Document:

Exhibit 10.2

 

ASSIGNMENT AGREEMENT

 

THIS ASSIGNMENT AGREEMENT (this “Agreement”), dated as of the date signed
by the last party hereto, is made and entered into by and between Ergo Science,
Inc. 790 Turnpike St, Suite 205, North Andover, MA 01845, a Delaware company
(“Assignor”) and ERGO Versicherungsgruppe AG, Victoria Platz 2, 40198
Dusseldorf, Germany, a company organized under the laws of Germany
(“Assignee”).

 

WHEREAS, Assignor is the owner of the domain name
registration for ergo.com (“Domain Name Registration”); and

 

WHEREAS, Assignee wishes to purchase and receive an
assignment of the Assignor’s entire right, title and interest in and to the
said Domain Name Registration, and Assignor is willing, pursuant to the terms
of this Agreement, to sell and assign the same to Assignee;

 

NOW THEREFORE, pursuant to the terms of this Agreement and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Subject to payment in full of the Purchase Price
(as defined herein) within 20 days after Assignor completes its obligations
under paragraph 4 hereunder transferring the domain name registration hereunder
and notifies Assignee’s counsel, Assignor does hereby grant, assign, and convey
unto Assignee its entire right, title and interest in and to the Domain Name
Registration.  If the Purchase Price is
not paid in full in cash by such date, or if Assignee has failed to request
prior to September 30, 2003 that the domain name be transferred as contemplated
under paragraph 3 hereunder, this Agreement shall automatically terminate and
the grant, assignment and conveyance shall be null and void ab initio.

 

2.                                       In full consideration for the assignment set
forth herein, Assignee shall pay Assignor in lawful money of the United States
of America, One Hundred Thousand Dollars (US $100,000) (the “Purchase Price”)
in immediately available funds in the form of a bank cashier’s check, certified
check, or wire transfer, payment to be made and delivered to Assignor as set
forth herein.

 

3.                                       Assignee will forward $100,000 (the “Funds”) to
Assignee’s counsel, Janet F. Satterthwaite, Venable Baetjer, Howard &
Civiletti, 1201 New York Avenue, NW, Suite 1000, Washington, DC 20005
(“Assignee’s Counsel”), to be held by such counsel until the domain name has
been transferred as provided in this Section 3.  Once Assignee’s Counsel confirms to Assignor’s counsel, Pitney,
Hardin, Kipp & Szuch LLP, Attention: Michael J. Dunne (“Assignor’s
Counsel”), that the Funds have been received and are being held in escrow by
Assignee’s Counsel, Assignee’s Counsel will direct Assignee, or its Internet
service provider, Cable & Wireless Deutschland GmbH, to go to www.nsi.com
and request that the domain name ergo.com (the “Domain Name”) be transferred to
Assignee.  Assignor will receive an
e-mail addressed to its administrative contact to approve the transfer.  Assignor will approve the transfer

 

 

within three business days of receipt of the
request for approval from Network Solutions. 
Once the transfer has been approved and the transfer to Assignee has
been completed, Assignee’s Counsel shall release the Funds to Assignor.  Upon the transfer of the Domain Name to
Assignee, Assignee will notify Assignee’s Counsel, who will immediately notify
Assignor’s Counsel of the same.

 

4.                                       Assignor agrees to take such further actions and
to execute such other documents, at Assignee’s request and expense, reasonably
necessary to effectuate the transfer of the Domain Name Registration ergo.com
and to vest in and perfect for the benefit of Assignee, the rights, titles and
interests hereby granted, assigned and conveyed.

 

5.                                       Upon payment in full of the Purchase Price, and
except as provided above, Assignor shall have no rights in or obligations
regarding the Domain Name Registration, and Assignee shall bear all costs and
expenses for any recordation of the assignment, further prosecution and
maintenance and transfer of registrations, as the case may be, associated with
the assigned Domain Name Registration, subject to the terms of this Agreement.

 

6.                                       (a) 
Assignor represents and warrants that:

 

i.                                          To the best of its knowledge, Assignor is the
owner of all right and title in the Domain Name Registration free and clear of
all liens and encumbrances; and to its knowledge the Domain Name Registration
has not expired;

 

ii.                                       No claims, actions or disputes involving Assignor
concerning the Domain Name Registration are, to Assignor’s knowledge, pending
or threatened; and

 

iii.                                    Assignor has not granted any right or license to
any third party to use the Domain Name Registration.

 

(b)                                 Except as expressly provided under 6(a) above,
the Domain Name Registration is transferred “AS IS” and “WITH ALL FAULTS” and
Assignor makes no other and hereby disclaims all other representations and
warranties, including, without limitation, any and all implied warranties of
title, lack of infringement, merchantability and fitness for a particular
purpose.

 

7.                                       Assignee agrees to forward e-mails directed to
Assignor for ninety days following the transfer of the Domain Name
Registration.

 

8.                                       All covenants, conditions and agreements
contained in this Agreement shall bind and inure to the benefit of the parties
hereto and their respective executors, administrators, heirs at law, successors
in interest, and assignees.

 

9.                                       This Agreement constitutes the entire
understanding between the parties with respect to its subject matter and cannot
be modified, changed or amended except in writing executed by the parties
hereto, or their successors or assignees.

 

2

 

10.                                 Each party agrees that it has had the opportunity
to request assistance of counsel; that it has reviewed and had the opportunity
to participate in the drafting of the Agreement; and that the normal rule of
construction, to the effect that any ambiguities are to be resolved against the
drafting party, shall not be employed in the interpretation of the Agreement or
any revision or addendum hereto.

 

11.                                 The Agreement shall be construed under the laws
of the State of New York and each of the parties agrees to submit to personal
jurisdiction in U.S. District Court for the Southern District of New York, or
New York State Courts, and not to contest jurisdiction or venue in the
above-named courts in any dispute arising out of this Agreement.

 

12.                                 The Agreement may be executed in counterparts,
each of which shall be deemed to be an original for all purposes.

 

13.                                 Confidentiality:  The Parties agree to keep the
terms and identity of this Agreement confidential, except as may be required by
law, court order, or to enforce the terms of this Agreement.  Neither party shall issue any press release
or other public statement about this Agreement nor otherwise disclose the
identity of, or any details of, this Agreement.

 

IN WITNESS WHEREOF, the undersigned has duly executed this
Agreement on the 28th day of May, 2003

 

 

	
   

  	
  ASSIGNOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ERGO SCIENCE INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/David
  R. Burt

  	
   

  
	
   

  	
  Name:

  	
   

  	
  David
  R. Burt

  	
   

  
	
   

  	
  Title:

  	
   

  	
  CEO

  	
   

  
						

 

 

IN WITNESS WHEREOF, the undersigned has duly executed this
Agreement on the 30th day of June, 2003.

 

 

	
   

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ERGO Versicherungsgruppe AG

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Dr. Boetius Schmidt

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Dr. Boetius Schmidt

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Member of the Board

  	
   

  
							

 

3EXHIBIT
10.2

 

DIGITAL
RIVER, INC.

1999 STOCK OPTION PLAN

(FORMERLY KNOWN AS THE 1999 NON-OFFICER STOCK OPTION PLAN)

 

ADOPTED AUGUST 10, 1999

AMENDED FEBRUARY 7, 2000

FURTHER AMENDED FEBRUARY 7, 2001

FURTHER AMENDED AUGUST 1, 2002

 

1.                            PURPOSES.  The principal purposes of the Digital River,
Inc. (the “Corporation”) 1999 Stock Option Plan (formerly known as the 1999
Non-Officer Stock Option Plan) (the “Plan”) Plan are: (a) to improve individual
performance by providing long-term incentives and rewards to Employees,
Directors and Consultants of the Corporation; (b) to assist the Corporation in
attracting, retaining and motivating Employees, Directors and Consultants with
experience and ability; and (c) to associate the interests of such persons with
those of the Corporation’s stockholders.

 

Options granted under this Plan may be Non-Qualified
Stock Options.

 

2.                            DEFINITIONS.  For purposes of this Plan, the following
terms shall have the meanings indicated below:

 

(a)                        “Affiliate”
shall mean any parent corporation or subsidiary corporation of the Corporation,
whether now or hereafter existing, as those terms are defined in Sections
424(e) and (f), respectively, of the Code.

 

(b)                        “Board”
shall mean the Board of Directors of the Corporation.

 

(c)                        “Capital
Stock” shall mean any of the Corporation’s authorized but unissued
shares of voting common stock, par value of One Cent ($.01) per share.

 

(d)                        “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(e)                        “Committee”
shall mean a committee comprised of one or more members of the Board appointed
by the Board in accordance with Section 4 of the Plan.

 

(f)                          “Consultant”
shall mean any person, including an advisor or other form of independent
contractor, engaged by the Corporation or an Affiliate to render consulting
services and who is compensated for such services (provided that such services
are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the Corporation’s securities), provided that the term “Consultant” shall not
include Employees or Directors.

 

(g)                       “Continuous
Service” shall mean the Optionee’s service with the Corporation or
an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Optionee’s Continuous Service shall not be
deemed to have terminated merely because of a

 

 

change in the capacity in which the Optionee renders service to the
Corporation or an Affiliate as an Employee, Consultant or Director or a change
in the entity for which the Optionee renders such service, provided that there
is no interruption or termination of the Optionee’s Continuous Service. For
example, a change in status from an Employee of the Corporation to a Consultant
of an Affiliate or a Director of the Corporation will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of
the Corporation, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of
absence approved by that party, including sick leave, military leave or any
other personal leave.

 

(h)                       “Corporation”
shall mean Digital River, Inc., a Delaware corporation and any of its
Affiliates.

 

(i)                          “Director”
shall mean a member of the Board.

 

(j)                          “Employee”
shall mean any person employed by the Corporation or by any Affiliate. Mere
services as a Director or payment of a director’s fee by the Corporation or an
Affiliate shall not be sufficient to constitute “employment” by the Corporation
or an Affiliate.

 

(k)                      “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

(l)                          “Fair Market
Value” shall mean the price per share determined as follows: (a) if
the security is listed for trading on one or more national securities exchanges
(including the NASDAQ National Market System), the reported last sales price on
such principal exchange on the date in question, or if such security shall not
have been traded on such principal exchange on such date, the reported last
sales price on such principal exchange on the first day prior thereto on which
such security was so traded; or (b) if the security is not listed for trading
on a national securities exchange (including the NASDAQ National Market System)
but is traded in the over-the-counter market, the mean of the highest and
lowest bid prices for such security on the date in question, or if there are no
such bid prices for such security on such date, the mean of the highest and
lowest bid prices on the first day prior thereto on which such prices existed;
or (c) if neither (a) nor (b) is applicable, by any means deemed fair and
reasonable by the Committee (as defined below) which determination shall be
final and binding on all parties.

 

(m)                    “Non-Qualified
Stock Option” shall mean an Option, not intended to qualify as an
“incentive stock option” as defined in Section 422 of the Code, to purchase
Capital Stock of the Corporation.

 

(n)                       “Officer”
shall mean a person who possesses the authority of an “officer” as that term is
used in Rule 4460(i)(1)(A) of the Rules of the National Association of
Securities Dealers, Inc. For purposes of the Plan, a person in the position of
“Vice President” or higher shall be classified as an “Officer” unless the Board
or the Committee expressly finds that such person does not possess the
authority of an “officer” as that term is used in Rule 4460(i)(1)(A) of the
Rules of the National Association of Securities Dealers, Inc.

 

(o)                        “Option”
shall mean a Non-Qualified Stock Option granted pursuant to the Plan.

 

2

 

(p)                        “Option
Agreement” shall mean a written agreement pursuant to which the
Corporation grants an Option to an Optionee and sets the terms and conditions
of the Option. Each Option Agreement shall be subject to the terms and
conditions of the Plan.

 

(q)                        “Option Date”
shall mean the date upon which an Option Agreement for an Option granted
pursuant to the Plan is duly executed by or on behalf of the Corporation.

 

(r)                        “Option Stock”
shall mean the voting common stock of the Corporation, par value of One Cent
($.01) per share (subject to adjustment as described in Section 7) reserved for
Options pursuant to this Plan, or any other class of stock of the Corporation
which may be substituted therefor by exchange, stock split or otherwise.

 

(s)                        “Optionee”
shall mean an Employee, Director or Consultant of the Corporation or one of its
Affiliates to whom an Option has been granted under the Plan or, if applicable,
such other person who holds an outstanding Option.

 

(t)                          “Plan”
shall mean this 1999 Stock Option Plan (formerly known as the 1999 Non-Officer
Stock Option Plan), as amended hereafter from time to time.

 

(u)                       “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

3.                            OPTIONS
AVAILABLE UNDER PLAN.  The
Corporation’s authorized Capital Stock in an amount equal to Eight Million Four
Hundred Fifty Thousand (8,450,000) shares is hereby made available, and shall
be reserved for issuance under this Plan. The aggregate number of shares
available under this Plan shall be subject to adjustment on the occurrence of
any of the events and in the manner set forth in Section 7. Except as provided
in Section 7, in no event shall the number of shares reserved be reduced below
the number of shares issuable upon exercise of outstanding Options. If an
Option shall expire or terminate for any reason without having been exercised
in full, the unpurchased shares shall (unless the Plan shall have been
terminated) become available for other Options under the Plan.

 

4.                            ADMINISTRATION.  The Plan shall be administered by the
Committee. The Corporation shall grant Options pursuant to the Plan upon
determinations of the Committee as to which of the eligible persons shall be
granted Options, the number of shares to be optioned and the term during which
any such Options may be exercised. The Committee may from time to time adopt
rules and regulations for carrying out the Plan and shall have authority and
discretion to interpret and construe any provision of the Plan. Each
determination, interpretation or other action made or taken by the Committee
pursuant to the provisions of the Plan shall be final and conclusive. No member
of the Committee will be liable for any action or determination made in good
faith with respect to the Plan or any Option granted under the Plan.

 

5.                            ELIGIBILITY
FOR NON-QUALIFIED STOCK OPTIONS.

 

(a)                        Eligible
Persons.  Non-Qualified Stock
Options may be granted to Employees, Directors and Consultants.

 

(b)                        Restrictions
on Eligibility.  Notwithstanding the
foregoing, the aggregate number of shares issued pursuant to Options granted to
Officers and Directors cannot exceed forty percent

 

3

 

(40%) of the number of shares reserved for issuance under the Plan as
determined at the time of each such issuance to an Officer or Director, except
that there shall be excluded from this calculation shares issued to Officers
not previously employed by the Corporation pursuant to Options granted as an
inducement essential to such individuals entering into employment contracts
with the Corporation.

 

(c)                        Consultants.

 

(i)                         A
Consultant shall not be eligible for the grant of an Option if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”)
is not available to register either the offer or the sale of the Corporation’s
securities to such Consultant because of the nature of the services that the
Consultant is providing to the Corporation, or because the Consultant is not a
natural person, or as otherwise provided by the rules governing the use of Form
S-8, unless the Corporation determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (E.G., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of
all other relevant jurisdictions.

 

(ii)                     Form S-8
generally is available to consultants and advisors only if (i) they are natural
persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s
parent; and (iii) the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and do not directly or indirectly
promote or maintain a market for the issuer’s securities.

 

6.                            TERMS
AND CONDITIONS OF OPTIONS.  Whenever
the Committee shall designate an Optionee, it shall communicate to the
Secretary of the Corporation the name of the Optionee, the number of shares to
be optioned and such other terms and conditions as it shall determine, not
inconsistent with the provisions of this Plan. The chief executive officer or
other officer of the Corporation shall then enter into an Option Agreement with
the Optionee, complying with and subject to the following terms and conditions
and setting forth such other terms and conditions of the Option as determined
by the Committee:

 

(a)                        Number of
Shares and Option Price.  The Option
Agreement shall state the total number of shares to which it pertains. The
price of Option Stock for a Non-Qualified Stock Option shall be determined by
the Committee and may be less than the Fair Market Value at the Option Date.
The Option price shall be subject to adjustment as provided in Section 7
hereof.

 

(b)                        Time and
Manner of Exercise of Option. 
Options granted hereunder shall be exercisable as determined by the Committee
at the time of the grant of such Options. Notwithstanding the foregoing, no
Option may be exercised after ten (10) years from the date on which the Option
was granted.

 

(c)                        Termination
of Continuous Service, Except Death or Disability.  In the event that the continuous service of
an Optionee shall cease for any reason other than his or her death, disability
or “for cause,” unless otherwise specified in the Option Agreement, any vested,
outstanding Options shall terminate ninety (90) days after the termination of
the employee or at

 

4

 

the time specified in the Option Agreement.  If an alternate period other than ninety (90) days is included in
the Option Agreement, any vested Options not exercised within the period
specified in the Option Agreement shall terminate at the expiration of such
period.  In the event that Optionee
shall be terminated “for cause” including, but not limited to: (i) willful
breach of any agreement entered into with the Corporation; (ii)
misappropriation of the Corporation’s property, fraud, embezzlement, breach of
fiduciary duty, other acts of dishonesty against the Corporation; or (iii)
conviction of any felony or crime involving moral turpitude, the Option shall
terminate seven (7) days after termination of the employee.

 

(d)                        Death or
Disability of Optionee.  If the
Optionee shall die or become disabled within the definition of Section 22(e)(3)
of the Code while in the employ of the Corporation or any Affiliate or if the
Optionee shall die within the period after the termination of his or her
Continuous Service with the Corporation or any Affiliate as provided in
paragraph (c) of this Section, and in either case shall not have fully
exercised his or her vested Options, any vested Options granted pursuant to the
Plan which were exercisable at the date of termination of Continuous Service
shall terminate at the time specified in the Option Agreement; provided,
however, that such vested Options shall not be exercisable for a period greater
than one (1) year following his or her death or date of disability. If no such
periods are specified in the Option Agreement, then any vested outstanding
Options shall be exercisable only within: (i) six (6) months following the
Optionee’s death and (ii) thirty (30) days following the Optionee’s disability.
In the case of death, such Option shall be exercised pursuant to paragraph (e)
of this Section by the person or persons to whom the Optionee’s rights under
the Option shall pass by the Optionee’s will or by the laws of descent and
distribution, and only to the extent that such Options were exercisable at the
time of death.

 

(e)                        Transfer
of Option.  Each Option granted
hereunder shall, by its terms, not be transferable by the Optionee other than
by will or by the laws of descent and distribution, and shall be, during the
Optionee’s lifetime, exercisable only by the Optionee or Optionee’s guardian or
legal representative. Except as permitted by the preceding sentence, each
Option granted under the Plan and the rights and privileges thereby conferred
shall not be transferred, assigned or pledged in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Upon any attempt to so transfer, assign, pledge, or otherwise
dispose of the Option, or of any right or privilege conferred thereby, contrary
to the provisions of the Option or the Plan, or upon levy of any attachment or
similar process upon such rights and privileges, the Option, and such rights
and privileges, shall immediately become null and void.

 

(f)                          Manner
of Exercise of Options.  An Option
may be exercised, in whole or in part, at such time or times and with such
rights with respect to such shares, which have accrued and are in effect. Such
Option shall be exercisable only by: (i) written notice to the Corporation of
intent to exercise the Option with respect to a specified number of shares of
stock; (ii) tendering the original Option Agreement to the Corporation; and
(iii) payment to the Corporation of the amount of the Option purchase price for
the number of shares of stock with respect to which the Option is then
exercised. Payment of the Option purchase price shall be made in the manner set
forth in the Option Agreement, which may be in: (i) cash, check or equivalent
form; (ii) by delivery of shares of common stock of the Corporation which have
been owned for no less than six (6) months, with a Fair Market Value equal to
the Option purchase price; (iii) by a

 

5

 

combination of cash and shares of common stock of the Corporation,
which valued together shall equal the Option purchase price; provided, however,
that there shall be no such exercise at any time as to fewer than one hundred
(100) shares or all of the remaining shares then purchasable by the Optionee or
person exercising the Option. When all shares of optioned stock covered by the
Option Agreement have been issued to the Optionee, or the Option shall expire,
the Option Agreement shall be canceled.

 

(g)                       Option
Certificate.  The Board of Directors
shall have discretion to issue a certificate representing an Option granted
pursuant to this Plan. Such certificate shall be surrendered to the Corporation
upon exercise of the Option.

 

(h)                       Delivery of
Certificate.  Except where shares
are held for unpaid withholding taxes, between fifteen (15) and thirty (30)
days after receipt of the written notice and payment specified above, the
Corporation shall deliver to the Optionee certificates for the number of shares
with respect to which the Option has been exercised, issued in the Optionee’s
name; provided, however, that such delivery shall be deemed effected for all
purposes when the Corporation, or the stock transfer agent for the Corporation,
shall have deposited such certificates in the United States mail, postage
prepaid, addressed to the Optionee and the address specified in the written
notice of exercise.

 

(i)                          Other
Provisions.  The Option Agreements
under this Section shall contain such other provisions as the Committee shall
deem advisable.

 

7.                            ADJUSTMENTS.

 

(a)                        Capitalization
Adjustments.  If any change is made
in the Capital Stock subject to the Plan, or subject to any Option, without the
receipt of consideration by the Corporation (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Corporation), the Plan will
be appropriately adjusted in the class(es) and maximum number of shares subject
to the Plan pursuant to Section 3 and the maximum number of shares subject to
award to any person pursuant to Sections 5 and 6, and the outstanding Options
will be appropriately adjusted in the class(es) and number of shares and price
per share of stock subject to such outstanding Options. Such adjustments shall
be made by the Board of Directors of the Corporation, the determination of
which shall be final, binding and conclusive. (The conversion of any
convertible securities of the Corporation shall not be treated as a transaction
“without receipt of consideration” by the Corporation.)

 

(b)                        Change In
Control - Asset Sale, Merger, Consolidation Or Reverse Merger.  In the event of (1) a sale of substantially
all of the assets of the Corporation, (2) a merger or consolidation in which
the Corporation is not the surviving corporation or (3) a reverse merger in
which the Corporation is the surviving corporation but the shares of Capital
Stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Options outstanding under the Plan or shall substitute similar Options
(including an award to acquire the same consideration paid to the stockholders
in the

 

6

 

transaction described in this Section 7, paragraph (b)) for those
outstanding under the Plan. In the event any surviving corporation or acquiring
corporation refuses to assume such Options or to substitute similar Options for
those outstanding under the Plan but subject to the restrictions in this
Section 7, paragraph (d), then with respect to Options held by Optionees whose
Continuous Service has not terminated, the vesting shall be accelerated in
full, and the Options shall terminate if not exercised at or prior to such
event. With respect to any other Options outstanding under the Plan, such
Options shall terminate if not exercised prior to such event.

 

(c)                        Change In
Control - Securities Acquisition. 
In the event of an acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Corporation or an Affiliate) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Corporation representing at
least fifty percent (50%) of the combined voting power entitled to vote in the
election of directors (other than an acquisition pursuant to Section 7,
paragraph (b) above), then with respect to Options held by Optionees whose
Continuous Service has not terminated and subject to the restrictions in
Section 7, paragraph (d), the vesting of such Options shall be accelerated in
full.

 

(d)                        Pooling of
Interests.  If the Corporation and
the other party to the transaction constituting a “change in control” as
described in this Section 7 agree that such transaction is to be treated as a
“pooling of interests” for financial reporting purposes, and if such
transaction in fact is so treated, then the accelerated vesting of Options
described in this Section 7 shall not occur to the extent that the
Corporation’s independent public accountants and such other party’s independent
public accountants separately determine in good faith that such acceleration
would preclude the use of “pooling of interests” accounting.

 

8.                            NO
RIGHTS AS STOCKHOLDER.  An Optionee
shall not, by reason of any Option granted hereunder, have any right of a
stockholder of the Corporation with respect to the shares covered by his Option
until such shares shall have been issued to the Optionee.

 

9.                            NO
OBLIGATION TO EXERCISE OPTION.  The
granting of an Option shall impose no obligation upon the Optionee to exercise
such Option. Neither shall the Plan confer upon the Optionee any rights
respecting continued Continuous Service nor limit the Optionee’s rights or the
Corporation’s rights to terminate such Continuous Service.

 

10.                     WITHHOLDING
TAXES.  Whenever under the Plan
shares of Option Stock are to be issued upon exercise of the Options granted
hereunder, and prior to the delivery of any certificate or certificates for
said shares by the Corporation, the Corporation shall have the right to require
the Optionee to remit to the Corporation an amount sufficient to satisfy any
federal and state withholding or other employment taxes resulting from such
exercise. In the event that withholding taxes are not paid within five days
after the date of exercise, to the extent permitted by law the Corporation
shall have the right, but not the obligation, to cause such withholding taxes
to be satisfied by reducing the number of shares of stock deliverable or by
offsetting such withholding taxes against amounts otherwise due from the
Corporation to the Optionee; provided, however, that no shares are withheld
with a value exceeding the minimum amount of tax required to be withheld by
law. If withholding taxes are paid by reduction of the number of

 

7

 

shares deliverable to Optionee, such shares shall be valued at the Fair
Market Value as of the fifth business day following the date of exercise.

 

11.                     MODIFICATION
OF OUTSTANDING OPTIONS.  The
Committee may accelerate the exercisability of an outstanding Option and may
authorize modification of any outstanding Option with the consent of the
Optionee when and subject to such conditions as are deemed to be in the best
interests of the Corporation and in accordance with the purposes of the Plan.

 

12.                     FOREIGN
EMPLOYEES.  Without amending the
Plan, the Committee may grant Options to eligible Employees, Directors and
Consultants who are foreign nationals on such terms and conditions different
from those specified in this Plan as may in the judgment of the Committee be
necessary or desirable to foster and promote achievement of the purposes of the
Plan, and, in furtherance of such purposes the Committee may make such
modification, amendments, procedures, subplans and the like as may be necessary
or advisable to comply with provisions of laws in other countries in which the
Corporation operates or has Employees, Directors and Consultants.

 

13.                     LIQUIDATION.  Upon the complete liquidation of the
Corporation, any unexercised Options theretofore granted under this Plan shall
be deemed canceled, except as otherwise provided in Section 7 in connection
with a merger, consolidation or reorganization of the Corporation.

 

14.                     CONDITIONS
UPON ISSUANCE OF SHARES.  The
Corporation may require the Optionee (or any person to whom an Option is
transferred under Section 6 paragraph (e)) to execute such documents and to
provide such representations, written assurances or information which the
Corporation shall determine is necessary, desirable or appropriate to comply
with applicable securities and other laws as a condition of granting an Option
to such Optionee or permitting the Optionee (or any person to whom an Option is
transferred under Section 6 paragraph (e)) to exercise such Option. The Corporation
may, upon advice of counsel to the Corporation, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities and other laws,
including, but not limited to, legends restricting the transfer of the Option
Stock.

 

15.                     TERMINATION
AND AMENDMENT OF THE PLAN.  This
Plan shall terminate when all reserved Option Stock has been issued and cannot
return to the reserve or at such earlier time as the Board of Directors shall
determine. Any termination shall not affect any Options then outstanding under
the Plan.

 

The Board or the Committee at any time, and from time
to time, may amend the Plan.

 

16.                     INDEMNIFICATION.  In addition to such other rights of
indemnification as they may have and subject to limitations of applicable law,
the members of the Committee shall be indemnified by the Corporation against
all costs and expenses reasonably incurred by them in connection with any
action, suit or proceeding to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any rights granted thereunder and against all amounts paid to them in
settlement thereof or paid by them in satisfaction of a judgment of any such
action, suit or proceeding. The Committee member or

 

8

 

members shall notify the Corporation in writing, giving the Corporation
an opportunity at its own cost to defend the same before such Committee member
or members undertake to defend the same on their own behalf.

 

17.                     GENERAL
PROVISIONS.  If any day on or before
which action under the Plan must be taken falls on a Saturday, Sunday, or legal
holiday, such action may be taken on the next succeeding day not a Saturday,
Sunday or legal holiday. To the extent that federal laws do not otherwise
control, the Plan and all determinations made and actions taken pursuant hereto
shall be governed by and construed under the laws of the State of Delaware.

 

9

 

DIGITAL RIVER, INC.

NOTICE OF EXERCISE

 

	
  Digital River, Inc.

  
	
   

  
	
   

  	
  Re:

  	
  Exercise of Stock Options

  
	
   

  	
   

  	
  1999 Stock Option Plan

  
	
   

  	
   

  	
  (formerly known as the 1999 Non-Officer Stock Option
  Plan)

  

 

Ladies and Gentlemen:

 

Pursuant to the terms of that certain Stock Option Agreement under the
Digital River, Inc. 1999 Stock Option Plan (formerly known as the 1999
Non-Officer Stock Option Plan), this Letter is to notify you that I hereby
exercise my outstanding stock options to purchase                 
shares of common stock (the “Shares”) of Digital River, Inc. Attached is
(indicate by placing an “X” in the appropriate box):

 

o     (i)   
a check in the amount of
$                  
made payable to Digital River, Inc.;

 

o      (ii) 
 another form of consideration
acceptable to Digital River, Inc. (explain below):

 

                                                                                                      
in payment of the exercise price of
$                          
per share.

 

I acknowledge prior receipt of a copy of the Digital River, Inc. 1999
Stock Option Plan (formerly known as the 1999 Non-Officer Stock Option Plan). I
understand that I may suffer adverse tax consequences as the result of my
purchase of Shares. I represent that I have consulted with any tax consultants
I deem advisable in connection with the purchase or disposition of the Shares
and that I am not relying on Digital River, Inc. for any tax advice.

 

	
   

  	
  Very Truly Yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						

 

10

 

DIGITAL RIVER, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

UNDER THE 1999 STOCK OPTION PLAN

 

THIS AGREEMENT is made as of
                     ,
between DIGITAL RIVER, INC., a Delaware corporation (the “Company’), and
                                      
(the “Optionee”).

 

THE PARTIES AGREE AS FOLLOWS:

 

1.                            OPTION
GRANT.  The Company hereby grants to
the Optionee an option (the “Option”) to purchase the number of shares of the
Company’s voting common stock (the “Shares”), for an exercise price per share
(the “Option Price”) and based upon a Grant Date, all as set forth below:

 

	
  Shares Under Option:

  	
   

  	
   

  
	
  Option Price Per Share:

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
   

  
	
  Vesting Commencement Date:

  	
   

  	
   

  
	
  Vesting Schedule (Cumulative):

  	
   

  	
   

  

 

The Option will be subject to all of the terms and conditions set forth
herein and in the Company’s 1999 Stock Option Plan (the “1999 Plan”), a copy of
which is attached hereto and incorporated herein by reference. The Option granted
hereunder will be a Non-Qualified Stock Option, NOT intended to qualify as an
“incentive stock option” as defined in Section 422 of the Internal Revenue Code
of 1986, as amended.

 

2.                            STOCKHOLDER
RIGHTS.  No rights or privileges of
a stockholder in the Company are conferred by reason of the granting of the
Option. Optionee will not become a stockholder in the Company with respect to
the Shares unless and until the Option has been properly exercised and the
Option Price fully paid as to the portion of the Option exercised.

 

3.                            TERMINATION.  Subject to earlier termination as provided
in the 1999 Plan, this Option will expire, unless previously exercised in full,
on the date ten (10) years from the Grant Date.

 

4.                            TERMS
OF THE 1999 PLAN.  The Optionee
understands that the 1999 Plan includes important terms and conditions that
apply to this Option. Those terms include (without limitation): important
conditions on the right of the Optionee to exercise the Option; important
restrictions on the ability of the Optionee to transfer the Option or to
transfer Shares received upon exercise of the Option; and early termination of
the Option following the occurrence of certain events, including the Optionee
no longer being an employee, director or consultant to or of the Company or its
subsidiaries. The Optionee acknowledges that he or she has read the 1999 Plan,
agrees to be bound by its terms, and makes each of the representations required
to be made by the Optionee under it.

 

5.                            MISCELLANEOUS.  This Agreement (together with the 1999 Plan)
sets forth the complete agreement of the parties concerning the subject matter
hereof; superseding all prior agreements, negotiations and understandings. This
Agreement will be governed by the laws of the State of Minnesota irrespective
of such state’s choice of law provisions, and may be executed in counterparts.

 

11

 

The parties hereby have entered into this Agreement as of the date set
forth above.

 

	
   

  	
  DIGITAL RIVER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:   President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “OPTIONEE”

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Attachments:

  	
   

  	
  (1) 1999 Stock Option Plan

  
	
   

  	
   

  	
  (2) Notice of Exercise

  

 

12

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