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. 1. 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. 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 2.