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This activity could increase (or reduce the size of any decrease in) the market price of LivePerson common stock or the Notes at that time. The cap price of the capped call transactions will initially be approximately $105.58 per share, which represents a premium of approximately 100% over the closing price of LivePerson common stock on The Nasdaq Global Select Market of $52.79 per share on December 1, 2020, and is subject to certain adjustments under the terms of the capped call transactions. LivePerson may redeem all or any portion of the Notes, at its option, on or after December 20, 2023, at a cash redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding the redemption date, if the last reported sale price of LivePerson common stock has been at least 130% of the conversion price then in effect for a specified period of time ending on, and including, the trading day immediately before the date the notice of redemption is sent. This activity could also cause or avoid an increase or decrease in the market price of LivePerson common stock or the Notes, which could affect Noteholders’ ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the amount and value of the consideration that Noteholders will receive upon conversion of such Notes.

The capped call transactions are expected generally to reduce the potential dilution to holders of LivePerson common stock upon any conversion of the Notes and/or offset any cash payments that LivePerson could be required to make in excess of the aggregate principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. In connection with the pricing of the Notes, LivePerson has entered into privately negotiated capped call transactions with one or more of the initial purchasers of the Notes and/or their respective affiliates and/or other financial institutions (the “capped call counterparties”). LivePerson estimates that the net proceeds from the offering will be approximately $439.6 million (or $505.7 million if the initial purchasers exercise their option to purchase additional Notes in full), after deducting the initial purchasers’ discount and estimated offering expenses payable by LivePerson. In connection with establishing their initial hedges of the capped call transactions, the capped call counterparties have advised LivePerson that they and/or their respective affiliates expect to purchase LivePerson common stock and/or enter into various derivative transactions with respect to LivePerson common stock concurrently with, or shortly after, the pricing of the Notes.

If the initial purchasers of the Notes exercise their option to purchase additional Notes, LivePerson expects to enter into additional capped call transactions with capped call counterparties that are expected to generally offset potential dilution and/or potential cash payments relating to any conversion of the additional Notes issued upon exercise of such option, as the case may be. In addition, the capped call counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to LivePerson common stock and/or purchasing or selling LivePerson common stock, securities or instruments (if any) of LivePerson in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of the Notes occurring on or after August 15, 2026 or following any earlier conversion, repurchase or redemption of the Notes by LivePerson on any fundamental change repurchase date, on any optional redemption date or otherwise). Prior to joining LivePerson, Higgins gained over two decades of experience growing revenue and reach through strategic partnerships, business development, revenue optimization, customer success, and bringing to market innovative solutions leveraging data and machine learning at companies including Mozilla, Infoseek, and Ziff Davis, as well as in her role as CEO of Technorati.

Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual future events or results to differ materially from such statements, including, but not limited to, prevailing market conditions, the impact of general economic, industry or political conditions in the United States or internationally, and whether the capped call transactions will become effective. The Notes and any shares of LivePerson common stock issuable upon conversion of the Notes have not been and will not be registered under the Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The forward-looking statements contained in this press release are also subject to additional risks, uncertainties, and factors, including those more fully described in the “Risk Factors” described in LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2019 and in LivePerson’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020, each of which has been filed with the Securities and Exchange Commission, or SEC, and in LivePerson’s other filings with the SEC.