EXHIBIT 10.4
AMENDED AND RESTATED (SECOND) STOCK OPTION AGREEMENT
THIS AMENDED AND RESTATED STOCK (SECOND) OPTION AGREEMENT is entered
into and effective this 11th day of July, 1999, by and between Xxxx X. Xxxxxxx
(the "Optionor") and MacUSA, Inc., a Minnesota corporation (the "Optionee").
RECITALS
A. On December 28, 1995, the Optionor gave the Optionee the right and
option (the "Option") to purchase from the Optionor certain shares of
the Common Stock, $.01 par value (the "Common Stock") of Digital River,
Inc., then a Minnesota corporation and subsequently reincorporated as a
Delaware Corporation (the "Company") owned by the Optionor.
B. On December 8, 1998, the parties clarified that the Option may be
exercised in whole or in part by entering into an Amended and Restated
Stock Option Agreement (the "First Restatement").
C. Subsequent to the date of the First Restatement, the Optionee exercised
the Option as to a portion of the Common Stock.
D. The Optionor is a party, together with the Company and Fujitsu Limited,
a corporation organized under the laws of Japan ("Fujitsu"), to a Stock
Purchase Agreement dated August 30, 1994 (the "Purchase Agreement"),
whereby Fujitsu purchased approximately 40% of the outstanding Common
Stock, and to the related Investors' Rights Agreement, Voting
Agreement, Memorandum of Understanding, Personal Guaranty and Stock
Pledge Agreement, and certain other agreements ancillary or relating to
the Purchase Agreement (collectively, the "Related Agreements").
E. The terms and conditions of this Agreement, including the grant and/or
exercise of the Option granted hereby, are intended by the Optionor to
be subject to any and all restrictions on the rights of the Optionor
with respect to the Common Stock owned by the Optionor contained in any
of the Related Agreements.
AGREEMENT
In consideration of the mutual covenants and conditions hereinafter set forth,
the parties hereto hereby agree that the Option is hereby amended and restated
to read in full as follows:
1. GRANT OF OPTION. The Optionor hereby grants to the Optionee the
right, privilege, and option (the "Option") to purchase Three Million
(3,000,000) shares of the Common Stock (the "Option Shares"), from the Optionor
according to the terms and subject to the conditions hereinafter set forth.
2. OPTION EXERCISE PRICE. The aggregate price to be paid by Optionee
for all of the Option Shares in the event of an exercise of the Option shall be
$.93.
1.
3. DURATION OF OPTION AND TIME OF EXERCISE. The Option shall become
exercisable with respect to the Option Shares on or after the date hereof and
shall expire on and no longer be exercisable after 5:00 p.m., Minneapolis,
Minnesota time, on December 31, 2000 (the "Option Term"). This Option shall not
be exercisable, unless and until the Optionor and Optionee have negotiated and
executed a stock purchase agreement relating to the purchase of the Option
Shares of the Optionee pursuant to the exercise of this Option containing such
representations and warranties of the parties as are characteristic of similar
stock purchase transactions.
4. VOTING OF OPTION SHARES. During the Option Term, the Optionor shall
seek the advice and consultation of the Board of Directors of the Optionee
before voting the Option Shares in any and all Company actions to be taken by
the holders of Common Stock. Subject to the restrictions imposed on shareholders
of the Company pursuant to the Related Agreements, Optionor will vote the Option
Shares as directed by the Board of Directors of Optionee.
5. COMPLIANCE WITH RELATED AGREEMENTS. It is expressly agreed by the
parties hereto that the terms of this Agreement, including without limitation
the transfer of the Option Shares pursuant to exercise of the Option granted
hereunder, are in all respects subject to the terms and conditions contained in
the Related Agreements, and that any provision of this Agreement of action taken
hereunder that violates any term or condition of the Related Agreements will be
void.
6. INDEMNIFICATION FOR TAX LIABILITY. As additional consideration for
the Option Shares, Optionee hereby agrees to reimburse Optionor with respect to
any tax liability of Optionor associated with the transfer to Optionee of the
Option shares. For purposes of this provision, Optionor's tax liability includes
all federal, state and local taxes due as a result of the transfer, together
with any penalties and interest associated therewith. In addition, Optionee will
reimburse Optionor for the tax liability associated with the reimbursement
payment pursuant to this Section so that, on an after-tax basis, Optionor has
been fully reimbursed for any tax liability associated with the transfer of the
Option Shares to the Optionee.
7. MANNER OF OPTION EXERCISE.
a. NOTE. The Option may be exercised by the Optionee in whole or in
part, subject to the conditions contained herein, by delivery, in person or by
registered mail, of written notice of exercise to the Optionor at the Optionee's
principal executive office, such notice to identify this Option and to be
accompanied by payment of purchase price for the shares purchased (which, in the
event this Option is being exercised in part, shall be the pro rata portion of
the aggregate exercise price for the number of shares being exercised), and the
Optionor shall deliver to the Optionee a certificate representing the shares
purchased. As soon as practicable after such notice and payment are received,
the Optionee shall be recorded on the books of the Company as the owner of the
Option Shares purchased, and the Optionor shall deliver to the Optionee one or
more duly issued stock certificates evidencing such ownership.
b. CASH. At the time of exercise of this Option, the Optionee shall
pay the exercise price of the Option Shares in cash.
2.
c. CASHLESS. At the time of exercise of this Option, the Optionee
shall surrender the right to acquire pursuant to the Option that number of
Shares where the difference between (i) the market price of the Shares
purchasable pursuant to that portion of the Option surrendered and (ii) the
exercise price of that portion of the Option surrendered shall equal the
exercise price of that portion of the Option exercised.
8. NONTRANSFERABILITY. This Option shall not be (i) transferable by the
Optionee, either voluntarily or involuntarily, or (ii) subject to any lien,
directly or indirectly, by operation of law or otherwise. Any attempt to
transfer this Option shall void this Option.
9. BINDING EFFECT. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
10. GOVERNING LAW. This Agreement and all rights and obligations
hereunder shall be construed in accordance with and governed by the laws of the
State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated (Second) Stock Option Agreement effective the day and year first above
written.
OPTIONOR:
/s/Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
OPTIONEE:
MacUSA, INC.
/s/Xxxxxxx X. Xxxxx Xx.
By: ------------------------------------
Its: President
NOTICE AND ACCEPTANCE OF EXERCISE
JULY 11, 1999
Optionee hereby elects to exercise this Option as to 2,999,999 Option
Shares (the "Exercised Shares") on a cashless basis, as described above, and
hereby surrenders its right, pursuant to this Option, to acquire 1 Option Share
(the "Surrendered Shares) in payment of the Option Exercise Price.
Optionor hereby accepts such exercise and the surrender of Optionee's
right to acquire 1 Option Share as payment of the Option Exercise Price.
Optionor agrees to deliver the certificate(s) representing the Option Shares to
Optionee, together with necessary stock powers, for transfer of the Exercised
Shares to Optionee and return to the Optionor of the Surrendered Shares.
3.
Optionee and Optionor agree that the market price of the Shares
purchasable pursuant to that portion of the Option surrendered less the exercise
price of that portion of the Option surrendered exceeds the exercise price of
that portion of the Option exercised.
OPTIONOR:
/s/Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
OPTIONEE:
MacUSA, INC.
/s/Xxxxxxx X. Xxxxx Xx.
By: ------------------------------------
Its: President
4.
