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January 8, 2015

Dear Stockholder:

        You are cordially invited to attend a special meeting of stockholders of Digital River, Inc., which we refer to as Digital River, to be held on February 12, 2015, at our offices at 10380 Bren Road West, Minnetonka, Minnesota 55343, at 8:00 a.m., Central time.

        At the special meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated October 23, 2014, which we refer to as the merger agreement, by and among Danube Private Holdings II, LLC, which we refer to as Parent; Danube Private Acquisition Corp., which we refer to as Acquisition Sub and which is a direct wholly owned subsidiary of Parent; and Digital River. Parent and Acquisition Sub are affiliates of Siris Capital Group, LLC. Pursuant to the terms of the merger agreement, Acquisition Sub will merge with and into Digital River, which we refer to as the merger, and Digital River will become a direct wholly owned subsidiary of Parent. You will also be asked to consider and vote on a non-binding, advisory proposal to approve compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

        If the merger is consummated, you will be entitled to receive $26.00 in cash, without interest, for each share of our common stock you own (unless you have properly exercised your appraisal rights with respect to such shares), which represents a premium of (i) approximately 50% to Digital River's closing stock price on October 23, 2014, the last trading day prior to the public announcement of the execution of the merger agreement, and (ii) approximately 67% over the volume weighted average share price of our common stock during the 90 days ended October 23, 2014.

        Digital River's Board of Directors, after considering factors more fully described in this proxy statement, determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law and approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger. The Board of Directors recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

        The enclosed proxy statement provides detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of our Board of Directors in connection with its evaluation of the merger agreement and the merger. We encourage you to read the proxy statement and its annexes, including the merger agreement, carefully and in their entirety. You may also obtain more information about Digital River from documents we file with the Securities and Exchange Commission from time to time.

        Whether or not you plan to attend the special meeting in person, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted. If you hold your shares in "street name," you should instruct your broker how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee.

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        Your vote is very important, regardless of the number of shares that you own. We cannot consummate the merger unless the proposal to adopt the merger agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock. The failure of any stockholder to vote in person by ballot at the special meeting, to submit a signed proxy card or to grant a proxy electronically over the Internet or by telephone will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

        If you have any questions or need assistance voting your shares of our common stock, please contact MacKenzie Partners, Inc., our proxy solicitor, by calling (800) 322-2885 toll-free or (212) 929-5500 collect.

        On behalf of our Board of Directors, I thank you for your support and appreciate your consideration of this matter.

		Sincerely,
		Thomas F. Madison Chairman of the Board of Directors

        Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

        The accompanying proxy statement is dated January 8, 2015, and, together with the enclosed form of proxy card, is first being mailed to stockholders of Digital River on or about January 9, 2015.

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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
YOUR VOTE IS VERY IMPORTANT. PLEASE VOTE YOUR SHARES PROMPTLY.

        Notice is hereby given that a special meeting of stockholders of Digital River, Inc., a Delaware corporation, which we refer to as Digital River, will be held on February 12, 2015, at our offices at 10380 Bren Road West, Minnetonka, Minnesota 55343, at 8:00 a.m., Central time for the following purposes:

        1.     To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated October 23, 2014, which we refer to as the merger agreement, by and among Danube Private Holdings II, LLC, Danube Private Acquisition Corp., a direct wholly owned subsidiary of Danube Private Holdings II, LLC, and Digital River, as it may be amended from time to time (a copy of the merger agreement is attached as Annex A to the proxy statement accompanying this notice);

        2.     To consider and vote on the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting;

        3.     To consider and vote on the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger contemplated by the merger agreement; and

        4.     To transact any other business that may properly come before the special meeting or any adjournment or postponement of the special meeting.

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the proposal to adopt the merger agreement. The affirmative vote of a majority of our shares of common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon, whether or not a quorum is present, is required to approve the proposal to approve one or more adjournments of the special meeting. The affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon is required to approve the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger. The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, but will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, but will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may be paid to Digital River's named executive officers that is based on or otherwise relates to the merger. Abstentions will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, the adjournment proposal and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

        Only stockholders of record as of the close of business on January 7, 2015, are entitled to notice of the special meeting and to vote at the special meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 10380 Bren Road West, Minnetonka, Minnesota 55343, during regular business hours for a period of at least ten days before the special meeting and at the place of the special meeting during the meeting.

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        Stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of Digital River common stock if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all the requirements of Delaware law, which are summarized herein and reproduced in their entirety in Annex C to the accompanying proxy statement.

        The Board of Directors recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

		By Order of the Board of Directors,
		Kevin L. Crudden Senior Vice President, General Counsel and Secretary

Dated: January 8, 2015

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YOUR VOTE IS IMPORTANT

        WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) THROUGH THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the special meeting. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such broker, bank or other nominee, which is considered the stockholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

        If you fail to return your proxy card, grant your proxy electronically over the Internet or by telephone or vote by ballot in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If you are a stockholder of record, voting in person by ballot at the special meeting will revoke any proxy that you previously submitted. If you hold your shares through a broker, bank or other nominee, you must obtain from the record holder a valid proxy issued in your name in order to vote in person at the special meeting.

        We encourage you to read the accompanying proxy statement, including all documents incorporated by reference into the accompanying proxy statement, and its annexes carefully and in their entirety. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
Email: proxy@mackenziepartners.com
Call collect: (212) 929-5500
Call toll-free: (800) 322-2885

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SUMMARY

        This summary highlights selected information from this proxy statement related to the merger of Danube Private Acquisition Corp. with and into Digital River, Inc., with Digital River, Inc. surviving as a direct wholly owned subsidiary of Danube Private Holdings II, LLC, which transaction we refer to as the merger, and may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents we incorporate by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page 108. The merger agreement is attached as Annex A to this proxy statement.

        Except as otherwise specifically noted in this proxy statement or as context otherwise requires, "Digital River," "we," "our," "us" and similar words in this proxy statement refer to Digital River, Inc., including, in certain cases, our subsidiaries. Throughout this proxy statement we refer to Danube Private Holdings II, LLC as Parent and Danube Private Acquisition Corp. as Acquisition Sub. In addition, throughout this proxy statement we refer to the Agreement and Plan of Merger, dated October 23, 2014, as it may be amended from time to time, by and among Parent, Acquisition Sub and Digital River, as the merger agreement.

Parties Involved in the Merger (page 32)

Digital River, Inc.

        Digital River is a leading provider of global Commerce-as-a-Service solutions. We provide commerce, payments and marketing solutions to business-to-business and business-to-consumer digital product and cloud service companies as well as branded manufacturers across a variety of vertical markets through our multi-tenant technology, platform and service offerings. Our customers range in size from small to mid-sized companies to multi-national enterprises that serve a wide variety of markets, including, software, consumer electronics, computer games, publishing, travel, music, video games, electronic toys, housewares, medical equipment, power tools and direct-selling, among others.

        We offer our customers a broad range of solutions to quickly and cost effectively establish, manage and grow commerce sales channels via Internet-connected devices. We have invested substantial resources to develop our solutions, services, infrastructure and platforms, and to mitigate the risks our customers may encounter when conducting global commerce.

        Our common stock is currently listed on the Nasdaq Global Select Market under the symbol "DRIV".

Danube Private Holdings II, LLC

        Parent is a Delaware limited liability company that was formed on October 15, 2014, by Siris Capital Group, LLC, which we refer to as Siris. Siris is a private equity firm focused on complex, control equity investments in the telecom, technology and technology-enabled business service sectors. Parent was formed solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement and the related financing transactions. Parent has not conducted any business operations except in furtherance of this purpose and activities incident to its formation. Upon completion of the merger, Digital River will be a direct wholly owned subsidiary of Parent.

Danube Private Acquisition Corp.

        Acquisition Sub is a Delaware corporation and a direct wholly owned subsidiary of Parent, formed on October 15, 2014, solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement and the related financing transactions. Acquisition

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Sub has not conducted any business operations except in furtherance of this purpose and activities incident to its formation. Upon completion of the merger, Acquisition Sub will cease to exist.

Certain Effects of the Merger on Digital River (page 33)

        Upon the terms and subject to the conditions of the merger agreement, Acquisition Sub will merge with and into Digital River, with Digital River continuing as the surviving corporation and a direct wholly owned subsidiary of Parent. Throughout this proxy statement, we use the term surviving corporation to refer to Digital River as the surviving corporation following the merger. If the merger is consummated, you will not own any shares of the capital stock of the surviving corporation.

        The time at which the merger will become effective, which we refer to as the effective time of the merger, will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we and Parent may agree and specify in the certificate of merger).

Effect on Digital River if the Merger is Not Completed (page 33)

        If the merger agreement is not adopted by Digital River stockholders or if the merger is not completed for any other reason, Digital River stockholders will not receive any payment for their shares of common stock. Instead, Digital River will remain a public company, our common stock will continue to be listed and traded on the Nasdaq Global Select Market and registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, and we will continue to file periodic reports with the Securities and Exchange Commission, which we refer to as the SEC. Under specified circumstances, Digital River may be required to reimburse certain of Parent's expenses incurred in respect of the transactions contemplated by the merger agreement or pay Parent a termination fee, or may be entitled to receive a reverse termination fee from Parent, upon the termination of the merger agreement, as described under "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99.

Merger Consideration (page 34)

        In the merger, each outstanding share of our common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect their demand for appraisal rights under Delaware law) will be converted automatically into the right to receive $26.00 in cash, without interest and less any applicable withholding taxes, which amount we refer to as the per share merger consideration, and, without any action by the holders of such shares, will cease to be outstanding, be canceled and cease to exist, and each certificate formerly representing any of the shares of Digital River common stock will thereafter represent only the right to receive the per share merger consideration. As described further in "Proposal 1: Adoption of the Merger Agreement—Exchange and Payment Procedures" beginning on page 81, at or immediately prior to the effective time of the merger, Parent will deposit or cause to be deposited sufficient funds to pay the aggregate per share merger consideration with a designated paying agent. Following completion of the merger, once a stockholder has provided the paying agent with his or her stock certificates or book-entry shares, as applicable, and the other items specified by the paying agent, the paying agent will promptly pay the stockholder the per share merger consideration.

        After the merger is completed, under the terms of the merger agreement, you will have the right to receive the per share merger consideration, but you will no longer have any rights as a Digital River stockholder as a result of the merger (except that stockholders who properly exercise and perfect their demand for right of appraisal will have the right to receive a payment for the "fair value" of their

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shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described below under "The Merger—Appraisal Rights" beginning on page 70).

The Special Meeting (page 27)

Date, Time and Place

        A special meeting of our stockholders will be held on February 12, 2015, at our offices at 10380 Bren Road West, Minnetonka, Minnesota 55343, at 8:00 a.m., Central time.

Record Date; Shares Entitled to Vote

        You are entitled to vote at the special meeting if you owned shares of our common stock at the close of business on January 7, 2015, the record date for the special meeting. You will have one vote at the special meeting for each share of our common stock you owned at the close of business on the record date.

Purpose

        At the special meeting, we will ask our stockholders of record as of the record date to vote on proposals (i) to adopt the merger agreement, (ii) to approve one or more adjournments of the special meeting to a later date to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Quorum

        As of the record date, there were approximately 31,898,701 shares of our common stock outstanding and entitled to be voted at the special meeting. A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 15,949,352 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.

Required Vote

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to adopt the merger agreement. Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, in person or by proxy, and entitled to vote thereon.

Share Ownership of Our Directors and Executive Officers

        As of January 7, 2015, the record date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 1,065,614 shares of our common stock (excluding any shares of our common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), representing approximately 3.3% of the outstanding shares of our common stock. Our directors and executive officers have informed us that they currently intend to vote all of their

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shares of Digital River common stock (i) "FOR" the proposal to adopt the merger agreement, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Voting of Proxies

        Any Digital River stockholder of record entitled to vote at the special meeting may submit a proxy by returning a signed proxy card by mail or voting electronically over the Internet or by telephone, or may vote in person by appearing at the special meeting. If you are a beneficial owner and hold your shares of Digital River common stock in "street name" through a broker, bank or other nominee, you should instruct your broker, bank or other nominee on how you wish to vote your shares of Digital River common stock using the instructions provided by your broker, bank or other nominee. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. The proposals in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions, resulting in what we refer to as a broker non-vote. Therefore, it is important that you cast your vote or instruct your broker, bank or nominee on how you wish to vote your shares.

        If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy, signing another proxy card with a later date and returning it to us prior to the special meeting or attending the special meeting and voting in person. If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote.

Recommendation of Our Board of Directors and Reasons for the Merger (page 40)

        Our Board of Directors, which we refer to as the Board, after considering various factors described in the section entitled "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger," determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law and approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger. The Board recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Opinion of Morgan Stanley & Co. LLC (page 45)

        On October 22, 2014, Morgan Stanley & Co. LLC, which we refer to as Morgan Stanley, rendered its oral opinion to the Board, subsequently confirmed in writing on October 23, 2014, that as of that date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, the per share merger consideration of $26.00 in cash to be received by the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury

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stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement was fair from a financial point of view to the holders of Digital River's common stock.

        The full text of the written opinion of Morgan Stanley to the Board, dated as of October 23, 2014, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached to this proxy statement as Annex B, and is incorporated by reference in this proxy statement in its entirety. The summary of the opinion of Morgan Stanley in this proxy statement is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Morgan Stanley's opinion and the section summarizing Morgan Stanley's opinion carefully and in their entirety. Morgan Stanley's opinion was directed to the Board, in its capacity as such, and addressed only the fairness from a financial point of view of the consideration to be received by the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement as of the date of the opinion and did not address any other aspects or implications of the merger. It was not intended to, and does not, constitute advice or a recommendation to any holder of shares of Digital River's common stock as to how to vote at any stockholders meeting to be held in connection with the merger or whether to take any other action with respect to the merger.

Financing of the Merger (page 67)

        We anticipate that the total amount of funds necessary to consummate the merger and the related transactions, including the funds needed to (i) pay our stockholders the amounts due to them under the merger agreement; (ii) make payments in respect of Digital River's outstanding equity and equity-based awards pursuant to the merger agreement; (iii) refinance or otherwise discharge certain outstanding indebtedness of Digital River, including indebtedness that will come due or otherwise be repaid or repurchased as a result of the merger (and with respect to certain convertible notes, as described further in "Proposal 1: Adoption of the Merger Agreement—Other Covenants—Treatment of Convertible Notes" beginning on page 96); and (iv) pay all fees and expenses payable by Parent and Acquisition Sub under the merger agreement and in connection with the debt financing under the debt commitment letters described below, will be approximately $1,010 million. This amount will be funded through a combination of up to approximately $328.9 million in equity financing under the equity commitment letters described below, up to $345 million in debt financing under the debt commitment letter described below, and Digital River's cash and cash equivalents on hand at closing.

        In connection with the financing of the merger, Parent has entered into equity commitment letters, dated as of October 23, 2014, with each of (i) Siris Partners II, L.P. (an affiliate of Siris that we refer to as the guarantor or Siris Partners), (ii) GCM SPV 14 Beta, LLC, (iii) GCM Grosvenor Co-Investment Opportunities Fund, L.P., (iv) MIHI LLC, (v) Sankaty Drawbridge Opportunities, L.P., (vi) Sankaty Credit Opportunities V-B, L.P., (vii) Sankaty Credit Opportunities V AIV II, L.P. (Master), (viii) Sankaty Credit Opportunities V AIV I, L.P., (ix) Sankaty Middle Market Opportunities Fund II, L.P., (x) Sankaty Middle Market Opportunities Fund II-A (Master), L.P. and (xi) Sankaty Middle Market Opportunities Fund II-F, L.P., which letters we refer to collectively as the equity commitment letters and which parties we refer to collectively as the equity investors.

        In addition, Parent has entered into a debt commitment letter, dated as of October 23, 2014, with (i) MIHI LLC, (ii) Macquarie Capital (USA) Inc. (which we refer to as Macquarie), (iii) Sankaty Middle Market Opportunities Fund II, L.P., (iv) Sankaty Middle Market Opportunities Fund II-A (Master), L.P., (v) Sankaty Middle Market Opportunities Fund II-F, L.P., (vi) MPS Investments S.À

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R.L. and (vii) BCSSS Investments S.À R.L., which letter we refer to as the debt commitment letter and which parties we refer to collectively as the debt financing parties. We refer to the equity commitment letters and the debt commitment letter collectively as the financing commitments and the financing under each of them as the equity financing and the debt financing, respectively. We cannot assure you that the amounts committed under the financing commitments, together with Digital River's cash and cash equivalents on hand, will be sufficient to consummate the merger. Those amounts might be insufficient if, among other things, one or more of the parties to the financing commitments fails to fund the committed amounts in breach of such financing commitments or if the conditions to such commitments are not met. Although obtaining the proceeds of any financing, including the financing under the financing commitments, is not a condition to the consummation of the merger, the failure of Parent and Acquisition Sub to obtain any portion of the equity financing or debt financing (or any alternative financing) is likely to result in the failure of the merger to be completed. In that case, Parent may be obligated to pay Digital River a fee of $50,370,547, as described under "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99.

        The funding under the financing commitments is subject to conditions, including conditions that do not relate directly to the conditions to closing in the merger agreement.

Limited Guarantee (page 69)

        Pursuant to a limited guarantee delivered by the guarantor in favor of Digital River, dated as of October 23, 2014, which we refer to as the limited guarantee, the guarantor agreed to guarantee the due, punctual and complete payment of:

•

The obligation of Parent under the merger agreement to pay a reverse termination fee of $50,370,547 if the merger agreement is terminated by Digital River under specified circumstances (see "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99); and



•

Certain additional amounts, including certain reimbursement and indemnification obligations of Parent under the merger agreement.

        The guarantor's obligations under the limited guarantee are subject to an aggregate cap equal to the amount of (i) the reverse termination fee plus (ii) certain expense reimbursement and indemnification obligations specified in the merger agreement plus (iii) the reasonable and documented out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) incurred by Digital River in connection with its enforcement of such guarantee, less the portion of the above amounts, if any, paid to Digital River by Parent, Acquisition Sub or any other person that is not returned or rescinded.

Other Covenants (page 95)

Treatment of Convertible Notes

        Among other covenants in the merger agreement, Digital River agreed that before the effective time of the merger, Digital River will take all actions required in connection with the transactions contemplated by the merger agreement pursuant to the terms of the Indenture, dated as of November 1, 2010, between Digital River and Wells Fargo Bank, National Association, as trustee, as amended or supplemented to the date of the merger agreement, which we refer to as the convertible notes indenture.

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Treatment of Options, Restricted Stock, Performance Share Awards and Other Awards; ESPP (page 80)

        The merger agreement provides that Digital River's equity awards that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment at the effective time of the merger:

Options

        Each outstanding option to purchase shares of Digital River common stock, whether or not vested, will be canceled and converted into the right to receive an amount in cash (subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (i) the total number of shares of Digital River common stock subject to the option as of the effective time of the merger and (ii) the amount, if any, by which $26.00 exceeds the exercise price per share of Digital River common stock underlying the stock option.

Restricted Stock

        Immediately prior to the effective time of the merger, each then-outstanding share of unvested Digital River restricted stock, including shares of restricted stock subject to time-based or performance-based vesting, which we refer to as restricted stock, will, contingent upon the effective time of the merger, vest and, at the effective time of the merger, be canceled and converted into the right to receive the per share merger consideration.

Performance Share Awards

        Each Digital River restricted stock unit, which we refer to as an RSU, or performance stock unit granted pursuant to Digital River's benefit plans that is subject to performance-based vesting conditions, which awards we refer to as performance share awards, that is outstanding and vested immediately prior to the effective time of the merger (after taking into account any acceleration of vesting or lapse restrictions thereto provided for in Digital River's benefit plans or in any award agreement by reason of the transactions contemplated by the merger agreement), will automatically be canceled and cease to exist, and the holder of such performance share award will be entitled to receive an amount in cash equal (subject to any applicable withholding or other taxes required by applicable law to be withheld) to the product of (i) the total number of vested shares of Digital River common stock subject to such performance share award and (ii) the per share merger consideration. Each performance share award that is not so vested immediately prior to the effective time of the merger will be canceled without consideration.

Other Company Awards

        Any vesting or settlement conditions or restrictions applicable to each RSU and performance stock unit granted pursuant to Digital River's benefit plans that is not subject to performance-based vesting conditions, other than stock options and restricted stock, which awards we refer to as other company awards, outstanding immediately prior to the effective time of the merger will lapse and the holder will receive an amount in cash equal (subject to any applicable withholding or other taxes required by applicable law to be withheld) to the product of (i) the total number of shares of Digital River common stock subject to such other company award and (ii) the per share merger consideration.

Employee Stock Purchase Plan

        Under Digital River's Amended and Restated 2011 Employee Stock Purchase Plan, which we refer to as the stock purchase plan, no new offering period will commence following completion of the offering period in progress as of the date of the merger agreement; we refer to the date of such completion as the final purchase date. Shares of Digital River common stock will be issued to

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participants under the stock purchase plan on the final purchase date, such that each then outstanding option under the stock purchase plan will be exercised automatically on such final purchase date. Digital River will terminate the stock purchase plan as of or prior to the effective time of the merger.

Employee Benefits (page 93)

        For one year following the effective time of the merger, Parent has agreed to provide, or cause the surviving corporation to provide, each employee of Digital River and its subsidiaries who continues to be so employed following the effective time of the merger, who we refer to collectively as the continuing employees, with (i) a base salary and target cash bonus opportunity (excluding any equity or equity-based compensation) that are each no less favorable than, and (ii) defined contribution pension and welfare plan benefits (excluding any severance benefits) that in the aggregate are no less favorable than, the base salary and target cash bonus opportunity (excluding any equity or equity-based compensation) and defined contribution pension and welfare plan benefits (excluding any severance benefits) provided to such individuals by Digital River and its subsidiaries immediately prior to the effective time of the merger. Parent has also agreed to provide, or cause the surviving corporation to provide, severance payments and benefits to each continuing employee whose employment is terminated without cause, on or before the first anniversary of the effective time of the merger, that are consistent with the severance payments and benefits that would have been paid or provided under the terms and conditions of Digital River's severance plan. As of the effective time of the merger, Parent has also agreed to honor, and cause the surviving corporation to honor, in accordance with their terms, all employment, change in control, severance and other compensation plans and agreements existing immediately prior to the execution of the merger agreement, which are between Digital River or any of its subsidiaries and any director, officer or employee thereof or maintained by Digital River or any of its subsidiaries, and we refer to each such agreement as a company agreement. Parent has also agreed to pay 2014 cash bonuses (including annual bonuses, annual sales awards and other annual cash incentive awards in respect of Digital River's 2014 fiscal year) under Digital River's applicable benefit plans if the effective time of the merger occurs prior such payment otherwise coming due under the terms of the applicable benefit plan.

Interests of the Directors and Executive Officers of Digital River in the Merger (page 61)

        When considering the recommendation of the Board that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be deemed to be different from, or in addition to, your interests as a stockholder. The Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of Digital River. These interests may include the following:

•

Accelerated vesting or settlement of equity and equity-based awards simultaneously with the effective time of the merger, and the settlement of such awards in exchange for cash in the amounts specified in this proxy statement;



•

The entitlement of Digital River's named executive officers to receive payments and benefits under their respective executive change in control agreements or employee retention agreements, as applicable, generally in the event such officer experiences a termination for cause or resignation for good reason on or following the completion of the merger;



•

Continued indemnification and directors' and officers' liability insurance to be provided by the surviving corporation; and

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•

The possible employment of certain of Digital River's executive officers by Siris or the surviving corporation after the merger, although as of the date of this proxy statement no agreements related to such matters have been proposed or entered into.

        If the proposal to adopt the merger agreement is approved by our stockholders and the merger closes, under the terms of the merger agreement any shares of common stock held by our directors and executive officers, including such shares held following the vesting or settlement of equity and equity-based awards, will be treated in the same manner as outstanding shares of common stock held by all other stockholders of Digital River entitled to receive the per share merger consideration.

Appraisal Rights (page 70)

        If the merger is adopted by Digital River stockholders, stockholders who do not vote in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL. This means that holders of Digital River common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Digital River common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest based to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process.

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares.

        To exercise your appraisal rights, you must submit a written demand for appraisal to Digital River before the vote is taken on the adoption of the merger agreement, you must not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of Digital River common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement. If you hold your shares of Digital River common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank or nominee.

U.S. Federal Income Tax Consequences of the Merger (page 75)

        The receipt of cash for shares of Digital River common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. The receipt of cash by a U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 75) in exchange for such U.S. Holder's shares of Digital River common stock in the merger generally will result in the recognition of gain or loss in an amount measured by the difference between the cash such U.S. Holder receives in the merger and such U.S. Holder's adjusted tax basis in the shares of Digital River common stock surrendered in the merger. A Non-U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 75) generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States.

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Stockholders should refer to the discussion in the section entitled "The Merger—U.S. Federal Income Tax Consequences of the Merger," beginning on page 75 and consult their own tax advisors concerning the U.S. federal income tax consequences relating to the merger in light of their particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Regulatory Approvals Required for the Merger (page 77)

        Under the merger agreement, the merger cannot be completed until (i) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act, has expired or been terminated and (ii) the approval of the merger by the Russian competition authority under the Russian Law on Protection of Competition, dated 26 July 2006 (as amended), which we refer to as the LPC, has been granted. Digital River and Parent and its affiliates were granted early termination of the waiting period under the HSR Act on December 5, 2014. Parent received approval of the merger from the Russian competition authority on December 19, 2014.

Legal Proceedings Regarding the Merger (page 78)

        On November 18, 2014, a purported stockholder of Digital River filed a complaint styled as a class action lawsuit in the Delaware Court of Chancery. The case caption of this complaint, which we refer to as the Parsons Complaint, is: Amy Parsons, Individually and on behalf of all others similarly situated, v. Digital River, Inc., David C. Dobson, Thomas F. Madison, Alfred Castino, Ed Eger, Jeffrey Katz, Timothy J. Pawlenty, Cheryl F. Rosner, Douglas M. Steenland, Perry W. Steiner, Danube Private Acquisition Corp., Danube Private Holdings II, LLC, and Siris Capital Group, LLC, Civil Action No. 10370-VCG. The Parsons Complaint asserts that the members of the Board breached their fiduciary duties in agreeing to the merger, and that Digital River, Parent, Acquisition Sub and Siris aided and abetted in the alleged breaches of fiduciary duties. The Parsons Complaint seeks to enjoin the merger and an award of money damages. Although it is not possible to predict the outcome of litigation matters with certainty, Digital River and our directors believe that the claims raised by the purported stockholder are without merit, and we intend to defend our position in the matter vigorously. On December 22, 2014, the Parsons plaintiff filed an amended complaint that added allegations that the Board breached its fiduciary duties by filing a preliminary proxy statement with the SEC that omitted material information. Also on December 22, 2014, the Parsons plaintiff filed a Motion for Preliminary Injunction and a Motion for Expedited Proceedings. On December 31, 2014, the Delaware Court of Chancery denied the Parsons plaintiff's Motion for Expedited Proceedings regarding unfair process and reserved ruling on any alleged disclosure violations pending an additional submission from the Parsons plaintiff focusing on no more than two or three of the plaintiff's more than thirty disclosure claims.

Solicitations of Other Offers (page 87)

Go-Shop Period

        From the date of the merger agreement until 11:59 p.m. Chicago time on December 7, 2014, which period we refer to as the go-shop period, Digital River and its subsidiaries were permitted to, directly or indirectly,

•

Solicit, initiate, encourage and facilitate (publicly or otherwise) any inquiry, discussion, offer, proposal or request that could constitute, or could reasonably be expected to lead to, a competing proposal (as defined in "Proposal 1: Adoption of the Merger Agreement—Solicitations of Other Offers" beginning on page 87);

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•

Grant a limited waiver under any "standstill" or similar obligation of any third party with respect to Digital River or any of its subsidiaries to allow such third party to submit a competing proposal solely during the go-shop period;



•

Engage in or enter into, continue or otherwise participate in discussions and negotiations with any third party in connection with a competing proposal or any inquiry, discussion, offer, proposal or request that could reasonably be expected to lead to a competing proposal, or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations or any effort or attempt to make any competing proposal; and



•

Furnish non-public information relating to, and afford access to the books and records of, Digital River and its subsidiaries to any third party in connection with a competing proposal or any inquiry, discussion, offer, proposal or request that could reasonably be expected to lead to a competing proposal, subject to entry into an acceptable confidentiality agreement (as defined in "Proposal 1: Adoption of the Merger Agreement—Solicitations of Other Offers—Go-Shop Period" beginning on page 87) and certain additional obligations.

        From the tenth day following the execution of the merger agreement through the end of the go-shop period, Digital River was required to provide a written report to Parent every ten business days setting forth certain information regarding the foregoing actions and third party discussions.

        Following the end of the go-shop period:

•

As promptly as reasonably practicable, and in any event within two business days following the end of the go-shop period, Digital River was required to provide Parent with (i) a written list identifying each excluded party (as defined in "Proposal 1: Adoption of the Merger Agreement—Solicitations of Other Offers" beginning on page 87), if any and (ii) the material terms and conditions of the pending competing proposal made by such excluded party;



•

Digital River was required to immediately cease and terminate any existing solicitation of, or discussions or negotiations with, any third party (other than excluded parties) relating to any competing proposal; and



•

Digital River was required to:



•

To the extent permitted by an applicable confidentiality agreement, request that each third party (other than any excluded party) that has previously executed a confidentiality agreement in connection with its consideration of a competing proposal promptly return to Digital River or destroy any non-public information previously furnished or made available to such third party and



•

Immediately terminate access to any third party (other than any excluded party) to any electronic data room maintained by Digital River with respect to the transactions contemplated by the merger agreement.

        See "The Merger—Background of the Merger" beginning on page 34 for information regarding the results of the go-shop process.

No-Shop Period

        Except as otherwise provided in the merger agreement, following the end of the go-shop period until the effective time of the merger or, if earlier, the termination of the merger agreement, which period we refer to as the no-shop period, Digital River will not,

•

Initiate, solicit or knowingly encourage any inquiries or the making of any offer or proposal that could reasonably be expected to lead to a competing proposal,

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•

Engage in, enter into, continue or otherwise participate in any negotiations with, or furnish any material nonpublic information to, any third party relating to a competing proposal, or



•

Otherwise knowingly facilitate any such inquiries, proposals, discussions or negotiations or any effort or attempt by any person to make a competing proposal, or publicly propose to take any of the actions in this or the preceding two bullets.

        Notwithstanding the start of the no-shop period, during the no-shop period and before Digital River obtains the approval of the proposal to adopt the merger agreement by holders of a majority of the outstanding shares of Digital River common stock entitled to vote thereon, which we refer to as the stockholder approval, Digital River may continue to engage in the activities permitted during the go-shop period with respect to any excluded party.

        At any time during the no-shop period and before the stockholder approval is obtained, in the event that Digital River receives a written competing proposal from any third party,

•

Digital River may contact such third party to clarify the terms and conditions thereof, and



•

Digital River may engage in negotiations with, or furnish any information and other access to, any third party making such competing proposal if, prior to taking any such actions described in this bullet, the Board determines in good faith (after consultation with its financial advisors and legal counsel) that



•

the failure to take such action would be inconsistent with the directors' fiduciary duties under applicable law, and



•

such competing proposal either constitutes a superior proposal (as defined in "Proposal 1: Adoption of the Merger Agreement—Solicitations of Other Offers" beginning on page 87) or could reasonably be expected to lead to a superior proposal, provided that prior to furnishing any material non-public information concerning Digital River, Digital River receives from such third party an acceptable confidentiality agreement.

Adverse Recommendation Changes; Alternative Acquisition Agreements (page 90)

        Under the merger agreement, generally, the Board will not:

•

(i) Withdraw, withhold, qualify or modify (or propose publicly to withdraw, withhold, qualify or modify) its recommendation that our stockholders adopt the merger agreement in a manner adverse to Parent or Acquisition Sub or (ii) authorize, recommend, adopt, approve or otherwise declare advisable, or propose publicly to recommend, adopt, approve or otherwise declare advisable, any competing proposal; or



•

Authorize, adopt, approve, recommend or otherwise declare advisable, or allow Digital River to execute or enter into, any letter of intent, memorandum of understanding or definitive merger or similar agreement with respect to any competing proposal, which such agreement we refer to as an alternative acquisition agreement.

        Subject to certain notice obligations, and having in good faith taken into account any revisions proposed in writing by Parent to the merger agreement or certain other agreements in response to such notice, at any time before obtaining stockholder approval for the proposal to adopt the merger agreement, the Board may:

•

Make an adverse recommendation change of the type described in clause (i) of the second preceding bullet immediately above in connection with an event, fact, development or occurrence that affects the business, assets or operations of Digital River that is unknown to the Board as of the date of the merger agreement and thereafter becomes known to the Board, which such event we refer to as an intervening event, if the Board determines in good faith

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(after consultation with its legal counsel) that the failure to take such action would reasonably be expected to be inconsistent with the directors' fiduciary duties under applicable law or

•

Make an adverse recommendation change or cause Digital River to enter into an alternative acquisition agreement and terminate the merger agreement if the Board determines in good faith (after consultation with its financial advisors and legal counsel) that (i) such competing proposal constitutes a superior proposal and (ii) the failure to take such action would reasonably be expected to be inconsistent with the directors' fiduciary duties under applicable law.

        Through the end of the go-shop period, none of the parties in the go-shop process had submitted a competing proposal to Digital River or its representatives, and no such party remained engaged in discussions with representatives of Digital River with respect to a possible transaction.

Conditions to the Closing of the Merger (page 96)

        The following are some of the conditions that must be satisfied or, where permitted by law, waived before the merger may be consummated:

•

The approval of the proposal to adopt the merger agreement by the requisite affirmative vote of Digital River's stockholders;



•

The expiration or termination of the applicable waiting period under the HSR Act and approval of the merger by the Russian competition authority (see "The Merger—Regulatory Approvals Required for the Merger" beginning on page 77);



•

The consummation of the merger not being restrained, enjoined, rendered illegal or otherwise prohibited by any law or order of any governmental authority;



•

The accuracy of the representations and warranties of Digital River, Parent and Acquisition Sub in the merger agreement, subject in some instances to materiality or "material adverse effect" qualifiers, as of the date of the merger agreement and the closing date of the merger;



•

The performance in all material respects by Digital River, on the one hand, and Parent and Acquisition Sub, on the other hand, of their respective obligations required to be performed by them under the merger agreement on or before the closing date of the merger; and



•

Since the date of the merger agreement, there not having occurred and be continuing any "material adverse effect" with respect to Digital River.

Termination of the Merger Agreement (page 97)

        In general, the merger agreement may be terminated at any time prior to the effective time, whether before or after approval of the proposal to adopt the merger agreement by the stockholders of Digital River, in the following ways:

•

By mutual written consent of Parent and Digital River;



•

By either Parent or Digital River:



•

If the merger has not been consummated by 5:00 p.m., Chicago time, on April 23, 2015, which date we refer to as the termination date;



•

If any governmental authority has, by law or order, permanently restrained, enjoined, rendered illegal or otherwise prohibited the transactions contemplated by the merger agreement and such law or order has become final or nonappealable; or



•

If Digital River's stockholders fail to approve the proposal to adopt the merger agreement at the special meeting of stockholders, or any adjournment or postponement thereof, at

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which a vote on such proposal is taken, which termination right we refer to as the stockholder approval termination right; or

•

By Digital River:



•

If Parent or Acquisition Sub has breached or failed to perform any of their respective representations, warranties, covenants or other agreements in the merger agreement, which (i) would result in the failure of a related closing condition and (ii) is not capable of being cured, or is not cured, before the earlier of the termination date or the date that is 30 calendar days following Digital River's delivery of written notice of such breach or failure to perform; we refer to Digital River's right to terminate under this bullet as the Digital River satisfaction termination right;



•

Prior to receiving the stockholder approval, if (i) the Board has, after complying with its solicitation obligations, authorized Digital River to enter into an alternative acquisition agreement with respect to a superior proposal, (ii) Digital River enters into such an alternative acquisition agreement and (iii) Digital River pays to Parent the termination fee under the merger agreement, which could be up to $27,284,046 (less certain Parent expenses of up to $8.4 million, if reimbursed by Digital River in certain circumstances specified in the merger agreement); we refer to Digital River's right to terminate under this bullet as the Digital River alternative acquisition termination right; or



•

If (i) all of the conditions to Parent's and Acquisition Sub's obligation to consummate the merger are satisfied (other than those conditions that by their terms are to be satisfied at the closing, each of which are then capable of being satisfied at the closing) or, to the extent permitted by law, waived, (ii) Parent has failed to consummate the merger by the time the closing is required to have occurred pursuant to the merger agreement, (iii) Digital River has notified Parent in writing that it stands and will stand ready, willing and able to consummate the merger, (iv) Digital River has given Parent written notice of its intention to terminate under this bullet at least three business days prior to such termination and (v) the merger is not consummated by the end of such three business day notice period; we refer to Digital River's right to terminate under this bullet as the Digital River closing termination right; or



•

By Parent:



•

If Digital River has breached or failed to perform any of its representations, warranties, covenants or other agreements in the merger agreement such that specified conditions in the merger agreement are not satisfied and such breach or failure to perform is not capable of being cured, or is not cured, before the earlier of the termination date or the date that is 30 calendar days following Parent's delivery of written notice of such breach or failure to perform; we refer to Parent's right to terminate under this bullet as the Parent satisfaction termination right;



•

If at any time before receiving the stockholder approval, the Board makes an adverse recommendation change; or



•

If Digital River enters into a definitive agreement with respect to a superior proposal.

Termination Fees (page 99)

        Under the merger agreement, Digital River may be required to pay to Parent a termination fee of either $27,284,046 or $12,592,637 (less certain Parent expenses of up to $8.4 million, if reimbursed by Digital River, as described below), or approximately 3.25% and 1.50%, respectively, of the aggregate equity value of the transaction, if the merger agreement is terminated under specified circumstances.

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        Under the merger agreement, Parent may be required to pay to Digital River a reverse termination fee of $50,370,547, or approximately 6.0% of the aggregate equity value of the transaction, if the merger agreement is terminated under specified circumstances. In no event will either Digital River or Parent be required to pay a termination fee more than once.

Expense Reimbursement (page 100)

        If the merger agreement is terminated due to failure to obtain stockholder approval of the merger, Digital River would be required to reimburse up to $8.4 million in certain reasonable, documented out-of-pocket expenses incurred by Parent and Acquisition Sub in connection with the merger agreement and the transactions contemplated thereby. The payment of any termination fee by Digital River to Parent would be reduced by any such expense reimbursement amount previously paid.

Specific Performance (page 100)

        Parent, Acquisition Sub and Digital River are entitled to seek specific performance to prevent breaches of the merger agreement and to enforce the terms of the merger agreement in addition to any other remedy to which they are entitled at law or in equity. Digital River is entitled to obtain specific performance or other equitable relief to cause the full proceeds of the equity financing contemplated by the equity commitment letter to be drawn down on the terms and subject to the conditions set forth in the equity commitment letter and the merger agreement and/or to cause Parent and/or Acquisition Sub to consummate the transactions contemplated the merger agreement if and only if (i) all conditions to Parent and Acquisition Sub's obligation to consummate the merger (other than conditions to be satisfied at the closing, each of which is capable of being satisfied at that time) have been satisfied at the time when the closing would have occurred but for the failure of the equity financing and the debt financing to be funded, and remain satisfied, (ii) Parent and Acquisition Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, (iii) the debt financing provided for by the debt commitment letter (or by alternative financing, if applicable) has been funded or is required under the terms of the debt commitment letter to be funded at the closing if the equity financing is funded at the closing and (iv) Digital River has irrevocably confirmed in writing to Parent that if specific performance is granted and the equity financing and the debt financing are funded, then the closing would occur.

Fees and Expenses (page 101)

        Except in specified circumstances, whether or not the merger is consummated, Digital River and Parent are each responsible for all of their respective costs and expenses incurred in connection with the merger and the other transactions contemplated by the merger agreement.

Market Prices and Dividend Data (page 104)

        Our common stock is listed on the Nasdaq Global Select Market under the symbol "DRIV". On October 23, 2014, the last trading day prior to the public announcement of the execution of the merger agreement, the closing price of our common stock was $17.38 per share. On January 7, 2015, the latest practicable trading day before the printing of this proxy statement, the closing price for our common stock on the Nasdaq Global Select Market was $24.64 per share.

        Under the terms of the merger agreement, from the date of the merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement, we may not declare or pay quarterly cash dividends to our common stockholders without Parent's written consent. Under our current dividend policy, we have never declared or paid any cash dividends on our capital stock and have retained any future earnings to support operations and to finance the growth and development of our business.

        Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

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QUESTIONS AND ANSWERS

        The following questions and answers are intended to address some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Digital River stockholder. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents we incorporate by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page 108. The merger agreement is attached as Annex A to this proxy statement.

Q:

Why am I receiving these materials?

A:

The Board is furnishing this proxy statement and form of proxy card to the holders of Digital River common stock in connection with the solicitation of proxies to be voted at a special meeting of stockholders or at any adjournments or postponements of the special meeting.

Q:

When and where is the special meeting?

A:

The special meeting will take place on February 12, 2015, at our offices at 10380 Bren Road West, Minnetonka, Minnesota 55343, at 8:00 a.m., Central time.

Q:

Who is entitled to vote at the special meeting?

A:

Only stockholders of record as of the close of business on January 7, 2015, are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each holder of Digital River common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of Digital River common stock that such holder owned as of the record date.

Q:

May I attend the special meeting and vote in person?

A:

Yes. All stockholders as of the record date may attend the special meeting and vote in person. Seating will be limited. Stockholders will need to present proof of ownership of Digital River common stock, such as a bank or brokerage account statement, and a form of personal identification to be admitted to the special meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting. Even if you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy or vote electronically over the Internet or via telephone to ensure that your shares will be represented at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you hold your shares in "street name," because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.

Q:

What am I being asked to vote on at the special meeting?

A:

You are being asked to consider and vote on the following proposals:

•

To adopt the merger agreement, pursuant to which Acquisition Sub will merge with and into Digital River, and Digital River will become a direct wholly owned subsidiary of Parent;

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•

To approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and



•

To approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Q:

What is the proposed merger and what effects will it have on Digital River?

A:

The proposed merger is the acquisition of Digital River by Parent pursuant to the merger agreement. If the proposal to adopt the merger agreement is approved by the holders of Digital River common stock and the other closing conditions under the merger agreement have been satisfied or waived, Acquisition Sub will merge with and into Digital River, with Digital River continuing as the surviving corporation. As a result of the merger, Digital River will become a direct wholly owned subsidiary of Parent. Digital River will cooperate with Parent to de-list our common stock from the Nasdaq Global Select Market and de-register under the Exchange Act as soon as reasonably practicable following the effective time of the merger, and at such time, we will no longer be a publicly traded company and will no longer file periodic reports with the SEC. If the merger is consummated, you will not own any shares of the capital stock of the surviving corporation.

Q:

What will I receive if the merger is completed?

A:

Upon completion of the merger, you will be entitled to receive the per share merger consideration of $26.00 in cash, without interest and less any applicable withholding taxes, for each share of common stock that you own, unless you have properly exercised and perfected and not withdrawn your demand for appraisal rights under the DGCL with respect to such shares. For example, if you own 100 shares of common stock, you will receive $2,600 in cash in exchange for your shares of common stock, less any applicable withholding taxes. In either case, you will not own shares in the surviving corporation.

Q:

How does the per share merger consideration compare to the market price of Digital River common stock prior to the public announcement of the merger agreement?

A:

The per share merger consideration represents a premium of (i) approximately 50% to Digital River's closing stock price on October 23, 2014, the last trading day prior to the public announcement of the execution of the merger agreement, and (ii) approximately 67% over the volume weighted average share price of the common stock during the 90 days ended October 23, 2014.

Q:

What do I need to do now?

A:

We encourage you to read this proxy statement, the annexes to this proxy statement, including the merger agreement, and the documents we refer to in this proxy statement carefully and consider how the merger affects you. Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the special meeting. If you hold your shares in "street name," please refer to the voting instruction forms provided by your broker, bank or other nominee to vote your shares.

Q:

Should I send in my stock certificates now?

A:

No. After the merger is completed, under the terms of the merger agreement, you will receive shortly thereafter the letter of transmittal instructing you to send your stock certificates to the

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paying agent in order to receive the cash payment of the per share merger consideration for each share of our common stock represented by the stock certificates. You should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled upon completion of the merger. Please do not send in your stock certificates now.

Q:

What happens if I sell or otherwise transfer my shares of Digital River common stock after the record date but before the special meeting?

A:

The record date for the special meeting is earlier than the date of the special meeting and the date the merger is expected to be completed. If you sell or transfer your shares of our common stock after the record date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies Digital River in writing of such special arrangements, you will transfer the right to receive the per share merger consideration, if the merger is completed, to the person to whom you sell or transfer your shares of our common stock, but you will retain your right to vote these shares at the special meeting. Even if you sell or otherwise transfer your shares of common stock after the record date, we encourage you to complete, date, sign and return the enclosed proxy or vote via the Internet or telephone.

Q:

How does Digital River's Board of Directors recommend that I vote?

A:

The Board, after considering the various factors described under "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger," determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law and approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger.

The Board recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Q:

What happens if the merger is not completed?

A:

If the merger agreement is not adopted by Digital River stockholders or if the merger is not consummated for any other reason, Digital River stockholders will not receive any payment for their shares of common stock. Instead, Digital River will remain a public company, the common stock will continue to be listed and traded on the Nasdaq Global Select Market and registered under the Exchange Act and we will continue to file periodic reports with the SEC.

Under specified circumstances, Digital River may be required to reimburse certain of Parent's expenses incurred in respect of the transactions contemplated by the merger agreement or pay Parent a termination fee, or may be entitled to receive a reverse termination fee from Parent, upon the termination of the merger agreement, as described under "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99 and "Proposal 1: Adoption of the Merger Agreement—Expense Reimbursement" beginning on page 100.

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Q:

Do any of Digital River's directors or officers have interests in the merger that may differ from those of Digital River stockholders generally?

A:

In considering the recommendation of the Board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be deemed to be different from, or in addition to, the interests of our stockholders generally. The Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of Digital River. For a description of the interests of our directors and executive officers in the merger, see "The Merger—Interests of the Directors and Executive Officers of Digital River in the Merger" beginning on page 61.

Q:

What vote is required to adopt the merger agreement?

A:

The affirmative vote of the holders of a majority of the outstanding shares of our common stock is required to approve the proposal to adopt the merger agreement.

The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will result in a broker non-vote and will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. Abstentions will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

As of January 7, 2015, the record date for determining who is entitled to vote at the special meeting, there were approximately 31,898,701 shares of Digital River common stock issued and outstanding. Each holder of Digital River common stock is entitled to one vote per share of stock owned by such holder as of the record date.

Q:

What vote is required to approve the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger?

A:

Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, in person or by proxy, and entitled to vote thereon.

The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will result in a broker non-vote and will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger. Abstentions will have the same effect as a vote "AGAINST" the adjournment proposal and the proposal to approve, by non-binding, advisory

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vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

If your shares are registered directly in your name with our transfer agent, Wells Fargo Shareowner Services, you are considered, with respect to those shares, to be the "stockholder of record." In this case, this proxy statement and your proxy card have been sent directly to you by Digital River.

If your shares are held through a broker, bank or other nominee, you are considered the "beneficial owner" of the shares of Digital River common stock held in "street name." In that case, this proxy statement has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.

Q:

How may I vote?

A:

If you are a stockholder of record (that is, if your shares of common stock are registered in your name with Wells Fargo Shareowner Services, our transfer agent), there are four ways to vote:

•

By attending the special meeting and voting in person by ballot;

•

By visiting the Internet at the address on your proxy card;

•

By calling toll-free (within the U.S. or Canada) at the phone number on your proxy card; or

•

By completing, dating, signing and returning the enclosed proxy card in the accompanying prepaid reply envelope.

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of common stock, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet or by telephone. Please be aware that, although there is no charge for voting your shares, if you vote electronically over the Internet or by telephone, you may incur costs such as telephone and Internet access charges for which you will be responsible.

Even if you plan to attend the special meeting in person, you are strongly encouraged to vote your shares of common stock by proxy. If you are a record holder or if you obtain a valid proxy to vote shares which you beneficially own, you may still vote your shares of common stock in person at the special meeting even if you have previously voted by proxy. If you are present at the special meeting and vote in person, your previous vote by proxy will not be counted.

If your shares are held in "street name" through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or electronically over the Internet or by telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or via telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or nominee.

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Q:

If my broker holds my shares in "street name," will my broker vote my shares for me?

A:

Not without your direction. Your broker, bank or other nominee will only be permitted to vote your shares on any proposal only if you instruct your broker, bank or other nominee on how to vote. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. The proposals in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. Consequently, it is important that you instruct your broker, bank or nominee on how you wish to vote your shares.

You should follow the procedures provided by your broker, bank or other nominee regarding the voting of your shares of Digital River common stock. Without instructions, a broker non-vote will result, and your shares will not be voted. A broker non-vote will have the same effect as if you voted against the proposal to adopt the merger agreement, but will have no effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Q:

May I change my vote after I have mailed my signed proxy card or otherwise submitted my vote by proxy?

A:

Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

•

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

•

Delivering a written notice of revocation to our Corporate Secretary;

•

Signing another proxy card with a later date and returning it to us prior to the special meeting; or

•

Attending the special meeting and voting in person.

If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a valid proxy from your broker, bank or other nominee.

Q:

What is a proxy?

A:

A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of Digital River common stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of Digital River common stock is called a "proxy card." The Board has designated David C. Dobson and Kevin L. Crudden, and each of them, with full power of substitution, as proxies for the special meeting.

Q:

If a stockholder gives a proxy, how are the shares voted?

A:

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

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If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted (i) "FOR" the proposal to adopt the merger agreement, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Q:

What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or vote via the Internet or telephone with respect to) each proxy card and voting instruction card that you receive.

Q:

Where can I find the voting results of the special meeting?

A:

Digital River intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports Digital River files with the SEC are publicly available when filed. See "Where You Can Find More Information" beginning on page 108 of this proxy statement.

Q:

Will I be subject to U.S. federal income tax upon the exchange of Digital River common stock for cash pursuant to the merger?

A:

If you are a U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 75), the exchange of Digital River common stock for cash pursuant to the merger generally will require a U.S. Holder to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash received by such U.S. Holder pursuant to the merger and such U.S. Holder's adjusted tax basis in the shares of our common stock surrendered pursuant to the merger. A Non-U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 75) generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States. Because particular circumstances may differ, we recommend that you consult your own tax advisor to determine the U.S. federal income tax consequences relating to the merger in light of your own particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction. A more complete description of the U.S. federal income tax consequences of the merger is provided under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 75 of this proxy statement.

Q:

What will the holders of Digital River stock options, restricted stock and other company awards and the participants in Digital River's stock purchase plan receive in the merger?

A:

At the effective time of the merger, each outstanding option to purchase shares of Digital River common stock, whether or not vested, will be canceled and converted into the right to receive an amount in cash (subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (i) the total number of shares of Digital River common stock subject to the option as of the effective time of the merger and (ii) the amount, if any, by which

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$26.00 exceeds the exercise price per share of Digital River common stock underlying the stock option.

Immediately prior to the effective time of the merger, each then-outstanding share of restricted stock will, contingent upon the effective time of the merger, vest and, at the effective time of the merger, be canceled and converted into the right to receive the per share merger consideration.

At the effective time of the merger, each performance share award that is outstanding and vested immediately prior to the effective time of the merger (after taking into account any acceleration of vesting or lapse restrictions thereto provided for in Digital River's benefit plans or in any award agreement by reason of the transactions contemplated by the merger agreement) will automatically be canceled and cease to exist, and the holder of such performance share award will be entitled to receive an amount in cash equal (subject to any applicable withholding or other taxes required by applicable law to be withheld) to the product of (i) the total number of vested shares of Digital River common stock subject to such performance share award and (ii) the per share merger consideration. Each performance share award that is not so vested immediately prior to the effective time of the merger will be canceled without consideration.

At the effective time of the merger, any vesting or settlement conditions or restrictions applicable to each other company award (e.g., RSU) outstanding immediately prior to the effective time of the merger will lapse and the holder will receive an amount in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) equal to the product of (i) the total number of shares of Digital River common stock subject to such other company award and (ii) the per share merger consideration.

Under the stock purchase plan, no new offering period will commence following completion of the offering period in progress as of the date of the merger agreement. Shares of Digital River common stock will be issued to participants under the stock purchase plan on the date of completion of such offering period, such that each then-outstanding option under the stock purchase plan will be exercised automatically on such date. Digital River will terminate the stock purchase plan as of or prior to the effective time of the merger.

Q:

When do you expect the merger to be completed?

A:

We are working toward completing the merger as quickly as possible and currently expect to consummate the merger in the first calendar quarter of 2015, likely shortly following the special meeting. However, the exact timing of completion of the merger cannot be predicted because the merger is subject to conditions, including adoption of the merger agreement by our stockholders.

Q:

Am I entitled to appraisal rights under the DGCL?

A:

If the merger is adopted by Digital River's stockholders, stockholders who do not vote (whether in person or by proxy) in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of Digital River common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Digital River common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest based to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant

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section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement.

Q:

Who can help answer my questions?

A:

If you have any questions concerning the merger, the special meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
Email: proxy@mackenziepartners.com
Call collect: (212) 929-5500
Call toll-free: (800) 322-2885

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FORWARD-LOOKING STATEMENTS

        This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, contain "forward-looking statements" that do not directly or exclusively relate to historical facts. You can typically identify forward-looking statements by the use of forward-looking words, such as "may," "should," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "forecast" and other words of similar import. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-Q and 10-K, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

•

The inability to consummate the merger due to the failure to obtain stockholder approval to adopt the merger agreement or failure to satisfy the other conditions to the completion of the merger, including receipt of required regulatory approvals;



•

The risk that the merger agreement may be terminated in certain circumstances that require us to pay Parent a termination fee of up to $27,284,046 and/or reimburse certain of Parent's expenses of up to $8.4 million, which reimbursement would be deducted from a termination fee owed to Parent under certain circumstances;



•

The failure by Parent to obtain the necessary equity and debt financing set forth in the financing commitments entered into in connection with the merger agreement, or alternative financing, as applicable, or the failure of any such financing to be sufficient to consummate the merger and the other transactions contemplated by the merger agreement;



•

Risks that the proposed merger disrupts our current plans and operations or affects our ability to retain or recruit key employees;



•

The fact that, although Parent must use reasonable best efforts to obtain the necessary equity and debt financing contemplated by the equity commitment letters and the debt commitment letter, there is a risk that such financing might not be obtained and that, in certain instances, Digital River's only viable recourse would be to pursue the reverse termination fee;



•

The effect of the announcement of the merger on Digital River's business relationships (including, without limitation, customers and suppliers), operating results and business generally;



•

The amount of the costs, fees, expenses and charges related to the merger agreement or the merger;



•

Risks related to diverting management's or employees' attention from ongoing business operations;



•

Risk that our stock price may decline significantly if the merger is not completed;



•

Risks related to obtaining the requisite consents to the merger;



•

The risk that the merger may not be consummated in a timely manner, if at all;



•

The nature, cost and outcome of pending and future litigation and other legal proceedings, including any such proceedings related to the merger and instituted against us and others; and



•

The fact that Digital River's stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of Digital River's current strategy as an independent company.

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        Consequently, all of the forward-looking statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information contained under the headings "Risk Factors" and information in our consolidated financial statements and notes thereto included in our most recent filings on Forms 10-K and 10-Q (see "Where You Can Find More Information" beginning on page 108). No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

        Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Digital River stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

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THE SPECIAL MEETING

        The enclosed proxy is solicited on behalf of the Board for use at the special meeting of stockholders or at any adjournments or postponements thereof.

Date, Time and Place

        We will hold the special meeting on February 12, 2015, at our offices at 10380 Bren Road West, Minnetonka, Minnesota 55343, at 8:00 a.m., Central time.

Purpose of the Special Meeting

        At the special meeting, we will ask our stockholders of record as of the record date to vote on proposals to (i) adopt the merger agreement, (ii) approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Record Date; Shares Entitled to Vote; Quorum

        Only stockholders of record as of the close of business on January 7, 2015, are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 10380 Bren Road West, Minnetonka, Minnesota 55343, during regular business hours for a period of at least ten days before the special meeting and at the place of the special meeting during the meeting.

        As of the record date, there were approximately 31,898,701 shares of our common stock outstanding and entitled to be voted at the special meeting.

        A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 15,949,352 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.

        In the event that a quorum is not present at the special meeting, it is expected that the meeting would be adjourned to a later date to solicit additional proxies.

Vote Required; Abstentions and Broker Non-Votes

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the proposal to adopt the merger agreement. Adoption of the merger agreement by our stockholders is a condition to the closing of the merger.

        Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, in person or by proxy, and entitled to vote thereon.

        If a Digital River stockholder abstains from voting, the abstention will have the same effect as if the stockholder voted "AGAINST" the proposal to adopt the merger agreement. For stockholders who

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attend the meeting or are represented by proxy and abstain from voting, the abstention will have the same effect as if the stockholder voted "AGAINST" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and "AGAINST" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

        If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will result in a broker non-vote, and each broker non-vote will count as a vote "AGAINST" the proposal to adopt the merger agreement, but will have no effect on the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Shares Held by Digital River's Directors and Executive Officers

        At the close of business on January 7, 2015, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 1,065,614 shares of our common stock (excluding any shares of our common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately 3.3% of the shares of our outstanding common stock on that date. The directors and executive officers have informed Digital River that they currently intend to vote all of their shares of Digital River common stock (i) "FOR" the proposal to adopt the merger agreement, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Voting of Proxies

        If your shares are registered in your name with our transfer agent, Wells Fargo Shareowner Services, you may cause your shares to be voted by returning a signed proxy card, or you may vote in person at the special meeting. Additionally, you may submit electronically over the Internet or by phone a proxy authorizing the voting of your shares by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

        If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting in person. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

        Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted (i) "FOR" the proposal to adopt the merger agreement, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in

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connection with the merger. No proxy that is specifically marked against the proposal to adopt the merger agreement will be voted in favor of the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger, unless it is specifically marked "FOR" the approval of such proposal.

        If your shares are held in "street name" through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or by the Internet or telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. The proposals in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. If you do not return your broker's, bank's or other nominee's voting form, do not vote via the Internet or telephone through your broker, bank or other nominee, if applicable, or do not attend the special meeting and vote in person with a proxy from your broker, bank or other nominee, such actions will result in a broker non-vote and will have the same effect as if you voted "AGAINST" the proposal to adopt the merger agreement but will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Revocability of Proxies

        If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

•

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;



•

Delivering a written notice of revocation to our Secretary;



•

Signing another proxy card with a later date and returning it to us prior to the special meeting; or



•

Attending the special meeting and voting in person.

        Please note that to be effective, your new proxy card, internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m., Eastern time on February 11, 2015. If you have submitted a proxy, your appearance at the special meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

        If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a valid proxy from your broker, bank or other nominee. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow Digital River stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned.

Board of Directors' Recommendation

        The Board, after considering various factors described in the section entitled "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger," determined that the merger

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agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law and approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger. The Board recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Solicitation of Proxies

        The expense of soliciting proxies in the enclosed form will be borne by Digital River. We have retained MacKenzie Partners, Inc., a proxy solicitation firm, to solicit proxies in connection with the special meeting at a cost not to exceed $50,000 plus reasonable expenses. We have agreed to indemnify MacKenzie Partners, Inc. against losses arising out of its provision of such services on our behalf. In addition, we may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by some of our directors, officers and employees, personally or by telephone, facsimile or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Completion of the Merger

        Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the proposal to adopt the merger agreement, we anticipate that the merger will be consummated in the first calendar quarter of 2015, likely shortly following the special meeting.

Rights of Stockholders Who Seek Appraisal

        If the merger is adopted by Digital River stockholders, stockholders who do not vote in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of Digital River common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Digital River common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest based to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process.

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares.

        To exercise your appraisal rights, you must submit a written demand for appraisal to Digital River before the vote is taken on the adoption of the merger agreement, you must not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of Digital River common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal

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rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement. If you hold your shares of Digital River common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank firm or nominee.

Other Matters

        At this time, we know of no other matters to be submitted at the special meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on February 12, 2015

        The proxy statement is available at www.digitalriver.com under "Company—Investor Relations—Proxy Materials."

Householding of Special Meeting Materials

        We may send a single copy of this proxy statement to any household at which two or more stockholders reside in accordance with SEC rules, unless we have received contrary instructions. Each stockholder in the household will continue to receive a separate proxy card. This process, known as "householding," reduces the volume of duplicate information received at your household and helps to reduce our expenses.

        If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate proxy statement, please notify your broker or direct your written request to: Investor Relations, Digital River, Inc., 10380 Bren Road West, Minnetonka, Minnesota 55343 or contact our Investor Relations department at (952) 253-1234. We will promptly deliver upon written or oral request a separate copy of the proxy statement to a stockholder at a shared address to which a single copy of the proxy statement was delivered. Stockholders who currently receive multiple copies of the proxy statement at their addresses and would like to request "householding" of their communications should contact their broker.

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THE MERGER

        This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

Parties Involved in the Merger

Digital River, Inc.

10380 Bren Road West
Minnetonka, MN 55343
Phone: (952) 253-1234

        Digital River is a leading provider of global Commerce-as-a-Service solutions. We provide commerce, payments and marketing solutions to business-to-business and business-to-consumer digital product and cloud service companies as well as branded manufacturers across a variety of vertical markets through our multi-tenant technology, platform and service offerings. Our customers range in size from small to mid-sized companies to multi-national enterprises that serve a wide variety of markets, including, software, consumer electronics, computer games, publishing, travel, music, video games, electronic toys, housewares, medical equipment, power tools and direct-selling, among others.

        We offer our customers a broad range of solutions to quickly and cost effectively establish, manage and grow commerce sales channels via Internet-connected devices. We have invested substantial resources to develop our solutions, services, infrastructure and platforms, and to mitigate the risks our customers may encounter when conducting global commerce.

        For more information about Digital River, please visit our website at www.digitalriver.com. Our website address is provided as an inactive textual reference only. The information contained on our website is not incorporated into, and does not form a part of, this proxy statement or any other report or document on file with or furnished to the SEC. See also "Where You Can Find More Information" beginning on page 108.

        Our common stock is currently listed on the Nasdaq Global Select Market under the symbol "DRIV".

Danube Private Holdings II, LLC

c/o Siris Capital Group, LLC
601 Lexington Avenue, 59th Floor
New York, NY 10022
Phone: (212) 231-0095

        Parent is a Delaware limited liability company that was formed on October 15, 2014, by Siris Capital Group, LLC, which we refer to as Siris. Siris is a private equity firm focused on complex, control equity investments in the telecom, technology and technology-enabled business service sectors. Parent was formed solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement and the related financing transactions. Parent has not conducted any business operations except in furtherance of this purpose and activities incident to its formation. Upon completion of the merger, Digital River will be a direct wholly owned subsidiary of Parent.

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Danube Private Acquisition Corp.

c/o Siris Capital Group, LLC
601 Lexington Avenue, 59th Floor
New York, NY 10022
Phone: (212) 231-0095

        Acquisition Sub is a Delaware corporation and a direct wholly owned subsidiary of Parent, formed on October 15, 2014, solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement and the related financing transactions. Acquisition Sub has not conducted any business operations except in furtherance of this purpose and activities incident to its formation. Upon completion of the merger, Acquisition Sub will cease to exist.

Certain Effects of the Merger on Digital River

        Upon the terms and subject to the conditions of the merger agreement, Acquisition Sub will merge with and into Digital River, with Digital River continuing as the surviving corporation. As a result of the merger, Digital River will become a direct wholly owned subsidiary of Parent. Digital River will cooperate with Parent to de-list our common stock from the Nasdaq Global Select Market and de-register under the Exchange Act as soon as reasonably practicable following the effective time of the merger, and at such time, we will no longer be a publicly traded company and will no longer file periodic reports with the SEC. If the merger is consummated, you will not own any shares of the capital stock of the surviving corporation.

        The time at which the merger will become effective, which we refer to as the effective time of the merger, will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we and Parent may agree and specify in the certificate of merger).

Effect on Digital River if the Merger is Not Completed

        If the merger agreement is not adopted by Digital River stockholders or if the merger is not completed for any other reason, Digital River stockholders will not receive any payment for their shares of common stock. Instead, Digital River will remain a public company, our common stock will continue to be listed and traded on the Nasdaq Global Select Market and registered under the Exchange Act and we will continue to file periodic reports with the SEC.

        Furthermore, if the merger is not consummated, and depending on the circumstances that would have caused the merger not to be consummated, it is likely that the price of Digital River's common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Digital River's common stock would return to the price at which it trades as of the date of this proxy statement.

        Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Digital River's common stock. If the merger is not consummated, the Board will continue to evaluate and review Digital River's business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to enhance stockholder value. If the merger agreement is not adopted by Digital River's stockholders or if the merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to Digital River will be offered or that Digital River's business, prospects or results of operation will not be adversely impacted.

        In addition, under specified circumstances, Digital River may be required to reimburse certain of Parent's expenses incurred in respect of the transactions contemplated by the merger agreement or pay Parent a termination fee, or may be entitled to receive a reverse termination fee from Parent, upon the

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termination of the merger agreement, as described under "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99.

Merger Consideration

        In the merger, each outstanding share of common stock, par value $0.01 per share, of Digital River issued and outstanding immediately prior to the effective time of the merger (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect their demand for appraisal rights under Delaware law) will be converted automatically into the right to receive $26.00 in cash, without interest and less any applicable withholding taxes, which amount we refer to as the per share merger consideration, and, without any action by the holders of such shares, will cease to be outstanding, be canceled and cease to exist, and each certificate formerly representing any of the shares of Digital River common stock will thereafter represent only the right to receive the per share merger consideration.

        After the merger is completed, under the terms of the merger agreement, you will have the right to receive the per share merger consideration, but you will no longer have any rights as a Digital River stockholder as a result of the merger (except that stockholders who properly exercise and perfect their demand for right of appraisal will have the right to receive a payment for the "fair value" of their shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described below under "—Appraisal Rights").

Background of the Merger

        The following chronology summarizes certain key events and contacts that led to the signing of the merger agreement. It does not purport to catalogue every conversation among the Board, members of our management or our representatives and other parties.

        The Board and Digital River's senior management regularly review Digital River's long-term strategic plan with the goal of maximizing stockholder value. As part of that process, in 2013, in response to challenges in Digital River's business, Digital River began implementing a "strategic transformation" plan to drive revenue growth, address customer attrition and customer concentration and increase profitability. As part of the strategic transformation plan, Digital River increased investment in its technology platforms and information technology infrastructure while divesting non-core assets and has focused on strengthening relationships with existing customers, allocating resources to its highest growth markets and improving its operational capacity. In addition, the Board and Digital River's senior management have evaluated potential acquisitions, dispositions and other potential opportunities intended to increase stockholder value.

        From time to time, Digital River has been contacted by industry participants, investors and other parties indicating interest in Digital River's business and expressing a desire to meet to discuss Digital River.

        On November 25, 2013, Siris sent a letter to Digital River expressing a general interest in exploring possible strategic alliances and partnerships involving Digital River and a Siris portfolio company. On January 24, 2014, Mr. David Dobson, Chief Executive Officer of Digital River, and Ms. Melissa Fisher, Vice President of Corporate Development, Treasury and Investor Relations of Digital River, met with representatives of Siris in New York. This meeting did not involve a specific discussion of a potential acquisition of Digital River and was instead focused on the industry and strategy.

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        On May 1, 2014, representatives of Morgan Stanley, at the Board's request, presented to the Board a preliminary overview of the strategic mergers and acquisitions environment and provided a preliminary segment valuation analysis of certain of Digital River's businesses. These presentations were not related to any offer from Siris.

        On May 23, 2014, Mr. Dobson had a follow-up meeting with representatives of Siris in New York. As with the January 24, 2014 meeting, this meeting did not involve a specific discussion of a potential acquisition of Digital River and was instead focused on the industry and strategy.

        On June 13, 2014, Mr. Dobson and Ms. Fisher again met with representatives of Siris in New York. At this meeting, representatives of Siris indicated a strong interest in reviewing a potential transaction with Digital River but did not provide a price or other substantive terms. Mr. Dobson told the representatives of Siris that he believed the Board would consider any bona fide proposal received from any interested party and that Siris could present a proposal, but he did not believe the Board was likely to pursue a proposal unless it reflected a compelling offer that the Board believed reflected the future value of Digital River executing its business plan.

        On June 20, 2014, Mr. Thomas Madison, Chairman of the Board, and Mr. Dobson received a letter from Mr. Frank A. Baker, co-founder of Siris, regarding Siris' interest in a potential acquisition of Digital River. The letter indicated that Siris would be interested in discussing a potential negotiated transaction to acquire 100% of the common stock of Digital River at a price in a range of $23.00 to $25.00 per share. According to the letter, the contemplated price represented a 49% to 62% premium to Digital River's closing share price and a 47% to 60% premium to Digital River's weighted average closing price over the 30 trading days ended June 18, 2014.

        On June 23, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley were present. At the meeting, the Board reviewed the June 20 letter from Siris, and Mr. Dobson and representatives of Morgan Stanley provided background information regarding Siris. The Board requested Digital River's management work with Morgan Stanley to review Siris' indication of interest and instructed Digital River's management to advise Siris that the Board would review Siris' indication of interest.

        During the period between June 20, 2014, and July 14, 2014, members of Digital River's management and Morgan Stanley performed a preliminary financial analysis of Digital River and Siris' indication of interest.

        On July 14, 2014, the Board held a strategic review session focused on Digital River and industry trends, including Digital River's growth strategy and the impact of Digital River's transformation process on its growth strategy.

        On July 15, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden, Arps, Slate, Meagher & Flom LLP, legal advisor to Digital River, which we refer to as Skadden, were present. At this meeting, senior management of Digital River reviewed with the Board Digital River's 2014 operating plan and medium-term financial outlook. Representatives of Morgan Stanley reviewed the financial terms of the June 20 letter from Siris and its preliminary valuation analysis as well as potential alternatives to a transaction with Siris, such as alternative acquisition or disposition transactions or continuing to execute Digital River's strategic transformation plan. A representative of Skadden reviewed legal matters including directors' fiduciary duties. The Board considered whether to engage in discussions with Siris and possible alternatives if the Board were to determine to explore a sale of Digital River. After discussion, the Board instructed Digital River's management and Morgan Stanley to obtain from Siris additional information regarding its indication of interest and ability to finance a transaction. Mr. Dobson subsequently asked representatives of Morgan Stanley and Ms. Fisher to follow up in order to determine this additional information.

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        On July 18, 2014, Ms. Fisher and representatives of Morgan Stanley met via telephone conference with representatives of Siris to discuss Siris' June 20 letter and the additional information requested by the Board. At this meeting, Siris representatives provided an overview of Siris, its view of Digital River and its assessment of potential financing for a transaction.

        On July 29, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At this meeting, senior management of Digital River and representatives of Morgan Stanley reviewed the information provided by Siris in response to the Board's request for more information at its July 15 meeting. Representatives of Morgan Stanley reviewed Siris' financial assumptions about Digital River and Siris' sources of capital and potential alternatives should the Board determine to further pursue a potential transaction. The Board determined to request additional information regarding Siris' indication of interest before taking any further action regarding Siris' proposal.

        On August 7, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley were present. At the meeting, representatives of Morgan Stanley reviewed financial matters, including information regarding Siris' indication of interest and certain financial forecasts of Digital River. The Board determined, subject to execution of a satisfactory confidentiality agreement, to provide Digital River's forecasts to Siris and for Digital River's management to provide presentations to Siris in order to allow Siris to confirm its offer range per share.

        On August 8, 2014, Mr. Kevin Crudden, Senior Vice President and General Counsel of Digital River, provided a representative of Siris a draft confidentiality agreement. Representatives of Digital River and Siris then negotiated the terms of the confidentiality agreement, and on August 20, 2014, Digital River and Siris executed the confidentiality agreement. Following entry into such agreement, Digital River made available to Siris certain due diligence materials, including certain financial information, and representatives of Digital River's management and Morgan Stanley participated in telephone conferences with Siris and its advisors with respect to diligence matters.

        On August 26, 2014, certain representatives of senior management of Digital River, representatives of Morgan Stanley and representatives of Siris met in Edina, Minnesota. At this meeting, Digital River's senior management provided an overview of Digital River's business and strategic goals and discussed financial topics. The management presentation materials included certain unaudited prospective financial information of Digital River, as described further in "The Merger—Certain Financial Forecasts" beginning on page 57.

        On September 12, 2014, a representative of Siris sent a letter to Messrs. Dobson and Madison reaffirming Siris' interest in acquiring Digital River at a price range of $23.50-$24.50 per share. The letter contained a request that Digital River agree to exclusively negotiate with Siris and noted that Siris' proposal was predicated on exclusivity. The letter also indicated Siris' willingness to agree to a post-signing go-shop process.

        On September 14, 2014, Siris sent a presentation to representatives of Morgan Stanley containing additional information regarding Siris' indication of interest. The presentation contained additional details regarding sources and uses of the potential debt and equity financing in the contemplated acquisition, noting that necessary financing would be committed by the time of signing of a definitive acquisition agreement. The presentation also contained an overview of certain of Siris' proposed terms of a potential acquisition agreement, including the existence of a 45 day go-shop period (subject to a four day Siris match right); that obtaining financing would not be a condition to closing the acquisition; a Digital River termination fee during the go-shop period of 1.75% of Digital River's equity value and 3.25% thereafter, in each case in connection with certain terminations of the acquisition agreement; a Digital River termination fee of 1% in the event Digital River stockholder approval was not obtained; a 6% reverse termination fee payable by Siris upon certain terminations; and a "modified" specific performance right for Digital River to enforce the equity commitments in certain circumstances. Siris

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also proposed that its representatives be permitted to have limited pre-signing discussions with key customers of Digital River.

        On September 16, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At the meeting, representatives of Morgan Stanley and members of Digital River's senior management reviewed information regarding Siris' interest in Digital River and the status of due diligence being conducted by Siris since the last meeting. Representatives of Morgan Stanley and Skadden reviewed the terms of Siris' proposal, and representatives of Morgan Stanley reviewed with the Board Morgan Stanley's preliminary financial analysis of the proposal. A representative of Skadden reviewed legal matters including directors' fiduciary duties. The non-management members of the Board met without any members of Digital River management present to discuss Siris' proposal and the potential responses. The Board considered Siris' request for exclusivity, including possible benefits and risks of granting exclusivity, and received advice from the representatives of Morgan Stanley and Skadden. The Board determined to offer exclusivity in return for an increase in the price being offered by Siris to a level that the Board believed would maximize the value attainable by stockholders. As a negotiating matter, the Board determined to request from Siris an increased price of $26.50 per share and certain other improved terms in exchange for agreeing to a limited 30-day exclusivity period. The Board directed Morgan Stanley to contact Siris and propose a price of $26.50 per share and to improve other terms of a potential acquisition agreement, including a reduction in the termination fee during the go-shop period. The Board also instructed Mr. Dobson that members of management were not to discuss with Siris any potential employment or other arrangements prior to express Board authorization, and requested that Mr. Madison work with the advisors and management to oversee the process for Digital River's interaction with Siris and any other potential acquirers.

        On September 17, 2014, a representative of Morgan Stanley contacted Mr. Baker of Siris and conveyed the Board's proposed terms for agreeing to an exclusivity period. Later that day, Mr. Baker indicated that Siris would agree to the proposed terms, except that Siris would only raise its indicative offer price to $25.75 per share. The representative of Morgan Stanley indicated that he would convey Siris' counter-proposal to the Board for its consideration.

        Later on September 17, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At the meeting, a representative of Morgan Stanley provided an overview of the counter-proposal from Siris and reviewed potential alternatives available to the Board in response. After discussion and receiving advice from its financial and legal advisors, the Board determined to propose that Siris agree to a price of $26.00 per share in return for agreement to the contemplated exclusivity period and instructed Morgan Stanley to convey the Board's counter-proposal to Siris. Later in the day, a representative of Morgan Stanley contacted Mr. Baker and conveyed the Board's proposed price and other terms. Mr. Baker agreed, in return for exclusivity, to raise Siris' offer price to $26.00 per share.

        On September 19, 2014, Digital River and Siris executed an exclusivity agreement, which provided that Digital River would not negotiate with any party other than Siris with respect to a potential acquisition for a period ending on October 19, 2014.

        Following the execution of the exclusivity agreement through signing of the merger agreement, an electronic data site was opened for diligence purposes to Siris and various due diligence meetings and calls between Siris and Digital River management were held.

        On October 3, 2014, Skadden sent a draft merger agreement to Simpson Thacher & Bartlett LLP, counsel to Siris and which we refer to as Simpson.

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        On October 7, 2014, a representative of Siris provided "highly confident" letters of Sankaty Advisors, LLC, which we refer to as Sankaty, GSO Capital Partners LP and Macquarie with respect to financing of a potential acquisition of Digital River to representatives of Morgan Stanley.

        On October 10, 2014, Simpson sent a revised draft of the merger agreement to Skadden.

        On October 13, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At the meeting, the Board formalized Morgan Stanley's retention as Digital River's financial advisor by approving the terms of an engagement letter with Morgan Stanley setting forth those terms. At the meeting, a representative of Morgan Stanley provided an update of the status of diligence with Siris and the status of Siris' financing. Representatives of Skadden reviewed the terms of the draft merger agreement and the revisions proposed by Siris to Digital River's draft. A representative of Morgan Stanley then provided an overview of a potential "go-shop" process that might be employed should an agreement with Siris ultimately be reached.

        On October 15, 2014, Skadden sent a revised draft merger agreement to Simpson.

        On October 16, 2014, a representative of Siris provided a draft debt commitment letter to Skadden and Simpson sent a draft of a limited guarantee to Skadden.

        Later on October 16, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At this meeting, senior management of Digital River provided an update on Siris due diligence, including a meeting held among Digital River, Siris and Digital River's largest customer, noting that Siris desired to see the terms of an upcoming renewal of the contract with such customer before entering into any agreement with Digital River. A representative of Morgan Stanley provided an update on Siris' financing efforts and potential plans for conduct of the post-signing "go-shop" period and a representative of Skadden provided an update on the status of negotiations on the key transaction documents. During the meeting, the non-management members of the Board met with representatives of Morgan Stanley and Skadden.

        On October 17, 2014, Simpson sent a revised draft merger agreement to Skadden. Later on October 17, Skadden sent comments to the draft debt commitment letter to Simpson. Also on October 17, Messrs. Dobson and Schulz and Ms. Fisher, together with representatives of Siris and Morgan Stanley, made a presentation to Siris' potential financing sources. On October 18, 2014, Simpson sent comments on the draft disclosure letter and a draft of equity commitment letters to Skadden.

        Later on October 18, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. A representative of Morgan Stanley then provided an update on due diligence matters and Siris' financing efforts and a representative of Skadden provided an update on the status of negotiations on the key transaction documents. Members of senior management then provided an update on the status of discussions regarding Digital River's pending contract renewal negotiations with its largest customer. Mr. Dobson also confirmed that neither he nor other members of senior management had discussed any arrangements with Siris regarding potential post-transaction employment by Digital River, although he believed it likely that Siris would be interested in retaining members of senior management post-closing. The representative of Skadden noted the pending expiration of the exclusivity period and described options available to the Board in connection with the expiration.

        On October 19, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At the meeting, Mr. Dobson provided an update on discussions with Siris with respect to a potential contract renewal with Digital River's largest customer, and a representative of Skadden described the parties' positions with respect to the potential impact of non-renewal under the terms of the merger agreement. The representative of Skadden also provided an overview of certain other proposed terms of the merger agreement, including the legal framework of

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the go-shop process contemplated and the non-solicitation period that would follow, the circumstances in which the Board would be entitled to change its recommendation of the Siris transaction, the circumstances in which the Board would be entitled to terminate the merger agreement to accept a superior proposal, the termination events and circumstances giving rise to, and the amount of, the termination fees and expenses. A representative of Morgan Stanley then noted the pending expiration of the exclusivity period and reviewed potential alternatives available with the Board in light of Siris' request to extend the exclusivity period. The Board determined that in light of the continued attractiveness of Siris' proposed price and the proposed terms of the merger agreement to grant an extension of the exclusivity period through October 22, 2014.

        On October 19, 2014, through October 22, 2014, Skadden and Simpson negotiated the terms of, and exchanged multiple drafts of, the merger agreement, debt and equity commitment letters, limited guarantee and disclosure letter.

        On October 22, 2014, a meeting of the Board was held, at which representatives of Morgan Stanley and Skadden were present. At the meeting, Mr. Dobson provided an update with respect to the contract renewal negotiations with Digital River's largest customer, including a meeting held among representatives of Digital River, Siris and Digital River's largest customer. Mr. Dobson noted that Siris had agreed to forgo insisting that Digital River's contract with the customer be finalized prior to execution of a merger agreement, so long as the "material adverse effect" provision of the merger agreement did not expressly exclude from consideration non-renewal or termination of customer contracts. A representative of Skadden discussed the impact of Siris' position and also provided a summary of the proposed terms of the transaction documents, including changes in proposed terms since the prior meeting. The representative of Skadden also reviewed the fiduciary duties of the Board in the context of a sale of Digital River. Representatives of Morgan Stanley then reviewed with the Board Morgan Stanley's financial analysis of the proposed transaction and rendered Morgan Stanley's oral opinion, subsequently confirmed by delivery of a written opinion dated October 23, 2014, to the effect that, as of that date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the per share merger consideration to be received by the holders of shares of Digital River's common stock pursuant to the merger agreement was fair from a financial point of view to such holders. After discussion, the Board determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, were fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law, approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger, subject to Digital River's receipt of the financing commitments and resolved, subject to the terms of the merger agreement, to recommend that Digital River's stockholders vote in favor of the adoption of the merger agreement. The Board then requested Mr. Madison oversee finalizing the merger agreement working with the advisors and Digital River's management and directed Digital River's management to, subject to receipt of the final debt and equity commitment letters in a form consistent with agreed terms, execute and enter into the merger agreement consistent with the Board's instructions. Representatives of Morgan Stanley next provided an overview of the potential go-shop process following signing. After discussion, the Board directed Morgan Stanley to initiate the contemplated go-shop process following execution of the merger agreement.

        During the course of the day on October 23, 2014, representatives of Siris delivered the execution versions of the debt and equity commitment letters. Following the close of business on October 23, 2014, the parties executed the merger agreement and Siris delivered the final executed debt commitment letter, limited guarantee and equity commitment letters, and Digital River issued a press release announcing entry into the merger agreement.

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        Under the merger agreement, during the "go-shop period" that began on the date of the merger agreement and continued until 11:59 p.m., Chicago time, on December 7, 2014, Digital River was permitted to solicit, initiate, encourage and facilitate any competing proposal from third parties, including by providing third parties with nonpublic information pursuant to acceptable confidentiality agreements, and to engage in or enter into, continue or otherwise participate in, discussions and negotiations with any third party in connection with a competing proposal. Representatives of Morgan Stanley commenced the go-shop process on behalf of Digital River on October 24, 2014. In the go-shop process, representatives of Morgan Stanley contacted or were contacted by a total of 49 parties (including potential strategic and financial buyers) regarding each such party's interest in exploring a transaction with Digital River. Six such parties signed acceptable confidentiality agreements with Digital River, including one strategic party and five financial sponsors, and received certain Digital River diligence materials and/or held certain calls with Digital River's management regarding Digital River due diligence matters. Through the end of the go-shop period, none of the parties in the go-shop process had submitted a competing proposal to Digital River or its representatives, and no such party remained engaged in discussions with representatives of Digital River with respect to a possible transaction.

Recommendation of Our Board of Directors and Reasons for the Merger

Recommendation of Our Board of Directors

        The Board, after considering various factors described below, determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, advisable and in the best interests of Digital River and its stockholders, declared the merger agreement advisable under Delaware law and approved, adopted and authorized the merger agreement and the transactions contemplated by the merger agreement, including the merger.

        The Board recommends that you vote (i) "FOR" the proposal to adopt the merger agreement and thereby approve the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and (iii) "FOR" the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by Digital River to its named executive officers in connection with the merger.

Reasons for the Merger

        In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Board consulted with Digital River's senior management, outside legal counsel and an independent financial advisor. In recommending that Digital River's stockholders vote their shares of common stock in favor of the proposal to adopt the merger agreement, the Board also considered a number of factors, including the following (not necessarily in order of relative importance):

•

Digital River's business and operations, and its current and historical financial condition and results of operations.



•

Digital River's business plan and related financial projections and the ability to execute long-term, high-potential opportunities and to fully achieve Digital River's transformation, and the risks and uncertainties in executing on the business plan and transformation and achieving such financial projections and opportunities.



•

The historic trading ranges of the common stock and the potential trading range of the common stock absent announcement of the merger agreement, and the possibility that absent such

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announcement it could take a considerable period of time before the trading price of the common stock would trade at a level in excess of the per share merger consideration of $26.00 on a present value basis.

•

The relationship of the $26.00 per share merger consideration to the trading price of our common stock, including that the per share merger consideration constituted a premium of:



•

Approximately 50% to Digital River's closing stock price on October 23, 2014, the last trading day prior to the public announcement of the execution of the merger agreement; and



•

Approximately 67% over the volume weighted average share price of the common stock during the 90 days ended October 23, 2014.



•

The financial analysis of Morgan Stanley, Digital River's financial advisor in connection with the merger, and the opinion of Morgan Stanley, dated as of October 23, 2014, and delivered to the Board, that, as of October 23, 2014, and based upon and subject to the factors and assumptions set forth therein, the $26.00 per share in cash to be paid to the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement was fair from a financial point of view to the holders of Digital River's common stock, as more fully described below under the heading "—Opinion of Morgan Stanley & Co. LLC."



•

The fact that the all-cash merger consideration will provide certainty of value and liquidity to Digital River's stockholders, while eliminating long-term business and execution risk.



•

The perceived risks of continuing as a standalone public company; and the assessment that no other alternatives were reasonably likely to create greater value for Digital River's stockholders than the merger, taking into account risk of execution of Digital River's ongoing transformation as well as business, competitive, industry, customer concentration and market risk.



•

Based on its review and the negotiations conducted, the Board believed that $26.00 per share merger consideration was the best price reasonably attainable for Digital River's stockholders.



•

The Board's view that the terms of the merger agreement would be unlikely to deter third parties from making a superior proposal.



•

Digital River's right, under the merger agreement, during the "go-shop period" beginning on the date of the merger agreement and continuing until 11:59 p.m., Chicago time, on December 7, 2014, to solicit, initiate, encourage and facilitate any competing proposal from third parties, including by providing third parties with nonpublic information pursuant to acceptable confidentiality agreements, and to engage in or enter into, continue or otherwise participate in discussions and negotiations with any third party in connection with a competing proposal.



•

Digital River's ability to continue discussions after the end of the go-shop period and before the stockholder approval is obtained, with any third party from which Digital River received during the go-shop period a written competing proposal (i) that remains pending as of the end of the go-shop period and (ii) that the Board determines in good faith constitutes or could reasonably be expected to lead to a superior proposal and (iii) as of any date following the end of the go-shop period, has not been withdrawn or abandoned.



•

Digital River's right under the merger agreement, after expiration of the go-shop period, to respond to third parties submitting acquisition proposals by providing non-public information

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subject to an acceptable confidentiality agreement, and to engage in negotiations or substantive discussions with such person, if the Board, prior to taking any such actions, determines in good faith that (i) the failure to take such action would be inconsistent with the directors' fiduciary duties under applicable law and (ii) such competing proposal either constitutes a superior proposal or could reasonably be expected to lead to a superior proposal.

•

The Board's right, under certain circumstances, to withdraw, withhold, qualify or modify its recommendation that our stockholders adopt the merger agreement in a manner adverse to Parent or Acquisition Sub.



•

Digital River's ability to terminate the merger agreement in order to enter into an alternative acquisition agreement that the Board determines to be a superior proposal, subject to certain conditions (including certain rights of Parent to have an opportunity to revise the terms of the merger agreement, the financing commitments and the limited guarantee in light of such superior proposal), provided that we concurrently pay either a $27,284,046 or $12,592,637 termination fee (less certain expense reimbursements payable to Parent) to Parent under circumstances as described in "Proposal 1: Adoption of the Merger Agreement—Termination Fees" beginning on page 99.



•

The reverse termination fee of $50,370,547 that would become payable by Parent in certain circumstances, as described in "Proposal 1: Adoption of the Merger Agreement—Termination Fees" and beginning on page 99.



•

The other terms of the merger agreement, including:



•

The other termination provisions, including:



•

The fact that the Board believed that the termination fee of either $27,284,046 or $12,592,637, or approximately 3.25% and 1.50% of the aggregate equity value of the transaction, respectively, is reasonable and not preclusive of other offers; and



•

The obligation of Parent to pay Digital River a $50,370,547 reverse termination fee, or approximately 6.0% of the aggregate equity value of the transaction, if Digital River has terminated the merger agreement as a result of Parent's breach of the merger agreement or Parent fails to consummate the merger if the conditions to closing are satisfied or waived.



•

The conditions to the closing, including the Board's belief that while the closing is subject to certain antitrust approvals, there were not likely to be significant antitrust or other regulatory impediments to the closing, including as a result of the obligations of Parent and Acquisition Sub and the fact that there is no third-party consent condition, no stockholder litigation condition and no financing condition in the merger agreement;



•

The fact that under specified circumstances, the merger agreement permits Digital River to seek specific performance against Parent and Acquisition Sub with respect to the financing commitments, as well as against the equity investors with respect to the equity financing under Digital River's third party beneficiary rights pursuant to the equity commitment letters; and



•

The fact that Parent agreed to take all steps necessary to eliminate any impediment and obtain all consents under antitrust laws, including committing to sell assets in order to avoid or vacate any order that would prevent or materially delay the merger.



•

The fact that Siris Partners, an affiliate of Siris, provided a limited guarantee in favor of Digital River, that the equity investors provided the executed equity commitment letters and that the debt financing parties provided the executed debt commitment letter.

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•

The fact that the merger agreement was the product of arms-length negotiations and contained terms and conditions that were, in the Board's view, favorable to Digital River and its stockholders.



•

The fact that Siris did not require management participation as a condition to the transaction.



•

The fact that the merger agreement was approved by the Board, which is comprised of a majority of independent directors who are not affiliated with Siris and are not employees of Digital River or any of its subsidiaries, and which retained and received advice from Digital River's outside financial and legal advisors in evaluating, negotiating and recommending the terms of the merger agreement.



•

The availability of appraisal rights to Digital River's stockholders who comply with specified procedures under Delaware law.

        The Board also considered a number of uncertainties, risks and other factors in its deliberations concerning the merger and the other transactions contemplated by the merger agreement, including the following (not necessarily in order of relative importance):

•

The fact that Digital River engaged in exclusive negotiations with Siris regarding a potential transaction and was not contacting other potential buyers until after the execution of the merger agreement during the go-shop period.



•

The fact that Digital River's stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of Digital River's current strategy as an independent company.



•

The fact that receipt of the all-cash merger consideration would be taxable to Digital River's stockholders that are treated as U.S. holders for U.S. federal income tax purposes.



•

The fact that, under specified circumstances, Digital River may be required to pay fees and expenses in the event the merger agreement is terminated and the effect this could have on Digital River, including:



•

The possibility that the $27,284,046 or $12,592,637, as applicable, termination fee payable by Digital River to Parent upon the termination of the merger agreement under certain circumstances could discourage other potential acquirers from making a competing proposal, although the Board believed that the termination fee was reasonable in amount and would not unduly deter any other party that might be interested in acquiring Digital River;



•

If the merger is not consummated, Digital River will generally be required to pay its own expenses associated with the merger agreement and the transactions contemplated thereby; and



•

The requirement that Digital River reimburse Parent for up to $8.4 million of its and Acquisition Sub's reasonable, documented out-of-pocket expenses incurred by Parent and Acquisition Sub in connection with the merger agreement if the merger agreement is terminated as a result of the failure to obtain approval of Digital River's stockholders for the proposal to adopt the merger agreement, which reimbursement would be offset against any termination fee that might subsequently become payable by Digital River to Parent pursuant to the merger agreement.



•

The fact that the reverse termination fee is not available in all instances where the merger agreement may be terminated and may be Digital River's only recourse in respect of termination where it is available.

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•

The fact that Parent's, Acquisition Sub's and the guarantor's monetary damages under the merger agreement or limited guarantee (as applicable) cannot exceed the amount of the reverse termination fee payable by Parent and Acquisition Sub, other than for specified reimbursement and indemnification obligations under the merger agreement.



•

The significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to consummate the merger, which could disrupt Digital River's business operations.



•

The fact that the announcement and pendency of the merger, or the failure to complete the merger, may cause substantial harm to Digital River's relationships with its employees (including making it more difficult to attract and retain key personnel and the possible loss of key management, technical, sales and other personnel), vendors and customers.



•

The restrictions on Digital River's conduct of business prior to completion of the merger, which could delay or prevent Digital River from undertaking business opportunities that may arise or taking other actions with respect to its operations.



•

The fact that, while Digital River expects the merger to be consummated if the proposal to adopt the merger agreement is approved by Digital River's stockholders, there can be no assurance that all conditions to the parties' obligations to consummate the merger will be satisfied.



•

The risk that the debt financing contemplated by the debt commitment letter (or any alternative financing) might not be obtained, resulting in Parent potentially not having sufficient funds to complete the merger.



•

The fact that the market price of our common stock could be affected by many factors, including: (i) if the merger agreement is terminated, the reason or reasons for such termination and whether such termination resulted from factors adversely affecting Digital River; (ii) the possibility that, as a result of the termination of the merger agreement, possible acquirers may consider Digital River to be an unattractive acquisition candidate; and (iii) the possible sale of our common stock by short-term investors following an announcement that the merger agreement was terminated.



•

The fact that Digital River's directors and executive officers may have interests in the merger that may be deemed to be different from, or in addition to, those of Digital River's stockholders. The Board was made aware of and considered these interests, to the extent such interests existed at the time; for more information about such interests, see below under the heading "—Interests of the Directors and Executive Officers of Digital River in the Merger."



•

The fact that the completion of the merger would require antitrust clearance in the United States and Russia.

        The Board believed that, overall, the potential benefits of the merger to Digital River's stockholders outweighed the risks and uncertainties of the merger.

        The foregoing discussion of factors considered by the Board not intended to be exhaustive, but includes the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

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Opinion of Morgan Stanley & Co. LLC

        Digital River retained Morgan Stanley to provide it with financial advisory services and to render a financial opinion in connection with the proposed merger. The Board selected Morgan Stanley to act as its financial advisor based on Morgan Stanley's qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in Digital River's industry, and its knowledge of Digital River's business and affairs. On October 22, 2014, Morgan Stanley rendered its oral opinion to the Board, subsequently confirmed in writing on October 23, 2014, that as of that date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, the per share merger consideration of $26.00 in cash to be received by the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement was fair from a financial point of view to the holders of Digital River's common stock.

        The full text of the written opinion of Morgan Stanley to the Board, dated as of October 23, 2014, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached to this proxy statement as Annex B, and is incorporated by reference in this proxy statement in its entirety. The summary of the opinion of Morgan Stanley in this proxy statement is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Morgan Stanley's opinion and this section summarizing Morgan Stanley's opinion carefully and in their entirety. Morgan Stanley's opinion was directed to the Board, in its capacity as such, and addressed only the fairness from a financial point of view of the consideration to be received by the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement as of the date of the opinion and did not address any other aspects or implications of the merger. It was not intended to, and does not, constitute advice or a recommendation to any holder of shares of Digital River's common stock as to how to vote at any stockholders meeting to be held in connection with the merger or whether to take any other action with respect to the merger.

        In connection with rendering its opinion, Morgan Stanley, among other things:

•

Reviewed certain publicly available financial statements and other business and financial information of Digital River;



•

Reviewed certain internal financial statements and other financial and operating data concerning Digital River;



•

Reviewed certain financial projections prepared by the management of Digital River;



•

Discussed the past and current operations and financial condition and the prospects of Digital River with senior executives of Digital River;



•

Reviewed the reported prices and trading activity for Digital River common stock;



•

Compared the financial performance of Digital River and the prices and trading activity of Digital River common stock with that of certain other publicly-traded companies comparable with Digital River and Digital River's securities;



•

Reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;

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•

Participated in discussions and negotiations among representatives of Digital River and Parent and their financial and legal advisors;



•

Reviewed the merger agreement and certain related documents;



•

Reviewed a draft of the debt commitment letter, dated October 22, 2014, and certain related documents;



•

Reviewed drafts of the equity commitment letters, dated October 22, 2014, and certain related documents; and



•

Performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.

        In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by Digital River, and that formed a substantial basis for its opinion. With respect to Digital River's financial projections, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Digital River of the future financial performance of Digital River. In addition, Morgan Stanley assumed that the merger will be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that Parent will obtain financing in accordance with the terms set forth in the financing commitments. Morgan Stanley has assumed that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the merger. Morgan Stanley is not a legal, tax, or regulatory advisor. Morgan Stanley is a financial advisor only and has relied upon, without independent verification, the assessment of Digital River and its legal, tax and regulatory advisors with respect to legal, tax and regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the consideration to be received by any of Digital River's officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of Digital River's common stock in the merger. Morgan Stanley's opinion does not address the relative merits of the merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available. Morgan Stanley has not made any independent valuation or appraisal of the assets or liabilities of Digital River, nor has it been furnished with any such valuations or appraisals. Morgan Stanley's opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, the date of its opinion. Events occurring after such date may affect Morgan Stanley's opinion and the assumptions used in preparing it, and Morgan Stanley does not assume any obligation to update, revise or reaffirm its opinion.

        In arriving at its opinion, Morgan Stanley was not authorized to solicit, and did not solicit, interest from any party with respect to the acquisition, business combination or other extraordinary transaction, involving Digital River. However, during the go-shop period following the execution of the merger agreement, Morgan Stanley solicited interest on behalf of Digital River from other parties with respect to the possible acquisition of Digital River. See "—Background of the Merger" above.

Summary of Financial Analyses

        The following is a brief summary of the material financial analyses performed by Morgan Stanley in connection with the preparation of its opinion to the Board. The following summary is not a complete description of Morgan Stanley's opinion or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described

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represent the relative importance or weight given to those analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before October 20, 2014. The various analyses summarized below were based on the closing price of $16.68 per share of Digital River's common stock as of October 20, 2014, and is not necessarily indicative of current market conditions. Some of these summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley's opinion. Furthermore, mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using the data referred to below.

        In performing the financial analysis summarized below and arriving at its opinion, Morgan Stanley used and relied upon certain non-public unaudited prospective financial information provided by Digital River's management and referred to below, including management-provided estimates (referred to in this summary of Morgan Stanley's opinion as the Management Case). For further information regarding this unaudited prospective financial information, see "—Certain Financial Forecasts" below.

Historical Trading Range Analysis

        Morgan Stanley performed a trading range analysis with respect to the historical share prices of Digital River's common stock for various periods ending on October 20, 2014. Morgan Stanley observed the following:

        Morgan Stanley noted that during the last twelve months ending on October 20, 2014, the maximum closing trading price for shares of Digital River's common stock was $19.51 and the minimum closing trading price for shares of Digital River's common stock was $14.17. Morgan Stanley compared the per share merger consideration to the share price performance of Digital River's common stock over such periods and on such dates. Morgan Stanley calculated that the per share merger consideration represents:

•

a premium of approximately 55.9% over the closing price per share of Digital River's common stock on October 20, 2014, of $16.68;



•

a premium of approximately 66.5% over the average closing price per share of Digital River's common stock for the 30 days prior to and including October 20, 2014;



•

a premium of approximately 69.2% over the average closing price per share of Digital River's common stock for the 60 days prior to and including October 20, 2014;



•

a premium of approximately 70.5% over the average closing price per share of Digital River's common stock for the 90 days prior to and including October 20, 2014;



•

a premium of approximately 33.3% over the highest closing price per share of Digital River's common stock for the 52 weeks prior to and including October 20, 2014; and

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•

a premium of approximately 83.5% over the lowest closing price per share of Digital River's common stock for the 52 weeks prior to and including October 20, 2014.

Analysts' Price Targets

        Morgan Stanley reviewed and analyzed future public market trading price targets for Digital River's common stock prepared and published by equity research analysts prior to October 20, 2014. These future stock price targets reflected each analyst's estimate of the future public market trading price of Digital River's common stock and were not discounted to reflect present values. The range of undiscounted analysts' future stock price targets for Digital River's common stock was $14.00 to $22.00 per share as of October 20, 2014. In order to better compare the equity research analysts' future stock price targets with the per share merger consideration, Morgan Stanley discounted the range of analysts' future stock price targets for Digital River's common stock for one year at a rate of 9.5%, which discount rate was selected based on Digital River's cost of equity. Morgan Stanley calculated Digital River's cost of equity using the capital asset pricing model with a 6% market premium, 2.57% 10-Year risk free rate, and beta of 1.15 from Barra Beta's predicted U.S. Equity Model (Long Term Horizon). Morgan Stanley assumed an all equity capital structure for Digital River given its large cash balance, a portion of which is expected to be used to repay, repurchase or otherwise retire its outstanding convertible notes, resulting in a cost of equity that was equal to Digital River's cost of capital. This analysis indicated an implied range of equity values for Digital River's common stock of $12.79 to $20.10 per share.

        The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for Digital River's common stock, and these estimates are subject to uncertainties, including the future financial performance of Digital River and future financial market conditions.

Public Trading Comparables Analysis

        Morgan Stanley performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Morgan Stanley reviewed and compared certain financial estimates for Digital River with comparable publicly available consensus equity analyst research estimates for selected technology companies that share similar business characteristics and have certain comparable operating characteristics including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics. These companies were the following:

•

Bazaarvoice, Inc.



•

Borderfree, Inc.



•

Brightcove Inc.



•

ChannelAdvisor Corporation



•

Constant Contact, Inc.



•

Dealertrack Technologies, Inc.



•

Demandware, Inc.



•

E2open, Inc.



•

eBay, Inc.



•

LivePerson, Inc.



•

Model N, Inc.

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•

PFSweb, Inc.



•

Speed Commerce, Inc.



•

Web.com, Inc.

        For purposes of this analysis, Morgan Stanley analyzed the ratio of aggregate value to estimated revenue and Adjusted EBITDA for calendar year 2015 for each of the companies above. Morgan Stanley calculated the aggregate value of each company as its fully diluted market capitalization, plus total debt, plus non-controlling interests, less cash, cash equivalents, short-term investments and liquid long-term investments. Revenue and Adjusted EBITDA estimates were based on publicly available consensus equity analyst research estimates compiled by Thompson Reuters. Equity analysts typically calculate Adjusted EBITDA as net income excluding net interest expense, income tax expense and certain other non-cash and non-recurring items, principally depreciation, amortization and stock-based compensation and charges.

        Based on its analysis of the relevant metrics for the comparable companies and upon the application of its professional judgment and experience, Morgan Stanley selected representative ranges of aggregate value to revenue and Adjusted EBITDA multiples and applied these ranges of multiples to the estimated relevant metric for Digital River, in each case as shown below. In determining the aggregate value to Adjusted EBITDA range, Morgan Stanley excluded as not meaningful comparable companies with negative Adjusted EBITDA or aggregate value to Adjusted EBITDA multiples exceeding 50x.

        For purposes of this analysis and other analyses described below, Morgan Stanley utilized the financial projections represented by the Management Case, as well as publicly available consensus analyst estimates of revenue and Adjusted EBITDA for Digital River that had been compiled by Thomson Reuters prior to October 20, 2014, which is referred to in this section as the Street Case. For the Management Case, Adjusted EBITDA was calculated as described above for analyst estimates, but did not reflect any exclusions or adjustments for non-recurring items.

        Based on the outstanding shares of Digital River's common stock on a fully-diluted basis (including outstanding equity awards) provided by Digital River's management as of October 15, 2014, Morgan Stanley calculated the estimated implied value per share of Digital River's common stock as follows:

        No company utilized in the public trading comparables analysis is identical to Digital River. In evaluating comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond Digital River's and Morgan Stanley's control. These include, among other things, comparable company growth, profitability and customer concentration, the impact of competition on Digital River's businesses and the industry generally, industry growth and the absence of any adverse material change in Digital River's financial condition and prospects or the industry, or

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in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

Discounted Cash Flow Analysis

        Morgan Stanley performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future cash flows and terminal value of such company. Morgan Stanley calculated a range of implied equity values per share for Digital River's common stock based on a discounted cash flow analysis to value Digital River as a stand-alone entity. Morgan Stanley utilized financial projections for Digital River from September 30, 2014, to December 31, 2023, in its analysis. Financial projections for Digital River from September 30, 2014, through December 31, 2017, were from the Management Case. Financial projections for Digital River from calendar years 2018 through 2023 were prepared by Morgan Stanley by extrapolating the Management Case, which extrapolations were reviewed and approved by Digital River for use by Morgan Stanley in its analysis.

        In performing its discounted cash flow analysis, Morgan Stanley first calculated Digital River's estimated unlevered free cash flows, which it defined as Adjusted EBITDA, less (1) stock-based compensation expense, (2) taxes, (3) capital expenditures, and (4) net changes in working capital. For purposes of the discounted cash flow analysis, changes in net working capital excluded client cash (which is cash Digital River is holding for which it has an offsetting obligation to pay to or on behalf of customers) and were assumed to be zero because forecasted growth in free cash flow from changes in net working capital is primarily generated by an increase in client cash. Morgan Stanley then calculated a range of implied aggregate values of Digital River by calculating a range of the present values of Digital River's free cash flows for the period from September 30, 2014, through December 31, 2023, and a terminal value based on a terminal perpetual growth rate ranging from 2.5% to 3.5%. Morgan Stanley selected these terminal perpetual growth rates based on the application of its professional judgment and experience. The free cash flows and terminal values were discounted to present values as of September 30, 2014, at a range of discount rates of 8.5% to 10.5%, which range was selected, in Morgan Stanley's professional judgment and experience, by applying a 1% sensitivity to Digital River's cost of equity (which was assumed equal to its weighted average cost of capital) as described above. Morgan Stanley then adjusted the total implied aggregate value ranges by Digital River's (i) $168 million in net cash, defined as cash and cash equivalents (excluding $122 million of cash held by Digital River that it is obligated to remit to its clients), plus short-term investments and liquid long-term investments, less debt, and (ii) net operating losses, which had a net present value of $7 million, and divided the resulting implied total equity value ranges by Digital River's approximately 32.3 million fully-diluted shares outstanding.

        Based on the above-described analysis, Morgan Stanley derived an implied range of equity values per share of Digital River's common stock of $16.13 to $21.68.

        Morgan Stanley also performed a sensitivity analysis on its discounted cash flow analysis by upwardly adjusting the calendar 2018 through 2023 Adjusted EBITDA margin extrapolation assumptions based on guidance from Digital River's management to reflect potential operating improvements that might be implemented. This analysis resulted in an implied present value per share range for Digital River's common stock of $17.49 to $24.04.

Discounted Equity Value Analysis

        Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into the estimated future value of a company's common equity price per share as a function of the company's estimated future Adjusted EBITDA and price-earnings ("P/E") ratio, and a potential range of aggregate value to Adjusted EBITDA and P/E ratio multiples. The resulting values are subsequently discounted to arrive at a range of present values for such company's price per share. In connection with this analysis, Morgan Stanley calculated a range of present equity values per share of Digital River's common stock on a stand-alone basis.

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        For purposes of its analysis, Morgan Stanley reviewed and compared certain financial estimates for Digital River with comparable publicly available consensus equity analyst research estimates for technology companies with 5% to 10% projected 2015 revenue growth rates and 12.5% to 17.5% projected 2015 Adjusted EBITDA margin, according to Capital IQ. These companies were the following:

•

Advanced Energy Industries, Inc.



•

ARRIS Group, Inc.



•

Convergys Corporation



•

Electronics for Imaging, Inc.



•

GSI Technology, Inc.



•

Guidewire Software, Inc.



•

Intralinks Holdings, Inc.



•

Ixia



•

JDS Uniphrase Corporation



•

Methode Electronics, Inc.



•

NCR Corporation



•

Orbitz Worldwide, Inc.



•

Rogers Corporation



•

Silicon Image, Inc.



•

Spansion Inc.



•

SunPower Corporation



•

TeleTech Holdings, Inc.



•

TTM Technologies, Inc.



•

Rofin-Sinar Technologies, Inc.



•

Xcerra Corporation



•

XO Group Inc.

        Based on its analysis of the relevant metrics for each of the comparable companies above, Morgan Stanley determined a range of forward aggregate value to Adjusted EBITDA and P/E multiples, based on the upper and lower quartiles of the comparable company set for each metric, and applied these multiples to Digital River's aggregate value to calendar year 2017 Adjusted EBITDA estimate based on the Management Case and Digital River's calendar year 2017 fully-diluted non-GAAP earnings per share ("EPS") estimate based on the Management Case. Morgan Stanley then discounted the results to their net present values as of September 30, 2014, by applying a discount rate of 9.5%, which was selected based on Digital River's cost of equity.

        In determining the forward aggregate value to Adjusted EBITDA multiple range, Morgan Stanley excluded as not meaningful comparable companies with aggregate value to Adjusted EBITDA multiples exceeding 45x. In determining the forward P/E multiple range, Morgan Stanley excluded as not meaningful comparable companies with multiples exceeding 35x. In calculating P/E multiples, Morgan Stanley based fully diluted non-GAAP EPS on publicly available consensus equity analyst research

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estimates that had been compiled by Thomson Reuters. In addition, for purposes of this analysis, Morgan Stanley calculated fully-diluted non-GAAP EPS for Digital River as tax-effected income (loss) from continuing operations, plus amortization of acquisition-related intangibles, stock-based compensation expense, restructuring related costs, litigation settlement-related costs, acquisition and integration costs, realized investment loss (gain), goodwill impairment charges, and debt interest expense and issuance cost amortization, divided by weighted average shares outstanding. Morgan Stanley applied its selected comparable company multiples range to Digital River's 2017 metrics, as 2017 was considered more representative of Digital River's long-term operating model.

        The following table summarizes Morgan Stanley's analysis:

        No company utilized in the discounted equity value analysis is identical to Digital River. In evaluating comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond Digital River's and Morgan Stanley's control. These include, among other things, the impact of competition on Digital River's businesses and the industry generally, industry growth and the absence of any adverse material change in Digital River's financial condition and prospects or the industry, or in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

Leveraged Buyout Analysis

        Morgan Stanley performed a leveraged buyout analysis, which is designed to illustrate the ability of a financial sponsor to pay, at a given return target, exit multiple and financing structure. Morgan Stanley performed the leveraged buyout analysis to estimate the theoretical prices at which a financial sponsor might effect a leveraged buyout of Digital River if the sponsor based its buyout on the Management Case, as extrapolated as discussed above, and on the Street Case. Because the Street Case did not include financial results for calendar years after 2015, Morgan Stanley based the Street Case Adjusted EBITDA for the exit transaction on extrapolation using 5% revenue growth and constant Adjusted EBITDA margin.

        Based upon its professional judgment, Morgan Stanley assumed a financing structure consisting of debt in the amount of five (5) times estimated Adjusted EBITDA for the twelve months ended December 31, 2014, and that a financial buyer would attempt to realize a return on its investment on December 31, 2019 (approximately 5 years after purchase).

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        Morgan Stanley then derived a range of theoretical purchase prices that a financial sponsor might pay in a leveraged buyout of Digital River using each of the Management Case and Street Case, based on a range of internal rates of return for a financial buyer of between 20.0% and 25.0%, determined through Morgan Stanley's professional judgment and experience, at an assumed exit multiple range of last twelve months ("LTM") Adjusted EBITDA. The midpoint of the exit multiple range was based on the assumption that the exit multiple would equal the acquisition multiple. Based on the number of outstanding shares of Digital River's common stock on a fully-diluted basis and Digital River's net cash, the analysis indicated the following implied per share reference ranges for Digital River's common stock:

Precedent Premiums Paid Analysis

        Morgan Stanley considered, based on publicly available information, premiums paid in all-cash acquisition transactions in Morgan Stanley's transaction database occurring from 2011 through September 30, 2014, which was the date that Morgan Stanley compiled the analysis, involving U.S. public company targets in the technology sector having a transaction value of more than $250 million (64 total transactions). Morgan Stanley reviewed the premium paid to the target company's closing stock price one day and 30 days prior to market awareness of such transaction, as well as to the company's highest closing stock price in the 52-weeks prior to such market awareness. Morgan Stanley's analysis identified the following premium ranges:

        Morgan Stanley then applied these premium ranges to Digital River's stock price for the relevant period or date. The analysis indicated an implied value per share reference range as follows:

        No company or transaction utilized in the precedent premiums paid analysis is identical to Digital River or to the merger. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, market and financial conditions and other matters, which are beyond the control of Digital River, such as the impact of competition on the business of Digital River or the industry generally, industry growth and the absence of any adverse material change in the financial condition of Digital River or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value of the transactions to which they are being compared.

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Comparable Company Sum-of-the-Parts Analysis

        Morgan Stanley performed a comparable company sum-of-the-parts analysis with respect to Digital River. This valuation methodology is designed to provide an implied public trading value of a company by comparing segments of a company's business to trading levels of other companies engaged in a similar business, and aggregating the implied valuations of each segment. Morgan Stanley compared certain financial information of Digital River with publicly available information for peers that operate in and are exposed to similar lines of business as Digital River's primary lines of business: (1) enterprise eCommerce, (2) small to mid-sized businesses ("SMB") eCommerce, (3) BlueHornet (marketing) and (4) Payments (payment processing).

        With respect to eCommerce, the peer group included the following companies:

•

Bazaarvoice, Inc.



•

Borderfree, Inc.



•

ChannelAdvisor Corporation



•

Demandware, Inc.



•

eBay, Inc.



•

PFSweb, Inc.



•

Speed Commerce, Inc.

        The enterprise eCommerce and SMB eCommerce peer companies were grouped due to similarities in these businesses and the limited availability of "pure play" comparable companies within these two categories.

        With respect to BlueHornet, the peer group included the following companies:

•

Alliance Data Systems Corporation



•

Constant Contact, Inc.



•

Harte-Hanks, Inc.



•

Jive Software, Inc.



•

LivePerson, Inc.



•

Marchex, Inc.



•

Marketo, Inc.



•

ReachLocal, Inc.

        With respect to Payments, the peer group included the following companies:

•

Global Payments, Inc.



•

Heartland Payment Systems, Inc.



•

Optimal Payments Plc.



•

Vantiv, Inc.



•

Wirecard AG

        With respect to the enterprise eCommerce peer group companies, the BlueHornet peer group companies and the Payments peer group companies, Morgan Stanley analyzed the following statistics

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for each company in the respective group, as of October 20, 2014, based on publicly available consensus equity analyst research estimates and trading data for the applicable company:

•

the ratio of aggregate value to estimated calendar year 2014 Adjusted EBITDA;



•

the ratio of aggregate value to estimated calendar year 2015 Adjusted EBITDA; and



•

the ratio of aggregate value to estimated calendar year 2014 revenue.

        With respect to SMB eCommerce, Morgan Stanley did not include multiple ranges based on comparable Adjusted EBITDA metrics due to the limited usefulness of valuing the SMB eCommerce business on an EBITDA basis given SMB eCommerce's relatively low EBITDA levels.

        Based on the analysis of the relevant metrics for each of the comparable companies and on the professional judgment and experience of Morgan Stanley, Morgan Stanley selected a representative range of financial multiples of the comparable companies, by peer group, and applied this range of multiples to the relevant financial statistics for each of Digital River's business lines derived from the Management Case to determine an indicative value range by business line. A summary of Morgan Stanley's analysis is below:

        Morgan Stanley then estimated a range of aggregate values for the entirety of Digital River as the sum of the indicative value ranges for each business line shown above plus Digital River's net cash at September 30, 2014. Based on Digital River's fully-diluted outstanding shares, Morgan Stanley estimated the implied range of equity values per share of Digital River's common stock to be $21.31 to $25.65.

        No company utilized in the comparable company sum-of-the-parts analysis is identical to Digital River. In evaluating peer companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Digital River, such as the impact of competition on the businesses of Digital River and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of Digital River. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

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General

        In connection with the review of the merger by the Board, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley's view of the actual value of Digital River. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond Digital River's control. These include, among other things, the impact of competition on Digital River's businesses and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of Digital River and the industry, and in the financial markets in general. Any estimates contained in Morgan Stanley's analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

        Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the per share merger consideration to be received by the holders of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement and in connection with the delivery of its opinion to the Board. These analyses do not purport to be appraisals or to reflect the prices at which shares of Digital River's common stock might actually trade.

        The per share merger consideration to be received by the holders of shares of Digital River's common stock (other than (i) shares owned by Digital River as treasury stock, (ii) shares owned, directly or indirectly, by Parent or Acquisition Sub, (iii) shares owned by wholly owned subsidiaries of Digital River and (iv) shares owned by stockholders who are entitled to and who properly exercise and perfect appraisal rights under Delaware law) pursuant to the merger agreement was determined through arm's length negotiations between Digital River and Parent and was approved by the Board. Morgan Stanley provided advice to the Board during these negotiations but did not, however, recommend any specific consideration to Digital River or the Board, nor did Morgan Stanley opine that any specific consideration constituted the only appropriate consideration for the merger. Morgan Stanley's opinion does not address the relative merits of the merger as compared to any other alternative business transactions, or whether or not such alternative business transactions could be achieved or are available. Morgan Stanley's opinion was not intended to, and does not, constitute advice or a recommendation to any holder of shares of Digital River's common stock as to how such holder should vote at any stockholders meeting to be held in connection with the merger or whether to take any other action with respect to the merger.

        Morgan Stanley's opinion and its oral presentation to the Board was one of many factors taken into consideration by the Board in deciding to approve the merger. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board with respect to the per share merger consideration pursuant to the merger agreement or of whether the Board would have been willing to agree to different consideration. Morgan Stanley's opinion was approved by a

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committee of Morgan Stanley investment banking and other professionals in accordance with Morgan Stanley's customary practice.

        The Board retained Morgan Stanley based upon Morgan Stanley's qualifications, experience and expertise. Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of Parent, Digital River, or any other company, or any currency or commodity, that may be involved in the merger, or any related derivative instrument. Investment funds managed by an affiliate of Morgan Stanley, whose limited partners include third-party clients of Morgan Stanley, currently hold limited partnership interests in a Siris fund. In addition, Morgan Stanley, its affiliates, directors or officers, including individuals working with Digital River in connection with the merger, may have committed and may commit in the future to invest in private equity funds managed by affiliates of Parent. None of the Morgan Stanley professionals working with Digital River on the merger, however, have any personal direct equity interests in private equity funds managed by affiliates of Parent. Moreover, in the ordinary course of its investment banking business, Morgan Stanley has relationships with various private equity firms, including Siris, and discusses potential transactions with such firms from time to time. Morgan Stanley is also currently providing financial advisory services to Transaction Network Services, Inc., a portfolio company affiliated with Siris, in connection with the announced sale of its Payment Gateway Services business, and expects to receive customary fees for rendering such services.

        Under the terms of its engagement letter, Morgan Stanley provided Digital River financial advisory services and a financial opinion, described in this section and attached to this proxy statement as Annex B, in connection with the merger, and Digital River has agreed to pay Morgan Stanley a fee estimated to be approximately $10.1 million for its services, of which $1.5 million was payable upon rendering its opinion, and the remainder of which is contingent upon the closing of the merger. Digital River has also agreed to reimburse Morgan Stanley for its reasonable out-of-pocket expenses, including fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, Digital River has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses relating to or arising out of Morgan Stanley's engagement. In the two years prior to the date of its opinion, Morgan Stanley or its affiliates have provided financing services for Digital River and Siris and have received fees of approximately $38,000 from Digital River and approximately $0.7 million from Siris, respectively, in connection with such services. In the two years prior to the date of its opinion, Morgan Stanley or its affiliates have provided financing services to an affiliate of Macquarie and have received fees of approximately $6.2 million from such affiliate of Macquarie in connection with such services. Morgan Stanley or its affiliates may also provide or seek to provide financial advisory or financing services to Parent, Macquarie, Sankaty, GCM Grosvenor and/or Digital River or any of their affiliates, including portfolio companies of Siris, in the future and would expect to receive customary fees for the rendering of these services.

Certain Financial Forecasts

        Digital River does not, as a matter of course, publicly disclose long-term projections as to its future financial performance due to, among other reasons, the unpredictability of the underlying assumptions and estimates, though Digital River has in the past provided investors with quarterly and full-year financial guidance which may cover areas such as revenue and earnings per share, among

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other items, which it may update from time to time during the relevant year. However, in connection with Digital River's evaluation of a possible transaction, Digital River provided the Board and its advisors, including Morgan Stanley in performing its financial analysis summarized under "—Opinion of Morgan Stanley & Co. LLC" with certain non-public unaudited prospective financial information prepared by our management. The forecasts were used as the basis for the Management Case (including the extrapolations) summarized below and presented to the Board by Morgan Stanley, which we refer to as the Final Forecasts. The Final Forecasts (excluding the unlevered free cash flows therein) were also provided to Siris in connection with its due diligence review of a possible transaction. In August 2014, Digital River also provided Siris certain additional non-public unaudited prospective financial information prepared by our management, which we refer to as the August Operational Forecasts and a summary of which is presented in this section as described below. The Final Forecasts and the August Operational Forecasts together are referred to herein as the Forecasts.

        The Forecasts were not prepared with a view to public disclosure and are included in this proxy statement only because such information was made available as described above. The Forecasts were not prepared with a view to compliance with generally accepted accounting principles as applied in the United States, which we refer to as GAAP, the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, Ernst & Young LLP, our independent auditor, has not examined, reviewed, compiled or otherwise applied procedures to, the Forecasts and, accordingly, assumes no responsibility for, and expresses no opinion on, them. The Forecasts included in this proxy statement have been prepared by, and are the responsibility of, our management. The Forecasts were prepared solely for internal use of Digital River and are subjective in many respects.

        Although a summary of the Forecasts is presented with numerical specificity, they reflect numerous assumptions and estimates as to future events made by our management that our management believed were reasonable at the time the Forecasts were prepared, taking into account the relevant information available to management at the time. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may affect actual results and cause the Forecasts not to be achieved include general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, and changes in tax laws. In addition, the Forecasts do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the merger. As a result, there can be no assurance that the Forecasts will be realized, and actual results may be materially better or worse than those contained in the Forecasts. The inclusion of this information should not be regarded as an indication that the Board, Digital River, Morgan Stanley or any other recipient of this information considered, or now considers, the Forecasts to be material information of Digital River or predictive of actual future results nor should it be construed as financial guidance, and it should not be relied upon as such. The summary of the Forecasts is not included in this proxy statement in order to induce any stockholder to vote in favor of the proposal to adopt the merger agreement or any of the other proposals to be voted on at the special meeting or to influence any stockholder to make any investment decision with respect to the merger, including whether or not to seek appraisal rights with respect to shares of our common stock.

        The Forecasts should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Digital River contained in our public filings with the SEC. The Final Forecasts were reviewed by Digital River's management with, and considered by, the Board in connection with its evaluation and approval of the merger.

        The Forecasts are forward-looking statements. For information on factors that may cause Digital River's future results to materially vary, see "Forward-Looking Statements" beginning on page 25.

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        Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Forecasts to reflect circumstances existing after the date when Digital River prepared the Forecasts or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Forecasts are shown to be in error.

        In light of the foregoing factors and the uncertainties inherent in the Forecasts, stockholders are cautioned not to rely on the Forecasts included in this proxy statement.

        Certain of the measures included in the Forecasts may be considered non-GAAP financial measures, as noted below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Digital River may not be comparable to similarly titled amounts used by other companies.

Management Case-Final Forecasts

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Certain Forecasts

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Interests of the Directors and Executive Officers of Digital River in the Merger

        When considering the recommendation of the Board that you vote to approve the proposal to adopt the merger agreement, you should be aware that some of our directors and executive officers may have interests in the merger that may be deemed to be different from, or in addition to, the interests of our stockholders generally, as more fully described below. The Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of Digital River.

Arrangements with Parent

        As of the date of this proxy statement, none of our executive officers has entered into any agreement with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates. Prior to or following the closing, however, some or all of our executive officers may discuss or enter into agreements with Parent or Acquisition Sub or any of their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates.

        Mr. Schulz has provided notice to Digital River that he intends to resign from his position as Chief Financial Officer of Digital River for personal reasons, effective after the closing date of the merger. Mr. Schulz has been invited to serve as a member of the Board and Digital River's audit committee after the merger closes, following the effectiveness of his resignation. Mr. Schulz has indicated he would accept these positions.

Insurance and Indemnification of Directors and Executive Officers

        Parent will cause the certificate of incorporation, bylaws or other organizational documents of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification, advancement of expenses and limitation of director, officer and employee liability that are no less favorable to the current or former directors, officers, managers or employees of Digital River and its subsidiaries than those set forth in Digital River's and its subsidiaries' organizational documents as of the date of the merger agreement. The surviving corporation and its subsidiaries will not, for a period of six years from the effective time of the merger, amend, repeal or otherwise modify these provisions in the organizational documents in any manner that would adversely affect the rights of the current or former directors, officers, managers or employees of Digital River and its subsidiaries.

        To the fullest extent that Digital River would be permitted by applicable law to do so, Parent will, or will cause the surviving corporation to, (i) indemnify and hold harmless each current or former director, officer, manager or employee of Digital River or its subsidiaries against and from any costs or expenses (including reasonable attorneys' fees), judgments and similar liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, to the extent such claim, action, suit, proceeding or investigation arises out of or pertains to (A) any alleged action or omission in such indemnified party's capacity as a director, officer or employee of Digital River or any of its subsidiaries prior to the effective time of the merger or (B) the merger agreement or the transactions contemplated thereby and (ii) pay in advance of the final disposition of any such claim, action, suit, proceeding or investigation the expenses (including attorneys' fees) of any such indemnified party upon receipt of an undertaking by or on behalf of such indemnified party to repay such amount if it shall ultimately be determined that such indemnified party is not entitled to be indemnified by applicable law.

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        The merger agreement also provides that prior to the effective time of the merger, Digital River may purchase a six year "tail" prepaid policy on the same terms and conditions as Parent would be required to cause the surviving corporation to purchase as discussed below. Digital River's ability to purchase a "tail" policy is subject to a cap on a one-time premium for such policy equal to 200% of the aggregate annual premiums currently paid by Digital River for its existing directors' and officers' liability insurance and fiduciary insurance as of the date of the merger agreement. If Digital River does not purchase a "tail" policy prior to the effective time of the merger, for at least six years after the effective time, Parent will cause the surviving corporation to maintain in full force and effect, on terms and conditions no less advantageous to the current or former directors, officers, managers or employees of Digital River and its subsidiaries, the existing directors' and officers' liability insurance and fiduciary insurance maintained by Digital River as of the date of the merger agreement. The "tail" policy will cover claims arising from facts, events, acts or omissions that occurred at or prior to the effective time, including the transactions contemplated in the merger agreement. Parent will not be required to pay premiums which on an annual basis exceed 300% of the aggregate annual premiums currently paid by Digital River; however, Parent must obtain the greatest coverage available at such cost. Please see "Proposal 1: Adoption of the Merger Agreement—Indemnification and Insurance" section for additional information beginning on page 95.

Treatment of Equity and Equity-Based Awards; ESPP

        Each Digital River stock option that is outstanding immediately prior to the completion of the merger, whether or not vested, will fully vest immediately prior to the completion of the merger and will be canceled and converted into the right to receive an amount in cash (subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (i) the total number of shares of Digital River common stock subject to the option as of the effective time of the merger and (ii) the amount, if any, by which $26.00 exceeds the exercise price per share of Digital River common stock underlying the stock option.

        Each share of Digital River restricted stock that is outstanding and unvested immediately prior to the effective time of the merger, including shares of restricted stock subject to time-based or performance-based vesting, which we refer to as restricted stock, will, contingent upon the effective time of the merger, vest and at the effective time of the merger be canceled and converted into the right to receive the per share merger consideration.

        Each Digital River restricted stock unit, which we refer to as an RSU, or performance stock unit granted pursuant to Digital River's benefit plans that is subject to performance-based vesting conditions, which awards we refer to as performance share awards, that is outstanding and vested immediately prior to the effective time of the merger (after taking into account any acceleration of vesting or lapse restrictions thereto provided for in Digital River's benefit plans or in any award agreement by reason of the transactions contemplated by the merger agreement) will automatically be canceled and cease to exist, and the holder of such performance share award will be entitled to receive an amount in cash equal (subject to any applicable withholding or other taxes required by applicable law to be withheld) to the product of (i) the total number of vested shares of Digital River common stock subject to such performance share award and (ii) the per share merger consideration. Each performance share award that is not so vested immediately prior to the effective time of the merger will be canceled without consideration.

        Any vesting or settlement conditions or restrictions applicable to each RSU and performance stock unit granted pursuant to Digital River's benefit plans that is not subject to performance-based vesting conditions, other than stock options and restricted stock, which awards we refer to as other company awards, that is outstanding immediately prior to the effective time of the merger, will lapse and the holder will receive an amount in cash equal (subject to any applicable withholding or other taxes

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required by applicable law to be withheld) to the product of (i) the total number of shares of Digital River common stock subject to such other company award and (ii) the per share merger consideration.

        Under Digital River's Amended and Restated 2011 Employee Stock Purchase Plan, which we refer to as the stock purchase plan, no new offering period will commence following completion of the offering period in progress as of the date of the merger agreement; we refer to the date of such completion as the final purchase date. Shares of Digital River common stock will be issued to participants under the stock purchase plan on the final purchase date, such that each then outstanding option under the stock purchase plan will be exercised automatically on such final purchase date. Digital River will terminate the stock purchase plan as of or prior to the effective time of the merger.

Payments to Executives Upon Termination Following Change-in-Control

Executive Change in Control and Retention Agreements

        Each of Digital River's named executive officers except for Mr. Dobson is party to a Change of Control and Severance Agreement, which we refer to collectively as the change in control agreements. Mr. Dobson is party to an Executive Employment Agreement and an Employee Retention and Motivation Agreement with Digital River, which we refer to collectively as the employee retention agreement. The change in control agreements and the employee retention agreement provide enhanced benefits generally in the event a named executive officer party thereto experiences a qualifying termination of employment without cause or resigns for good reason, which we refer to as a qualifying termination, on or following the completion of a transaction such as the merger.

        No named executive officer's severance payments pursuant to a change in control agreement or the employee retention agreement, as applicable, shall exceed the greater of (i) the largest portion of the payment that would result in no portion of the payment being subject to an excise tax under Sections 280G and 4999 of the Code, which we refer to as the excise tax, and (ii) the total payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and any excise tax (all computed at the highest applicable marginal rate) that results in such named executive officer's receipt, on an after-tax basis, of the greater amount of the payment notwithstanding that all or some portion of the payment may be subject to the excise tax. In addition, each named executive officer must refrain from competing with Digital River for one year following a qualifying termination, except for Mr. Dobson, whose non-competition period would last for 18 months following a qualifying termination.

David C. Dobson

        Mr. Dobson's employee retention agreement provides that if he experiences a qualifying termination following completion of the merger and prior to the first anniversary thereof, subject to his execution and non-revocation of a release of claims in favor of Digital River, (i) he will be paid the sum of his annual base salary and target bonus based upon 100% attainment of performance levels applicable to him from the period of time immediately prior to the change in control through the effective date of his termination, and (ii) for a period of 12 months after such termination, Digital River will be obligated to provide him with benefits that are substantially equivalent to his benefits (e.g., medical, dental and vision insurance) that were in effect immediately prior to the change in control. Such severance payments will be paid in one lump sum cash amount (less any required withholding taxes) on the date that is at least 6 months after Mr. Dobson's termination or, if allowed under Section 409A of the Code, within 30 days of the effective date of Mr. Dobson's termination.

Stefan B. Schulz

        Mr. Schulz's change in control agreement provides that if he experiences a qualifying termination following completion of the merger, subject to his execution of a release of claims in favor of Digital

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River, (i) he will be paid a cash amount equal to the sum of his base salary in effect at the time of the change in control plus the average of the annual bonus amount paid to him for the prior 3 years, and (ii) for a period of 12 months after such termination, Digital River will be obligated to provide him with benefits that are substantially equivalent to his benefits (e.g., medical, dental and vision insurance) that were in effect immediately prior to the change in control. Such severance payments will be paid in one lump sum amount on the date that is 6 months after Mr. Schulz's termination or, if allowed under Section 409A of the Code, in 12 equal monthly installments during the 12 months following such termination. Mr. Schulz has provided notice to Digital River that he intends to resign from his position as Chief Financial Officer of Digital River for personal reasons, effective after the closing date of the merger.

Theodore R. Cahall, Jr. and Thomas E. Peterson

        Messrs. Cahall's and Peterson's change in control agreements each provide that if the respective executive experiences a qualifying termination following completion of the merger, subject to his execution of a release of claims in favor of Digital River, (i) he will be paid a cash amount equal to the sum of (A) his base salary in effect at the time of the change in control and (B) a pro-rated portion of his target bonus for the year in which the change in control occurs and (ii) for a period of 12 months after such termination, Digital River will be obligated to provide him with benefits that are substantially equivalent to his benefits (e.g., medical, dental and vision insurance) that were in effect immediately prior to the change in control. Such severance payments will be paid in one lump sum amount on the date that is 6 months after such executive's termination or, if allowed under Section 409A of the Code, in 12 equal monthly installments during the 12 months following such termination.

Kevin L. Crudden

        Mr. Crudden's change in control agreement provides that if he experiences a qualifying termination following completion of the merger, subject to his execution of a release of claims in favor of Digital River, (i) he will be paid a cash amount equal to his base salary in effect at the time of the change in control and (ii) for a period of 12 months after such termination, Digital River will be obligated to provide him with benefits that are substantially equivalent to his benefits (e.g., medical, dental and vision insurance) that were in effect immediately prior to the change in control. Such severance payments will be paid in one lump sum amount on the date that is 6 months after Mr. Crudden's termination or, if allowed under Section 409A of the Code, in 12 equal monthly installments during the 12 months following such termination.

Golden Parachutes

        The following tables show the estimated amounts of payments and benefits that each named executive officer of Digital River would receive in connection with the merger, assuming consummation of the merger occurred on February 12, 2015, the date of the special meeting, and the employment of the named executive officer was terminated without cause or resigned for good reason on such date.

        The first table below, entitled "Potential Change-in-Control Payments to Named Executive Officers," along with its footnotes, sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation payable to Digital River's chief executive officer, chief financial officer and the three other most highly compensated executive officers, as determined for purposes of its most recent annual proxy statement, each of which we refer to as a named executive officer, which compensation is subject to an advisory vote of Digital River's stockholders, as described below in "Proposal 3: Advisory Vote on Merger-Related Executive Compensation Arrangements" beginning on page 103.

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        The calculations in the tables below do not include amounts the named executive officers would already be entitled to receive or that would be vested as of February 12, 2015, or amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all of the salaried employees of Digital River. In addition to the assumptions regarding the consummation date of the merger and termination of the employment of the named executive officers, these estimates are based on certain other assumptions that are described in the footnotes accompanying the tables below. Accordingly, the ultimate values to be received by a named executive officer in connection with the merger may differ from the amounts set forth below.

Potential Change-in-Control Payments to Named Executive Officers