losses expire in the years 2020 through 2025 and are subject to other deductibility restrictions discussed below.

In prior years, there was uncertainty of future realization of the deferred tax assets resulting from temporary differences and from tax loss carryforwards from operations and stock option deductions, therefore a valuation allowance equal to the deferred tax assets was recorded. At December 31, 2005, we evaluated our deferred tax assets related to tax loss carryforwards from stock option deductions and other items and concluded that it was more likely than not that the deferred tax assets would be realized, and accordingly the valuation allowance was reversed.

We also have evaluated our deferred tax assets related to acquired operating losses and we believe a full valuation allowance for these assets is required under GAAP. This valuation allowance is due to anticipated limitations, including limitations under Section 382 of the Internal Revenue Code, on acquired losses. Any future release of this valuation allowance will reduce goodwill.

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Quarterly Period Ended June 30, 2006

The following table sets forth certain items from our condensed consolidated statements of operations as a percentage of total revenue for the periods indicated.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
				As Restated(1)						As Restated(1)
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of Revenue (exclusive of depreciation and amortization expense shown separately below):
Direct cost of services		2.7			2.4			2.5			2.4
Network and infrastructure		8.8			9.3			9.2			8.7
Sales and marketing		38.7			30.8			36.5			30.5
Product research and development		10.5			10.1			10.1			9.1
General and administrative		11.6			10.4			11.1			10.3
Depreciation and amortization		3.5			4.6			3.2			4.3
Amortization of acquisition-related costs		4.3			4.1			3.9			4.3
Total costs and expenses		80.1			71.7			76.5			69.6
Income from operations		19.9			28.3			23.5			30.4
Other income/(expense), net		8.9			1.8			6.2			2.0
Income before income tax expense		28.8			30.1			29.7			32.4
Income tax expense		10.2			10.2			9.8			7.7
Net income		18.6	%		19.9	%		19.9	%		24.7	%

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

REVENUE.  Our revenue increased to $71.3 million for the three months ended June 30, 2006 from $51.1 million for the same period in the prior year, an increase of $20.1 million, or 39.4%. For the six months ended June 30, 2006, revenue totaled $149.3 million, an increase of $43.6 million, or 41.3%, from revenue of $105.7 million in the same period of the prior year. The increase was primarily attributable to higher online sales activity across our client base, increased sales from international sites, expanded strategic marketing activities with a larger number of clients, and acquisitions made during 2005 and 2006.

International sales were approximately 42% and 39% of total sales in the three month period ended June 30, 2006 and 2005, respectively, and approximately 41% and 38% of total sales for the six month period ended June 30, 2006 and 2005, respectively. That growth is attributable to a larger number of international stores being operated for our clients as well as the European outsourced e-commerce providers we acquired in 2004 and 2005.

DIRECT COST OF SERVICES.  Our direct cost of services line item primarily includes the personnel costs and costs related to product fulfillment, physical on demand, our proprietary back-up CD production and client-specific dedicated costs. Direct cost of service expense was $1.9 million for the three months ended June 30, 2006, up from $1.2 million for the same period in the prior year. For the six months ended June 30, 2006, direct cost of service expense was $3.8 million, up from $2.5 million for the same period of the prior year. The increase resulted primarily from (i) personnel added to serve new clients, and to handle increased transaction volumes, (ii) recent acquisitions and (iii) stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that direct cost of services will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide fulfillment capacity in order to meet anticipated shipment volumes from sales, and expense related

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to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

NETWORK AND INFRASTRUCTURE.  Our network and infrastructure expense line item primarily includes the personnel costs and related expenses to operate and maintain our technology platforms, customer service, data communication and data center operations. Network and infrastructure expense was $6.3 million for the three months ended June 30, 2006, up from $4.7 million for the same period in the prior year. For the six months ended June 30, 2006, network and infrastructure expense was $13.7 million, up from $9.2 million for the same period in the prior year. The increase resulted primarily from personnel added to support our revenue growth as well as those gained through acquisition of other businesses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that network and infrastructure expenses will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide customer service capacity, as we expand the number of operating global data centers, expected increased network usage, which will drive higher Internet connection charges, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of the adoption of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

SALES AND MARKETING.  Our sales and marketing expense line item primarily includes personnel costs and related expenses, advertising, promotional and product marketing expenses, credit card transaction and other payment processing fees, credit card chargebacks and bad debt expense. Sales and marketing expense increased to $27.6 million for the three months ended June 30, 2006 from $15.8 million for the same period in the prior year, an increase of $11.9 million, or 75.3%. Sales and marketing expense increased to $54.6 million for the six months ended June 30, 2006 from $32.2 million for the same period in the prior year, an increase of $22.4 million, or 69.5%. The increase primarily resulted from credit card fees directly associated with the increase in revenue and additional sales, the addition of new, international payment methods, personnel and related expenses to support our growth initiatives, costs from recent acquisitions, and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, sales and marketing expense was 38.7% and 36.5% in the three months and six months ended June 30, 2006, compared to 30.8% and 30.5% for the same periods in the prior year. During the first half of 2006, we continued to expand our presence in global markets, our strategic marketing services programs, and our oneNetwork affiliate program. We currently believe that sales and marketing expenses will increase in absolute dollars in 2006 compared to 2005, as we continue to grow and expand our reach to clients, as we continue to offer increased levels of strategic marketing services, as we incur costs for acquisitions completed in 2005 and 2006, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

PRODUCT RESEARCH AND DEVELOPMENT.  Our product research and development expense line item includes the costs of personnel and related expenses associated with developing and enhancing our technology platforms and related systems. Product research and development expense increased to $7.5 million and $15.1 million, respectively, for the three and six months ended June 30, 2006 from $5.2 million and $9.7 million for the same periods in the prior year, an increase of $2.3 million, or 45.1%, and $5.4 million, or 56.2%, respectively. The increase was primarily driven by increases in personnel-related expenses to support our growth initiatives, costs from recent acquisitions and stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). During the first half of 2006, we continued to advance our remote-control technology, as well as the international and e-marketing capabilities. We capitalized approximately $0.0 million and $0.4 million of software development costs related to these efforts in the six months ended June 30, 2006 and 2005, respectively. We did not capitalize any material costs related to software development during the six months ended June 30, 2006 and do not expect to capitalize any such costs for the balance of 2006. As a percentage of revenue, product research and development expense was 10.5% and 10.1% in the three and six months ended June 30, 2006, compared to 10.1% and 9.1% for the same periods in the prior year. We currently believe that product research and

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development expenses will increase in absolute dollars in 2006 compared to 2005, as a result of (i) continued investments in product development required to remain competitive, (ii) costs from acquisitions completed in 2005 and 2006, and (iii) recording expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

GENERAL AND ADMINISTRATIVE.  Our general and administrative expense line item primarily includes the costs of executive, accounting, and administrative personnel and related expenses, insurance expense, and professional fees for legal, tax and audit services. General and administrative expenses increased to $8.2 million and $16.5 million, respectively, for the three and six months ended June 30, 2006 from $5.3 million and $10.9 million for the same periods in the prior year, an increase of $2.9 million, or 55.5%, and $5.6 million, or 51.1%, respectively. The increase resulted primarily from the addition of personnel and facilities to support our global expansion, such as our offices in Ireland and Luxembourg, as well as those gained through acquisition of other businesses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, general and administrative expense was 11.6% and 11.1% for the three and six months ended June 30, 2006, compared to 10.4% and 10.3% for the same periods in the prior year. We currently believe that general and administrative expenses will increase in absolute dollars in 2006 compared to 2005, as we (i) continue to invest in our infrastructure to support our continued organic growth, (ii) incur costs from acquisitions completed in 2005 and 2006 and (iii) record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

AMORTIZATION OF ACQUISITION-RELATED INTANGIBLES.  Our amortization of acquisition-related intangibles line item consists of amortization of intangible assets recorded from 13 of our acquisitions during the past four years. Amortization of acquisition-related intangible assets was $3.0 million and $5.9 million, respectively, for the three and six months ended June 30, 2006 compared to $2.1 million and $4.5 million for the same periods in the prior year. The increase was due to additional amortizable assets acquired throughout 2005 and the first half of 2006. We have purchased, and expect to continue purchasing, assets or businesses, which may include the purchase of intangible assets.

OTHER INCOME, NET.  Our other income, net line item is the total of interest income on our cash, cash equivalents and short-term investments, interest expense on our debt and foreign currency transaction gains and losses. Interest income was $5.8 million and $9.2 million, respectively, for the three and six months ended June 30, 2006 compared to $2.3 million and $4.1 million for the same periods in the prior year. Interest expense was $0.6 million and $1.2 million, respectively, for the three and six months ended June 30, 2006 compared to $0.6 million and $1.2 million for the same periods in the prior year. Gains from foreign currency remeasurement were $1.2 million and $1.3 million, respectively, for the three and six months ended June 30, 2006 compared to losses of $0.7 million and $0.8 million for the same periods in the prior year. Gains and losses from the sale of investments were immaterial for the three and six months ended June 30, 2006 and 2005.

INCOME TAXES.  For the three months ended June 30, 2006, our tax expense was $7.3 million, made up of approximately $9.6 million of current tax expense and $2.3 million of deferred tax benefit. For the three months ended June 30, 2005, our tax expense was $5.2 million, made up of $4.3 million related to domestic and $0.9 million to foreign operations.

During the three month period ended June 30, 2006, we recorded tax expense at a rate that reflects the estimated impact of recent changes in foreign operations. We established new locations in Shannon, Ireland and Luxembourg. We transferred existing non-U.S. operations to these locations and expanded these operations in order to more effectively manage current international activity and facilitate further international growth. We commenced business operations in these locations on April 1, 2006. We have also established in the past 18 months, or are in the process of establishing, operations in Taipei, Taiwan, Tokyo, Japan, Seoul, Korea and Rio de Janeiro, Brazil. These operating changes may reduce our effective tax rate from prior quarters.

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As of June 30, 2006, we had net U.S. tax loss carryforwards of approximately $82.4 million, and foreign tax loss carryforwards of $4.8 million. The U.S. amount consists of $40.4 million of deductions resulting from exercise of stock options and $42.0 million of acquired net operating losses. The tax loss carryforwards from exercise of stock options expire in the years 2020 through 2024. The acquired net operating losses expire in the years 2020 through 2025 and are subject to other deductibility restrictions discussed below.

In prior years, there was uncertainty of future realization of the deferred tax assets resulting from temporary differences and from tax loss carryforwards from operations and stock option deductions, therefore a valuation allowance equal to the deferred tax assets was recorded. At December 31, 2005, we evaluated our deferred tax assets related to tax loss carryforwards from stock option deductions and other items and concluded that the valuation allowance should be reversed. We met the requirements under GAAP as we believe it is more likely than not that we will realize the benefit of these deferred tax assets. This conclusion was based primarily on our earnings history over the last three years as well as our expected future taxable income. The impact on U.S. taxable income of future stock option deductions should not reduce taxable income to a level that would jeopardize this conclusion or unreasonably extend the period in which we may recognize the tax benefit associated with these deferred tax assets.

We also have evaluated our deferred tax assets related to acquired operating losses and we believe a full valuation allowance for these assets is required under GAAP. This valuation allowance is due to anticipated limitations, including limitations under Section 382 of the Internal Revenue Code, on acquired losses. Any future release of this valuation allowance will reduce goodwill.

Quarterly Period Ended March 31, 2006

The following table sets forth certain items from our condensed consolidated statements of operations as a percentage of total revenue for the periods indicated.

	Three Months Ended
	March 31,
	2006			2005
				As Restated(1)
Revenue		100.0	%		100.0	%
Cost of Revenue (exclusive of depreciation and amortization expense shown separately below):
Direct cost of services		2.4			2.4
Network and infrastructure		9.6			8.2
Sales and marketing		34.5			30.2
Product research and development		9.7			8.2
General and administrative		10.6			10.3
Depreciation and amortization		2.9			3.9
Amortization of acquisition related costs		3.6			4.4
Total costs and expenses		73.3			67.6
Income from operations		26.7			32.4
Other income/(expense), net		3.8			2.1
Income before income tax expense		30.5			34.5
Income tax expense		9.5			5.3
Net income		21.0	%		29.2	%

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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REVENUE.  Our revenue increased to $78.0 million for the three months ended March 31, 2006 from $54.5 million for the same period in the prior year, an increase of $23.5 million, or 43.1%. The increase was primarily attributable to higher online sales activity across our client base, increased sales from international sites, expanded strategic marketing activities with a larger number of clients, and acquisitions made during 2005. Sales of security software products for PCs represent the largest contributor to our revenues.

International sales represented approximately 40% and 36% of total revenue in the three month period ended March 31, 2006 and 2005, respectively. That growth is attributable to a larger number of international stores being operated for our clients as well as the European outsourced e-commerce providers we acquired in 2004 and 2005.

DIRECT COST OF SERVICES.  Our direct cost of services line item primarily includes the personnel costs and costs related to product fulfillment, physical on demand and our proprietary back-up CD production. Direct cost of service expense was $1.9 million for the three months ended March 31, 2006, up from $1.3 million for the same period in the prior year. The increase resulted primarily from (i) personnel added to serve new clients, and to handle increased transaction volumes, and (ii) stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that direct cost of services will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide fulfillment capacity in order to meet anticipated shipment volumes from sales, and expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

NETWORK AND INFRASTRUCTURE.  Our network and infrastructure expense line item primarily includes the personnel costs and related expenses to operate and maintain our technology platforms, customer service, data communication and data center operations. Network and infrastructure expense was $7.4 million for the three months ended March 31, 2006, up from $4.5 million for the same period in the prior year. The increase resulted primarily from personnel added to support our revenue growth as well as those gained through acquisition of other businesses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). We currently believe that network and infrastructure expenses will increase in absolute dollars in 2006 compared to 2005 as we continue to expand our worldwide customer service capacity, as we expand the number of operating global data centers, expected increased network usage, which will drive higher Internet connection charges, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of the adoption of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

SALES AND MARKETING.  Our sales and marketing expense line item primarily includes personnel costs and related expenses, advertising and promotional expenses, credit card transaction and other payment processing fees, credit card chargebacks and bad debt expense. Sales and marketing expense increased to $26.9 million for the three months ended March 31, 2006 from $16.4 million for the same period in the prior year, an increase of $10.5 million, or 63.9%. The increase primarily resulted from credit card fees directly associated with the increase in revenue and additional sales, marketing personnel and related expenses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, sales and marketing expense was 34.5% in the three months ended March 31, 2006, compared to 30.2% for the same period in the prior year. During the first quarter of 2006, we expanded the depth and breadth of our strategic marketing programs that we manage on behalf of our clients. These core programs include search engine optimization, affiliate and email marketing and site optimization. We also increased our marketing efforts to expand our oneNetwork affiliate program. We currently believe that sales and marketing expenses will increase in absolute dollars in 2006 compared to 2005, as we continue to grow and expand our reach to clients, as we continue to offer increased levels of strategic marketing services, as we incur a full year of costs in 2006 related to acquisitions completed in 2005, and as we record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

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PRODUCT RESEARCH AND DEVELOPMENT.  Our product research and development expense line item includes the costs of personnel and related expenses associated with developing and enhancing our technology platforms and related systems. Product research and development expense increased to $7.6 million for the three months ended March 31, 2006 from $4.5 million for the same period in the prior year, an increase of $3.1 million, or 69.0%. The increase was primarily driven by increases in personnel-related expenses, outside consulting fees and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). During the first quarter of 2006, we continued to advance our remote-control technology, as well as the international and e-marketing capabilities. We capitalized approximately $0.4 million of software development costs related to these efforts in the three months ended March 31, 2005. We did not capitalize any costs related to software development during the three months ended March 31, 2006 and do not expect to capitalize any such costs for the balance of 2006. As a percentage of revenue, product research and development expense was 9.7% in the three months ended March 31, 2006, compared to 8.2% for the same period in the prior year. We currently believe that product research and development expenses will increase in absolute dollars in 2006 compared to 2005, as a result of (i) continued investments in product development required to remain competitive, (ii) incurring a full year of costs in 2006 related to acquisitions completed in 2005, and (iii) recording expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

GENERAL AND ADMINISTRATIVE.  Our general and administrative expense line item primarily includes the costs of executive, accounting, and administrative personnel and related expenses, insurance expense, professional fees, including legal and accounting, and shareholder and compliance expenses. General and administrative expenses increased to $8.3 million for the three months ended March 31, 2006 from $5.6 million for the same period in the prior year, an increase of $2.6 million, or 46.8%. The increase resulted primarily from the addition of personnel and facilities to support our growth as well as those gained through acquisition of other businesses, and from stock-based compensation expense related to employee stock options and employee stock purchases recognized under SFAS 123(R). As a percentage of revenue, general and administrative expense was 10.6% for the three months ended March 31, 2006, compared to 10.3% for the same period in the prior year. We currently believe that general and administrative expenses will increase in absolute dollars in 2006 compared to 2005, as we (i) continue to invest in our infrastructure to support our continued organic growth, (ii) incur a full year of costs in 2006 related to acquisitions completed in 2005 and (iii) record expense related to stock-based compensation. See Note 6 — “Stock-Based Compensation,” in the consolidated financial statements for a discussion of the impact of SFAS 123(R), “Share Based Payment,” which we adopted on January 1, 2006.

AMORTIZATION OF ACQUISITION-RELATED INTANGIBLES.  Our amortization of acquisition-related intangibles line item consists of amortization of intangible assets recorded from our 15 acquisitions in the last four years. Amortization of acquisition-related intangibles assets was $2.8 million for the three months ended March 31, 2006 compared to $2.4 million for the same period in the prior year. The increase was due to additional amortizable assets acquired throughout 2005 and the first quarter of 2006. We have purchased, and expect to continue purchasing, assets or businesses, which may include the purchase of intangible assets.

OTHER INCOME, NET.  Our other income, net line item is the total of interest income on our cash, cash equivalents and short-term investments, interest expense on our debt and foreign currency transaction gains and losses. Interest income was $3.4 million and $1.8 million for the three months ended March 31, 2006 and 2005, respectively. Interest expense was $0.6 million and $0.6 million for the three months ended March 31, 2006 and 2005, respectively. Gains and losses from foreign currency remeasurement were $0.1 million for the three months ended March 31, 2006 and immaterial for the same period in the prior year. Gains and losses from the sale of investments were immaterial for the three months ended March 31, 2006 and 2005.

INCOME TAXES.  For the three months ended March 31, 2006, our tax expense was $7.4 million, made up of approximately $8.9 million of current tax expense and $1.5 million of deferred tax benefit. For the three months ended March 31, 2005, our tax expense was $2.9 million, made up of $1.7 million related to domestic and $1.2 million to foreign operations.

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During the three month period ending March 31, 2006, we recorded tax expense at a rate that reflected the estimated impact of recent changes in foreign operations. These operating changes generally reduce our effective tax rate compared to prior quarters. However, the estimated tax rate in the first quarter of 2005 reflected the favorable impact of utilizing U.S. tax loss carryforwards arising from operations including a $2.0 million tax benefit related to stock-based compensation expense (see “Explanatory Note” immediately preceding Part I Item 1 and in Note 2, “Restatement of Consolidated Financial Statements” in Notes to Consolidated Financial Statements of this Form 10-K). The utilization of these U.S. tax loss carryforwards had a favorable impact on our tax rate due to the fact that we released the valuation allowance associated with these tax loss carryforwards at the time of utilization.

As of March 31, 2006, we had net U.S. tax loss carryforwards of approximately $97.0 million, and foreign tax loss carryforwards of $6.0 million. The U.S. amount consists of $55.0 million of deductions resulting from exercise of stock options and $42.0 million of acquired net operating losses. These tax loss carryforwards expire in the years 2020 through 2024. The acquired net operating losses expire in the years 2020 through 2025 and are subject to other deductibility restrictions discussed below.

In prior years, there was uncertainty of future realization of the deferred tax assets resulting from temporary differences and from tax loss carryforwards from operations and stock option deductions, therefore a valuation allowance equal to the deferred tax assets was recorded. At December 31, 2005, we have evaluated our deferred tax assets related to tax loss carryforwards from stock option deductions and other items and concluded that the valuation allowance should be reversed. We met the requirements under GAAP as we believe it is more likely than not that we will realize the benefit of these deferred tax assets. This conclusion was based primarily on our earnings history over the last three years as well as our expected future taxable income. The impact on U.S. taxable income of future stock option deductions should not reduce taxable income to a level that would jeopardize this conclusion or unreasonably extend the period in which we may recognize the tax benefit associated with these deferred tax assets. We also have evaluated our deferred tax assets related to acquired operating losses and we believe a full valuation allowance for these assets is required under GAAP. This valuation allowance is due to anticipated limitations, including limitations under Section 382 of the Internal Revenue Code, on acquired losses. Any future release of this valuation allowance will reduce goodwill.

Liquidity and Capital Resources

As of December 31, 2006, we had $390.2 million of cash and cash equivalents, $235.7 million of short-term investments, and working capital of $497.9 million. The major components of our working capital are cash and cash equivalents, short-term investments and short-term receivables net of client and merchant payables. Our primary source of internal liquidity is our operating activities. Net cash provided by operating activities in 2006, 2005 and 2004 was $117.5 million, $119.8 million and $85.1 million, respectively. Net cash provided by operating activities in 2006 and 2005 was primarily the result of net income adjusted for non-cash expenses, and increases in accrued liabilities, accounts payable and income tax payable partially offset by an increase in accounts receivable. Net cash provided by operating activities in 2004 was primarily the result of net income adjusted for non-cash expenses, and increases in accrued liabilities and accounts payable partially offset by an increase in accounts receivable. Due to our adoption of SFAS 123(R), as of January 1, 2006, the impact of the excess tax benefits of stock-based compensation, defined as the benefits of a tax deduction for share-based payment expenses that exceeds the recognized compensation expenses, is now reported under financing activities with a corresponding deduction from operating activities in our Consolidated Statements of Cash Flows.

Net cash used in investing activities was $68.0 million in 2006 and was the result of net purchases of investments of $14.3 million, cash paid for acquisitions, net of cash received, of $37.8 million, and purchases of capital equipment of $15.9 million. Net cash used in investing activities was $125.4 million in 2005 and was the result of net purchases of investments of $62.9 million, cash paid for acquisitions, net of cash received, of $54.2 million, and purchases of capital equipment of $8.3 million. Net cash used in investing activities in 2004 was $241.4 million and was the result of net purchases of investments of $105.6 million

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cash paid for acquisitions, net of cash received, of $126.5 million and purchases of capital equipment of $6.6 million and capitalized internal-use software of $2.7 million.

In January 2006, we acquired Direct Response Technologies, Inc. (now DR Marketing Solutions, Inc.) for approximately $15.0 million in cash, and in June 2006, we acquired MindVision for approximately $21.2 million in cash payments to stockholders plus the assumption of certain liabilities. In December 2005, we acquired all of the capital stock of Commerce5, Inc., an outsourced e-commerce provider to high-tech and consumer electronics manufacturers for $45.1 million in cash. In March 2005, we acquired SWReg, an operating business of Atlantic Coast plc, a private limited UK company, for $8.8 million in cash. In November 2004, we acquired all of the outstanding stock of BlueHornet Networks, Inc. Under the terms of the agreement we issued 160,185 shares of common stock to BlueHornet shareholders and assumed debt obligations of BlueHornet totaling approximately $0.7 million. In June 2004, we acquired substantially all of the assets and assumed certain liabilities of Fireclick, Inc. Under the terms of the agreement, we paid $7.5 million in cash. In April 2004, we acquired element 5 AG (now Digital River GmbH), a privately held company based in Germany. Under the terms of the acquisition, we paid $120 million in cash to acquire all of the outstanding shares of capital stock of element 5.

Net cash provided by financing activities in 2006, 2005 and 2004 was $204.6 million, $12.3 million and $209.0 million, respectively. Our external financing has been provided primarily by the sale of our stock and convertible notes in private and public offerings, and, to a lesser extent, by sales to employees under our employee stock purchase plan and by exercise of stock options. In March 2006, we sold 4.0 million shares of our common stock. The offering provided net proceeds of $172.8 million, and was made pursuant to a shelf registration statement previously filed with the Securities and Exchange Commission. During 2006, proceeds from the exercise of stock options provided cash of $21.1 million, and proceeds of $9.0 million were provided by the excess tax benefit from stock-based compensation. During 2005, proceeds from the exercise of stock options provided cash of $23.2 million, and we repurchased $13.1 million of common stock, which reduced our net cash provided by financing activities. In June 2004, we sold and issued $175 million in aggregate principal amount of 1.25% convertible senior notes due January 1, 2024, in a private, unregistered offering. The notes were subsequently registered for resale. The notes were sold at 100% of their principal amount. The initial purchasers exercised in full their option to purchase up to an additional $20 million in aggregate principal amount of the notes, closing on July 6, 2004. Cash provided from the issuance of convertible senior notes in 2004 totaled $188.4 million, net of financing expense. Proceeds from the exercise of stock options provided cash of $19.7 million in 2004.

Liquidity and Capital Resource Requirements

We believe that existing sources of liquidity and the results of our operations will provide adequate cash to fund our ongoing operations for the foreseeable future, although we may seek to raise additional capital during that period. In January 2005, we filed a registration statement to increase our available shelf registration amount from approximately $55 million to approximately $255 million. In addition, we filed an acquisition shelf for up to approximately 1.5 million shares. In February 2006, we filed a shelf registration that would allow us to sell an undetermined amount of equity or debt securities in accordance with the recently approved rules applying to “well known seasoned issuers.” These filings were made to provide future flexibility for acquisition and financing purposes. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. There can be no assurances that financing will be available in amounts or on terms acceptable to us, if at all.

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Contractual Obligations

At December 31, 2006, our principal commitments consisted of interest and principal on our convertible senior notes and long-term obligations outstanding under operating leases. Although we have no material commitments for capital expenditures, we anticipate continued capital expenditures consistent with our anticipated growth in operations, infrastructure and personnel. We expect that our operating expenses will continue to grow as our overall business grows and that they will be a material use of our cash resources.

	Payment Due by Period
	Total Amount								2011 and
Contractual Obligations	Committed		2007		2008		2009-2010		Thereafter
	(In thousands)
Operating Lease Obligations	$	14,770	$	3,964	$	2,893	$	2,245	$	5,668
Convertible Senior Notes	$	237,657	$	2,438	$	2,438	$	4,875	$	227,906
Total	$	252,427	$	6,402	$	5,331	$	7,120	$	233,574

With respect to our convertible senior notes, we are required to pay interest on the notes on January 1 and July 1 of each year. The notes bear interest at a rate of 1.25% and, if specified conditions are met, are convertible into our common stock at a conversion price of $44.063 per share. The notes may be surrendered for conversion under certain circumstances, including the satisfaction of a market price condition, such that the price of our common stock reaches a specified threshold; the satisfaction of a trading price condition, such that the trading price of the notes falls below a specified level; the redemption of the notes by us; the occurrence of specified corporate transactions, as defined in the related indenture; and the occurrence of a fundamental change, as defined in the related indenture. The initial conversion price is equivalent to a conversion rate of approximately 22.6948 shares per $1,000 of principal amount of the notes. We will adjust the conversion price if certain events occur, as specified in the related indenture, such as the issuance of our common stock as a dividend or distribution or the occurrence of a stock subdivision or combination. If a fundamental change, such as a change in our control, as defined in the related indenture, occurs on or before January 1, 2009, we also may be required to purchase the notes for cash and pay an additional make-whole premium payable in our common stock, or in the same form of consideration into which all, or substantially, all of the shares of our common stock have been converted or exchanged in connection with the fundamental change, upon the repurchase or conversion of the notes in connection with the fundamental change. Holders of the notes have the right to require us to repurchase their notes prior to maturity on January 1, 2009, 2014 and 2019. We have the right to redeem the notes, under certain circumstances, on or after July 1, 2007, and prior to January 1, 2009, and we may redeem the notes at any time on or after January 1, 2009.

2007 Outlook

We believe the outlook for our business remains positive for 2007. Total online sales continue to increase globally and buyers appear increasingly comfortable shopping and purchasing online. In our core market, trends continue to favor the transition from packaged, physical delivery of software products to electronic download. In addition, our strategic marketing programs have been well received by our clients to date and we believe we can expand adoption of these services by additional clients as well as add new services. We anticipate making additional investments to support existing client growth, new client additions, development of other complementary vertical markets, international expansion and improvements in our technology platform.

New Accounting Standards

In September 2006, the FASB issued statement No. 157, “Fair Value Measurements”, (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, with earlier application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will be recorded to the opening balance of retained earnings in the year of adoption. The Company has not yet determined the impact of this Statement on its financial condition and results of operations.

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In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 108 (SAB 108). To reduce diversity in practice among registrants, SAB 108 expresses SEC staff views regarding the process by which misstatements in financial statements are evaluated for purposes of determining whether financial statement restatement is necessary. The accounting requirements of SAB 108 were effective for us on January 1, 2006, and did not have a material impact on our consolidated financial position, results of operations or cash flows.

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48), which clarifies the accounting and disclosure for uncertainty in tax positions. FIN 48 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. We will adopt FIN 48 as of January 1, 2007, as required. The cumulative effect of adopting FIN 48 will be recorded in retained earnings and other accounts as applicable. We do not believe that FIN 48 will have a material impact on our consolidated financial statements.

In November 2005, the FASB issued Staff Position No. FAS 115-1, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments” (“FSP 115-1”). FSP 115-1 provides accounting guidance for determining and measuring other-than-temporary impairments of debt and equity securities, and confirms the disclosure requirements for investments in unrealized loss positions as outlined in EITF issue 03-01, “The Meaning of Other-Than-Temporary Impairments and its Application to Certain Investments.” The accounting requirements of FSP 115-1 were effective for us on January 1, 2006, and did not have a material impact on our consolidated financial position, results of operations or cash flows.

Off Balance Sheet Arrangements

None

ITEM 7A.   QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk

Our portfolio of cash equivalents and short-term investments is maintained in a variety of securities, including government obligations and money market funds. Investments are classified as available-for-sale securities and carried at their market value with cumulative unrealized gains or losses recorded as a component of “accumulated other comprehensive income/(loss)” within stockholders’ equity. At December 31, 2006 and 2005, all securities held had maturities or reset dates of less than three years. A sharp rise in interest rates could have an adverse impact on the market value of certain securities in our portfolio. We do not currently hedge our interest rate exposure and do not enter into financial instruments for trading or speculative purposes or utilize derivative financial instruments. A hypothetical and immediate one percent (1%) increase in interest rates would decrease the fair value in our investment portfolio held at December 31, 2006 and 2005, by $1.38 million and by $1.77 million, respectively. A hypothetical and immediate one percent (1%) decrease in interest rates would increase the fair value in our investment portfolio held at December 31, 2006 and 2005, by $1.38 million and by $1.77 million, respectively. The approximate gains or losses in earnings are estimates, and actual results could vary due to the assumptions used. At December 31, 2006 and 2005, we had $195.0 million of 1.25% fixed rate contingent convertible debt outstanding. We presently believe there is minimal risk that market interest rates will drop significantly below 1.25%.

Foreign Currency Risk

Our business has historically been transacted primarily in the U.S. dollar and, as such, has not been subject to material foreign currency exchange rate risk. However, the growth in our international operations has increased our exposure to foreign currency fluctuations as well as other risks typical of international operations, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures and other regulations and restrictions. Accordingly, our future results could be materially adversely impacted by changes in these or other factors.

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Foreign exchange rate fluctuations may adversely impact our consolidated results of operations as exchange rate fluctuations on transactions denominated in currencies other than our functional currencies result in gains and losses that are reflected in our consolidated statement of income. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency-denominated transactions will result in increased net revenues and operating expenses. Conversely, our net revenues and operating expenses will decrease when the U.S. dollar strengthens against foreign currencies. The following schedule summarizes revenue, costs and expenses and income from operations that would have resulted had exchange rates in the current period been the same as those in effect in the comparable prior-year period for operating results.

The effect on our consolidated statements of operations from changes in exchange rates versus the U.S. Dollar is as follows (in thousands):

	Year Ended						Year Ended							Year Ended
	December 31,						December 31,							December 31,
	2006						2005							2004
	At Prior		Exchange				At Prior		Exchange					At Prior		Exchange
	Year		Rate		As		Year		Rate			As		Year		Rate		As
	Rates(1)		Effect(2)		Reported		Rates(1)		Effect(2)			Restated(3)		Rates(1)		Effect(2)		Restated(3)
Revenue	$	307,071	$	561	$	307,632	$	220,625	$	(217	)	$	220,408	$	150,182	$	3,948	$	154,130
Costs and expenses		239,621		416		240,037		153,981		7			153,988		118,553		1,632		120,185
Income from operations		67,450		145		67,595		66,644		(224	)		66,420		31,629		2,316		33,945
Other income, net		20,351		1,536		21,887		7,210		(2,243	)		4,967		1,611		30		1,641
Income before income tax expense	$	87,801	$	1,681	$	89,482	$	73,854	$	(2,467	)	$	71,387	$	33,240	$	2,346	$	35,586

(1)	Represents the outcome that would have resulted had exchange rates in the current period been the same as those in effect in the comparable prior-year period for operating results.
(2)	Represents the increase (decrease) in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior-year period for operating results.
(3)	See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

Transaction Exposure

The Company enters into short term foreign currency forward contracts to offset the foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives are recognized in current earnings in other income and expense.

Translation Exposure

Foreign exchange rate fluctuations may adversely impact our consolidated financial position as well as our consolidated results of operations. Foreign exchange rate fluctuations may adversely impact our financial position as the assets and liabilities of our foreign operations are translated into U.S. dollars in preparing our consolidated balance sheet. These gains or losses are recognized as an adjustment to stockholders’ equity through accumulated other comprehensive income/(loss) net of tax benefit or expense. The potential loss in fair value resulting from a hypothetical 10% adverse currency movement is $16.0 million and $11.6 million for 2006 and 2005, respectively.

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following information has been adjusted to reflect the restatement of our financial results, which is more fully described in the “Explanatory Note” immediately preceding Part I Item 1 and in Note 2, “Restatement of Consolidated Financial Statements” in Notes to Consolidated Financial Statements of this Form 10-K.

Our Financial Statements and Notes thereto appear beginning at page 68 of this report.

QUARTERLY FINANCIAL DATA (UNAUDITED)

	Quarter Ended
	March 31		June 30		September 30		December 31
	(In thousands, except per share data)
2006
Revenue	$	78,014	$	71,277	$	75,337	$	83,004
Income from operations		20,824		14,189		14,565		18,017
Net income		16,377		13,289		14,788		16,355
Net income per share — basic	$	0.46	$	0.34	$	0.37	$	0.41
Net income per share — diluted	$	0.41	$	0.30	$	0.33	$	0.36

	Quarter Ended
	March 31		June 30		September 30		December 31
	As Restated(1)		As Restated(1)		As Restated(1)		As Restated(1)
	(In thousands, except per share data)
2005
Revenue	$	54,529	$	51,143	$	53,179	$	61,557
Income from operations		17,661		14,489		15,460		18,810
Net income		15,905		10,178		12,313		18,116
Net income per share — basic	$	0.47	$	0.30	$	0.35	$	0.52
Net income per share — diluted	$	0.39	$	0.26	$	0.31	$	0.45

(1) See Note 2, “Restatement of Consolidated Financial Statements,” and Note 13, “Selected Quarterly Financial Information (Unaudited)” in Notes to Consolidated Financial Statements.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

Special Committee Review into Stock Option Grant Practices and Restatement.

As discussed in the Explanatory Note preceding Part I and in Note 2 in Notes to Consolidated Financial Statements of this Form 10-K, we recently completed a voluntary internal investigation of our stock option grant practices. The investigation covered all grants of options made since our initial public offering in August 1998 through December 2006. During the course of the internal investigation, we determined that eighteen grant dates, representing three million shares, had improper measurement dates for the related options. In particular, we identified certain instances in which (i) grants to non-officer employees were backdated in order to obtain favorable exercise prices; (ii) grants to Section 16 officers were awarded without proper authority; (iii) grants to newly hired employees were awarded upon the offer of employment rather than as of or after the actual commencement of employment; and (iv) grants to consultants were not properly expensed. In each instance, the grants were subsequently ratified by the Board of Directors at a subsequent meeting. As a result,

58

we have recorded additional non-cash stock-based compensation expense and related tax effects with regard to past stock option grants, and we are restating previously filed financial statements in this Form 10-K.

The internal investigation identified a number of deficiencies in our internal controls that existed primarily from 1998 through 2002. In particular, the internal investigation found that from 1998 through 2002:

•  We lacked appropriate systems to ensure adequate communication among our departments, particularly accounting and human resources, pertaining to the option grant process;

•  We failed on some occasions to prepare adequate minutes of meetings of the Compensation Committee and the Stock Option Committee; and

•  There were inadequate control mechanisms in the accounting department to ensure that information about stock option grant dates and exercise prices accurately reflected the true measurement dates for accounting purposes.

Beginning in January 2003, we implemented improvements to procedures, processes, and systems to provide additional safeguards and greater internal control over the stock option granting and administration function. Management believes these improved controls have reduced to remote the likelihood that a material error in accounting arising from the use of an incorrect stock option grant measurement date could occur and not be detected. These improved controls, which were implemented at various times from 2003 to 2006, include:

•  The General Counsel and CFO, both experienced with public companies and stock option granting procedures, attend all Board and Committee meetings;

•  We adopted new Equity Grant Procedures, eliminating all delegated authority to management to make equity awards; and

•  We implemented a process to comply with the requirements regarding grant date determination related to our adoption of SFAS 123(R) on January 1, 2006.

The internal investigation did not identify any measurement date issues associated with stock option grants since January 2003, with the exception of three dates, each of which apparently resulted from errors in internal processes rather than any intentional backdating.

Management has concluded that the control deficiencies resulting in the restatement of previously issued financial statements did not constitute a material weakness in disclosure controls and procedures, or internal controls and procedures over financial reporting, as of December 31, 2006. In coming to this conclusion, management considered, among other things, the impact of the restatement to the financial statements and the effectiveness of the internal controls in this area as of the fiscal years ended 2006, 2005, 2004 and 2003.

(a)   Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures conducted as of December 31, 2006, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) were effective at reasonable assurance levels to ensure that the information required to be disclosed by us in this Form 10-K was recorded, processed, summarized and reported within the time periods specified in the rules and instructions for Form 10-K.

(b)   Management’s Annual Report on Internal Control over Financial Reporting

Our management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining an adequate system of internal control over financial reporting. This system of internal accounting controls is designed to provide reasonable assurance that assets are safeguarded, transactions are properly recorded and executed in accordance with management’s authorization and financial statements are prepared in accordance with generally accepted accounting principles. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the

59

objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2006, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. That evaluation excluded the business operations of MindVision, Inc. acquired on June 15, 2006. The acquired business operations excluded from the evaluation together constituted less than three percent of total assets at December 31, 2006, and approximately one percent of revenues and net income, for the year then ended. Management’s assessment of the effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report in which they expressed an unqualified opinion, which is included herein.

(c)   Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2006, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(d)   Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Digital River, Inc.

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Digital River, Inc. and subsidiaries maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Digital River, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

60

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of MindVision, Inc., which is included in the December 31, 2006, consolidated financial statements of Digital River, Inc. and constituted less than three percent of total assets at December 31, 2006, and approximately one percent of revenue and net income for the year then ended. Our audit of internal control over financial reporting of Digital River, Inc. also did not include an evaluation of the internal control over financial reporting of MindVision, Inc.

In our opinion, management’s assessment that Digital River, Inc. maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Digital River, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Digital River, Inc. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006, and our report dated March 1, 2007, expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Minneapolis, Minnesota

March 1, 2007

ITEM 9B.   OTHER INFORMATION

None.

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PART III

Certain information required in Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Other than the identification of executive officers, which is set forth in Part  I, Item 1 hereof, the information required in Item 10 of Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

We have adopted a Code of Conduct and Ethics, a copy of which we undertake to provide to any person, without charge, upon request. Such requests can be made in writing to the attention of Corporate Secretary at our principal executive offices address. To the extent permitted by the rules promulgated by the NASD, we intend to disclose any amendments to, or waivers from, the Code provisions applicable to our principal executive officer or senior financial officers, including our chief financial officer and controller, or with respect to the required elements of the Code, on our website, www.digitalriver.com under the “Investor Relations” link.

ITEM 11.   EXECUTIVE COMPENSATION

The information required in Item 11 of Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required in Item 12 of Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required in Item 13 of Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required in Item 14 of Part III of this report is incorporated by reference to our Proxy Statement in connection with our 2006 Annual Meeting to be filed in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended.

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PART IV

ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

(1) Financial Statements.

The consolidated financial statements required by this item are submitted in a separate section beginning on page 68 of this report.

Report of Independent Registered Public Accounting Firm	67
Consolidated Balance Sheets	68
Consolidated Statements of Operations	69
Consolidated Statements of Stockholders’ Equity	70
Consolidated Statements of Cash Flows	71
Notes to Consolidated Financial Statements	72

(2) Financial Statement Schedules.

All schedules for which provision is made in the applicable accounting regulations of the SEC have been omitted as not required or not applicable, or the information required has been included elsewhere by reference in the financial statements and related notes, except for Schedule II, which is included with this Form 10-K, as filed with the SEC.

(3) Exhibits.

Exhibit
Number			Description of Document
	2	.1(1)	Stock Purchase Agreement, dated as of April 17, 2004, by and among Digital River, Inc., Blitz F03-1424 GmbH, a company organized under the laws of Germany and a wholly owned subsidiary of Digital River, and the selling shareholders of element 5 Informationstechnologien und — dienstleistungen Aktiengesellschaft, a company organized under the laws of Germany.
	3	.1(4)	Amended and Restated Certificate of Incorporation of the Registrant, as currently in effect.
	3	.2(6)	Amended and Restated Bylaws of the Registrant, as currently in effect.
	4	.1(7)	Specimen Stock Certificate.
	4	.2(4)	Form of Senior Debt Indenture.
	4	.3(4)	Form of Subordinated Debt Indenture.
	4	.4	References are hereby made to Exhibits 3.1 and 3.2.
	4	.5(13)	Indenture dated as of June 1, 2004, between Digital River, Inc. and Wells Fargo Bank, N.A. as trustee, including therein the form of the Note.
	10	.1(7)	Form of Indemnity Agreement between Registrant and each of its directors and executive officers.
	10	.3(7)	Consent to Assignment and Assumption of Lease dated April 22, 1998, by and between CSM Investors, Inc., IntraNet Integration Group, Inc. and Registrant.
	10	.4(5)	Assignment of Lease dated April 21, 1998, by and between Intranet Integration Group, Inc. and Registrant.
	10	.5(5)	Lease Agreement dated January 18, 2000, between Property Reserve, Inc. and Registrant.
	10	.6(6)	First Amendment of Lease dated January 31, 2001, to that certain Lease dated April 24, 1996, between CSM Investors, Inc. and Registrant (as assignee of Intranet Integration Group, Inc.).
	10	.7(8)	1998 Stock Option Plan, as amended and superseded by Exhibit 10.19.*
	10	.8(9)	1999 Stock Option Plan, formerly known as the 1999 Non-Officer Stock Option Plan, as amended and superseded by Exhibit 10.19.*
	10	.9(8)	2000 Employee Stock Purchase Plan, as amended, and offering.*

63

Exhibit
Number			Description of Document
	10	.11(10)	Second Amendment of Lease dated April 22, 2002, to that certain Lease dated April 24, 1996, between CSM Investors, Inc. and Registrant (as assignee of Intranet Integration Group, Inc.) as amended.
	10	.12(10)	Second Amendment of Lease dated April 28, 2003, to that certain Lease dated January 18, 2000, between Property Reserve Inc. and Registrant.
	10	.15(13)	Registration Rights Agreement dated as of June 1, 2004, between Digital River, Inc. and the initial purchasers of Senior Convertible Notes due January 1, 2024.
	10	.16(14)	Supplemental Agreement and Settlement Agreement, by and among Digital River, Inc., Digital River GmbH, element 5 AG, Messrs. Clemens Roth, Christopher Reimold, Gerrit Schumann, Stephan Naujoks and various other former element 5 shareholders, dated as of January 18, 2005.
	10	.17(15)	Summary of Compensation Program for Non-Employee Directors.
	10	.18++	Second Amended and Restated Symantec Online Store Agreement, by and among Symantec Corporation, Symantec Limited, Digital River, Inc. and Digital River Ireland Limited effective April 1, 2006‡
	10	.19(16)	1998 Equity Incentive Plan (formerly known as 1998 Stock Option Plan).*
	10	.20(17)	Employment Agreement between Digital River, Inc. and Carter D. Hicks.*
	10	.21(17)	Employment Offer Letter between Digital River, Inc. and Thomas M. Donnelly.*
	10	.24(18)	Form of Amendment to Non-Qualified Stock Option Agreement.*
	10	.25(19)	Inducement Equity Incentive Plan.*
	12	.1++	Computation of Ratio of Earnings to Fixed Charges.
	21	.1++	Subsidiaries of Digital River, Inc.
	23	.1++	Consent of Independent Registered Public Accounting Firm, dated March 1, 2007.
	24	.1++	Power of Attorney, pursuant to which amendments to this Annual Report on Form 10-K may be filed, is included on the signature pages of this Annual Report on Form 10-K.
	31	.1++	Certification of Digital River, Inc.’s Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2++	Certification of Digital River, Inc.’s Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	++	Certification of Digital River, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

++	Filed herewith.
*	Management contract or compensatory plan.
‡	Confidential treatment has been requested for portions of this agreement, which portions have been filed † separately with the SEC.
(1)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 4, 2004.
(2)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 11, 2002.
(3)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 15, 2002.
(4)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 1, 2006.
(5)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, filed on March 30, 2000.
(6)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 27, 2001.
(7)	Incorporated by reference from the Company’s Registration Statement on Form S-1 (File No. 333-56787), declared effective on August 11, 1998.
(8)	Incorporated by reference from the Company’s Registration Statement on Form S-8 (File No. 333-105864) filed on June 5, 2003.

64

(9)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed on August 14, 2003.
(10)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, filed on May 15, 2003.
(11)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed on November 13, 2003.
(12)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed on March 15, 2004.
(13)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 13, 2004.
(14)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 20, 2005.
(15)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 16, 2006.
(16)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 31, 2005.
(17)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 5, 2005.
(18)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 9, 2005.
(19)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 20, 2005.

65

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Eden Prairie, State of Minnesota, on March 1, 2007.

DIGITAL RIVER, INC.

By:  /s/  Joel A. Ronning

Joel A. Ronning

Chief Executive Officer

We, the undersigned, directors and officers of Digital River, Inc., do hereby severally constitute and appoint Joel A. Ronning and Thomas M. Donnelly and each or any of them, our true and lawful attorneys and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys and agents, and each or any of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys and agents, and each of them, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  Joel A. Ronning Joel A. Ronning	Chief Executive Officer and Director (Principal Executive Officer)	March 1, 2007
/s/  Thomas M. Donnelly Thomas M. Donnelly	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	March 1, 2007
/s/  Perry W. Steiner Perry W. Steiner	Director	March 1, 2007
/s/  William Lansing William Lansing	Director	March 1, 2007
/s/  Thomas F. Madison Thomas F. Madison	Director	March 1, 2007
/s/  J. Paul Thorin J. Paul Thorin	Director	March 1, 2007
/s/  Frederic Seegal Frederic Seegal	Director	March 1, 2007

66

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Digital River, Inc.

We have audited the accompanying consolidated balance sheets of Digital River, Inc. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Digital River, Inc. and subsidiaries at December 31, 2006 and 2005, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the Consolidated Financial Statements, the consolidated financial statements as of December 31, 2005 and for each of the two years then ended have been restated to record additional stock-based compensation expense.

As discussed in Note 1 to the Consolidated Financial Statements, effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123(Revised 2004), Share-Based Payment.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Digital River, Inc.’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2007, expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Minneapolis, Minnesota

March 1, 2007

67

DIGITAL RIVER, INC.

Consolidated Balance Sheets

	December 31,		December 31,
	2006		2005
			As Restated(1)
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	390,243	$	131,770
Short-term investments		235,699		220,569
Accounts receivable, net of allowance of $2,339 and $1,023		52,392		34,883
Deferred income taxes		19,687		22,660
Prepaid expenses and other		6,025		3,741
Total current assets		704,046		413,623
Property and equipment, net		24,079		17,955
Goodwill		243,799		195,299
Intangible assets, net of accumulated amortization of $50,092 and $36,798		21,106		20,054
Deferred income taxes		1,276		10,444
Other assets		11,957		12,174
TOTAL ASSETS	$	1,006,263	$	669,549
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	141,386	$	127,846
Accrued payroll		12,097		8,866
Deferred revenue		7,040		5,403
Accrued acquisition liabilities		5,654		5,651
Other accrued liabilities		39,982		21,210
Total current liabilities		206,159		168,976
NON-CURRENT LIABILITIES:
Convertible senior notes		195,000		195,000
Other liabilities		1,345		22
Total non-current liabilities		196,345		195,022
TOTAL LIABILITIES		402,504		363,998
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred Stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—		—
Common Stock, $.01 par value; 120,000,000 shares authorized; 40,458,093 and 35,033,741 shares issued and outstanding		404		350
Additional paid-in capital		546,758		325,249
Deferred compensation		—		(1,990	)
Retained earnings/(accumulated deficit)		44,989		(15,627	)
Accumulated other comprehensive income (loss)		11,608		(2,431	)
Total stockholders’ equity		603,759		305,551
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,006,263	$	669,549

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

The accompanying notes are an integral part of these consolidated financial statements.

68

DIGITAL RIVER, INC.

Consolidated Statements of Operations

	For the Years Ended December 31
	2006		2005		2004
			As Restated(1)		As Restated(1)
	(In thousands)
Revenue	$	307,632	$	220,408	$	154,130
Costs and expenses
Direct cost of services		7,709		5,063		5,167
Network and infrastructure		29,250		19,817		15,164
Sales and marketing		113,462		69,371		52,083
Product research and development		32,341		20,690		14,293
General and administrative		34,158		21,484		17,006
Depreciation and amortization		10,983		8,833		8,203
Amortization of acquisition-related intangibles		12,134		8,730		8,269
Total costs and expenses		240,037		153,988		120,185
Income from operations		67,595		66,420		33,945
Other income, net		21,887		4,967		1,641
Income before income tax expense		89,482		71,387		35,586
Income tax expense		28,672		14,875		1,079
Net income	$	60,810	$	56,512	$	34,507
Net income per share — basic	$	1.58	$	1.64	$	1.07
Net income per share — diluted	$	1.40	$	1.41	$	0.94
Shares used in per-share calculation — basic		38,593		34,536		32,328
Shares used in per-share calculation — diluted		44,642		41,448		38,532

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

The accompanying notes are an integral part of these consolidated financial statements.

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DIGITAL RIVER, INC.

Consolidated Statements of Stockholders’ Equity

																Retained
							Additional						Accumulated			Earnings			Total
	Common Stock						Paid-In			Deferred			Comprehensive			(Accumulated			Stockholders’			Comprehensive
	Shares			Amount			Capital			Compensation			Income (Loss)			Deficit)			Equity			Income (Loss)
							As			As						As			As			As
							Restated(1)			Restated(1)						Restated(1)			Restated(1)			Restated(1)
	(In thousands)
BALANCE, December 31, 2003 as previously reported		31,498		$	315		$	217,981		$	—		$	44		$	(86,488	)	$	131,852		$	17,180
Adjustments to opening shareholders’ equity		—			—			11,798			(1,143	)		—			(10,655	)		—			(1,241	)
BALANCE, December 31, 2003 as restated		31,498		$	315		$	229,779		$	(1,143	)	$	44		$	(97,143	)	$	131,852		$	15,939
Net income		—			—			—			—			—			34,507			34,507			34,507
Unrealized (loss) on investments		—			—			—			—			(275	)		—			(275	)		(275	)
Foreign currency translation (loss)		—			—			—			—			(99	)		—			(99	)		(99	)
Common stock issued for acquisitions		160			2			5,342			—			—			—			5,344			—
Exercise of stock options		1,943			19			19,700			—			—			—			19,719			—
Stock-based compensation		—			—			15			802			—			—			817			—
Common stock issued under the Employee Stock Purchase Plan		51			1			903			—			—			—			904			—
BALANCE, December 31, 2004		33,652		$	337		$	255,739		$	(341	)	$	(330	)	$	(62,636	)	$	192,769		$	34,133
Net income		—			—			—			—			—			56,512			56,512			56,512
Unrealized (loss) on investments		—			—			—			—			(776	)		—			(776	)		(776	)
Foreign currency translation (loss)		—			—			—			—			(1,325	)		—			(1,325	)		(1,325	)
Repurchase of common stock		(483	)		(5	)		(3,637	)		—			—			(9,503	)		(13,145	)		—
Exercise of stock options		1,718			17			23,182			—			—			—			23,199			—
Stock-based compensation		—			—			(2,053	)		293			—			—			(1,760	)		—
Inducement Equity Incentive Plan		64			1			1,971			(1,942	)		—			—			30			—
Tax benefit of stock-based compensation		—			—			47,848			—			—			—			47,848			—
Common stock issued under the Employee Stock Purchase Plan		83			—			2,199			—			—			—			2,199			—
BALANCE, December 31, 2005		35,034		$	350		$	325,249		$	(1,990	)	$	(2,431	)	$	(15,627	)	$	305,551		$	54,411
Net income		—			—			—			—			—			60,810			60,810			60,810
Reclassification of deferred compensation balance upon adoption of SFAS 123(R)		—			—			(1,990	)		1,990			—			—			—			—
Unrealized gain (loss) on investments		—			—			—			—			576			—			576			576
Foreign currency translation gain (loss)		—			—			—			—			13,463			—			13,463			13,463
Sale of common stock		4,000			40			172,740												172,780			—
Stock Issued for Acquisition		28			—			1,175			—			—			(3	)		1,172			—
Exercise of stock options		1,220			12			21,106			—			—			—			21,118			—
Stock-based compensation		113			1			13,903			—			—			—			13,904			—
Tax withheld in restricted stock vesting		(8	)					(235	)		—			—			(191	)		(426	)		—
Tax benefit of stock-based compensation		—			—			12,700			—			—			—			12,700			—
Common stock issued under the Employee Stock Purchase Plan		71			1			2,110			—			—			—			2,111			—
BALANCE, December 31, 2006		40,458		$	404		$	546,758		$	—		$	11,608		$	44,989		$	603,759		$	74,849

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

The accompanying notes are an integral part of these consolidated financial statements.

70

DIGITAL RIVER, INC.

Consolidated Statements of Cash Flows

	For the Years Ended December 31
	2006			2005			2004
				As Restated(1)			As Restated(1)
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	60,810		$	56,512		$	34,507
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of acquisition-related intangibles		12,134			8,730			8,269
Change in accounts receivable allowance, net of acquisitions		1,215			(598	)		709
Depreciation and amortization		10,983			8,833			8,203
Stock-based compensation expense related to stock-based compensation plans		13,904			293			817
Tax benefit of stock-based compensation		—			45,417			—
Excess tax benefits from stock-based compensation		(8,980	)		—			—
Deferred income taxes and other		19,583			(34,789	)		—
Litigation and other charges		—			(739	)		1,090
Change in operating assets and liabilities (net of acquisitions):
Accounts receivable		(14,678	)		(10,304	)		(8,223	)
Prepaid and other assets		(1,293	)		(2,417	)		1,037
Accounts payable		3,701			34,822			34,433
Deferred revenue		811			1,395			(230	)
Income tax payable		8,126			2,740			143
Accrued payroll and other accrued liabilities		11,190			9,859			4,380
Net cash provided by operating activities		117,506			119,754			85,135
INVESTING ACTIVITIES:
Purchases of investments		(193,609	)		(190,713	)		(199,699	)
Sales of investments		179,296			127,771			94,059
Cash paid for acquisitions, net of cash received		(37,800	)		(54,177	)		(126,457	)
Purchases of equipment and capitalized software		(15,907	)		(8,328	)		(9,255	)
Net cash used in investing activities		(68,020	)		(125,447	)		(241,352	)
FINANCING ACTIVITIES:
Principal amount on line of credit		—			—			45,000
Repayment of principal on line of credit		—			—			(45,000	)
Proceeds from convertible senior notes		—			—			188,371
Proceeds from sales of common stock		172,780			—			—
Exercise of stock options		21,118			23,199			19,719
Sales of common stock under employee stock purchase plan		2,109			2,199			904
Repurchase of common stock		—			(13,145	)		—
Repurchase of restricted stock to satisfy tax witholding obligation		(426	)		—			—
Excess tax benefits from stock-based compensation		8,980			—			—
Net cash provided by financing activities		204,561			12,253			208,994
EFFECT OF EXCHANGE RATE CHANGES ON CASH		4,426			(2,524	)		2,072
NET INCREASE IN CASH AND CASH EQUIVALENTS		258,473			4,036			54,849
CASH AND CASH EQUIVALENTS, beginning of period		131,770			127,734			72,885
CASH AND CASH EQUIVALENTS, end of period	$	390,243		$	131,770		$	127,734
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest on Convertible Senior Notes	$	2,438		$	2,641		$	—
Cash paid for income taxes	$	2,006		$	193		$	—
Noncash investing and financing activities:
Common stock issued in acquisitions and earn-outs	$	1,172		$	—		$	5,344

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

The accompanying notes are an integral part of these consolidated financial statements.

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DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements
December 31, 2006 and 2005

1.   Nature of Operations and Summary of Significant Accounting Policies:

We provide outsourced e-commerce solutions globally to a wide variety of companies primarily in the software and high-tech products markets. We were incorporated in 1994 and began building and operating online stores for our clients in 1996. We generate revenue primarily based on the sales of products made in those stores, and in addition, offer services designed to increase traffic to our clients’ online stores and to improve the sales effectiveness of those stores.

Principles of Consolidation and Classification

The consolidated financial statements include the accounts of Digital River, Inc. and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year balances in order to conform to the current year’s presentation.

Foreign Currency Translation

Substantially all of our foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of equity. Gains and losses resulting from foreign currency transactions are recognized as “other income, net.”

Cash and Cash Equivalents

We consider all short-term, highly liquid investments, primarily high grade commercial paper and money market accounts, that are readily convertible into known amounts of cash and that have original or remaining maturities of three months or less at the date of purchase to be cash equivalents. As of December 31, 2006 and 2005, cash balances of $2.9 million and $12.9 million, respectively, were held by banks or credit card processors to secure potential future credit card fees, fines and chargebacks or for other payments. In addition, at December 31, 2006 and 2005, $0.55 million and $0.4 million were restricted by letter of credit and agreements required by international tax jurisdictions as security for potential tax liabilities.

Short-Term Investments

Our short-term investments consist of debt securities that are classified as available-for-sale and are carried on our balance sheet at their market value with cumulative unrealized gains or losses recorded as a component of accumulated other comprehensive income within stockholders’ equity. As of December 31, 2006 and 2005, all securities had dates to maturity or reset dates of less than three years. We classify all of our available-for-sale securities as current assets, as these securities represent investments available for current corporate purposes.

Property and Equipment

Property and equipment is stated at historical cost. Computer equipment, software and furniture are depreciated under the straight-line method using estimated useful lives of three to seven years and leasehold

72

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

improvements are amortized over the shorter of the asset life or remaining length of the lease. Property and equipment at December 31 consisted of the following (in thousands):

	2006			2005
Computer hardware and software	$	46,326		$	44,849
Furniture, fixtures and leasehold improvements		10,055			7,151
Total property and equipment	$	56,381		$	52,000
Accumulated depreciation		(32,302	)		(34,045	)
Net property and equipment	$	24,079		$	17,955

Purchased Intangible Assets

Through both domestic and international acquisitions, we have continued to expand our global online businesses. Tangible net assets for our acquisitions were valued at their respective carrying amounts as we believe that these amounts approximated their current fair values at the respective acquisition dates. The valuation of identifiable intangible assets acquired reflects management’s estimates based on, among other factors, use of established valuation methods. Such assets consist of customer lists and user base, trademarks and trade names, developed technologies and other acquired intangible assets, including contractual agreements. Identifiable intangible assets are amortized using the straight-line method over the estimated useful lives, generally three to ten years. We believe the straight-line method of amortization best represents the distribution of the economic value of the identifiable intangible assets acquired to date. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. The purchase prices of the acquisitions described in Note 5 below exceeded the estimated fair value of the respective related identifiable intangible and tangible assets because we believe these acquisitions will assist with our strategy of establishing and expanding our global online marketplace.

Long-Lived Assets

We review all long-lived assets, including intangible assets with definite lives, for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). Under SFAS 144, impairment losses are recorded whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. An impairment loss is recognized when estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. As part of our evaluation, we consider certain non-financial data as indicators of impairment such as changes in the operating environment and business strategy, competitive information, market trends and operating performance. When an impairment loss is identified, the carrying amount of the asset is reduced to its estimated fair value. There were no significant impairments of long-lived assets, including definite-lived intangible assets, recorded in 2006, 2005 or 2004.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable, notes payable and accounts payable approximates fair value because of the short maturity of these instruments. As of December 31, 2006 and 2005, the fair value of our $195 million 1.25% fixed rate convertible senior notes was valued at $270 million and $189 million, respectively, based on the quoted fair market value of the debt.

73

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

Other Assets

The following table summarizes our other assets as of December 31, 2006 and 2005 (in thousands):

	2006		2005
Unamortized debt financing costs	$	5,630	$	5,960
Cost of investment		6,000		6,000
Other		327		214
Total other assets	$	11,957	$	12,174

During 2005, we purchased $6 million of the Series B Convertible Preferred stock of Intraware, Inc., a provider of enterprise digital license management and other services. We account for this investment using the cost method. Through this investment, we intend to establish a strategic partnership with Intraware that will enhance our access to the enterprise segment of the software and digital products market.

Other Accrued Liabilities

The following table summarizes our other accrued liabilities as of December 31, 2006 and 2005 (in thousands):

	2006		2005
Accrued expenses	$	15,212	$	12,451
Sales, value-added and transaction taxes		13,394		5,479
Current income taxes		11,376		3,280
Total other accrued liabilities	$	39,982	$	21,210

Comprehensive Income

Comprehensive income includes revenues, expenses, gains and losses that are excluded from net earnings under GAAP. Items of comprehensive income are unrealized gains and losses on short term investments and foreign currency translation adjustments which are added to net income to compute comprehensive income. Comprehensive income is net of income tax benefits or expense.

In 2006, comprehensive income included $13.5 million recorded for unrealized foreign exchange gains on the revaluation of investments in foreign subsidiaries, and $0.6 million net of $0.2 million tax expense for unrealized investment gains. In 2005, comprehensive income included $1.3 million recorded for unrealized foreign exchange losses on the revaluation of investments in foreign subsidiaries, and $0.8 million net of $0.5 million tax benefit for unrealized investment losses. In 2004, comprehensive income included $0.1 million recorded for unrealized foreign exchange losses on the revaluation of investments in foreign subsidiaries, and $0.3 million for unrealized investment losses. There was no tax benefit for comprehensive income in 2004 as we had no tax expense.

Revenue Recognition

We recognize revenue from services rendered once all the following criteria for revenue recognition have been met: (1) pervasive evidence of an agreement exists; (2) the services have been rendered; (3) the fee is fixed and determinable and not subject to refund or adjustment; and (4) collection of the amounts due is reasonably assured.

We evaluate the criteria outlined in Emerging Issues Task Force, (“EITF”) Issues No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent, in determining whether it is appropriate to record the

74

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

gross amount of product sales and related costs or the net amount earned as net revenue. We act as the merchant of record on most of the transactions processed and have contractual relationships with our clients, which obligate us to pay to the client a specified percentage of each sale. We derive our revenue primarily from transaction fees based on a percentage of the products sale price and fees from services rendered associated with the e-commerce and other services provided to our clients and end customers. Our revenue is recorded at net as generally our clients are subject to inventory risks and control customers’ product choices. Clients do not have the right to take possession of the software applications used in the delivery of services.

We also provide customers with various proprietary software backup services. We recognize revenue for these back up services upon delivery or based upon historical usage within the contract period of the digital backup services when this information is available. Digital backup services are recognized straight-line over the life of the backup service when historical usage information is unavailable. Shipping revenues are recorded net of any associated costs.

We also, to a lesser extent, provide fee-based client services, which include website design, custom development and integration, analytical marketing and email marketing services. If we receive payments for fee-based services in advance of delivery, these amounts are deferred and recognized over the service period.

Provisions for doubtful accounts and transaction losses and authorized credits are made at the time of revenue recognition based upon our historical experience. The provision for doubtful accounts and transaction losses are recorded as charges to operating expense, while the provision for authorized credits is recognized as a reduction of net revenues.

Deferred Revenue

Deferred revenue is recorded when service payment is received in advance of performing our service obligation. Revenue is recognized over either the estimated usage period when usage information is available, or ratably over the service period when usage information is not available.

Advertising Costs

The costs of advertising are charged to sales and marketing expense as incurred. We incurred advertising expense of $1.5 million, $0.1 million and $1.0 million in 2006, 2005 and 2004, respectively.

Income Taxes

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We record deferred tax assets for favorable tax attributes, including tax loss carryforwards. We currently have significant U.S. tax loss carryforwards resulting from the tax deduction for exercise of stock options and acquired operating tax loss carryforwards. The benefit of the loss carryforwards from exercise of stock options was recognized as additional paid in capital when the deferred tax asset valuation allowance was reversed in the fourth quarter of 2005. The benefit of the acquired tax loss carryforwards has been reserved by a valuation allowance pursuant to United States generally accepted accounting principles. These valuation reserves of the deferred tax asset will be reversed if and when it is more likely than not that the deferred tax asset will be realized. We evaluate the need for a valuation allowance of the deferred tax asset on a quarterly basis.

Other Income, Net

Our other income, net line item is the total of interest income on our cash, cash equivalents, and short-term investments, interest expense on our debt and foreign currency transaction gains and losses. Interest income was $22.8 million, $9.7 million and $3.2 million in 2006, 2005 and 2004, respectively. Interest expense was $2.5 million in 2006 compared with $2.5 million in 2005 and $1.5 million in 2004. Gains related

75

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

to foreign currency transactions were $1.5 million in 2006 and a loss of $2.2 million in 2005, and gains or losses were immaterial in 2004.

Use of Estimates

The preparation of financial statements in accordance with the United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Research and Development and Software Development

Research and development expenses consist primarily of development personnel and non-employee contractor costs related to the development of new products and services, enhancement of existing products and services, quality assurance, and testing. We follow AICPA Statement of Position No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use,” in accounting for internally developed software. During 2006, 2005 and 2004, we capitalized $0.1 million, $0.4 million and $2.7 million, respectively, of software development costs.

Stock-Based Compensation Expense

On January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which requires the measurement and recognition of compensation expense for all share-based payments made to employees and directors including stock options, restricted stock grants and employee stock purchases made through our Employee Stock Purchase Plan based on estimated fair values. SFAS 123(R) supersedes our previous accounting under Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees,” for periods beginning in 2006.

Prior to the adoption of SFAS 123(R), we had elected to apply the disclosure-only provision of SFAS No. 123, “Accounting for Stock-Based Compensation” as amended by SFAS No. 148. Accordingly, we accounted for stock-based compensation using the intrinsic value method prescribed in APB 25 and related interpretations. Compensation expense for stock options was measured as the excess, if any, of the fair value of our common stock at the date of grant over the stock option exercise price.

We have adopted SFAS 123(R) using the modified prospective transition method under which prior periods are not revised. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. Stock-based compensation expense recognized in our Consolidated Statement of Operations for 2006 includes compensation expense for share-based awards granted prior to, but not yet vested, as of December 31, 2005 as well as compensation expense for the share-based payment awards granted subsequent to December 31, 2005. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of our common stock on the date of grant. Compensation expense for all share-based payment awards are recognized using the straight-line amortization method over the vesting period. Stock-based compensation expense of $13.9 million was charged to operating expenses during 2006. The related tax benefit of $4.9 million resulted in a net after-tax stock-based compensation expense of $9.0 million for 2006.

As stock-based compensation expense recognized in our Consolidated Statement of Operations for 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our pro forma information required under SFAS 123, for periods

76

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

prior to 2006, accounted for forfeitures as they occurred. In March 2005 the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (“SAB 107”), which provides supplemental implementation guidance for SFAS 123(R). We have applied the provision of SAB 107 in our adoption of SFAS 123(R).

SFAS 123(R) also requires the benefits of tax deductions in excess of recognized stock-based compensation expense be reported as a financing cash flow, rather than an operating cash flow as required prior to adoption of SFAS 123(R) in our Consolidated Statement of Cash Flows. On November 10, 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. FAS 123(R)-3 “Transition Election Related to Accounting for Tax Effects of Share-based Payment Awards.” We have elected not to adopt the alternative transition method provided in the FASB Staff Position for calculating the tax effects of stock-based compensation pursuant to SFAS 123(R).

See Note 6 for further information regarding the impact of our adoption of SFAS 123(R) and the assumptions we use to calculate the fair value of share-based compensation.

Recent Accounting Pronouncements

In September 2006, the FASB issued statement No. 157, “Fair Value Measurements”, (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November  15, 2007, with earlier application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will be recorded to the opening balance of retained earnings in the year of adoption. The Company has not yet determined the impact of this Statement on its financial condition and results of operations.

In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 108 (SAB 108). To reduce diversity in practice among registrants, SAB 108 expresses SEC staff views regarding the process by which misstatements in financial statements are evaluated for purposes of determining whether financial statement restatement is necessary. The accounting requirements of SAB 108 were effective for us on January 1, 2006, and did not have a material impact on our consolidated financial position, results of operations or cash flows.

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48), which clarifies the accounting and disclosure for uncertainty in tax positions. FIN 48 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. We will adopt FIN 48 as of January 1, 2007, as required. The cumulative effect of adopting FIN 48 will be recorded in retained earnings and other accounts as applicable. We do not believe that FIN 48 will have a material impact on our consolidated financial statements.

In November 2005, the FASB issued Staff Position No. FAS 115-1, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments” (“FSP 115-1”). FSP 115-1 provides accounting guidance for determining and measuring other-than-temporary impairments of debt and equity securities, and confirms the disclosure requirements for investments in unrealized loss positions as outlined in EITF issue 03-01, “The Meaning of Other-Than-Temporary Impairments and its Application to Certain Investments.” The accounting requirements of FSP 115-1 were effective for us on January 1, 2006, and did not have a material impact on our consolidated financial position, results of operations or cash flows.

2.   Restatement of Consolidated Financial Statements

We have restated our consolidated financial statements to reflect additional stock-based compensation expense and related income tax effects relating to annual stock option awards granted since 1998. This

77

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

Form 10-K reflects the restatement of our consolidated financial statements as of December 31, 2005 and for the years ended December 31, 2004 and 2003.

On February 6, 2007, we announced the substantial completion of an internal investigation into our historical stock option granting practices. Since that date, we have completed one additional witness interview, which did not alter the results of the investigation. The investigation uncovered irregularities related to the issuance of certain stock option grants made between 1998 and 2005. A Special Committee of the Board oversaw the investigation. The Special Committee authorized the General Counsel and Chief Financial Officer (who joined Digital River in January 2006 and February 2005, respectively) to conduct the investigation, with the assistance of outside counsel and forensic experts.

In particular, as a result of the internal investigation, the Special Committee concluded, and the Audit Committee and Board of Directors agree, that we used incorrect measurement dates for financial accounting purposes for certain stock option grants in prior periods. Therefore, we have recorded additional non-cash stock-based compensation expense and related tax effect with regard to certain past stock option grants, and we are restating previously filed financial statements in this Form 10-K. These adjustments, after-tax, amounted to $9.4 million, spread over the nine year period from 1998 through 2006. The full year adjustment to 2006 was recorded in the fourth quarter of 2006 due to its insignificance.

The Special Committee investigation examined each stock option grant from August 1998 through December 2006 (the “relevant period”), a total of 69 distinct grant dates. These grants include all of the options granted since our initial public offering in August 1998. In all cases, the investigation considered the particular facts and circumstances surrounding each grant date, including all available documentation, relevant email archives, and interviews with present and former directors, officers, employees, and advisors.

Based on the totality of the evidence and the applicable law, the Special Committee found that no officer or director engaged in any wrongdoing for personal enrichment. The Special Committee also concluded that no director or member of the committee charged with awarding stock options to employees (the Stock Option Committee) knowingly failed to comply with the relevant accounting principles.

The Special Committee’s analysis determined that eighteen grant dates, representing three million shares, were not the proper measurement dates for the related options. Specifically, the Special Committee’s investigation identified certain non-officer employee grants for which the Stock Option Committee, with the involvement of our finance staff, selected grant dates in order to obtain favorable exercise prices. This did not occur with respect to any grants to directors or members of the Stock Option Committee, and thus did not result in any financial benefit to those individuals. Additionally, the Special Committee determined that on certain occasions, the Stock Option Committee unknowingly exceeded its authority in granting stock options to Section 16 officers, which options should have been granted by the Board. In each of these instances, the Board ratified the grants at a subsequent meeting. The Special Committee also discovered a small number of instances where option grant dates preceded employee hire dates; such instances are attributable to either administrative error or a practice of pricing options for certain employees as of the employment offer date. Finally, the Special Committee identified six occasions when we did not properly expense option grants to consultants.

More generally, the internal investigation revealed weaknesses in our internal controls and record-keeping related to stock options during the relevant period. In particular, we lacked appropriate systems to ensure adequate communication between our accounting and human resources departments pertaining to the option grant process. Thus, the accounting personnel did not consistently receive accurate information necessary to determine appropriate measurement dates. Moreover, we failed to prepare adequate minutes of meetings of the Compensation Committee and Stock Option Committee.

Beginning in January 2003, we strengthened our internal controls and made significant improvements to our stock option granting practices. The Special Committee did not identify any measurement date issues

78

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

associated with stock option grants since January 2003, with the exception of three dates, each of which apparently resulted from errors in internal processes rather than any intentional backdating.

During the relevant period, we granted 1,306 employees, consultants, officers and directors options to acquire approximately 16.8 million shares of our common stock. These option grants, awarded on 69 distinct grant dates, consisted of one or more of the following types of grants: (i) grants to directors; (ii) grants to Section 16 officers; (iii) follow-on grants to employees; (iv) grants to new hires; (v) grants to employees receiving promotions; and (vi) grants to consultants.

Grants to Directors.

During the relevant period, we appropriately awarded grants to directors during Board of Directors or Compensation Committee meetings. The Special Committee discovered no problems associated with director grants, with the exception of one grant to one director on February 13, 2003. Due to a clerical error, the original paperwork for the February 13, 2003 Board of Director grants was misdated, which was corrected in 2003 with the exception of one former director who had already exercised his option. We subsequently corrected this error for all but one director. We should have recorded a charge related to the grant price and recorded an additional charge for a subsequent vesting acceleration. These charges make up less than $10,000 of the total $9.4 million after-tax restatement.

Grants to Section 16 Officers.

During the relevant period, the Stock Option Committee awarded 540,000 stock options to nine Section 16 officers on four different specified grant dates. After a review of the corporate record, the Special Committee determined that the Stock Option Committee was not vested with the authority to award stock options to Section 16 officers. Outside counsel conducted interviews with the Stock Option Committee members and certain Compensation Committee members and determined that the committee members believed the Stock Option Committee possessed the authority to make the grants. This is corroborated by subsequent Board ratification of the grants. However, because the requisite authority did not exist, the measurement dates for these grants have been adjusted to the Board ratification date, and the charges under APB 25 make up $1.0 million of the total $9.4 million after-tax restatement.

Grants to Employees and Consultants (inclusive of follow-on, new hire, and promotion grants).

During the relevant period, stock option grants to non-Section 16 employees and consultants were generally awarded by the Stock Option Committee. Stock Option Committee documentation with respect to such grants is in many instances inadequate, particularly from 1998 through 2002. Based on interviews and a review of all available documentation, including relevant email archives, the Special Committee determined that employee and consultant grants on sixteen grant dates may not have been measured on the correct date. Consistent with accounting literature and recent guidance from the Securities and Exchange Commission (“SEC”), we employed one of three methods to assign the correct measurement date: (i) the date of a relevant email, if the content of the email indicates action by the Stock Option Committee; (ii) beginning in 2003, the last trading day of the month of the grant in accordance with our policy adopted in early 2003; or (iii) the date a grant was ratified by the Board of Directors if no other relevant documentation existed.

Based on the findings of the Special Committee, after accounting for forfeitures, we calculated stock-based compensation expense (under APB 25 for 1998 through 2005 and under SFAS 123(R) for 2006) of approximately $11.9 million over the respective awards’ vesting terms for the periods from 1998 through 2006. We recorded $85,000, after-tax, of stock-based compensation on its 2006 financial statements in the fourth quarter related to the foregoing options. In addition, the Company included unrecorded charges related to option grants to consultants not expensed in the relevant periods under EITF 96-18 ($427,862) and charges of ($70,008) related to option grants to employees prior to their dates of hire.

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DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The incremental impact from recognizing stock-based compensation expense resulting from the investigation of past stock option grants is as follows (dollars in thousands):

	Pre-Tax		After Tax
	Expense		Expense
Fiscal Year	(Income)		(Income)
1998	$	172	$	172
1999		3,211		3,211
2000		2,238		2,238
2001		2,114		2,114
2002		1,679		1,679
2003		1,241		1,241
Total 1998-2003 impact		10,655		10,655
2004		817		817
2005		293		(2,169	)
2006		135		85
Total	$	11,900	$	9,388

80

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table presents the effects of the stock-based compensation and related tax adjustments made to the Company’s previously reported consolidated balance sheet as of December 31, 2005 (in thousands, except share amounts).

	December 31, 2005
	As Reported			Adjustments			As Restated(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	131,770		$	—		$	131,770
Short-term investments		220,569			—			220,569
Accounts receivable, net of allowance of $1,023		34,883			—			34,883
Deferred income taxes		22,251			409			22,660
Prepaid expenses and other		3,741			—			3,741
Total current assets		413,214			409			413,623
Property and equipment, net		17,955			—			17,955
Goodwill		195,299			—			195,299
Intangible assets, net of accumulated amortization of $36,798		20,054			—			20,054
Deferred income taxes		10,444			—			10,444
Other assets		12,174			—			12,174
TOTAL ASSETS	$	669,140		$	409		$	669,549
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	127,846		$	—		$	127,846
Accrued payroll		8,866			—			8,866
Deferred revenue		5,403			—			5,403
Accrued acquisition costs		5,651			—			5,651
Other accrued liabilities		21,210			—			21,210
Total current liabilities		168,976			—			168,976
NON-CURRENT LIABILITIES:
Convertible senior notes		195,000			—			195,000
Other liabilities		22			—			22
Total non-current liabilities		195,022			—			195,022
TOTAL LIABILITIES		363,998			—			363,998
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred Stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—			—
Common Stock, $.01 par value; 120,000,000 shares authorized; 35,033,741 shares issued and outstanding		350			—			350
Additional paid-in capital		315,489			9,760			325,249
Deferred compensation		(1,942	)		(48	)		(1,990	)
Retained earnings/(accumulated deficit)		(6,324	)		(9,303	)		(15,627	)
Accumulated other comprehensive income (loss)		(2,431	)		—			(2,431	)
Total stockholders’ equity		305,142			409			305,551
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	669,140		$	409		$	669,549

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table presents the effects of the stock-based compensation and related tax adjustments made to the Company’s previously reported consolidated statements of operations (in thousands, except per share amounts).

	2005							2004
	As Previously					As		As Previously					As
	Reported		Adjustments			Restated(1)		Reported		Adjustments			Restated(1)
Statement of Operations Data:
Revenue	$	220,408	$	—		$	220,408	$	154,130	$	—		$	154,130
Costs and expenses (exclusive of depreciation and amortization expense shown separately below)
Direct cost of services		5,013		50			5,063		5,013		154			5,167
Network and infrastructure		19,814		3			19,817		15,143		21			15,164
Sales and marketing		69,256		115			69,371		51,749		334			52,083
Product research and development		20,575		115			20,690		14,097		196			14,293
General and administrative		21,474		10			21,484		16,894		112			17,006
Depreciation and amortization		8,833		—			8,833		8,203		—			8,203
Amortization of acquisition related intangibles		8,730		—			8,730		8,269		—			8,269
Total costs and expenses		153,695		293			153,988		119,368		817			120,185
Income (loss) from operations		66,713		(293	)		66,420		34,762		(817	)		33,945
Other income, net		4,967		—			4,967		1,641		—			1,641
Income (loss) before income tax expense		71,680		(293	)		71,387		36,403		(817	)		35,586
Income tax expense		17,337		(2,462	)		14,875		1,079		—			1,079
Net income (loss)	$	54,343	$	2,169		$	56,512	$	35,324	$	(817	)	$	34,507
Net income (loss) per share — basic	$	1.57	$	0.06		$	1.64	$	1.09	$	(0.02	)	$	1.07
Net income (loss) per share — diluted	$	1.36	$	0.05		$	1.41	$	0.96	$	(0.02	)	$	0.94
Shares used in per-share calculation — basic		34,536		34,536			34,536		32,328		32,328			32,328
Shares used in per-share calculation — diluted		41,448		41,448			41,448		38,532		38,532			38,532

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

82

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table presents the effects of adjustments made to our previously reported consolidated statement of cash flows (in thousands):

DIGITAL RIVER, INC.

Consolidated Statements of Cash Flows For the Years Ended December 31,

	2005									2004
	As Previously									As Previously
	Reported			Adjustments			As Restated(1)			Reported			Adjustments			As Restated(1)
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	54,343		$	2,169		$	56,512		$	35,324		$	(817	)	$	34,507
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of acquisition-related intangibles		8,730			—			8,730			8,269			—			8,269
Change in accounts receivable allowance, net of acquisitions		(598	)		—			(598	)		709			—			709
Depreciation and amortization		8,833			—			8,833			8,203			—			8,203
Stock-based compensation expense related to stock-based compensation plans		—			293			293			—			817			817
Tax benefit of stock-based compensation		47,879			(2,462	)		45,417			—			—			—
Excess tax benefits from stock-based compensation		—			—			—			—			—			—
Deferred income taxes and other		(34,789	)		—			(34,789	)		—			—			—
Litigation and other charges		(739	)		—			(739	)		1,090			—			1,090
Change in operating assets and liabilities (net of acquisitions):
Accounts receivable		(10,304	)		—			(10,304	)		(8,223	)		—			(8,223	)
Prepaid and other assets		(2,417	)		—			(2,417	)		1,037			—			1,037
Accounts payable		34,822			—			34,822			34,433			—			34,433
Deferred revenue		1,395			—			1,395			(230	)		—			(230	)
Income tax payable		2,740			—			2,740			143			—			143
Accrued payroll and other accrued liabilities		9,859			—			9,859			4,380			—			4,380
Net cash provided by operating activities		119,754			—			119,754			85,135			—			85,135
INVESTING ACTIVITIES:
Purchases of investments		(190,713	)		—			(190,713	)		(199,699	)		—			(199,699	)
Sales of investments		127,771			—			127,771			94,059			—			94,059
Cash paid for acquisitions, net of cash received		(54,177	)		—			(54,177	)		(126,457	)		—			(126,457	)
Purchases of equipment and capitalized software		(8,328	)		—			(8,328	)		(9,255	)		—			(9,255	)
Net cash used in investing activities		(125,447	)		—			(125,447	)		(241,352	)		—			(241,352	)
FINANCING ACTIVITIES:
Principal amount on line of credit		—			—			—			45,000			—			45,000
Repayment of principal on line of credit		—			—			—			(45,000	)		—			(45,000	)
Proceeds from convertible senior notes		—			—			—			188,371			—			188,371
Proceeds from sales of common stock		—			—			—			—			—			—
Exercise of stock options		23,199			—			23,199			19,719			—			19,719
Sales of common stock under employee stock purchase plan		2,199			—			2,199			904			—			904
Repurchase of common stock		(13,145	)		—			(13,145	)		—			—			—
Repurchase of restricted stock to satisfy tax witholding obligation		—			—			—			—			—			—
Excess tax benefits from stock-based compensation		—			—			—			—			—			—
Net cash provided by financing activities		12,253			—			12,253			208,994			—			208,994
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(2,524	)		—			(2,524	)		2,072			—			2,072
NET INCREASE IN CASH AND CASH EQUIVALENTS		4,036			—			4,036			54,849			—			54,849
CASH AND CASH EQUIVALENTS, beginning of period		127,734			—			127,734			72,885			—			72,885
CASH AND CASH EQUIVALENTS, end of period	$	131,770		$	—		$	131,770		$	127,734		$	—		$	127,734
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest on Convertible Senior Notes	$	2,641		$	—		$	2,641		$	—		$	—		$	—
Cash paid for income taxes	$	193		$	—		$	193		$	—		$	—		$	—
Noncash investing and financing activities:
Common stock issued in acquisitions and earn-outs	$	—		$	—		$	—		$	5,344		$	—		$	5,344

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

83

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table presents the cumulative adjustments of each component of shareholders’ equity at the end of each fiscal year (in thousands):

	Additional Paid in		Deferred Stock						Net Impact to
Fiscal Year	Capital		Compensation			Retained Earnings			Shareholders’ Equity
1998	$	5,170	$	(4,998	)	$	(172	)	$	—
1999		8,429		(5,046	)		(3,383	)		—
2000		8,293		(2,672	)		(5,621	)		—
2001		11,103		(3,368	)		(7,735	)		—
2002		11,783		(2,368	)		(9,415	)		—
2003		11,798		(1,143	)		(10,655	)		—
2004		11,813		(341	)		(11,472	)		—
2005	$	9,761	$	(48	)	$	(9,304	)	$	409

3.   Net Income per Share:

Basic income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated by dividing net income, adjusted to exclude interest expense and financing cost amortization related to potentially dilutive securities, by the weighted average number of common shares related to potentially dilutive securities outstanding during the period, plus any additional common shares that would have been outstanding if potentially dilutive common shares had been issued during the period.

The following table summarizes the computation of basic and diluted earnings per share (in thousands, except per share data):

	For the Years Ended December 31,
	2006		2005		2004
			Restated(1)		Restated(1)
Earnings per share — basic
Net income — basic	$	60,810	$	56,512	$	34,507
Weighted average shares outstanding — basic		38,593		34,536		32,328
Earnings per share — basic	$	1.58	$	1.64	$	1.07
Earnings per share — diluted
Net income — basic	$	60,810	$	56,512	$	34,507
Exclude: Interest expense and amortized financing cost of convertible senior notes, net of tax benefit		1,739		2,099		1,772
Net income — diluted	$	62,549	$	58,611	$	36,279
Weighted average shares outstanding — basic		38,593		34,536		32,328
Dilutive impact of non-vested stock and options outstanding		1,624		2,487		3,626
Dilutive impact of convertible senior notes		4,425		4,425		2,578
Weighted average shares outstanding — diluted		44,642		41,448		38,532
Earnings per share — diluted	$	1.40	$	1.41	$	0.94

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

In accordance with the Emerging Issues Task Force (EITF), Issue No. 04-8, the unissued shares underlying contingent convertible notes are treated as if such shares were issued and outstanding for the purposes of calculating GAAP diluted earnings per share beginning with the issuance of our 1.25% convertible senior notes on June 1, 2004.

4.   Short-Term Investments:

As of December 31, 2006 and 2005, our available-for-sale securities consisted of the following (in thousands):

			Unrealized Gain/(Loss)								Maturities/Reset Dates
			Less Than 12			Greater Than 12					Less Than 12
	Cost		Months			Months			Fair Value		Months		1 to 3 Years
2006
U.S. government sponsored entities	$	142,473	$	(441	)	$	(208	)	$	141,824	$	79,961	$	61,863
Student loan bonds		35,000		—			—			35,000		35,000		—
Other		58,875		—			—			58,875		58,875		—
Total available-for-sale securities	$	236,348	$	(441	)	$	(208	)	$	235,699	$	173,836	$	61,863
2005
U.S. government sponsored entities	$	147,982	$	(1,277	)	$	(189	)	$	146,516	$	64,003	$	82,513
Student loan bonds		60,000		—			—			60,000		60,000		—
Other		14,053		—			—			14,053		14,053		—
Total available-for-sale securities	$	222,035	$	(1,277	)	$	(189	)	$	220,569	$	138,056	$	82,513

Realized gains or losses on investments are recorded in our statement of operations within other income, net. Realized losses on sales of investments were immaterial in 2006, 2005 and 2004. Interest income of $22.8 million, $9.7 million and $3.2 million was recorded in 2006, 2005 and 2004, respectively.

85

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

5.   Business Combinations, Goodwill and Intangible Assets:

The following table summarizes the purchase acquisitions completed during the three years in the period ended December 31, 2006 (in thousands):

	Initial		Initial									Other Intangible Assets
	Shares		Purchase		Acquired		Assumed					Technology/		Customer		Non-Compete
Acquisition	Issued		Consideration		Assets		Liabilities			Goodwill		Tradenames		Relationships		Agreements
2006
Mindvision, Inc.		—	$	24,975	$	2,555	$	(8,036	)	$	18,859	$	3,170	$	4,490	$	40
Direct Response
Technologies, Inc.		—		14,876		1,573		(3,723	)		11,343		2,465		3,620		—
Total		—	$	39,851	$	4,128	$	(11,759	)	$	30,202	$	5,635	$	8,110	$	40
2005
Commerce5, Inc.		—	$	45,000	$	3,321	$	(5,501	)	$	38,737	$	1,607	$	7,639	$	—
SWReg		—		8,800		5,373		(6,464	)		9,090		589		1,747		—
Total		—	$	53,800	$	8,694	$	(11,965	)	$	47,827	$	2,196	$	9,386	$	—
2004
element 5, AG		—	$	120,000	$	14,662	$	(16,673	)	$	110,775	$	5,654	$	7,814	$	784
Fireclick, Inc.		—		7,500		451		(111	)		7,512		701		—		250
BlueHornet Networks, Inc.		160		1,176		756		(280	)		4,280		836		1,104		250
Total		160	$	128,676	$	15,869	$	(17,064	)	$	122,567	$	7,191	$	8,918	$	1,284

Note:  Balances as of acquisition date and do not reflect subsequent earn-outs, adjustments or currency translation.

Acquisitions completed in 2006

In June 2006, we acquired all of the capital stock of MindVision, Inc., a privately held e-commerce company based in Lincoln, Nebraska, for approximately $25.0 million comprised of payments to stockholders of $21.2 million plus the assumption of certain liabilities totaling approximately $3.7 million. In November 2006, we recorded $0.2 million as acquisition cost related to a restructuring plan for employee severance to be paid out over a six month period.

In January 2006, we acquired all of the capital stock of Direct Response Technologies, Inc. (Direct Response), a privately held company based in Pittsburgh, Pennsylvania, for approximately $15.0 million in cash. Direct Response, a provider of tools for managing affiliate networks, is now named DR Marketing Solutions, Inc. The agreement also provides Direct Response shareholders with an earn-out opportunity based on DR Marketing Solutions, Inc. achieving certain revenue and earnings targets during the first three years subsequent to the acquisition. In 2006, we accrued $3.5 million for future earn-out payments. Earn-outs were recorded as goodwill in 2006 as they were considered incremental to the purchase price.

Acquisitions completed in 2005

In December 2005, we acquired all of the capital stock of Commerce5, Inc. (Commerce5) for approximately $45.1 million in cash comprised of payments to stockholders of $32.4 million plus assumption of $12.7 million in liabilities. Commerce5, now named DR globalTech, Inc., is an outsourced e-commerce provider to high-tech and consumer electronics manufacturers headquartered in Aliso Viejo, California.

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In March 2005, we acquired certain assets and assumed certain liabilities, vendor contracts and intellectual property of SWReg, an operating business of Atlantic Coast plc, a private limited UK company, for $8.8 million in cash. SWReg is a provider of e-commerce for services for software authors. The agreement also provided an opportunity for earn-out based on achieving specific revenue and development goals over the first 12 months following the closing of the acquisition. Earn-outs totaling $0.5 million have been recorded as goodwill as of December 31, 2006 as they were considered incremental to the purchase price.

Acquisitions completed in 2004

In April 2004, we acquired element 5 AG, a privately held company based in Germany and a leading European e-commerce solution provider for software publishers. Under the terms of the acquisition, we paid $120 million in cash to acquire all of the outstanding shares of capital stock of element 5. We also agreed to pay up to an additional $2.5 million in cash based on element 5’s operating performance over the first 24 months following the closing of the acquisition.

On January 18, 2005, we entered into an agreement with senior employees of element 5 AG, pursuant to which these employees agreed to cease providing services to element 5 sixty days after the date of the agreement. Pursuant to the agreement, we also agreed to resolve a $12 million escrow associated with our acquisition of element 5 by distributing $10 million to the former element 5 shareholders, and $2 million to us. Certain adjustments also were made to our earn-out obligations under the April 2004 acquisition agreement. Under the restructured earn-out, $1.25 million in cash was paid to the former element 5 shareholders on March 1, 2005 and an additional $1.25 million was paid on April 10, 2006. These earn-out amounts have been recorded as additional goodwill as they were incremental to the purchase price. We have recorded a net of $5.4 million as part of the acquisition cost of element 5 related to these acquisition restructuring plans of which $0.5 million remained as of December 31, 2006. The following table provides detail on the activity and our remaining accrual balance by category as of December 31, 2006 (in thousands):

	Accrual							Accrual								Accrual					Accrual
	April 16,		Net					December 31,		Adjust-						December 31,					December 31,
	2004		Additions		Charges			2004		ments			Charges			2005		Charges			2006
Shareholder escrow	$	—	$	2,500	$	—		$	2,500	$	—		$	(1,250	)	$	1,250	$	(1,250	)	$	—
Employee severance costs		700		2,100		(400	)		2,400		(200	)		(1,250	)		950		(451	)		499
Facilities consolidation		200		100		(300	)		—		—			—			—		—			—
Total	$	900	$	4,700	$	(700	)	$	4,900	$	(200	)	$	(2,500	)	$	2,200	$	(1,701	)	$	499

In June 2004, we acquired substantially all of the assets and assumed certain liabilities of Fireclick, Inc., a leading provider of web-analysis solutions for online retailers, providing website site owners with the tools necessary to measure campaign return-on-investment, track user path analysis and enhance website site user experience. Under the terms of the agreement, we paid $7.5 million in cash and an additional $0.3 million in cash upon the completion of certain integration milestones. The agreement also provides Fireclick the opportunity for an earn-out based on our achieving certain revenue and profitability targets attributable to Fireclick over the course of the 36 months following the closing of the acquisition. Earn-outs totaling $1.2 million have been recorded as goodwill as of December 31, 2006, as they were considered part of the purchase price.

In November 2004, we acquired all of the outstanding capital stock of BlueHornet Networks, Inc. BlueHornet is a leading provider of e-mail marketing campaign management services and related customer relationship management (CRM) tools. As consideration for the acquisition, we issued a total of 160,185 shares of our common stock to the BlueHornet stockholders, valued at approximately $5.3 million, paid off $0.7 million of BlueHornet debt obligations at closing and agreed to pay an additional $0.5 million in cash to the former BlueHornet stockholders following the transition of certain BlueHornet assets to our facilities in Eden Prairie, Minnesota. In addition, the former BlueHornet stockholders may receive additional earn-out

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payments of cash or our common stock, at our discretion, based on BlueHornet’s operating performance over the first 36 months following the closing of the acquisition. Earn-outs totaling $1.7 million have been recorded as goodwill as of December 31, 2006, as they were considered part of the purchase price.

As of December 31, 2006, there was an estimated maximum potential for future earn-outs of approximately $1.1 million in excess of the $4.9 million in earn-outs included in accrued acquisition liabilities. Any of the estimated maximum potential future earn-out beyond the $4.9 million accrued will result in additional goodwill.

Pro Forma Operating Results (Unaudited)

The consolidated financial statements include the operating results of each business acquired from the date of acquisition. The following unaudited pro forma condensed results of operations for 2006, 2005 and 2004 have been prepared as if each of the acquisitions in 2006 had occurred on January 1, 2005, and as if each of the 2005 acquisitions had occurred on January 1, 2004 (in thousands except per share data):

	2006		2005		2004
			As Restated(1)		As Restated(1)
Revenue	$	311,090	$	242,488	$	178,814
Income from operations		67,213		63,606		24,832
Net income		60,208		53,954		25,594
Diluted income per share	$	1.39	$	1.32	$	0.69

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

This pro forma financial information does not purport to represent results that would actually have been obtained if the transactions had been in effect on January 1, 2005 or 2004, as applicable, or any future results that may be realized.

Goodwill

We account for our goodwill in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 precludes the amortization of goodwill and intangible assets with indefinite lives, but these assets are reviewed annually (or more frequently if impairment indicators arise) for impairment.

We complete our annual impairment test using a two-step approach based in the fourth quarter of each fiscal year and reassess any intangible assets, including goodwill, recorded in connection with earlier acquisitions. Our assessment has indicated that there is no impairment of goodwill for the years ended December 31, 2006, 2005 and 2004.

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The changes in the net carrying amount of goodwill for the years ended December 31, 2006 and 2005 are as follows (in thousands):

	Total
Balance as of December 31, 2004	$	148,086
Goodwill from acquisitions and earn-outs		49,096
Adjustments(1)		(1,883	)
Balance as of December 31, 2005	$	195,299
Goodwill from acquisitions and earn-outs		35,883
Adjustments(1)		12,617
Balance as of December 31, 2006	$	243,799

(1) Adjustments to goodwill during the year ended December 31, 2006 and December 31, 2005, resulted primarily from foreign currency translation adjustments relating to goodwill associated with our current and prior period acquisitions.

Intangible Assets

Information regarding our other intangible assets is as follows (in thousands):

	As of December 31, 2006
	Carrying Amount		Accumulated		Carrying Amount
	Gross		Amortization		Net
Customer relationships	$	43,072	$	28,890	$	14,182
Non-compete agreements		5,251		5,017		234
Technology/tradename		22,875		16,185		6,690
Total	$	71,198	$	50,092	$	21,106

	As of December 31, 2005
	Carrying Amount		Accumulated		Carrying Amount
	Gross		Amortization		Net
Customer relationships	$	34,666	$	21,103	$	13,563
Non-compete agreements		5,121		4,300		821
Technology/tradename		17,065		11,395		5,670
Total	$	56,852	$	36,798	$	20,054

The components of intangible assets acquired during the years ended December 31, 2006, 2005 and 2004, are as follows (in thousands). No significant residual value is estimated for these assets.

	2006(1)				2005				2004
			Weighted				Weighted				Weighted
			Average				Average				Average
	Amount		Life		Amount		Life		Amount		Life
Customer relationships	$	8,110		8 years	$	9,386		4 years	$	8,918		3 years
Non-compete agreements		40		4 years		—		—		1,284		3 years
Technology/tradename		5,635		4 years		2,196		4 years		7,191		3 years
Total	$	13,785		6 years	$	11,582		4 years	$	17,393		3 years

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Estimated amortization expense for the remaining life of the intangible assets, based on intangible assets as of December 31, 2006, is as follows (in thousands):

Year
2007	$	6,683
2008		4,192
2009		3,281
2010		1,836
2011		1,246
Thereafter		3,868
Total	$	21,106

Following is an allocation of the net assets acquired from the acquisitions consummated and amounts paid under earn-out arrangements in 2006 and 2005 (in thousands) which includes subsequent year activity for 2005 acquisitions:

	2006			2005
Tangible assets	$	4,128		$	8,694
Liabilities assumed		(11,759	)		(11,965	)
Customer relationships		8,110			9,386
Non-compete agreements		40			—
Technology/tradename		5,635			2,196
Goodwill (year of acquisition)		30,202			47,827
Goodwill (subsequent to year of acquisition)		—			985
Net assets acquired	$	36,356		$	57,123

6.   Stock-Based Compensation:

Prior to the annual stockholders’ meeting held in May 2005, we had two stock-based employee compensation plans. At the annual stockholders’ meeting held in May 2005, our stockholders approved an amendment and restatement of our 1998 Stock Option Plan that combined the 1998 Plan with our 1999 Stock Option Plan and gave us the flexibility to grant restricted stock awards, restricted stock unit awards and performance shares, in addition to incentive and non-statutory stock options, to our directors, employees, and consultants under the combined plan. We call our new amended and restated plan our 1998 Equity Incentive Plan (the “1998 Plan”). Our current plan is described more fully in Note 11.

Prior to the adoption of SFAS 123(R), we presented deferred compensation as a separate component of shareholders’ equity. In 2006, in accordance with the provisions of SFAS(R), we reclassified the balance in deferred compensation to additional paid-in capital on our balance sheet.

Expense Information under SFAS 123(R)

On January 1, 2006, we adopted SFAS 123(R) which requires measurement and recognition of compensation expense for all stock-based payments made to employees and directors including stock options, restricted stock grants and employee stock purchases made through our Employee Stock Purchase Plan based

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on estimated fair values. The following table summarizes stock-based compensation expense, net of tax, related to our stock-based compensations plans recognized under SFAS 123(R):

	2006 Three Months Ended												Year Ended
	March 31			June 30			September 30			December 31			December 31, 2006
	(In thousands)												(In thousands)
Costs and expenses
Direct cost of services	$	214		$	218		$	197		$	213		$	842
Network and infrastructure		86			84			78			81			329
Sales and marketing		1,289			1,323			1,268			1,302			5,182
Product research and development		585			591			556			560			2,292
General and administrative		1,239			1,303			1,357			1,360			5,259
Stock-based compensation included in costs and expenses		3,413			3,519			3,456			3,516			13,904
Tax benefit		(1,200	)		(1,218	)		(1,221	)		(1,229	)		(4,868	)
Stock-based compensation expense, net of tax	$	2,213		$	2,301		$	2,235		$	2,287		$	9,036

The following table reflects net income and basic and diluted net income per share for 2006 compared with the pro forma information for 2005 and 2004 as if the Company had applied the fair value recognition provisions SFAS No. 123 to stock-based compensation during 2005 and 2004 (in thousands, except per share amounts):

	For the Years Ended December 31,
				Pro Forma			Pro Forma
	2006			2005			2004
				As Restated(1)			As Restated(1)
Net income, as reported for prior periods(2)	$	N/A		$	56,512		$	34,507
Stock-based compensation expense included in reported net income, net of tax					184			817
Stock-based compensation expense determined under the fair value based method for all awards		(13,904	)		(13,170	)		(27,236	)
Tax benefit(3)		4,868			4,588			0
Stock-based compensation expense, net of tax(4)		(9,036	)		(8,582	)		(27,236	)
Net income, including the effect of stock-based compensation expense(5)	$	60,810		$	48,114		$	8,088
Basic net income per share — as reported for prior periods(1)(2)		N/A		$	1.64		$	1.07
Diluted net income per share — as reported for prior periods(1)(2)		N/A		$	1.41		$	0.94
Basic net income per share, including the effect of stock-based compensation expense(5)	$	1.58		$	1.39		$	0.25
Diluted net income per share, including the effect of stock-based compensation expense(5)	$	1.40		$	1.24		$	0.26

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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(2)	Net income and net income per share prior to 2006 did not include stock-based compensation expense under SFAS 123 because we were following the provisions of APB 25.
(3)	No tax benefit was recorded prior to the removal of the valuation allowance on certain deferred tax assets in the fourth quarter of 2005.
(4)	Total stock-based compensation expense prior to 2006 is calculated based on the pro forma application of SFAS 123.
(5)	Net income and net income per share prior to 2006 represents pro forma information based on SFAS 123.

Valuation Information under SFAS 123(R)

During the twelve months ending ended December 31, 2006, 2005 and 2004 we used the Black-Scholes option pricing model with the following weighted average assumptions:

	2006			2005			2004
				As Restated(1)			As Restated(1)
Risk-free interest rate		5	%		4	%		4	%
Expected life (years)		4.08			3.14			1-4
Volatility factor		0.59			0.68			1.3
Expected dividends		—			—			—
Weighted average fair value of options granted	$	19.00		$	13.71		$	13.00

The risk-free interest rate assumption is based on observed interest rates appropriate for the term of our stock options. The expected life of stock options represents the weighted-average period the stock options are expected to remain outstanding and is based on historical exercise patterns. We used historical closing stock price volatility for a period equal to the expected term of the options granted. The dividend yield assumption is based on our history and expectation of future dividend payouts.

As stock-based compensation expense recognized in the Consolidated Statement of Operations for the twelve months ended December 31, 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience. In our pro forma information required under SFAS 123 for the periods prior to 2006, we accounted for forfeitures as they occurred in accordance with APB 25.

At December 31, 2006, there was approximately $19.1 million of total unrecognized stock-based compensation expense, adjusted for estimated forfeitures, related to unvested share-based awards. Unrecognized stock-based compensation expense is expected to be recognized over the next 4.0 years on a weighted average basis and will be adjusted for any future changes in estimated forfeitures.

7.   Income Taxes:

The components of pretax income are as follows (in thousands):

	Year Ended December 31,
	2006		2005		2004
			As Restated(1)		As Restated(1)
United States	$	65,171	$	65,054	$	32,961
International		24,311		6,333		2,625
Total	$	89,482	$	71,387	$	35,586

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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The provision (benefit) for income taxes is composed of the following (in thousands):

	Year Ended December 31,
	2006			2005			2004
				As Restated(1)			As Restated(1)
Current tax expense (benefit):
United States federal	$	34,362		$	20,825		$	—
State and local		2,160			1,484			—
International		2,915			3,825			1,079
Total current provision for income taxes		39,437			26,134			1,079
Deferred tax expense (benefit):
United States federal		(10,136	)		(10,288	)		—
State and local		(637	)		(647	)		—
International		8			(324	)		—
Total deferred provision (benefit) for income taxes		(10,765	)		(11,259	)		—
Provision for income taxes	$	28,672		$	14,875		$	1,079

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

The following is a reconciliation of the difference between the actual provision for income taxes and the provision computed by applying the federal statutory rate of 35% to income before income taxes (in thousands):

	Year Ended December 31,
	2006			2005			2004
				As Restated(1)			As Restated(1)
Tax expense at statutory rate	$	31,319		$	24,986		$	12,455
State taxes, net of federal benefit		1,469			1,359			1,484
International rate differential		(3,193	)		(1,561	)		128
Tax Credits		(1,909	)		—			—
Non-deductible goodwill and earn-out compensation		—			—			183
Nondeductible expense and other		986			1,801			1,012
Change in valuation allowance		—			(11,710	)		(14,183	)
Total	$	28,672		$	14,875		$	1,079

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

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Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred income taxes are as follows (in thousands):

	2006			2005
				As Restated(1)
Deferred tax assets:
Net operating loss and credit carryforwards	$	30,302		$	48,353
Nondeductible reserves and accruals		6,123			2,854
Depreciation and amortization		4,522			5,475
Valuation allowance		(12,960	)		(17,504	)
Total deferred tax assets		27,987			39,178
Deferred tax liabilities:
Depreciation		—			(788	)
Other intangibles		(7,540	)		(5,706	)
Total deferred tax liabilities		(7,540	)		(6,494	)
Net deferred tax assets	$	20,447		$	32,684

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

As of December 31, 2006, we had net U.S. tax loss carryforwards of approximately $61.6 million and foreign tax loss carryforwards of $1.3 million. The U.S. amount consists of $30.0 million of deductions resulting from exercise of stock options and $31.6 million of acquired net operating losses. The U.S. tax loss carryforwards expire in the years 2020 through 2025.

In prior years, there was uncertainty of future realization of the deferred tax assets resulting from temporary differences and from tax loss carryforwards from operations and stock option deductions, therefore a valuation allowance equal to the deferred tax assets was recorded. At December 31, 2005, we evaluated our deferred tax assets related to tax loss carryforwards from stock option deductions and other items and concluded it was more likely than not that the deferred tax assets would be realized, and accordingly the valuation allowance was reversed. The reversal of the valuation allowance increased additional paid-in-capital by approximately $28.0 million and decreased income tax expense by approximately $7.1 million.

We also have evaluated our deferred tax assets related to acquired operating losses and we believe a full valuation allowance for these assets is required as it is not more likely than not that the deferred tax assets will be realized. This valuation allowance is due to anticipated limitations on acquired losses, including limitations under Section 382 of the Internal Revenue Code. Any future release of this valuation allowance will reduce goodwill.

In accordance with SFAF 123(R), which we adopted January 1, 2006, tax savings from expected future deductions based on the expense attributable to our stock option plans are reflected in the U.S. tax provisions for 2006 and 2005. They were not reflected in the provision for 2004.

No provision has been made for federal income taxes on approximately $25.8 million of our foreign subsidiaries undistributed earnings since we plan to indefinitely reinvest all such earnings. If these earnings were distributed to the U.S. in the form of dividends or otherwise, then we would be subject to U.S. income taxes on such earnings. The amount of U.S. income taxes would be subject to adjustment for foreign tax credits and for the impact of the step-up in the basis of assets resulting from a Section 338 election made at

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the time of acquisition. If these earnings were to be distributed, the income tax liability would be approximately $4.9 million.

8.   Commitments and Contingencies:

Leases

We currently have 34 facility leases in addition to leasing certain computer equipment under non-cancelable operating leases. Total rent expense, including common area maintenance charges, recognized under all leases was $4.3 million, $3.0 million and $2.4 million for the years ended December 31, 2006, 2005 and 2004, respectively. The minimum annual rents under long-term leases at December 31, 2006, were as follows (in thousands):

Year Ending December 31,	Lease Obligations
2007	$	3,964
2008		2,893
2009		1,395
2010		850
2011		362
Thereafter		5,306
Total future minimum obligations	$	14,770

Litigation

We are subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the final outcome of these matters is currently not determinable, we believe there is no litigation pending against us that is likely to have, individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operation or cash flows. Because of the uncertainty inherent in litigation, it is possible that unfavorable resolutions of these lawsuits, proceedings and claims could exceed the amount we have currently reserved for these matters.

Third parties have from time-to-time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We have been notified of several potential patent disputes, and expect that we will increasingly be subject to patent infringement claims as our services expand in scope and complexity. We have in the past been forced to litigate such claims. We may also become more vulnerable to third-party claims as laws, such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts and as we expand geographically into jurisdictions where the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or less favorable. These claims, whether meritorious or not, could be time consuming and costly to resolve, cause service upgrade delays, require expensive changes in our methods of doing business, or could require us to enter into costly royalty or licensing agreements.

Indemnification Provisions

In the ordinary course of business we have included limited indemnification provisions in certain of our agreements with parties with whom we have commercial relations. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by any third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In a limited number of agreements, including agreements under which we have developed technology for certain commercial parties, we have provided an indemnity for other types of third-party

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claims. To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions.

In addition, we are required by our processors to comply with credit card association operating rules, and we have agreed to indemnify our processors for any fines they are assessed by credit card associations as a result of processing payments for us. The credit card associations and their member banks set and interpret the credit card rules. Visa, MasterCard, American Express, or Discover could adopt new operating rules or re-interpret existing rules that we or our processors might find difficult to follow. We have had payment processing agreements with certain of our payment processors terminated due to violations of their rules. We also could be subject to fines or increased fees from MasterCard and Visa.

9.   Long-Term Debt:

On April 16, 2004, in connection with our acquisition of element 5, we established a $45 million secured revolving credit facility with Harris Trust and Savings Bank. This facility was repaid in full and terminated in connection with the sale and issuance of our 1.25% convertible senior notes on June 1, 2004.

On June 1, 2004, we sold and issued $175 million in aggregate principal amount of 1.25% convertible senior notes due January 1, 2024, in a private, unregistered offering. The notes were subsequently registered for resale. The notes were sold at 100% of their principal amount. The initial purchasers exercised in full their option to purchase up to an additional $20 million in aggregate principal amount of the notes on June 30, 2004, which purchase transaction closed on July 6, 2004.

We are required to pay interest on the notes on January 1 and July 1 of each year beginning January 1, 2005. The notes bear interest at a rate of 1.25% and, if specified conditions are met, are convertible into our common stock at a conversion price of $44.063 per share. The notes may be surrendered for conversion under certain circumstances, including the satisfaction of a market price condition, such that the price of our common stock reaches a specified threshold; the satisfaction of a trading price condition, such that the trading price of the notes falls below a specified level; the redemption of the notes by us, the occurrence of specified corporate transactions, as defined in the related indenture; and the occurrence of a fundamental change, as defined in the related indenture. The initial conversion price is equivalent to a conversion rate of approximately 22.6948 shares per $1,000 of principal amount of the notes. We will adjust the conversion price if certain events occur, as specified in the related indenture, such as the issuance of our common stock as a dividend or distribution or the occurrence of a stock subdivision or combination. If a fundamental change, such as a change in our control, as defined in the related indenture, occurs on or before January 1, 2009, we also may be required to purchase the notes for cash and pay an additional make-whole premium payable in our common stock, or in the same form of consideration into which all, or substantially all, of the shares of our common stock have been converted or exchanged in connection with the fundamental change, upon the repurchase or conversion of the notes in connection with the fundamental change. Holders of the notes have the right to require us to repurchase their notes prior to maturity on January 1, 2009, 2014 and 2019. We have the right to redeem the notes, under certain circumstances, on or after July 1, 2007, and prior to January 1, 2009, and we may redeem the notes at anytime on or after January 1, 2009.

A portion of the net proceeds of the offering was used to repay our senior secured revolving credit facility with Harris Trust and Savings Bank. The balance is being used for general corporate purposes, including working capital, capital expenditures, potential future acquisitions, investments, and the potential repurchase of shares of our common stock.

We incurred interest expense of $2.5 million in 2006 and made interest payments of $2.4 million. We incurred interest expense of $2.5 million in 2005 and made interest payments of $2.6 million. We incurred interest expense of $1.5 million in 2004 and made no interest payments.

96

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

10.   Stockholders’ Equity:

Share Repurchase Program

In April 2005, our Board of Directors authorized a new share repurchase program of up to $50.0 million of our outstanding shares of common stock. This new program superseded and replaced the $5.0 million share repurchase program adopted in 2001. Under the new program, the shares may be repurchased in the open market or in privately negotiated transactions. Repurchases are at our discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. No time limit was set for the completion of the repurchase program. During 2005, we repurchased a total of 483,371 shares at a weighted average price per share of $27.20. No shares were repurchased during 2006 or 2004.

11.   Employee Benefit Plans:

Option and Restricted Stock Awards

Prior to the annual stockholders’ meeting held in May 2005, we had two stock-based employee compensation plans. At the annual stockholders’ meeting held in May 2005, our stockholders approved an amendment and restatement of our 1998 Stock Option Plan that combined the 1998 Plan with our 1999 Stock Option Plan and gave us the flexibility to grant restricted stock awards, restricted stock unit awards and performance shares, in addition to incentive and nonstatutory stock options, to our directors, employees, and consultants under the combined plan. We call our new amended and restated plan our 1998 Equity Incentive Plan (the “1998 Plan”).

As of December 31, 2006, there were 1,540,200 shares available for future awards under our 1998 Plan. The number of shares available will be reduced by three shares for every two shares granted under the stock award plan that does not provide for full payment by the participant.

Options granted to employees typically expire no later than ten years after the date of grant. Incentive stock option grants must have an exercise price of at least 100% of the fair market value of a share of common stock on the grant date. Incentive stock options granted to employees who, immediately before such grant, owned stock directly or indirectly representing more than 10% of the voting power of our stock will have an exercise price of 110% of the fair market value of a share of common stock on the grant date and will expire no later than five years from the date of grant. The 1998 Plan also provides for other stock-based awards as may be established by the Board of Directors or the Compensation Committee.

97

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

A Summary of the changes in outstanding options is as follows:

									Weighted
	Shares						Options		Average
	Available			Options			Price		Price
	for Grant			Outstanding			per Share		per Share
Balance, December 31, 2003		3,461,199			6,652,096			$ 1.69 - $31.13	$	10.87
Granted		(1,603,600	)		1,603,600			20.60 - 24.86		22.83
Exercised					(1,942,212	)		2.59 - 31.13		10.15
Canceled/expired		596,944			(596,944	)		2.59 - 31.13		15.93
Balance, December 31, 2004		2,454,543			5,716,540			$ 1.69 - $31.13	$	13.94
Granted		(846,678	)		846,678			23.90 - 30.69		28.15
Exercised					(1,719,114	)		1.69 - 30.69		13.50
Canceled/expired		320,719			(320,719	)		3.88 - 27.40		15.15
Balance, December 31, 2005		1,928,584			4,523,385			$ 2.59 - $31.13	$	16.69
Granted		(395,000	)		395,000			29.75 - 57.36		38.64
Restricted stock effect on shares available for grant		(134,250	)		N/A			N/A		N/A
Exercised					(1,219,736	)		2.59 - 45.24		17.31
Canceled/expired		140,866			(140,866	)		2.59 - 30.69		22.57
Balance, December 31, 2006		1,540,200			3,557,783			$ 2.59 - $57.36	$	18.68

The following table summarizes significant ranges of outstanding and exercisable options under our 1998 Plan as of December 31, 2006:

		Options Outstanding								Options Exercisable
				Weighted		Weighted		Aggregate				Weighted		Aggregate
		Number		Average		Average		Intrinsic		Number		Average		Intrinsic
Exercise Price		Outstanding		Life Remaining		Price		Value		Exercisable		Price		Value
	$ 2.59 - $ 3.88		122,433		1.8 years	$	2.96	$	6,468,315		122,433	$	2.96	$	6,468,315
	4.56 -  7.55		806,923		4.2 years		5.32		40,723,068		806,923		5.32		40,723,068
	9.12 - 13.92		729,486		5.8 years		11.65		32,199,619		580,402		11.86		25,497,181
	16.72 - 22.98		627,899		6.8 years		22.20		21,089,713		412,757		22.52		13,733,276
	23.01 - 31.13		929,445		8.1 years		27.65		26,158,720		217,766		27.88		6,077,869
	31.14 - 57.36		341,597		9.3 years		39.98		5,400,636		41,003		35.39		836,605
	$ 2.59 - $57.36		3,557,783		6.4 years	$	18.68	$	132,040,071		2,181,284	$	13.00	$	93,336,315

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s closing stock price of $55.79 as of December 31, 2006, which would have been received by the option holders had those option holders exercised their options as of that date. The total intrinsic value of options exercised during the twelve months ended December 31, 2006, 2005 and 2004 were $38.6 million, $41.4 million and $43.7 million, respectively, determined as of the date of exercise. The weighted average life remaining on exercisable options is 5.3 years.

Restricted stock awards are subject to forfeiture if employment terminates prior to the release of the restrictions. During the vesting period, ownership of the shares cannot be transferred. Restricted stock is considered issued and outstanding at the grant date and has the same dividend and voting rights as other

98

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

common stock. A summary of the changes in restricted stock under our 1998 Plan as of December 31, 2006 is as follows:

			Weighted
	Restricted		Average
	Stock		Fair Value
Non-Vested Balance, December 31, 2005		—	$	—
Granted		89,500		39.96
Vested		—		—
Forfeited		—		—
Non-Vested Balance, December 31, 2006		89,500	$	39.96

Employee Stock Purchase Plan

We also sponsor an employee stock purchase plan under which 1,200,000 shares have been reserved for purchase by employees. The purchase price of the shares under the plan is the lesser of 85% of the fair market value on the first or last day of the offering period. Offering periods are currently every six months ending on June 30 and December 31. Employees may designate up to ten percent of their compensation for the purchase of shares under the plan. Total shares purchased by employees under the plan were 71,000, 83,000 and 51,000 in the years ended December 31, 2006, 2005 and 2004, respectively. There are 556,853 shares still reserved under the plan as of December 31, 2006.

Inducement Equity Incentive Plan

Effective on December 14, 2005, in connection with our acquisition of Commerce5, Inc., we adopted an Inducement Equity Incentive Plan (the “Inducement Plan”) initially for Commerce5 executives who joined Digital River as a result of the acquisition, or other personnel who join us after the date of the Inducement Plan adoption. A total of 87,500 restricted shares of Digital River stock may be issued under the Inducement Plan, subject to vesting. In December 2005, we issued 63,750 shares under the plan. In January 2006, we issued the remaining 23,750 shares. In accordance with the NASDAQ rules, no stockholder approval was required for the Inducement Plan.

Employee Benefit Plan

We have a defined contribution 401(k) retirement plan for eligible employees. Employees may contribute up to 15% of their pretax compensation to the plan, with us providing a discretionary match of up to 50% of the total employee contribution. Amounts charged to expense related to our matching contributions were $1.4 million in 2006, $1.1 million in 2005 and $0.7 million in 2004.

12.   Segment Information:

We view our operations and manage our business as one reportable segment, providing outsourced e-commerce solutions globally to a variety of companies, primarily in the software and high-tech products markets. Factors used to identify our single operating segment include the financial information available for evaluation by the chief operating decision maker in making decisions about how to allocate resources and assess performance. We market our products and services through our offices in the United States and our wholly-owned branches and subsidiaries operating in the United Kingdom, Germany, Japan and Taiwan.

Prior to January 1, 2004, we managed our physical goods clients through a division (formerly our E-Business Services Division) that was separate from our Software and Digital Commerce Services Division. Beginning in January 2004, this divisional structure was consolidated, and we announced that we would no longer report our activities as separate business segments.

99

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

Sales to international customers accounted for 41%, 39% and 31% of revenue for 2006, 2005 and 2004, respectively. Sales are attributed to a geographic region based on the ordering location of the customer. Summarized revenue information by region for fiscal 2006, 2005 and 2004 is as follows (dollars in thousands):

	2006		2005		2004
United States	$	180,905	$	135,110	$	106,350
Europe		87,854		59,951		35,450
Other		38,873		25,347		12,330
Total	$	307,632	$	220,408	$	154,130

Revenue derived from sales of product from one software publisher, Symantec Corporation, accounted for approximately 30.2%, 29.7% and 27.2% of our total revenue in 2006, 2005 and 2004, respectively. In addition, revenues derived from proprietary Digital River services sold to Symantec end-users and dealer network sales of Symantec products amounted to approximately 16.6% of total Digital River revenue in 2006, 14.4% in 2005 and 10.8% in 2004.

The following table presents selected asset information by geographic area based on the physical location of the assets (in thousands):

	2006						2005
	United States			Europe			United States			Europe
Total property and equipment	$	46,997		$	9,384		$	46,694		$	5,306
Accumulated depreciation		(27,904	)		(4,398	)		(30,691	)		(3,354	)
Net property and equipment	$	19,093		$	4,986		$	16,003		$	1,952
Total intangible assets	$	55,590		$	15,608		$	42,871		$	13,981
Accumulated amortization		(36,021	)		(14,071	)		(28,995	)		(7,803	)
Net intangible assets	$	19,569		$	1,537		$	13,876		$	6,178
Total goodwill	$	145,454		$	120,800		$	109,374		$	108,380
Accumulated amortization		(22,455	)		—			(22,455	)		—
Net goodwill	$	122,999		$	120,800		$	86,919		$	108,380

13.   Selected Quarterly Financial Information (Unaudited)

The following tables set forth a summary of the Company’s quarterly financial information for each of the four quarters ended December 31, 2006 and 2005 (in thousands, except per share amounts):

	Quarter Ended
	March 31		June 30		September 30		December 31
	(In thousands, except per share data)
2006
Revenue	$	78,014	$	71,277	$	75,337	$	83,004
Income from operations		20,824		14,189		14,565		18,017
Net income		16,377		13,289		14,788		16,355
Net income per share — basic	$	0.46	$	0.34	$	0.37	$	0.41
Net income per share — diluted	$	0.41	$	0.30	$	0.33	$	0.36

100

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

	Quarter Ended
	March 31		June 30		September 30		December 31
	As Restated(1)		As Restated(1)		As Restated(1)		As Restated(1)
	(In thousands, except per share data)
2005
Revenue	$	54,529	$	51,143	$	53,179	$	61,557
Income from operations		17,661		14,489		15,460		18,810
Net income		15,905		10,178		12,313		18,116
Net income per share — basic	$	0.47	$	0.30	$	0.35	$	0.52
Net income per share — diluted	$	0.39	$	0.26	$	0.31	$	0.45

(1) See Note 2, “Restatement of Consolidated Financial Statements,” and Note 13, “Selected Quarterly

	Quarter Ended
	March 31							June 30
	As Previously							As Previously
2005	Reported		Adjustments			As Restated(1)		Reported		Adjustments			As Restated(1)
Statement of Operations Data:
Revenue	$	54,529	$	—		$	54,529	$	51,143	$	—		$	51,143
Costs and expenses
Direct cost of services		1,301		16			1,317		1,187		15			1,202
Network and infrastructure		4,479		2			4,481		4,738		1			4,739
Sales and marketing		16,376		61			16,437		15,740		23			15,763
Product research and development		4,458		39			4,497		5,127		35			5,162
General and administrative		5,615		3			5,618		5,301		2			5,303
Depreciation and amortization		2,122		—			2,122		2,375		—			2,375
Amortization of acquisition related intangibles		2,396		—			2,396		2,110		—			2,110
Total costs and expenses		36,747		121			36,868		36,578		76			36,654
Income (loss) from operations		17,782		(121	)		17,661		14,565		(76	)		14,489
Other income, net		1,155		—			1,155		891		—			891
Income (loss) before income tax expense		18,937		(121	)		18,816		15,456		(76	)		15,380
Income tax expense		4,900		(1,989	)		2,911		5,230		(28	)		5,202
Net income (loss)	$	14,037	$	1,868		$	15,905	$	10,226	$	(48	)	$	10,178
Net income (loss) per share — basic	$	0.41	$	0.06		$	0.47	$	0.30	$	—		$	0.30
Net income (loss) per share — diluted	$	0.35	$	0.04		$	0.39	$	0.26	$	—		$	0.26
Shares used in per-share calculation — basic		33,932		33,932			33,932		34,176		34,176			34,176
Shares used in per-share calculation — diluted		41,454		41,454			41,454		41,154		41,154			41,154

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

101

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

	Quarter Ended
	September 30							December 31
	As Previously							As Previously
2005	Reported		Adjustments			As Restated(1)		Reported		Adjustments			As Restated(1)
Statement of Operations Data:
Revenue	$	53,179	$	—		$	53,179	$	61,557	$	—		$	61,557
Costs and expenses
Direct cost of services		1,050		15			1,065		1,475		4			1,479
Network and infrastructure		4,983		—			4,983		5,614		—			5,614
Sales and marketing		16,713		21			16,734		20,428		11			20,439
Product research and development		5,210		34			5,244		5,779		7			5,786
General and administrative		5,294		2			5,296		5,264		2			5,266
Depreciation and amortization		2,308		—			2,308		2,028		—			2,028
Amortization of acquisition related intangibles		2,089		—			2,089		2,135		—			2,135
Total costs and expenses		37,647		72			37,719		42,723		24			42,747
Income (loss) from operations		15,532		(72	)		15,460		18,834		(24	)		18,810
Other income, net		1,526		—			1,526		1,395		—			1,395
Income (loss) before income tax expense		17,058		(72	)		16,986		20,229		(24	)		20,205
Income tax expense		4,700		(27	)		4,673		2,507		(418	)		2,089
Net income (loss)	$	12,358	$	(45	)	$	12,313	$	17,722	$	394		$	18,116
Net income (loss) per share — basic	$	0.35	$	—		$	0.35	$	0.50	$	0.01		$	0.52
Net income (loss) per share — diluted	$	0.31	$	—		$	0.31	$	0.44	$	0.01		$	0.45
Shares used in per-share calculation — basic		34,824		34,824			34,824		35,112		35,112			35,112
Shares used in per-share calculation — diluted		41,972		41,972			41,972		41,244		41,244			41,244

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

102

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

The following tables present the effects of adjustments made to our previously reported quarterly consolidated balance sheets (in thousands):

	September 30, 2005									June 30, 2005
	As Previously									As Previously
	Reported			Adjustments			As Restated(1)			Reported			Adjustments			As Restated(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	145,068		$	—		$	145,068		$	142,221		$	—		$	142,221
Short-term investments		210,217			—			210,217			179,824			—			179,824
Accounts receivable, net of allowance		25,540			—			25,540			21,903			—			21,903
Deferred income taxes		—			—			—			—			—			—
Prepaid expenses and other		5,123			—			5,123			3,109			—			3,109
Total current assets		385,948			—			385,948			347,057			—			347,057
Property and equipment, net		18,470			—			18,470			19,314			—			19,314
Goodwill		156,515			—			156,515			156,279			—			156,279
Intangible assets, net of accumulated amortization		13,089			—			13,089			15,194			—			15,194
Deferred income taxes		—			—			—			—			—			—
Other assets		9,637			—			9,637			9,566			—			9,566
TOTAL ASSETS	$	583,659		$	—		$	583,659		$	547,410		$	—		$	547,410
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	91,983			—		$	91,983		$	84,879			—		$	84,879
Accrued payroll		7,263			—			7,263			4,254			—			4,254
Deferred revenue		4,309			—			4,309			4,419			—			4,419
Accrued acquisition costs		5,297			—			5,297			6,588			—			6,588
Other accrued liabilities		16,903			—			16,903			16,987			—			16,987
Total current liabilities		125,755			—			125,755			117,127			—			117,127
NON-CURRENT LIABILITIES:
Convertible senior notes		195,000			—			195,000			195,000			—			195,000
Other liabilities		3,245			—			3,245			3,245			—			3,245
Total non-current liabilities		198,245			—			198,245			198,245			—			198,245
TOTAL LIABILITIES		324,000			—			324,000			315,372			—			315,372
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred Stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—			—			—			—			—
Common Stock		352			—			352			342			—			342
Additional paid-in capital		277,021			9,770			286,791			261,103			9,797			270,900
Deferred compensation		—			(72	)		(72	)		—			(144	)		(144	)
Retained earnings/(accumulated deficit)		(16,721	)		(9,698	)		(26,419	)		(29,079	)		(9,653	)		(38,732	)
Accumulated other comprehensive income (loss)		(993	)		—			(993	)		(328	)		—			(328	)
Total stockholders’ equity		259,659			—			259,659			232,038			—			232,038
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	583,659		$	—		$	583,659		$	547,410		$	—		$	547,410

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

103

DIGITAL RIVER, INC.

Notes to Consolidated Financial Statements — (Continued)

	March 31, 2005
	As Previously
	Reported			Adjustments			As Restated(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	142,786		$	—		$	142,786
Short-term investments		172,826			—			172,826
Accounts receivable, net of allowance		22,580			—			22,580
Deferred income taxes		—			—			—
Prepaid expenses and other		6,215			—			6,215
Total current assets		344,407			—			344,407
Property and equipment, net		18,999			—			18,999
Goodwill		154,330			—			154,330
Intangible assets, net of accumulated amortization		17,144			—			17,144
Deferred income taxes		—			—			—
Other assets		6,218			—			6,218
TOTAL ASSETS	$	541,098		$	—		$	541,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	97,549		$	—		$	97,549
Accrued payroll		3,842			—			3,842
Deferred revenue		4,702			—			4,702
Accrued acquisition costs		3,643			—			3,643
Other accrued liabilities		18,502			—			18,502
Total current liabilities		128,238			—			128,238
NON-CURRENT LIABILITIES:
Convertible senior notes		195,000			—			195,000
Other liabilities		—			—			—
Total non-current liabilities		195,000			—			195,000
TOTAL LIABILITIES		323,238			—			323,238
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred Stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—			—
Common Stock		342			—			342
Additional paid-in capital		256,091			9,825			265,916
Deferred compensation		—			(220	)		(220	)
Retained earnings/(accumulated deficit)		(37,127	)		(9,605	)		(46,732	)
Accumulated other comprehensive income (loss)		(1,446	)		—			(1,446	)
Total stockholders’ equity		217,860			—			217,860
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	541,098		$	—		$	541,098

(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

14.   Subsequent Events

None.

104

Digital River, Inc.

Schedule II
For Years Ended December 31, 2005, 2004 and 2003
(In thousands)

			Charges to
	Balance at		Costs and					Balance at
2006	Beginning of Year		Expenses		Deductions			End of Year
Allowance for doubtful accounts	$	1,023	$	1,426	$	(110	)	$	2,339
Accrued chargeback reserve		1,445		2,937		(3,548	)		834

			Charges to
	Balance at		Costs and					Balance at
2005	Beginning of Year		Expenses		Deductions			End of Year
Allowance for doubtful accounts	$	1,146	$	468	$	(591	)	$	1,023
Accrued chargeback reserve		2,246		3,031		(3,832	)		1,445

			Charges to
	Balance at		Costs and					Balance at
2004	Beginning of Year		Expenses		Deductions			End of Year
Allowance for doubtful accounts	$	319	$	1,061	$	(234	)	$	1,146
Accrued chargeback reserve		1,774		3,008		(2,536	)	$	2,246

						Charged /
			Charged /			(Credited) to
	Balance at		(Credited) to			Other			Balance at
Deferred income tax asset Valuation Allowance	Beginning of Year		Expenses			Accounts(1)			End of Year
2006	$	17,504	$	—		$	(4,543	)	$	12,961
2005		42,973		(9,364	)		(16,105	)		17,504
2004		42,944		(14,468	)		14,497			42,973

(1)  Amounts not charged (credited) to expenses were charged (credited) to equity or goodwill

105

INDEX TO EXHIBITS

Exhibit
Number			Description of Document
	2	.1(1)	Stock Purchase Agreement, dated as of April 17, 2004, by and among Digital River, Inc., Blitz F03-1424 GmbH, a company organized under the laws of Germany and a wholly owned subsidiary of Digital River, and the selling shareholders of element 5 Informationstechnologien und — dienstleistungen Aktiengesellschaft, a company organized under the laws of Germany.
	3	.1(4)	Amended and Restated Certificate of Incorporation of the Registrant, as currently in effect.
	3	.2(6)	Amended and Restated Bylaws of the Registrant, as currently in effect.
	4	.1(7)	Specimen Stock Certificate.
	4	.2(4)	Form of Senior Debt Indenture.
	4	.3(4)	Form of Subordinated Debt Indenture.
	4	.4	References are hereby made to Exhibits 3.1 and 3.2.
	4	.5(13)	Indenture dated as of June 1, 2004, between Digital River, Inc. and Wells Fargo Bank, N.A. as trustee, including therein the form of the Note.
	10	.1(7)	Form of Indemnity Agreement between Registrant and each of its directors and executive officers.
	10	.3(7)	Consent to Assignment and Assumption of Lease dated April 22, 1998, by and between CSM Investors, Inc., IntraNet Integration Group, Inc. and Registrant.
	10	.4(5)	Assignment of Lease dated April 21, 1998, by and between Intranet Integration Group, Inc. and Registrant.
	10	.5(5)	Lease Agreement dated January 18, 2000, between Property Reserve, Inc. and Registrant.
	10	.6(6)	First Amendment of Lease dated January 31, 2001, to that certain Lease dated April 24, 1996, between CSM Investors, Inc. and Registrant (as assignee of Intranet Integration Group, Inc.).
	10	.7(8)	1998 Stock Option Plan, as amended and superseded by Exhibit 10.19.*
	10	.8(9)	1999 Stock Option Plan, formerly known as the 1999 Non-Officer Stock Option Plan, as amended and superseded by Exhibit 10.19.*
	10	.9(8)	2000 Employee Stock Purchase Plan, as amended and offering.*
	10	.11(10)	Second Amendment of Lease dated April 22, 2002, to that certain Lease dated April 24, 1996, between CSM Investors, Inc. and Registrant (as assignee of Intranet Integration Group, Inc.) as amended.
	10	.12(10)	Second Amendment of Lease dated April 28, 2003, to that certain Lease dated January 18, 2000, between Property Reserve Inc. and Registrant.
	10	.15(13)	Registration Rights Agreement dated as of June 1, 2004, between Digital River, Inc. and the initial purchasers of Senior Convertible Notes due January 1, 2024.
	10	.16(14)	Supplemental Agreement and Settlement Agreement, by and among Digital River, Inc., Digital River GmbH, element 5 AG, Messrs. Clemens Roth, Christopher Reimold, Gerrit Schumann, Stephan Naujoks and various other former element 5 shareholders, dated as of January 18, 2005.
	10	.17(15)	Summary of Compensation Program for Non-Employee Directors.
	10	.18++	Second Amended and Restated Symantec Online Store Agreement, by and among Symantec Corporation, Symantec Limited, Digital River, Inc. and Digital River Ireland Limited effective April 1, 2006 ‡.
	10	.19(16)	1998 Equity Incentive Plan (formerly known as 1998 Stock Option Plan).*
	10	.20(17)	Employment Agreement between Digital River, Inc. and Carter D. Hicks.*
	10	.21(17)	Employment Offer Letter between Digital River, Inc. and Thomas M. Donnelly.*
	10	.24(18)	Form of Amendment to Non-Qualified Stock Option Agreement.*
	10	.25(19)	Inducement Equity Incentive Plan.*
	12	.1++	Computation of Ratio of Earnings to Fixed Charges
	21	.1++	Subsidiaries of Digital River, Inc.
	23	.1++	Consent of Independent Registered Public Accounting Firm, dated March 1, 2007.

106

Exhibit
Number			Description of Document
	24	.1++	Power of Attorney, pursuant to which amendments to this Annual Report on Form 10-K may be filed, is included on the signature pages of this Annual Report on Form 10-K.
	31	.1++	Certification of Digital River, Inc.’s Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2++	Certification of Digital River, Inc.’s Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32++		Certification of Digital River, Inc.’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

++	Filed herewith
*	Management contract or compensatory plan
†	Confidential treatment has been requested for portions of this agreement, which portions have been filed separately with the SEC
(1)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 4, 2004.
(2)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 11, 2002.
(3)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 15, 2002.
(4)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 1, 2006.
(5)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, filed on March 30, 2000.
(6)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 27, 2001.
(7)	Incorporated by reference from the Company’s Registration Statement on Form S-1 (File No. 333-56787), declared effective on August 11, 1998.
(8)	Incorporated by reference from the Company’s Registration Statement on Form S-8 (File No. 333-105864) filed on June 5, 2003.
(9)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed on August 14, 2003.
(10)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, filed on May 15, 2003.
(11)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed on November 13, 2003.
(12)	Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed on March 15, 2004.
(13)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 13, 2004.
(14)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 20, 2005.
(15)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 16, 2006.
(16)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 31, 2005.
(17)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 5, 2005.
(18)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 9, 2005.
(19)	Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 20, 2005.

107

EX-10.18

Exhibit 10.18

SECOND AMENDED AND RESTATED
SYMANTEC ONLINE STORE 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.

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

1

This nonexclusive Second Amended and Restated Symantec Online Store Agreement (the “Agreement”) is entered into as of the Effective Date between Symantec Corporation, a Delaware corporation maintaining its principal place of business at 20330 Stevens Creek Boulevard, Cupertino, California 95014, Symantec Limited, an Irish corporation maintaining its principal place of business at Ballycoolen Industrial Park, Blanchardstown, Co. Dublin 15, Ireland (collectively, “Symantec”), Digital River, Inc., a Delaware corporation maintaining its principal place of business at 9625 West 76^th Street, Eden Prairie, Minnesota 55344, and Digital River Ireland Limited, Bay E7 Shannon Free Zone, Shannon, Co Clare, Ireland (collectively, “Digital River”) (the parties collectively referred to herein as the “Parties” and individually as a “Party”) and supersedes and replaces the prior Authorized Symantec Electronic Reseller for Shop Symantec Agreement with an Effective Date of December 20, 2000 and the Amended and Restated Symantec Online Store Agreement with an Amended Date of July 1, 2003. All Statements of Work and Site Initiation Forms (including Backend Provider Agreements) under the prior Agreements will continue in full force and effect. This Agreement shall be effective as of the Effective Date. Unless otherwise defined herein, the capitalized terms used in this Agreement, shall have the meanings given to them in Exhibit A .

RECITALS

A. Symantec designs, publishes, manufactures and distributes computer software products, including the Symantec Products, which products Symantec licenses to End Users under the terms of Symantec’s EULAs.

B. Digital River has developed or otherwise acquired rights in a system comprising of software and hardware used by Digital River to distribute software products to third parties by allowing such third parties to download the software products through the Internet (as more particularly described in Section A(5), the “Reseller System”).

C. Symantec and Digital River desire that Digital River obtain the right to resell Symantec Products to End Users through Symantec’s Storefront, in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements hereinafter set forth, Symantec and Digital River agree as follows:

A. APPOINTMENT AS AUTHORIZED ELECTRONIC RESELLER.

1. Outsourcer Appointment to the Storefront. Subject to the terms and conditions set forth herein, Symantec hereby appoints Digital River, and Digital River hereby accepts such appointment, as an independent, nonexclusive electronic reseller of Symantec Products through the Storefront, solely within the Territory. Symantec is under no obligation to use solely Digital River for operations related to its Storefront, Sub-sites, Sites or Partner Sites within the Territory and Symantec may, in its sole discretion, engage multiple suppliers, back end providers and/or perform any or all aspects in house. Digital River shall perform as Symantec’s outsourcer for operating the Storefront in the Territory until the termination or expiration of this Agreement. Digital River’s appointment under this Agreement as an electronic reseller shall be limited to reselling the Symantec Products (i) through the Storefront and (ii) to Customers located within the geographic limits of the Territory. Digital River’s appointment only grants to Digital River a license to market, distribute, and transfer the Symantec Products to Customers, and does not otherwise transfer any right, title or interest in any such software to Digital River. Digital River agrees that it will not purchase Symantec Products from a source other than Symantec, a Symantec authorized distributor, or any other party authorized by Symantec.

Digital River, Inc. shall have all rights and duties necessary in order to perform the obligations under this Agreement with respect to transactions conducted with End Users located within the United States. Digital River

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

2

Ireland Limited (“Digital River, Ltd.”) shall have all rights and duties necessary in order to perform the obligations under this Agreement with respect to transactions conducted with End Users located outside of the United States. Either Digital River, Inc. or Digital River Ltd. may sell to End Users, as authorized under the Agreement, through other wholly-owned subsidiaries of Digital River via a back-to-back sale, under a commissionaire arrangement, or under any similar inter-company agreement. Digital River will be responsible for any liability resulting from its use of any such inter-company agreement(s).

2. Limitations. The appointment in Section A(1) pertains only to the distribution through the Storefront of Symantec Products listed on Exhibit R as it may be amended from time to time to include new Symantec Products or remove Symantec Products that Symantec chooses not to offer its resellers or distributors. The deletion or addition of Symantec Products from Exhibit R shall be consistent with Symantec’s deletion or addition of Symantec products for sale to End Users through Symantec’s reseller and distributor channel for the Territory, with the exception of product, product bundle or price promotions that may be offered by Symantec to select resellers or distributors from time to time. This Agreement does not pertain to the resale of Symantec Products by Digital River other than through the Storefront using the Reseller System; provided, however, that the foregoing limitation shall not preclude Digital River from distributing packaged Symantec Products to End Users who conduct the purchase of such packaged products through the Storefront, subject to the limitations set forth in Section B(13) hereof. Digital River’s appointment is additionally limited to distribution of Symantec Products to End Users on a single or multi-user basis.

3. Nature of Appointment. With respect to any Symantec Product, Digital River’s appointment only grants to Digital River such rights as are set out in this Agreement, and does not transfer any right, title or interest in any such software to Digital River. Use of the terms “sell,” “purchase,” license,” and “price” in this Agreement shall be interpreted in accordance with Section A(1) and this Section A(3).

4. Symantec’s Reserved Rights.

     a. Changes in Number of Electronic Resellers. Symantec reserves the right, from time to time and in its sole discretion, to increase or decrease the number of authorized Symantec distributors and resellers (including electronic resellers) and to distribute Symantec Products directly to all types of Customers using its own personnel or independent sales representatives.

     b. Symantec Accounts. Symantec reserves the right to distribute Symantec Products to any person or entity.

     c. Symantec Products; Changes in Products. Symantec reserves the right, in its sole discretion and without liability to Digital River, to add to and/or delete from the list of Symantec Products, any products distributed by Symantec. Any addition or deletion from the list of Symantec Products shall be indicated by Symantec’s unilateral amendment of Exhibit R to this Agreement and notice thereof to Digital River. Symantec reserves the right, in its sole discretion and without liability to Digital River, to delete and add Symantec Products from time to time. Any addition or deletion from the list of Symantec Products shall be indicated by Symantec’s delivery to Digital River of an updated product list, subject to the following conditions: (x) any addition or deletion of Symantec Products from the product list shall be consistent with Symantec’s deletion or addition of Products for sale to End Users through Symantec’s authorized distribution and reseller channel for the Territory, (y) Symantec may unilaterally add Symantec Products to the product list if such products have an ERP of $19.95 or greater, and the parties must mutually agree to the addition to the product list of Symantec Products having an ERP of less than $19.95 and (z) in the case of a Product Bundle, Symantec may unilaterally add such Product Bundle to the product list so long as the average ERP for each Symantec Product contained in the Product Bundle (determined by dividing the total ERP for the Product Bundle by the number of individual products contained in the Product Bundle) is at least $19.95, regardless of whether any one or more of the products contained in the Product Bundle may individually have an

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

3

ERP of less than $19.95. Symantec may in its sole discretion determine the regions for which certain Symantec Products are appropriate, and Digital River shall offer the Symantec Products only through the Sub-site for such regions.

5. Reseller System. The following is a general description of the Reseller System and certain obligations of Digital River with respect thereto, subject to the additional terms and conditions contained in this Agreement:

     a. Symantec will provide Digital River with a master copy for each Purchase First and Try/Buy Symantec Product. Digital River will secure, store, and distribute Symantec Products in accordance with the terms and conditions of this Agreement, including the Exhibits attached hereto, and any SOWs mutually agreed upon by the Parties.

     b. When an End User visits the Storefront website and decides to obtain a Symantec Product, Digital River shall provide the End User with an electronic order form and, in the case of Purchase First products, shall obtain credit card or other acceptable payment information for authorization. Upon Digital River’s acceptance of the order form and the credit card or other acceptable payment information (in the case of Purchase First), Digital River shall permit the download of the applicable BOB or cryptographic keys that support or control functionality for Symantec Products (“Keys”). Digital River shall provide to Symantec free downloads of Try/Buy products by End Users [*].

     c. Digital River will distribute BOBs only as packaged in accordance with this Agreement, with all Symantec provided warranties, disclaimers and EULAs intact. Digital River shall honor any refund requests received from End Users for Symantec Products distributed by Digital River pursuant to the terms of the applicable EULA for such product. Digital River agrees not to take any action contrary to Symantec’s EULA with regard to refunds unless such action is expressly and unambiguously allowed under this Agreement or otherwise required by law. When Digital River acts in accordance with this Section A(5)(c), it will advise Symantec of the action taken and its reasons for the same, and will indemnify Symantec under Section I(1) against any losses related to the same.

     d. Digital River is strictly prohibited from sublicensing the right to provide ESD or, except as otherwise provided for under Section A(1) or Exhibit Z of this Agreement, distribute any Symantec Products in any form and shall not make any ESD available to any third party for further download distribution, unless specifically authorized by Symantec in a fully executed Amendment, SOW or other agreement with Symantec.

B. OBLIGATIONS OF DIGITAL RIVER.

In recognition of the particular expertise and commitment necessary to support Symantec Products properly, Digital River warrants and represents and agrees with Symantec that Digital River has, and during the term of this Agreement will continue to maintain, the capacity, technology, facilities and personnel reasonably necessary to perform such functions as are required to carry out its obligations under this Agreement, and that it is ready and willing to do so. Digital River shall also perform the following obligations:

1.  Staffing and Storefront Requirements.

     a. General Staffing. Digital River will retain sufficient fully trained staff at all times reasonably necessary to maintain and provide the level of Customer support detailed in Exhibit S, including during periods of promotional programs, high sales volume and staff attrition. Digital River shall notify Symantec of any anticipated material changes in staffing and management immediately upon becoming aware of such anticipated changes. As Symantec increases and adds more features and services on line for its Customers through the various marketing programs, campaigns and web sites, as indicated to Digital River, Digital River agrees make best efforts to add its own

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

4

staffing and infrastructure, at no cost to Symantec, as necessary to scale its environment to meet the demands for such aforementioned services.

     b. Dedicated Team. The Dedicated Team will: (a) work solely on Symantec projects and requests at a one hundred percent (100%) utilization rate; (b) work only [*] per person, per week, or [*], per person, per quarter (less any holidays) (the “Dedicated Team Hours”). Digital River will be responsible for all costs and fees related to the Dedicated Team. Digital River will provide a weekly written report to Symantec in substantially the form it has used to report on the team’s utilization throughout 2005. To the extent Symantec requires work by the Dedicated Team in excess of the Dedicated Team Hours, Symantec will request such work in writing, and will pay the Consulting Rate for all such work.

     c. Account Management Team. Digital River will maintain an account management team sufficient to support the worldwide nature and level of the Storefront business. The Account Management Team will not work on infrastructure or systems related projects — which projects are the responsibility of Digital River’s general staff or the Dedicated Team, depending on the nature of the project — but will work on marketing, Storefront content changes, adding or deleting Symantec Products on the Storefront, and the relative placement of such Symantec Product, and related tasks. The nature of the work performed by the Account Management Team is discussed in further detail below.

          i. [*] of [*] Account Management Time per Month. Digital River will provide, at [*], [*] per month of account manager time for making updates or changes to the Storefront on Symantec’s behalf, which updates or changes could be made by Symantec through the DRCC.

          ii. In Excess of [*] of Account Management Time per Month. Symantec shall pay Digital River the Consulting Rate for Digital River account manager time used beyond the initial [*] per month to make updates or changes to the Storefront that could be made by Symantec through the DRCC. Digital River shall obtain Symantec’s written approval to exceed [*] in making updates or changes to the Storefront in a given month, and shall not bill Symantec for any hours spent without obtaining Symantec’s prior written approval. Digital River shall provide reasonable assistance to Symantec if they encounter problems making changes using the DRCC Digital River shall follow the procedures and schedules set forth on Exhibit C with respect to the changes and updates it is obligated to make to the Storefront hereunder.

     d. Storefront Requirements. Digital River shall host the Storefront on its servers and shall operate the Storefront 24 X 7 X 365, with the no less than the minimum amount of Up Time required by Exhibit F hereto. Digital River shall also perform the following obligations with respect to the Storefront:

          i. Initial Storefront Design; Look and Feel; Style Guidelines. The Storefront, including all Sub-sites, will meet Symantec’s specifications and quality assurance testing requirements. All websites used in connection with the Storefront must: (a) comply with Symantec’s style guidelines; and (b) contain all features, including graphical components that comprise the “look and feel” of Symantec’s Storefront. The Storefront must have Symantec’s look and feel as if Customers are buying directly from Symantec. However: (a) as directed and approved by Symantec, or (b) as required by law and without such direction and approval, but with written notice to Symantec, a clear and prominent statement indicating that Digital River is Symantec’s contracted vendor, with Digital River’s full legal corporate name, address and contact details must be present on the Storefront. When Digital River acts without Symantec’s direction or approval in accordance with this Section B(1)(d)(i), it will advise Symantec of the action taken and its reasons for the same, will indemnify Symantec under Section I(1) against any losses related to the same, and will incorporate any reasonable changes requested by Symantec.

          ii. Content Changes and Updates.

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

5

               a. Symantec shall have sole discretion regarding the Content (other than pricing information for the Symantec Products), structure and look and feel of the Storefront. Digital River may make changes to the Storefront that are immaterial or that relate to pricing of the Symantec Products upon prior email notification to Symantec, but shall obtain Symantec’s prior approval of all other changes. Nothing in this section, or anywhere else in this Agreement, is intended to limit Digital River’s right to change the content or placement of disclosures on the Storefront relating to Digital River’s data handling policies and processes, terms and conditions of sale, its role as a reseller, or any related disclosure to Customers, provided all of the foregoing are required by law. Digital River will: (a) inform Symantec in writing of any legally required changes discussed in the foregoing sentence; & coordinate the implementation of such changes with at least a Director in Symantec’s Global Online Sales team; and (c) incorporate any reasonable changes requested by Symantec. Similarly, nothing in this section, or anywhere else in this Agreement, is intended to limit Symantec’s right to change the content or placement of disclosures on the Storefront relating to Symantec’s data handling policies and processes, or any related disclosure to Customers.

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

6

               b. Symantec will provide an account manager to make all changes to the Storefront and Sub-Sites requested by Symantec, including posting new Symantec Products, making product information changes and making the changes listed on Exhibit C. Digital River requires Symantec to utilize the DRCC to enter the ERPs directly into the pricing information of the Storefront either manually or when technology permits, automatically from Symantec’s own computer systems; provided however that Symantec agrees that Digital River has the right to change the actual sale prices to Consumers and set the prices as Digital River decides in its sole discretion. Digital River shall provide reasonable assistance to Symantec if they encounter problems making changes using the DRCC and Digital River shall follow the procedures and schedules set forth on Exhibit C with respect to the changes and updates it is obligated to make to the Storefront hereunder.

               c. Digital River shall provide the DRCC to permit Symantec to make certain modifications to the layout and Content of the Storefront remotely. The access provided to Symantec by such remote management tool shall include but not be limited to front page and category page product assignment and ranking and product description modifications; provided, however, that Digital River shall ensure that such online tool allows Digital River to control Symantec’s ability to alter or update any prices of the Symantec Products offered or sold through the Storefront, at Digital River’s sole direction.

               d. If Symantec should need to request assistance from Digital River, the following types of Storefront changes and updates requested by Symantec will be provided by the Account Management Team: product arrangement on the front page of the Storefront, arrangement of products within categories, adding or deleting products from the Storefront and modification of existing products (including but not limited to product name, item listing, marketing information, product description and box shot changes) adding new Symantec Product IDs and email campaign activities that could be done by Symantec with the Enterprise Campaign Manager (ECM) tool (including uploading Customer Information, segmenting of Customer Information, and creating graphics text and html); Storefront template (including but not limited to the “look and feel” of the Storefront) changes, navigation bar changes, and shopping cart changes. Any additional types of Storefront changes or updates not identified herein shall also be provided by the Account Management Team [*]. If neither the Agreement nor any SOW specifies which Party is responsible for a particular area, Digital River shall not charge Symantec for a change or update relating to such area unless the Parties have previously agreed in writing to the scope of the work to be performed by Digital River and the rate to be charged.

               e. The time required to make any Storefront changes or updates that are necessary because of an error on the part of Digital River will be fixed by Digital River at no cost to Symantec.

               f. All changes counted as part of the Account Management time shall be completed by Digital River within two business days after Symantec makes the request and provides all necessary materials to Digital River; provided, however, that in the case of mis-posted products, items on the Storefront in error or any other situation reasonably deemed an emergency by Symantec, Digital River shall use its best efforts to complete the requested change as soon as reasonably possible following Symantec’s request, but in no event later than two business days after Symantec’s request.

               g. Digital River shall maintain a spreadsheet to track the following data relating to all Storefront changes or updates requested by Symantec: change requested, site(s) within the Storefront to which the change applies, name of person requesting the change, date requested, estimated and actual completion dates, and estimated and actual completion hours. Digital River shall provide monthly updates of the spreadsheet to Symantec until such time as the Parties may mutually agree in writing that Digital River shall provide bi-monthly updates of such spreadsheet to Symantec.

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

7

2. Sub-sites. The Storefront shall contain the Sub-sites, which Sub-sites are subject to change or addition from time to time at the sole discretion of Symantec. Upon Symantec’s request for Digital River to design and set up a new Sub-site, the Parties shall prepare a SIF for the work to be performed. Digital River shall develop each new site as described in the applicable SIF [*]. All current Sub-sites as of the Effective Date, which Sub-sites are shown on Exhibit U shall continue unless Symantec requests Digital River to discontinue. Unless otherwise agreed to in writing by Symantec, each Sub-site will be subject to the following provisions:

     a. Featured Partner Spots. Each Sub-site must have one to four graphic spots for featuring Symantec-designated partners that are online retailers of Symantec Products. The specific number of graphic spots in each Sub-site shall be specified by Symantec, and Symantec will provide the graphics and applicable links. Digital River shall make needed changes to feature spots on Sub-sites as requested by Symantec with two weeks’ advanced notice, [*] to Symantec. Changes to Sub-sites feature spots shall not be requested by Symantec more than one time per month for each Sub-Site.

     b. Banners. Each Sub-site must have a section to accommodate a minimum of three (3) rotating marketing banners that promote Symantec Products and Symantec-designated links to other web sites. Symantec shall create any such banners, which may be different for each Sub-site. Digital River shall update banner rotation upon two weeks’ advance notice by Symantec at [*]. Symantec’s requested changes to marketing banners shall not exceed once each two weeks. Notwithstanding the foregoing, in the event of an outdated banner, obsolete product, virus outbreak or other event reasonably deemed an emergency by Symantec, Digital River shall update the applicable banner promptly following Symantec’s request.

     c. Purchase Options. Each Sub-site must have a section that outlines ordering options available to Symantec Customers. The section is to contain a link to the www.symantec.com web site. The following ordering options shall be available for purchasing Symantec Products:

          i. Toll Free or Toll Share Telephone Numbers. Digital River will establish toll free or toll share numbers for the United States and Canada for purposes of permitting Customers in those locations to order packaged Symantec Products via telephone, to order Wrapped Purchase First and Try/Buy Symantec Products and to obtain Keys to unlock downloads of Wrapped Symantec Products. Such list of toll free or toll share countries may change from time to time based upon mutual agreement by Symantec and Digital River. The applicable toll free or toll share telephone numbers shall be displayed in locations on the Sub-sites that are reasonably able to be located by Customers. The toll free or toll share telephone number ordering option for packaged products is available only for deliveries to addresses in the locations Digital River is expressly permitted under this Agreement to distribute packaged Symantec Products. Upon a decrease in the [*] that Digital River pays for Symantec Product attributable to the transfer of part of the Customer Service responsibility under Section G(4) of this Agreement, Symantec shall become responsible, in accordance with the Customer Support Transition Schedule, for all costs associated with the maintenance of such numbers.

          ii. Fax. While Digital River is responsible for Customer Service in a particular region, Digital River shall cause Customers who desire to purchase Symantec Products by fax to be presented with a printable form containing the product title and SKU of the Symantec Products to be ordered. The form should contain fields for Customers to supply missing information, and information on how to fax completed forms to Digital River’s order processing center with Customers’ credit card numbers. Such fields should include purchase quantity, credit card and shipping information. Digital River shall display the applicable fax number(s) on each Sub-site in locations that are reasonably able to be located by Customers.

          iii. Internet Orders. Digital River shall permit Customers to make orders directly through the Internet via online order forms.

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

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     d. Site Traffic Reporting. Each Sub-site must be set up to measure Traffic and the effectiveness of specific marketing campaigns.

     e. Currency and Payment Options. Digital River shall provide Customers the currency options specified in Exhibit D and the payment options specified in Exhibit E.

     f. Try/Buy Products. Digital River’s order processing system must be able to process orders for Symantec Try/Buy products, using the Wrapper Technology. Order processing for Try/Buy products shall be available in all localized languages available using the Wrapper Technology and shall include the currency processing and payment options listed in Exhibits D and E, respectively.

3. Digital Rights Management. Digital River will comply with the product wrapping and/or other digital rights requirements required by Symantec, as these requirements are communicated to Digital River by Symantec from time to time and as specifically set forth in Exhibit Y. Pursuant to the terms of this Agreement, and conditioned upon full compliance with the same, Symantec grants to Digital River, a limited, revocable, non-exclusive, non-transferable right to use within the Territory and for the Term of the Agreement only, the digital rights and/or wrapping technology provided by Symantec to Digital River, collectively, the “DRM Technology”. Symantec (and its licensors as applicable) own all right, title, and interest in and to the DRM Technology. Digital River shall not commit or omit any act or omission in its use of the DRM Technology if applicable, in any manner that would impair Symantec’s (and its applicable licensors’) proprietary rights or goodwill in the foregoing DRM Technology. Digital River shall use the DRM Technology only as expressly permitted herein. Symantec may update the content and functionality of and/or discontinue or modify, at any time, in its sole discretion any of the DRM Technology.

4. Symantec Digital Purchase First Products. Digital River will offer and distribute Symantec digital Purchase First Products for orders placed on the Storefront, or as otherwise directed by Symantec.

5. Try/Buy Symantec Products. Upon Symantec’s request, Digital River will provide purchase options to Customers who initiate the download of Try/Buy Symantec Products and shall use the message provided by Symantec, as modified in text or process by Symantec in writing from time to time. In such case, Digital River shall require Customers to submit the requested information prior to permitting the download of the requested Try/Buy Symantec Product, and Digital River shall make such information available to Symantec (in a form that is grouped, and/or permits sorting, by Sub-Site and country) through the DRCC or via data feed pursuant to the terms of Section E(2) of the Agreement.

6. Service Levels. Digital River shall provide service levels for the Storefront that at a minimum meet the requirements set forth in Exhibit F.

7. E-Commerce and Hosting Arrangements.

     a. Main Scope of E-Commerce and Hosting Arrangements. From time to time, Symantec will enter into contracts (the “Front End Agreement(s)”) with certain third parties, who are Customers and partners of Symantec (the “Partners”), and based on those Front End Agreements, Symantec may request Digital River, as one of its back end providers of its e-commerce and hosting needs, to: (i) create and host a solely Symantec branded or alternatively co-branded online product purchase store (the “Online Stores”); (ii) create and host a private download site for a Partner pursuant to specific and unique terms and conditions (the “Download Site”); and/or (iii) facilitate a Partner linking to the Storefront in return for either [*] Symantec Products (“Link [*],”) or a revenue share payment from Symantec (“Link and Revenue Share”). Collectively and interchangeably, the Online Stores (which includes each Generic Store and each Co-Branded Store), Link [*] and Link and Revenue Share

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

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arrangements, as well as Download Sites shall be referred to as the “Site(s).” (For the avoidance of doubt, Digital River is not acting as a reseller of Symantec Products on Download Sites,) This Section B7 applies only to such Sites and not to the Storefront. Provided that Symantec and Digital River agree upon such terms and enter into a separate SIF for such Site to govern the hosting and building of each such Site, or for such linking arrangement, the terms of which are incorporated herein by reference and shall become part of this Agreement, Digital River shall build such Site(s) for Symantec using Digital Rivers’ web and delivery technologies, as further described herein. Digital River shall give full support to Symantec relating to the purchase and installation process of Symantec Products obtained from such Sites. Symantec is the sole owner of all domain names, URLs, Site addresses or other id’s and the actual Sites under the terms of this Agreement. Digital River shall provide all Customer service to the Site’s users in regard to problems with downloads or questions concerning the process of downloading the Symantec Products, as more specifically detailed in Exhibit S, which shall apply equally to the Sites as it does to the Storefront. Symantec shall provide technical support to the End-Users in accordance with the license terms under which each Symantec Product was distributed. Within three (3) business days of receiving a Symantec approved SIF regarding a linking arrangement with a Partner, Digital River shall supply Symantec with one or more Campaign URL’s for that Partner, and indicate such on the SIF, execute it and promptly return the same to Symantec. Each Campaign URL shall allow Digital River to: (i) track the sales generated by Customers entering the Storefront from the Partner’s web site; and (ii) pay Symantec for the Symantec Products purchased through Partner, and pay the Partner the appropriate portion of the revenue generated in the form of a Revenue Share, as detailed below.

     b. Hosting of Download Sites. Digital River agrees to create and host certain Download Sites, as requested by Symantec, from time to time, pursuant to the terms of this Agreement and pursuant to separately negotiated terms between Symantec and Digital River set forth in the separate SIF for various Partners. The specific terms relating to the creation and maintenance of a particular Download Site shall be pursuant to such applicable SIF between Digital River and Symantec. Further, Digital River takes full responsibility for securing the Site and preventing unauthorized downloads or access to the Symantec Product and if not adequately secured, Digital River will fully indemnify Symantec for the lost revenue at the price at which the Partner purchased the Symantec Product from Symantec, for such lost or inappropriate downloads, for any other expenses incurred by Symantec as a result of inadequate security and for all other costs and losses incurred as a result of the inadequate security, so long as such costs are adequately documented, and for any and all other costs and losses associated with such security problems. Further, Digital River may not charge Symantec or the Partner for any expenses it would normally be able to charge Symantec or the Partner for, including but not limited to, per download fees, which are incurred during the time in which the Site is inadequately secured. Examples of inadequate security include, but are not limited to, those in which (i) the authentication process for screening allowed users does not adequately screen out unauthorized users, as defined by the Partner or (ii) authorized users are able to download or obtain copies of Symantec Product in excess of that authorized by the promotion or coupon of the Partner or actually paid for by the user or (iii) authorized users are able to download or obtain copies of Symantec Product in any manner not intended by the Partner, or (iv) unauthorized users are able to obtain Symantec Products, or (v) Symantec Products are obtained in a manner which was not intended by the terms of the applicable SIF, or (vi) such other security breaches, whether or not listed in the examples given above, which were preventable as they were in the complete control of Digital River to prevent. Symantec may extend the length of the Site’s existence upon written notice by Symantec to Digital River, without further action.

     c. Royalty Payment and Report from Digital River to Partners. If a SIF calls for a revenue share to be paid to a Partner, Digital River shall, no later than twenty (20) days after the end of each calendar quarter, on behalf of Symantec, pay to each Partner an amount equal to such Partner’s Revenue Share Percentage (as listed on the SIF) of Net Revenue (as defined in the SIF) but only on Net Revenue associated with those particular Symantec Products that the SIF indicates on which the Partner should receive a Revenue Share. Along with such payment, Digital River shall deliver to the Partner a written report showing, in reasonable detail, the calculation of such payment for such

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

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quarter. The payment and report required hereunder shall be sent to the Partner at the address listed on the SIF (which may be changed by Symantec upon reasonable notice to Digital River). No later than twenty (20) days after the end of each calendar quarter, Digital River shall confirm to Symantec in writing that it has complied with its payment and reporting obligations pursuant to this subsection and shall provide Symantec with a copy of the report sent to each Partner at the address stated in Exhibit M. Digital River is entitled to withhold from the amounts owed to, and to be paid to, Symantec, such amount of Revenue Share that Digital River paid to each Partner on Symantec’s behalf and any other promotions, discounts or rebates that Symantec contractually provides to Customers of the Partner which results in a reduction of the proceeds that Digital River collects on a particular sale of a Symantec Product, pursuant to this section. All other amounts due and owing to Symantec are to be paid to Symantec pursuant to the terms of this Agreement.

     d. Hosting of Online Stores.

          i. Co-Branded Stores. Digital River agrees to create and host certain “Co-Branded” Online Stores that contain certain designated Symantec Products and sets forth both the intellectual property marks of the Partner and of Symantec (the “Co-Branded Store”), as requested by Symantec, from time to time, and as mutually agreed to by Symantec and Digital River under the terms of the separate SIFs. Such Co-Branded Stores shall be created and hosted pursuant to the terms of this Agreement and pursuant to specifically negotiated terms set forth in a separate SIF entered into by Digital River and Symantec for each such Co-Branded Store, which SIF shall include no less than a description of the Co-Branded Store along with the Specifications, any fees or rebates, length of Site existence, launch date, revenue share for the Partner, any electronic coupons or rebates, and other unique terms. Symantec may extend the length of the length of the Site’s existence upon written notice by Symantec to Digital River, without further action.

          ii. Generic Stores. Digital River agrees to create and host certain “Generic” Online Stores that contain certain designated Symantec Products, but which do not specifically identify the Partner or its intellectual property marks (the “Generic Store”), as requested by Symantec, from time to time, pursuant to the terms of this Agreement and pursuant to the terms of the specific SIF entered into by Digital River and Symantec for each Generic Store. Such SIF shall include no less than a description of the links and Site address needed to create the Generic Store, fees or rebates, length of Site existence, launch date, revenue share for the Partner, any electronic coupons or rebates, and other unique terms. Symantec may extend the length of the Site’s existence upon written notice by Symantec to Digital River, without further action.

     e. URL’s for Sites. The URL for each Site shall be as specified in the relevant Exhibit containing the SIF for the particular Partner (the “URL”). The URL should only be accessible to such Partner’s customers or Site users coming directly from the Partner’s own website or through whatever promotional link is required, such as from the Symantec Product or in an e-mail provided by the Partner or Digital River on Partner’s behalf as part of an e-mail campaign, if so specified in the applicable SIF. Symantec shall obtain from Partner and provide to Digital River, on Partner’s behalf, the allowed URLs that a Partner’s customer or Site users may click through from to arrive at the Site (the “Allowed URLs”). The SIF will indicate if the Partner requires access to the Site to be restricted to only users coming from the Allowed URLs. In such a case, Digital River shall use the Allowed URLs to verify the permissible access by a Site user. If the Partner requires access to be restricted per the SIF, Digital River will not allow access to the Site by any user who accesses the Site from any URL other than the Allowed URLs. Digital River agrees to not allow any unauthorized links or third party advertisements or promotions of any kind whatsoever on any Site, except as specifically directed by Symantec. Notwithstanding the foregoing, Digital River shall not be responsible for any unauthorized links placed by Partner, or transferred to unauthorized email lists, or an unauthorized third party end user. Digital River shall create and host a single page location, as the page to which Digital River will send unauthorized Site users who do not meet the definition of an authorized Customer when access is restricted to users coming from Allowed URLs (the “Authentication Page”). Symantec shall obtain and

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

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provide to Digital River, the information and wording instructing the non-authorized Site user as to the reason for their failed access to the Site and information and links on how to obtain membership and proper access, as each Partner deems appropriate, for the Authentication Page and as more specifically detailed in the relevant SIF. Digital River agrees to specifically comply with, and ensure that the Site will be in compliance with, all authentication requirements as provided for by any relevant SIF.

     f. Trademarks, Trade Names and Copyrights. Digital River agrees that each Site will include the proper trademarks, logos and trade names, for Symantec and if applicable, for the Partner, as indicated in the SIF for the Partner, all pursuant to the requirements of Sections D of the Agreement in the same manner as applied to the Storefront; provided however, no identification shall be made with “Symantec Online Store.” Digital River may rely upon Symantec’s presentation of the SIF as a warranty by Symantec that Symantec has obtained the necessary rights to permit Digital River to use the Partner’s copyrights, trademarks and other intellectual property to permit Digital River to create and run the Site. Symantec will indemnify Digital River, pursuant to Section I(2), for its failure to obtain adequate rights in this regard.

     g. Quality, Functionality and Look and Feel. Digital River shall build, host on its servers, and completely maintain all Download Sites and Online Stores and resell (as applicable and in accordance with the terms of this Agreement and the SIF) through such Online Stores and/or Download Sites to Site Customers, at a level of quality, functionality and look and feel, as set forth in the terms of each SIF, as applicable, the terms of this Agreement and the generally accepted standards in the online reseller and retail industry. The design and content of each Download Site and Online Store will be in compliance with the terms and conditions of each SIF, as applicable, at all times, and Digital River shall notify Symantec immediately upon discovery otherwise and remedy such problems within one (1) business day, unless otherwise provided an extended period of time to cure in writing, by an authorized Symantec Vice President or higher. Digital River shall follow the approved design and content blueprint for each Site, which shall be first pre-approved by the Partner and attached as an exhibit to the relevant SIF, as applicable, or as otherwise separately provided by Symantec (the “Specifications”).

          i. Initial Look and Feel. The initial look and feel and content of the Download Site or Online Store shall be as set forth in the Specifications at the date indicated for the Download Site or Online Store to be first fully functional, launched and available for public use, which includes ability to download or purchase Symantec Products on the Site (the “Launch Date”). Digital River agrees that unless the Specifications are later changed after the Launch Date, in accordance with the terms of this Agreement, the Site will continue to meet the Specifications set forth in the SIF throughout its existence.

          ii. Security and Compliance with Specifications. Digital River agrees to comply with all the Specifications applicable for a particular Site, including all security on the Site, which are necessary to allow for the described functions to operate as the Partner desires, and to prevent third parties from unauthorized access or downloads of Symantec Products, as well as ensuring the ability to complete authorized access to the Symantec Products, starting from the Launch Date, and continuing throughout the life of the Site. If such malfunctions are not fully remedied within the time periods provided for under the terms of the Agreement or such applicable SIF, Digital River takes full financial responsibility for the failure to secure the Site and for failing to prevent unauthorized downloads or failure to allow authorized access to the Symantec Product, as such case may be, regardless of whether or not there is a third party Digital River or reseller involved, and will indemnify Symantec for the lost revenue it cannot charge its Partners for such lost downloads or inappropriate downloads for any other expenses incurred by Symantec as a result of inadequate security and for all other costs and losses incurred as a result of the inadequate security or malfunction of the Site, so long as such costs are adequately documented, and for any and all other costs and losses associated with such security or access problems. Further, Digital River may not charge Symantec or the Partner for any expenses it would normally be able to charge Symantec or the Partner for, including but not limited to, per download fees, which are incurred during the time in which the Site is

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

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inadequately secured or malfunctioning.

          iii. Examples of Inadequate Security. Examples of inadequate security include, but are not limited to, those in which (i) the authentication process for screening allowed users does not adequately screen out unauthorized users, as defined by the Partner or (ii) authorized users are able to download or obtain copies of Symantec Product in excess of that authorized by the promotion or coupon of the Partner or actually paid for by the user or (iii) authorized users are able to download or obtain copies of Symantec Product in any manner not intended by the Partner, or (iv) unauthorized users are able to obtain Symantec Products or (v) Symantec Products are obtained in a manner which was not intended by the terms of the applicable SIF, or (vi) such other security breaches, whether or not listed in the examples given above, which were preventable as they were in the complete control of Digital River to prevent.

     h. Adjustment Period and Deviations from Specifications. Digital River agrees that upon receipt of any oral or written notice, during a period from the time of such notice of the “Effective Date” of the SIF until no later than five (5) business days prior to the Launch Date of the Online Store or Download Site (the “Adjustment Period”), Digital River will make minor modifications to the Site, which are not part of the Specifications. Any change or modification to the Site which is not shown or otherwise specified in the Specifications of the SIF is defined as a “Deviation.” The Partner may notify Symantec (who will in turn notify Digital River) of any minor Deviation to the look and feel of the actual Download Site or Online Store and Digital River shall implement such minor Deviations prior to the Launch Date. After the Adjustment Period, any additional requested Deviations to the look and feel of the Download Site shall be completed by Digital River within twenty (20) days of the receipt of such requested Deviations. Any Deviation in the links provided for under the SIFs, as well as to the look and feel and specific content contained on the Site after the Launch Date, which are not Corrections, shall be requested in writing by the Partner.

     i. Corrections and Related Timing. The Parties agree that any corrections or modifications to the Site in order to conform to, and for full and complete implementation of, the Specifications or the functionality or operation of the Site or any technical problem on the Site Store which prevents the redemption or purchase of Symantec Products or any other navigation or access by any Customer or any corrections to the Partner’s service marks, trademarks and logos is defined as a “Correction.” Digital River agrees from the “effective date” of the relevant SIF, until the actual Launch Date (the “Correction Period”), Corrections shall be made immediately upon receipt of such written or oral notice, but no later than before the Launch Date. Digital River will not charge for Corrections, regardless of whether requested during or after the Correction Period. After the Correction Period, Digital River agrees that all Corrections which prevent click-through sales or downloads, as applicable, by Customers must be repaired with the highest sense of urgency and shall be treated as Downtime, as defined in Exhibit F of the Agreement and Digital River shall remedy the situation pursuant to the terms set forth in Exhibit F of the Agreement. In any case, Corrections shall be completed no later than twenty-four (24) hours after receipt of written or oral notice of the Correction by Symantec or the Partner. Any failure to do so shall be a material breach of this Agreement and Digital River shall fully indemnify and compensate Symantec for any and all losses and damages as a result of such Corrections which are not repaired as indicated. In the event a Correction is not corrected as required under the terms of this Agreement, Symantec may, by written notice, require Digital River to immediately shut down or disable such Site and Digital River shall do so and shall otherwise be liable for all damages to Symantec as a result from any delay in doing so and for the time period in which it remains shut down and/or inoperable in accordance with the Specifications.

     j. Down Time. Digital River shall not take down any Site in a manner that prevents click-through download redemptions or purchases and installation of the Symantec Products by Customers as outlined under the maintenance provisions of Exhibit F of the Agreement.

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

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     k. Testing. All Sites must: (i) first be tested by Digital River’s quality control personnel no less than seventy-two (72) hours before agreed upon Launch Date; (ii) be fully functional and operational; (iii) be presented to, reviewed by and approved by the Partner and Symantec prior to actual accessibility by the Partner’s customers and/or the public, as applicable; and (iv) reviewed and approved thereafter for each and every Correction or other modification made to the Online Store or Download Site. All testing must meet the quality assurance criteria and standards set forth for testing in Exhibit N, attached hereto and incorporated by reference into the Agreement. Digital River represents and warrants, as part of the testing and as an important function of any Site, that the Site shall be secure, at all times from the Launch Date through the life of the Site, and prevent all unauthorized users and unauthorized downloads of multiple Symantec Products without proper payment or coupon redemption by such Site user, as the case may be.

     l. Product Updates and New Release Postings. Digital River agrees to post all Symantec Product updates and new releases on each Site, as directed by Symantec, within two (2) business days of the release or posting and receipt of notification. Notification can be via any form of written notice. All Symantec Products that Digital River is authorized to resell under this Agreement shall only be available for resale under each Site, as specifically provided for under the relevant SIF, as applicable.

     m. Account Managers and Responsibilities. The Account Manager will be (i) the point person for resolving all issues relating to the ongoing operations and management of the Online Stores and Download Sites, (ii) authorized to provide and bind (as applicable) Digital River or Symantec on all quotes on new Online Stores and Download Sites, (iii) authorized to provide and bind (as applicable) Digital River or Symantec on all representations of the ability to provide to Symantec certain technical features and advise on the technical feasibility of all aspects of the Storefront, Online Stores and Download Sties. All cost and time quotes which shall be used to create any SIFs and all verifications of technical feasibility for Online Stores and Download Sites provided by the Account Manager on behalf of Digital River, which are based upon Specifications, which are unchanged in terms of functionality in the final Specifications for the Sites, which were provided by Symantec in the form of written term sheets or e-mails from the Account Manager prior to the finalization of the Front End Agreement and the Specifications, shall be binding on Digital River. Symantec shall be able to rely upon such quotes and advice in drafting and entering into the Front End Agreement with its Partners and in its drafting and expectation of entering into the SIF with Digital River.

     n. Fulfillment and Other Fees. The provisions for fees under Section B(2) of the Agreement concerning Sub-sites shall apply to the Sites. Digital River will sell the Symantec Products, pursuant to the terms and conditions of this Agreement, under the electronic reseller and/or packaged products provisions set forth in its Agreement, and as so indicated in the SIF, as applicable. If Digital River is appointed as the reseller under the terms of the SIF, as applicable, then Digital River shall be free to set the prices to the Customers for the Symantec Products sold on the relevant Online Store or Download Site. If Digital River is only providing hosting and design services for the Online Store or Download Site, the price for Symantec Products shall be set between Symantec and the purchaser, if a direct sell, or Symantec and such other distributor or reseller. Prices and payments from Digital River to Symantec for Symantec Products shall be as set forth in the Agreement; provided that Digital River agrees to submit a separate product order for each Online Store and/or Download Site, as applicable, and purchases of Symantec Products sold through such Online Store and/or Download Site will not be eligible for any incentive rebate programs available to Digital River under the Agreement. All fees due hereunder by Symantec shall be invoiced to Symantec to the following address: Attention Accounts Payable, Symantec Corporation, 20330 Stevens Creek Blvd., Cupertino, CA 95014. All invoices will be paid within forty-five (45) days of receipt, provided the invoice is complete and accurate.

     o. Ownership of Site URLs, Domain Names and Sites. Digital River agrees to comply with and apply the same requirements set forth in Section C of the Agreement in relation to the Sites, as it currently does to the Storefront.

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

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     p. No Other Changes and Application of Provisions to the Sites. All other provisions set forth in the Agreement, as amended to date, but except as modified specifically by this Section, shall apply specifically to the Sites, equally in the same manner as applied to the Storefront, and if there is any ambiguity or conflict of terms, the more specific terms set forth in this Section B(7) concerning the Sites, shall apply.

8. Customer Support Services. For so long as Digital River is responsible for Customer Service within a particular region, Digital River will provide the Customer support services as described in Exhibit S within that region. After Digital River ceases to provide Customer Service within a given region in accordance with the Customer Support Transition Schedule, all Customer Service under this section shall be at the Customer Service Rate.

9. Shipping. For packaged Symantec Products that are then currently available in stock, Digital River shall conduct same business day shipment of no less than [*] of all orders averaged monthly, when such orders are placed before 2:00 p.m. local time of the applicable worldwide fulfillment center. Orders placed after 2:00 p.m. local time of the applicable worldwide fulfillment center may be shipped the next business day. Orders that are partially available in stock must also be shipped in accordance herewith, provided, however, that in the event that split shipments are required as a result, [*] for additional shipments after the first shipment (for which [*] shall bear the cost) if the split shipment is necessary because the applicable inventory was not available in Digital River’s stock due to the fault of Symantec (for example, because (i) Symantec did not fulfill in a reasonable timeframe any order made by Digital River in accordance with the procedures set forth herein, or (ii) inaccurate Storefront forecasting provided by Symantec to Digital River caused Digital River to have insufficient inventory of the applicable product(s)). If the inventory was not available in Digital River’s stock due to Digital River’s failure to maintain the minimum inventory level required by Section F(2), [*] shall be responsible for all split shipment freight charges.

10. Compliance with Laws. Digital River will: (a) comply with all applicable international, national, state, regional and local laws and regulations in performing its obligations hereunder and in any of its dealings with respect to Symantec Products; and (b) provide Symantec with all reasonable assistance in Symantec’s efforts to comply, if applicable, with such international, national, state, regional and local laws and regulations. Digital River understands that Symantec Products are restricted by the United States Government from export to certain countries and agrees that it will not distribute or re-export Symantec Products in any way that will violate any of the export control laws or regulations of the United States, including the United States Department of Commerce Denial and Prohibition Orders, the various Office of Foreign Asset Controls (OFAC) lists, and shall not distribute Symantec Products to any country, firm or person listed on such Orders. Accordingly, Digital River shall use commercially reasonable measures to ensure that it does not deliver Symantec Products to End Users located in jurisdictions to which the export of Symantec Products would be prohibited under United States or other applicable laws, including, without limitation, the measures specified in Exhibit G. Digital River further understands that some Symantec Products require export licenses if sold to government end-users outside of the Supplement 3 countries and that all Symantec Products sold into EPCI countries require export licenses if the end-user is involved in any type of EPCI activities. Further Digital River is required to comply with the US ENC Reporting requirements for Symantec Products. Symantec will provide Digital River with the Export Control Classification Numbers regarding any Symantec Product and will make available to Digital River updates with respect to any additional or modified classifications specific to Symantec Products. Symantec represents and warrants that it has accurately classified all of the Symantec Products with correct Export Control Classification Numbers and that Digital River may rely upon the classifications made available to it by Symantec to its detriment.

11. Digital River’s Financial Condition. Digital River warrants and represents that it is in good financial condition,

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

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solvent and able to pay its bills when due. Digital River will maintain and employ in connection with its business under this Agreement such working capital and net worth as may be required in the reasonable opinion of Symantec to enable Digital River to carry out and perform all of Digital River’s obligations and responsibilities under this Agreement for the duration of its term. From time to time, upon reasonable notice by Symantec, Digital River will furnish the Symantec Chief Financial Officer, or his/her designee, such financial reports and other financial data as Symantec may reasonably request.

12. Marketing by Digital River. Digital River shall market only Symantec Products and/or services, or third party products and/or services authorized by Symantec, to Customers while they are in the Storefront, but only as pre-approved and specifically provided by Symantec. The Symantec Account Manager shall be solely responsible for approval of marketing activities and initiatives, and shall use commercially reasonable efforts to communicate such approval or disapproval within twenty four hours of receiving marketing creative from Digital River. In the event that the Symantec Account Manager does not specifically communicate disapproval of any Digital River supplied creative within this twenty four hour period, Digital River shall be permitted to use such creative until such time as the Symantec Account Manager communicates specific disapproval of the applicable Digital River creative.

Symantec will have no obligation to provide funding or other assistance in any marketing of the Symantec Products by Digital River except as otherwise mutually agreed upon by the Parties. Digital River’s sole compensation for any marketing efforts is as discussed in Exhibit L. The current list of authorized marketing activities, and the terms associated with each such effort, is attached hereto as Exhibit L.

13. Distribution of Packaged Symantec Products.

     a. Digital River’s Obligations. Digital River shall offer and distribute packaged Symantec Products to, at a minimum, Customers purchasing from the Storefront and the Sub-sites. Such distribution of packaged products shall be further subject to the SOW(s) executed by the Parties addressing implementation and other related issues. Digital River will distribute such packaged products with all notices, labels, logos, packaging, warranties, disclaimers and license agreements intact as shipped from Digital River or Digital River contracted facility. Digital River may not open the packaging for the Symantec Products without Symantec’s express written permission.

     b.  Packaged Products. The Parties agree that the following subsections apply to all distribution by Digital River under the Agreement of packaged products after the Effective Date.

          i. Commencement Date; Terms. Digital River shall begin offering and distributing packaged Symantec Products to Customers no later than ten business days after delivery by Symantec of the applicable pricelist for packaged Symantec Products. In the event of any future amendment of the Agreement by the Parties to include additional countries Digital River shall begin offering and distributing packaged Symantec Products to Customers located in the new countries no later than one business day after the effective date of any such amendment, unless the Parties agree in writing to another timeframe.

          ii. Delivery Method. Digital River shall offer the following two delivery options to Customers who purchase packaged Symantec Products through the Storefront: (a) standard delivery through the local postal service and (ii) overnight delivery through UPS, DHL or a similarly reliable overnight carrier. Symantec will reimburse Digital River for re-shipment costs associated with lost shipments of goods shipped via postal delivery, for up to a maximum of three percent (3%) of the total shipments made via postal delivery by Digital River, at which time postal service delivery will be immediately reviewed by both Parties. Such delivery methods shall be reviewed by the Parties on a quarterly basis, and Digital River shall provide Symantec with loss statistics and other reasonably requested information for purposes thereof. In the event Symantec determines that delivery through the carriers

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

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then being used for standard and/or overnight delivery are unsatisfactory in one or more countries, Digital River will begin using the different standard delivery or overnight carriers requested by Symantec as soon as reasonably possible after such request is made by Symantec, and the Parties shall mutually agree on any changes to the approved shipping costs referenced in Section B(13)(b)(iii), immediately below, that are necessary due to the change(s) in carriers.

          iii. Customer Shipping Costs. Digital River shall not charge Customers more than the applicable approved shipping charges in the table attached as Exhibit O hereto for delivery of packaged products calculated at the then current exchange rate from U.S. Dollars to the applicable local currency in which the Customer pays for the purchased products.

          iv. Customer Payment Options. Digital River shall make available to Customers the credit card and direct debit card payment options required by Exhibit E to the Agreement, but shall not be required to make the cash on delivery payment option available until notice by Symantec (if any) at a later date after further evaluation of such option. In the event Symantec requests Digital River to begin making the cash on delivery payment option available to Customers, the Parties will further address the details in a separate SOW or Amendment to this Agreement.

14. Security. Digital River shall comply with the security requirements set forth in Exhibit H attached hereto.

15. Symantec Marketing Opportunities and Promotions. From time to time, Symantec may send out direct mailings to Customers and potential Customers offering a discount or instant electronic rebate on the purchase price of Symantec Products and/or free shipping and handling. Digital River agrees to honor such promotional mailings and Symantec shall reimburse the exact dollar amount of such discounts, instant electronic rebates and free shipping and handling promotions actually honored by Digital River to Customers.

16. Download Warranty Service aka Electronic Download Service (“EDS”).

     a. Download Warranty Service. Digital River shall offer the Download Warranty Service through the Storefront, which may be purchased by Symantec Customers simultaneously purchasing Symantec Products through the Storefront. Such right to re-download shall only apply to the Symantec Product version originally purchased by the Customer simultaneously with the purchase of the Download Warranty Service, and the re-downloaded Symantec Product shall be considered a replacement of the originally purchased product, which replacement continues to be subject to the applicable product EULA.

     b. Discontinuation of Service. Symantec may terminate Digital River’s right to offer and sell the Download Warranty Service if a notice of breach relating to this service remains uncured for a period of thirty (30) days after delivery of notice in compliance with Section K(5) of the Agreement. Digital River shall continue to offer the Download Warranty Service under the terms set forth herein unless or until this right is terminated per the termination provisions set forth herein, or the Parties mutually agree to terminate this right or the Parties otherwise modify it as agreed in an amendment to this Agreement executed by both Parties. Digital River agrees that Symantec shall have the right to terminate Digital River’s right to offer the service at any time upon five business days’ written notice if a breach of the security requirements set forth in Exhibit H are not remedied within five (5) business days from delivery of notice, in compliance with Section K(5) of the Agreement. Symantec may agree, in its sole discretion, to provide an extension of this time period if Symantec is satisfied that Digital River has a plan to, and is acting to, mitigate the failure and to correct the problems. Notwithstanding the foregoing, or the termination of this Agreement, Digital River shall retain all rights necessary to continue to provide the Download Warranty Service to those End Users who purchased the service prior to the termination of this Agreement and/or the discontinuation of Digital River offering the Download Warranty Service for sale.

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

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     c. Details to Customer. Digital River shall provide Storefront Customers with an accurate description of the terms and conditions of the Download Warranty Service as specified in this Section, and shall submit such terms and conditions to Symantec for its pre-approval. If Symantec requests, Digital River will structure the order page on which the Customer will indicate whether he/she will purchase the Download Warranty Service such that the Customer is required to take an action to order the service. In jurisdictions where Digital River’s “opt out” presentation of the Download Warranty service is illegal, or results in legitimate customer service complaints demonstrating a deterioration of the Customer experience, Digital River will restructure the order page within the impacted jurisdiction(s) on which the Customers purchase the Download Warranty Service such that the Customer is required to take action to order the service.

     d. Payment to Symantec. As consideration for the right to sell the Download Warranty Service or EDS granted to Digital River by Symantec herein, Digital River shall pay Symantec [*] of the fees that Digital River charges the End User. Digital River shall charge the End Users whatever fee it so determines. The amounts owed by Digital River to Symantec under this paragraph shall be applied as a credit on the monthly invoice(s) sent by Digital River to Symantec pursuant to Section G(3) of the Agreement. Such invoice(s) will contain information reflecting Digital River’s method of calculating the total credit applied. If no invoice is sent to Symantec in a particular month, Digital River will apply the credit to the next invoice sent to Symantec, or at Symantec’s request, to a Symantec marketing campaign.

          i. Digital River shall make the following Customer and product information for Customers that purchased the Download Warranty Service available on an ongoing basis through the DRCC, or if temporarily not available through the remote management tool, Digital River will send such information electronically to Symantec on a weekly basis: Customer name, address, telephone number and email address; name, version number and SKU of the Symantec Product(s) for which the Download Warranty Service was purchased; and the Download Warranty Service purchase date.

          ii. Within 15 days following the end of any month during which Digital River is offering the Download Warranty Service through the Storefront, Digital River shall provide a report to Symantec with the following information for that region for the previous month: (i) the number of Customer service/technical support calls received, despite the fact that Symantec should be receiving such calls, in which a Customer had a question or issue relating to the Download Warranty Service and the total number of minutes it took to resolve each such call and (ii) Digital River’s Net Receipts from sales of the Download Warranty Service.

          iii. Any Customer service/technical support calls in which a Customer has a question or issue relating to the Download Warranty Service shall not be included as part of Digital River’s Customer Service Expense under Section 3 of Exhibit S of the Agreement.

     e. Process by which EDS is Bundled. Digital River may, without prior approval, bundle the Electronic Download Service with a single Symantec Product delivered via ESD, both retail and upgrade; provided that such bundling will be reported to the appropriate Director, or higher, in the Symantec Global Online Sales team. Digital River may also, without prior approval, bundle EDS on subscription renewals processed by Digital River provided that: (i) a technical implementation that is mutually accepted, in writing, regarding such bundling can be achieved; and (ii) the parties agree that the branding for EDS on subscription renewals shall be a new name to be provided by Symantec to Digital River, and which can be changed by Symantec, in its sole discretion, from time to time. Symantec will not unreasonably withhold its approval regarding the technical implementation mentioned in the previous sentence. Digital River must, however, obtain prior approval from Symantec before bundling the Electronic Download Service with any Symantec Product that is already bundled with another product (either a Symantec Product or a third party product).

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

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17. Symantec Tools. The terms set forth herein shall govern all past uses and access by Digital River to the Symantec Tools, effective as of the date Digital River first had access to the applicable Symantec Tool. In accordance with the terms of this Agreement, Symantec grants to Digital River, and Digital River accepts from Symantec, a worldwide, limited, non-exclusive, non-transferable license to provide access to and host for the Term of the Agreement only, Sites containing the Symantec Security Information and various Symantec Tools as part of the Symantec Security Connection and separately on the Storefront, or if authorized through SIF or its equivalent, solely in accordance with Symantec’s instructions and guidelines, as provided to Digital River and updated by Symantec, from time to time; provided that any work requested by Symantec requiring Digital River to change Symantec content which is already hosted by Digital River, or to change pre-existing Digital River code, and such changes would result in Digital River incurring additional costs, then such work will be described in a separate Statement of Work. Notwithstanding the foregoing, Digital River acknowledges that only Symantec can host the Symantec Security Check but that Digital River is hereby authorized to provide a link thereto from the Storefront and through the Symantec Security Connection and may be authorized in the future to do so from such other Sites, as specifically authorized from time to time in writing by Symantec. Digital River shall ensure that the Storefront provides Customers access to and use, in an unaltered form (unless otherwise specifically authorized by Symantec in writing), of (i) the Symantec Security Connection Site, which shall contain the lay out and look and feel that Symantec indicates and modifies, from time to time, and which may contain any one, or a combination of, the Symantec Tools, and (ii) such other features, programs or Symantec Tools as indicated and provided by Symantec, in such combinations as Symantec may authorize, from time to time. Digital River agrees that it shall maintain a direct link to the Symantec Security Alerts or such other names used, including but not limited to “Realtime Security Alerts” located on any “Symantec.com” website or other Sites in order to ensure an automatic update of the information on the Storefront. Digital River shall not make any changes to any of the Symantec Security Information content or any links or the look and feel of any of the Symantec Tools or the Symantec Security Connection Site without Symantec’s prior written consent. Digital River agrees its license to provide access and to host certain Symantec Tools is expressly conditioned upon full compliance with the restrictions and obligations set forth in this Agreement. Digital River shall not provide the use of the Symantec Tools and the related Symantec Security Information to any third party, other than regular access to Customers, except as expressly permitted herein. Digital River agrees to host and if requested pursuant to the processes outlined in the Agreement, which involves either a SOW or a SIF, create customized, co-branded Symantec Security Connection sites or other featured tool Sites for Symantec Partners, in accordance with the terms of Section B(7)(a). Digital River acknowledges that all right, title and interest in the Symantec Security Information, the various Symantec Tools, as part of the Symantec Security Connection and separately on the Storefront, and the Symantec Security Connection itself belong solely to Symantec and its licensors, if any, and that the rights granted hereunder do not transfer any such rights whatsoever to Digital River, other than the license grant rights set forth herein. All the same obligations set forth in the Agreement that relate to protection and indemnity of either party concern ing Symantec’s intellectual property shall apply equally to the Symantec Tools and various Sites.

18. Retention Business Under the Symantec Renewal Center and Related Services.

     a. Process. Digital River shall be responsible, on a worldwide basis, for, implementing, tracking and processing all traffic from Symantec Products that Symantec directs to the Symantec Renewal Center, on the Storefront. Digital River will present to the Customer the renewal options and the upgrade options in languages, payment methods and currencies consistent with the traffic being sent. The initial traffic will be US traffic and subsequent traffic will be defined by SIFs. If the option selected is a renewal then at Symantec’s discretion, Digital River shall redirect the Customer to the Symantec Renewal Center. If not, then Digital River shall process the Customer’s order in accordance with the terms of the Agreement. All renewals processed by Digital River will be assigned a SKU and processed per the payment terms of the Agreement. The foregoing shall be subject to mutually agreed upon requirements, which include but are not limited to:

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

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• Symantec provided style, legal, and user experience guidelines, as well as the Security Requirements.

• Digital River will provide localization, coding, QA, and publishing (including international QA).

• Digital River will provide mock web pages to Symantec for approval prior to posting.

• Digital River and Symantec will jointly propose optimization tests and usability plans, and upon Symantec’s approval, Digital River will execute them.

Symantec reserves the right in all cases to disapprove of any look and feel, content or process in place and Digital River shall make all requested changes in the foregoing, for live pages, in no less than twenty-four (24) hours from the written notice of the requested change. The Parties may mutually agree to extend such time frame, or to define a time for making changes to mock pages.

     b. Incentive Rebate Program. In relation to the foregoing, DR will be eligible to participate in Symantec’s standard, then current, incentive rebate program for resellers, based on the increased close ratios, in accordance with and subject to the separate terms and metrics of such program. As part of participating in the incentive rebate program, Digital River will provide the necessary reports to justify the payment of rebate.

     c. Indemnification. Subject to the notice, cooperation and related process provisions of the indemnification provision in Section I of the Agreement, Digital River shall fully indemnify Symantec for any Customer claims or complaints that relate to Digital River’s actions or omissions related to its conduct under Section B(18).

     d. Symantec’s responsibilities. Symantec will provide Digital River with the following, on a quarterly basis:

• Online retention strategy and consumer/SMB product roadmap.

• Online Sales program and promotional strategy and plans.

• Customer contact strategy and plan.

19. Review and Revision of Certain Email Addresses for Symantec, and Emailing to such Addresses. Symantec will provide certain subscription database opt-in data to Digital River, and the Dedicated Team will perform the following:

     a. Scrubbing Email Addresses:

i.	Digital River will delete duplicate names, the classification of which will depend upon the particular e-mail campaign. The classification of a name as a “duplicate” name could be based upon SKUs and/or names, but will always be based upon e-mail address.
ii.	Digital River will delete phony names.

     b. Once Email Addresses are Scrubbed:

i.	Digital River must suppress, or, not send mail to, the Symantec Master Opt-out list (which is delivered to DR daily) and the Symantec Store Opt-out list (as updated by DR for Symantec).
ii.	In addition, Digital River must suppress any names who have received e-mails from Symantec or Digital River within the last two weeks (by mailing list), or any names of customers who own the products to which Symantec is up-selling (at the VID level).

     c. Once the Email Addresses are all Confirmed Opt-Ins. Digital River will

i.	Segment by region;
ii.	Segment by subscription product; and
iii.	Segment by expiration date

     d. Digital River Sending E-mails on Symantec’s Behalf. Symantec may direct Digital River to send emails to certain email addresses from time to time. Digital River may not send any emails on Symantec’s behalf, or to

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

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any email addresses provided by Symantec, without Symantec’s express written direction. The content, email strategy, and any offers contained in any such emails must be approved, in writing, by Symantec.

     e. Indemnification. Subject to the notice and cooperation and related process provisions of the indemnification provision in Section I of the Agreement, Digital River will defend and indemnify Symantec, for any third party claims for damages, which arise out of, through no fault of Symantec: (a) Digital River’s failure to comply with the scrubbing and emailing requirements as stated in this Section B(19); (b) Digital River’s failure to comply with Symantec’s direction regarding emails sent by Digital River on Symantec’s behalf; or (c) any misrepresentation by Digital River in the performance of the services as stated in this Section B(19). Subject to the notice and cooperation and related process provisions of the indemnification provision in Section I of the Agreement, Symantec will defend and indemnify DR for any third party claims for damages, which arise (through no fault of DR) out of incomplete or inaccurate information or instruction provided by Symantec pursuant to this Section B(19), including incomplete or inaccurate information provided as part of the Master Opt-Out list

20. Symantec Rights Upon a Trigger Event. In order for this Section B(20) to apply, the volume of all of Symantec’s online sales business (regardless of whether or not that online sales business is included or not included within the term “Symantec’s OSB”), but excluding any direct relationships between Symantec and its partners as well as Symantec’s xSP, OEM, and enterprise business, processed by Digital River cannot fall below [*] at the end of any single quarter (the “Trigger Event Percentage”). The Trigger Event Percentage will be calculated by dividing the Net Sales of Symantec products and services transacted by Digital River, under this Agreement or any related SOW, by the net sales (which means the purchase price paid by the seller of the Symantec product to Symantec for the Symantec products, or the amount received by Symantec from the Customer for the Symantec Product, less returns, Taxes, and shipping and handling charges) of all Symantec’s online sales business (regardless of whether or not that online sales business is included or not included in the term “Symantec’s OSB”). Measurements regarding Symantec’s satisfaction of the Trigger Event Percentage will only be made at end of a calendar quarter. If the Trigger Event Percentage falls below [*], then the applicability of this Section B(20) is suspended until Symantec satisfies the Trigger Event Percentage upon the next Trigger Event Percentage measurement date. In the event of a Trigger Event, Symantec will have the option to require that Digital River assign this contract [*].

a.	Change of Control. “Change of Control” means any Symantec Competitor has acquired beneficial ownership interest of [*] percent ([*]%) or more of Digital River.
b.	Symantec Competitor. “Symantec Competitor” means: [*].
c.	Trigger Event. A “Trigger Event” means if Digital River is merged into, consolidated with, sells all or substantially all of its assets to, or implements or suffers a Change of Control from, a Symantec Competitor. For purposes of Section 20(e), “Trigger Event Date” shall mean the date an agreement is executed between Digital River and a Symantec Competitor, and notice of such Trigger Event Date must be provided by Digital River to Symantec within 24 hours.
d.	[*] The Parties acknowledge that the purpose of this Section is to permit seamless operation of the Storefront, and that therefore the foregoing list is not intended to be exhaustive, but will be deemed to contain anything reasonably required [*] in order to achieve the purpose of this provision. [*].

21. Intellectual Property Protection. DR agrees that it shall file patents in the areas that are necessary in its opinion to protect its rights to provide the services and technology under the terms of this Agreement.

C. PRIVACY; OWNERSHIP; CONFIDENTIALITY.

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

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1. Symantec Privacy Policy; Use and Ownership of Customer Information. Digital River shall (i) post the Symantec provided Privacy Policy on the Symantec hosted pages of each Sub-site in the applicable language of such Sub-site; (ii) post the Digital River privacy policy on Digital River hosted pages of each Sub-site in the applicable language of such Sub-site; (iii) update such Privacy Policy on each Sub-site from time to time upon notice from Symantec that such Privacy Policy has been changed; and (iv) comply with all the obligations of Symantec described in such Privacy Policy in connection with all Customer transactions conducted through the Storefront. Notwithstanding the foregoing, nothing in the Digital River privacy policy, or in any related site disclosures, will relieve Digital River of its obligations to provide Symantec with the Customer Information from all Sub-sites.

     a. Customer Information. Digital River shall not request any Customer Information that is not required to perform its obligations hereunder. Digital River agrees that all Customer Information is the property of Symantec and Digital River may only use such information to perform its obligations as specifically authorized under this Agreement, or as requested by Symantec, and for no other purpose. Digital River further shall (i) keep all Customer Information strictly confidential, provided that Digital River may provide necessary Customer Information to payment processors solely in connection with processing payments from Customers for Symantec Products or in response to any subpoena or inquiry from law enforcement, and (ii) delete all Customer Information from its records and systems after it is no longer reasonably necessary for Digital River to retain such information to perform its obligations hereunder. The Parties recognize that Digital River may retain Customer Information solely for the purpose of engaging in ongoing fraud prevention regarding customer transactions.

     b. Billing Details and Auto-Renewal Consents.

          i. Collection and Transfer. Digital River shall collect and transfer all Auto-Renewal Consents and Billing Details obtained from customers to Symantec, its payment processors and any agents as designated by Symantec, provided each of the foregoing are PCI compliant (each a “Processor”). Digital River acknowledges and agrees that, unless otherwise agreed to in writing by Symantec, it has an ongoing obligation, from the Statement of Work Six Effective Date forward, to obtain United States and Canadian Customers’ consent to provide Customers’ Billing Details to Symantec in situations where the Customer agrees at the time of Customer’s purchase to the auto-renewal of his/her subscription (the “Auto-Renewal Consents”). To the extent the Auto-Renewal Consents were not collected on the shopping cart page on the Storefront from the Statement of Work Six Effective Date, the Auto-Renewal Consents will be collected in post-purchase confirmation emails sent by Symantec to Customers. The collection of Auto-Renewal Consents outside of United States and Canada will be addressed by subsequent amendments to this Agreement. Notwithstanding anything to the contrary in this Agreement, Symantec or its Processors will only use Billing Details in accordance with the consents provided by the relevant Customers. Symantec will not ask Digital River to send Billing Details for a unique transaction to multiple Processors. Digital River will not transfer such information to a Processor in a manner that: (a) requires the Processor to complete the transaction with Digital River, or otherwise restricts the Processor’s ability to complete customer transactions; or (b) prevents the Processor from transferring the data to Symantec. Digital River will provide any and all other Customer Information to Symantec upon Symantec’s request.

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

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          ii. Auto-Renewal Consent and Related Disclaimer Content. Symantec will possess sole control over the content of the Auto-Renewal Consent, and those portions of the disclaimer as it applies to Symantec. Digital River will have five business days within which to post the Auto-Renewal Consent, along with any applicable disclaimers, that is approved by Symantec and provided by Symantec to Digital River. Notwithstanding the foregoing, the parties will include required content in order to comply with payment processor requirements or applicable Credit Card Association rules; provided that Digital River may not: (a) alter the content of the Symantec approved Auto-Renewal Consent, or any related disclaimers; or (b) employ content which conflicts with, or alters the content of, the Symantec Auto-Renewal Consent or related disclaimers. The Parties will resolve any issues regarding the Auto-Renewal Consents and related disclaimers within five (5) business days. The Auto-Renewal Consents will conspicuously and prominently display the appropriate disclaimer, the current version of which is reproduced immediately below.

On-going Protection

This product includes the On-going Protection feature. On-going Protection keeps your computer protected against the latest internet risks by automatically renewing your subscription at the regular price (plus applicable tax) at the time of renewal using the credit/debit card provided in connection with your original purchase of downloaded product (if still valid at the time of renewal). Symantec will send an email with the renewal and billing details prior to your subscription’s expiration date. You authorize Symantec to use the contact and billing information you provided for your purchase to charge each renewal. You also authorize Digital River to transfer the contact and billing information you provided for your purchase today to Symantec for this purpose. You may cancel On-going Protection at any time. To cancel On-going Protection, please forward this email (which includes your order number and product key) to renewal@symantec.com and type “Cancel my On- going Protection” in the Subject Line. You will receive an email confirming that On-going Protection will no longer be active.

          iii. Billing Details Restrictions. Digital River is responsible for the security of Billing Details while such Billing Details are in Digital River’s possession or while Digital River is transferring such Billing Details. The Parties acknowledge and agree that Billing Details can only be used for assisting Customers in completing a transaction, which includes providing the Billing Details to a Processor as stated above, providing ongoing fraud control, or for others uses specifically required by law. Each party will treat Billing Details as Confidential Information during and after the Term of this Agreement.

     c. Collecting Customer Information. Further Digital River will comply with all applicable foreign laws, as well as its posted privacy policy, when collecting Customer Information, and shall disclose that it is providing the Customer Information to Symantec. The process of collecting data must inform the Customer that all payment related information will be used only by Digital River to process the order and for ongoing fraud control, and that all other provided information will be used solely by Symantec as indicated in the Symantec Privacy Policy. The process required must allow the Customer to access his or her own Customer Information collected by contacting Customer support and asking them to amend or otherwise designate the Customer as opted out and not to be contacted or when such automated technology later becomes available and is implemented by mutual agreement of the Parties, allow the Customer to directly access his or her own Customer Information collected and amend or otherwise designate the Customer as opted out and not to be contacted.

2. Disclosures to Customers; Customer Choice. In connection with processing Customer orders, Digital River shall (i) distinguish between “required” and “non-required” fields in the order entry process, (ii) disclose how the Customer Information provided may or will be used and (iii) present Customers with opt out or opt in options on order pages, which options shall require Customers to give permission for subsequent uses of their personal information by Symantec or third parties for purposes of providing notification of product upgrades, new services and/or products, newsgroups, special offers, seminars or other marketing purposes, except in all European Union

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

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countries, where only opt-in options will be presented to those Customers. For Sub-Sites serving North America, and so long as not prohibited by law, fields for consent options will have default answers (with the default set at “consent”) or field validation methods that force decisions such that fields are not left unanswered. For Sub-sites serving all other regions in the Territory (and so long as not prohibited by law), fields for consent options will have default answers (with the default set at “no consent”) or field validation methods that force decisions such that fields are not left unanswered, except in all European Union countries, where only an opt-in is provided. The foregoing consent options and default answers may be modified at Symantec’s discretion, however, if Symantec requires Digital River to use a default answer mechanism based upon Symantec’s interpretation of the local law, which interpretation differs from Digital River’s interpretation, and this default answer mechanism violates local law, Symantec will indemnify Digital River under Section I(2) against any losses related to the same.

3. AntiSpam Policies and All Messaging to Customers. Digital River will not send any unsolicited email on Symantec’s behalf without express written authorization to do so from a Symantec Vice President or higher. Any and all messaging that Digital River sends out on behalf of Symantec, electronic or otherwise, shall be first approved in writing or email by the Vice President of Global On-Line Sales of Symantec. Digital River shall not send any messages to Symantec’s Customers or any visitors to Storefront which are other than those requested by Symantec and shall not use any Customer list of Symantec’s for any purpose, other than for Symantec’s benefit, as directed by Symantec.

4. Rights in Work Product.

     a. Ownership. Except for Statement of Work #14 (ownership issues, if any, to be resolved at a later time), as set forth in Sections C(4)(b) and (c) immediately below, and beginning on the Effective Date, the Work Product created for Symantec by Digital River under this Agreement shall be the property of Symantec where so indicated in an Amendment or SOW. The Parties recognize that, except for the Digital River Information and the Digital River Core Technology, the Work Product is a “work made for hire” and Digital River shall not sell, transfer, publish, disclose, display or otherwise make available the Work Product as developed for Symantec. Except as otherwise provided herein, Digital River acknowledges that it has no right to use the Work Product with or for the benefit of any entity or person, other than Symantec, without the executed written consent of Symantec. Where indicated in a SOW or Amendment Work Product will be the sole property of Symantec, and, in such instances, Digital River hereby assigns to Symantec all rights, title and interest, including but not limited to all patent rights, copyright, mask work rights, trade secret rights and other proprietary rights therein.

     b. Exceptions. The Digital River Information and the Digital River Core Technology, subject to the terms of this Agreement, will remain the exclusive property of Digital River. To the extent that Digital River incorporates any Digital River Information or Digital River Core Technology into the final Wrapper Technology or Work Product delivered by Digital River, Digital River hereby grants to Symantec a royalty-free, non-exclusive, non-transferable license to use such Digital River Information or Digital River Core Technology solely in direct connection with the use by Symantec of the final Wrapper Technology or Work Product, and any and all later versions and updates thereto, for Symantec’s Storefront business in accordance with the limitations set forth in this Agreement and any applicable SOW. Any licensed technology from a third party that is integrated into the final Wrapper Technology remains the property of such licensor, unless otherwise specifically agreed to by that party.

     c. Modifications. Any Modifications to the Symantec Technology by Digital River not performed pursuant to this Agreement, or not at Symantec’s expense, will not be considered Work Product, and will be the property of Digital River; provided, however, that Digital River hereby provides Symantec and its Affiliates with a perpetual, irrevocable, worldwide, non-exclusive, royalty free, non-transferable (except as otherwise stated in this Agreement) license to use such Modifications, and to create derivative works thereof. Prior to making any Modifications to the Digital River Core Technology or Digital River Information, Symantec shall obtain written consent from Digital

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

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River, and such Modifications by Symantec will be the property of Symantec; provided, however, that Symantec hereby provides Digital River and its Affiliates with a perpetual, irrevocable, worldwide, non-exclusive, royalty free, non-transferable (except as otherwise stated in this Agreement) license to use such Modifications, and to create derivative works thereof.

     d. Assistance. During and after the term of this Agreement Digital River will assist Symantec and its nominees in every proper way, at Symantec’s expense, to document, secure, maintain and defend for Symantec’s own benefit in any and all countries all copyrights, patent rights, mask work rights, trade secret rights and other proprietary rights in and to the Work Product.

5. Confidentiality. Each Party acknowledges that in the course of performing its obligations hereunder it will receive information that is confidential and proprietary to the other Party. Each Party agrees not to, during or subsequent to the term of this Agreement, directly or indirectly (a) use any of the disclosing Party’s Confidential Information for the benefit of anyone other than the disclosing Party, or other than for a Party to perform an obligation under this Agreement, or (b) disclose any of the disclosing Party’s Confidential Information to anyone other than an employee or consultant of the receiving Party who is obligated by written contract to protect the confidentiality thereof and requires such information to perform hereunder, or an employee of the disclosing Party. Consultants include either Party’s attorneys, accountants, programmers, or other persons who render professional services to either Party. Each Party will use commercially reasonable efforts to carry out the foregoing obligations. Except as set forth in the next sentence, without each Party’s prior written approval one Party will not directly or indirectly disclose to anyone the terms and conditions of this Agreement. In the event that either Party is required by any governmental entity or legal process to disclose information that is subject to this Section C (5), the Party that is subject to the duty of disclosure shall provide the other Party with reasonable notice (given the constraints placed upon the Party under the duty to disclose) to enable either Party to take actions necessary to attempt to prevent such disclosure. Each Party agrees that it shall not make any comments of any kind in any forum (public or otherwise) relating to the other Party’s potential earnings or earnings announcements prior to that Party making its own public announcement of such information.

D. USE OF SYMANTEC AND DIGITAL RIVER NAMES.

1. Symantec Name.

     a. Orders. Except for required disclosures to Consumers, all Internet orders processed by Digital River, including orders from the Storefront and Try/Buy sections, must have the look and feel of Symantec.

     b. Telephone. Digital River shall use the name “Symantec Order Desk” when answering telephone lines that are dedicated to providing services for eligible End Users.

     c. Documents. Digital River shall use the name “Symantec Online Store” on its correspondence when it deals with Symantec Customers, and when it bills Customers’ credit cards. Digital River may also indicate on its correspondence that it is the operator of the Symantec Online Store, and that it is an authorized reseller of Symantec Products via the Symantec Online Store.

     d. Invoices; Confirmations. Digital River shall use the name “Symantec Online Store” and the appropriate Digital River address when it sends invoices and confirmations to Symantec Customers. Digital River shall also indicate on the invoices and confirmations that it is the operator of the Symantec Online Store, and that it is an authorized reseller of Symantec Products via the Symantec Online Store.

     e. Nonaffiliation. If at any point during the term of this Agreement, Digital River publishes, either orally or

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

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written, any promotion of Symantec Products or services, Digital River shall use a disclaimer that states that Digital River is not an affiliate of Symantec in such promotion. At no time will Digital River hold itself out to be an affiliate of Symantec, either orally or in writing.

     f. Other. Digital River may use the name “Symantec Online Store” for other purposes for which it requests and receives written permission to do so. Digital River does not have a license to use the Symantec name, or any variation thereof, for any purposes not listed above.

2. Digital River Name. Except as otherwise provided under this Agreement, Digital River shall not display its name or any of its trademarks or other identifying marks at any location on the Storefront except as required by law to provide notice that Digital River is an authorized reseller and/or contracted vendor and on the order processing page prior to receiving Customers’ credit card information for purposes of notifying Customers that the applicable credit card charge will be made by Digital River.

3. Symantec’s Trademarks, Trade Names and Copyrights. During the term of this Agreement, Digital River is authorized by Symantec to use the trademark “Symantec,” the Symantec logos for Symantec Products and the designations “Symantec Order Desk” and “Symantec Online Store” in connection with Digital River’s services under this Agreement. Digital River’s use of such trademark, logos, and designations will be in accordance with Symantec’s policies in effect from time to time, including but not limited to trademark usage and cooperative advertising policies. Digital River shall not alter, erase, deface or overprint any trademark, copyright, trade name, or other proprietary right notice on anything provided by Symantec. Digital River acknowledges that Symantec owns and retains all copyrights and other proprietary rights in all Symantec Products, and agrees that it will not at any time during or after this Agreement assert or claim any interest in or do anything that may adversely affect the validity or enforceability of any trademark, trade name, copyright or logo belonging to or licensed to Symantec (including, without limitation, any act, or assistance to any act, which may infringe or lead to the infringement of any copyright in Symantec Products). All rights not expressly granted herein are reserved by Symantec. Nothing in the Agreement or in the performance thereof, or that might otherwise be implied by law, shall operate to grant Digital River any right, title, or interest in Symantec’s trademarks and logos. Digital River’s use of Symantec’s trademarks and logos shall inure solely to the benefit of Symantec. Digital River hereby assigns all rights it may acquire by operation of law or otherwise in Symantec’s trademarks and logos, including all goodwill associated therewith. Digital River will not alter, reverse engineer, decompile, disassemble or rent the Symantec Products or otherwise attempt to learn the source code, structure, or algorithms underlying the Symantec Products or Symantec Tools. Digital River will not sell, lend or transfer any user manual or printed documentation or other materials included with Symantec Products separately from the distribution of Symantec Products.

4. Digital River’s Trademarks, Trade Names and Copyrights. During the term of this Agreement, Symantec is authorized by Digital River to use Digital River’s trademarks and logos in connection with Symantec’s advertisement and promotion of the Storefront. Symantec’s use of such trademark and logos will be in accordance with Digital River’s policies in effect from time to time, including, but not limited to, trademark usage and cooperative advertising policies. Symantec will not at any time during or after this Agreement assert or claim any interest in or do anything that may adversely affect the validity or enforceability of any trademark, trade name, copyright or logo belonging to Digital River. All rights not expressly granted herein are reserved by Digital River. Nothing in the Agreement or in the performance thereof, or that might otherwise be implied by law, shall operate to grant Symantec any right, title, or interest in Digital River’s trademarks and logos. Symantec’s use of Digital River’s trademarks and logos shall inure solely to the benefit of Digital River. Symantec hereby assigns all rights it may acquire by operation of law or otherwise in Digital River’s trademarks and logos, including all goodwill associated therewith. Symantec will not alter, reverse engineer, decompile, disassemble or rent the Digital River Core Technology or Digital River Information, or otherwise attempt to learn the source code, structure, or algorithms underlying the Digital River Core Technology or Digital River Information.

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

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5. Ownership of Storefront URLs and Domain Names. Symantec shall designate and own the URLs that are to be used for the Storefront, any Sub-sites, and/or Sites. These ownership rights extend to all domain names and URLs required to functionally operate the Storefront, any Sub-sites and/or Sites, including, but not limited to, Storefront URLs and Key server URLs. Symantec grants Digital River limited rights to the URLs to the extent that access to the URLs that are necessary in order for Digital River to meet its obligations hereunder.

E. REPORTING; RECORDS; INSPECTION; PURCHASE ORDERS.

1. Notification. Digital River will notify Symantec in writing of any claim or proceeding involving Symantec Products within ten (10) days after Digital River learns of such claim or proceeding. This notification requirement shall not include claims relating to service or credit card charges. Digital River will report promptly to Symantec all claimed or suspected product defects. Digital River will also notify Symantec in writing not more than thirty (30) days after any change in the control of Digital River or any transfer of more than twenty-five percent (25%) of Digital River’s voting control or a transfer of substantially all its assets.

2. Reporting. Digital River must provide Symantec with the reports and access to reporting information set forth below. All reports provided by Digital River must have the capability of being sorted or totaled on every field.

     a. DRCC. Digital River shall provide Symantec access on a 24 X 7 X 365 basis to its online reporting tool, the DRCC, which will provide Symantec the ability to obtain all sales and marketing data relating to the Symantec Products as fully updated by Digital River each 24 hours. The data made available by the DRCC shall at a minimum include all Customer Information gathered by Digital River in the course of performing its obligations hereunder, other than credit card numbers of other financially sensitive information, and the following sales data for each product sold: Customer name, Customer billing and email addresses, product sold, SKU, quantity, price, country code and promotional code/campaign ID. The DRCC will provide authenticated access to authorized Symantec employees on a worldwide basis.

     b. Site Reporting. Digital River shall provide Symantec the site reports detailed in Exhibit I, as may be amended by Symantec from time to time upon reasonable notice to Digital River, either through the DRCC described in the foregoing subsection, or by electronic transmission if not available through the DRCC. If Symantec makes a request for a new report or a change to an existing report, the Parties will prepare and mutually agree upon an SOW with respect thereto.

     c. EDI Sell-Through and Returns Reporting. Digital River shall (a) provide to Symantec electronically on a daily basis the EDI sell-through reports containing the information set forth in Section 1 of Exhibit K hereto and (b) provide to Symantec electronically on a weekly basis the product returns reports containing the information set forth in Section 2 of Exhibit K hereto, as such Exhibit K may be amended by Symantec from time to time upon the mutual written agreement of the Parties. The Parties agree that the daily EDI information feed provided for in this Section of the Agreement shall be based on a three-day lag period (i.e., the EDI sell-through information submitted on a given day shall relate to Storefront sales three days prior) and be presented in accordance with the EDI template provided by Symantec. In addition, with respect to any Symantec Products sold through the Sub-sites that have List Prices in currencies other than the U.S. Dollar, the price reflected in the EDI information feed to be paid to Symantec by Digital River for such Symantec Products shall be noted in U.S. Dollars. Digital River shall determine the amount owed to Symantec in U.S. Dollars for each such Symantec Product by using a published exchange rate for the date of the sale of such product by Digital River to the Customer in order to convert the amount owed in the applicable List Price currency for such product to a total in U.S. Dollars. Symantec understands that Digital River’s internal processes are structured such that Digital River automatically sends payment to Symantec based on the monthly Penetration Report processed by Digital River. To the extent there are

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

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any discrepancies in the amount owed to Symantec based on the daily EDI reporting and the monthly Penetration Report, the Parties shall cooperate to reconcile such discrepancies in order to determine the amount actually owed by Digital River to Symantec based on the number of Symantec Product units actually sold and the applicable List Prices.

     d. Penetration Report. Digital River shall provide Symantec with a penetration report (“Penetration Report”) by the tenth (10^th ) day of each month for the prior month sales which contains the information prescribed in the template provided by Symantec. The price reflected on such Penetration Report as the amount to be paid by Digital River to Symantec for any Symantec Products sold through the Sub-Sites that have List Prices in currencies other than the U.S. Dollar shall be calculated in the same manner as required for the daily EDI reports.

3. Records and Audits. Digital River will maintain its records relating to distribution of Symantec Products for at least three (3) years after their creation, and will permit Symantec or its representative to examine such records upon reasonable notice during reasonable business hours. Symantec or any such representative shall agree to hold information obtained in such examination in confidence and shall only reveal to Symantec such information as is necessary to verify Digital River’s compliance or noncompliance with this Agreement. Digital River will promptly pay any payments found due by such an examination, plus interest, and if any examination discloses a shortfall in any payments due Symantec in a calendar quarter of more than five percent (5%), Digital River will pay the reasonable fee of the auditors for that examination. In addition to the foregoing, Payment Card Industry representatives, or a Payment Card Industry approved third party, will be provided with full cooperation and access to conduct a thorough security review after a security intrusion, if applicable. The review will validate compliance with the Payment Card Industry Data Security Standard for protecting cardholder data. Capitalized terms used herein, but not defined in this Agreement, have the meaning given to them by the PCI Compliance Guide. Digital River will provide Symantec with a letter certifying the completion of any such post-security intrusion audit, but not a copy of the actual audit.

4. Audit of Packaged Product Inventory. Symantec or its representative shall have the right to inspect the packaged Symantec Products inventory held by Digital River upon reasonable notice at all reasonable times.

5. Purchase Orders.

     a. Purchase Order Procedures for all Symantec Products. Digital River shall submit purchase orders to Symantec Order Services at the address listed in Section 5 of Exhibit K hereto for packaged Symantec Products, which purchase orders shall indicate for each product the product name and SKU, quantity ordered and List Price. The terms and conditions of this Agreement and the Symantec confirmation will apply to each order accepted by Symantec hereunder. Should there be conflicts in terms between Symantec’s confirmations and this Agreement, the terms of this Agreement shall control. The provisions of Digital River’s form of purchase order or business forms will not apply to any order notwithstanding Symantec’s acknowledgment or acceptance of such order.

     b. Additional Purchase Order Policies for Packaged Symantec Products. All of Digital River’s orders for packaged Symantec Products shall be in shipping carton quantities (or integral multiples thereof) and shall be subject to acceptance in writing by Symantec at its principal place(s) of business and shall not be binding until the earlier of such acceptance or shipment, and, in the case of acceptance by shipment, only as to the portion of the order actually shipped. Symantec reserves the right to cancel any orders placed by Digital River and accepted by Symantec as set forth above, or to refuse or delay shipment thereof, as it so desires if Digital River (a) fails to make any payment as provided in this Agreement or under the terms of payment set forth in any invoice or otherwise agreed to by Symantec and Digital River, (b) fails to meet reasonable credit or financial requirements established by Symantec, including any limitations on allowable credit, (c) otherwise fails to comply with the terms and conditions of this Agreement or (d) in Symantec’s opinion, has an excess inventory of packaged Symantec

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

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Products. Symantec also reserves the right to cancel any orders for Symantec Products deleted from Exhibit R to this Agreement pursuant to Section A(4)(c) without liability of any kind to Digital River or to any other person. No such cancellation, refusal or delay will be deemed a termination (unless Symantec so advises Digital River) or breach of this Agreement by Symantec.

     c. Acceptance of North America Purchase Orders by Digital River for Purchase on the Storefront. Digital River agrees to accept purchase orders from small business and Enterprise Customers on the Storefront that purchase more than Five Hundred Dollars ($500.00) if the purchase order is in the form set forth in Exhibit T (the “Customer Purchase Order”). Digital River hereby [*] associated with accepting the Customer Purchase Orders, including but not limited to [*]. Digital River shall settle the Symantec’s invoices and pay Symantec in full, notwithstanding any default on the part of End Users to pay Digital River. Digital River will ensure that the Customer Purchase Order process remains available in accordance with the Service Level Requirements set forth in Exhibit F. Digital River shall ensure that the End User experience with the Customer Purchase Order is as follows:

• Customer decides to purchase a Symantec Product

• Shopping cart page displays “Pay on Purchase Order”

• Customer completes the Customer Purchaser Order and submits it to Digital River electronically

• Digital River communicates approval or denial of credit within no more than forty-eight (48) hours

• If approved, Customer will have the ability to download the Symantec Product(s), have physical versions shipped, or license certificate generated once they complete the process.

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

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F. Packaged Symantec Products.

1. Consignment of Packaged Symantec Products; Title. Digital River shall hold all packaged Symantec Products ordered and received from Symantec under this Agreement on a consignment basis. Title to all Symantec Products held on consignment is reserved by Symantec until the sale of the Symantec Products by Digital River to End Users. For sales within the United States, at the moment of sale of Symantec Products to End Users, title shall pass from Symantec to Digital River, Inc. and then immediately from Digital River, Inc. to the End User upon delivery of the Symantec Products to the common carrier. For sales outside the United States, at the moment of sale of Symantec Products to End Users, title shall pass from the appropriate Symantec entity to Digital River Ireland Limited, and then from Digital River Ireland Limited to the End User upon delivery of the Symantec Products to the End User. Until such time as title passes to Digital River, Digital River shall have no right to pledge, mortgage, or otherwise encumber Symantec Products. Digital River agrees to cooperate with Symantec in effecting protections afforded consignment sellers under the Uniform Commercial Code, including the execution of UCC-1 financing statements. Symantec shall be responsible for the preparation of such financing statements for Digital River’s review and signature, and for the filing of such financing statements and payment of filing costs. No security interest shall be granted in the proceeds from the sale of the consigned Symantec Products.

2. Inventory. Digital River will maintain warehousing facilities and an inventory of packaged Symantec Products sufficient to serve adequately the needs of the Storefront Customers on a reasonably timely basis. Digital River will maintain a minimum of four weeks of packaged product inventory and a maximum of six weeks of packaged product inventory based on Symantec’s forecast for the Storefront for the applicable quarter.

3. Storage and Segregation of Symantec Products. Digital River shall store all Symantec Products held on consignment at the Digital River contracted or owned facility to which Symantec ships such Symantec Products. Digital River and Symantec may mutually agree to amend Exhibit O from time to time to include additional or alternative fulfillment locations. Digital River shall clearly label Symantec Products as products and property owned by Symantec and held by Digital River on consignment. Digital River shall not use any Symantec Product inventory purchased or held by Digital River under any agreement between the Parties other than this Agreement to fulfill Customer purchases made through the Storefront.

4. Shrinkage; Insurance. Digital River shall be responsible for any shrinkage due to loss or damage to any Symantec Products while on consignment. For purposes of calculating any Digital River liability due to shrinkage, the value of such consigned goods shall be based upon Symantec’s cost of manufacturing the applicable products that were lost or damaged. Without limiting the foregoing, Digital River agrees to use commercially reasonable efforts to protect and preserve the Symantec Products while on consignment and to use all reasonable precautions with its staff and facilities to prevent unauthorized access to, removal of, or interference with, the Symantec Products. Digital River further agrees to maintain all-risk property insurance in an adequate amount to fully insure all Symantec Products while on consignment, wherever located, and will cause Symantec to be named as an additional insured on such policy throughout the term of this Agreement. Such insurance shall indicate that the coverage with respect to Symantec will be primary without right of contribution of any other insurance carried by Symantec.

5. Shipment. All packaged Symantec Products purchased directly from Symantec will be shipped by Symantec F.O.B., Symantec’s point of delivery. Shipments will be made to Digital River’s identified warehouse facilities or freight forwarder. Symantec will be responsible for paying all shipping, freight and insurance charges.

6. Risk of Loss. Title to Symantec Products ordered by Digital River is reserved by Symantec until sale by Digital River to End Users. However, all risk of loss or damage will pass to Digital River, or to such financing institution or other parties as may have been designated to Symantec by Digital River, upon delivery by Symantec

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

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to Digital River. Symantec will bear the risk of loss or damage in transit.

7. Partial Delivery. Unless Digital River clearly advises Symantec to the contrary in writing, Symantec may make partial shipments on account of Digital River’s orders, to be separately invoiced and paid for when due.

8. Delivery Schedule; Delays. Symantec will use reasonable efforts to meet Digital River’s requested delivery schedules for packaged Symantec Products, but Symantec reserves the right to refuse, cancel or delay shipment to Digital River as it so desires. Should orders for Symantec Products exceed Symantec’s available inventory, Symantec will allocate its available inventory and make deliveries on a basis Symantec deems equitable, in its sole discretion, and without liability to Digital River on account of the method of allocation chosen or its implementation. In any event, Symantec shall not be liable for any damages, direct, consequential, special or otherwise, to Digital River or to any other person for failure to deliver or for any delay or error in delivery of Symantec Products for any reason whatsoever.

9. Account Receivables in Trust. Until such time as payment is received by Symantec, Digital River shall hold the account receivables from the sale of any packaged Symantec Products to End Users in trust for Symantec. Digital River shall have no right, title, or interest in, and shall not pledge, mortgage, or otherwise encumber such accounts receivables.

10. Field Destruction. Digital River may destroy obsolete inventory in the field subject to the field destruction process, which is attached hereto as Exhibit V (the “Field Destruction Process”). Digital River is responsible for managing the audit and destruction of obsolete and/or defective packaged Symantec Products at Digital River’s sole expense, all as pursuant to the terms of this Agreement, and the Field Destruction Process; provided, however, that is Symantec’s required order minimums are responsible for Digital River’s overstocking on certain Symantec Product, then Symantec will bear the cost of destruction of such overstocked Symantec Product. If Digital River uses a third party to complete the Field Destruction Process, then Symantec must approve, and certify, the third party destruction provider (a “Destruction Provider”) prior to Digital River using such third party. All Destruction Providers must comply with Symantec’s audit and destruction requirements, a copy of which requirements will be provided to the third party prior to its performance of the services. Symantec and Digital River will accept the third party’s count as final, however Symantec reserves the right, in its sole discretion, to audit any count hereunder. Digital River and third party will comply with the Field Destruction Process, and (to the extent provided by Symantec) any RMA procedures provided by Symantec, as may be modified from time to time unilaterally by Symantec.

G. PRICING AND LICENSE FEES; PAYMENTS; PAYMENT TERMS; TAXES, TARIFFS.

1. Digital River Pricing to End Users. Although Symantec may provide and change from time to time a suggested retail price (“ERP”) for the Symantec Products, Digital River shall be free to set and offer End Users any price (license fee) for the Symantec Products.

2. Pricing When Symantec Does Direct Sale on Sites For Partners Under Section B(7). From time to time, Symantec may agree to a direct sale to the Partners under the terms of the Symantec Partner Agreement for a particular Site and then only engage Digital River to provide hosting and design services for the Site. If such an arrangement is indicated in the SIF, the price for the Symantec Products will be set by Symantec directly for the Partner’s End Users and the terms for payment and pricing are between the Partner’s End Users (or if purchased by the Partner, then the Partner) and Symantec only. Symantec shall pay Digital River only its Margin, per the terms of the Agreement, if Symantec requires Digital River to deliver any boxed product in the SIF. If the direct sale is pursuant to a download site, then Symantec shall pay Digital River its standard per transaction or per download fee as indicated in the relevant SIF, which will clearly indicate the transaction is a direct sale by Symantec

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

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arrangement. All other terms of this Section G shall apply to such Sites unless otherwise specifically modified herein.

3. Payments by Symantec to Digital River. Digital River’s sole compensation for its services under this Agreement will be the amount obtained through its resale of Symantec Products, those amounts due to Digital River under Exhibit L, and any other amounts expressly agreed by the Parties herein. Digital River shall invoice Symantec on a monthly basis for any fees owing by Symantec to Digital River hereunder. Invoices shall be mailed to Symantec Accounts Payable at the address set forth in Section K(5) hereof, and shall be due and payable thirty (30) days after receipt by Symantec.

4. Payments by Digital River to Symantec.

     a. List Prices. From time to time, Symantec shall provide Digital River with price lists setting forth the [*] prices from Symantec to Digital River for the Symantec Products (“List Price(s)”). The current price lists for the Symantec Products as of the Effective Date is set forth as Exhibit R to this Agreement. Symantec’s Revenue Accounting department and Global Online Sales team will maintain and update the Symantec Products in terms of both product lines offered, their SKUs listing and any List Price changes, and forward this updated list to Digital River. Unless otherwise noted and provided as separate lists in Exhibit R, the List Price and the ERPs are the same.

     b. Partner Efficiency Model. Effective October 1, 2006, the actual final price that Digital River pays Symantec for each Symantec Product shall be based upon the Partner Efficiency Model, or PEM, set forth in Exhibit A1, which is determined based upon the volume of sales of Symantec Products made by Digital River. This section G(4)(b) does not apply to the Acquisition Products, the [*] for which are addressed below in Section G(4)(c); however, the application of the PEM will be based upon the sales of all Symantec Products, including the sales of Acquisition Products. At the end of each quarter, the Parties will agree on an estimated “Revenue @ ERP” for the upcoming quarter, which shall be no less than the prior quarter’s actual “Revenue @ ERP.” After the conclusion of each quarter, a true up against the actual “Revenue @ ERP” shall be performed per the schedule set forth in this Section G(4). The amount due for consumer Symantec Products will be determined as follows: (i) the actual total dollar value of the consumer Symantec Products sold for the quarter (which amount shall be derived from the Penetration Report) (the “[*]”) will be multiplied by four (4) to annualize the amount; then (ii) locate that total amount in the column “Revenue @ ERP” on the PEM; and (iii) find the applicable [*] indicated at such level of “Revenue @ ERP” in the PEM. The applicable [*] will be applied to the [*] for such consumer Symantec Products to determine the [*] that Digital River shall pay Symantec for the Symantec Products. The Parties agree to communicate the actual amount due to Symantec on the fourth day of the next quarter.

     c. Acquisition Products. The effective date of Exhibit A-2 is October 1, 2006. The Symantec Vice President for Global Online Sales may add additional Symantec products to the Acquisition Products by adding such Products to Exhibit A1 and providing the new Exhibit A2 directly to Digital River, or as otherwise mutually agreed upon by the Parties. Notwithstanding the foregoing, the Symantec products NAV, NIS, NSW, NSWB, Norton 360, and Norton Confidential cannot be removed from the Acquisition Products.

          i. Suspension of MarketForce Amounts and Acquisition Product [*] Symantec will only pay Digital River the MarketForce Amounts for the Acquisition Products until Digital River satisfies the Acquisition Product Threshold for a given quarter, which are defined below. Once Digital River satisfies the Acquisition Product Threshold for a particular quarter, for the remainder of that quarter: (a) MarketForce Amounts for the Acquisition Products are suspended; (b) the application of the PEM to the Acquisition Products is suspended; and (c) Digital River is then entitled to the Acquisition Product [*] for the Acquisition Products. At the end of a given quarter, Digital River must satisfy the Acquisition Product Threshold for the next applicable quarter in order to suspend the MarketForce Amounts for that quarter and receive the Acquisition Product [*]for that quarter. Symantec will

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

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never: (a) pay MarketForce Amounts and allow the Acquisition Product [*] on the same product(s); or (b) apply the PEM and allow the Acquisition Product [*] on the same product(s). This Section G(c) does not affect Symantec’s obligation to pay Digital River the Market Force Amounts for Digital River’s selling of Symantec Products that are not Acquisition Products, pursuant to the terms and conditions of Exhibit L.

          ii. Acquisition Product Thresholds. Unless revised by the Parties via a written amendment to this Agreement, the below dollar amount thresholds will continue to apply.

a.	Quarter Ending December 31, 2006, 2007, 2008, and 2009: Ten million three hundred thousand dollars of Acquisition Products sold by Digital River during this quarter.
b.	Quarter Ending March 31, 2007, 2008, 2009, and 2010: Ten million three hundred thousand dollars of Acquisition Products sold by Digital River during this quarter.
c.	Quarter Ending June 30, 2007, 2008, 2009, and 2010: Nine million four hundred thousand dollars of Acquisition Products sold by Digital River during this quarter.
d.	Quarter Ending September 30, 2007, 2008, 2009, and 2010: Nine million four hundred thousand dollars of Acquisition Products sold by Digital River during this quarter.

          iii. Acquisition Product [*]: [*].

          iv. Two-Year Acquisition Product Exception. The Acquisition Product [*] will only apply to the first year value of any two-year Acquisition Product; the second year value of any two-year Acquisition Product will be subject to the PEM.

          v. Reporting. Digital River will provided quarterly written reporting to Symantec within four business days after the commencement of the subsequent quarter documenting the: (a) [*] provided by Symantec to Digital River per product, and per activity, as stated above in this Section G(4)(c); and (b) two reports for each MarketForce Program, one report regarding Acquisition Products, and one report regarding all other activities.

          vi. Direct Renewals. The Parties shall use best efforts to complete technical integration necessary to permit Digital River to offer direct renewals to End Users no later than November 1st, 2006.

     d. Emerging Market Stores and Payment Types. As new stores are created, and new payment types are added to these new stores, the parties will agree in writing whether the store and/or payment type is within an emerging market (an “Emerging Market Store”). If the Parties designate a store, or a particular payment type, as an Emerging Market Store, then the Parties will evaluate the costs associated with the Emerging Market Store, and will mutually agree upon any changes to Digital River’s [*] or other compensation for sales from such Emerging Market Store and such changes will be reflected in the Site Initiation Form or Amendment. DR is not obligated to add additional payment types beyond those found in Exhibit D.

     e. First Quarter, FY’07 Savings. The parties have agreed that Digital River will pay to Symantec; (i) no later than June 30, 2006, US [*]; and (ii) no later than July 21, 2006, US [*], both of which are [*] under the Partner Efficiency Model for the period from April 1, 2006 through June 30, 2006.

     f. Finalized Reports. A finalized activity report will be sent to Symantec on the tenth (10^th) of each month. Digital River shall pay Symantec the amount due by no later than the tenth (10^th) of each month. Digital River will provide such other reporting to Symantec as is mutually agreed upon by the Parties. There are no other annual

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

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catch up adjustments or rebates based upon other quarterly activity that will be applied in determining the final price that Digital River shall pay Symantec for the Symantec Products. Subject to the foregoing requirement, Symantec reserves the right to from time to time increase or decrease its List Prices to Digital River and the ERPs for the Symantec Products, which changes shall be effected by Symantec’s delivery to Digital River of an updated price list.

     g. Invoicing. For all ESD products, Symantec shall invoice Digital River for Purchase First products sold to End Users, and for Try/Buy products downloaded and subsequently purchased by End Users. For packaged Symantec Products, Symantec shall invoice Digital River for stock shipped and sold to End Users (even if payment has not been collected from any End User) and for shrinkage as outlined in Section F(4) of the Agreement.

     h. Sub-sites Selling in Foreign Currency. For the Symantec Products sold through the Sub-sites that have List Prices in currencies other than the U.S. Dollar, Symantec will invoice Digital River in U.S. Dollars based on the currency conversion calculated by Digital River as required by Section E(2)(c) of the Agreement and transmitted through the EDI report for processing by Symantec.

     i. Digital River Payment Terms. On the 10^th day of each month, Digital River shall: (i) settle all Symantec invoices for the previous month’s sales and shrinkage by wire transfer; and (ii) send remittance advice to Symantec Accounts Receivable at the address set forth on Section 4 of Exhibit K, which remittance advice shall detail the payments made to Symantec by purchase order number. All payments due from Digital River shall be made in United States dollars (or such other currency as agreed by both Parties) by wire transfer to the applicable banking facilities set forth on Section 3 of Exhibit K, or such other banking facility designated in writing by Symantec. Symantec shall pay the applicable wire transfer fees incurred in connection with Digital River’s transmission of payments hereunder. Symantec reserves the right, upon written notice to Digital River, to declare all sums immediately due and payable in the event of a breach by Digital River of any of its obligations to Symantec as outlined in Section J(2)(a) and (b).

     j. Transfers. Digital River is hereby authorized to do a “Fed Wire” or “Pure Swift Transfer” only of any funds due and owing to Symantec, directly into Symantec’s bank account. This does not authorize Digital River to do any other electronic deposits of any type. Digital River shall keep all information relating to Symantec’s bank accounts and other related financial information (the “Confidential Banking Information”) completely confidential and shall not disclose any Confidential Banking Information to any party without Symantec’s prior written consent. Digital River shall be solely liable for any losses that Symantec incurs as a result of mistakes, misappropriations of funds or unauthorized disclosure of Confidential Banking Information and shall separately obtain its own indemnity from any third parties who may also be responsible, as applicable. Digital River shall correct the problem or mistake and compensate Symantec within no less than twenty-four (24) hours of becoming aware of the problem or mistake. Any failure to comply with these provisions shall be deemed an immediate and material breach of this Agreement.

5. Failure to Pay. Any payment or part of a payment owing by either Party that is not paid when due, shall, after written notice by the other, bear interest at the rate of 1.5% per month from its due date until paid. Failure of either Party to pay any non-disputed fees or other charges when due shall constitute, after the other Party receives written notice and has had ten (10) days to cure non-payment, sufficient cause for the other Party to immediately suspend its performance hereunder and/or to terminate this Agreement in accordance with Section J(2)(a). Digital River’s obligation to pay Symantec hereunder shall not be affected by Digital River’s [*]

6. Taxes, Tariffs, Fees. The Symantec Product List Prices do not include any national, state or local sales, use, value added or other taxes, customs duties, or similar tariffs and fees which Symantec may be required to pay or collect upon the sale or delivery of Symantec Products or upon collection of the sales price (a “Tax”). The

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

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definition of Tax does not include any income or similar taxes payable by Symantec as a result of revenues received by Symantec pursuant to this Agreement. Should any Tax or levy be made, Digital River shall pay such Tax or levy and indemnify Symantec for any claim for such Tax or levy demanded. Digital River represents and warrants to Symantec that all Symantec Products acquired hereunder are for redistribution in the ordinary course of Digital River’s business, and Digital River shall provide Symantec with appropriate resale certificate and other documentation satisfactory to the applicable taxing authorities to substantiate any claim of exemption from any such taxes or fees.

7. Credit Risk. So long as Digital River is responsible for world-wide customer service, Digital River shall take [*] related to the End Users, including but not limited to [*]. Digital River shall settle Symantec’s invoices notwithstanding any default on the part of End Users to pay Digital River. In the event Symantec takes responsibility for customer service in a region, Digital River shall only take the credit risks for the first [*] of chargebacks, after which Symantec shall make Digital River whole for all chargebacks.

Symantec acknowledges that an unacceptable increase in the chargeback rate for its business could adversely impact Digital River’s ability to continue processing payments on its Merchant Account(s) and/or increase the cost to Digital River of the same. Accordingly, in the event the chargeback rate exceeds [*], Symantec shall have seven days from the notice to draft a plan to address the issue and twenty one days from the notice within which to demonstrate it has taken steps within its handling of customer service to reverse the chargeback trend, or it shall return Customer Service in any impacted region(s) to Digital River. Moreover, in the event Symantec’s chargeback rate exceeds [*], and Digital River is fined or otherwise penalized by the either its credit card processor(s) or a Credit Card Association (including by way of example, but not limitation, MasterCard or Visa), Symantec shall have full responsibility for all fines or penalties levied against Digital River by its credit card processor(s) or the Credit Card Association for conduct during any period when Symantec’s chargeback rate exceeded [*].

8. Returned Products. Symantec’s return policy, which may be revised in Symantec’s sole discretion, is that Symantec will provide a full refund, which includes a refund of taxes, shipping and handling, for any product refund. As a result, Digital River will include such taxes, shipping and handling, if applicable, in its refunds for product returns and Symantec will credit Digital River: (a) the exact amounts verified as paid for the Symantec Product(s) as well as the associated shipping and handling in question; (b) for all confirmed authentic Symantec Product(s); (c) which Symantec Product(s) was verified as purchased on the Storefront. Symantec’s policy regarding Symantec Product returned more than sixty (60) days from its purchase is attached hereto and made a part of the Agreement as Exhibit W. Digital River will invoice Symantec separately, on a quarterly basis, for the shipping and handling referenced above. Digital River shall be authorized to conduct field destruction for products returned by End Users that are not suitable for resale. Symantec shall provide Digital River with a credit equal to the applicable List Price for each return received in accordance with the applicable EULA and reported to Symantec in accordance with Section E(2)(c). Digital River will require a letter of destruction from all End Users who request a refund in accordance with Symantec’s refund policy. Upon Symantec’s request, Digital River will provide Symantec with all letters of destruction as proof of refund. Symantec shall reimburse Digital River for the return costs to the extent the total gross units of Symantec Product returned in a given quarter exceeds [*] of gross total number of units of Symantec Product returned for such quarter, as calculated on a monthly basis and average for the quarter. In such case, Digital River shall invoice Symantec for such amounts as set forth in Section G(4) of this Agreement. The amount of the return/refund request processing fee will be subject to review by the Parties on a quarterly basis. In addition, in those regions where Symantec is handling Customer Service, Digital River shall receive a fee, equal to [*] of the List Price of the applicable Symantec Products for the services it performed in connection with handling the transaction that gave rise to the return.

H. DISCLAIMER OF WARRANTY; LIMITED LIABILITY.

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

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1. Disclaimer of Warranty. SYMANTEC MAKES NO WARRANTIES OR REPRESENTATIONS AS TO PERFORMANCE OF SYMANTEC PRODUCTS OR AS TO SERVICE TO DIGITAL RIVER OR TO ANY OTHER PERSON, EXCEPT AS SET FORTH IN SYMANTEC’S LIMITED WARRANTY ACCOMPANYING DELIVERY OF SYMANTEC PRODUCTS. SYMANTEC RESERVES THE RIGHT TO CHANGE THE WARRANTY AND SERVICE POLICY SET FORTH IN SUCH LIMITED WARRANTY OR ELSEWHERE, AT ANY TIME, WITHOUT FURTHER NOTICE AND WITHOUT LIABILITY TO DIGITAL RIVER OR TO ANY OTHER PERSON. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BOTH PARTIES HEREBY EXCLUDE ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE

2. Limited Liability. EXCEPT FOR EITHER PARTY’S OBLIGATIONS UNDER SECTION I HEREOF, THE LIABILITY OF EACH PARTY, IF ANY, FOR DAMAGES SHALL BE LIMITED TO THE ACTUAL NET AMOUNT RECEIVED UNDER THIS AGREEMENT BY DIGITAL RIVER FROM SALES OF THE SYMANTEC PRODUCTS], WHICH AMOUNT SHALL BE CALCULATED AS THE GROSS AMOUNTS RECEIVED BY DIGITAL RIVER IN CONNECTION WITH ITS DISTRIBUTION OF THE SYMANTEC PRODUCTS, LESS THE AMOUNTS PAID BY DIGITAL RIVER TO SYMANTEC FOR THE SYMANTEC PRODUCTS, RETURNS, AND RELATED TAX AND SHIPPING COSTS. IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OF ANY KIND INCLUDING ANY LOST PROFITS OR LOST DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES ACKNOWLEDGE THAT NOTHING IN THIS SECTION SHALL LIMIT A PARTY’S OBLIGATION TO PAY AMOUNTS DUE AND OWING TO THE OTHER PARTY UNDER THIS AGREEMENT.

3. No Warranty by Digital River. Digital River will make no warranty, guarantee or representation, whether written or oral, on Symantec’s behalf.

I. INDEMNIFICATION.

1. Indemnification of Symantec. Digital River shall indemnify Symantec and its Affiliates and hold it harmless from any third party costs, claims, liabilities, losses, expenses or damages, or any other liability, to the extent it arises from any allegation regarding (i) the negligence, fault, or unlawful acts of Digital River, its employees or subcontractors, (ii) any unauthorized use by Digital River, its employees or subcontractors of any trademarks, copyrights or patents relating to Symantec Products or BOBs, Billing Details, Customer Information or any other third party’s intellectual property, (iii) any unauthorized warranty or representation made by Digital River, its employees or agents relating to Symantec Products or BOBs, (iv) any improper or unauthorized replication, packaging, marketing, distribution or installation of any Symantec Products or BOBs, (v) the combination, operation or use of the Symantec Products by Digital River with any hardware, software, products, data or other materials, other than the Wrapper Technology, that are not specified or provided by Symantec (other than such hardware, software, products, data or other materials reasonably required to use the Symantec Products for their respective normal commercial use), (vi) the alteration or modification by Digital River of the Symantec Products, (vii) any breaches of any warranties provided under Section B; or (viii) that Digital River has violated its Privacy Policy or otherwise misused any Customer Information or Billing Details collected by it pursuant to its performance under this Agreement. Symantec shall notify Digital River in writing of any such claim promptly after Symantec first learns of it, and shall cooperate fully with Digital River in connection with the defense thereof and shall grant Digital River control of any such claim. Digital River will pay any resulting costs, damages and reasonable attorney’s fees (which reasonable attorney’s fees are finally awarded by a court), including any settlements, with respect to any such claims. Symantec shall also have the right to participate with its own counsel at Symantec’s expense. In addition to the foregoing indemnity, the Parties agree that any fines or penalties assessed against Symantec in the case where Digital River is at fault for misuse of Billing Details shall be covered under this

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

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indemnification provision. As well, Digital River shall defend Symantec and its Affiliates, and hold it harmless from any third party costs, claims, liabilities, losses, expenses or damages to the extent it arises from any allegation regarding Digital River’s misuse of Billing Details and shall pay all expense, settlements and judgments, pursuant to the indemnification provisions set forth herein subject to the limitations in Section I(1)(b) below. In recognition of the potential damage to Symantec’s reputation due to the Parties’ close association, once the matter is finally resolved, Digital River shall publicly address its responsibility for the misuse and measures it has taken and will take to avoid further problems, if Digital River is found to be solely responsible for the misuse of the Billing Details. Digital River shall take commercially reasonable measures to address the public’s perception regarding such misuse during the resolution of the matter.

     a. Limitation. In the event of indemnification under Section I(1)(ii) relating to a third party claim, Digital River shall acquire all necessary rights to continue operations under the terms of this Agreement and cannot pass those costs onto Symantec in any format. Nothing in this Section I(a) will relieve Digital River of its obligation to pay Symantec the amounts referenced in Section G, and Digital River cannot use the revenue stream from sales of Symantec Products to pay any damages to third parties or to indemnify Symantec; provided that Digital River can use the margin it makes on the selling of Symantec Products after purchasing such Symantec Products at the amounts listed in Section G to pay such damages or to indemnify Symantec.

     b. Exceptions. Notwithstanding the foregoing section, Digital River shall only be liable to Symantec to the extent that such claim is attributable to Digital River’s conduct where any claim arises in part from, or is based in part upon, any Symantec conduct listed in Section I(2)(i) through (iv).

2. Indemnification of Digital River. Symantec shall indemnify Digital River and its Affiliates and hold it harmless from any third party costs, claims, liabilities, losses, expenses or damages, or any other liability, to the extent it arises from any allegation: (i) that a Symantec Product supplied hereunder infringes a patent or copyright, (ii) related to a product liability claim regarding Symantec Products, (iii) that Symantec has violated its Privacy Policy or otherwise misused any Billing Details provided to it by Digital River, or (iv) for any unauthorized use by Symantec, its employees or subcontractors of any Billing Details, trademarks, copyrights or patents relating to Digital River Core Technology, Digital River Information, Customer Information or any other third party’s intellectual property. Digital River shall notify Symantec in writing promptly after Digital River first learns of it, and shall cooperate fully with Symantec in Symantec’s defense thereof and shall grant Symantec control of any such claim. Symantec will pay any resulting costs, damages and reasonable attorney’s fees (which reasonable attorney’s fees are finally awarded by a court), including any settlements, with respect to any such claims. Digital River shall also have the right to participate in any such claims with its own counsel at Digital River’s expense. In addition to the foregoing indemnity, the Parties agree that any fines or penalties assessed against Digital River in the case where Symantec is solely at fault for misuse of Billing Details shall be covered under this indemnity provision. As well, Symantec shall defend Digital River and its Affiliates and hold it harmless from any third party costs, claims, liabilities, losses, expenses or damages to the extent it arises from any allegation regarding Symantec’s misuse of Billing Details and shall pay all expense, settlements and judgments; pursuant to the indemnity provisions set forth herein subject to the limitations in Section I(2)(a). In recognition of the potential damage to Digital River’s reputation due to the Parties’ close association, once the matter is finally resolved, Symantec shall publicly address its responsibility for the misuse and measures it has taken and will take to avoid further problems, if Symantec is found to be solely responsible for the misuse of the Billing Details. Symantec shall take commercially reasonable measures to address the public’s perception regarding such misuse during the resolution of the matter.

     a. Exceptions. Notwithstanding the foregoing section, Symantec shall only be liable to Digital River to the extent that such claim is attributable to Symantec’s conduct where any claim arises in part from, or is based in part upon, any Digital River conduct listed in Section I(1)(i) through (viii).

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

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     b. Limitation. Symantec shall have no obligation to Digital River with respect to infringement of patents or copyrights beyond that stated in this Section I(2).

3. Settlement by an Indemnifying Party. The indemnifying Party will obtain the indemnified Party’s express prior written approval (such approval not to be unreasonably withheld, delayed or conditioned) to settle any claim if such settlement (i) arises from or is part of any criminal action, suit or proceeding, or (ii) contains a stipulation to or admission or acknowledgment of any liability or wrongdoing on the part of the indemnified Party, or (iii) requires any specific performance or non pecuniary remedy by the indemnified Party.

J. TERM AND TERMINATION.

1. Term. The term of this Agreement shall be from the Effective Date until June 30, 2010 (the “Term”). Thereafter, the Term of the Agreement may be mutually extended by an amendment signed by both Parties. Nothing contained herein shall be interpreted as requiring either Party to renew or extend this Agreement. Notwithstanding the foregoing, this Agreement may be terminated prior to the expiration of its stated Term as set forth below.

2. Termination For Cause. The Parties may terminate this Agreement for cause at any time during its term for the reasons set forth below

     a. Failure to Pay. Either Party may terminate this Agreement if the other Party fails to make payment of any undisputed amount due hereunder when due, and such failure to pay continues unremedied for a period of ten (10) days after a Party notifies the other Party in writing of such non-payment. The Parties shall reconcile all disputed amounts in writing within thirty (30) days of notice and shall promptly pay any outstanding reconciled amounts.

     b. Failure to Perform. Either Party may terminate this Agreement if the other Party fails to perform any material obligation, warranty, duty or responsibility or is in default with respect to any material term or condition undertaken by such Party under this Agreement and such failure or default continues unremedied for a period of thirty (30) days after the breaching Party is notified in writing of such default. Notwithstanding the foregoing, in the event that a Party has given notice of failure or default to the other Party under this section three or more times, the non-breaching Party in all three of those cases may terminate this Agreement immediately upon any subsequent failure by the other Party to perform any material obligation, warranty, duty or responsibility under this Agreement or its default with respect to any material term or condition undertaken under this Agreement.

     c. Digital River Change of Control. Symantec may terminate this Agreement if Digital River is merged, consolidated, sells all or substantially all of its assets, or implements or suffers any substantial change in control, except as agreed to by Symantec under Section K(3) of this Agreement.

3. Termination At Will. Symantec has no right to terminate this Agreement without cause but Digital River does agree that Symantec may remove or terminate distinct segments or areas of obligations of Digital River set forth in this Agreement upon written notice without cause at any time. In the event Symantec exercises its right to remove or terminate distinct segments or areas of obligation of Digital River without cause, and there is a drop in revenue in the combined regions of US, Euro, (United Kingdom, France, Germany, Italy, and Spain) International English, (Australia, Singapore, New Zealand and Canada) (collectively the “Affected Business”) of more than [*] as a result of Symantec’s exercising such a right, Digital River shall have the right to renegotiate the contract to address the economic impact on Digital River as a result of the change. If the parties have not agreed on new pricing for the remaining segments or areas of obligation within ninety (90) days of Digital River giving notice of its desire to invoke its rights under this provision, then Digital River can terminate, upon thirty (30) days written notice, any

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

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distinct segment or area distinct segments or areas of service that, in Digital River’s discretion, are no longer economically feasible to perform based on the impact of Symantec’s termination of any segment or area of obligation. The terms and conditions of Section G(4) will still apply. In such case of a termination of any segment or area of obligations of Digital River, then Digital River agrees to comply with Section J(5) below as to such terminated segment or obligation.

4. Automatic Termination. Except as set forth in Section B(20), this Agreement terminates automatically, with no further act or action of either Party, if Digital River ceases to do business or otherwise terminates its business operations, or if a receiver is appointed for Digital River or its property, Digital River makes an assignment for the benefit of its creditors, any proceedings are commenced by, for or against Digital River under any bankruptcy, insolvency or debtor’s relief law, or Digital River is liquidated or dissolved.

5. Effect of Termination. Upon expiration or any termination of this Agreement, except as set forth in Exhibit J and what may be agreed to after the Effective Date in an amendment to this Agreement, (1) Digital River’s license to use any Symantec trademark or trade name hereunder shall terminate, and Digital River shall cease holding itself out as an authorized electronic reseller for Symantec Products through the Storefront; (2) Digital River shall return to Symantec all Symantec property, including, but not limited to, Work Product, proprietary and confidential material, demonstration copies of Symantec Products, and selling aids provided by Symantec, Customer Information, databases and code created for Symantec as a work for hire; (3) for a period of three (3) years after the date of termination, Digital River shall make available to Symantec for inspection and copying all books and records of Digital River that pertain to Digital River’s performance of and compliance with its obligations and representations under this Agreement (4) Digital River will reasonably assist Symantec in taking over Digital River’s End User accounts handled during the term of the Agreement, including providing Symantec with the most current Customer Information, those Billing Details for which consent to transfer has been obtained from the Customer, databases and code created for Symantec as a work for hire, (5) the due dates of all outstanding invoices to Digital River for Symantec Products automatically will be accelerated so they become due and payable by immediate wire transfer on the effective date of termination or expiration, even if longer terms had been provided previously; provided, however, that Digital River may reserve payment to Symantec for an amount equal to the reasonably estimated value of returns for the 90-day period following the effective date of termination and following such 90-day period, Digital River shall pay all remaining amounts owing to Symantec, and (6) upon termination of this Agreement, Digital River agrees to fully cooperate in the transition of the maintenance and hosting obligations of any existing Sites, including the Storefront, to Symantec or to a third party vendor selected by Symantec, as well as the Customer Information, Billing Details for which consent to transfer has been obtained from the Customer, and Work Product, as directed by Symantec in writing. Until such transition is complete, Digital River agrees to continue to comply with the terms and obligations of this Agreement, as amended to date, and each relevant SIF, for such Sites, Partner Sites, as well as the Storefront. Digital River is obligated to not shut down any Site or the Storefront and to allow it to remain operational in the normal course of business, which “normal course of business” will include the continued application to the parties of the then-current terms, conditions and obligations of this Agreement, including, but not limited to, the then-current financial terms, conditions, and obligations of the Agreement, provided however, the Site must have active traffic for this obligation to continue. In addition to the above termination requirements, Digital River shall carry out the termination procedures detailed in Exhibit J upon termination of this Agreement. For the avoidance of doubt, Digital River shall be permitted to retain a copy of the Customer Information solely for legal recordkeeping compliance, responding to chargebacks, other accounting matters, and for ongoing fraud control purposes.

6. No Damages For Termination. NEITHER SYMANTEC NOR DIGITAL RIVER WILL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY KIND, INCLUDING INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. DIGITAL RIVER WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR

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

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REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. Except as expressly set forth herein, neither Symantec nor Digital River will be liable to the other on account of termination or expiration of this Agreement for reimbursement or damages for loss of goodwill, prospective profits, anticipated orders, any incidental or consequential damages or on account of any expenditures, investments, translations, localizations, leases or commitments made by either Symantec or Digital River or for any other reason whatsoever based upon or growing out of such termination or expiration. Digital River acknowledges and agrees that (1) Digital River has no expectation and has received no assurances that its business relationship with Symantec will continue beyond the stated Term of this Agreement or its earlier termination in accordance with this Section J, that any investment by Digital River in the promotion of Symantec Products will be recovered or recouped, or that Digital River will obtain any anticipated amount of profits by virtue of this Agreement or otherwise any vested, proprietary or other right in the promotion of Symantec Products or in any goodwill created by its efforts hereunder. THE PARTIES ACKNOWLEDGE THAT THIS SECTION J(6) HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR SYMANTEC TO ENTER INTO THIS AGREEMENT AND THAT SYMANTEC WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN.

7. Survival. Symantec’s rights to receive and Digital River’s obligations to pay Symantec all amounts due hereunder, as well as all indemnity and confidentiality obligations, and the Parties’ obligations under Sections E(3) (for the stated three-year period), G (limited to any payment obligations accrued prior to termination of this Agreement), H, I, J, C(5), K(1), J(5), (for the stated transition period), J(6), K(8), (for the stated one-year period), K(11) and K(12) shall survive termination of this Agreement.

K. MISCELLANEOUS.

1. Investment and Maintenance Costs. Except as stated herein or in a SOW, Symantec will not be liable to Digital River for (a) any investment costs for the set up of the Storefront, Sub-site, Site or Partner Site by Digital River or (b) any ongoing maintenance costs for the operation of, or upgrades to, the Storefront, Sub-site, Site or Partner Site by Digital River.

2. Waiver. The waiver by a Party of any default by the other Party shall not waive subsequent defaults by the other Party of the same or different kind.

3. Assignment. Digital River is appointed an authorized Symantec electronic reseller through the Storefront for Symantec Products because of Digital River’s commitments in this Agreement, and further because of Symantec’s confidence in Digital River, which confidence is personal in nature. This Agreement shall not be assignable by either company, without the prior written consent of the other. The provisions hereof shall be binding upon and inure to the benefit of the Parties, their successors and permitted assigns.

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

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4. Symantec Company or Product Acquisitions. Digital River understands and agrees that during the term of this Agreement, Symantec may acquire rights to additional products through company or product acquisitions. In the event that Symantec acquires any company (or the products of any company) which has in force a support services, reseller, or distribution agreement with Digital River, Digital River agrees that if Symantec elects to add such products to the Symantec Product list in accordance with the terms set forth herein, this Agreement shall automatically, without further action, govern such other agreement with regard to such products. Digital River shall have the right to review the addition of products and services acquired through company or product acquisitions to insure alignment with operational and cost target outlined in this agreement. Any identified issues requiring a change in systems or costs will be addressed in a mutually agreed upon SOW.

5. Notices. All notices and demands hereunder shall be given in English by facsimile and confirmed by certified or international mail mailed the same date, and will be deemed given upon the earlier of actual receipt or one day after sending of a confirmed facsimile to the addresses for the respective Parties set forth below, as they may be changed by proper notice from time to time.

To Symantec:
Symantec Corporation
20330 Stevens Creek Boulevard
Cupertino, CA 95014
UNITED STATES
Attn: [*], Vice President Online Sales
Fax: (408) 517-8122

and, as applicable:
Symantec Limited
Ballycoolen Industrial Park
Blanchardstown, Co. Dublin 15
Ireland
Attn: Signatory of this Agreement for Symantec Limited
With a copy to:
Symantec Limited Sr. Director Legal, EMEA
Symantec (UK) Ltd, 350 Brook Drive, Green Park
Reading, Berkshire RG2 6UH
England
Fax: + 44 1189 436242
All notices to Symantec Limited will be accompanied by a notice to Symantec Corporation.

With a copy of any legal notice to General Counsel at the Cupertino, CA address set forth above.

To Digital River:
Digital River, Inc.
9625 West 76^th Street
Eden Prairie, MN 55344
Attn: Chief Financial Officer
Fax: 952-253-8877

and, as applicable:
Digital River Ireland Limited
Bay E7 Shannon Free Zone

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

41

Shannon, Co Clare,
Ireland
Attn: General Counsel
Fax: 011 353 61 230005

With a copy of any legal notice to General Counsel at the Eden Prairie, MN set forth above via fax at 952-674-4444.

6. Relationship of the Parties. Digital River’s relationship with Symantec during the term of this Agreement will be that of an independent contractor. Digital River will not have, and will not represent that it has, any power, right or authority to bind Symantec, or to assume or create any obligation or responsibility, express or implied, on behalf of Symantec or in Symantec’s name, except as expressly provided herein. Nothing stated in this Agreement shall be construed as constituting Digital River and Symantec as partners or as creating the relationships of employer/employee, franchisor/franchisee, or principal/agent between the Parties.

7. Other Agreements. This Agreement relates only to Digital River’s appointment as an independent, nonexclusive electronic reseller of Symantec Products through the Storefront as set forth in Section A(1) hereof, and shall not supersede any other agreements between Symantec and Digital River.

8. No Solicitation. During the term of this Agreement and for one year after its termination or expiration, neither Party will recruit, solicit, assist others in recruiting or soliciting, or refer to others concerning employment, any person who is then an employee of the other Party or any of its subsidiaries or induce or attempt to induce any such employee to terminate his employment with the other company or any of its subsidiaries.

9. Section Headings, Language Interpretation and Exhibits. The section headings contained herein are for reference only and shall not be considered substantive parts of this Agreement. The use of the singular or plural form shall include the other form and the use of the masculine, feminine or neuter gender shall include the other genders. All exhibits and attachments referenced in this Agreement are incorporated herein by this reference.

10. Entire Agreement. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and supersedes in their entirety any and all written or oral agreements previously existing between the Parties with respect to such subject matter. Each Party acknowledges that it is not entering into this Agreement on the basis of any representations not expressly contained herein. Any modifications of this Agreement or Exhibits must be in writing and signed by both Parties hereto except as otherwise expressly set forth herein. Any such modification shall be binding upon the party to be charged only if and when signed by one of its duly authorized officers.

11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for that body of law pertaining to conflicts of law. Venue for any legal action shall be solely in the state and federal courts of Santa Clara County, California. Both Parties expressly consent to the jurisdiction indicated herein.

12. Attorney’s Fees. In the event any litigation is brought by either Party in connection with this Agreement, the prevailing Party in such litigation shall be entitled to recover from the other Party all the costs, reasonable attorney’s fees and other expenses incurred by such prevailing Party in the litigation.

13. Severability. In the event any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be unenforceable, the remaining portions of this Agreement shall remain in full force and effect.

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

42

14. Equitable Relief. Each party acknowledges that any breach of its obligations under this Agreement with respect to the proprietary rights or confidential information of the other will cause the other irreparable injury for which there are inadequate remedies at law, and therefore the aggrieved party will be entitled to equitable relief in addition to all other remedies provided by this Agreement or available at law.

15. Press Release. Upon the full execution of this Agreement and receipt by Symantec of the signature pages from Digital River, and after the Effective Date, the Parties shall release a mutually agreed upon press release regarding the arrangements established by this Agreement. Digital River shall not release any press release relating to Symantec or this relationship, without the prior written approval of a Symantec senior vice president.

16. Execution of Agreement.

     a. Effective Date. Once it has been signed by Digital River and signed and accepted by Symantec at its principal place of business, the effective date of this Agreement will be April 1, 2006 (the “Effective Date”).

     b. Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed an original, and all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date specified below.

SYMANTEC CORPORATION		DIGITAL RIVER, INC.
Signature:	/s/ Vincent Steckler	Signature:	/s/ Thomas Donnelly
	Printed Name: Vincent Steckler		Printed Name: Thomas Donnelly
	Title: SVP ww consumer sales		Title: CFO
	Date: 19 Oct 2006		Date: 10/18/06
SYMANTEC LIMITED		DIGITAL RIVER IRELAND LIMITED
Signature:	/s/ Ray Thornberry	Signature:	/s/ Patrick Rickard
	Printed Name: Ray Thornberry		Printed Name: Patrick Rickard
	Title: Senior Director Revenue		Title: Director of Finance
	Date: 24 Oct 2006		Date: October 18th 2006

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

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EXHIBITS ATTACHED:

Exhibit A:	Definitions
Exhibit A1:	Modified PEM
Exhibit A2:	Acquisition Products
Exhibit B:	Digital River’s Customer Support Metrics and Staffing Requirements
Exhibit C:	Symantec Storefront Content Updating Procedures
Exhibit D:	Symantec’s Currency Policies
Exhibit E:	Payment Options
Exhibit F:	Digital River’s Service Level
Exhibit G:	Export Control Measures
Exhibit H:	Security Requirements
Exhibit I:	Site Reporting Requirements
Exhibit J:	Termination Procedures
Exhibit K:	Symantec Sell Through Reporting Procedures and Policies
Exhibit L:	Digital River Marketing Activities
Exhibit M:	Storefront Site Initiation Form
Exhibit N:	Site Testing Standards and Criteria
Exhibit O:	Shipping Charges and Sub-site Shipping Locations
Exhibit P:	Text for Try/Buy Product
Exhibit Q:	URL Requirements
Exhibit R:	Symantec Products and List Prices
Exhibit S:	Customer Service
Exhibit T:	Purchase Order Format
Exhibit U:	List of Sub-sites
Exhibit V:	Field Destruction Certificate
Exhibit W:	Return Policy
Exhibit X:	Customer Support Transition Schedule
Exhibit Y:	DRM
Exhibit Z:	Channel Partners and Electronic Distribution

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

44

EXHIBIT A
Definitions

Capitalized terms used in this Agreement, which are not otherwise defined elsewhere in this Agreement, shall have the respective meanings set forth below:

“24 X 7” shall mean 24 hours a day, 7 days a week.

“24 X 7 X 365” shall mean 24 hours a day, 7 days a week, 365 days a year.

“Account Manager” means a Digital River or Symantec account manager who will act as a contact person and resource in regards to all matters relating to the Storefront, the Sites and the Parties’ relationship thereto. As of the Effective Date, the Digital River Account Manager is [*], and the Symantec Account Manager is the Vice President of Global Online Sales (as of the Effective Date this title is held by [*]), or higher, within that reporting chain, The Account Manager may change from time to time upon written notice from the party that employs the Account Manager to the other.

“Acquisition Products” means those products listed on Exhibit A-2 and all subsequent versions of such products.

“Affiliate” means any person, partnership, joint venture, corporation or other form of enterprise, domestic or foreign, including subsidiaries, that directly or indirectly, control, are controlled by, or are under common control with a party. For purposes of this definition, “control” is defined as: (a) ownership of a majority of the voting power of those classes of voting stock entitled to vote in the election of directors or (b) ownership of a majority of the beneficial interests in income and capital of an entity other than a corporation.

“API” shall stand for Application Program Interface.

“Auto-Renewals” shall mean those transactions resulting from Customers who purchase Products that contain a subscription sold by Digital River and who do not affirmatively opt out from having their subscription automatically renewed by Symantec.

“Billing Details” means: (i) Name on credit card; (ii) Payment Type; (iii) Credit card type; (iv) Credit card number; (v) Credit card expiry date; (vi) Billing Address Line 1; (vii) Billing Address Line 2; (viii) Billing Address Line 3; (ix) Billing Post/Zip Code; (x)Billing State; and (xi) Billing Country.

“BOB” shall stand for Bag of Bits, and shall mean software digitally Wrapped for electronic distribution. A BOB shall contain a Symantec Product, a EULA, and other documentation and information as determined by Symantec in its sole and absolute discretion.

“Co-branded Store” means one or more interim pages linked between the Partner’s Site and the Storefront.

“Commerce Enable” shall mean the process of preparing a product for entry into an ESD channel.

“Confidential Information” means without limitation all information related to the services described in this Agreement, each Party’s know-how, all information regarding each Party not known to the general public, and confidential information disclosed to either Party by third parties (whether acquired or developed by either Party during either Party’s performance under this Agreement or disclosed by either Party’s employees or consultants). Confidential Information does not include information that (a) is known to the receiving Party at the time of

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

45

disclosure by the disclosing Party, (b) has become publicly known through no wrongful act of a Party, (c) has been rightfully received by either Party from a third party who is authorized to make such disclosure, or (d) has been independently developed by either Party other than pursuant to this Agreement.

“Consulting Rate” means [*].

“Content” shall mean the text, pictures, sound, graphics, video, and other data that appear on Storefront and Sub-Site web pages and web sites and any other Sites, as defined under the terms of this Agreement.

“Customer” shall mean a person or entity that visits any Site or the Storefront and includes any End User.

“Customer Information” shall mean (i) all Customer information gathered by Digital River in the course of performing its obligations hereunder, including but not limited to opt in flags or histories as well as customers purchasing download warranty services, and (ii) any Customer information that may be provided by Symantec to Digital River in connection with this Agreement, (iii) all Customer email lists or other listings that contain Symantec Customer information, whether or not created by or on behalf of Symantec.

“Customer Service” means the Customer support services provided by Digital River, or by Symantec, as applicable, to Symantec Customers pursuant to Exhibit S and this Agreement.

“Customer Service Rate” shall mean the rate charged by Digital River for all customer service provided by DR in any region where Symantec has taken over Customer Service. The Customer Service Rate will be [*] per hour during the transition of responsibility for Customer Support from Digital River to Symantec, on a per region basis. Once the transition of responsibility for Customer Support from Digital River to Symantec is complete, the Customer Service Rate for the affected region will become [*] per hour. Digital River will [*] for: (a) Digital River personnel coordinating ongoing fraud checking; (b) Escalation by Digital River personnel to Symantec customer service personnel, and/or to the Digital River escalation team or ADM; and/or (c) Digital River personnel time regarding any customer support issues if such time resulted from a failure by Digital River to provide the Customer Service Tools.

“Customer Service Tools” means those tools and/or services provided by Digital River to Symantec under the “Tools” section of the Customer Service Transition Schedule.

“Customer Support Transition Schedule” means the customer support schedule, describing the respective parties obligations in the event certain regional customer support responsibilities transfer from Digital River to Symantec, which is attached hereto as Exhibit X.

“Dedicated Team” means no less than the following Digital River personnel: [*] software development engineers; [*] web developer(s) (Creative and site design); [*] project manager(s); [*] business analyst(s); and [*] Q&A engineer(s), but in any event no fewer people than are required in order to provide the services required by the Dedicated Team pursuant to this Agreement.

“Digital River Core Technology” shall mean any proprietary or Confidential Information, software (in source and object forms), code, technology, documentation, processes, methodologies, and any other materials, items, or information of Digital River or any Digital River Affiliate that are a part of the Digital River technology engine referred to as “The Digital River Application,” including but not limited to, “The Express Entitlement System” (the “EE System”), the Atlantic platform, the Pacific Platform, the Common Payment Gateway, and Digital River’s fraud checking processes, together with any copyrights, patent rights, mask work rights, trade secret rights and any related intellectual property rights throughout the world (whether owned by a Digital River or licensed to

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

46

a Digital River from a third party) which may be used by Digital River in the conduct of its business and to provide services for Digital River’s other customers and clients, together with any Digital River modifications or improvements to any of the foregoing, any of which may be made at any time by Digital River in its sole discretion.

“Digital River Information” means any Digital River proprietary or Confidential Information not developed specifically for Symantec or at Symantec’s expense, and used by Digital River to perform its obligations hereunder, including but not limited to Digital River software, technology, development tools, processes, appliances, methodologies, code, templates, tools, policies, records, working papers, knowledge, data, trade secrets or other intellectual property, written or otherwise.

“Download Warranty Service” shall mean a service which, when purchased by a Customer, will give the Customer the right to re-download any Symantec Product purchased through the Storefront within one year of the date of purchase of such product, for the sole purpose of reinstalling a replacement copy of such Symantec Product on the Customer’s computer in the event the Customer has reformatted his/her hard drive, inadvertently uninstalled the Symantec Product, or changed computers.

“Downtime” shall have the meaning set forth in Section 1 of Exhibit F to this Agreement.

“DRCC”means the online reporting tool known as the Digital River Command Console, or any later subsequent evolution, or replacement, of the DRCC, which will be provided by Digital River to Symantec, [*], for the Term of the Agreement.

“EMEA” shall mean Symantec’s Europe, Middle East and Africa region.

“End User” shall mean person(s) or entity(ies) that acquire Symantec Products for actual use, rather than for resale or distribution.

“Enterprise” shall mean those Symantec Products listed on Exhibit R-2, which are subject to change, from time to time, at Symantec’s sole discretion.

“ERP” shall have the meaning set forth in Section G(1)of this Agreement.

“ESD” shall stand for “electronic software distribution,” and shall mean a sale of Symantec Products  through electronic distribution.

“EULA(s) “ shall mean Symantec’s end user license agreement(s) for any of the Symantec Products.

“Hits” shall mean the total number of requests served by the web server to any particular item on a web page.

“Issues” shall mean inquiries regarding Symantec’s Storefront or the Symantec Products received through e-mail messages and telephone calls. Inquiries may include Customer service problems, including questions regarding the download of Symantec Products, product and sales information, order status, refunds, shipping, billing, pricing, installation of software, and misdirected telephone calls transferred to Symantec or other Symantec resellers, outsourcing providers, and distributors.

“Japan Store” means the website currently hosted at www.Symantecstore.com.jp.

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

47

“Key(s)” shall have the meaning set forth in Section A(5)(b) of this Agreement.

“List Price” shall have the meaning set forth in Section G(4)(a) of this Agreement.

“Margin” means the applicable percentage of List Price retained by Digital River for the sale of the Symantec Product, as described in Section G(4), for the duration of the Protective License Term.

“MarketForce Programs” are those services provided by Digital River to Symantec, which are listed in Exhibit L.

“MarketForce Program Amounts” are those amounts which are listed in Exhibit L, and which are to be paid by Symantec to Digital River for Symantec’s use of the MarketForce Programs.

“Modifications” means any derivatives, improvements, enhancements or extensions conceived, reduced to practice, or developed during the term of this Agreement by the developing Party.

“Net Sales” means the purchase price paid by Digital River to Symantec for the Symantec Products less returns, Taxes, and shipping and handling charges.

“Page View” shall mean the viewing of a complete page, including all of its graphical, text, and data elements.

“Partner Toolbox” means a particular Symantec site, web pages, or web sites produced by Symantec or its third party contractors and hosted or managed by Digital River, which shall be accessible by Partners and shall display and provide dynamically updated content, including but not limited to, virus news and/or security tips, provided by Symantec, for use by Partners on Partner websites. For the avoidance of doubt, the Partner Toolbox was created by a third party vendor for Symantec, and to Symantec’s knowledge no Digital River technology, code or content was used in its creation.

“Privacy Policy” shall mean Symantec’s privacy policy as currently posted by Symantec at URL www.symantec.com/legal/privacy.html, which policy or location may be revised by Symantec from time to time at its sole discretion.

“Product Bundle” shall mean two or more Symantec Products offered and sold together.

“Purchase First” shall mean the ESD purchase model in which payment processing or credit approval is completed before a copy of the ESD product inventory is made available to the End User.

“Reseller System” shall have the meaning set forth in the Recitals section of this Agreement.

“Site Initiation Form,” or “SIF” means a separate agreement, in the form attached hereto as Exhibit M, to govern the hosting and building of each Site, linking arrangement, or regional storefront, and once completed and signed, the terms of which are incorporated herein by reference and shall become part of this Agreement

“SKU” shall mean the unique number designated by Symantec for a Symantec Product, which may also be referred to as the “part number.”

“Solutions Builder” means a product offering tool that helps End Users select Symantec Products based on their Internet security needs, and which may include a variety of information for the End User and particular Symantec Product recommendations, such as multi-pack recommendations and up sell options. For the avoidance of doubt, Solutions Builder was created by a third party vendor for Symantec, and to Symantec’s knowledge no

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

48

Digital River technology, code or content was used in its creation. Digital River may integrate the Digital River Core Technology into Solutions Builder. Nothing herein is intended to give Symantec any rights to the Digital River Core Technology.

“Statement of Work” or “SOW” shall mean a project document that outlines the scope of work to by performed by Digital River for a Storefront project. The SOW shall provide a sufficient level of detail such that the technical, aesthetic and business requirements are clearly defined, and will include a functional description of the services to be completed by Digital River under this Agreement. Each SOW must be approved and executed by both Parties prior to Digital River’s commencement of work in accordance with the SOW. Approval of an SOW shall not be interpreted as acceptance of the finished project outlined in the SOW. Each SOW must outline the criteria for the acceptance of work described in the SOW.

“Storefront” shall mean Symantec’s online shopping service referred to as the Symantec online store, and currently located at http://www.symantecstore.com, which name, URL and domain name(s) may be changed at Symantec’s sole discretion. “Storefront” does not include online shopping services that are co-branded between Symantec and any other party. The Storefront shall contain the Sub-sites and shall include the following sections, which may be changed by Symantec from time to time: (1) global stores, (2) Try/Buy department, (3) upgrade department, (4) full product department, (5) featured partners spots, (6) purchase options and (7) areas for marketing banners. References to the “Storefront” in this Agreement shall be deemed to include the Sub-sites.

“Sub-sites” shall mean Internet Storefront sites contained within the Storefront. Sub-sites are regionally based, and presented in localized languages. The number, Content, and localized languages of Sub-sites are subject to change from time to time at the sole discretion of Symantec. Although the general layout is the same for all Sub-sites, the Sub-sites are not simply translated versions of any one site. Sub-sites shall be localized to reflect the different merchandise and local partners available in each region. The Content, sections, Symantec Products sold, featured partners, and purchase options may vary with each Sub-site. Symantec shall provide all Content and direct translations for localization of Sub-sites. The Sub-sites do not include Sites, as defined in Section 3(b)(xii) or (xiii) hereof.

“Symantec’s Online Sales Business” or “Symantec’s OSB,” means all commerce conducted by Symantec online, and includes new product sales, and the online sales of Symantec product upgrades, subscription renewals, , and software as a service. Symantec’s OSB will also include any other business that Digital River bids on and is not awarded, provided that Digital River: (a) bids in good faith; (b) can technically integrate the business, using the below definition; and (c) bids within the competitive range of other bidders. Symantec’s OSB does not include: (a) Global Online Sales business that Digital River cannot technically integrate to provide a unique product activation key to the End User, or where the integration would result in an End User having to manually enter the product activation key; (b) Global Online Sales business refused by Digital River; (c) Any direct relationship between Symantec and its partners as well as Symantec’s xSP; OEM, and enterprise business; (d) the Japan Store; and (e) Auto-Renewals. Symantec and Digital River will each make reasonable efforts, and work in good faith with one another, to enable Digital River to work closely with the Symantec engineers during the design phase of projects so that Digital River will be able to enable all necessary integrations

“Symantec Products” shall have the meaning of all software products listed in Exhibit R attached hereto, as it may be amended by Symantec from time to time pursuant to this Agreement, and which Exhibit shall consist of two separate lists which are (i) Consumer Symantec Products set forth in Exhibit R-1, and (2) Enterprise Symantec Products set forth in Exhibit R-2.

“Symantec Product Selector” means a Symantec Tool that helps End Users select Symantec Products based on their Internet security needs.

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

49

“Symantec Redirector” means the Symantec project, by which Symantec will direct customers with expiring product subscriptions — who would normally upgrade their subscriptions in the Symantec Renewal Center, with upgrade requests coming to DR hosted product detail pages (Nitro) — to DR hosted upsell pages, to take advantage of optimization flexibility. Those customers choosing to renew rather than upgrade will be sent back to the Symantec Renewal Center to complete their purchase.

“Symantec Renewal Center” means the Symantec internal subscription renewal segment of Symantec’s website, which is hosted and operated solely by Symantec.

“Symantec Security Advisor” means a Symantec Tool that scans a personal computer for existing Internet security applications, makes relevant product recommendations if such applications are lacking, and then recommends appropriate security applications to the End User for purchase.

“Symantec Security Alerts” means a Symantec Tool that provides End Users with real time alerts on current Internet security threats.

“Symantec Security Check” means a Symantec Tool that assesses a personal computer’s antivirus or firewall protection, and which is accessible to End Users via a link from the Symantec Security Connection site or through such other authorized links and which is solely hosted by Symantec and will never be offered as a co-branded Site to Partners or any third party.

“Symantec Security Connection” means that particular Symantec Site, web pages, or web sites and all related links to Symantec Tools, all proprietary to Symantec, and hosted and managed by Digital River, or such other third party contractors as Symantec may select, according to such Symantec specifications, which shall be accessible by Customers and shall display Symantec Security Information that allows Customers to learn about, assess and protect their personal computers against Internet threats, and may include links to various Sites and itself may be co-branded with various Partners.

“Symantec Security Information” means the actual content, including but not limited to, the complete look and feel, and any and all information or data, including but not limited to, that of virus news and security tips which are provided by the Symantec Security Alert or any other Symantec Tool(s) , and/or which may also be accessible through links to any “Symantec.com” web-site, any Site, any Co-branded Store, and/or the Storefront as applicable, and/or which may be provided by Symantec on the Symantec Security Connection or through some other Symantec Tool.

“Symantec Technology” means any proprietary or Confidential Information, software (in source and object forms), Symantec Tools, code, technology, documentation, processes, methodologies, and any other materials, user interface designs, architectures, class libraries, know-how, trade secrets and any related intellectual property rights throughout the world (whether owned by a Symantec or licensed to a Symantec from a third party).

“Symantec Tool(s) ” means any one or more of any proprietary methods or tools that Symantec creates or has created for it by a third party for the use of Customers, which includes those tools defined herein as follows, including but not limited to, Partner Toolbox, Solutions Builder, Symantec Security Advisor, Symantec Product Selector, Symantec Security Alerts, Symantec Security Check, Symantec Security Connection, Symantec Upgrade Assistant, try before you buy download offerings, and any other tools that Symantec creates or has created for it by a third party for the use by Customers that Symantec later makes available through Digital River, regardless of whether now existing or created in the future.

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

50

“Symantec Upgrade Assistant” means a Symantec Tool that helps an End User determine what products will best meet the End User’s security needs.

“Tax” shall have the meaning set forth in Section G(6) of this Agreement.

“Territory” shall mean worldwide; provided that implementation of particular countries are discussed in more detail in the body of the Agreement, and may be addressed on a case by case basis via amendment to this Agreement or a Statement of Work.

“Traffic” shall mean the number of Hits, visitors, Page Views, and other measurements of activity on the Storefront, including the Sub-sites, and may also be used specifically in reference to Sites and Partner Sites.

“Transition Period” shall have the meaning set forth in Exhibit J to this Agreement.

“Try/Buy” shall mean a version of a Symantec Product that allows prospective End Users to use the Symantec Product for a designated period, or for designated uses, before purchasing the Symantec Product through ESD.

“Up Time” shall have the meaning set forth in Exhibit F attached hereto.

“Work Product” means the product of all work performed under this Agreement by Digital River including, without limitation notes, reports, documentation, drawings, computer programs (source code, object code and listings), inventions, creations, works, devices, masks, mask works, models, work-in-progress and deliverables.

“Wrap” shall mean the process of integrating a software application with e-commerce functionality.

“Wrapper” shall mean a secure electronic container that Commerce Enables an application.

“Wrapper Technology” shall mean the [*] software for ESD and Try/Buy products, or any other Wrapper software mutually agreed upon in writing by the Parties, such as the [*] Technology.

“Wrap Up Code” shall mean, with respect to Customer service inquiries, the question category or type of a telephone call.

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

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Exhibit A1: The PEM

[
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
*	*
	]

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

52

Exhibit A-2
Acquisition Products

From DR Source List — Product Name

Norton Internet Security 2006 2-Year Subscription + Norton SystemWorks 2006 Basic Edition Bundle

Norton Internet Security 2006/ Norton SystemWorks 2006 Basic Bundle <Promo>

Norton Internet Security 2006/ Norton SystemWorks 2006 Basic Bundle

Norton Internet Security / Norton SystemWorks Basic Bundle <IN 30 WC DR PROMO>

Norton Internet Security & Norton SystemWorks Basic Bundle <IN>

Norton Internet Security / Norton SystemWorks Basic Bundle <SW 30 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <SF 30 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <NO 30 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <MEA 30 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <IT 20 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <GE 30 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <ES 20 WC DR PROMO>

Norton Internet Security / Norton SystemWorks Basic Bundle <DK 30 WC DR PROMO>

Norton Internet Security & Norton SystemWorks Basic Bundle <NO NIS + 10 Promo>

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

53

From DR Source List — Product Name

Norton Internet Security & Norton SystemWorks Basic Bundle <NL NIS + 10 Promo>

Norton Internet Security & Norton SystemWorks Basic Bundle <IT>

Norton Internet Security & Norton SystemWorks Basic Bundle <GE>

Norton Internet Security & Norton SystemWorks Basic Bundle <FI NIS + 10 Promo>

Norton Internet Security & Norton SystemWorks Basic Bundle <ES>

Norton Internet Security & Norton SystemWorks Basic Bundle <DK NIS + 10 Promo>

Norton Internet Security & Norton SystemWorks Basic Bundle — Pdivitys<FI NIS + 10 Promo>

Norton Internet Security & Norton SystemWorks Basic Bundle — Pdivittdd <FI NIS + 10 Promo>

Norton Internet Security / Norton SystemWorks Basic Bundle <SW NIS + 10 Promo>

Norton SystemWorks 2006 2-yr Subscription <SG>

Norton SystemWorks 2006 2-yr Subscription <APAC>

Norton SystemWorks 2006 2-yr Subscription

Norton SystemWorks 2006 15-DayTrialware <APAC>

Norton SystemWorks 2006 — 15 Day Trialware <NL>

Norton SystemWorks 2006 — 15 Day Trialware <IN>

Norton SystemWorks 2006 — 15 Day Trialware <FR>

Norton SystemWorks 2006 — 15 Day Trialware

Norton SystemWorks 2006 —

Norton SystemWorks 2005 15 Day Trialware

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

54

From DR Source List — Product Name

Norton SystemWorks Basic 2006 <SL>

Norton SystemWorks Basic 2006 <IN>

Norton SystemWorks Basic

Norton SystemWorks 2006<SL>

Norton SystemWorks 2006 Premier

Norton SystemWorks 2006 Nederlands<NL>

Norton SystemWorks 2006 Italiano <IT>

Norton SystemWorks 2006 Inglis <ES>

Norton SystemWorks 2006 Espaqol <ES>

Norton SystemWorks 2006 Engelsk version <DK>

Norton SystemWorks 2006 Deutsch

Norton SystemWorks 2006 <SG>

Norton SystemWorks 2006 <PS>

Norton SystemWorks 2006 <MEA IN>

Norton SystemWorks 2006 <IN>

Norton SystemWorks 2006 <DaVinci Code Promo>

Norton SystemWorks 2006 <APAC>

Norton SystemWorks 2006 — Frangais <FR>

Norton SystemWorks 2006

Norton SystemWorks 2005 Deutsch

Norton SystemWorks 2005 <Mapping PID US>

Norton SystemWorks 2005 <IN>

Norton SystemWorks 2005 <APAC>

Norton SystemWorks 2005

Norton System Works 2006 — Portugujs <BR>

Norton System Works 2005 <IN>

Norton System Works 2005 <IE>

Norton System Works 2005 <BR>

Norton SystemWorks Premier 2006 Espaqol — Actualizacisn <ES>

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

55

From DR Source List — Product Name

Norton SystemWorks Premier 2006 <MEA IN>

Norton SystemWorks Premier 2006 <APAC>

Norton SystemWorks Premier 2006 — Spanish <SL>

Norton Systemworks For Macintosh Tilaus

Norton SystemWorks Essentials

Norton SystemWorks Basic 2006 Engelsk version <NO English Version>

Norton SystemWorks Basic 2006 Actualizacisn <ES>

Norton SystemWorks Basic 2006 <TW CH>

Norton SystemWorks Basic 2006 <SW English Version>

Norton SystemWorks Basic 2006 <NL>

Norton SystemWorks Basic 2006 <IT>

Norton SystemWorks Basic 2006 <GE>

Norton SystemWorks Basic 2006 <FR>

Norton SystemWorks Basic 2006 <ES>

Norton SystemWorks Basic 2006 <BR>

Norton SystemWorks Basic 2006 — Mise ` jour <FR>

Norton SystemWorks Basic 2006 — Englanninkielinen version <FI English Version>

Norton SystemWorks Basic 2006 — Engelsk version <SW English Version>

Norton SystemWorks Basic 2006 — Engelsk version <DK English Version>

Norton SystemWorks Basic <SG>

Norton SystemWorks Basic <APAC>

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

56

From DR Source List — Product Name

Norton SystemWorks 2006 Retail <TW CH>

Norton SystemWorks 2006 Premier Nederlands <NL>

Norton SystemWorks 2006 Premier Italiano<IT>

Norton SystemWorks 2006 Premier Inglis

Norton SystemWorks 2006 Premier Espaqol <ES>

Norton SystemWorks 2006 Premier Engelsk version <SW>

Norton SystemWorks 2006 Premier Engelsk version <DK>

Norton SystemWorks 2006 Premier Deutsch

Norton SystemWorks 2006 Premier <IN>

Norton SystemWorks 2006 Premier — Mise ` jour — Frangais

Norton SystemWorks 2006 Premier — Frangais

Norton SystemWorks 2006 Engelsk version <NO>

Norton SystemWorks 2006 — Mise ` jour — Frangais

Norton SystemWorks 2005 Mise ` jour — Francais

Norton SystemWorks 2005 Actualizacisn Espaqol

Norton System Works Premier 2006 — Portugujs <BR>

Norton Internet Security 3.0 for Macintosh — Upgrade <intl English>

Norton Internet Security 2006 with 2yr Subscription — Portugujs <BR>

Norton Internet Security 2006 with 2-Year Subscription

Norton Internet Security 2006 Trialware <DK>

Norton Internet Security 2006 2-yr Subscription Trialware

Norton Internet Security 2006 2-yr Subscription <SL>

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

57

From DR Source List — Product Name

Norton Internet Security 2006 2-yr Subscription <SG>

Norton Internet Security 2006 2-yr Subscription <APAC>

Norton Internet Security 2006 2-yr Subscription

Norton Internet Security 2006 2 ers prenumeration <SW>

Norton Internet Security 2006 2 ers abonnement <NO>

Norton Internet Security 2006 2 aqos de suscripcisn — Actualizacisn <ES>

Norton Internet Security 2006 2 aqos de suscripcisn <ES>

Norton Internet Security 2006 15-Day Trialware <APAC>

Norton Internet Security 2006 <A/B>

Norton Internet Security 2006 — 15 Day Trialware <FI>

Norton Internet Security 2006 — 15 Day Trialware <ES>

Norton Internet Security 2006 — 15 Day Trialware

Norton Internet Security 2005 15-Day Trialware

Norton Internet Security 2 Year Subscription <IN>

Norton Internet Security for Macintosh 3.0 <AP>

Norton Internet Security o 3.0 pour Macintosh — Frangais

Norton Internet Security 3.0 pour Macintosh — Frangais

Norton Internet Security 3.0 para Macintosh <SL>

Norton Internet Security 3.0 para Macintosh

Norton Internet Security 3.0 fvr Macintosh. Engelsk version

Norton Internet Security 3.0 for Macintosh English Version

Norton Internet Security 3.0 for Macintosh Englanninkielinen versio

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

58

From DR Source List — Product Name

Norton Internet Security 3.0 for Macintosh Engelsk version

Norton Internet Security 3.0 for Macintosh <IE>

Norton Internet Security 3.0 for Macintosh

Norton Internet Security 3.0 for MAC <SG>

Norton Internet security 3.0 for MAC <20% off AFP promo>

Norton Internet Security o 3.0 f|r Macintosh — Deutsch

Norton Internet Security 3.0 f|r Macintosh — Deutsch

Norton Internet Security 2006<SL World Cup Promo>

Norton Internet Security 2006<BR World Cup Promo>

Norton Internet Security 2006 with 2-Year <MEA IN>

Norton Internet Security 2006 Wersja Polska <PL>

Norton Internet Security 2006 Retail

Norton Internet Security 2006 Nederlands<NL>

Norton Internet Security 2006 Italiano<IT>

Norton Internet Security 2006 Italiano

Norton Internet Security 2006 Espaqol <ES>

Norton Internet Security 2006 Deutsch

Norton Internet Security 2006 <TBYB test emails>

Norton Internet Security 2006 <SW 50% PROMO>

Norton Internet Security 2006 <SL>

Norton Internet Security 2006 <SG>

Norton Internet Security 2006 <MEA IN>

Norton Internet Security 2006 <IT>

Norton Internet Security 2006 <IT 40% Promo>

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

59

From DR Source List — Product Name

Norton Internet Security 2006 <IN>

Norton Internet Security 2006 <IN 20% Finning Promo>

Norton Internet Security 2006 <IN 10% Promo>

Norton Internet Security 2006 <GM DR Promo>

Norton Internet Security 2006 <FR RET 20% DR PROMO>

Norton Internet Security 2006 <Fandango promo>

Norton Internet Security 2006 <EOQ Ads>

Norton Internet Security 2006 <DK>

Norton Internet Security 2006 <DaVinci Code Promo>

Norton Internet Security 2006 <DaVinci Code Promo 2>

Norton Internet Security 2006 <APAC>

Norton Internet Security 2006 <APAC Telstra>

Norton Internet Security 2006 <30% OFF PROMO>

Norton Internet Security 2006 <20% Promo>

Norton Internet Security 2006 <20% off AFP promo>

Norton Internet Security 2006 <15 off Promo>

Norton Internet Security 2006 + 2 Free Fandango Tickets

Norton Internet Security 2006 — Portugujs <BR>

Norton Internet Security 2006

Norton Internet Security 2005 Norsk versjon

Norton Internet Security 2005 Nederlands

Norton Internet Security 2005 Italiano

Norton Internet Security 2005 Espaqol

Norton Internet Security 2005 Deutsch

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

60

From DR Source List — Product Name

Norton Internet Security 2005 Dansk version

Norton Internet Security 2005 <SL>

Norton Internet Security 2005 <Mapping PID US>

Norton Internet Security 2005 <IN>

Norton Internet Security 2005 <BR>

Norton Internet Security 2005 <APAC>

Norton Internet Security 2005 — Frangais

Norton Internet Security 2005

Norton Internet Security <SW 30 WC DR PROMO>

Norton Internet Security <SF 30 WC DR PROMO>

Norton Internet Security <NO 30 WC DR PROMO>

Norton Internet Security <MEA 30 WC DR PROMO>

Norton Internet Security <IT 20 WC DR PROMO>

Norton Internet Security <IN 30 WC DR PROMO>

Norton Internet Security <GE 30 WC DR PROMO>

Norton Internet Security <ES 20 WC DR PROMO>

Norton Internet Security <DK 30 WC DR PROMO>

Norton Internet Security 3.0 Mise ` jour pour Macintosh — Frangais

Norton Internet Security o 3.0 fvr Macintosh. Engelsk version

Norton Internet Security 2006/Norton SystemWorks 2006 Basic Bundle<SL>

Norton Internet Security 2006/Norton SystemWorks 2006 Basic Bundle<BR>

Norton Internet Security 2006 Uaktualnienie — Wersja Polska <PL>

Norton Internet Security 2006 Retail <Refer a Friend>

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

61

From DR Source List — Product Name

Norton Internet Security 2006 <TW CH>

Norton Internet Security 2006 <Norton SystemWorks 2006 Basic Bundle Promo>

Norton Internet Security 2006 /Norton SystemWorks 2006 Basic Edition Bundle

Norton Internet Security 2006 & Norton System Works Basic Bundle <US English>

Norton Internet Security 2006 — Svensk version<SW>

Norton Internet Security 2006 — Promozione <IT>

Norton Internet Security 2006 — Promo <IN>

Norton Internet Security 2006 — Pdivitys — Suomenkielinen versio<FI>

Norton Internet Security 2006 — Pdivittdd — Suomenkielinen versio<FI>

Norton Internet Security 2006 — Pakiet dla 2 Użytkowniksw <PL>

Norton Internet Security 2006 — Offre spiciale <FR>

Norton Internet Security 2006 — Offre spiciale — Promotion — Mise ` jour — <FR>

Norton Internet Security 2006 — Norsk versjon <NO>

Norton Internet Security 2006 — Mise ` jour — Frangais <FR>

Norton Internet Security 2006 — Ingljs <BR>

Norton Internet Security 2006 — Frangais

Norton Internet Security 2006 — English <IE>

Norton Internet Security 2006 Deutsch

Norton Internet Security 2006 — Dansk version <DK>

Norton Internet Security 2006 — Aktion <DE>

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

62

From DR Source List — Product Name

Norton Internet Security 2006 <IE>

Norton Internet Security 2005 Suomenkielinen versio

Norton Internet Security 2005 Pdivittdd Suomenkielinen versio

Norton Internet Security 2005 Mise ` jour — Frangais

Norton Internet Security o 2005 Espaqol

Norton Internet Security 2005 AntiSpyware Edition

Norton Internet Security 2005 Actualizacisn Espaqol

Norton Internet Security 2005 <APAC Telstra>

Norton Internet Security 2005 + FREE Norton Password Manager 2004

Norton AntiVirus 2-Year Subscription

Norton AntiVirus 2006 Abonnement pour 2 ans <FR>

Norton AntiVirus 2006 Abonnement pour 2 ans — Mise ` jour — Frangais <FR>

Norton AntiVirus 2006 2-yr Subscription<Price Test>

Norton AntiVirus 2006 2-yr Subscription Trialware

Norton AntiVirus 2006 2-yr Subscription <SG>

Norton AntiVirus 2006 2-yr Subscription <APAC>

Norton AntiVirus 2006 2-yr Subscription

Norton AntiVirus 2006 2 Year Subscription

Norton AntiVirus 2006 2 ers abonnement <NO>

Norton AntiVirus 2006 2 aqos de suscripcisn <ES>

Norton AntiVirus 2006 15-Day Trialware <APAC>

Norton AntiVirus 2006 — Spanish 2 yr subscription <SL>

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

63

From DR Source List — Product Name

Norton AntiVirus 2006 — Gratis 15-Tage Testsoftware <GE>

Norton AntiVirus 2006 — Abonnement voor 2 jaar <NL>

Norton AntiVirus 2006 — 2 yr subscription <BR>

Norton AntiVirus 2006 — 2 Jahres-Abonnement <DE>

Norton AntiVirus 2006 — 2 ers prenumeration <SW>

Norton AntiVirus 2006 — 2 ers abonnement <DK>

Norton AntiVirus 2006 — 2 anni di abbonamento <IT>

Norton AntiVirus 2006 — 15 Day Trialware Italiano <IT>

Norton AntiVirus 2006 — 15 Day Trialware <SW>

Norton AntiVirus 2006 — 15 Day Trialware <SL>

Norton AntiVirus 2006 — 15 Day Trialware <NL>

Norton AntiVirus 2006 — 15 Day Trialware <IN>

Norton AntiVirus 2006 — 15 Day Trialware <FR>

Norton AntiVirus 2006 — 15 Day Trialware <ES>

Norton AntiVirus 2006 — 15 Day Trialware <DK>

Norton AntiVirus 2006 — 15 Day Trialware

Norton AntiVirus 2006 — 15 Day Portugujs Trialware <BR>

Norton AntiVirus 2005 15-Day Trialware

Norton AntiVirus 2005 — 15 Day Trialware <IT>

Norton AntiVirus 2005 — 15 Day Trialware <DK>

Norton AntiVirus 2006<SL>

Norton AntiVirus 2006 Nederlands<NL>

Norton AntiVirus 2006 Italiano <IT>

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

64

From DR Source List — Product Name

Norton AntiVirus 2006 Espaqol <ES>

Norton AntiVirus 2006 Deutsch

Norton AntiVirus 2006 Dansk version <DK>

Norton AntiVirus 2006 <SG>

Norton AntiVirus 2006 <PS>

Norton AntiVirus 2006 <Promo>

Norton AntiVirus 2006 <Price Test>

Norton AntiVirus 2006 <IN>

Norton AntiVirus 2006 <APAC>

Norton AntiVirus 2006 <20 Promo>

Norton AntiVirus 2006 <$5 off AFP promo>

Norton AntiVirus 2006 — Svensk version<SW>

Norton AntiVirus 2006 — Suomenkielinen versio <FI>

Norton AntiVirus 2006 — Portugujs<BR>

Norton AntiVirus 2006 — Norsk versjon <NO>

Norton AntiVirus 2006 — Magyarorszag<HU>

Norton AntiVirus 2006 — Frangais

Norton AntiVirus 2006 — Englanninkielinen versio<IN>

Norton AntiVirus 2006 — Engelsk versjon<NO>

Norton AntiVirus 2006 — Engelsk version <DK>

Norton AntiVirus 2006 —

Norton AntiVirus 2006

Norton AntiVirus 2005<SL>

Norton AntiVirus 2005. Svensk version.

Norton AntiVirus 2005. Engelsk version.

Norton AntiVirus 2005 Suomenkielinen versio

Norton AntiVirus 2005 Norsk versjon

Norton AntiVirus 2005 Nederlands

Norton AntiVirus 2005 Italiano

Norton AntiVirus o 2005 Frangais

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

65

From DR Source List — Product Name

Norton AntiVirus 2005 Frangais

Norton AntiVirus 2005 Espanol

Norton AntiVirus 2005 Deutsch

Norton AntiVirus 2005 Dansk version

Norton AntiVirus 2005 <SG>

Norton AntiVirus 2005 <Mapping PID US>

Norton AntiVirus 2005 <IN>

Norton AntiVirus 2005 <IE>

Norton AntiVirus 2005 <BR>

Norton AntiVirus 2005 <APAC>

Norton AntiVirus 2005

Norton AntiVirus 10.0 per MAC — Italiano

Norton AntiVirus 10.0 for Macintosh <NL>

Norton AntiVirus 10.0 for Macintosh <intl English>

Norton AntiVirus 10.0 for Macintosh <AP>

Norton AntiVirus 10.0 for Macintosh

Norton AntiVirus 10.0 for MAC <SG>

Norton AntiVirus 10.0 for MAC <$5 off AFP promo>

Norton AntiVirus 10.0 f|r Macintosh — Deutsch <GE>

Norton AntiVirus 10.0 — Macintosh English Version — DK

Norton AntiVirus 10.0 — Macintosh — NO

Norton AntiVirus™ 2006

Norton Antivirus Tilaus 2005

Norton Antivirus Tilaus

Norton AntiVirus for Mac 10.0

Norton AntiVirus 9.0 For Macintosh

Norton AntiVirus 2006<IE>

Norton AntiVirus 2006<BR>

Norton AntiVirus 2006 with 2-Year <MEA IN>

Norton AntiVirus 2006 Wersja Polska<PL>

Norton AntiVirus 2006 Pdivitys — Suomenkielinen versio<FI>

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

66

From DR Source List — Product Name

Norton AntiVirus 2006 Pdivittdd — Suomenkielinen versio<FI>

Norton AntiVirus 2006 <TW CH>

Norton AntiVirus 2006 <SW RET 20% DR PROMO>

Norton AntiVirus 2006 <NO RET 20% DR PROMO>

Norton AntiVirus 2006 <NL RET 20% DR PROMO>

Norton AntiVirus 2006 <IN RET 30% DR PROMO>

Norton AntiVirus 2006 <IN RET 20% DR PROMO>

Norton AntiVirus 2006 <GE RET 20% DR PROMO>

Norton AntiVirus 2006 <FR RET 20% DR PROMO>

Norton AntiVirus 2006 <ES RET 20% DR PROMO>

Norton AntiVirus 2006 <DK RET 20% DR PROMO>

Norton AntiVirus 2006 — Pdivitys Englanninkielinen versio <FI>

Norton AntiVirus 2006 — Pakiet dla 2 Użytkowniksw <PL>

Norton AntiVirus 2006 — Mise ` jour — Frangais <FR>

Norton Antivirus 2006 <MEA IN>

Norton AntiVirus 2005 Pdivittdd Suomenkielinen versio

Norton AntiVirus 2005 Pdivittdd Englanninkielinen versio

Norton AntiVirus 2005 Engelsk versjon

Norton AntiVirus o 10.0 pour Macintosh — Frangais <FR>

Norton AntiVirus 10.0 pour Macintosh — Frangais <FR>

Norton AntiVirus o 10.0 f|r Macintosh — Deutsch <GE>

Norton AntiVirus o 10.0 — Macintosh English Version — FI

Norton AntiVirus o 10.0 — Macintosh — NO

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

67

From DR Source List — Product Name

Norton Antivirus <copy for paid search>

Norton AnitVirus 10.0 for MAC <$5 off AFP promo>

NAV 2006 <KR>

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

68

EXHIBIT B
Digital River’s Customer Support Metrics And Staffing Requirements

For so long as Digital River is responsible for Customer Service within a particular region, this Exhibit B shall govern Digital River’s Customer Support Metrics and Staffing Requirements within that region. Digital River shall use commercially reasonable efforts to increase and decrease Customer support agents in the event of unexpected attrition, high volume sales, voicemail messages and order increases.

Digital River may utilize a combination of in-house and outsourced call center support to provide maximum flexibility. An example of outsource support is the contracting of independent Customer support, such as Sykes Enterprises or ClientLogic. Examples of in-house support include: escalation of Customer issues and training of new Customer support agents.

Specific support requirements are:

1. A monthly average of [*] of all Customer service telephone calls must be answered within [*] of entering the queue.

2. Response on a global-wide basis to Customer email inquiries within [*] hours of receipt by the email inbox, as indicated by the email header.

3. [*] of orders must be processed on the same day they are submitted, and orders must be shipped pursuant to Section B(9) of the Agreement.

4. [*] of all returns requests must be answered within [*].

5. [*] of all returns requests must be processed and submitted by Digital River (to a third party when applicable) for a refund within [*] of receipt of a letter of destruction from the End User.

6. Customer telephone call abandonment rates must be [*] or less on average per month.

7. The average close ratio on orders when Customers telephone to place an order must be [*] or higher as applicable.

8. Customer support agents must capture and record [*] of all Promotion Codes, and [*] of other Wrap Up Codes.

9. [*] of orders received from Customers telephoning to place an order must result in additional sales of Symantec Products through up-sells and cross-sells as applicable.

10. Customer support agents must respond to issues requiring research within [*]. Any additional actions required by Customer support agents to resolve issues must be completed within [*].

11. Customer support agents must be experienced in telephone and e-mail Customer support and fully trained on the Symantec Products and services, the Storefront and Symantec’s knowledgebase system prior to responding to inquiries regarding Symantec Products and services or being placed on Symantec telephone queues. Digital River shall designate a team of Customer support agents who will be devoted to supporting only Symantec Products and services. Agents must be proven good performers and dedicated to fulfilling Symantec’s Customer support requirements under the terms of this Agreement. To ensure high quality service, Digital River shall conduct regular call monitoring of all agents providing Customer support under this Agreement (including any outsourcer(s)

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

69

conducting support on Digital River’s behalf) and shall evaluate and rank such agents in accordance with performance. Digital River shall provide Symantec with the metrics and corrective actions used to measure and improve the performance of agents at each of Digital River’s support locations that are employed by Digital River to carry out Digital River’s support obligations under this Agreement. Digital River shall provide means for Symantec to participate in joint call monitoring of Customer support agents providing support hereunder (including any outsourcer(s)). If service level falls below the performance levels set forth in this Exhibit B for [*], Digital River will take whatever corrective actions necessary to resolve the situation within [*]. Symantec shall provide all Symantec Product-related training and training materials necessary to train Digital River Customer support agents on Symantec Products and services and promotions. Digital River shall train all agents on Symantec Products and services, based on training materials supplied by Symantec. Digital River shall provide on-going training to all its agents on normal Customer service and technical skills.

12. Customer support agents must correctly transfers callers to appropriate locations and telephone numbers. Procedures regarding the transfer of telephone calls are as follows:

     a. Customers Who Call Digital River For Technical Support. Digital River will provide its Customer support agents with instructions for when and how to transfer telephone calls to Symantec’s technical support department.

     b. Customers Who Call Digital River For Order Status Not Placed Through Digital River. Digital River will provide its Customer support agents with instructions on how to handle order inquiries that were not placed through Digital River. Such orders include purchases from other Symantec resellers and outsourcing providers. These Customers are to be given the same level of care as Customers who order through Digital River, provided however, Digital River is not required to resolve the problems of other resellers and outsourcing providers. Symantec agrees that it will use commercially reasonable efforts not to refer telephone calls to Digital River without first determining that the Customer has in fact placed an order through Digital River. Symantec agrees that it will provide Digital River with all reasonable assistance necessary to enable Digital River to meet its obligations set forth herein.

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

70

EXHIBIT C
Symantec Storefront Content Updating Procedures

Digital River shall follow the procedures and schedules set forth below for all Content updates that Digital River shall make to the Storefront and Sub-sites:

1. Posting products. Upon notification of a new Symantec Product on the Symantec Product list, Digital River shall post new Symantec Products on the Storefront in accordance with the process and schedule set forth in Section B(7)(m) of the Agreement.

2. Changes to the Navigation Bar and Links. Digital River will make changes to the navigation bar and links on the Storefront within five business days of receiving such request from Symantec.

3. Featured Partner Spots and Banners. Digital River shall make changes to featured partner spots and banners in accordance with the procedures set forth in Sections B(2)(a) and B(2)(b) of the Agreement.

4. Marketing Campaigns. Symantec will manage all Symantec Product marketing campaigns through Digital River’s DRCC, including pulling populations, text, html, etc. Once a marketing campaign has been designed through the remote management tool, it will be set in a staging environment for approval from Symantec’s regional managers and Digital River. After approval is designated, Digital River shall post or email such campaign within 48 hours.

5. Bug Fixes. Digital River shall fix bugs on the Storefront within the following time frames: (a) “Critical” bugs will be addressed on the highest priority and must be fixed as soon as possible after Digital River receives notice from Symantec or otherwise becomes aware of such bug, whichever is first, (b) “Serious” bugs must be fixed within 24 hours after Digital River receives notice from Symantec or otherwise becomes aware of such bug, whichever is first and (c) “Minor” bugs must be fixed within a reasonable timeframe (given the nature of the bug) after Digital River receives notice from Symantec or otherwise becomes aware of such bug, whichever is first. For purposes of this Exhibit, (x) a “Critical” bug is an issue that disallows the normal operation of the Storefront, is an unacceptable Customer experience, or causes latency on the Storefront as evidenced by an alert generated by Keynote, (y) a “Serious” bug is one that disallows the normal operation of the Storefront but a work-around is available to keep the Storefront functioning properly and (z) a “Minor” bug is any problem on the Storefront other than one falling within the Critical or Serious categories.

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

71

EXHIBIT D
Symantec’s Currency Policies

Digital River’s commitment to use multiple currencies is outlined below:

1. Display and Processing of Base Price in Other Currencies: Sub-sites (other than Shop United States) shall allow the user to change the currency in which the price is displayed. When a price is displayed in other currencies, the displayed price is a pre-calculated static value using the exchange rate applied to the base price. Display prices are static and established when a product goes up for sale on any Sub-site. Updates of display prices for currency fluctuations are done using the same process used for physical products. An order is calculated and processed in the currency chosen by the Customer. Digital River shall bear all currency fluctuation risks with respect to payments made by End Users in currencies other than US Dollars. Digital River shall cooperate with Symantec in making modifications to the manner in which currency and pricing information is displayed on the Storefront in the event Symantec changes its policy with respect thereto.

2. Default Currency: Each Sub-site will have a default currency for display and processing. The default currency, as well as other currencies offered on a Sub-site, may be changed upon mutual agreement between a Symantec and Digital River. The Parties acknowledge that they intend to transition to making local currency the default currency offered on each Sub-site as soon as reasonably possibly and upon mutually agreed upon terms set forth in an SOW or a written amendment to this Agreement.

3. Sub-site Currency: The following are the default currencies in which Symantec Product prices will appear to Customers on each Sub-Site (each, a “Default Currency”), and the alternative currency options (“Currency Options”) that Customers may elect to use instead of the Default Currency for purchases on such Sub-Site.

a.	Shop United States
	Default Currency:	US Dollar
	Currency Options:	None
b.	Shop América Latina
	Default Currency:	US Dollar
	Currency Options:	Venezuelan Bolivar, Mexican Peso, US Dollar, Euro
c.	Shop Brazil
	Default Currency:	Brazilian Real
	Currency Options:	US Dollar
d.	Shop Deutschland
	Default Currency:	Euro
	Currency Options:	Franken
e.	Shop Italia

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

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	Default Currency:	Euro
	Currency Options:	None
f.	Shop Asia/Pacific
	Default Currency:	Australian Dollar
	Currency Options:	New Zealand Dollar, Singapore Dollar, Hong Kong Dollar
g.	Shop Benelux
	Default Currency:	Euro
	Currency Options:	None
h.	Shop United Kingdom
	Default Currency:	British Pound
	Currency Options:	Euro
i.	Shop Canada: English
	Default Currency:	Canadian Dollar
	Currency Options:	US Dollar
j.	Shop Canada: Francais
	Default Currency:	Canadian Dollar
	Currency Options:	US Dollar
k.	Shop France
	Default Currency:	Euro
	Currency Options:	None
l.	Shop Nordic
	Default Currency:	Euro
	Currency Options:	Swedish Krone, Danish Krone, Norwegian Krone
m.	Middle East & Africa
	Default Currency:	South African Rand
	Currency Options:	US Dollar

Notwithstanding the foregoing, in the event any of the currencies on the above list are completely replaced by the Euro, such currency shall also be deemed to be replaced by the Euro for purposes of this Section 3 of Exhibit D to the Agreement.

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

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EXHIBIT E
Payment Options

The following payment options are the minimum options that must be available for the purchase of Symantec Products. Additional payment options may vary by region. Specific payment requirements by country or region are to be determined and developed on an ongoing basis and will be mutually agreed to by the Parties.

1. Credit Card. Digital River has in place a system for payments to be made by Visa, MasterCard, Diner’s Club, and/or American Express (AMEX) credit cards in various locales within the Territory as of the Effective Date. Unless otherwise agreed by the parties, Digital River shall, at a minimum, continue to maintain the same payment options on a by locale basis that it maintains as of the Effective Date.

2. Direct Debit Cards. Digital River shall have a system for payments to be made by direct debit from Customers’ bank accounts via Visa, MasterCard, Switch and SOLO debit cards for packaged product purchases by Customers in EMEA. The Parties shall further address this payment option in an SOW prior to the time Digital River begins offering packaged products to Customers in EMEA.

3.	Other Payment Options. The Parties agree that in the future, subject to adding the appropriate details by a mutually signed amendment, Digital River shall have a system for online banking purchases as an option for payment by End Users, along with other new concepts in payment options.
4.	PayPal and Western Union.

a.	Subject to the provisions of this Subsection, Digital River shall establish and maintain a payment system to be provided by PayPal, Inc., or its affiliates (“PayPal”). The terms and conditions of any agreement between Digital River and PayPal shall be as may be agreed upon by Digital River in its sole discretion. Subject to Section 4(e) below, any terms and conditions in the Agreement regarding Digital River’s provision of Credit Cards and/or Direct Debit Cards will also apply to Digital River’s provision of a PayPal payment system.
b.	Digital River shall use commercially reasonable efforts to establish and maintain a payment system consisting of End User purchase orders which shall contain such terms and conditions as are satisfactory to Digital River in its sole discretion and which are processed in a manner that is satisfactory to Digital River in its sole discretion; provided that neither such terms and conditions nor such process affect, in any fashion, Digital River’s obligation to pay Symantec the amounts due under the Agreement.
c.	Subject to the provisions of this Subsection, Digital River shall establish and maintain a payment system to be provided by Western Union, or its affiliates (“Western Union”). The terms and conditions of any agreement between Digital River and Western Union shall be as may be agreed upon by Digital River in its sole discretion. Subject to Section 4(e) below, any terms and conditions in the Agreement regarding Digital River’s provision of Credit Cards and/or Direct Debit Cards will also apply to Digital River’s provision of a Western Union payment system.
d.	The Parties agree that in the future, subject to adding the appropriate details by a mutually signed amendment, Digital River shall have a system for online banking purchases as an option for payment by End Users, along with other new concepts in payment options.
e.	If, through its provision of the PayPal or Western Union payment systems, Digital River becomes aware of a commercially reasonable basis for terminating such payment systems — such as, for example, offering

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

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such payment systems is no longer technically feasible, or PayPal or Western Union increase the rates to Digital River for its use of such payment systems — then Digital River will provide Symantec with thirty (30) days written notice of its intention to terminate the affected payment system. Such notice will include a description, in reasonable detail, of the commercially reasonable basis for Digital River’s proposed termination. If Symantec and Digital River cannot mutually agree on how to address this commercially reasonable basis for termination within thirty (30) days of Symantec’s receipt of such notice, then Digital River will be free to terminate the affected payment system.

f.

For the avoidance of doubt, nothing in subparagraph (e) shall prohibit Digital River from terminating its PayPal contract or Western Union payment contract based upon a material breach of the applicable underlying contract with Digital River by (as applicable) PayPal or Western Union. Moreover, Digital River shall have no liability if, through no breach by Digital River, either PayPal or Western Union cancels its contract with Digital River or otherwise ceases to provide services to Digital River. In the event of such occurrence, Digital River shall give prompt notice to Symantec of the facts and circumstances related to the applicable service interruption.

5. Bill Me Later Payment Option.

a.	Subject to the provisions of this Subsection, Digital River shall establish and maintain a payment system to be provided by I4 Commerce, Inc., commonly referred to as “Bill Me Later,” or its affiliates (“BML”). The terms and conditions of any agreement between Digital River and BML shall be as agreed upon by Digital River in its sole discretion. Subject to Section 5(b) below, any terms and conditions in the Agreement regarding Digital River’s provision of Credit Cards and/or Direct Debit Cards will also apply to Digital River’s provision of a BML payment system.
b.	If, through its provision of the BML payment system, Digital River becomes aware of a commercially reasonable basis for terminating such payment system — such as, for example, offering such payment systems is no longer technically feasible, or BML increase the rates to Digital River for its use of such payment systems — then Digital River will provide Symantec with thirty (30) days written notice of its intention to terminate the affected payment system. Such notice will include a description, in reasonable detail, of the commercially reasonable basis for Digital River’s proposed termination. If Symantec and Digital River cannot mutually agree on how to address this commercially reasonable basis for termination within thirty (30) days of Symantec’s receipt of such notice, then Digital River will be free to terminate the affected payment system.
c.	For the avoidance of doubt, nothing in subparagraph (b) shall prohibit Digital River from terminating its BML contract based upon a material breach of the applicable underlying contract with Digital River by BML. Moreover, Digital River shall have no liability if, through no breach by Digital River, BML cancels its contract with Digital River or otherwise ceases to provide services to Digital River. In the event of such occurrence, Digital River shall give prompt notice to Symantec of the facts and circumstances related to the applicable service interruption.

6. Deferred Payment Option.

a. Digital River shall provide to certain End Users of Symantec’s Storefront the ability to purchase Symantec Products with deferred payment (the “Deferred Payment Option”). Digital River will evaluate the creditworthiness of any such End Users and will be solely responsible for making the decision to extend or deny such deferred payment, in Digital River’s sole discretion. Symantec acknowledges that Digital River requires that End Users requesting deferred payment present a valid credit card in good standing at the time

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

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	of the order. Symantec further acknowledges that Digital River may initiate a credit card authorization at the time of the order to verify that the End User’s credit card is valid and in good standing at the time of the order.
b.	Digital River shall have the right to limit the number of days in the deferred period that is offered to End Users.
c.	Either party shall have the right to discontinue the Deferred Payment Option at any time; provided that the terminating party provides the other party with reasonable written notice, which will not be less than ten (10) business days.
d.	Digital River alone shall bear the risk of collection on any accounts on which Digital River elects to sell Symantec Products with deferred payments. Any and all costs incurred by Digital River due to any late or unpaid credit accounts shall be the sole responsibility of Digital River and shall not affect Digital River’s upfront payments to Symantec. In addition, the Deferred Payment Amount will be reconciled, and Digital River will report with the same frequency and timing as under the Agreement, and will become a part of the same accounting process.
e.	The territory for the Deferred Payment Option will be worldwide.

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

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EXHIBIT F
Digital River’s Service Level

1. Up Time.

     a. Minimum Up Time. Digital River shall eliminate any Downtime (as defined in Section 1(b) of this Exhibit) or intermittent order processing issues within its control, and shall provide a minimum of [*] up time (including scheduled routine maintenance) each month for all server-based services.

     b. Calculation of Up Time. Up time (“Up Time”) is to be measured by the total number of minutes during a calendar month in which all systems operated by Digital River required for the completion of Customer transactions, order status requests and information browsing are completely available, divided by the total number of minutes during the calendar month. Routine maintenance, minor maintenance and major maintenance time shall be included when calculating total Up Time.

The following formula shall be used to calculate Up Time:

Up Time =	(Total minutes per calendar month — Total minutes Downtime per calendar month)
	(Total minutes per calendar month)

Total minutes per calendar month includes minutes for scheduled maintenance. “Downtime” shall mean (i) any lapse in network availability, calculated from the time Digital River first detects an incidence of a service interruption and ending when the service is restored, provided the outage occurred within the Digital River facility and (ii) any lapse in order processing availability, calculated as follows by Keynote Systems, Inc. (“Keynote”), or a similar web performance management company mutually agreed upon by the Parties. The process used to calculate lapses in order processing availability will be as follows. Every 15 minutes, Keynote will test the entry point page to one Sub-site, one category product page, and one order entry page on the Storefront. If any of the three points fails to load within 60 seconds, an email will be sent to Symantec and a designated Digital River representative. If Symantec receives more than two Keynote alerts within a thirty-minute period, such thirty minutes will be considered Downtime and included when calculating Up Time in accordance with the above formula. Digital River will have the ability to dispute the Keynote alert outage by providing evidence that the outage was not within Digital River’s facility.

     c. Payments by Digital River for Failure to Maintain Minimum Up Time. In any month in which Digital River fails to maintain Up Time of [*], then Digital River shall pay to Symantec an amount as liquidated damages (and not as a penalty) equal to the average amount remitted to Symantec for Net Sales during the same time periods (i.e., day of the week, time of the day, duration of outage) in the four weeks prior to the Downtime.

     d. Analysis of Failure to Maintain Minimum Up Time; Remedy Plan. If Digital River fails to maintain the minimum Up Time required herein, then Digital River shall within ten (10) days of notice from Symantec perform a root cause analysis to identify the cause of such failure, provide Symantec with a remedy plan and implement such plan in an agreed upon time frame.

     e. Broken Links. If any Links, updated by Digital River or Digital River ADM staff updating on behalf of Symantec, do not default back to a Symantec approved landing page on Symantecstore.com that offers only Symantec products for sale (“Broken Links”), then the time such Broken Links do not comply with this Section 1(e) will be treated as a breach and Digital River shall pay to Symantec an amount as liquidated damages (and not as a penalty) equal to the average amount remitted to Symantec for Net Sales of the affected products during the

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

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same time periods (i.e., day of the week, time of the day, duration of outage) in the four weeks prior to the Broken Link’s existence.

2. Maintenance.

     a. Routine Maintenance. All routine maintenance will be performed online and require zero downtime. All routine maintenance will be scheduled to be as least intrusive to sales as possible. Digital River shall notify Symantec of its general maintenance schedule.

     b. Minor Maintenance. Any minor maintenance will be performed during the lowest traffic time available, usually between the hours of 1:00 a.m. and 5:00 a.m. Central Time on a weekend and require less than two hours of downtime. Digital River shall provide written notification to Symantec at least 24 hours in advance of such maintenance.

     c. Major Maintenance. Any major maintenance or upgrades that will impact sales opportunities will be discussed with Symantec and the Parties shall mutually agree to a time that will have the least impact on sales.

     d. Unscheduled Downtime. In the event of a system failure, Digital River will “fail-over” to a redundant system within 15 minutes, and shall bring up the entire infrastructure and the Storefront from a cold boot in a maximum of one hour. In the event of such a system failure, Digital River will notify Symantec of the unscheduled downtime and the status of the event via a telephone conversation. Digital River will escalate the issue within Symantec until live human contact is made.

     e. Catastrophic Failure. In the event of multiple catastrophic system failures, Digital River shall find a working solution or switch to a backup server in a maximum of four hours. In the event of such a catastrophic system failure, Digital River will notify Symantec of the unscheduled downtime and the status of the event via a telephone conversation. Digital River will escalate the issue within Symantec until live human contact is made.

3. Backup / Recovery Plan.

     a. Data.

i.	Digital River shall maintain all data on two separate physical arrays and two separate servers.
ii.	If any non-database data is lost then it shall be copied back from the backup server and its disk arrays. The backup server shall be updated automatically with the new non-database data from the primary server every morning. The primary server and backup server shall have standby databases that are updated immediately when a new archive log is produced.
iii.	A nightly backup to tape shall be performed by a robotic tape drive with four DLT 7000s. Digital River uses a standard rotation that involves nightly incremental and weekly full backups of all non-database data. All Oracle databases are hot backed up nightly. The tape drive can restore data with all four drives in parallel.
iv.	Digital River shall maintain a fire proof room in its facility that holds backup tapes. Backup tapes shall be rotated to an offsite tape storage facility every week.
v.	Non-database data that is no longer in use will be removed and stored for 6 months to a year.

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

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vi. Digital River shall test database restores daily.

     b. Recovery Plan. If a full system restore is required, Digital River will switch from the primary server to the backup server. The backup server will act as the primary server until the original primary server is restored. The transition back to the original state will be scheduled at a time least likely to affect sales of Symantec Products, as mutually agreed by the Parties. Restoration of the original primary server will be done from tape. The internal boot and swap drives in the primary server and the backup server are mirrored and may be replaced hot.

     c. Audit Trails. Digital River shall maintain weekly access logs on its servers and shall maintain all access logs on backup for at least three years after the termination of this Agreement.

4. Disaster Recovery Plan.

     a. Internet Service Providers. Digital River shall maintain at least two Internet Service Providers (“ISPs”) with BGP routing with multiple paths into the building. If any of the ISPs have difficulties, traffic shall automatically be rerouted to another carrier.

     b. Fire. Digital River’s Data Center shall contain an automated fire suppression system that will not affect any of the equipment or systems but will immediately extinguish a fire. The Data Center shall also contain individual fire extinguishers that are safe to the systems and equipment.

     c. Bandwidth. In addition to the two ISPs and the automatic fail over between ISPs, Digital River shall maintain two identical routers and two firewall servers. The back-up router and Firewall shall be pre-configured and able to be brought online immediately.

     d. Power. Digital River’s Data Center shall have multiple sources of power including heavy-duty utility feed, extensive battery backup and a diesel generator. All systems shall be supported by an automatic transfer switch that will switch all power requirements to battery and start the generator in the event of a power failure. The generator shall have sufficient capacity to power not only the Data Center, but also the entire Digital River facility, allowing Digital River to continue to meet its obligations hereunder (including Customer service and development) until power is restored. Digital River shall not have any single point of failure with electrical power.

     e. Server Failure. Digital River’s commerce system shall be completely redundant. Digital River shall keep two complete commerce systems (primary and a backup) online at all times. If for any reason any of the primary servers fail, then a completely redundant backup server will be brought online.

5. System Monitors.

     a. Traffic. Digital River shall utilize a monitoring program to track its bandwidth and the status of individual data lines. In addition, Digital River shall capture the latency to server pages 24X7 and on a per client basis, connections to the database, and paths of Customers through the system, user drop off and all the other data required for reporting.

     b. Performance. Digital River shall use two primary tools for monitoring performance: (i) a crawler that tests URLs for response, database server pages for latency, and success of downloads and (ii) the Oracle Enterprise Manager to monitor its database performance.

6. Infrastructure Support.

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

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     a. Organization. Digital River shall maintain a dedicated staff of at least [*] support engineers, including an Oracle Certified DBA, a Sun Solaris Engineer and a Sun Ultra Enterprise Engineer (authorized for Sun’s complete line of systems, software and networking). Digital River shall also maintain cross-trained people from the development teams who carry pagers and react to system problems. Digital River’s Development team members shall also be on call for 24X7 solutions that require programming or other developmental support.

     b. Escalation Plan.

          i. Problem Reporting.

(1)

Digital River shall maintain monitoring tools that report all problems and contact Digital River’s 24X7 support engineers simultaneously via email and pagers. Digital River’s onsite staff shall be notified when an error is discovered. Such staff shall respond on a priority basis. Digital River shall maintain continuous “on-call” and “on-call backup” administrators, and Digital River’s staff and senior management shall monitor their progress.

(2)

After making the appropriate corrective action, the administrator shall complete a detailed problem log that is permanently stored in the database.

          ii. Resolving Problem Reports.

(1)	Digital River’s monitoring programs shall allow for proactive response to avoid problems and alert Digital River’s system administration team, Digital River’s entire “on call” system administration team and senior management.
(2)	In the event of a Customer-detected problem, Digital River’s Customer service department shall have instant access to Digital River’s System Administration Team. A problem can often be fixed within minutes of a Customer being exposed to it. Customer Service team members shall also trained to monitor basic system functions throughout their shift, and report any issues to the “on-call” system administrator.
(3)	Once the Digital River administrator is contacted, such individual(s) shall immediately take steps to implement the appropriate solution. Any problem that causes or can cause a greater than 20 minute down time shall immediately escalated to senior management.
(4)	If maintenance is required, it shall be scheduled for during the lowest traffic time available, usually between 1:00am to 5:00am on a weekend. Digital River shall use its best efforts to perform maintenance without affecting Customers.
(5)	Digital River shall provide all downtime reports and/or incident reports to Symantec. Digital River will permit Symantec to be involved in any part of the alert process upon its request.

7. Security

     a. Personal and Financial Information.

i. Transmission. All critical information shall be encrypted using SSL in the http interface and DES encryption, using the TCP / IP API interfaces.

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

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ii. Storage. Data shall not be accessible directly from the web server or directly from the database. All data must all go through proper page or API requests, which are abstracted from the data, Firewall, Unix, Oracle database and web server security block access to any data. In addition, fraud and hacker level tampering at the URL level shall be protected with behavior analysis programs, URL misdirection techniques, URL spoofing techniques and page to page integrity verification.

     b. System Integrity.

i.	Physical. The Data Center shall utilize state of the art card-key access systems and motion detection equipment. All visitors shall be escorted by an authorized Digital River employee at all times. Facility breach alarms shall automatically generate local police notification.
ii.	Operational.

(1)	Digital River shall use two proprietary heuristic security systems that will identify and block attempts to abuse the system. The first is the credit card fraud detection system, which uses hundreds of indicators (e.g., seeing the same credit card under different user names, users who have repeated attempts with different names and credit card numbers, etc.). The second program eliminates physically accessing the locations of the software on the computer, which program spoofs the location of the download so that even if someone captured the download location they could not use it as it does not physically exist. No downloads or any data shall be directly accessible via URLs.
(2)	Administrative access shall be controlled by a security login system, which assigns valid day, time of day and functional access. Such system shall also tracks and documents every access to the system.
(3)	Digital River shall utilize industry-leading software and industry standard Unix and Database techniques.

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

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EXHIBIT G
EXPORT CONTROL MEASURES

Digital River shall use commercially reasonable measures to ensure that it does not deliver Symantec Products to End Users located in jurisdictions which the export of Symantec Products would be prohibited under United States or other applicable laws, including, without limitations, the measures specified below.

Digital River shall:

1.

Compare ESD End User’s billing address information (to account for international markets) and packaged product End User’s shipping address information (to account for international markets) with a list of countries that Symantec is allowed to export to. If the billing address or shipping address is located at a country Symantec is not allowed to export Symantec Products, Digital River will not allow the transaction or Symantec Product purchase to proceed.

2.

Use an integrated system to:

     a. Verify End User or purchaser information and geographic location using a sophisticated combination of geolocation technology and artificial intelligence to validate information provided by the End User or purchaser for compliance with applicable export control laws.

     b. Compare relevant order information against databases of Denied Persons, Specially Designated Nationals, Unverified List, Restricted Countries and numerous other U.S. Government lists published by the US Department of Commerce, US Department of State and the US Department of the Treasury as well as restricted and denied party lists as well as the embargoed countries and uses lists published by the European Union and the United Nations, and analyze transactions against those on the lists.

3. Conduct a secondary check on the transaction history of an End User’s IP address to identify any inconsistencies in ship-to or bill-to requests.

Digital River hereby certifies that it will not sell any Symantec Product that is controlled for export purposes, and, in particular those goods identified as “dual use” items under either the US or the EU legislation, to any military entity or to any other entity for any military purpose, nor will it sell any Symantec Product for use in connection with chemical, biological or nuclear weapons or missiles capable of delivering such weapons. Digital River understands and agrees that Symantec Product containing encryption may require action on its behalf prior to sale into certain countries and to persons or entities within those countries. It is Digital River’s responsibility to comply with all applicable international, national, state, regional and local laws, regulations and any export licenses (when notified by Symantec from time to time) in performing its duties hereunder and in any of its dealings with respect to Symantec Products.

As the exporter of record, Digital River agrees to take any and all actions necessary to comply with applicable United States and European Union (in particular as implemented in Ireland) export laws and regulations in its performance of any Agreement with Symantec, including making determinations of final destination of Symantec Product(s) licensed to End Users in the Territory that may be intended for re-export or transfer to a location outside of the Territory. Digital River agrees that any export or re-export of Symantec Product by Digital River shall be done in accordance with the United States Export Administration Regulations, European Regulations (including Council Regulation EC No 1334/2000 of 22 June 2000) and Irish Department of Enterprise Trade and Employment regulations including reporting compliance. Diversion contrary to U.S. and Irish law is prohibited. Symantec Product is currently prohibited for export or re-export to Cuba, North Korea, Iran, Iraq, Libya, Syria and Sudan or

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

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to any country subject to relevant EU trade sanctions. In addition, Symantec Product is prohibited for export or re-export to any person or entity on the U.S. Department of Commerce Denied Persons, Entities and Unverified Lists, the U.S. Department of State’s Debarred List, or on the U.S. Department of Treasury’s lists of Specially Designated Nationals, Specially Designated Narcotics Traffickers or Specially Designated Terrorists.

EXHIBIT H
Security Requirements

Supplier Security Review Checklist

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

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Copyright June 2005
www.symantec.com
e-mail: Security@Symantec.com

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

The Supplier Security Review Checklist

     Introduction

Use this checklist as you gather the necessary information based on the Supplier Security Standards for a security review and prepare to present the results of the review. Review the sample checklist if you have any questions.

     Project Information

Project Description

Type of Data handled by project

Project Manager

Contact Information

Remarks

Approval Date

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

Checklist

	Compliance
Standard	Status	Risk	Recommendation
Network-Level Requirements
Security program
The supplier must have a security program in place that comprehensively addresses network-level requirements similar to those detailed in the European Computer Manufacturers Association (ECMA) Standard 271, Extended Commercially Oriented Functionality Class for Security Evaluation (E — COFC), addressing such issues as access control, accountability and audit. (See http://www.ecma.ch/.)
Controls
The supplier must use an International Computer Security Association (ICSA) Labs 1 or Trust Technology Assessment Program (TTAP) 2 certified firewall to protect servers hosting Symantec information.
The supplier must specify the name and version of the firewall(s) used.
The supplier must submit a sanitized network diagram for the portion of its network used to supply services to Symantec.
Intrusion detection
The supplier must use a network-based intrusion detection system (IDS; a freeware product such as Snort) to monitor the segment(s) on which servers hosting Symantec information are logically located.
This requirement shall be implemented within six (6) months of contract signing date.
The supplier must specify the name and version of the network-based intrusion detection system(s) used.

1	http://www.icsalabs.com/html/communities/firewalls/newsite/cert.shtml
2	http://niap.nist.gov/cc-scheme/ValidatedProducts.html — firewalls
*	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as *. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
Vulnerability assessment
The supplier must use commercial products or freeware (e.g., Nessus) for vulnerability assessment and/or penetration testing of the segment(s) on which servers hosting Symantec information are logically located.
The supplier must specify the name and version of the network-based vulnerability assessment tool(s) used.
The supplier must conduct vulnerability assessment and/or penetration testing at least twice a year.
The supplier must submit the vulnerability assessment and/or penetration testing report(s) to Symantec’s Information Security upon request.
The supplier must agree to Symantec-conducted vulnerability assessment scans of the portion of its extranet to be used to service Symantec.
Operating System-Level Requirements
Security program
The supplier must have a security program that comprehensively addresses operating system-level requirements, similar to those detailed in the European Computer Manufacturers Association (ECMA) Standard 205, Commercially Oriented Functionality Class for Security Evaluation (COFC). These requirements address such issues as identification and authentication, access control, accountability and audit, and password requirements. (See http://www.ecma.ch/.)
Controls
The operating system(s) for the supplier’s servers must be “hardened” prior to use in accordance with recognized “best practices” configuration. These operating system(s) for servers must not be operated with an “out of the box” configuration. Several organizations and suppliers have documentation, checklists, or tools designed to facilitate this security configuration process, and are generally recognized as “best practices”.
For each platform used to host Symantec information, the supplier must indicate whose guidelines it adheres to for operating systems “best practices” (e.g., operating system supplier, Center for Internet Security).

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
The supplier must submit documentation on patch management program.
Intrusion detection
A host-based intrusion detection system (IDS) shall monitor the server(s) on which Symantec information is hosted (e.g., Symantec’s Host Intrusion Detection System or a freeware product such as Logsurfer).
The host-based IDS must be implemented within six (6) months of the contract signing date.
The supplier must specify the name and version of the host-based intrusion detection system(s) used.
Vulnerability assessment
The supplier must use commercial products or freeware (e.g., Cerberus’ Internet Scanner) for vulnerability assessment and/or penetration testing of the servers(s) on which Symantec information is hosted.
The supplier must specify the name and version of the host-based vulnerability assessment tool(s) used.
The supplier must conduct vulnerability assessment and/or penetration testing at least twice a year.
The supplier must submit the vulnerability assessment and/or penetration testing report(s) to Symantec’s Information Security upon request.
Application-Level Requirements
Controls
“For Technology Service Approval Only”: The following programming languages must not be used for the application(s) hosting the service(s): Visual Basic (VB), PHP, Perl, and Python.

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
“For Technology Service Approval Only”: Secure Programming Specifications are provided for the following categories. The supplier must state their compliance level against these specifications and provide further information upon request.
Logical Layers of the application architecture (See Appendix 1A)
Domino web application (See Appendix 1B)
Custom application (See Appendix 1C)
The supplier must provide documentation on overall architecture, development and implementation of application(s) used by Symantec. If application-level security is applicable, the supplier must meet the related security requirements.
The supplier must submit documentation on an application patch management program with version control.
Vulnerability assessment/audit
The supplier must use commercial products or freeware for vulnerability assessment and/or penetration testing of the installed application(s) providing Symantec information.
The supplier must specify the name and version of the application-based vulnerability assessment tool(s) used.
The supplier must conduct vulnerability assessment and/or penetration testing at least twice a year.
The supplier must submit the vulnerability assessment and/or penetration testing report(s) to Symantec’s Information Security upon request.
For Technology Service Approval Only: The supplier must engage an independent and reputable IT company to audit their code. The subsequent audit report must be approved by Symantec’s IT security group before going live.
Data-Level Requirements
Controls
The supplier must use strong encryption for transmission of personal information collected from a customer.

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
If a customer completes a Web-based form with personal information, the supplier must protect that session using Transport Layer Security (TLS) or Secure Sockets Layer (SSL, version 3.0). The supplier must support both TLS and SSL v3.0.
If a customer completes a Web-based form with personal information, the supplier must use SSL with “strong encryption” (i.e., 128-bit) using a “step-up” technology (i.e., 40-bit browsers are stepped up to 128-bits), such as a Secure Site Pro certificate (Global Server ID) from VeriSign, or a SuperCert from Thawte.
The supplier must not use SSL version 2.0 due to known security weaknesses.
The supplier must use strong encryption (i.e., ³ 112-bit symmetric) to encrypt and store personal information collected from a customer or a Symantec employee.
If the supplier receives personal data from employees and customers, it must be explicitly acknowledged. All data elements must be fully identified, with a clear explanation for the need and how the information will be used.
The supplier must provide session encryption to protect authentication information (e.g., username + password) when Symantec personnel logon to a server (e.g., to upload content, or to perform any administrative function). This session encryption may be SSL or Secure Shell (SSH). The supplier may not use insecure means for logon (i.e., username + password transmitted in the clear).
To ensure authenticity and integrity, the supplier must have the capability of digitally signing messages sent (e.g., e-mail, newsletters) on Symantec’s behalf.
The supplier must provide dataflow documentation highlighting the type of data involved at each point of the application system and how is it secured if not already addressed in the earlier requirements.
Intrusion detection
The supplier must specify the name and version of the anti-virus software(s) used.

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

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
The supplier must deploy comprehensive anti-virus software, preferably in a three-tiered deployment (i.e., at the gateway, server, and client-level), and preferably using Symantec products.
The supplier must demonstrate the ability to scan all documents for malicious code that are to be posted for download on Symantec’s behalf This requirement shall be implemented as a condition of service before going live.
The supplier must demonstrate the ability to scan all outgoing messages for malicious code (e.g., e-mails) sent on Symantec’s behalf. This requirement shall be implemented as a condition of service before going live.
General Requirements
The supplier must be in compliance with related regulatory requirements (eg. Payment Card Industry Data Security Standard, Japan’s Personal Information Protection Law) if applicable.
The supplier must provide documentation similar to a Statement Of Work (SOW), detailing the technologies, infrastructure, business arrangement, workflow, schedule, etc.
If the supplier’s contract with Symantec is more than or equal to USD $50,000.00 annually, the supplier shall complete an annual audit by a “nationally recognized” information security firm to certify compliance with all requirements. The supplier and Symantec must agree upon the selected audit firm prior to the audit.
The supplier must complete the initial audit within one (1) year of contract signing date.
The supplier must agree to the following audit methodology:
•    British Standard (BS) 7799, “Code of practice for information security management” (now ISO Recommendation 17799)
•    SAS 3 70 Type II — if it’s control objectives match BS 7799 controls, or these Symantec security requirements
•    AICPA SysTrust

3	American Institute of Certified Public Accounts (AICPA; http://www.aicpa.org/) Statement on Accounting Standards (SAS).
*	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as *. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Supplier Security Policy Manual
The Supplier Security Review Checklist

	Compliance
Standard	Status	Risk	Recommendation
The selected nationally recognized information security firm must provide Symantec with a full copy of the audit report within two weeks of completion.
If the supplier’s contract with Symantec is less than USD $50,000.00 annually, the supplier may chose to be audited directly by Symantec Security Services to fulfill their audit compliance and security requirement verification.
“For Technology Service Approval Only”: Upon completion of final development on the web site/service, the supplier must provide the Information Security group with the URL and IP addresses for penetration testing and approval before going live.

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

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EXHIBIT I
Site Reporting Requirements

The following reports shall be made available through Digital River’s DRCC, or if not available through the remote management tool, sent electronically to Symantec no later than every Tuesday by 12:00 p.m. Pacific Standard Time for the previous week’s information, and no later than the 10^th calendar day of each month for the prior month’s information. Digital River’s report generator shall have the capability to provide all reports in formats that are grouped and/or able to be sorted by region and/or country.

1. Customer Support Metrics. This report outlines the Customer support metric goal, actual Customer support performance, and the variance between the actual performance and the metric goal in regions where Digital River is providing Customer Support services. This information must be provided for the entire Storefront and divided between Sub-sites within the Storefront and countries. The following information is required to be reported:

a.	Total number of Issues.
b.	Total number of telephone calls.
c.	Total number of e-mail messages.
d.	Total number of Issues by sub-site.
e.	Total number of Issues by Wrap Up Codes.
f.	Volume of telephone call transfers to Symantec and/or other retailers.
h.	Total number of abandoned telephone calls, and average time to abandonment.
i.	Average length of telephone calls.
j.	Average queue time of telephone calls.

2. Order Processing and Shipping Metrics. This report outlines the order processing and shipping metrics, and actual performance. This information must be provided for all Sub-sites within the Storefront. This report must also be compiled into a summary report for the entire Storefront. The following information is required to be reported:

a.	Ratios of orders booked to orders shipped.
b.	Breakdown of orders booked according to the reasons why they were not processed.

3. Download Reports. This report outlines the download of Symantec Products. The following information is required to be reported (except as limited by the Wrapper Technology):

a.	Types of downloads broken down between Purchase First, Try/Buy and Try Before you Buy.
b.	Total number of Symantec Products downloaded successfully and unsuccessfully.

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

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c.	Total number of attempts to download Symantec Products (“Attempts”). An “Attempt” is defined as any request that is registered server-side to initiate a download.
d.	Total number of successful downloads (“Successful Download”). A “Successful Download” is defined as a complete download of an item as indicated on a server log.
e.	Total number of abandoned downloads.
f.	“Success Percentage,” which is defined as a percentage of download Attempts that result in Successful Downloads.

4. Sales Reports. This report outlines the sales of Symantec Products to End Users. Orders electronically placed through the Internet from within Symantec Products must be recorded and reported. The following information is required to be reported:

a.	Symantec Product SKUs.
b.	Symantec Product titles.
c.	Units of Symantec Products sold and revenues that resulted from sales.
d.	Dates, including the month and quarter, End Users purchased Symantec Products.
e.	Sub-sites where End Users purchased Symantec Products.
f.	Media type.
g.	Purchase option elected by the End User, e.g., Try/Buy, ESD purchase or packaged product purchase.

5. Inventory Levels. This report indicates the number of units of inventory of each Symantec Product that are held by Digital River, separated out by each SKU. Such report shall include the Symantec Product name, SKU, number of units actually held in inventory, and the number of units that would represent four weeks and six weeks of inventory based on Symantec’s forecast for the Storefront for the applicable quarter.

6. Report Formats. Digital River shall provide Symantec with a separate sales report and a returns report for each Partner in electronic format no later than the 30^th calendar day of each month for the prior month’s sales and returns. These two files shall contain the information described below, and should be sent to ESDSALES@symantec.com in standard ASCII format (comma delimited, i.e., quotes around the text). Symantec shall also have access to all reports on a weekly basis and reserves the right to request reports more than once a month.

Sales report required information and format for Affiliates

• status of order (paid and shipped),

• dollar amount of total sale per transaction,

• the website the purchaser came from and campaign ID used,

• the order identification number,

• transaction tracking number, and

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

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• the date and time of order.

Sales report required information and format for Partners:

• Indicate the Storefront Name and Campaign URL, and the reporting period

• For all units sold, include: Symantec SKU (“part number”), name of Symantec Product, number of units sold, distribution cost, total distribution revenue, which countries in the Territory the Symantec Products were sold into and the transaction date. Reports should be summarized by Storefront and Campaign URL; Symantec SKU; and number of units sold should be separated from any returns.

• Include a calculation of the total amounts due Symantec from Digital River for products sold by Digital River during the reporting period, with subtotals for each Storefront.

• A monthly hardcopy sales report with a check, or alternatively, as indicated below, an authorized wire transfer for amounts due from Digital River is due to Partner no later than the 20th calendar day of each month.

• The report and check (if applicable) should be sent to Partners address listed on the SIF:

7. Partner Site Reporting Requirements. In addition to the current reporting and records requirements of Section 9 and Exhibit I of the Agreement, as amended, the following provisions shall be added to the Agreement under Exhibit I to govern certain reporting requirements by Digital River to both Symantec and such third party Partners concerning the various Site arrangements for Symantec Partner relationships In addition:

Partner Site Reports. Except as specifically set forth in any particular SIF, and in addition to all other non-conflicting reporting requirements, as set forth in the Agreement and this Exhibit I, as amended to date, Digital River reporting shall comply with the terms:

     (a) Download Sites. Digital River shall record all downloads of Symantec Products. Digital River shall report all such downloads to Symantec on any Download Site, per Download Site. The reports for Download Sites shall include: (i) the number of units of Symantec Product downloaded, by product name, (ii) the coupon number, if applicable, redeemed, (iii) the date of each download, (iv) the type of product version, as in Macintosh or PC version, and (v) any other Site statistics, such as traffic in a traffic analysis report per the SIF requirements. Digital River shall provide Symantec with both a separate penetration report by the tenth (10^th ) day of each month for the prior month sales and a separate Partner report in electronic format no later than the fifteenth (15^th) calendar day of each month for the prior month’s downloads, except as otherwise agreed to in the separate SIFs. The Partner report may need to contain only a subset of the foregoing or some additional information and Digital River agrees to comply with such other special requirements, as may be agreed to and set forth in the relevant SIF for such Partner. The Partner report, which will be customized, if applicable, per the terms of the SIF, should be sent to the Partner, only after approval by Symantec, but no later than the twentieth (20^th) calendar day after the end of each calendar quarter except as otherwise agreed in separate SIFs, at the Partner’s reporting address listed in the SIF for such Partner. Symantec shall also have access to all reports on a weekly basis and reserves the right to request reports more often than once a month.

     (b) Store Sites. Digital River shall provide Symantec with a penetration report by the tenth (10^th ) day of each month for the prior month sales, as well as a Partner report quarterly by the fifteenth (15^th) day of the month for the prior quarter, both as a separate sales report and a separate report for each Partner in electronic format no later than the fifteenth (15^th) calendar day of each month for the prior month’s sales and returns, except as otherwise agreed in separate SIFs, and comply with such other special requirements, as may be agreed to and set forth in the relevant SIFs. The Partner report will be a subset of the information in the Symantec

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

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report, and typically should only contain the total number of units, by Symantec Product, of the Symantec Product sold and the detailed revenue share calculation, but which report shall be customized, as applicable per the SIF. The Partner report (after approval by Symantec), and check if applicable, is due to the Partner no later than the twentieth (20^th) calendar day after the end of each calendar quarter and should be sent to the Partner’s address listed in the SIF for such Partner. Symantec shall also have access to all reports on a weekly basis and reserves the right to request reports more often than once a month.

     (c) Requirements for Report to Symantec. Unless and until such future on-line reporting method provided by Digital River is available in such format which shall be detailed in writing and approved as being satisfactory in writing and signed by an authorized signatory of Symantec, the sales report to Symantec shall include the following information and be in the following format:

          (i) Indicate the Site by Partner name and URL, and the reporting period;

          (ii) For all units of Symantec Product sold, include: Symantec SKU (“part number”), name of the Symantec Product, number of units sold, unit sales price charged to the End User, total distribution revenue, which countries in the Territory the Symantec Products were sold into and the transaction date.

          (iii) Reports should be summarized by Site and URL; Symantec SKU; and number of units sold should be separated from any returns;

          (iv) A revenue share calculation for each Partner, which includes that particular Partner’s formula and revenue share percentage, as indicated in the SIF;

          (v) Include a calculation of the total amounts due to Symantec from Digital River for Symantec Products sold by Digital River during the reporting period, with subtotals for each Site; and

          (vi) Reporting should be separately by territory, which consists of the (i) the Americas, which consists of North America and South America, (ii) AsiaPac which is the Asian and Pacific rim countries and (iii) EMEA, which consists of Europe, Middle East and Africa.

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

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EXHIBIT J
Termination Procedures

Digital River shall carry out the following termination procedures upon termination or expiration of this Agreement:

For a period of two months after the termination or expiration of this Agreement (the “Transition Period”), Digital River shall perform all its obligations and services under this Agreement, including but not limited to continuing to take orders for Symantec Products. During any Transition Period, Symantec shall continue to honor all of its obligations under this Agreement, including, but not limited to, providing Digital River with the same [*] for all orders it takes for Symantec Products pursuant to this Agreement. Symantec reserves the right, in its sole discretion, to reduce the duration of the Transition Period or Digital River’s obligations during the Transition Period, and will notify Digital River of any such changes. Any Transition Period extensions are to be mutually agreed to by both Parties.

During the Transition Period, Digital River shall also use best efforts to assist Symantec in transferring its Storefront responsibilities to Symantec or a third party authorized by Symantec. Such assistance shall include, but not limited to, the following requirements, which shall be performed by Digital River at [*]:

1. Customer Information and Databases. Digital River shall ensure that all Customer data, including Customer names, Key server data, licensing information on individual Customer records, and telephone numbers, are provided to Symantec in the file format to be mutually agreed upon by the Parties. Digital River will update Symantec, on a weekly basis, as to any Customer data changes it becomes aware of as a result of Customer support calls, even if such changes are received after the Storefront has been transitioned to Symantec. Digital River’s notification obligations shall not extend for more than a period of one month after the Transition Period expires.

2. URLs. At termination, Digital River will ensure that any links to the Symantec Storefront or related sites hosted by Digital River are appropriately redirected to new mutually agreed upon URLs or IP addresses. Digital River will assist Symantec in redirecting all links, including the forwarding of any Storefront e-mail services, to Symantec or a new Storefront location to be decided at termination.

3. Transition Notifications. During the Transition Period, Digital River will provide required notifications on the Symantec Storefront regarding the transition plan from Digital River to Symantec or another party. Any transition notifications must be approved by Symantec. Transition notifications include messages regarding Storefront downtime.

4. Marketing Programs. Upon notice of termination, Symantec shall have the discretion to decide whether to immediately terminate any current or planned marketing arrangements.

5. Support/Fulfillment. Digital River shall not claim any exclusive rights when contracting with third party vendors for Customer support or order fulfillment during the term of this Agreement. After the Agreement’s termination, Symantec will have all rights to retain the same vendors obtained by Digital River during the term of this Agreement. If Symantec decides to retain such vendors, it will establish separate service agreements with such vendors. Further, Digital River shall not enter into any contracts with vendors which would bind Symantec to Digital River obligations under such contracts when the Agreement expires or terminates. Symantec has all rights not to obtain such vendors upon the Agreement’s termination or expiration, and may select other vendors that were not retained by Digital River.

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

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6. Telephone Call Support. Digital River will ensure that Symantec possesses the latest telephone scripts and procedures during the Transition Period. During the Transition Period, Digital River will alter Customer support protocols only based on mutually agreed upon alterations. Such alterations may include implementing automatic forwarding of calls, or performing manual transfers to a location or telephone number(s) specified by Symantec. At the end of the Transition Period, all telephone calls to Digital River personnel, relating to Symantec Products and services, including Customer support calls, shall be automatically transferred or forwarded to Symantec, at Symantec’s expense.

7. Storefront Content. Digital River will provide all graphics and text (HTML) files to Symantec used on the Storefront during the term of this Agreement. Digital River shall transfer a source database to Symantec in a format mutually agreed to by the Parties during the Transition Period. During the Transition Period, Symantec shall have rights to request up to three (3) transfers of all Storefront Content.

8. Redirection of Telephone Numbers. The toll free and toll share numbers referenced in Section B(2)(c)(i), Exhibit X, or elsewhere in the Agreement shall be redirected to telephone numbers selected by Symantec. Any cost of such redirect shall be paid by Symantec.

9. Processing of Try/Buy Keys. During the Transition Period and for 30 days thereafter, Digital River shall continue to provide purchase transaction services for Try/Buy Symantec Products that were that were downloaded or ordered by Customers prior to the Agreement termination date.

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

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EXHIBIT K
Symantec Sell Through Reporting Procedures And Policies

1. EDI Sell—Through Reporting Requirements

Americas (including LAM)

• Daily

• Via EDI

• Fields:

Customer name

Customer address (bill to)

Customer Address (ship to)

Customer email address

Product

P/N

Qty

Price (matching price list)

Country code

EMEA

• Daily

• Via EDI

• Fields:

Customer name

Customer address (bill to)

Customer Address (ship to)

Customer email address

Product

P/N

Qty

Price (matching price list)

Promo Code (Symc. ID which drives correct price for promotions)

Country code

Asia Pac

• Daily

• Via EDI

• Fields:

Customer name

Customer address (bill to)

Customer Address (ship to)

Customer email address

Product

P/N

Qty

Price (matching price list)

Country code

2. Product Returns Reporting Requirements

Americas (including LAM)

• Daily via EDI

• Fields:

Customer Name

Customer Address (bill to)

Customer email address

Product description

P/N

Qty

Price

Country code

Promo code/campaign ID

EMEA

• Daily via EDI

• Fields:

Customer Name

Customer Address (bill to)

Customer email address

Product description

P/N

Qty

Price

Country code

Promo code/campaign ID

Asia Pac

• Daily via EDI

• Fields:

Customer Name

Customer Address (bill to)

Customer email address

Product description

P/N

Qty

Price

Country code

Promo code/campaign ID

3. Wire Transfer Information

Americas (including LAM)

[*]

EMEA

[*]

Asia Pac

[*]

4. Accounts Receivable

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

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Americas (including LAM)

Symantec Corporation

International Way, Springfield, Oregon 97477

Attn: Credit and Collections Supervisor

EMEA

Symantec Limited

Schipholweg 103

2316 XC Leiden

Netherlands

Attn: Credit and Collections Supervisor

Asia Pac

Symantec Singapore

3 Phillip Street

#19-00

Commerce Point

Singapore 048693

Attn: Credit and Collections Supervisor

5. Symantec Order Services:

     Symantec Corporation

International Way, Springfield, Oregon 97477

     Attention: Order Services

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

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EXHIBIT L
Digital River MarketForce Programs

Placement of Advertising with Providers, aka, Paid Search

1. General. Digital River has entered into agreements with the Providers, pursuant to which Digital River will purchase the Paid Search Services. Digital River will use the Paid Search Services to promote the distribution of Consumer Symantec Products, in return for which Symantec will pay Digital River the Management Fee, as defined below in Section “3,” “Payments.” Symantec acknowledges and agrees that the Providers are authorized to make use of any and all materials provided by Symantec for such purposes, or by Digital River at Symantec’s written request, in connection with the Paid Search Services. Symantec will have reasonable operational control of the Paid Search Services, and Digital River will provide such services to Symantec at Symantec’s direction.

2. Paid Search Campaigns. “Paid Search Campaign,” or “Campaign,” means a discrete marketing effort focused on a specific market segment with the goal of increasing sales of Consumer Symantec Products from that segment. The following parameters will apply to each Campaign on a per Campaign basis (each individually a “Campaign Parameter” and collectively the “Campaign Parameters”). Symantec must provide its written approval, if applicable, of a Campaign Parameter for each separate Campaign prior to the commencement of that Campaign. For the avoidance of doubt, the approval of a Campaign Parameter for one Campaign does not translate to approval for that Campaign Parameter for any subsequent Campaigns. The Campaign Parameters are as follows:

a.	Keyword Bid Pricing: Digital River may make changes to keyword bid pricing without Symantec’s prior approval.
b.	Landing Pages: Digital River will create, and Symantec will pre-approve in writing, several landing pages. Digital River will be free to select from among the pre-approved landing pages in their sole discretion.
c.	Keywords: Symantec will pre-approve, in writing, a list of keywords per campaign, and Digital River will be free to select from among that list, in their sole discretion.
d.	Search Engines: Symantec will pre-approve, in writing, a list of search engines, and Digital River will be free to select from among that list in their sole discretion.
e.	Advertising Copy: Symantec will pre-approve, in writing, several different sets of advertising copy, and Digital River will be free to select from among those sets in their sole discretion.
f.	Landing Page URLs: Symantec has registered all necessary URLs for the landing pages associated with the Paid Search Services, and Digital River may select which specific URL to utilize.
g.	Paid Search Campaign Commencement and Completion Dates: Symantec and Digital River will mutually agree, in writing, on a Campaign calendar for the next calendar month, which calendar will include the commencement and completion dates for each Campaign scheduled for that month.

To clarify: other that as expressly set forth above, Symantec must approve, in writing, any and all customer-facing efforts or materials of any kind prior to their implementation.

3. Payments. As payment for the Paid Search Services, Symantec shall pay Digital River a service fee in an amount equal to [*] of the product sales of Symantec Products — and not for any purchases of third party product sold together with the Symantec Product as a bundle — through the Storefront, which purchases are directly traceable to End Users who click through to the Storefront as a direct result of the Paid Search Services, and not as a result of any other web site or method (the “Paid Search Service Fee”). In order to receive the Paid Search Service Fee, Digital River must track and report to Symantec the product sales

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

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resulting from the Paid Search Services, in a manner and format reasonably acceptable to Symantec, as a part of the Paid Search Reports. Symantec’s payment of the Management Fee to Digital River will not affect the [*] for Digital River pursuant to the Agreement. Symantec’s paying of the Management Fee to Digital River will be according to Symantec and Digital River’s current accounting process. For the avoidance of doubt, other than the Management Fee, and [*] discussed in the Agreement, Symantec will [*] as a result of its use of the Paid Search Services.

4.	Territory. Digital River may provide the Paid Search Services in the Territory.
5.	Reporting. Digital River will make reports regarding the Paid Search Services available to Symantec on a weekly and monthly basis (the “Paid Search Reports”). The Paid Search Reports will contain: (i) costs; (ii) sales revenue; (iii) return on investment; and (iv) percentage of the global spend. The Paid Search Reports will be broken down by the following regions: (i) North America, which will be further broken down into the United States and Canada; (ii) EMEA, which will be further broken down into the UK, France, Germany, Italy, the Netherlands, and Switzerland; (iii) Other EMEA; APAC; (iv) Japan; and (v) Latin America.
6.	Termination. Either party may, by providing the other party with prior thirty (30) days written notice of termination, terminate the Paid Search Services. Any such termination shall not affect the parties’ rights and obligations with respect to the Paid Search Services used prior to such termination.

Free Trial with Automatic Billing Marketing Program.

1.	DR shall provide to certain End Users of Symantec’s Storefront the ability to try Symantec Products and automatically bill End Users who decide to keep the Symantec Product. Symantec acknowledges that DR requires that End Users requesting Free Trial with Automatic Billing present a valid credit card in good standing at the time of the Free Trial request. Symantec further acknowledges that DR may initiate a credit card authorization at the time of the free trial request to verify that the End User’s credit card is valid and in good standing at the time of the free trial request.
2.	DR shall provide End Users with the ability to cancel their free trial. DR will only allow two thousand downloads as a part of the initial test of the free trail with automatic billing marketing program, and will suspend the download within twenty-four (24) hours of reaching two thousand downloads. DR may only continue allowing downloads beyond the initial two thousand if Symantec provides written authorization, from a Symantec Vice President, to do so.
3.	At the end of each free trial period, DR shall settle the total price on the credit card of each End User who did not cancel their free trial.
4.	Symantec agrees that returns and refund requests will be granted to End Users up to thirty days after settling the free trial purchase.
5.	Symantec acknowledges that a live executable file (not trial version) will be delivered to End User at the time of the free trial request. End Users who cancel their free trial will be required to execute an Electronic Letter of Destruction similar to the current practice for returns and refunds (the “ELOD Process”). DR cannot process such cancellations unless and until the affected End User has completed the ELOD Process.

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

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6.

Either Party shall have the right to discontinue offering the Free Trial with Automatic Billing program at any time.

7.

For each Symantec Product in a transaction for which Free Trial with Automatic Billing has been settled on a credit card, DR will be entitled to an additional payment equal to [*] of the product sales of each such Symantec Product (the “Free Trial Amount”, payable monthly. In addition, the Free Trial Amount will be reconciled along with, and DR will report with the same frequency and timing as under Digital River and Symantec’s current accounting process.

Blue Hornet Services

Digital River will, either directly or through its subsidiary Blue Hornet, Inc., (“Blue Hornet”) provide the services listed on Attachment 1 (the “Blue Hornet Services”). The Blue Hornet Services will be considered Digital River Information, as defined in the Agreement. Digital River hereby authorizes Symantec to use the Blue Hornet Services in a manner consistent with the purposes of the Agreement, which may include, if applicable, the use of the Blue Hornet Services by Symantec subcontractors or independent contractors provided such third parties use the Blue Hornet Services solely on Symantec’s behalf and solely in accordance with the purposes of the Agreement.

Reporting regarding Symantec’s use of the Blue Hornet Services will be available for Symantec to view via the DRCC (“BH Reporting”). BH Reporting will: (i) be available on a 24x7x365 basis (subject to the Up Time requirements in Exhibit F); (ii) contain all relevant information regarding the Blue Hornet Services; (iii) provide authenticated access to authorized Symantec personnel on a worldwide basis; (iv) contain a user interface similar that found in the DRCC; and (v) be provided by Digital River to Symantec, [*], for the Term of the Agreement.

As compensation for Digital River’s provision of the Blue Hornet Services, Symantec will pay to Digital River [*] of the Tracked Sales per month (the “Blue Hornet Service Fee”). “Tracked Sales” means product sales, less returns, that result directly and solely from Blue Hornet Services; provided that, in order to receive the Blue Hornet Service Fee, Digital River must track and report to Symantec the product sales resulting from the Blue Hornet Services in a manner and format reasonably acceptable to Symantec. The Blue Hornet Service Fee will be reconciled with the same frequency and timing as under Symantec and Digital River’s current accounting process. For the avoidance of doubt, Symantec will not pay Digital River any other amounts for the Blue Hornet Services, however, Digital River will also be entitled to its [*] under the Partner Efficiency Model for each sale.

Fireclick Technology

The technologies and platforms used by Digital River to perform its obligations under this Agreement, including but not limited to the Digital River Core Technology, EE System, The Digital River Application, the Pacific (e-commerce) platform, and the Atlantic (e-Commerce) Platform, may include, as necessary, in all respects, those technologies, methodologies, development or other tools, platforms or other intellectual property, written or otherwise, obtained by Digital River through its acquisition of Fireclick, Inc., (the “Fireclick Technology”) and the use of the Fireclick Technology by Symantec will be governed by this Agreement. The Fireclick Technology will be considered Digital River Information, as defined in the Agreement. Digital River hereby authorizes Symantec to use the Fireclick Technology in a manner consistent

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

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with the purposes of the Agreement. The Fireclick Technology includes the Fireclick warehouse module hosted application (the “Warehouse Module”). As part of its use of the Warehouse Module, Symantec is allowed to have unlimited users, unlimited phone and email support, and unlimited training via online webinars, [*].

Reporting regarding Symantec’s use of the Fireclick Technology will be available for Symantec to view via the DRCC. Symantec may use the Fireclick Technology not only on the Storefront, but also, in Symantec’s sole discretion, on the Symantec Renewal Center, and all Symantec corporate web sites, including both Metro Symantec.com sites, as well as non-Metro Symantec.com sites.

In the event of a Transfer of the Digital River Fireclick subsidiary, which means the business operations and Fireclick Technology acquired by Digital River through its acquisition of Fireclick, Inc. (the “Fireclick Sub”), to a third party, Digital River will use commercially reasonable efforts to give Symantec sixty (60) days written notice of the entry of a letter of intent or equivalent document referencing an intent to make such a Transfer. Notwithstanding the foregoing, Digital River will not be obligated to provide Symantec with more notice that it can provide given the restrictions inherent in such a Transfer, including, but not limited to, confidentiality obligations and the adherence to applicable laws. “Transfer” means a transfer of Control to a third party, with “Control” meaning an ownership interest of fifty percent (50%) or more. Spinning off the Fireclick Sub to create a standalone entity is not considered a Transfer. If Digital River Transfers the Fireclick Sub, neither Digital River nor the entity acquiring the Fireclick Sub will be obligated to continue providing Symantec access to the Fireclick Technology.

If Symantec’s use of the Fireclick Technology is terminated for any reason, Digital River will: (a) within thirty days, at Symantec’s direction, remove any tagging or coding on any Symantec Site included by Digital River in connection with the Fireclick Technology; and (b) within thirty days, at Symantec’s direction, remove Symantec from any features or databases relating to the Fireclick Technology.

DR oneNetwork Services.

1. Definitions for purposes of the DR oneNetwork Services:

oneNetwork Affiliate: third party online merchant who has agreed, as evidenced by its acceptance of the DR oneNetwork Affiliate Terms and its acceptance of the Symantec Program Terms to participate in a Symantec Affiliate Program, which is available via the DR oneNetwork. Affiliates are recruited for the purpose of driving traffic the Storefront. Symantec must provide written approval for DR to drive traffic to any site other than the Storefront.

oneNetwork Affiliate Payments: financial compensation for each Referral Sale paid by DR on Symantec’s behalf to a oneNetwork Affiliate pursuant to the DR oneNetwork Affiliate Terms and the Symantec Program Terms. Notwithstanding the foregoing, DR shall be responsible for paying [*] in oneNetwork Affiliate payments. As a result, DR shall be responsible for the first [*] in oneNetwork Affiliate Payments each calendar quarter, and Symantec will not reimburse, or otherwise pay, DR for any such payments. Once DR has satisfied its [*] oneNetwork Affiliate Payments requirement, its responsibility for such payments will cease, and Symantec will then be responsible reimbursing DR for oneNetwork Affliate Payments.

Referral Customer: customer who used a Referral Link to purchase the Symantec Product on the Storefront.

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

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DR oneNetwork: DR’s network of relationships with online third party merchants, through which DR facilitates online marketing programs.

DR oneNetwork Affiliate Terms: the terms and conditions that govern the relationship between DR and its affiliate(s).

DR oneNetwork Services: all services provided by DR to Symantec under the DR oneNetwork program, as discussed in these DR oneNetwork Terms, including, but not limited to, access to the DR oneNetwork, and any related services, pursuant to which DR, as a service provider to Symantec, facilitates online marketing programs. For the avoidance of doubt, DR oneNetwork Services do not include any services provided to Symantec as part of the Global Managed Affiliate Program DR runs for Symantec under a separate amendment.

Referral Link: unique Internet URL, issued to a oneNetwork Affiliate by DR on Symantec’s behalf, which is to be used to refer potential customers to the Storefront.

Referral Sale: a sale of Symantec Product or third party products bundled with a Symantec Product on the Storefront to a purchaser who entered the Storefront and made the purchase via a Referral Link.

Symantec oneNetwork Affiliate Program: Through DR and the DR oneNetwork, Symantec may conduct a oneNetwork Affiliate marketing program, which will likely involve, among other things: (a) posting, distributing, or making available to oneNetwork Affiliates proposals to enter into the Symantec Program Terms; (b) entering into the Symantec Program Terms with certain third party online merchants; and (c) pursuant to which Symantec Program Terms, oneNetwork Affiliates: (1) agree to display a Referral Link; and (2) receive oneNetwork Affiliate Payments.

Symantec Info-Pack: The business terms and conditions regarding the Symantec oneNetwork Affiliate Program, viewed by potential affiliates via the DR oneNetwork affiliate interface, and which must be accepted by a potential affiliate in order to participate in the Symantec oneNetwork Affiliate Program. Either Symantec or DR will create, but Symantec will have final approval of, the Symantec Info-Pack. DR may suggest a template or other presentation format for the Symantec Info-Pack in order to maintain a uniform method of presentation. The Symantec Info-Pack will include, at least:

a.	the criteria and methods for calculating oneNetwork Affiliate Payments;
b.	whether and to what extent Symantec will provide marketing materials or any restrictions on how such materials may be used by oneNetwork Affiliate ;
c.	should Symantec so choose, a description of any Symantec Products which are the focus of the Symantec oneNetwork Affiliate Program
d.	restrictions, if any, on placement of Referral Links on particular media or delivery methods; and
e.	any special qualifications required of a potential affiliate to become approved by Symantec for participation in the Symantec oneNetwork Affiliate Program.

Symantec Program Terms: the terms and conditions approved by Symantec, and accepted by a third party online merchant via the DR oneNetwork Web site, which govern that merchant’s participation in a Symantec oneNetwork Affiliate Program. For the avoidance of doubt, Symantec Program Terms may include brand protection, keyword exclusion, and limits on oneNetwork Affiliate ‘ use of e-mail campaigns, but may not impact DR oneNetwork operational mechanics (notice, payment, etc.) of the DR oneNetwork without the advance written approval of DR, which will not be unreasonably withheld.

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

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2. Terms

a.	Control of Symantec oneNetwork Affiliate Program. Either Symantec or DR will create, but Symantec will have final approval of, the Symantec Program Terms. These DR oneNetwork Terms solely govern Symantec’s use of the DR oneNetwork Services, and do not contain any authorization for DR to manage any other affiliate marketing program. DR’s management of other Symantec Affiliate Programs is covered elsewhere in this Agreement. Symantec may, subject to the Symantec Program Terms and DR oneNetwork Affiliate Terms, direct DR to stop the DR oneNetwork Services as a whole, or to a particular Symantec oneNetwork Affiliate Program, at any time upon written notice to DR.
b.	Referral Links and Referral Sales. DR will make available one or more Referral Links to each oneNetwork Affiliate who has agreed to the Symantec Program Terms. Each Referral Link is designed to identify an individual oneNetwork Affiliate as the particular participant in the Symantec oneNetwork Affiliate Program that referred a specific Referral Customer to the Storefront. Referral Customer’s use of a oneNetwork Affiliate’s assigned Referral Link to purchase Symantec Product on the Storefront will be deemed a “Referral Sale” for purposes of these DR oneNetwork Terms.
c.	Use of Referral Links. Although DR makes available Referral Links on Symantec’s behalf, Symantec ultimately controls the use of, and access to, the Referral Links. Symantec reserves the right at any time to request that DR impose additional limitations on the use or posting of the Referral Link, or that DR suspend use of a particular oneNetwork Affiliate’s Referral Link, or particular group of Referral Links. DR will use, subject to the Symantec Program Terms and DR oneNetwork Affiliate Terms, commercially reasonable efforts to timely honor all such requests.
d.	Calculation of oneNetwork Affiliate Payments.

i. Payment Definitions.

a. Chargebacks. An amount of money which has been:

i.	deemed to have been refunded by or returned by Symantec or DR to a Referral Customer based on a Referral Sale which has been voided, retracted, subject to returns, been reversed due to fraud, or otherwise rescinded for any reason under the terms of these DR oneNetwork Terms or the terms of sale on the Storefront; or
ii.	retrieved from, reserved against and/or or charged against DR or DR’s credit card/debit card merchant accounts under the terms of any applicable credit card merchant account agreements; or
iii.	retrieved from, reserved against and/or or charged against DR, DR’s bank accounts or DR’s credit card merchant accounts because of government actions including but not limited to embargo, court order, levy, security interest or other form of lien, reclamation, escheat or civil forfeiture.

b. Related Chargeback. A Chargeback is a Related Chargeback to the extent DR’s records indicate that such Chargebacks arose out of Referral Sales whether the original Referral Sale occurred during the same period or a prior period.

c. Gross Receipts. For any particular period of time, the gross sum of money actually received from Referral Customers during the relevant period for all Referral Sales under the Symantec oneNetwork Affiliate Program less the amount collected by DR for any shipping, sales or use taxes, valued added or other transaction-based taxes, import or export duties or import/export fees arising out of such Referral Sales.

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

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d. Net Receipts. For any particular period of time, the net result of the following calculation:

i.	The Gross Receipts accruing during such period;
	less
ii.	The gross sum of all Related Chargebacks, which accrued during such period.

ii.	Calculation. oneNetwork Affiliate Payments will be calculated by multiplying the applicable oneNetwork Affiliate commission by the appropriate oneNetwork Affiliate Net Receipts accruing during the relevant payment period for that oneNetwork Affiliate. Subject to the DR oneNetwork Affiliate Terms, Symantec can alter this calculation via either the Symantec Program Terms or the Symantec Info-Pack.
iii.	oneNetwork Affiliate Payments for Referral Sales of Third Party Products. oneNetwork Affiliate Payments will be made by DR on Symantec’s behalf for all products that are the subject of a Referral Sale, regardless of whether such products are Symantec Products or third party products (excluding EDS sold by DR) bundled with Symantec Products on the Storefront.
iv.	Affiliate Payments & Chargebacks. DR will make reasonable efforts to match any Related Chargebacks to any related Referral Sale and to account for such Chargebacks as described above. Symantec acknowledges and agrees that in some cases DR may not be able to match certain Chargebacks to particular Referral Sales, and that this may cause certain Affiliate Net Receipt amounts to be calculated by DR without accounting for the Chargebacks. Symantec also agrees that DR’s only obligations are to make the reasonable efforts to match the Chargebacks as may occur, and that DR also has no obligation to attempt to collect any debit balances against Affiliates whose Related Chargebacks have put their Affiliate Net Receipt amounts into negative balances.

e. Trademark License. DR is authorized by Symantec to use the trademark “Symantec,” the Symantec logos for Symantec Products and the designations “Symantec Order Desk” and “Storefront” in connection with:

i. the promotion of the DR oneNetwork Affiliate Program in general or regarding any Symantec Info-Pak, in the manner specified by Symantec;

ii. the distribution of Symantec Info-Packs to oneNetwork Affiliate who may wish to participate in the Symantec oneNetwork Affiliate Program; and

iii. the distribution of any Symantec-created advertisements to oneNetwork Affiliate participating in the Symantec oneNetwork Affiliate Program in a manner specified by Symantec.

iv. Further, the above licenses shall be sublicenseable from DR to any oneNetwork Affiliate to the extent reasonably necessary for such oneNetwork Affiliate to perform its duties under the Symantec oneNetwork Affiliate Program.

3. DR Services.

a. Relationships. Symantec oneNetwork Affiliate Programs are offered by DR on Symantec’s behalf. The DR oneNetwork Affiliate Terms and the Symantec Program Terms, along with the Symantec Info-Pack, combine to form the terms that govern a oneNetwork Affiliate’s participation in the Symantec oneNetwork Affiliate Program. DR provides the value added service to Symantec of administering the Symantec oneNetwork Affiliate Program, which includes remitting oneNetwork Affiliate Payments.

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

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DR is not responsible for Symantec’s behavior and/or the content that Symantec makes available through the DR oneNetwork, or the performance of or any damages caused by the products or services sold by Symantec.

b. oneNetwork Affiliate Payment Services. Subject to these DR oneNetwork Terms, DR shall determine, and deliver to oneNetwork Affiliate, the actual oneNetwork Affiliate Payments that should be paid to a oneNetwork Affiliate by Symantec under a given Symantec oneNetwork Affiliate Program. The amounts to be paid by Symantec to a oneNetwork Affiliate will be set forth in the Symantec Info-Pak. Symantec will communicate to DR the relevant information in the Symantec Program Terms and/or Symantec Info-Pak regarding oneNetwork Affiliate Payments to be remitted by DR to oneNetwork Affiliates. DR’s delivery of oneNetwork Affiliate Payments to oneNetwork Affiliates will governed by the DR oneNetwork Affiliate Terms, the Symantec Program Terms and the Symantec Info-Pack. DR may withhold oneNetwork Affiliate Payments owed to a oneNetwork Affiliate, if such oneNetwork Affiliate has failed to satisfy the then-current minimum payment threshold, as agreed between oneNetwork Affiliate and DR.

c. Reporting. DR will make reports regarding the DR oneNetwork Services available to Symantec on a weekly and monthly basis (the “Symantec oneNetwork Affiliate Program Reports”). The Symantec oneNetwork Affiliate Program Reports will contain the: (i) number of sales per oneNetwork Affiliate, broken down by product; (ii) sales revenue to Symantec generated by each oneNetwork Affiliate; (iii) associated pending oneNetwork Affiliate Payments due to oneNetwork Affiliates; and (iv) total oneNetwork Affiliate Payments paid by DR on Symantec’s behalf.

d. Remote Control Functionality/Access. DR will provide Symantec additional functionality within the DR’s commerce engine to be used by Symantec to manage its oneNetwork Affiliate relationships within the Symantec oneNetwork Affiliate Program, including the ability to upload marketing materials, to control the status of particular oneNetwork Affiliates, and to receive various reports concerning Symantec’s use of the DR oneNetwork Services, including, but not limited to, the Symantec oneNetwork Affiliate Program Reports.

e. Payment for DR oneNetwork Services. As compensation for DR’s provision of the DR oneNetwork Services, Symantec will pay to DR [*] of Gross Receipts for all Referral Sales, less: (i) returns; and (ii) the amount collected by DR for any shipping, sales or use taxes, valued added or other transaction-based taxes, import or export duties or fees arising out of such Referral Sales (the “DR Network oneNetwork Affiliate Amount”). The DR Network oneNetwork Affiliate Amount will be reconciled with the same frequency and timing as under Symantec and Digital River’s current accounting process. Notwithstanding the foregoing, in order to receive the DR Network oneNetwork Affiliate Amount, DR must track and report the Referral Sales as stated above.

f. Credit Risk from Chargebacks. Until such time as Symantec takes over Customer Service within a given region, DR assumes [*] for that region under the Agreement, and will therefore absorb [*] resulting from any Chargebacks.

i. Accordingly, Symantec acknowledges and agrees that DR will still calculate any Affiliate Payments as though the Chargeback had occurred (in other words, the Affiliate’s receipts will be reduced in some manner due to the Chargeback).

ii. Because DR assumes [*] under the Agreement, Symantec receives the amounts paid for a Referral Sale regardless of the existence of a Chargeback. Similarly, Symantec will owe oneNetwork

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

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Affiliate Payments for all Referral Sales regardless of the existence of a Chargeback. However, oneNetwork Affiliates will not receive oneNetwork Affiliate Payments for Referral Sales with a Chargeback; in order to offset its assumption of the [*], DR will retain oneNetwork Affiliate Payments for a Referral Sales accompanied by Chargeback for its own benefit.

f. oneNetwork Affiliate Information. All oneNetwork Affiliates contact information (names, email addresses, mailing addresses or other personally identifiable contact information) (but not including contact information of end consumers) shall be deemed to be DR’s Confidential Information. For the avoidance of doubt, Symantec may use this Confidential Information to perform its obligations under this Agreement. All Referral Customer information of any kind is Symantec Confidential Information.

g. Exclusivity. While DR will not prohibit its affiliates from belonging to more than one affiliate network, or Symantec from using those affiliates in another network, Symantec is prohibited: (a) from soliciting oneNetwork Affiliate to join another affiliate network, or (b) from forming a direct affiliate relationship with Symantec. These prohibitions shall apply during the term of this Section 3 and for six (6) months after the termination of this Section 3. Notwithstanding the foregoing, if Symantec terminates the Section 3 for cause, this restriction shall not apply.

4. Term and Termination.

a. Term. The initial term of the DR Network Services will be four (4) months from the Effective Date (the “Initial Term”). After the Initial Term, the DR Network Services will continue automatically for additional terms equal to the Initial Term (each a “Renewal Term”) unless either party notifies the other in writing at least thirty (30) days prior to the end of the Initial Term or Renewal Term, as applicable, that it has elected not to renew the DR Network Services. Upon such written notice of non-renewal, the DR Network Services will terminate at the end of the Initial Term or Renewal Term, as applicable.

i. In the event of any third party claims involving violations of applicable law or regulation are asserted against DR or Symantec, in connection with the Symantec Affiliate Program or the Symantec Products, or in the event of a violation of the DR oneNetwork Affiliate Terms or the Symantec Program Terms or Info-Pack, DR shall have the right in its sole discretion to immediately terminate the affected Symantec Affiliate Program, to halt the distribution of any affected Symantec marketing materials, and/or to notify any oneNetwork Affiliate of any such actions as DR deems reasonably necessary to mitigate further damages to itself or any Affiliate.

ii. Upon thirty days written notice, DR may terminate its provision of the DR oneNetwork Services to Symantec.

b. oneNetwork Affiliate Payment Suspension. DR may, upon written approval from the Symantec Consumer Online Sales Manager, suspend oneNetwork Affiliate Payments to a oneNetwork Affiliate due to an investigation of potential fraud, misrepresentation, or violation of law.

c. Effect of Termination. Upon termination of these DR oneNetwork Terms, or the DR Network Services, oneNetwork Affiliate will no longer be credited for Referral Sales that occur on or after the termination date.

d. Indemnification. Subject to the notice and cooperation and related process provisions of the indemnification provision in Section I of the Agreement, which shall apply to both subsections below, each party will indemnify the other for:

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

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i. By Symantec. Symantec will defend and indemnify DR, for any third party claims for damages, which arise out of, through no fault of DR: (a) a oneNetwork Affiliate’s use of content provided by Symantec for use in the Symantec oneNetwork Affiliate Program; (b) the infringement of the Symantec Storefront or Symantec Product of any applicable intellectual property right; (c) any misrepresentation by Symantec in the performance of its obligations to DR regarding the DR oneNetwork Services; or (d) any third party claims arising out of the Symantec Program Terms or the Symantec Info-Pack.

ii. By Digital River. DR will defend and indemnify Symantec, for any third party claims for damages, which arise out of, through no fault of Symantec: (a) DR’s failure to comply with its payment obligations as stated herein; (b) DR’s failure to comply with Symantec’s direction, subject to the terms and conditions herein, regarding the Symantec Affiliate Program; or (c) any misrepresentation by DR in the performance of the DR oneNetwork Services.

Global Managed Affiliates

Definitions.

“Affiliates” means, for purposes of this exhibit only, all NP Affiliates and all oneNetwork Affiliates.

“Affiliate Network Partner,” or “ANPs,” means the entities that Symantec contracts with directly that create, manage, and operate its own network of Affiliates. ANPs may include Trade Doubler, Commission Junction, LinkShare (depending on Symantec’s execution of separate agreements with each of the foregoing), Digital River, and such other partners as Symantec shall engage from time to time.

“NP Affiliate” means third party online merchant that has agreed, as evidenced by its acceptance of the required terms, and who is accepted, in writing, by the Affiliate Network Partner, Digital River, or Symantec, as applicable, to participate in a Symantec NP Affiliate Program.

“Symantec Affiliate Program” means the Symantec NP Affiliate Program and the Symantec oneNetwork Affiliate Program.

“Symantec NP Affiliate Program” means Symantec marketing program conducted (either by Symantec or by DR) through an Affiliate Network Partner other than Digital River, which will likely involve, among other things, NP Affiliates posting links that drive traffic to the Storefront, and NP Affiliates receiving commissions based on sales resulting from such links.

“Symantec Program Services” means the management of all Affiliate Network Partners and Affiliates, pursuant to the applicable terms and conditions in place for each such relationship, by Digital River for Symantec.

I. Services Offered

a. Program Design.

i. Digital River will provide an optimized global affiliate marketing program using its pool of domestic and international affiliate network providers (the “Program Design”). Digital River will not share any details of the Program Design with any Symantec competitors. Certain elements of the Program Design are the intellectual property of Symantec, and therefore not to be shared with Symantec competitors. Such elements include, but are not limited to, any concepts suggested by

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

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Symantec, or by the Symantec Marketing Manager (as defined below) for incorporation into the Program Design. Notwithstanding the foregoing, nothing in the preceding sentence is deemed to provide Symantec any rights to: (a) the Digital River Core Technology; or (b) Program designs, concepts or strategies that were in use by DR with other clients prior to the introduction of the concept into the Symantec Program Services.

ii. Digital River will recommend positioning to Symantec for each Symantec Product to be included in the Symantec Program, which cannot be implemented without Symantec’s prior written approval.

b.	Symantec Affiliate Program Description. Digital River will maintain at each Affiliate Network Partner a program description, as approved in writing by Symantec, which introduces potential affiliates to: Symantec, Symantec’s products, and the benefits of joining the Symantec Affiliate Program (and therefore marketing Symantec’s products). Symantec shall have final approval and complete control over the Screening Criteria, the banner and text link messaging, the location where the customer lands on the Storefront, as well as the ability to reject, at any time, applications to the Symantec Affiliate Program, or Affiliates from the Symantec Affiliate Program. Subject to any limits in the applicable Symantec-ANP agreement, Symantec will also be able to approve a previously rejected potential affiliate should it so desire. Digital River will: (i) provide day-to-day operational management of the Symantec Program, which includes the monitoring Affiliate Network Partners and Affiliate Partners for compliance and enforcement with the terms of the Symantec Program; (ii) deliver performance metrics; (iii) track the sales from the traffic sent to the Storefront and report the same on a weekly basis to Symantec; and (iv) make all authorized payments to the Affiliate Network Partners. The Symantec Program will be run and managed by a single marketing manager, who has Symantec’s Program, and related Symantec MarketForce Programs, as his/her sole responsibility (the “Symantec Marketing Manager”). Digital River will also have at least one web designer, in addition to the Symantec Marketing Manager, who will be exclusively dedicated to the Symantec Program (the Symantec Marketing Manager and the web designer are collectively the “Dedicated Personnel”). The Dedicated Personnel will not be members of the Dedicated Team. The Dedicated Team will not divert its attention from any other Symantec project(s) to handle the Symantec Program Services. Notwithstanding the foregoing, if the volume of work generated by the Symantec Program Services is insufficient to reasonably occupy the web designer member of the Dedicated Personnel on a full time basis, then DR may, upon written notice to the Consumer Online Sales Manager, use this web designer on other Symantec MarketForce Programs until such time as the volume of work generated by the Symantec Program Services is again sufficient to reasonably occupy the web designer on a full time basis.
c.	Creative. Digital River will upload all banners, text links and other such links used by Affiliates for marketing Symantec’s Products, subject to review and prior written approval by Symantec.
d.	Landing Pages/Strategies. Digital River will test and optimize landing pages and strategies for each Symantec Product included in the Symantec Affiliate Program using DR’s proprietary optimization engine, the results of which will be reported to Symantec on a weekly basis, or as otherwise agreed between the Consumer Online Sales Manager and DR.
e.	Affiliate Participation Guidelines. All entities wishing to participate in a Symantec Affiliate Program must first apply, and be accepted by the appropriate Affiliate Network Partner or Symantec, as applicable, into the Symantec Affiliate Program. Symantec will, at all times, maintain sole control over the content of the applications and acceptance of potential affiliates and will create and provide to Digital River the Screening Criteria (defined below) under which it will allow affiliate participation. Digital River will review affiliate applications, and accept or reject such applications on Symantec’s behalf based upon the potential affiliate’s performance against the Screening Criteria. Digital River

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

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will then provide Symantec with a written list of Affiliates, as updated periodically by Digital River. Digital River will then maintain such list and guidelines for Affiliate participation in the Symantec Affiliate Program, as updated periodically by Symantec. Notwithstanding the foregoing, as part of Symantec’s sole control over the Symantec Affiliate Program, Symantec may choose to reject an Affiliate at any time, in its sole discretion.

f. Affiliate Commissions.

i.

Digital River will optimize affiliate commission rates with the target being greatest overall net dollars to Symantec. As the Symantec Affiliate Program matures, commission rates may be optimized by product, based on experience. All such changes are subject to Symantec’s prior written approval.

ii.

When the Symantec Affiliate Program begins, the commission shall be [*]. Digital River, with advance written approval from Symantec, will also recommend and optimize Affiliate incentives in the form of higher or lower commission rates for meeting sales thresholds; and Digital River will attempt to keep the range of such commissions at or around [*] to [*]. At no time will an Affiliate commission of greater than [*] be implemented without further amendment to the Agreement.

g. Affiliate Recruitment. Digital River will:

i.	Create and deploy recruitment emails.
ii.	Create and maintain affiliate network keywords that potential affiliates may use to find merchant programs within the network.
iii.	Manually approve each potential affiliate across all ANP networks joining the Symantec Affiliate Program, based on the Screening Criteria.
iv.	Create a potential affiliate onsite sign up page with information and links to be deployed on Symantecstore.com. DR will advise Symantec on the creation and placement of links from Symantec.com to the potential affiliate sign up page.
v.	Register the Symantec Affiliate Program with several affiliate directory sites, provided Symantec has given its prior written consent.

h. Affiliate Management, Retention and Termination. DR will:

i.	Respond to all potential affiliate requests and comments following the Screening Criteria, as defined below.
ii.	Develop and refine automated means to monitor Affiliates post acceptance into the Symantec Affiliate Program for ongoing compliance with the applicable criteria/guidelines, with manual review based on factual developments, provided, however, that regardless of the status of Digital River’s automation of the aforementioned monitoring process, Digital River remains responsible for ongoing monitoring of the active Affiliates and Affiliate Network Partners sites on no less than a quarterly basis, to ensure compliance with the program criteria/guidelines. For the avoidance of doubt, any automated process developed in this regard shall be deemed Digital River Core Technology, and shall not be Symantec’s intellectual property.
iii.	Use commercially reasonable efforts to identify and immediately terminate fraudulent Affiliates and Affiliate Network Partners who cease complying with the applicable guidelines/criteria, reporting the same to Symantec writing within forty eight (48) hours of termination. Digital River shall comply with the fraud prevention policy and termination requirements mandated by the Agreement
iv.	Create and deploy periodic affiliate newsletters highlighting new products, new releases, promotions, etc.
v.	Manage Affiliate transactions and/or charges
vi.	Review order transactions and decline orders, if necessary.

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

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vii.

Identify and manage fraudulent transactions consistent with its obligations under the Agreement. In addition, Digital River will use commercially reasonable efforts to report fraudulent or misleading content, of which it becomes aware, to Symantec. For the avoidance of doubt, DR shall not have an affirmative obligation to manually screen Affiliates in order to discover and report potentially fraudulent or misleading content to Symantec.

viii.

Digital River will identify returned orders and will, to the maximum extent possible under the applicable ANP agreement, delete these transactions from Affiliate commission payments. (Depending mostly on the timing of the return, certain Affiliate commissions related to returned items cannot be cancelled, but must be adjusted immediately thereafter.)

i.	Funding. Digital River will make all payments to Affiliate Network Providers and Affiliates, and (where applicable) maintain appropriate levels of funding for Affiliate commission payments at the Affiliate Network Providers.
j.	Account Set Up/Maintenance.

i.	To the extent permitted by Symantec’s contract with each Affiliate Network Provider, Digital River will set up and maintain all necessary accounts with Affiliate Network Providers in Symantec’s name.
ii.	Digital River will place the necessary tracking tags on Symantec confirmation pages hosted by Digital River.

k.	Reporting. Digital River will provide weekly reports summarizing gross sales, commissions paid, network provider transaction fees paid, additional fees paid, Net Sales, number of Affiliates which is then broken down by the number of active Affiliates and terminated Affiliates. Reporting and tracking shall include, but not be limited to, impressions, click—throughs, number of sales, and compensation earned (roll up views with historical data log). Digital River must provide the Affiliates with view reporting through their respective Affiliate Network Partner. Provided DR obtains reporting from other Affiliate Network Partners, if required, all reporting must run no later than a two (2) to three (3) hour time lag. Digital River must also provide Symantec online access to all information consolidated by Affiliate Network Partners.
l.	Interference with Symantec Business Prospects. Except as otherwise stated in this Exhibit, Digital River acknowledges that the purpose of the Symantec Affiliate Program is to establish affiliate marketing relationships with Affiliates and Affiliate Network Partners, as well as resulting Referral Customers, that Symantec would not otherwise reach through its other sales channels, which includes, but are not limited to, the various Symantec partner programs and the Storefront. Digital River shall comply with this purpose, and will not operate the Symantec Affiliate Program in any manner that would interfere with Symantec’s ability to engage in direct contractual relationships with certain entities or Referral Customers. Symantec shall establish a process by which it will evaluate potential affiliates and Affiliate Network Partners on the basis of size, as well as appropriateness of the potential Affiliate Partners and Affiliate Network Partners’ site content or products. Digital River acknowledges that the target group of Affiliate Network Partners and Affiliates will not include those that Symantec may wish to pursue a direct relationship and will be evaluated and classified by Symantec in relation to vertical market synergies and strategic value in Symantec’s sole discretion.
m.	Cookie Tracking Methodology. Digital River shall not allow any Affiliate Network Partner or Affiliate Partner to insert any type of a tracking method or tracking data on any of the links for the Symantec Program or on any pages of Symantec’s Storefront, which would allow a session to be permanent or otherwise allow an entity to : (i) take control of a browser in use by a potential Referral Customer; (ii)

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

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take control of any particular site session and cause it to continue beyond the duration desired by the end user; or (iii) capture any information captured within a session that may be associated with an individual customer. Notwithstanding the foregoing, Digital River may allow an Affiliate Network Partner or Affiliate Partner to capture clickstream data or any other data permitted to be captured/used by the Affiliate or Affiliate Network Partner under its agreement with Symantec.

n.

Spam/Adware/Scumware. Symantec must approve the language, and frequency, of email distributions to Affiliate Partners or Affiliate Partner prospects; provided that Symantec may provide Digital River with a database of pre-approved content, which Digital River may use without approval for such content. Except as otherwise provided for under the Agreement, under no circumstances will Digital River email end users, as compared to Affiliate Partners, directly. Digital River shall not violate the Symantec e-mail distribution policies currently required by the Agreement or any applicable anti-spam laws or regulations and will indemnify and hold Symantec harmless for any violations thereof to the same extent set forth in the underlying Agreement. Digital River shall also monitor, and to the extent they become aware of it, report any use of adware/scumware by Affiliates or ANPs, and refrain from using the same on the Storefront or as part of the Symantec Program.

o.

Screening Process.

i.

Symantec shall directly contract with its own Affiliate Network Partners. Digital River shall not be involved or participate in those discussions or matters and shall not interfere with the same.

ii.

Digital River will use the Screening Criteria to perform an initial screen of each potential affiliate, subject to update by Symantec from time to time at its sole discretion. All potential affiliate recruitment processes must be preapproved in writing by Symantec. Symantec will be involved in the screening and acceptance process for all potential affiliates. Symantec will provide Digital River with the screening criteria and guidelines (the “Screening Criteria”) to incorporate in an affiliate agreement that Digital River may share with the Affiliate Network Partners. Digital River will use the Screening Criteria to select Affiliates; provided that, notwithstanding anything to the contrary: (a) Symantec will have final control over the ongoing participation of each Affiliate in the Symantec Affiliate Program; and (b) Except as otherwise limited herein or as limited elsewhere in this Agreement, Symantec may, at any time, choose to engage a certain Affiliate in a direct contractual relationship, which would remove such an Affiliate from the Symantec Affiliate Program. Subject to any contractual limitations with the given Affiliate or ANP, Symantec shall have the right to refuse or to terminate any Affiliate relationship, or to take any action to restrict access to, or of availability of objectionable material, inaccurate listings, unlawful items or any items prohibited in the guidelines of the Affiliate agreement. Symantec may update and change the Screening Criteria and guidelines, as well as the terms for Affiliate agreements, without prior notice at any time.

p.	Affiliate Partner agreement terms/guidelines. Either Symantec or DR will create, but Symantec will have final approval of, all the contractual requirements a potential affiliate must accept in order to participate in the Symantec Affiliate Program.
q.	Contracting Process. Except as otherwise provided for in this Agreement, Symantec will determine the process by which potential affiliates will apply to the Symantec Affiliate Program and who are to be contracted with, subject to modifications as provided by Symantec from time to time.
r.	Sufficient Information to Perform. Symantec shall provide DR with sufficient information — related to DR’s obligations to perform the Symantec Program Services — regarding Symantec’s contractual obligations with each Affiliate Network Provider to permit DR to discharge its obligations, and

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

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Symantec specifically acknowledges that DR may rely to its detriment on the accuracy of any such information provided by Symantec.

II. Term.

The Symantec Program will terminate when the Agreement terminates, unless terminated earlier by Symantec, per the terms of the Agreement; provided however, either party may terminate this Symantec Program without cause upon thirty (30) days written notice to the other party.

III. Pricing/Fees

a.

Pass Through Fees. Only those network fees that Symantec has separately agreed to in a signed contract with the Affiliate Network Partner may be passed through to Symantec. The payment shall be made on a monthly basis. To the extent DR is making payments to Affiliates or Affiliate Network Partners on Symantec’s behalf, Symantec shall provide sufficient information for DR to make the correct payment to each Affiliate or Affiliate Network Partner, as applicable.

b.

Affiliate Management Amount. As payment for the Symantec Program Services provided by Digital River, Symantec will pay Digital River a value added service amount equal to [*] of the product sales of Symantec Products — and not for any purchases of third party product sold together with the Symantec Product as a bundle — through the Storefront, which purchases are directly traceable to End Users who click through to the Storefront as a direct result of the Symantec Program Services, and not as a result of any other web site or method (the “Affiliate Management Amount”). Digital River must track and report to Symantec the product sales resulting from the Symantec Program Services, in a manner and format reasonably acceptable to Symantec. For the avoidance of doubt, Symantec will not pay Digital River any other amounts for the Symantec Program Services; however, Digital River will also be entitled to its [*] for each sale.

IV. Authorization

Symantec may authorize Digital River to access and make operational management changes, with Symantec’s prior written approval, through Symantec’s accounts at all Affiliate Network Providers.

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

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Attachment 1 to Exhibit L

BlueHornet eMarketing Suite v3.0
Service Description

1. Term. Unless otherwise terminated earlier by Symantec pursuant to the Agreement, the term for the Blue Hornet Services will follow that defined in the Agreement between Digital River and Symantec.

2. The Blue Hornet Services. Symantec will have access to the features and functions as defined above thorough Digital River’s BlueHornet email Technology (or similar technology):

a.	Permission-Based Data Collection & Management
b.	Email Creation Tools
c.	Dynamic Content
d.	Viral Marketing Technology
e.	Smart List Builder & Management Tools
f.	Sub-Account Controls
g.	Event Triggered Messaging
h.	Campaign & Cross-Campaign Reporting
i.	QuickStart Program Services — Enterprise Service Level
j.	Campaign Management Services — Basic Level
k.	Delivery Management Services — Enterprise Level
l.	Delivery Optimization Analysis and Reporting Services
m.	Online Brand Tracking Report
n.	Viral Marketing and Online Loyalty Programs and Tools
o.	. Name Capture Optimization/List Management
p.	Campaign optimization

3. Creative Services. “Creative Services,” means complete development services, the creation of content, functionality, template design, and/or copywriting. Creative Services will also include any similar service that is provided by Digital River or Blue Hornet as a part of the Blue Hornet services to their other customers. Notwithstanding the foregoing, Symantec is responsible for providing Digital River or Blue Hornet all background marketing assets, such as box shots or marketing content, for campaigns created by Digital River or Blue Hornet.

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

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a.

Included in the Blue Hornet Service Fee: Creative Services for any online collateral or materials, which includes all collateral or materials to be used in electronic marketing efforts, or marketing efforts that are accessed by, or offered through, a computer, a computer network or the Internet.

b.

Not Included in the Blue Hornet Service Fee: Creative Services for any offline collateral or materials, that is, collateral or materials that cannot be offered electronically, or through a computer, a computer network, or the Internet. If a Creative Service is not included in the Blue Hornet Service Fee, then each such engagement and scope will be customized to meet specific client deliverables, goals and requirements. Pricing will be based on a time and materials basis at Symantec’s contracted per hour rate. Fixed price quotes are available.

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

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EXHIBIT M

Sample Symantec Store Site and/or Partnership Initiation or Modification Form

Instructions: The Symantec Business Development Representative submitting this Symantec Store Site and/or Partnership Form (the “Form” or also defined as the “SIF”), must complete Part I (other than the approval section), all of Part II, and Exhibit M-1 information, as well as attach required New Vendor Form and Specifications as Exhibit M-1. Then submit the completed Form to Symantec’s E-commerce Site Coordinator. The Symantec E-commerce Site Coordinator then signs off in Part I, indicating all necessary information has been provided and presents it to Digital River. Digital River completes the blanks in Part III and signs this Form. This SIF becomes part of the Agreement. The Symantec E-commerce Site Coordinator is responsible for tracking and delivering one (1) original, fully executed copy of this Form to Symantec Legal Department, to be stamped as accepted by the Legal Department, and filed as part of the Agreement. Any capitalized terms used herein and not otherwise defined in this SIF shall have the respective meanings set forth in the Second Amended and Restated Electronic Reseller Agreement by and between Symantec and Digital River, dated April 1, 2006, as amended to-date (the “Agreement”).

PART I: Partner Information, Symantec Business Development Representative’s Information and Symantec’s E-commerce Site Coordinator Approval.

1. Partner Information:

Partner’s Corporate Name:                                         

Partner’s Contact Persons Names:                                         

Headquarters’ Address:                                         

Phone:                                                   Fax:                                                   Email:                                         

2. Name of Symantec Business Development Representative owning the Partner relationship from outside of GOS:                                         

Title:                                         

Date Submitted:                                         

Contact Information:                                         

3. Name of Symantec Store Manager managing the Partner Relationship:                                         

4. Symantec E-commerce Site Coordinator Approval ([*], or the Senior Group Manager Online Partnerships, or higher, Global Online Sales) to sign form — coordinating with [*], [*] (APAC) & [*] (LAM) for partnerships outside North America):

I hereby verify that all the necessary information has been provided on this Form and all deviations from the standard approach have been discussed with and approved by Digital River.

Signature of approval from Symantec E-commerce Site Coordinator

Name/ Title:                                         

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

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Date:                                         

Phone:                                                       Fax:                                                    Email:                                         

PART II: Description of Promotion and Category of Partner Relationship. Please explain the promotion below.

1. Type of Promotion (check one):

a.	o	Download Site Only (i.e., for hosting OEM or Limited Subscriptions Builds)
b.	o	New Generic Store (only Symantec Marks) with a separate Site Identification (“SID”)
c.	o	New Co-branded Store (Both Symantec and Partner Marks) with a separate SID
d.	o	API tracking to existing country store SID or Partner Store SID page
e.	o	API tracking with a unique entry page to existing SID
f.	o	OEM build revenue share tracking via SKU from Renewal Center (skip to Question 13)
g.	o	Intersite partnership with DR network (DR allows a link on the Partner’s site, purchase takes place on Symantec site and DR handles payments to third party)
h.	o	New Reporting Site ID for use in tracking transactions on current country stores.
i.	o	CID tracking with a unique entry page to an existing store SID or to a Partner Store SID page. Please note, this will require a unique SID for reporting purposes if the partner does not already have a SID or if the revenue share percentage differs from what is paid for other existing upsell business with this account (this can be ecommerce SID or a reporting SID). For details on how to submit your part CIDs for tracking, please contact your applicable GOS representative.

2. Type of Sales Transaction Involved (check one):

a.

o Direct Sale by Symantec If checked, Digital River shall create, launch and host the Site in return for the “per transaction or per download fee” to be paid to Digital River, as indicated in Part III, item 2. Under a Direct Sale, check here if boxed Symantec Product is required to be delivered under this Direct Sale wherein Digital River shall be paid ERP o and explain under what circumstances Digital River will provide boxed Symantec Product to the Customer:

b.

o Standard resale transaction under the terms of the Agreement with Digital River. In this situation, Digital River pays Symantec ERP and sets the pricing on the Site.

3. Site Specifications and Requirements. The Site is to be built in accordance with the Specifications attached hereto as Exhibit M-1, which are hereby incorporated by reference, with the look and feel indicated in the Specifications and the Site shall meet all the requirements and functionality indicated in the Specifications, as well as the following additional special requirements and functionality not otherwise indicated in the attached Specification:                                         

The attached Specifications, which were approved by the Partner on:                                          (Date final approval from Partner received).

4. Go Live Date and Anticipated Time Period Site to be Active. The Site is anticipated to be active by the Partner per the terms of the Front End Agreement between Symantec and the Partner until:                                          (date), which is subject to change by written notice to Digital River by Symantec. The Go Live or Launch Date for Symantec, i.e. delivery of fully functional, activated Site:                                         

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

119

5. Sales Promotion. Describe the sales promotion of the Partner and indicate all additional requirements and special services required as part of the promo and the Site, such as any instant rebates or electronic coupons:

• Does Symantec provide/pay for a [*] to Partner’s Customer purchase?: o Yes o No (check one)

• If Yes: Percentage [*] off MSRP:       %

• The Symantec Products on which the customer will receive a [*]:

• Describe any additional info specific to this promo:

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

120

6. API Assignments (if using API tracking)

a.	API2: (REQUIRED: Partner Name, no spaces, example: Barclays_Bank)
b.	API3: (OPTIONAL: Program or other identifier)
c.	API4: (OPTIONAL: Program or other identifier)
d.	API5: (OPTIONAL: Program or other identifier)

7. SID(s) to direct API to (example: 24876, 27645, 37771):                     

8. Date URLs Needed to Go Live (this is provided by Symantec):                     

Final URLs:                     

9. Allowed URLs (as designated by Partner as the URLs Where End User may be directed from, such as the Partner’s homepage, coupons, email promos, etc):                     

Does Partner require access to the Site be restricted to only End Users coming from Allowed URLs:

o Yes o No

If yes, the Authentication Page requirements and verbiage are as follows:                     

10. Telesales Promo (describe):                     

11. Email Campaign Promo:                     

12. Referring URL (short URL for print media, For example: software.Symantec.com/partnername/cid#):

o Yes o No

13. Revenue Share: o Yes o No (check one)

If Yes, Digital River, shall, within twenty (20) days of the end of the calendar quarter, pay an amount equal to the Revenue Share Percentage, indicated below, of the Net Revenue received by Symantec resulting from the End Users of this Symantec Partner, who click through hypertext links on the Site and complete the purchase of the Symantec Products from the Site only and not from any other site or method (the “Click-Through Sales”). “Net Revenue” shall mean the ERP ( i.e. the purchase price paid by Digital River) for the Symantec Products sold through the Site as a result of Click-Through Sales due to Symantec, less returns, taxes, shipping and handling charges, and a flat [*] of ERP take into account the End User rebate redemption.

a.	Revenue Share Percentage:                     %
b.	Only pay Revenue Share if the Net Revenue is over $2,000 for the particular quarter in question (no carry over of prior quarter numbers in this calculation): o Yes o No (check one)
c.	The Symantec Products that Partner will receive a Revenue Share on:
d.	How will DR deliver the payment?

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

121

o ACH (direct deposit) (complete New Vendor Form)

o Wire Transfer (complete New Vendor Form)

o Live Check (goes to address on page 1)

e. New Vendor Form completed and attached?

o Yes o No

f. EMEA Partner Site?

o Yes o No (check one)

If “Yes” the following Net Revenue definition shall instead apply:

“Net Revenue” shall mean and be calculated on a quarterly basis as the purchase price paid by the Reseller for subscription renewals of Software and for those defined Symantec Products sold through the Renewal Center as a result of Click-Through Sales, which is due to Symantec, less returns, Taxes, shipping and handling charges. “Reseller” means a Symantec authorized agent or reseller, as appointed solely by Symantec.

14. Reporting Requirements:

a.	Report Due Date to Symantec: Per the Agreement, a penetration report is due by the tenth (10th) day of each month for the prior month sales, as well as a Partner report quarterly by the fifteenth (15th) day after the end of the previous month, for Symantec’s review.
b.	Report Due Date to Partner: Per the Agreement, twenty (20) days after end of calendar quarter along with a check if applicable.
c.	All reports must be sent to Symantec first for review and only after Symantec has signed off, will Digital River deliver the report to the Partner at the designated reporting address on page one: If different address is to be used, indicate here:
d.	Additional Reporting Requirements other than what is indicated in the Agreement. Explain the exact components that differ from the terms of the Agreement, if any, and also provide example:

15. Effective Date for Partner Agreement:                      (date)

16. Retention Business under the Symantec Renewal Center. Symantec hereby agrees to send traffic from the Symantec Renewal Center for the following jurisdiction to Digital River:                     .

—————————————————————————————————————

To be effective, this must be signed by the Vice President, Global Consumer and SMB Sales

Date:                     

Phone:                          Fax:                          Email:                      

17. Emerging Market — Requires VP Global Online Sales Signature: o Yes o No

     a. If yes, applicable [*]at which Digital River can purchase the Symantec Product:                      for           sales utilizing the following Emerging Market payment method(s):                     .

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

122

     b. If yes, applicable [*] at which Digital River can purchase the Symantec Product:                      for           sales utilizing the following Emerging Market shipping method(s):                  .

     c. If yes, applicable [*] at which Digital River can purchase the Symantec Product for           sales from the Emerging Market Store:                     .

PART III: This Part is to be completed by Digital River and signed and returned to the Symantec E-commerce Site Coordinator.

1. Basic Site Information. The Site has been set up with the following Site address, with the following URLs:

a.	Site Address:
b.	URLs:
c.	URL 1:
d.	URL 2:
e.	URL 3:
f.	URL 4:
g.	URL 5:
h.	Referring (short) URL:
i.	Date URL(s) were sent or will be sent to Symantec:
j.	If so required, verification that only the Allowed URLs have access: o Yes o No (check one)

2. Direct Sale Per Transaction Fee: If Part II, Item 2.a is checked, Digital River hereby agrees to a total fee per transaction as indicated for the Site if this Site is a “direct sale” from Symantec to the Partner or Partner’s End Users and not a traditional resale transaction:                     

3. Signing and Returning the Form: Instructions to Digital River: Please return an original signed copy of completed Site Initiation Form to the Symantec Site Coordinator via facsimile and mail one copy with original signature within one week of receiving this request.

I hereby confirm and acknowledge the terms set forth in this Form or SIF for this particular Site and will proceed subject to, and in accordance with, the terms and conditions of this SIF and the terms of the Agreement, to which this Form is incorporated by reference.

————————————————————————

Signature of Authorized person at Digital River.

Name/ Title:                     

Date:                     

Phone:                          Fax:                          Email:                     

4. For Future Use, Upon Completion of Site/Promo. When the promo is completed and the Site is taken down with only a redirect message being launched, Digital River will complete the following on its copy of the fully signed Form and provide the completed Form to The Symantec E-commerce Site Coordinator no less than three (3) days prior to expiration of the Promo:

a.	Partner Name:
b.	Effective Date of Form under which this Site is initiated:                      (date)
c.	The actual Promo has completed and no further sales activity is possible as of:                      (date)
d.	The Site will be completely disabled and a redirect message will be launched as of:                      (date); and shall continue

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

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until:                      (date)

————————————————————————

Signature of Authorized person at Digital River.

Name/ Title:                     

Date:                     

Phone:                          Fax:                          Email:                     

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

124

Exhibit M-1

     The attached Specifications apply to the Partner Site (name of Partner and date of Form) ______ and shall become part of the Agreement, and are incorporated herein by reference.

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

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EXHIBIT N

Site Testing Standards And Criteria

The Site shall be tested to ensure it is in complete compliance with all the requirements set forth in the Agreement, the SIF, and the Specifications, in accordance with the following standards and requirements (hereafter referred to as “QA”), which standards and requirements may be amended, from time to time, upon mutual agreement by the parties.

1. The Site design and functionality shall be fully tested in QA by Digital River before its own final testing and provided then to Symantec to review and provide feedback on prior to completion of the QA process. All feedback provided by Symantec and the Partner, through Symantec, shall be implemented.

2. The Site and all aspects of any promotion shall then be tested by Digital River to ensure it is in full compliance in terms of design, look and feel and functionality with the relevant final Specifications and the terms and descriptions set forth in the SIF.

3. After QA has been signed off by Digital River and Symantec in steps one and two, then secured access to the Site shall be provided to Symantec, and only as indicated by Symantec, to the Partner, for testing by Symantec and the Partner. This access shall be pursuant to a URL to the server of Digital River, known as the QA server. No one other than Symantec and the Partner shall be able to access the Site at this point in time.

4. Digital River shall also provide testing access to the Site to both Symantec, and the Partner pursuant to Symantec’s instructions, via any promotional process as a test run, such as an e-mail address, coupon or other testing harness that provides authorization access to the secure Site.

5. Digital River agrees that no less than ten (10) business days shall be allowed for the participation of Symantec and the Partner in the above outlined QA process for the purposes of allowing Symantec and the Partner to test the Site, as indicated above, and to allow at least three (3) business days for Digital River to make any final changes, Corrections and again QA to the Site prior to the Launch Date.

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

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EXHIBIT O

Shipping and Handling Table

Notwithstanding anything to the contrary in this Exhibit, or in the Agreement, [*] control of how the Symantec Products are shipped, including the carrier used and the freight account charged. In addition, within thirty days after the signing of this Agreement, Symantec will provide Digital River with a master shipping list for use in determining carriers, recommended delivery priorities (ie.; next day, two, air, ground, etc.), and Symantec freight account numbers (the “Master Shipping List”). To minimize shipping costs as much as possible for all Symantec products, Digital River will use best efforts to ship in accordance with the Master Shipping List. Symantec will maintain the Master Shipping List and has the option to revise, or update, the list no more than on a quarterly basis. Notification to Digital River of revisions, or updates, to the Master Shipping List will be controlled by date.

Weight: 1-5 pounds.

UPS Ground	Lower 48
Weight LB	New 2005 Rate
1	$	7.65
2	$	8.25
3	$	8.85
4	$	9.10
5	$	9.35

USPS PRIORITY MAIL	Lower 48
Weight LB	New 2005 Rate
1	$	6.95
2	$	7.95
3	$	9.95
4	$	11.75
5	$	11.95

USPS PRIORITY MAIL	Alaska & Hawaii
Weight LB	New 2005 Rate
1	$	6.95
2	$	8.45
3	$	11.25
4	$	13.10
5	$	14.95

Purolator (Canada Only)
Weight LB	New 2005 Rate
1	$	16.10
2	$	16.50
3	$	18.50
4	$	20.50
5	$	22.50

UPS 2nd Day	Lower 48
Weight LB	New 2005 Rate
1	$	12.45
2	$	13.50
3	$	14.70
4	$	15.95
5	$	17.30

UPS 2nd Day	Alaska & Hawaii
Weight LB	New 2005 Rate
1	$	17.65
2	$	19.20
3	$	20.65
4	$	22.10
5	$	23.85

UPS 2nd Day	Puerto Rico
Weight LB	New 2005 Rate
1	$	17.95
2	$	19.55
3	$	21.00
4	$	22.55
5	$	24.35

UPS OVERNIGHT	Lower 48
Weight LB	New 2005 Rate
1	$	15.10
2	$	16.10
3	$	18.05
4	$	18.95
5	$	19.95

UPS OVERNIGHT	Alaska & Hawaii
Weight LB	New 2005 Rate
1	$	23.20
2	$	25.45
3	$	27.60
4	$	29.70
5	$	31.65

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

127

UPS INTERNATIONAL	CANADA
Weight LB	New 2005 Rate
1	$	21.95
2	$	22.95
3	$	23.65
4	$	23.65
5	$	23.65

UPS INTERNATIONAL	S. AMERICA
Weight LB	New 2005 Rate
1		32.95
2		33.95
3		37.45
4		38.95
5		39.95

UPS INTERNATIONAL	EUROPE
Weight LB	New 2005 Rate
1	$	33.95
2	$	36.35
3	$	38.95
4	$	39.95
5	$	40.95

UPS INTERNATIONAL	MIDDLE EAST
Weight LB	New 2005 Rate
1	$	37.45
2	$	39.45
3	$	42.95
4	$	44.95
5	$	46.95

UPS INTERNATIONAL	JAPAN & ASIA
Weight LB	New 2005 Rate
1	$	30.50
2	$	30.95
3	$	31.45
4	$	32.50
5	$	36.95

UPS INTERNATIONAL	AFRICA
Weight LB	New 2005 Rate
1	$	47.95
2	$	57.95
3	$	64.95
4	$	72.45
5	$	81.95

UPS INTERNATIONAL	MEXICO
Weight LB	New 2005 Rate
1	$	24.95
2	$	26.95
3	$	29.95
4	$	30.95
5	$	31.95

UPS INTERNATIONAL	CARIBBEAN
Weight LB	New 2005 Rate
1	$	32.95
2	$	33.45
3	$	33.95
4	$	34.95
5	$	37.45

UPS INTERNATIONAL	PUERTO RICO
Weight LB	New 2005 Rate
1	$	26.95
2	$	28.95
3	$	31.95
4	$	32.95
5	$	33.95

UPS INTERNATIONAL	AUST — NZ
Weight LB	New 2005 Rate
1	$	32.95
2	$	33.25
3	$	33.45
4	$	33.95
5	$	34.95

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

128

Weight: 6 pounds and higher.

UPS GROUND

Weight LB	DOMESTIC
6	$	8.95
7	$	9.95
8	$	10.45
9	$	10.75
10	$	10.95
15	$	12.25
20	$	13.95
25	$	15.75
30	$	20.45
50	$	24.95
70	$	28.95
90	$	53.95
110	$	63.95
130	$	72.95
150	$	81.95

Purolator (Canada Only)

Weight LB	PRICE
6	$	21.95
7	$	22.95
8	$	23.95
9	$	24.95
10	$	25.95
15	$	36.95
20	$	40.95
25	$	41.95
30	$	42.95
50	$	92.95
70	$	132.95
90	$	165.95
110	$	199.95
130	$	232.95
150	$	267.95

USPS PRIORITY MAIL

Weight LB	Lower 48 States		A & H
6	$	15.45	$	17.95
7	$	16.45	$	19.95
8	$	16.95	$	21.95
9	$	17.45	$	22.45
10	$	19.95	$	22.95
15	$	26.95	$	36.95
20	$	33.95	$	46.95
25	$	40.95	$	49.95
30	$	42.95	$	52.95
50	$	76.95	$	109.95
70	$	103.95	$	150.95
90	$	134.95	$	195.95
110	$	162.95	$	237.95
130	$	189.95	$	279.95
150	$	219.95	$	322.95

FEDEX

Weight LB	Domestic		A & H		Canada		S. America		Europe		Middle East		Japan & Asia		Africa		Mexico		Caribbean		Puerto Rico		AUST — NZ
1	$	13.95	$	19.85	$	19.95	$	26.95	$	30.95	$	35.95	$	25.95	$	45.95	$	19.45	$	19.45	$	19.45	$	25.95
2	$	14.95	$	21.45	$	20.95	$	31.95	$	34.95	$	43.95	$	26.95	$	52.95	$	22.95	$	22.95	$	22.95	$	26.95
3	$	16.95	$	22.85	$	22.95	$	36.95	$	38.95	$	49.95	$	30.95	$	58.95	$	26.45	$	26.45	$	26.45	$	29.95
4	$	17.95	$	25.45	$	24.95	$	42.95	$	43.95	$	54.95	$	32.50	$	69.95	$	29.95	$	29.95	$	29.95	$	33.95
5	$	18.95	$	25.95	$	25.95	$	46.95	$	45.95	$	60.95	$	36.95	$	70.95	$	33.45	$	33.45	$	33.45	$	34.95

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

129

Weight LB	Domestic		A & H		Canada		S. America		Europe		Middle East		Japan & Asia		Africa		Mexico		Caribbean		Puerto Rico		AUST — NZ
6	$	20.45	$	29.95	$	27.95	$	58.95	$	46.95	$	62.95	$	43.95	$	82.95	$	36.95	$	36.95	$	36.95	$	41.95
7	$	21.95	$	30.45	$	28.45	$	59.95	$	47.95	$	66.95	$	45.95	$	88.95	$	40.45	$	40.45	$	40.45	$	42.95
8	$	22.95	$	30.95	$	28.95	$	60.95	$	50.45	$	70.95	$	47.95	$	89.95	$	43.95	$	43.95	$	43.95	$	44.95
9	$	24.45	$	31.45	$	29.45	$	61.45	$	54.95	$	74.95	$	50.45	$	90.95	$	47.45	$	47.45	$	47.45	$	45.45
10	$	25.95	$	31.95	$	29.95	$	61.95	$	56.95	$	78.95	$	50.95	$	91.95	$	47.95	$	49.45	$	43.95	$	45.95
15	$	30.95	$	46.95	$	43.95	$	120.95	$	65.95	$	82.95	$	62.95	$	140.95	$	60.45	$	61.45	$	54.45	$	80.95
20	$	34.95	$	48.95	$	46.95	$	123.95	$	89.95	$	136.95	$	93.95	$	170.95	$	83.45	$	83.45	$	61.95	$	87.95
25	$	38.95	$	50.95	$	47.95	$	124.95	$	90.95	$	154.95	$	98.45	$	172.95	$	86.95	$	86.95	$	68.45	$	88.45
30	$	43.55	$	51.95	$	48.95	$	125.95	$	92.95	$	174.95	$	98.95	$	174.95	$	88.95	$	88.95	$	74.95	$	88.95
50	$	61.95	$	103.95	$	117.95	$	365.95	$	192.95	$	240.95	$	184.95	$	378.45	$	129.45	$	199.45	$	107.95	$	241.95
70	$	81.95	$	143.95	$	141.95	$	468.95	$	252.45	$	319.95	$	241.95	$	488.95	$	155.95	$	258.95	$	149.95	$	319.95
90	$	106.25	$	186.95	$	164.95	$	556.95	$	311.95	$	398.45	$	298.95	$	603.95	$	176.95	$	313.45	$	192.95	$	398.95
110	$	127.45	$	228.95	$	193.95	$	632.95	$	375.45	$	476.95	$	359.95	$	725.45	$	204.95	$	372.95	$	235.95	$	476.95
130	$	149.95	$	268.95	$	228.95	$	714.95	$	441.95	$	555.95	$	423.95	$	854.95	$	240.95	$	437.95	$	277.45	$	555.95
150	$	172.95	$	308.95	$	263.45	$	799.95	$	506.45	$	635.45	$	484.95	$	983.95	$	276.95	$	502.95	$	319.95	$	635.95

Latin America

See table below

Shipping Locations for Packaged Symantec Products Purchased through the Puerto Rico and the Caribbean Sub-site

Anegada (British virgin Islands)

Anguilla

Antigua and Barbuda

Aruba

Bahamas

Barbados

Belize

Bermuda

Bonaire

Bonaire (Netherlands Antilles)

Cayman Islands

Curacao

Curacao (Netherlands Antilles)

Dominica

Dominican Republic

French Guiana

Shipping Locations for Packaged Symantec Products Purchased through the Puerto Rico and the Caribbean Sub-site (Continued)

Grenada

Guadeloupe

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

130

Guyana

Haiti

Jamaica

Martinique

Montserrat

Puerto Rico

Saba (Netherlands Antilles)

Saint Eustatius (Netherlands Antilles)

St. Croix (US Virgin Islands)

St. John (US Virgin Islands)

St. Kitts and Nevis

St. Lucia

St. Maarten (Netherlands Antilles)

St. Martin

St. Thomas (US Virgin Islands)

St. Vincent and the Grenadines

Suriname

Tortola (British Virgin Islands)

Trinidad and Tobago

Turks & Caicos Islands

Virgin Gorda (British Virgin Islands)

St. Christopher

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

131

EXHIBIT P
Product

Text of message to be provided to Customers prior to downloading Try/Buy Symantec Products:

“Please fill out all fields below, and press submit. Our server will then send you a confirmation email to verify your email address. Download instructions will be contained in this email.

First Name:

Last Name:

Country:

Email:

Please note: By confirming your email address and downloading this file, you are signing up to receive periodic follow up emails from us. Any emails we send you will contain unsubscribe information, and you may opt-out of future emails at any time.”

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

132

EXHIBIT Q
URL Structure Requirements

1.	In order for Symantec to effectively use the Fireclick Technology, as well as certain search engine optimization services, it is necessary for Symantec URLs to follow the below requirements. As a result, Digital River will ensure that all Symantec URLS meet the below requirements.
2.	Examples of Symantec STORE URLs that are unacceptable:
	[*]
	[*]
3.	Examples of STORE URLs, outside of Symantec, that are acceptable: http://www.macromedia.com/cfusion/store/index.cfm?store=OLS-US
	http://www.macromedia.com/cfusion/store/index.cfm?store=OLS- US#view=ols_prod&loc=en_us&store=OLS- US&category=/Software/Development/StandAlones/Captivate&distributionMethod=FULL
4.	Examples of Symantec CORP URLs that are acceptable: http://www.symantec.com/small_business/products/detail/requirements.jsp?cat_id=1030&prod_id=6001
5.	As a general matter, after “.com” Symantec requires consistent and clean variables. The below are provided solely as examples — and do not cover all possible variables that Symantec does not want included in its URL structures. If in doubt regarding whether or not a particular variable is acceptable, Digital River will confirm with either of the Primary Contacts listed in Exhibit X prior to the inclusion of such a variable.
	Sat 1 Sat 2 V2 Ec_Main_Entry SP=10007 V5=31033611 &S1= &S2= &S3= &S4= &S5= &V2= &V3= &V4= &DSP= 0&CUR=840 &PGRP=0 &CACHE_ID=0

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

133

EXHIBIT R
Symantec Products and List Prices

The Symantec Products consist of Consumer Symantec Products, attached hereto as Exhibit R-1, Enterprise Symantec Products and attached hereto as Exhibit R-2.

The scope of this Agreement covers operations of the worldwide stores, with exception of Japan and other yet to be determined emerging markets, for the sale of new products, upgrades of existing products and renewals of 2006 and later products.

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

134

Exhibit S
Customer Support Services

For so long as Digital River is responsible for Customer Service within a particular region, this Exhibit S shall govern Digital River’s Customer Support Services within that region.

1. Customer Support Services. English language Customer support services to Customers through a toll-free telephone number in North America on a 24 X 7 X 365 basis, and by email in the following languages: French, German, Italian, Swedish, Spanish, English, Portuguese, Dutch, and French Canadian. With respect to the Customer support services to be provided by Digital River hereunder, Digital River shall meet the metrics and staffing requirements set forth on Exhibit B hereto. In the event Symantec desires to change the support services that Digital River is to provide hereunder, the Parties shall mutually agree to any such changes. Specific Customer support services to be provided by Digital River are set forth below:

a.	Answer inquiries regarding order transactions and status by e-mail and/or telephone.
b.	Answer End Users’ e-mail inquiries.
c.	Respond to failed credit card transactions inquiries.
d.	Process Internet and telephone orders with all payment options listed in Exhibit E
e.	Respond to failed download inquiries.
f.	Respond to order disputes and billing questions.
g.	Answer pricing questions.
h.	Resolve authentication problem inquiries.
i.	Respond to subscribe and unsubscribe requests from Customers regarding broadcast e-mail messages on product upgrades and updates, online technical notes, and newsletters and promotions that are sent by Digital River.
j.	Respond to return and refund credit requests in accordance with the policy set forth in the applicable Symantec Product EULA.
k.	Include Symantec in Digital River’s Chat Support beta program (or the equivalent thereof in the event of a name change) at no additional cost to Symantec.

2. Online Support. Digital River will also provide the following online support:

     a. To End Users. Digital River shall (x) permit End Users to subscribe and unsubscribe from physical and electronic communications in a real-time, web-based interface and (y) provide End Users the ability to review their order status online on a real-time basis for electronic orders, and within 90 minutes during normal business hours for other orders.

     b. To Symantec. Digital River shall provide Symantec with secure online access to Digital River’s order information on a worldwide, 24 X 7 X 365 basis. Such order information shall include but not be limited to

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

135

identification of the product(s) ordered and shipping information.

3. Maximum Customer Service Expense. As provided in this subsection, Symantec shall reimburse Digital River to the extent its total Customer Service Expense in a given month exceeds [*] percent ([*] %) of Net Sales for such month, as calculated on a monthly basis and average for the quarter. “Net Sales,” for purposes of this subsection, shall mean Digital River’s actual gross receipts from distribution of the Symantec Products in the Territory, less returns and related tax and shipping costs. Digital River’s “Customer Service Expense” for a given month shall be calculated as: (i) Digital River’s Internal Customer Service Costs, plus (ii) the actual charges from third party providers used by Digital River to meet its Customer service obligations under this Agreement, provided that Symantec has previously approved in writing the arrangements (including rates charged) made between Digital River and any such third party provider, plus (iii) the actual cost to Digital River for use by Symantec Product Customers of the toll free and toll share telephone numbers for Customer support, if applicable, less (iv) the portion of the total Customer Service Expense relating to downtime of the Storefront, latency or intermittent order processing issues on the Storefront less returns, or corruption of Try/Buy or ESD products (calculated by adding the Internal Customer Service Costs and actual third party provider charges for all calls and emails received relating to those types of issues). “Internal Customer Service Costs” shall be the sum of the following amounts: (i) [*] per minute for each Customer service phone call received in Digital River’s North America Customer service center (currently in Eden Prairie, Minnesota), (ii) [*] per e-mail support request received and answered in Digital River’s North America Customer service center and (iii) [*] per email support request received and answered in Customer support sites outside of the United States, or [*] total for all such email supports requests answered, whichever amount is greater. No later than the tenth day of each month, Digital River will invoice Symantec for any amounts that may be due hereunder as set forth in Section G(4) hereof, and will concurrently provide Symantec with detailed reporting indicating the calculation of the Customer Support Expense. In the event of any disputes relating to the amounts owed by Symantec to Digital River hereunder, the Parties will mutually resolve such disputes.

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

136

EXHIBIT T
Purchase Order Format

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

137

Exhibit U
List of SubSites

Sites to be shut down:

Inactive Sites—Partnerships team to work with DR to close down

Dealer	Affiliates / Partner
27940	Symantec Brightmail
34175	Symantec Bell South
41168	Symantec Telewest
41187	Symantec BTOW for Business
41188	Symantec BTOW for Consumers
42665	Symantec NEC
43365	Symantec Tiscali UK
46205	Symantec Tiscali Germany
46206	Symantec Tiscali France
46207	Symantec Tiscali Italy
46208	Symantec Chello
49887	Symantec Cojeco
49951	Symantec Cojeco French
49995	Symantec Netbank
49996	Symantec MSN Germany
49992	Symantec Tiscali Belgium Nederland (NL)
49993	Symantec Tiscali Belgium French (FR)
53297	Symantec CMIT
49929	Symantec Westpak???
49930	Symantec HSBC
tbd	Symantec Westpak (Pacific)
tbd	Symantec HSBC (Pacific)
49936	Symantec EPPP 10%
49937	Symantec EPPP 20%
49938	Symantec EPPP 30%
49939	Symantec EPPP 40%
49941	Symantec PartnerNet
	OEMs
49946	Symantec Snap
49947	Symantec Evesham
49948	Symantec Watford
49947	Symantec Evesham
49948	Symantec Watford

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

138

Active Sites
Download Sites:

• Yahoo! NIS 30-day in U.S.

• Yahoo NIS 60-day in FR

• Yahoo NIS 60-day in GE

• Yahoo NIS 60-day in IT

• Yahoo NIS 60-day in SL

• Adobe NIS 60-day in U.S.

• Adobe NIS 60-day in FR

• Adobe NIS 60-day in GE

• Adobe NIS 60-day in JPN (hosted by SBT)

• Accoona NIS 60-day in U.S.

• Fidelity NIS 90-day in U.S.

• TD Bank NIS, NAV, NPF In EN and FR

• E*trade NIS 60-day in U.S.

• Telstra NIS 60-day only APAC

• Google NAV 05 special edition in 12 languages

• Wayport

Additional Partner Pages

• La Caixa

• Nokia

• Generic SMB Renewal Site

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

139

Affiliate/Partner Sites
26492	Symantec Yahoo
49949	Symantec TD Bank
49265	Symantec Earthlink
49953	Symantec Fidelity
49931	Symantec OCSP 10%
49932	Symantec OCSP 20%
49933	Symantec OCSP 30%
49934	Symantec OCSP 40%
49935	Symantec SBC (used to be Partner Net)
OEM Sites
37771	Symantec Generic
38512	Symantec HP Mobile
38612	Symantec Compaq
38613	Symantec Gateway
38614	Symantec Sony
38674	Symantec Micron
38872	Symantec Dell
40586	Symantec HP CPC
43485	Symantec eMachines
43486	Symantec Intel
47925	Symantec Scientific Atlantic
48146	Symantec Lynksys
48405	Symantec Sony Europe UK
48406	Symantec Sony Europe Germany
48407	Symantec Sony Europe France
48408	Symantec Sony Europe Italy
49950	Symantec Toshiba America Info Systems
49952	Symantec HP BPC
49950	Symantec Toshiba America Info Systems
49952	Symantec HP BPC

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

140

Host Metro

50905	Symantec Metropolis — Consumer Products (including multi-user packs)
50906	Symantec Metropolis — VLP-Media Media Packs, License products, and Maintenance for License products
50907	Symantec Metropolis — Maintenance for Multi User Packs (for small biz)
Host Legacy
6715	Symantec Corp
35335	Symantec VLP and Media Packs Retail
27687	Symantec Maintenance Products
Dealer Metro
49997	Symantec Metropolis — Home/Home Office
49998	Symantec Metropolis — Small Biz
49999	Symantec Metropolis — Enterprise
51185	Symantec Metropolis — Government — Enterprise
51186	Symantec Metropolis — Government — Small Business

Dealer	North America
27674	Symantec US
27677	Symantec Canada — English
27678	Symantec Canada — Francais
42305	Symantec Call Center
69059	Symantec Free Trial Program

Dealer	EMEA
27679	Symantec Deutschland
27680	Symantec Nordic
27681	Symantec France
27682	Symantec Italia
27683	Symantec Nederland
27684	Symantec Euro
27685	Symantec UK
27686	Symantec Middle East
41185	Symantec Espana
49465	Symantec Norway
49466	Symantec Sweden
49467	Symantec Denmark
49468	Symantec Finland

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

141

Dealer	APAC
27688	Symantec Asia Pacific (English)
symantkr	Symantec Korea (Pacific)
symanhk	Symantec Hong Kong (Pacific)
symantw	Symantec Tawain (Pacific)
72709	Symantec South Asia
symantch	Symantec China

Dealer	LAM
27675	Symantec America Latina
27676	Symantec Brasil
41186	Symantec Puerto Rico
49970	Symantec Puerto Rico HHO
49971	Symantec Puerto Rico SMB
49972	Symantec Puerto Rico ENT

Dealer	Affiliates / Partner
26492	Symantec Yahoo
27940	Symantec Brightmail
34175	Symantec Bell South
41168	Symantec Telewest
41187	Symantec BTOW for Business
41188	Symantec BTOW for Consumers
42665	Symantec NEC
43365	Symantec Tiscali UK
46205	Symantec Tiscali Germany
46206	Symantec Tiscali France
46207	Symantec Tiscali Italy
46208	Symantec Chello
49887	Symantec Cojeco
49951	Symantec Cojeco French
49949	Symantec TD Bank
49995	Symantec Netbank
49996	Symantec MSN Germany
49992	Symantec Tiscali Belgium Nederland (NL)
49993	Symantec Tiscali Belgium French (FR)
53297	Symantec CMIT
49265	Symantec Earthlink
49953	Symantec Fidelity
49929	Symantec Westpak
49930	Symantec HSBC
tbd	Symantec Westpak (Pacific)
tbd	Symantec HSBC (Pacific)
49931	Symantec OCSP 10%

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

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Dealer	Affiliates / Partner
49932	Symantec OCSP 20%
49933	Symantec OCSP 30%
49934	Symantec OCSP 40%
49935	Symantec SBC (used to be Partner Net)
49936	Symantec EPPP 10%
49937	Symantec EPPP 20%
49938	Symantec EPPP 30%
49939	Symantec EPPP 40%
49941	Symantec PartnerNet

Dealer	Subscriptions
40405	Symantec English Subscriptions
40406	Symantec German Subscriptions
40407	Symantec French Subscriptions
40408	Symantec Italian Subscriptions
40409	Symantec Nederlands Subscriptions
49886	Symantec Chile Subs

Dealer	OEMs
37771	Symantec Generic
38512	Symantec HP Mobile
38612	Symantec Compaq
38613	Symantec Gateway
38614	Symantec Sony
38674	Symantec Micro
38872	Symantec Dell
40586	Symantec HP CPC
43485	Symantec eMachines
43486	Symantec Intel
47925	Symantec Scientific Atlantic
48146	Symantec Lynksys
48405	Symantec Sony Europe UK
48406	Symantec Sony Europe Germany
48407	Symantec Sony Europe France
48408	Symantec Sony Europe Italy
49946	Symantec Snap
49947	Symantec Evesham
49948	Symantec Watford
49950	Symantec Toshiba America Info Systems
49952	Symantec HP BPC

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

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Dealer	I-Store
48125	Symantec I-Store
49925	Symantec Germany i-Store
49926	Symantec Italy i-Store
49927	Symantec France i-Store
49928	Symantec Nederland I-Store
57578	Symantec iStore Enterprise Admin Products
49992	Symantec iStore SMB
49993	Symantec iStore ENT
49942	? — Amy istore copy 9/27/05
49943	? — Amy istore copy 9/27/05

Atlantic Pacific SID Nitro Mapping SIDs

49990 49990 Symantec Hong Kong English <Nitro Mapping SID>

Additional Sites not mentioned above:

• 50727 Metro Shared Shopping Cart (this site is used for reporting purposes only, sales from 49997-49999 funnel into this site after nightly processing)

• 69559 Metropolis — Small Biz iStore

• symanlam Puerto Rico (these are the new Pacific LAM sites that are scheduled to launch shortly)

• symanbr Brasil

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

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Exhibit V
Destruction of Obsolete or Defective Product

Digital River Destruction Process:

1.	Schedule. Digital River will destroy obsolete and/or defective product a minimum of twice a year.
2.	Notification. The Symantec GOS Operations Specialist will notify Digital River’s warehouse which products need to be removed from the warehouse.

a.	The Symantec GOS Operations Specialist will review the most current stock status report and highlight which products are discontinued and need to be destroyed.
b.	Once the destruction list has been completed — the Symantec GOS Operations Specialist will send the list to the Symantec Regional Storefront Managers for their approval.
c.	Once the Symantec Regional Storefront Managers have approved, the Symantec GOS Operations Specialist will send Digital River the finalized list of Symantec products to be destroyed.

3. Preparation. Digital River will prepare the discontinued products for destruction.

a.	Digital River’s warehouse will comply with the destruction list sent by the Symantec GOS Operations Specialist and pallet all obsolete, damaged and discontinued products.
b.	Digital River will add any damaged products to the destruction list and send the list back to the Symantec GOS Operations Specialist for review and approval.

4.	Final Approval. Symantec Regional Storefront Managers and the Symantec GOS Operation Specialist must approve Digital River’s updated destruction list before the subject products can be removed from the warehouse and destroyed.
5.	Deadline. Digital River has thirty days from the final approval date to remove and destroy the products.
6.	Subcontracting. Digital River may subcontract the actual destruction of the product so long as: (i) Digital River subcontracts to a pre-approved Symantec Destruction Provider; (ii) Digital River represents and warrants that the subcontractor’s performance hereunder will comply with all terms and conditions of this Exhibit and the Agreement, as applicable; (iii) Digital River will be fully responsible for the performance of the subcontractor under the terms of this Exhibit and the Agreement and shall remedy any noncompliance thereunder; and (iv) any failure regarding an obligation under this Exhibit or the Agreement belonging to Subcontractor will be considered Digital River’s failure under the Exhibit or the Agreement.

a.	The subcontractor will provide Digital River with a certificate of destruction.
b.	This certificate will then be sent to the OSG RMA team.

7. Certifications. See the Attachment 1 to this Exhibit V for the certificates that Digital River will need to provide to the Symantec OSG RMA team after it has gathered all products that need to be destroyed.

Digital River — One off destruction process

Occasionally Digital River will need to destroy one product at a time. When this occurs Digital River will complete the form found on Attachment 2. This form will be sent to the GOS Operation Specialist. During this process Digital River will destroy the product on site.

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

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Attachment 1
Field Destruction Certificate

By signing below, Digital River agrees that they have taken the necessary steps to delete and destroy the obsolete Symantec Products described in the table below in full compliance with the required process outlined in the Agreement and Exhibit.

Digital River warrants and represents that the final quantities of product that were destroyed by title are as follows:

Product Name Version Number Total Quantity Destroyed Date Destroyed

Digital River certifies that the person signing below is a duly authorized signatory with full authority.

Digital River Contact Information

Name:

Title:

Date:

Signature:

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

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Attachment 2
Certification of Software Destruction

By signing below, the Digital River agrees that they have taken the necessary steps to delete and destroy the obsolete software described in the table below in full compliance with the required process outlined in the Agreement and Exhibit V.

Digital River warrants and represents that the final quantities of product that were destroyed by title are as follows:

Digital River certifies that the person signing below is a duly authorized signatory with full authority.

Date Received Product Name/Version # Qty Reason

Digital River certifies that the person signing below is a duly authorized signatory with full authority.

Digital River Contact Information

Name:

Title:

Date:

Signature:

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

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EXHIBIT W

Symantec Policy:
Refunds Requested More than Sixty Days from Purchase

For so long as Digital River is responsible for Customer Service aspects of Refunds within a particular region, this Exhibit W shall govern Digital River’s conduct with regard to Refunds within that region.

1. Refunds Requested More than Sixty Days from Purchase.

a. Policy. Symantec’s policy is to refuse refunds when a refund is requested more than sixty (60) days from purchase. Nonetheless, Symantec understands that exceptions should be considered in some circumstances. Digital River must always initially deny refund requests that are made after sixty (60) days of purchase; however, in the event of customer escalation, exceptions can be made for the following reasons:

i.	Processing error by Digital River;
ii.	Faxed LOD “not received” by Digital River;
iii.	Duplicate order with Digital River (Purchases made with other resellers do not qualify);
iv.	Other Symantec Support Partner Recovery Case involving a Digital River order.

b.	Other Exceptions. Other exceptions will be considered upon request, as necessary. Requests must be communicated to the Digital River Symantec Account Liaison, who will request further approvals from Symantec’s Global Online Sales Customer Support Manager.
c.	Refunds Requested More than Ninety Days from Purchase. Refunds requested more than ninety (90) days from purchase are not to be processed without prior approvals from Symantec’s Global Online Sales Customer Support Manager.

2. SMB/License/Maintenance/Appliance Refund Requests.

a. Policy. Symantec’s policy is to refuse refunds when a refund is requested returned more than sixty (60) days from purchase. Nonetheless, Symantec understands that exceptions should be considered in some circumstances. Digital River must always initially deny SMB/License/Maintenance/Appliance refund requests that are made after sixty (60) days of purchase; however, in the event of customer escalation, exceptions can be made for the following reasons:

i.	Processing error by Digital River, including customer not being told during phone order that the order is non-refundable;
ii.	Customer ordered wrong product, and wishes to get refund and reorder the correct product;
iii.	Duplicate order with Digital River (Purchases made with other resellers do not qualify);
iv.	Other Symantec Support Partner Recovery Case involving a Digital River order.

3. Installation Hard/Soft Count Reset Requests. Digital River is to approve and process all Hard/Soft Count Reset requests made by customers until further instruction from Symantec. Digital River Agents are to notify the Digital River Symantec Account Liaison with customer information if an account is suspect to abuse — more than three (3) reset requests will be considered by DR as suspected abuse. The Digital River Symantec Account Liaison will provide suspected abuse cases and reset statistics to Symantec’s Global Online Sales Customer Support Manager.

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

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Exhibit X
Customer Support Transition Schedule

In each region set forth below, the Parties will continue to operate under the terms of the Direct Marketing Outsourcing Agreement with an Effective Date of August 19, 2002 until the responsibility for Customer Service has transferred from Digital River to Symantec pursuant to the Customer Support Transition Schedule and the terms of this Agreement.

Transition Dates

The following are the initial dates on which transition of responsibility for Customer Service will move from Digital River to Symantec. The transition of responsibility will occur over a period of time not to exceed two weeks, at which point Symantec shall be 100% responsible for Customer Service within the listed region.

     July 1

• APAC English

• LAM

• Swedish

• APAC DBCS Countries

     July 15

• Japan OEM

     August 1

• EMEA English

• EMEA Languages — Dutch, German, Spanish, French, Italian

• French Canada

• (Japan other)

     August 15

• NAM English

     September

• Hebrew and Polish (Point to EMEA English on August 1)

     October

• Danish Norwegian Finnish (Point to EMEA English on August 1)

Phone Changes (numbers/IVR)

As each language/country support is moved from Digital River to Symantec, Symantec will modify the Customer contact information to point to Symantec. When this change is done the only Customers Symantec should have contacting the phone numbers at Digital River will be legacy Customers, meaning those who have stored the Digital River Customer Service phone number. After the Customer Service transition of responsibility period ends for a given region, Digital River will refer all Customers from that region, including legacy Customers, to Symantec.

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

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Where technically possible, Digital River will provide messaging at their telecom provider giving the appropriate Symantec phone number. Digital River will provide monthly reports of traffic for NAM to these numbers so Symantec can determine the appropriate time for the numbers to be discontinued. If Digital River is not able to do this, then Digital River will message appropriately on their IVR systems to give the new contact information. There will be no additional fees for the first thirty (30) days for Digital River to maintain telecom or IVR standard Customer facing automatic announcement messaging. Digital River will update IVR systems only after communicating with Symantec Support for approval. Unless Symantec provides localized IVR scripts, such communications will be in English. After the initial thirty (30) days, these lines will be, at Digital River’s sole discretion, either disconnected or repurposed within Digital River.

Email Changes (Online Contacts)

Symantec wishes to change the current Digital River auto-response email system. The current experience for Customers who contact Digital River online is that they fill out an online form; and are then sent an auto-response from the system with a list of possible generic solutions. If the Customer question is not answered by the auto-response, there is a link in the email that the Customer can click on and then their issue is put into the queue for agent response. Digital River agents are currently responding to these Customers while they are assisting Customers on the phone. Digital River will continue to use the auto-response functionality for replying to emails from Customers to Digital River that arrive in response to those emails generated by the ecommerce system. Digital River will redirect such Customers to Symantec Customer Service links. Symantec will either use the auto-response system at their partners, or will allow direct Customer contact. The maintenance of the Digital River auto-response system would require either another point of integration or a process for Symantec to request that Digital River update these, either of which would lead to a larger maintenance issue. In the event Symantec determines that this is still a course of action Symantec would like to pursue, Digital River will be prepared to address this for Symantec dependent upon system functionality due to internal tool enhancements or replacement that may limit external access outside of Digital River’s systems. Digital River will have no obligation to make any further refinements to the Symantec auto-response system without further consideration from Symantec, and an appropriate SOW or Amendment reflecting the same.

Symantec will still have legacy Customers that will have stored the email contact information. There are also some back office items that will remain at Digital River that require them to email Customers with potential contact information. If the response to these customers is an automatically generated response there is no work to be performed by Digital River, [*]. If Digital River performs work in connection with such customers, then such work will be performed at the Customer Service Rate or the Consulting Rate, depending on which Digital River personnel perform such work..

Online Support Experience (Web/Content)

Symantec is currently developing a new customer service online experience. This new site will be designed to support current customers (no matter who sold the Symantec products to that customer) as well as the Digital River Customers. Symantec intends to have a single experience for all customers. Symantec does not yet have dates for this to be complete or localized, so as a short term solution Symantec will use the Digital River sites that currently exist and redirect those who chose the contact option to the Symantec landing page that provides Symantec customer service contact options. As the new Symantec support pages are brought online, Symantec will send them for review by the regions to ensure that the pages maintain regional specific content.

Digital River will maintain the self-support options that they currently provide such as eLOD (electronic letter of destruction used by Customers to request refunds) and order look-up. Symantec will work with Digital River to address look and feel from the Symantec site to the Digital River site. These will still be hosted on the Digital

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

150

River side. If Symantec so requests, the Dedicated Team may be assigned to revise the Digital River hosted pages to mimic the look and feel of the new Symantec customer service online experience.

Digital River will continue hosting the support pages, as well as provide a mechanism for making any changes to the pages as determined to be necessary by Symantec. Changes shall be completed by the Dedicated Team.

Symantec will localize, at its sole expense, any Customer facing support documentation.

Back Office Activities

Digital River will provide Symantec access to any customer service tools, systems or technologies to which Digital River has access, and to any modifications and/or enhancements to such tools, systems or technologies that Digital River makes available. If there are separate tools, systems or technologies for the Altantic Pacific platforms, then Digital River will make all such items available to Symantec; provided that if Symantec desires that Digital River combine such tools into a single offering, then the Parties will mutually agree upon the appropriate compensation, if any, for such efforts.

Symantec agents use an escalation form to have Digital River access financial information and address Customer issues such as check status and refund of a manual payment option (ELV, Check, Wire Transfer). Symantec also has direct access to some data, though it may have gaps in areas such as check status (i.e., actual receipt or processing status) and credit card status (i.e., billed vs. incomplete). Symantec will use commercially reasonable efforts to eliminate the bulk of Symantec’s dependence on Digital River for back office activities by moving to Symantec through rights in the current tool as well as access to the payment processor (Global Collect). Until this is completed, Digital River will provide ongoing support to Symantec to manage the third party relationships they own, training, updates of material as well as account management at the Customer Service Rate. Digital River will also maintain staffing to handle escalations through the Digital River process at the Customer Service Rate when Symantec is unable to use functions within the third party tools. As requested, Digital River will act as a liaison between Symantec, Netfulfilment, DSS and Global Collect. Where tool transitions are not available, Digital River will assist with ongoing escalations at the Customer Service Rate.

Digital River will respond to requests for back office support within one business day, including fraud escalations that are not able to be handled by Symantec, either due to technical issues, or access issues. Based on the issue, if resolution is determined to take more than 24 hours, Symantec will be promptly told of the anticipated resolution time. This will also include limitations as a result of tools access, or access limitations. Symantec will use its business escalation path for any items that have been open for an unreasonable period time. Symantec will use its business escalation path for any items that have been open for an unreasonable period time.

Digital River will continue to support Symantec Support and Partners through the escalation forms and will respond within one business day to all requests. If Digital River cannot meet this commitment on any given item it will communicate this to Symantec within that period.

Tools

      DRCC

Digital River will continue to support DRCC and functionality for Symantec Support agents. This will include bug fixes, performance issues and any new functionality required to support Digital River/Symantec Customers.

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

151

Symantec Support order tool

This is the order tool that was developed for Symantec support agents and partners to allow for order taking. Digital River will make changes requested by Symantec via the Dedicated Team and through a SOW, in order to accommodate the ability for agents to place orders. Digital River will respond to Symantec inquiries on critical issues within one business day.

Netfulfilment

Digital River will make available a tool to Symantec which Symantec may view a Customer’s shipping status. Digital River will use best efforts to maintain this access for Symantec support and partners. Digital River will provide Symantec access to any tools, systems or technologies to which Digital River has access, and to any modifications and/or enhancements to such tools, systems or technologies, , as long as there is appropriate security in place so that only Symantec business can be seen (this is currently read only and Symantec only).

DSS

Digital River will make available a tool to Symantec via which Symantec, as well as Symantec’s support partners, may view a Customer’s shipping status. Digital River will use best efforts to maintain this access for Symantec support and partners. Digital River will provide Symantec access to any tools, systems or technologies to which Digital River has access, and to any modifications and/or enhancements to such tools, systems or technologies, as long as there is appropriate security in place so that only Symantec business can be seen (this is currently read only and Symantec Only)

Global Collect

Digital River will make available a tool to Symantec via which Symantec may view a Customer’s manual payment method status. Digital River will use best efforts to maintain this access for Symantec support and partners.

Tools Training

As tools are updated or changed, Digital River will provide, at the Customer Service Rate, training documentation to Symantec Support a minimum of three weeks prior to launch. When it is a Digital River developed tool Symantec will also require a UAT (User Acceptance Testing) to be included during that same time period.

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

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EXHIBIT Y

DRM Requirements and ESD Platform

DRM REQUIREMENTS

1. Posting Services. Vendor shall provide the following posting services:

a. Posting Process. Upon receiving an updated Symantec Product list containing a new Symantec Product, Vendor will retrieve the non-Commerce enabled Purchase First and Try/Buy Symantec Products and related collateral, including the product executable, product description, thumb nail and box shots, from [*] site. Vendor will Commerce Enable the Symantec Products for Purchase First sale, and for Try/Buy download and subsequent sale, from the [*]. Vendor will perform all necessary quality assurance to ensure that the Purchase First and Try/Buy Symantec Products can be successfully purchased at the correct price, and that the product can be successfully downloaded and installed. Following receipt of an updated Symantec Product list containing a new Symantec Product, Vendor shall Commerce Enable, test, and post the Purchase First and Try/Buy version live for sale on the [*] within [*] business days. Vendor will also perform the following.

i.	Commerce enablement. Vendor shall commerce enable Symantec Purchase First and Try/Buy products in appropriate localized languages.
ii.	Merchandising. Symantec will have final approval regarding not only the merchandise space and content, but also all confirmation procedures, to be presented to End Users during downloads. Symantec’s approval will not be unreasonably withheld or delayed.
iii.	Other Services. At Symantec’s request and pursuant to the terms of a separate SOW mutually agreed upon by the Parties, Vendor shall provide commerce enabling services for Try/Buy products to be distributed directly by Symantec or its partners.
iv.	Licensing and Entitlement Integration. Pursuant to the terms of the Agreement, Vendor will perform the Licensing and entitlement Integration, which will include any and all later versions and updates to the Symantec Licensing and Download Manager Technology. Vendor agrees to design, develop, launch, operate and maintain the Symantec Licensing and Download Manager Technology as provided herein and in the Agreement.

b. Technology Integration.

i.

Set-up. Symantec and Vendor will mutually create and agree upon timelines and specifications for integration of the Symantec Licensing and Download Manager Technology into the Vendor systems.

ii.

Integration and implementation of Symantec Licensing and Download Manager Technology. Vendor shall integrate, implement and maintain the Symantec Licensing and Download Manager Technology at Vendor’s operations sites according to Symantec’s specifications as agreed upon by both Parties and pursuant to the quality assurance testing requirements of Symantec, as provided to Vendor by Symantec, from time to time, which are subject to change in Symantec’s sole discretion. Such Integration of Symantec Licensing and Download Manager Technology must:

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

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a.

Comply with Symantec’s guidelines, specifications (as agreed to by the Parties), security and development requirements for the Taiwan Stores, as previously provided to Vendor, and as updated by Symantec;

b.

Contain all features, including operational, graphical components, and as otherwise indicated in the specific specifications that comprise the “look and feel” of the Licensing Technology; and support all languages, currencies, and payment options available on the Direct Store globally. Any future customization requests after the final acceptance signoff and any changes to the completed work product that are required due to Symantec’s changed quality assurance, security or development requirements which were provided by Symantec after the completion of the work product may require additional development, as mutually agreed upon by the Parties, and as evidenced by an executed amendment to this Agreement or separately executed SOW and shall be billed at the lesser of: (a) an amount agreed upon by the parties; or (b) [*] dollars an hour (the “Billing Rate”).

iii.	Collaboration and Customization. During the integration and implementation process, Vendor and Symantec will collaborate on the integration, implementation, and look and feel of such in the use of the Symantec Licensing and Download Manager Technology. Such customization shall include, but not be limited to, the Customer experience (front end purchase process), security and commerce integration (back end purchase process) for the Symantec products that are commerce enabled. Any future customization requests after the final acceptance signoff may require additional development, as mutually agreed upon by the Parties, and as evidenced by an executed amendment to this Agreement or separately executed SOW.
iv.	Symantec Review and Testing. During Vendor’s integration with Symantec’s Licensing and Download Manager Technology and related QA testing, Vendor will permit Symantec to review and conduct live testing of the code as often as it deems reasonably necessary in its sole discretion. Upon Vendor’s completion of the integration of the purchase process components using the Symantec Licensing and Download Manager Technology, Symantec will have final review and testing of the purchase process using before the commerce enabled Symantec product goes live for Customer use on the Direct Store. If Symantec requests changes to be made, Vendor will make such changes and re-submit such changes to Symantec by no later than the next business day. Any changes that deviate from the original Work Request Specification will be subject to additional development, as mutually agreed upon by the Parties, and as evidenced by an executed amendment to this Agreement or separately executed SOW, billed at the Billing Rate. Symantec will have up to [*] business days to re-review and test the final commerce enabled product, and will notify Vendor of any additional changes required or of its acceptance of the final work product by the end of such period. The procedure set forth in this Section will be repeated until Symantec accepts the final commerce enabled product, consisting of the Symantec Licensing and Download Manager Technology as fully integrated and implemented by the Integration process, in writing. Upon receipt of written approval, Vendor shall launch the final commerce enabled product within [*] (the “Launch Date”).
v.	Sub-site Launch. Vendor shall launch the final commerce enabled product to the public no later than [*] following receipt of Symantec’s written acceptance. Vendor shall launch and maintain the final commerce enabled product that integrated with the Symantec Licensing and Download Manager Technology as soon as is reasonably possible.

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

154

SOLS Overview

• This document gives an overview of the SOLS (Symantec Online Licensing System) platform, including system components, functions, general flows, and integration with Symantec backend systems.

• There are two main types of E-Commerce models — ESD (buy before you try) and Trialware (try before you buy). The first part of this document discusses the simpler, ESD case. The second part discusses the Trialware case.

• The SOLS platform allows E-Commerce and other partners to offer Symantec consumer security products to their customers. Partners handle the business relationship with their customers, and the SOLS platform handles the secure download of products.

SOLS System

• There are [*] main aspects of the SOLS system:

• [*]

• [*]

• [*]

• [*]

Terms

Term	Definition
SOLS	Symantec Online Licensing System
EBE	Entitlement Backend
ESD	Electronic Software Distribution. Buy before you try (ecommerce). User pays, downloads, and installs software.
Trialware	Try before you buy. User downloads software, installs, runs for a trial period, and then purchases a license for the software. Software is turned into a fully functioning product.
Activation	Process of unlocking the software after purchase. This can either be automatic (in the case of ESD and Trialware) or manual where the user will have to enter an Activation Key in order to unlock the product (in the case of reinstall on a new machine).
Grace Period	Amount of time that a user can run the purchased software before they are forced to activate.
[*]	[*]
[*]	[*]
Activation Key	Unique key that is required to unlock the application.
VID	Vendor ID. Used to uniquely identify a business entity in the backend. Ex. Symantec.
PID	Product ID. Used to identify a product family for a vendor. Ex. NAV
SID	SKU ID. Used to identify a SKU within a vendor product family. Ex. NAV US English.
[*]	[*]
[*]	[*]

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

155

Term	Definition
	Trialware: delivered in the initial purchase request from the Symantec application. ESD: delivered in the ecommerce request response.
[*]	[*]

System Components [*]

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

156

ESD — Buy Before You Try

ESD Process

• [*]

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

157

Trialware — Try Before You Buy

Trialware Process

• Providing a complete trialware solution is inherently more complicated than the ESD solution, as the [*]

The process of downloading and (later) purchasing a trialware application takes place in many steps, including:

• [*]

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

158

Exhibit Z

Channel Partners and Electronic Distribution

     a. Price List. The prices for the Symantec products sold on the Channel Partner Sites, as defined below, is as found on the Channel Partner price list, which is provided by Symantec to Digital River from time to time.

     b. Channel Partner Download Sites. Symantec hereby authorizes Digital River to distribute Symantec Products to, and operate the download sites for, certain Symantec Partners (the “Channel Partner Sites”). These certain Symantec Partners are: Best buy; Egghead; Comp USA or CompUSAnet; Office Max; Staples; Amazon; Circuit City; AT&T; Dell; Gateway; Microwarehouse; Binary Research; Iomega; Multimicro; Hewlett Packard, AAFES; Apple Wharehouse; ClubMac; Computers4Sure (and .com); dartek.com; E-cost; Fujitsu Systems Business of America, Inc. and Fujitsu Shop Ltd.; Futureshop Ltd; Global Direct Mail and the Ltd site; Government Acquisitions, Inc.; GTSI; Micro Center; Office Depot; Outpost.com (Fry’s); PC Mall; Programmer’s Paradise; Quill corporation; RadioShack.ca; Walmart.com (all variations); Zones Inc.; Toshiba; and DSG Retail Limited, Maylands Avenue, Hemel Hempstead, Hertfordshire HP2 7TG, registered in England No. 504877, VAT No. 22659933, who commonly uses the trading name “Dixon’s” (collectively the “Channel Partners”). Note that Symantec and Digital River will use the EMEA Channel Distribution Price list for this particular Channel Partner, Dixon’s. The Channel Partner Sites are treated as Link and Revenue Share arrangements under the Agreement. Symantec will provide Digital River with a completed SIF for each Channel Partner Site it has decided to remove from the Channel Partner program, and convert to a Symantec-direct partner relationship. Upon receipt by Digital River of a Channel Partner SIF: (a) the Channel Partner Site will be deemed removed from the Channel Partner program; (b) the Channel Partner Site Price List will no longer apply to such Channel Partner Site; and (c) sales from the affected Channel Partner Site(s) will then be combined with all other Digital River sales for the purposes determining the [*] that Digital River will pay Symantec for the Symantec Product. Digital River is only authorized to operate such Channel Partner Sites as such Sites exist. For the avoidance of doubt, without the express written consent of Symantec, Digital River is not authorized to: (a) operate download sites for any other entity; or (b) alter, enhance or expand the download sites for the Channel Partners in so far as they relate to the offering of Symantec Products. Upon Symantec’s determination, in its sole discretion, regarding how and where it will transition the Channel Partners, Digital River will offer all reasonable assistance to Symantec in connection with such a transition. The foregoing authorization includes the right to use, solely in connection with this Exhibit Z and to the minimum extent necessary, the DRM Technology and any other technology or Symantec Tools reasonably required in order for Digital River to discharge the specific obligations contained in this Exhibit.

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

159

EX-12.1

EXHIBIT 12.1

Digital River, Inc.

Computation of Ratio of Earnings to Fixed Charges

	Years Ended December 31,
	2002			2003		2004		2005		2006
	As Restated(2)			As Restated(2)		As Restated(2)		As Restated(2)
Income (Loss) from operations	$	(916	)	$	16,298	$	34,762	$	66,713	$	67,595
Add: Fixed charges		165			235		2,094		3,092		3,240
Earnings as defined		(751	)		16,533		36,856		69,805		70,835
Fixed charges	$	165		$	235	$	2,094	$	3,092	$	3,240
Ratio of earnings to fixed charges(1)		—			70.4		17.6		22.6		21.9

(1)

The ratio of earnings to fixed charges is computed by dividing income (loss) from operations plus fixed charges by fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs and that portion of rental payments under operating leases that we believe to be representative of interest. Earnings were insufficient to cover fixed charges in 2002 by an amount equal to the net loss for the period.

(2)

See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements.

EX-21.1

EXHIBIT 21.1

Subsidiaries of Digital River, Inc.

	State or Jurisdiction
Subsidiaries	of Incorporation
BlueHornet Networks, Inc.	California
CCNow, Inc.	Minnesota
Digibuy, Inc.	Minnesota
Digital River do Brasil Servicos Administrativos Limitada	Brazil
Digital River [Cyprus] Limited	Cyprus
Digital River E-Business Services, Inc.	Delaware
Digital River GmbH	Germany
Digital River Holding GmbH	Germany
Digital River International S.a.r.l	Luxembourg
Digital River Ireland Limited	Ireland
Digital River Japan K.K	Japan
Digital River Korea YH	Korea
Digital River Marketing Solutions, Inc.	Delaware
Digital River Mexico, S de R.L. de C.V.	Mexico
Digital River Technology Limited	Ireland
Digital River UK Limited	United Kingdom
DR Acquisition 03-F, Inc.	Minnesota
DR Acquisition Corp 04-E	Minnesota
DR APAC, LLC	Minnesota
DR Express, Inc.	Delaware
DR E-Channel, Inc.	Minnesota
DR E-Subscription Services, Inc.	Delaware
DR globalTech, Inc.	Delaware
DRT Acquisition Corp.	Delaware
element 5, Inc.	Delaware
Emetrix, Inc.	Minnesota
Fireclick, Inc.	Minnesota
FreeMerchant, Inc.	Minnesota
GameZone Online, Inc.	Minnesota
MindVision, Inc.	Nebraska
Orbit Commerce, Inc.	Minnesota
Reg.Net, Inc.	Minnesota
RegNow, Inc.	Minnesota
RegSoft, Inc.	Minnesota
SW REG, Inc.	Minnesota

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-67085, 333-79269, 333-36680, 333-47026, 333-53332, 333-69036, 333-101759, 333-105864 and 333-130626), the Registration Statements on Form S-3 (Nos. 333-81626, 333-85996, 333-118519, 333-120602, 333-122068 and 333-131433) and the Registration Statement on Form S-4 (No. 333-122069 of Digital River, Inc. and in the related Prospectus’) of our reports dated March 1, 2007, with respect to the consolidated financial statements of Digital River, Inc., Digital River, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Digital River, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2006.

Our audits also included the financial statement schedule of Digital River, Inc. listed in Item 15 (a) (2). This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/  Ernst & Young LLP

Minneapolis, Minnesota

March 1, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Joel A. Ronning, certify that:

1. I have reviewed this annual report on Form 10-K of Digital River, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Joel A. Ronning

Joel A. Ronning

Chief Executive Officer

Date: March 1, 2007

EX-31.2

EXHIBIT 31.2

I, Thomas M. Donnelly, certify that:

1. I have reviewed this annual report on Form 10-K of Digital River, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Thomas M. Donnelly

Thomas M. Donnelly

Chief Financial Officer

Date: March 1, 2007

EX-32

EXHIBIT 32

Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Digital River, Inc. (the “Company”) for the period ended December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Joel A. Ronning, Chief Executive Officer and Thomas M. Donnelly, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Joel A. Ronning

Joel A. Ronning

Chief Executive Officer

/s/  Thomas M. Donnelly

Thomas M. Donnelly

Chief Financial Officer

Date: March 1, 2007

A signed original of this written statement required by Section 906 has been provided to Digital River, Inc. and will be retained by Digital River, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.