MINNEAPOLIS -- Beyond.com Corp. filed for Chapter 11 bankruptcy protection and agreed to sell assets to Digital River Inc. for $3.5 million in cash and $7.5 million in shares, plus a so-called earn-out provision -- based on future performance -- for an additional $1.5 million in shares.

The online software seller expects the purchase price of the asset sale to be insufficient to cover all liabilities, and said its shareholders won't receive any distribution upon completion of the bankruptcy proceedings. The asset sale is subject to certain closing conditions, including bankruptcy-court approval.

Beyond said it plans to sell the assets and customer contracts related to its eStores and Government Systems Group businesses. Beyond.com said its Chapter 11 filing will help ensure its customers continue to receive uninterrupted service through the sale process.

Separately, Digital River said it isn't assuming liabilities of Beyond.com other than obligations under Beyond's client contracts. Digital River expects the deal to solidify its electronic-commerce position among software and digital commerce publishers, as well as expand its government sector presence.

Formerly called Software.net, Beyond.com began life as a software e- tailer and priced its initial public offering in June 1998.