Document:

Exhibit

EXECUTION COPY

EMPLOYMENT AGREEMENT

AGREEMENT effective as of the 27th day of December, 2017 (the “Effective Date”) by and between LivePerson, Inc., a Delaware corporation (the “Company”), and Robert LoCascio (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company wishes to continue to employ the Executive and the Executive wishes to accept such continued employment, upon the terms and conditions hereinafter set forth; 

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.    Employment

The Company agrees to employ the Executive during the Term specified in paragraph 2, and the Executive agrees to accept such continued employment, upon the terms and conditions hereinafter set forth.

2.    Term

Subject to the provisions contained in paragraphs 6 and 7, the term of this Agreement shall commence on December 31, 2017 (the “Commencement Date”) and end on the third anniversary thereof, unless sooner terminated or later extended in accordance with the provisions hereof (the “Term”).  On the expiration of the initial three-year term and on each yearly anniversary thereafter, the Agreement shall automatically renew for an additional one-year term unless sooner terminated in accordance with the provisions set forth in this Agreement.  This Agreement shall terminate in the event that: (a) the Company provides the Executive with advance written notice of its intention not to renew this Agreement not less than 90 calendar days prior to the expiration of the then-current Term; or (b) the Executive provides the Company with advance written notice of his intention not to renew this Agreement not less than 90 calendar days prior to the expiration of the initial one-year term or any additional one-year term thereafter (as applicable in each case, a “Notice of Nonrenewal”).  A termination of employment by the giving of a Notice of Nonrenewal by the Company under this paragraph 2 shall be deemed to be a termination without Cause under paragraph 6(c) hereof, but a termination of employment by the giving of a Notice of Nonrenewal by the Executive under this paragraph 2 shall not be deemed to be a termination with Good Reason under paragraph 6(b) hereof.  Any Notice of Nonrenewal given by either party under this paragraph 2 shall specify the date of termination.  The Company shall have the right at any time after either party has provided to the other a Notice of Nonrenewal to relieve the Executive of his offices, duties 

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and responsibilities and to place him on a paid leave-of-absence status, provided that during such notice period the Executive shall remain a full-time employee of the Company and shall continue to receive his then-current salary compensation and other benefits (to the extent permitted under applicable plan documents) as provided in this Agreement.  The date on which the Executive ceases to be employed by the Company, regardless of the reason therefor, is referred to in this Agreement as the “Date of Termination.”

3.    Duties and Responsibilities

(a)    Title.  During the Term, the Executive shall have the position of Chief Executive Officer of the Company.  

(b)    Duties.  The Executive shall report directly to the Board of Directors of the Company (the “Board”) at such times and in such detail as it or he shall reasonably require. The Executive shall have the power and authority to conduct the business of the Company and shall perform such executive and managerial duties consistent with his position as designated in paragraph 3(a) and as may be assigned to him from time to time by or under authority of the Board.   

(c)    Scope of Employment.  The Executive’s employment by the Company as described herein shall be full-time and exclusive, and during the Term, the Executive agrees that he will (i) devote all of his business time and attention, his reasonable best efforts, and all his skill and ability to promote the interests of the Company; and (ii) carry out his duties in a competent and diligent manner.  Notwithstanding the foregoing, the Executive shall be permitted to engage in charitable (including but not limited to his affiliation with Dream Big Foundation, a New York not-for-profit corporation (the “Foundation”)) and civic activities and manage his personal passive investments, provided that such passive investments are not in a company that transacts business with the Company or its affiliates or engages in business competitive with that conducted by the Company unless it is a publicly held corporation and the Executive’s participation is limited to passively owning no more than 1% of its outstanding shares and without any influence or control over such corporation), and further provided that such activities (individually or collectively) do not  interfere with the performance of his duties or responsibilities under this Agreement. 

(d)    Office Location.  During the Term, the Executive’s services hereunder shall be performed at the principal office of the Company in New York, New York, subject to reasonably necessary travel requirements in order to carry out his duties in connection with his position hereunder.  

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4.    Compensation

(a)    Base Salary.  As compensation for his services hereunder, during the Term the Company shall pay the Executive in accordance with its normal payroll practices, an annualized base salary of $611,820 (as may be adjusted in accordance with the terms hereof, “Base Salary”).  The Base Salary will be reviewed annually and may be adjusted upward (but not downward) by the Board (or a committee thereof) in its discretion; provided that, in the event of cost of living or similar across the board base salary increases for other executive staff members, Executive shall be eligible for the same or greater percentage of Base Salary increase.

(b)    Annual Cash Bonus.  During the Term, the Executive shall be eligible to receive an annual cash bonus with a bonus target of 100% of Executive’s then current Base Salary, subject to annual increase by the Board in its discretion, which bonus target may be achieved, underachieved or overachieved  (with a potential payout range of zero, up to a maximum of 200% of the target bonus) as determined by the Compensation Committee of the Board (the “Compensation Committee”) based upon the Executive’s performance against goals and metrics that shall be established by the Compensation Committee in its sole discretion on an annual basis, the overall financial performance of the Company and such other factors as the Compensation Committee in its sole discretion shall deem reasonable and appropriate (the “Annual Cash Bonus”), to be paid in accordance with the Company’s normal bonus payment procedures, but not later than March 15 of the calendar year following the year with respect to which the bonus is earned.  At the written election of the Executive on or before the payment date for such Annual Cash Bonus, the Executive may convert all or any portion of the Annual Cash Bonus payable to him into fully vested shares of common stock of the Company (“Stock”) (pursuant to the Second Amended and Restated LivePerson, Inc. 2009 Stock Incentive Plan, as such plan may be from time to time amended in accordance with the terms thereof, the “Stock Plan”) having a fair market value at the time of issuance equivalent in amount to that portion of the Annual Cash Bonus that the Executive elects to convert hereunder. Any such Stock shall be issued to Executive on the date for payment of the Annual Cash Bonus and shall be subject to the terms and conditions of the Stock Plan except to the extent expressly provided herein to the contrary. Notwithstanding anything to the contrary, the Annual Cash Bonus may, in the discretion of the Compensation Committee, be granted and payment, if any, made in accordance with a plan or program established by the Compensation Committee in compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended. During the Term, should the Executive’s Base Salary increase, the target bonus amount for the Annual Cash Bonus will be increased so that at any given time the bonus target for the Annual Cash Bonus is no less than 100% of the Executive’s then-current Base Salary, or such higher target bonus amount as the Compensation Committee may determine in its sole discretion.   In the event of a Change of Control, as defined below, should the Executive remain employed by the Company or a successor entity following such Change of Control, the Annual Cash Bonus for the then-current year shall be paid at a an amount equal to the greater of (i) one hundred percent (100%) of the amount of the Annual Cash Bonus actually paid to the Executive for the immediately preceding calendar year or (ii) the bonus target amount for the Annual Cash Bonus for the then current year.  In no event will the Company be obligated to pay more than one Annual Cash Bonus for the same annual period.   If the Annual Cash Bonus for the calendar year preceding the Change of Control has not been determined prior to the Change of Control, the amount of such bonus shall be determined by the 

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Board of Directors of the Company as constituted prior to the Change of Control and shall not be less than the target bonus for such year.   

A “Change of Control” shall be defined as and limited to:  (i) any person’s, entity’s or affiliated group’s becoming the beneficial owner or owners of more than fifty percent (50%) of the outstanding equity securities of the Company, or otherwise becoming entitled to vote shares representing more than fifty percent (50%) of the undiluted total voting power of the Company’s then-outstanding securities eligible to vote to elect members of the Board (the “Voting Securities”); (ii)  a consolidation or merger (in one transaction or a series of related transactions) of the Company pursuant to which the holders of the Company’s equity securities immediately prior to such transaction or series of related transactions are not the holders immediately after such transaction or series of related transactions of at least fifty-one percent (51%) of the Voting Securities of the entity surviving such transaction or series of related transactions; or (iii)  the sale or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company.  

(c)    Equity.  During the Term, the Compensation Committee may, in its sole discretion, grant to the Executive stock options and/or other equity-based incentives.  The amount(s) of such additional grants, if any, will be based on individual and Company performance objectives developed and approved by the Compensation Committee in its sole discretion, and will be subject to all of the terms and conditions (including vesting) as determined by the Compensation Committee in accordance with the plan under which any grant is made and in the applicable stock option agreements or other applicable documents evidencing such grant, except as expressly otherwise provided herein to the contrary.  The exercise price for such equity, as applicable, shall be determined at the time such equity rights may be granted by the Board, but in no event shall be less than the fair market value of a share of the Company’s common stock on the date of grant.  

(d)    One-Time Payment and Equity Award.  In addition to all of the foregoing and as compensation for services already provided, immediately upon execution of this Agreement, the Company shall make a one-time payment to Executive of (i) One Million Dollars ($1,000,000), payable by wire transfer of immediately available funds to an account designated by the Executive and (ii) two hundred and fifty thousand (250,000) RSUs (as defined in the Stock Plan), which such RSUs shall vest in one third increments on each of the next three annual anniversaries of the Effective Date.

5.    Expenses; Benefits 

(a)    Expenses.  The Company agrees to pay or to reimburse the Executive for all reasonable, ordinary, necessary and documented business or entertainment expenses incurred during the Term in the performance of his services hereunder in accordance with the policy of the Company as from time to time in effect.  The Executive, as a condition precedent to obtaining such payment or reimbursement, shall provide to the Company reasonable documentation, consistent with Company policy, evidencing the travel or out-of-pocket expenses for which the Executive seeks payment or reimbursement, and any other information or materials, as the Company may from time to time reasonably require.

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(b)    Benefits.  The Executive shall be entitled to such fringe benefits and other benefits as are available generally to key employees of the Company from time to time, subject to any eligibility criteria for such benefits.  Currently, the Company’s programs include group health insurance, prescription drug benefits, vision care and dental insurance, group life, short-term disability and long-term disability insurance and participation in 401(k). The benefits made available by the Company, and the rules, terms and conditions for participation in such benefit plans, may be modified by the Company at any time and from time to time without advance notice or consent by the Executive. 

(c)    Vacation.  The Executive shall be entitled to four weeks of vacation annually, accruing and to be taken in accordance with the Company’s policies.  Vacation time may not be carried over from year to year unless expressly provided by Company’s policies, and must be taken at such times as shall not materially interfere with the Executive’s fulfillment of his duties hereunder.  The Executive shall also be entitled to any holidays, sick days and/or other paid days off as may be available pursuant to, and to be taken in accordance with, the Company’s policies in effect generally for its key employees from time to time.

(d)    Intentionally Omitted. 

(e)    Indemnification. In the event that the Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), other than any Proceeding initiated by the Executive or the Company related to any contest or dispute between the Executive and the Company or the Executive’s employment hereunder, by reason of the fact that the Executive is or was a director or officer of the Company, or any affiliate of the Company, or is or was serving at the request of the Board as a director, officer, member, employee, or agent of another corporation or a partnership, joint venture, trust, or other enterprise, the Executive shall be indemnified and held harmless by the Company pursuant to the Indemnification Agreement entered into by and between the Company and the Executive, dated as of February 9, 2012- to the maximum extent permitted under such Indemnification Agreement, or if greater, under the Company’s bylaws or resolutions of the Board or, if greater, by the laws of the State of Delaware, from and against any liabilities, costs, claims, and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys’ fees), and such indemnification shall continue as to the Executive even if he has ceased to be a director, officer, member, employee or agent of the Company or other entity and shall inure to the benefit of the Executive’s heirs, executors and administrators. Costs and expenses incurred by the Executive in defense of such Proceeding (including attorneys’ fees) shall be paid by the Company in advance of the final disposition of such litigation upon receipt by the Company of: (i) a written request for payment; (ii) appropriate documentation evidencing the incurrence, amount, and nature of the costs and expenses for which payment is being sought; and (iii) an undertaking adequate under applicable law made by or on behalf of the Executive to repay the amounts so paid if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Company under this Agreement.

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During the Term and for a period of six (6) years thereafter, the Company or any successor to the Company shall purchase and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to other directors and similarly situated executives of the Company.

6.    Termination

(a)    Termination for Cause.  The Company, by direction of the Board, shall be entitled to terminate the Term and to discharge the Executive for “Cause” effective upon the giving of written notice.  The term “Cause” shall be limited to the following grounds:

(i)    the Executive’s material failure or refusal to perform his duties and responsibilities as set forth in paragraph 3 hereof as reasonably directed by the Board, in each case if such failure or refusal is not cured (if deemed curable, as determined in the sole discretion of the Board) within 30 calendar days after written notice thereof to the Executive by the Company; 

(ii)    the misappropriation of the funds or property of the Company;

(iii)    (x) the use of illegal drugs, or (y) the use of alcohol or the use of prescription or other legal drugs interfering with the performance of the Executive’s obligations under this Agreement, continuing after written warning;

(iv)    the conviction in a court of law of, or entering a plea of guilty or no contest to, any felony or any crime involving moral turpitude, dishonesty or theft;

(v)    the nonconformance with the Company’s policies against discrimination or harassment, which nonconformance is not cured (if deemed curable, as determined in the sole discretion of the Board) immediately after written notice to the Executive by the Company;

(vi)    the commission by the Executive of any act that materially injures the business or business relationships of the Company or brings the Company into substantial public disgrace or disrepute;

(vii)    any breach (not covered by any of the clauses (i) through (vi) above) of paragraphs 9, 13, and 25, if such breach is not cured (if deemed curable in the sole discretion of the Board) within 30 calendar days after written notice thereof to the Executive by the Company.

Any notice required to be given by the Company pursuant to clause (i), (v) or (vii) above shall specify the nature of the claimed breach and the manner in which the Company requires such breach to be cured (if such breach has been deemed curable in the sole discretion of the Board).  

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Notwithstanding anything herein to the contrary, termination of the Executive’s employment shall not be deemed to be for Cause unless and until the Company delivers to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the Board, finding that the Executive has engaged in the conduct described in any of (i)-(vii) above.

(b)    Termination for Good Reason.  Provided that Company has not given written notice of termination in accordance with Section 6(a) above with respect to a Cause event; or if such notice has been given, the applicable Cause event has not been cured (if deemed curable by the Board in its sole discretion), the Executive shall be entitled to terminate this Agreement and the Term hereunder for Good Reason (as defined below) at any time during the Term by written notice to the Company.  “Good Reason” shall be limited to: (i) a reduction in the Executive’s Base Salary or bonus opportunity or a termination or material reduction of any employee benefit or material perquisite enjoyed by him without his prior written consent or failure to pay any of the foregoing when due without the Executive’s prior written consent, in each case other than as part of an across-the-board reduction, change or suspension applicable to substantially all key executives of the Company or its successor entity as applicable; (ii) a material diminution in the Executive’s title, duties and responsibilities as set forth in paragraph 3, without his prior written consent or any action by the Board that unreasonably interferes with or materially impairs Executive’s ability to function as the Chief Executive Officer of the Company; (iii) a relocation of the Company’s principal office to a location that would require an increase in the Executive’s one-way commute by more than 25 miles as compared to its location on the Commencement Date (or from such other location to which the Executive has consented after the Commencement Date); (iv) any change in the reporting structure applicable to the Executive such that the Executive is required to report to any person, entity or body other than the Board without Executive’s prior written consent; or (v) any other material breach of this Agreement by the Company.  To be entitled to use this paragraph 6(b), the Executive must provide written notice of the event or change he considers constitutes “Good Reason” within 30 calendar days following its occurrence, and to the extent curable, must provide the Company with a period of at least 30 calendar days to cure the event or change, and must, if the Good Reason persists, actually resign within 90 calendar days following the event or change.  

(c)    Termination by the Company without Cause; Termination by the Executive without Good Reason.  The Company, by direction of the Board, shall have the right at any time during the Term to terminate the employment of the Executive without Cause by giving at least sixty (60) days advanced written notice to the Executive setting forth a Date of Termination.  The Executive shall have the right at any time during the Term to terminate his employment with the Company without Good Reason by giving at least sixty (60) days advanced written notice to the Company setting forth a Date of Termination. 

(d)    Termination for Death or Disability.  In the event of the Executive’s death, the Date of Termination shall be the date of the Executive’s death.  The Company may terminate the Executive’s employment for Disability at the end of any calendar month during the continuance of such Disability upon at least 30 calendar days’ prior written notice to the Executive.  “Disability” shall mean the Executive’s inability to substantially perform his duties hereunder by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever) (all such occurrences being herein referred to as “Disability”) and the Executive’s failure to substantially 

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perform such duties for a period aggregating 180 days as a result thereof, whether or not continuous, in any continuous period of 360 days. The Board shall determine, in its good faith judgment and upon consultation with, and after obtaining advance from, such medical advisors as it deems appropriate, including those of the Executive, whether or not the Executive has a Disability for purposes of this Agreement, and the Board shall provide notice of such determination to the Executive. In the event that the Executive disagrees with the Board’s determination as to his Disability, the Executive shall notify the Board in writing of such disagreement within fifteen (15) days of such determination regarding Disability by the Board (the “Disability Notice”).  Upon the Board’s receipt of the Disability Notice, the determination of the Executive’s Disability shall be settled by binding arbitration in New York, New York (unless the parties agree in writing to a different location), before a single arbitrator selected in accordance with the rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator.  The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.  Fees and costs for the arbitration shall be split evenly between Executive and the Company unless otherwise determined by the arbitrator. No other dispute or disagreement arising out of or related to this Agreement shall be subject to arbitration unless the parties agree otherwise.

7.    Effect of Termination of Employment.

(a)    Termination by the Company for Cause; by the Executive without Good Reason; or pursuant to a Notice of Nonrenewal delivered by the Executive pursuant to paragraph 2 above prior to the Executive reaching the normal age of retirement, which for purposes of this Agreement, shall be age 65.   In the event of the termination of the employment of the Executive (1) by the Company for Cause, (2) by the Executive without Good Reason, or (3) pursuant to a Notice of Nonrenewal delivered by the Executive pursuant to paragraph 2 above prior to the Executive reaching the normal age of retirement, the Executive shall be entitled to the following payments and benefits (those payments and benefits set forth in (i), (ii), (iv) and (v) below collectively, the “Accrued Benefits”):

(i)    his unpaid Base Salary through, and any unpaid reimbursable expenses outstanding as of, the Date of Termination; 

(ii)    all benefits, if any, that had accrued to the Executive through the Date of Termination under the plans and programs described in paragraph 5(b) above, or any other applicable plans and programs in which he participated as an employee of the Company, in the manner and in accordance with the terms of such plans and programs; it being understood that any and all rights that the Executive may have to severance payments by the Company shall be determined and solely based on the terms and conditions of this Agreement and not based on any severance policy or plan that the Company may have in effect as of the Date of Termination; 

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(iii)    except in the event of a Termination by the Company for Cause, his Annual Cash Bonus with respect to the calendar year ended prior to the Date of Termination, when otherwise payable, but only to the extent not already paid;

(iv)    the right to indemnification in accordance with Section 5(e) above; 

(v)    directors’ and officers’ liability insurance coverage in accordance with Section 5(e) above; and 

(vi)    except in the event of a Termination by the Company for Cause, notwithstanding anything to the contrary in any plan under which a grant is made or in an applicable stock option agreement or other applicable documents evidencing such grant  (collectively, the “Grant Documents”), all vested stock options held by the Executive on the Date of Termination shall remain eligible to exercise for a period of 18 months following the Date of Termination, or until the original expiration date of the option, if earlier.

In the event of the termination of the employment of the Executive (1) by the Company for Cause, (2) by the Executive without Good Reason, or (3) pursuant to a Notice of Nonrenewal delivered by the Executive pursuant to paragraph 2 above prior to the Executive reaching the normal age of retirement, except as provided above in this paragraph 7(a), the Company shall have no further liability to the Executive or the Executive’s heirs, beneficiaries or estate for damages, compensation, benefits, severance, indemnities or other amounts of whatever nature, directly or indirectly, arising out of or otherwise related to this Agreement and/or the Executive’s employment or cessation of employment with the Company.

(b)    Termination by the Company without Cause (which shall include, without a limitation, a termination by the Company pursuant to a Notice of Nonrenewal delivered by the Company pursuant to Paragraph 2 above), or by the Executive for Good Reason.  In the event of (1) a termination by the Company without Cause (which shall include, without a limitation, a termination by the Company pursuant to a Notice of Nonrenewal delivered by the Company pursuant to Paragraph 2 above) or (2) a termination by the Executive for Good Reason.:

(i)    the Accrued Benefits;

(ii)    intentionally omitted;
    
(iii)    his Annual Cash Bonus with respect to the calendar year ended prior to the Date of Termination, when otherwise payable, but only to the extent not already paid;
    
(iv)    severance pay in an amount equal to 18 months of base pay at his then current Base Salary rate, which shall be paid in installments in accordance with the Company’s regular payroll practices, beginning on the next payroll date following the 30th day after the Date of Termination; provided that the period (if any) during 

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which the Separation Agreement (defined below) can be revoked has expired within such 30-day period;

(v)    a pro-rated portion of his Annual Cash Bonus with respect to the then-current calendar year, calculated as follows (but only to the extent not already paid):  the product of (a) and (b) where (a) equals a percentage equal to the total number of weeks elapsed during the then-current calendar year through the Date of Termination divided by the total number of weeks in the then-current calendar year, multiplied by the amount of the highest Annual Cash Bonus payable to the Executive in the three calendar years immediately preceding the Date of Termination and (b) equals 1.5, such amount payable in a lump sum on the 30th day following the Date of Termination, provided that the period (if any) during which the Separation Agreement can be revoked has expired within such 30-day period;   

(vi)    if the Executive is eligible for and elects to continue his health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company will continue to contribute, until the earlier of (x) 18 months following the Date of Termination or (y) the date on which the Executive becomes eligible to receive group medical insurance coverage through another employer (the “COBRA Contribution Period”), toward the cost of the Executive’s COBRA premiums the same amount that it pays on behalf of active and similarly situated employees receiving the same type of coverage.  The remaining balance of any premium costs, and all premium costs after the COBRA Contribution Period, shall be paid by the Executive on a monthly basis.  After the COBRA Contribution Period, the Executive may continue receiving coverage under COBRA at his own cost if and to the extent that he remains eligible for COBRA continuation.  The Executive agrees that he shall notify the Company in writing immediately following the date on which he becomes eligible to receive group medical insurance coverage through another employer; 

(vii)    notwithstanding anything to the contrary in the Grant Documents, any stock options or RSUs held by the Executive on the Date of Termination that would have vested in the two year period following the Date of Termination if the Executive had remained employed by the Company for such period will immediately vest; and

(viii)    notwithstanding anything to the contrary in the Grant Documents, all vested stock options held by the Executive on the Date of Termination shall remain eligible to exercise for a period of 18 months following the Date of Termination, or until the original expiration date of the option, if earlier.

In connection with a termination by the Company without Cause or by the Executive for Good Reason, except as provided above in this paragraph 7(b), the Company shall have no further liability to the Executive or the Executive’s heirs, beneficiaries or estate for damages, compensation, benefits, severance, indemnities or other amounts of whatever nature, directly or indirectly, arising out of or 

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otherwise related to this Agreement and the Executive’s employment or cessation of employment with the Company.  The Executive shall be under no duty to mitigate damages hereunder.  The making of any severance payments and providing the other benefits as provided in subsections (iv) through (viii) of this paragraph 7(b) are conditioned upon delivery of the separation and release of claims agreement in the form attached hereto as Exhibit A (the “Separation Agreement”) that has become irrevocable within 30 days of the Executive’s Date of Termination.  If the Executive materially breaches the Separation Agreement or the provisions of paragraph 9 of this Agreement, in either case which such breach is not cured within thirty (30) days of written notice thereof by the Company to the Executive, in addition to any other remedies at law or in equity available to it, the Company may cease making any further payments and providing the other benefits provided for in subsections (iii) through (viii) of this paragraph 7(b), without affecting its rights under this Agreement or the Separation Agreement.

(c)    Termination by the Executive for Good Reason or Termination of the Executive without Cause following a Change of Control.  In the event of a termination by the Executive for Good Reason or Termination of the Executive without Cause within the twelve (12) month period immediately following a Change of Control, the Executive shall be entitled to the following payments and benefits:

(i)    the Accrued Benefits;

(ii)    Intentionally Omitted;
    
(iii)    his Annual Cash Bonus with respect to the calendar year ended prior to the Date of Termination, when otherwise payable, but only to the extent not already paid;
    
(iv)    severance pay in an amount equal to 18 months of base pay at his then current Base Salary rate, which shall be paid in installments in accordance with the Company’s regular payroll practices, beginning on the next payroll date following the 30th day after the Date of Termination; provided that the period (if any) during which the Separation Agreement can be revoked has expired within such 30-day period;

(v)    An Annual Cash Bonus for the then-current year calculated as one hundred-fifty percent (150%) of the amount of the highest Annual Cash Bonus actually paid to the Executive for the three calendar years immediately preceding the Date of Termination, payable in a lump sum on the 30th day following the Date of Termination, provided that the period (if any) during which the Separation Agreement can be revoked has expired within such 30-day period;    

(vi)    if the Executive is eligible for and elects to continue his health insurance coverage under COBRA, the Company will continue to contribute, for the COBRA Contribution Period, toward the cost of the Executive’s COBRA premiums the same amount that it pays on behalf of active and similarly situated employees 

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receiving the same type of coverage.  The remaining balance of any premium costs, and all premium costs after the COBRA Contribution Period, shall be paid by the Executive on a monthly basis.  After the COBRA Contribution Period, the Executive may continue receiving coverage under COBRA at his own cost if and to the extent that he remains eligible for COBRA continuation.  The Executive agrees that he shall notify the Company in writing immediately following the date on which he becomes eligible to receive group medical insurance coverage through another employer; and

(vii)     notwithstanding anything to the contrary in the Grant Documents, any unvested stock options and RSUs held by the Executive on the Date of Termination shall fully vest and all vested options (including those that vested pursuant to this paragraph 5(c)(vii)) shall remain exercisable for 18 months following the Date of Termination, or until the original expiration date of the option, if earlier. 

In connection with a termination by the Executive for Good Reason or Termination of the Executive without Cause within the twelve (12) month period immediately following a Change of Control, except as provided above in this paragraph 7(c), the Company shall have no further liability to the Executive or the Executive’s heirs, beneficiaries or estate for damages, compensation, benefits, severance, indemnities or other amounts of whatever nature, directly or indirectly, arising out of or otherwise related to this Agreement and the Executive’s employment or cessation of employment with the Company.  The Executive shall be under no duty to mitigate damages hereunder.  The making of any severance payments and providing the other benefits as provided in subsections (iii) through (vii) of this paragraph 7(c) is conditioned upon the delivery of an executed and irrevocable Separation Agreement within 30 days of the Date of Termination.  If the Executive materially breaches the Separation Agreement or the provisions of paragraph 9 of this Agreement, in either case which such breach is not cured within thirty (30) days of written notice thereof by the Company to the Executive, in addition to any other remedies at law or in equity available to it, the Company may cease making any further payments and providing the other benefits provided for in subsections (iii) through (vii) of this paragraph 7(c), without affecting its rights under this Agreement or the Separation Agreement.

(d)    Termination by Death or Disability; Notice of Nonrenewal delivered by the Executive pursuant to paragraph 2 above after the Executive having reached the normal age of retirement. In the event of a termination of the employment of the Executive by reason of Death or Disability or pursuant to a Notice of Nonrenewal delivered by the Executive pursuant to paragraph 2 above after the Executive having reached the normal age of retirement,  the Executive shall be entitled to the following payments and benefits:

(i)The Accrued Benefits;

(ii)his Annual Cash Bonus with respect to the calendar year ended prior to the Date of Termination, when otherwise payable, but only to the extent not already paid;

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(iii)a pro-rated portion of his Annual Cash Bonus with respect to the then-current calendar year, calculated as follows (but only to the extent not already paid):  the product of (a) and (b) where (a) equals a percentage equal to the total number of weeks elapsed during the then-current calendar year through the Date of Termination divided by the total number of weeks in the then-current calendar year, multiplied by the amount of the highest Annual Cash Bonus actually paid to the Executive in the three calendar years immediately preceding the Date of Termination and (b) equals 1.5, such amount payable in a lump sum on the 30th day following the Date of Termination, provided that the period (if any) during which the Separation Agreement can be revoked has expired within such 30-day period;  

(iv)if the Executive is eligible for and elects to continue his health insurance coverage under COBRA the Company will continue to contribute, for the COBRA Contribution Period, toward the cost of the Executive’s COBRA premiums the same amount that it pays on behalf of active and similarly situated employees receiving the same type of coverage.  The remaining balance of any premium costs, and all premium costs after the COBRA Contribution Period, shall be paid by the Executive on a monthly basis.  After the COBRA Contribution Period, the Executive may continue receiving coverage under COBRA at his own cost if and to the extent that he remains eligible for COBRA continuation.  The Executive agrees that he shall notify the Company in writing immediately following the date on which he becomes eligible to receive group medical insurance coverage through another employer; 

(v)notwithstanding anything to the contrary in the Grant Documents, any stock options and RSUs held by the Executive on the Date of Termination that would have vested in the two year period following the Date of Termination if the Executive had remained employed by the Company for such period will immediately vest; and 

(vi)notwithstanding anything to the contrary in the Grant Documents, all vested stock options held by the Executive on the Date of Termination shall remain eligible to exercise for a period of 18 months following the Date of Termination, or until the original expiration date of the option, if earlier.

In the event of the termination of the employment of the Executive under this paragraph 7(d) except as provided above in this paragraph 7(d), the Company shall have no further liability to the Executive or the Executive’s heirs, beneficiaries or estate for damages, compensation, benefits, severance, indemnities or other amounts of whatever nature, directly or indirectly, arising out of or otherwise related to this Agreement and/or the Executive’s employment or cessation of employment with the Company.

8.    Effect of Change in Control

In the event of a Change in Control of the Company, notwithstanding anything to the contrary in the Grant Documents, 50% of each of the unvested stock options and unvested RSUs 

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held by the Executive on the date of the Change in Control shall fully vest, subject to the Executive’s employment on such date.

9.    Proprietary Information, Developments, Non-Competition and Non-Solicitation

(a)    Execution of Restrictive Covenant Agreement.  As a condition of continued employment with the Company pursuant to the terms of this Agreement, the Executive shall execute contemporaneously with this Agreement the Proprietary Information, Developments, and Non-Solicitation Agreement attached hereto as Exhibit B (the “Restrictive Covenant Agreement”), which is hereby incorporated into this Agreement, with the modifications expressly set forth in Sections 9(b) and 9(c) below.

(b)    Notwithstanding Section 5 of the Restrictive Covenant Agreement, Company acknowledges that Inventions (as defined in the Restrictive Covenant Agreement) created or procured by Executive during his employment for use in philanthropic, non-profit endeavors, including but not limited to the Foundation, shall be exempt from Section 5 of the Restrictive Covenant Agreement; provided, that such Inventions do not incorporate any of the Company’s confidential or proprietary technology, information, or derivatives thereof. 

(c)    The Executive acknowledges and agrees that Section 6 of the Restrictive Covenant Agreement shall be deemed replaced in its entirety by subsections (i), (ii), and (iii) below:

(i)    Based on my exposure to the Company’s Confidential Information, I agree that while I am employed by the Company and for a restricted period of (i) twelve (12) months following termination or cessation of my employment with the Company in the event of a termination or cessation of employment for which I am not receiving severance pay pursuant to Sections 7(b)(iv) or Section 7(c)(iv) of my employment agreement, or (ii) with respect to a termination or cessation of employment for which I am receiving severance pay pursuant to Sections 7(b)(iv) or Section 7(c)(iv) of my employment agreement, for a period of  eighteen (18) months following the termination or cessation of such employment (the period during which Executive is employed together with the applicable twelve or eighteen month period referenced above, the “Restricted Period”), I will not directly or indirectly:

A.     Engage in any business or enterprise (whether as an owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise, except as the holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company) that is competitive with the Company’s business, including but not limited to any business or enterprise that develops, manufactures, designs, licenses, produces, markets, sells or renders (or assists any other person in developing, manufacturing, designing, licensing, producing, marketing, selling, or rendering) products or services competitive with those developed, manufactured, designed, licensed, produced, marketed, sold, or rendered by 

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the Company or planned to be developed, manufactured, designed, licensed, produced, marketed, sold, or rendered by the Company while I was employed by the Company (a “Competitive Enterprise”); provided, however, that notwithstanding the foregoing, I may engage in a business or enterprise that devotes less than five percent (5%) of its resources on a consolidated basis to developing or engaging in a Competitive Enterprise, or generates less than five percent (5%) of its revenues or earnings from a Competitive Enterprise so long as in neither case do I provide services (whether as an owner, partner, employee, consultant, principal, independent contractor, officer, director or otherwise) that directly or indirectly relate to a Competitive Enterprise;

B.    Either alone or in association with others, solicit, recruit, hire or engage as an independent contractor, or attempt to solicit, recruit, hire or engage as an independent contractor, any person who was employed by the Company or engaged as an independent contractor by the Company at any time during the period of my employment with the Company, except for an individual whose employment with or service for the Company has been terminated for a period of six months or longer; 

C.    Either alone or in association with others, induce or attempt to induce any customer, client, or account or prospective customer, client, or account of the Company to (i) cease purchasing, licensing, or leasing a product or service developed, designed, produced, marketed, sold or rendered by the Company while I was employed by the Company; or (ii) purchase, license, or lease a product or service competitive with any product or service developed, designed, produced, marketed, sold or rendered by the Company while I was employed by the Company; provided that the foregoing provisions shall not apply the Foundation’s licensing or ceasing to license the Company’s products conducted in the ordinary course of the Foundation’s business ; and/or

D.    Accept employment with or provide consulting services for any business or enterprise that was an actual or prospective client, customer, or account of the Company at any time during Executive’s employment with the Company if such employment or consulting services would result in such business or enterprise limiting or ceasing its purchasing, licensing, or leasing of a product or service developed, designed, produced, marketed, sold or rendered by the Company while I was employed by the Company; provided that the foregoing shall not apply to my services to the Foundation conducted in the ordinary course of its business.

(ii)    If any restriction set forth in this Section 9 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it 

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shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

(iii)    If I violate any of my obligations under this Section 9, I shall continue to be held by the restrictions set forth herein until the Restricted Period  has expired without any violation.

(d)    Notification of Restrictive Covenants.  Prior to accepting any employment or consulting engagement with any person, firm or entity during the Restricted Period following the Date of Termination, the Executive shall notify such person, firm or entity in writing of his obligations pursuant to the Restrictive Covenant Agreement and this Agreement, and shall simultaneously provide a copy of such notice to the Company (it being agreed by the Company that such notification required under this paragraph 9(b) shall not be deemed a breach of the confidentiality provisions of this Agreement).
        
10.    Non-Disparagement.  
From and after the Commencement Date and following termination of the Executive’s employment with the Company, the Executive agrees not to make any statement that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the Company, any of its subsidiaries, affiliates, employees, officers, directors or stockholders.  The Company agrees and covenants that it shall not and shall cause its employees, officers and directors to refrain from, making any defamatory or disparaging remarks, comments or statements concerning the Executive to any third parties. 

11.    Section 280G.    
(a)    Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company to the Executive or for the Executive’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute payments  within the meaning of Section 280G of the Code (“Parachute Payments”) and would, but for this Section 11 be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made in the manner set forth in Section 11(c) comparing (i) the Net Benefit (as defined below) to the Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to the Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. If, and only if, the amount calculated under (i) above is less than the amount under (ii) above, the Covered Payments shall be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes. 

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(b)    Any such reduction shall be made in accordance with Section 409A of the Code and the following: (i) the Covered Payments which do not constitute nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first; and (ii) all other Covered Payments shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date.
(c)    Any determination required under this Section 11 shall be made in writing by the Company’s regular independent auditor unless the Executive reasonably objects to the use of that firm, in which case, the determination will be made by a nationally recognized United States public accounting firm chosen by the parties (the “Accountants”), which shall provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. The Company and the Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 11. For purposes of making the calculations and determinations required by this Section 11, the Accountants may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and the Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 11.
(d)    The Auditor shall be the Company’s regular independent auditor unless the Executive reasonably objects to the use of that firm, in which event the Auditor will be a nationally recognized United States public accounting firm chosen by the parties.
(e)    It is possible that after the determinations and selections made pursuant to this Section 11 the Executive will receive Covered Payments that are in the aggregate more than the amount provided under this Section 11 (“Overpayment” ) or less than the amount provided under this Section 11 (“Underpayment”).
(f)    In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or the Executive which the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then the Executive shall pay any such Overpayment to the Company, together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of the Executive’s receipt of the Overpayment until the date of repayment.
In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of the Executive together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount would have otherwise been paid to the Executive until the payment date. 

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12.     Enforceability

The failure of any party at any time to require performance by another party of any provision hereunder shall in no way affect the right of that party thereafter to enforce the same, nor shall it affect any other party’s right to enforce the same, or to enforce any of the other provisions in this Agreement; nor shall the waiver by any party of the breach of any provision hereof be taken or held to be a waiver of any subsequent breach of such provision or as a waiver of the provision itself.

13.    Assignment

The Company and the Executive agree that the Company shall have the right to assign this Agreement, and, accordingly, this Agreement shall inure to the benefit of, be binding upon and may be enforced by, any and all successors and assigns (whether direct or indirect, by asset assignment, stock sale, merger, consolidation, corporate reorganization or otherwise) to all or substantially all of the business or assets of the Company.  The Company and Executive agree that Executive’s rights and obligations under this Agreement are personal to the Executive, and the Executive shall not have the right to assign or otherwise transfer his rights or obligations under this Agreement, and any purported assignment or transfer shall be void and ineffective, provided that the rights of the Executive to receive certain benefits upon death as expressly set forth under paragraph 7(d) of this Agreement shall inure to the Executive’s estate and heirs. The rights and obligations of the Company hereunder shall be binding upon and run in favor of the successors and permitted assigns of the Company.

14.    Modification

This Agreement may not be orally canceled, changed, modified or amended, and no cancellation, change, modification or amendment shall be effective or binding, unless in writing and signed by the parties to this Agreement, and approved in writing by the Board.

15.    Severability; Survival

If any provision or portion of this Agreement is determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall nevertheless be binding upon the parties with the same effect as though the invalid or unenforceable part had been severed and deleted or reformed to be enforceable.  The respective rights and obligations of the parties hereunder shall survive the termination of the Executive’s employment to the extent necessary to the intended preservation of such rights and obligations, specifically paragraphs 5(e), 7, 9, 10, 11, 12, 13, 14, 15, 17, 18, 22, 25, 26 and 27.

16.    Life Insurance

The Executive agrees that the Company shall have the right to obtain life insurance on the Executive’s life, at the sole expense of the Company and with the Company as the sole beneficiary thereof.  The Executive shall (a) cooperate fully in obtaining such life insurance, (b) 

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sign any necessary consents, applications and other related forms or documents and (c) at the expense of the Company, take any reasonably required medical examinations.

17.    Notice

Any notice, request, instruction or other document to be given hereunder by any party hereto to another party shall be in writing and shall be deemed effective (a) upon personal delivery, if delivered by hand, or (b) three calendar days after the date of deposit in the mails, postage prepaid if mailed by certified or registered mail, or (c) on the next business day, if sent by prepaid overnight courier service or facsimile transmission (if electronically confirmed), and in each case, addressed as follows:

If to the Executive:

Mr. Robert LoCascio        
At his address on file with the Company

If to the Company:
            
LivePerson, Inc.
475 10th Avenue
New York, NY 10018
Attn:  General Counsel

Any party may change the address to which notices are to be sent by giving notice of such change of address to the other party in the manner herein provided for giving notice.

18.    Applicable Law

This Agreement shall be governed by, enforced under, and construed in accordance with the laws of the State of New York without regard to any conflicts or conflict of laws principles in the State of New York that would result in the application of the law of any other jurisdiction.

19.    No Conflict

The Executive represents and warrants that he is not subject to any agreement, instrument, order, judgment or decree of any kind, or any other restrictive agreement of any character, which would prevent him from entering into this Agreement or which would be breached by the Executive upon his performance of his duties pursuant to this Agreement.

20.    Entire Agreement

This Agreement and the documents and collateral agreements referenced herein represent the entire agreement between the Company and the Executive with respect to the employment of the Executive by the Company, and all prior agreements, plans and arrangements 

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relating to the employment of the Executive by the Company are nullified and superseded hereby; provided, however, that except as expressly modified in this Agreement, the Grant Documents (as defined in Section 7(a)(vi)) associated with all equity awards granted to the Executive remain in full force and effect in accordance with the terms thereof.

21.    Headings

The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of this Agreement.
    
22.    Taxes; Section 409A; Clawbacks

(a)The Company shall withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.  

(b)The Executive shall be solely responsible for the payment of all taxes imposed on the Executive relating to the payment or provision of any amounts or benefits hereunder. If and to the extent any portion of any payment, compensation or other benefit provided to the Executive in connection with his employment termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the Executive is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, as determined by the Company in accordance with its procedures, by which determination the Executive hereby agrees that he is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of separation from service (as determined under Section 409A (the “New Payment Date”), except as Section 409A may then permit.  The aggregate of any payments that otherwise would have been paid to the Executive during the period between the date of separation from service and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.  For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Section 7 that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.  Notwithstanding anything herein to the contrary or otherwise, except to the extent any expense or reimbursement described in this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A, any expense or reimbursement described in this Agreement shall meet the following requirements: (a) the amount of expenses eligible for reimbursement provided to the Executive during any calendar year will not affect the amount of expenses eligible for reimbursement to the Executive in any other calendar year; (b) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred; (c) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit; and (d) the reimbursements shall be made pursuant to objectively determinable and nondiscretionary Company policies and procedures regarding such reimbursement of expenses. Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits 

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except to the extent specifically permitted or required by Section 409A.  This Agreement is intended to comply with the provisions of Section 409A and the Agreement shall, to the extent practicable, be construed in accordance therewith.  Terms defined in the Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A.  In any event, the Company makes no representations or warranty and shall have no liability to the Executive or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.  

(c)Clawbacks. If any law, rule or regulation applicable to the Company or its affiliates (including any rule or requirement of any nationally recognized stock exchange on which the stock of the Company or its affiliates has been listed), or any policy of the Company or its affiliates reasonably designed to comply therewith, requires the forfeiture or recoupment of any amount paid or payable to the Executive hereunder (or under any other agreement between the Executive and the Company or its affiliates or under any plan in which the Executive participates), the Executive hereby consents to such forfeiture or recoupment, in each case in the time and manner determined by the Company in its reasonable good faith discretion. Furthermore, if the Executive engages in any act of embezzlement, fraud or dishonesty involving the Company or its affiliates which results in a financial loss to the Company or its affiliates, the Company shall be entitled to recoup an amount from the Executive determined by the Company in its reasonable discretion to be commensurate with such financial loss.

23.    Counterparts

This Agreement may be executed in two counterparts or by facsimile transmission, both of which taken together shall constitute one instrument.

24.    No Strict Construction

The language used in this Agreement will be deemed to be the language chosen by the Company and the Executive to express their mutual intent, and no rule of law or contract interpretation that provides that in the case of ambiguity or uncertainty a provision should be construed against the draftsman will be applied against any party hereto.

25.    Cooperation    

The Executive agrees, both during and after the Term, at the reasonable request of the Company, to cooperate with the Company in connection with any investigation of or legal action against the Company or any of its affiliates involving misconduct or noncompliance by the Company, its affiliates or any of its present or former employees. The Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation, and to the extent that the Executive is required to spend substantial time after the Term on such matters, the Company shall compensate the Executive at an hourly rate of $250 per hour, to the extent compensation is permitted under applicable law.

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26.    Publicity    

Subject to the provisions of the next sentence, no party to this Agreement shall issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Company and the Executive.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that the Company is required to make any announcement relating to or arising out of this Agreement by virtue of applicable securities laws or other stock exchange rules, or any announcement by any party pursuant to applicable law or regulations.

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date indicated below.

                        
LivePerson, Inc.

                    
By: _____________________________            
      Jill Layfield                        Date
      Chair, Compensation Committee,  
                        Board of Directors

LivePerson, Inc.

                    
By: _______________________                
Daryl Carlough                    Date
SVP, Global Controller

                    
Executive

By: _______________________                
Robert LoCascio                    Date
                                 CEO

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Exhibit A to Employment Agreement

YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE OF CLAIMS.

 
Separation and Release of Claims Agreement
This Separation and Release of Claims Agreement (the “Agreement”) is made by and between LivePerson, Inc. (the “Company”) and Robert LoCascio (the “Executive”).

WHEREAS, the parties wish to resolve amicably the Executive’s separation from the Company and establish the terms of the Executive’s severance arrangement;

NOW, THEREFORE, in consideration of the promises and conditions set forth herein, the sufficiency of which is hereby acknowledged, the Company and the Executive agree as follows:

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1.    Separation Date.  The Executive’s effective date of separation from employment with the Company is ______________ (the “Separation Date”).  As of the Separation Date, all salary payments will cease and any benefits the Executive has under Company-provided benefit plans, programs, or practices will terminate, except as required by federal or state law or as otherwise expressly set forth in this Agreement or the Employment Agreement (as defined below). 
2.    Severance Benefits.  In return for the execution and non-revocation of this Agreement, and the Executive’s compliance with all of its terms, the Company agrees to provide the Executive with payments and benefits as set forth in Section 7 of the Employment Agreement dated as of [date] between the Executive and the Company (the “Employment Agreement”). 
 
    3.    Release of Claims. In consideration of the severance benefits, which the Executive acknowledges he would not otherwise be entitled to receive, the Executive hereby fully, forever, irrevocably and unconditionally releases, remises and discharges the Company, its officers, directors, stockholders, corporate affiliates, subsidiaries, parent companies, agents and employees (each in their individual and corporate capacities), all employee benefit plans and plan fiduciaries (hereinafter, the “Released Parties”) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature which the Executive ever had or now has against any or all of the Released Parties, including but not limited to any and all claims arising out of the Executive’s employment with and/or separation from the Company, including, but not limited to, all employment discrimination claims under Title VII of the Civil 

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Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1993, 42 U.S.C., § 12101 et seq., as amended by the Older Workers Benefit Protection Act (OWBPA), the Equal Pay Act of 1963, 29 U.S.C. § 206(d), and the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., all as amended; all claims arising out of  Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1681 et seq., the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., all as amended; all claims under the New York Human Rights Law, N.Y. Exec. Law § 290 et seq., the New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., N.Y. Civ. Rights Law § 40-c et seq. (New York anti-discrimination law), the New York Equal Pay Law, N.Y. Lab. Law § 194 et seq., and the New York Whistleblower Law, N.Y. Lab. Law § 740, all as amended; all common law claims including, but not limited to, actions in tort, defamation and breach of contract; all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to stock or stock options; and any claim or damage arising out of the Executive’s employment with or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that nothing in this Agreement (a) prevents the Executive from filing, cooperating with, or participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (b) should be considered a release of the Executive’s (i) rights under any contract preserved by this Agreement, (ii) right to receive COBRA continuation coverage in accordance with applicable law, (iii) right to pursue claims under ERISA with respect to an employee benefit plan pf the Company or (iv) rights to indemnification the Executive has or may have under the by-laws 

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of the Company, the Employment Agreement or as an insured under any director’s and officer’s liability insurance policy now or previously in force. 
4.    Post Termination Obligations.  The Executive acknowledges and reaffirms his obligation to keep confidential all non-public information concerning the Company which he acquired during the course of his employment with the Company (the “Proprietary Information”).  The Executive further acknowledges and reaffirms his continuing obligations to the Company pursuant to the terms of Section 9 of the Employment Agreement and the Proprietary Information Agreement attached thereto as Exhibit B (the “Proprietary Information Agreement”), which obligations remain in full force and effect.  Notwithstanding anything in the Proprietary Information Agreement:
(a)Nothing in this Section 4 or the Proprietary Information Agreement shall prevent the Executive from disclosing Proprietary Information to the extent required by law. Additionally, nothing in this Section 4 or the Proprietary Information Agreement shall preclude the Executive’s right to communicate, cooperate or file a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation or otherwise make disclosures to any Governmental Entity, in each case, that are protected under the whistleblower or similar provisions of any such law or regulation; provided that in each case such communications and disclosures are consistent with applicable law.  Further, nothing in this Section 4 or the Proprietary Information Agreement shall preclude the Executive’s right to receive an award from a governmental entity for information provided under any whistleblower or similar program.   

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(b)The Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. The Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the trade secret to his or her attorney and use the trade secret information in the court proceeding, provided, that that the Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
5.    Return of Company Property.  The Executive represents that he has returned to the Company all Company property and equipment in his possession or control, including, but not limited to, computer equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones, pagers, etc.), customer information, customer lists, employee lists, Company files, notes, contracts, records, business plans, financial information, specifications, computer-recorded information, software, tangible property, identification badges and keys, and any other materials of any kind which contain or embody any proprietary or confidential material of the Company (and all reproductions thereof).  The Executive also represents that he has not intentionally destroyed any electronic Company documents in connection with the termination of his Employment, including those that he developed or helped develop during his employment. The Executive further covenants to take all necessary steps to make known to the 

28

Company any accounts for his benefit, if any, in the Company’s name, which are known to Executive but not otherwise known to the Company, and otherwise to cooperate with the Company in, the cancellation of all accounts for his benefit, if any, in the Company’s name (and or the transition of those accounts to Executive), including, but not limited to, credit cards, telephone charge cards, cellular phone accounts, pager accounts, and computer accounts, and will not after the Separation Date use any such accounts that remain in the name of the Company. 
6.    Business Expenses and Final Compensation.  The Executive acknowledges that he has been reimbursed by the Company for all business expenses incurred by him in conjunction with his employment with the Company and that no other reimbursements are owed to him.  The Executive further acknowledges that he has been provided with all compensation and benefits due to him as of the Separation Date, including, but not limited to, any and all wages, bonuses, equity and any accrued but unused vacation time, and that he is not entitled to receive any additional consideration beyond that provided for pursuant to section 2 of this Agreement.
7.    Cooperation.  The Executive agrees to cooperate with the Company to the extent reasonably requested by the Board in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company; provided that, the Company shall make reasonable efforts to minimize disruption of the Executive’s other activities.  The Executive’s cooperation in connection with such claims or actions may include, but not be limited to, his being available to meet with Company counsel to prepare for trial or discovery or an administrative hearing or alternative dispute resolution and to act as a witness when requested by the Company at reasonable times designated by the Company.  The Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation, and to the 

29

extent that the Executive is required to spend substantial time on such matters, the Company shall compensate the Executive at an hourly rate of $250 per hour, to the extent compensation is permitted under applicable law.
8.    Nature of Agreement.  The Executive understands and agrees that this Agreement is a severance and settlement agreement and does not constitute an admission of liability or wrongdoing on the part of the Company.
9.    Amendment.  This Agreement shall be binding upon the parties and may not be abandoned, supplemented, changed or modified in any manner, orally or otherwise, except by an instrument in writing of concurrent or subsequent date signed by a duly authorized representative of the parties hereto.  This Agreement is binding upon and shall inure to the benefit of the parties and their respective agents, assigns, heirs, executors, successors and administrators.
10.    Validity.  Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby and said illegal and invalid part, term or provision shall be deemed not to be a part of this Agreement.
11.    Confidentiality.  To the extent permitted by law, the Executive understands and agrees that the terms and contents of this Agreement, and the contents of the negotiations and discussions resulting in this Agreement, shall be maintained as confidential by the Executive (provided, however, that Executive will not be prohibited from making disclosures to the Executive’s attorney, tax advisors, immediate family members),, and none of the above shall be disclosed except to the extent 

30

required by federal or state law or as otherwise agreed to in writing by the authorized agent of each party. 
12.    Non-Disparagement.  The Executive understands and agrees that as a condition for receipt of the severance benefits, he shall not make any false, disparaging or derogatory statements in public or private to any person or entity, including without limitation any media outlet, regarding the Company or any of its directors, officers, employees, agents, or representatives or regarding the Company’s business affairs and financial condition. This Section does not in any way restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. 
13.    Tax Acknowledgement.  In connection with the severance benefits provided to the Executive pursuant to this Agreement, the Company shall withhold and remit to the tax authorities the amounts required under applicable law, and the Executive shall be responsible for all applicable taxes with respect to such payments and consideration under applicable law.  The Executive acknowledges that he is not relying upon the advice or representation of the Company with respect to the tax treatment of any of the payments pursuant to this Agreement.
14.    Entire Agreement.  This Agreement contains and constitutes the entire understanding and agreement between the parties hereto with respect to severance and settlement and cancels all previous oral and written negotiations, agreements, commitments, and writings in connection therewith.

31

15.    Applicable Law and Consent to Jurisdiction.  This Agreement shall be interpreted and construed by the laws of the State of New  York, without regard to conflict of laws provisions.  The Executive hereby irrevocably submits to and acknowledges and recognizes the jurisdiction of the courts of the State of New York or if appropriate, a federal court located in New York (which courts, for purposes of this Agreement, are the only courts of competent jurisdiction) over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof.
16.    Acknowledgments.  The Employee acknowledges that he has been given at least [twenty-one (21)/forty-five (45)] days to consider the release of claims set forth in this Agreement and that the Company advised him to consult with any attorney of his own choosing prior to signing this Agreement.  The Executive further acknowledges that he may revoke this Agreement for a period of seven (7) days after the execution of this Agreement. If no such revocation occurs, the Agreement (including the release of claims contained in this Agreement) will become irrevocable and binding and enforceable against the Executive, on the date next following the day on which the foregoing 7-day period elapsed. The Executive understands and agrees that by entering into this Agreement he is waiving any and all rights or claims he might have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, and that he has received consideration beyond that to which he was previously entitled.    
17.    Voluntary Assent.  The Executive affirms that no other promises or agreements of any kind have been made to or with him by any person or entity whatsoever to cause him to sign this Agreement, and that he fully understands the meaning and intent of this Agreement.  The Executive states and represents that he has had an opportunity to fully discuss and review the terms 

32

of this Agreement with an attorney.  The Executive further states and represents that he has carefully read this Agreement, understands the contents herein, freely and voluntarily assents to all of the terms and conditions hereof, and signs his name of his own free act.

IN WITNESS WHEREOF, all parties have set their hand and seal to this Agreement as of the date written below.

	
		
	Robert LoCascio 

                  
	Date:                  

	 
	 

	LivePerson, Inc.
	 

	By:                  
	Date:                  

 

33

Exhibit B to Employment Agreement
    
{LivePerson Standard Employee Confidential & Proprietary Information Document}

34EX-4.1

 Exhibit 4.1 
  

 
 DISCOVER CARD EXECUTION NOTE TRUST

 Issuer 
 and 

U.S. BANK NATIONAL ASSOCIATION 

Indenture Trustee 
 CLASS A(2018-1) TERMS DOCUMENT 
 Dated as of March 14, 2018 

to 
 SECOND AMENDED AND RESTATED
INDENTURE SUPPLEMENT 
 Dated as of December 22, 2015 

for the DiscoverSeries Notes 
 to

 AMENDED AND RESTATED INDENTURE 

Dated as of December 22, 2015 
  

 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
			
		  	ARTICLE I	  			
		  	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	  			
			
	 Section 1.01
	  	Definitions	  	 	1	 
	 Section 1.02
	  	Representations and Warranties of Issuer	  	 	6	 
	 Section 1.03
	  	Representations and Warranties of Indenture Trustee	  	 	7	 
	 Section 1.04
	  	Limitations on Liability	  	 	7	 
	 Section 1.05
	  	Governing Law	  	 	8	 
	 Section 1.06
	  	Counterparts	  	 	8	 
	 Section 1.07
	  	Ratification of Indenture and Indenture Supplement	  	 	8	 
			
		  	ARTICLE II	  			
		  	THE CLASS A(2018-1) NOTES	  			
			
	 Section 2.01
	  	Creation and Designation	  	 	8	 
	 Section 2.02
	  	Adjustments to Required Subordinated Percentages and Amount	  	 	8	 
	 Section 2.03
	  	Interest Payment	  	 	9	 
	 Section 2.04
	  	[Reserved]	  	 	9	 
	 Section 2.05
	  	Payments of Interest and Principal	  	 	9	 
	 Section 2.06
	  	Form of Delivery of Class A(2018-1) Notes; Depository; Denominations	  	 	10	 
	 Section 2.07
	  	Delivery and Payment for the Class A(2018-1) Notes	  	 	10	 
	 Section 2.08
	  	Targeted Deposits to the Accumulation Reserve Account	  	 	10	 
	 Section 2.09
	  	Additional Issuances of Notes	  	 	10	 
	 Section 2.10
	  	Designation of Additional Amounts to Be Included in the Excess Spread Amount for the DiscoverSeries Notes	  	 	11	 
	 Section 2.11
	  	Variable Accumulation Period	  	 	11	 
	 Section 2.12
	  	Seller’s Interest to Be Included in the Monthly Statement	  	 	12	 
	 Section 2.13
	  	Duties of the Indenture Trustee	  	 	12	 
			
	 EXHIBIT A
	  	FORM OF CLASS A(2018-1) NOTE	  			

  
 -i- 

 THIS CLASS A(2018-1) TERMS DOCUMENT (this “Terms
Document”), by and between DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of March 14, 2018. 

Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class A Notes of the DiscoverSeries and shall specify the
principal terms thereof. 
 ARTICLE I 

Definitions and Other Provisions of General Application 

Section 1.01 Definitions. For all purposes of this Terms Document, except as otherwise expressly provided or unless the context
otherwise requires: 
 (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as
well as the singular; 
 (2) all other terms used herein which are defined in the Indenture Supplement or the Indenture, either directly or
by reference therein, have the meanings assigned to them therein; 
 (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted
hereunder means such accounting principles as are generally accepted in the United States of America at the date of such computation; 
 (4)
all references in this Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms Document; the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 

(5) in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in
the Indenture Supplement or the Indenture, the terms and provisions of this Terms Document shall be controlling, but solely with respect to the Class A(2018-1) Notes; 

(6) each capitalized term defined herein shall relate only to the Class A(2018-1) Notes and no
other Tranche of Notes issued by the Issuer; 
 (7) “including” and words of similar import will be deemed to be followed by
“without limitation”; and 

 (8) for purposes of determining any amount or making any calculation hereunder, such amount or
calculation, (x) if specified to be as of the first day of any Due Period, shall (a) include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and (b) give effect to any
payments, deposits or other allocations made on the Distribution Date related to the prior Due Period and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any payments, deposits or other
allocations made on the related Distribution Date. 
 “Accumulation Amount” means $52,083,333.34; provided,
however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Amount shall be determined in accordance with the definition of “Accumulation Amount” in the Indenture
Supplement. 
 “Accumulation Commencement Date” means February 1, 2022, or such later date as the Calculation Agent on
behalf of the Issuer determines in accordance with Section 2.11 hereof. 
 “Accumulation Period” has the meaning set
forth in the Indenture Supplement. 
 “Accumulation Period Length” means 12 months; provided, however, if the
commencement of the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Period Length shall be determined in accordance with the definition of “Accumulation Period Length” in the Indenture
Supplement. 
 “Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on behalf of the Issuer
notifies the Indenture Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution Date on which a condition in the right column of the following
table was in effect on the immediately preceding Distribution Date, if such Distribution Date is a Distribution Date described in the corresponding left column of the following table, and ending on the Distribution Date immediately preceding the
earlier to occur of: 
 (x) the Expected Maturity Date for the Class A(2018-1) Notes and 

(y) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2018-1) Notes is paid in full. 
  

			
	Distribution Date:	  	Condition:
		
	(a) The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution
Date	  	No condition.
		
	(b) The Distribution Date occurring four (4) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution
Date	  	The three-month rolling average Excess Spread Percentage is less than 4%.

  
 2 

			
	(c) The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution
Date	  	The three-month rolling average Excess Spread Percentage is less than 3%.
		
	(d) The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any following Distribution
Date	  	The three-month rolling average Excess Spread Percentage is less than 2%.

 provided, however, if at any point the Accumulation Reserve Funding Period has not commenced because no
condition requiring funding has occurred or the Calculation Agent has determined that the Accumulation Period Length will be shortened to one (1) month, and subsequently a condition requiring funding occurs and the Calculation Agent determines
that the Accumulation Period Length will not be so shortened, the Accumulation Reserve Funding Period shall commence on the following Distribution Date. 

“Class A(2018-1) Adverse Event” means the occurrence of any of the
following: (a) an Early Redemption Event with respect to the Class A(2018-1) Notes or (b) an Event of Default and acceleration of the Class A(2018-1)
Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred, a
Class A(2018-1) Adverse Event shall not be treated as continuing from and after the date of such cure. 

“Class A(2018-1) Note” means any Note, in the form set forth in
Exhibit A hereto, designated therein as a Class A(2018-1) Note and duly executed and authenticated in accordance with the Indenture. 

“Class A(2018-1) Noteholder” means a Person in whose name a Class A(2018-1) Note is registered in the Note Register. 
 “Class A(2018-1) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2018-1) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 

“Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount for
such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 

  
 3 

 “Expected Maturity Date” means February 15, 2023. 

“Indenture” means the Amended and Restated Indenture, dated as of December 22, 2015, between the Issuer and Indenture
Trustee, as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Indenture Supplement” means the Second Amended and Restated Indenture Supplement, dated as of December 22, 2015, for
the DiscoverSeries Notes, between the Issuer and the Indenture Trustee, as the same may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Initial Dollar Principal Amount” means $625,000,000, or such higher amount as is specified in any Notice of Additional
Issuance under Section 2.09 hereof. 
 “Interest Accrual Period” means, with respect to any Interest Payment Date, the
period from and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2018-1) Note, from and including the applicable Issuance Date) to but
excluding such Interest Payment Date. 
 “Interest Payment Date” means the fifteenth day of each month commencing in April
2018, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 
 “Issuance Date” means
March 14, 2018, with respect to all Class A(2018-1) Notes issued on the date hereof and, with respect to any additional Class A(2018-1) Notes issued
pursuant to Section 2.09 hereof, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 

“Legal Maturity Date” means August 15, 2025. 

“Note Interest Rate” means 3.03% per annum, calculated on the basis of twelve 30-day
months and a 360-day year. 
 “Notice of Additional Issuance” has the meaning set
forth in Section 2.09 hereof. 
 “Regulation RR” means Regulation RR (Credit Risk Retention) promulgated by the
Securities and Exchange Commission to implement the credit risk retention requirements of Section 15G of the Securities Exchange Act. 

“Required Daily Deposit Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the
Class A Tranche Interest Allocation for the related Distribution Date. 
 “Required Daily Deposit Target Principal
Amount” means, for any day in a Due Period, (i) if such Due Period is in the Accumulation Period for the Class A(2018-1) Notes, the Accumulation Amount, (ii) if such day is on or
after the occurrence and during the continuance of a Class A(2018-1) Adverse Event, the Nominal Liquidation Amount of the Class A(2018-1) Notes and
(iii) in all other circumstances, zero. 

  
 4 

 “Required Subordinated Amount of Class B Notes” means, for
the Class A(2018-1) Notes for any date of determination, an amount equal to the product of 

(a) the Required Subordinated Percentage of Class B Notes for such Class A(2018-1) Notes on
such date of determination; and 
 (b) the Nominal Liquidation Amount of such Class A(2018-1)
Notes on such date of determination; 
 provided, however, that for any date of determination on or after the occurrence and during the
continuation of a Class A(2018-1) Adverse Event, the Required Subordinated Amount of Class B Notes for the Class A(2018-1) Notes will be the greater of

 (x) the amount determined above for such date of determination; and 

(y) the amount determined above for the date immediately prior to the date on which such
Class A(2018-1) Adverse Event shall have occurred. 
 “Required Subordinated Amount of
Class C Notes” means, for the Class A(2018-1) Notes for any date of determination, an amount equal to the product of 

(a) the Required Subordinated Percentage of Class C Notes for such Class A(2018-1) Notes on
such date of determination; and 
 (b) the Nominal Liquidation Amount of such Class A(2018-1)
Notes on such date of determination; 
 provided, however, that for any date of determination on or after the occurrence and during the
continuation of a Class A(2018-1) Adverse Event, the Required Subordinated Amount of Class C Notes for the Class A(2018-1) Notes will be the greater of

 (x) the amount determined above for such date of determination; and 

(y) the amount determined above for the date immediately prior to the date on which such
Class A(2018-1) Adverse Event shall have occurred. 
 “Required Subordinated Amount of
Class D Notes” means, for the Class A(2018-1) Notes for any date of determination, an amount equal to the product of 

(a) the Required Subordinated Percentage of Class D Notes for such Class A(2018-1) Notes on
such date of determination; and 
 (b) the Nominal Liquidation Amount of such Class A(2018-1)
Notes on such date of determination; 
 provided, however, that for any date of determination on or after the occurrence and during the
continuation of a Class A(2018-1) Adverse Event, the Required Subordinated Amount of Class D Notes for the Class A(2018-1) Notes will be the greater of

  
 5 

 (x) the amount determined above for such date of determination; and 

(y) the amount determined above for the date immediately prior to the date on which the
Class A(2018-1) Adverse Event shall have occurred. 
 “Required Subordinated Percentage
of Class B Notes” means, for the Class A(2018-1) Notes, 6.96202532%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class C Notes” means, for the
Class A(2018-1) Notes, 8.86075950%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class D Notes” means, for the
Class A(2018-1) Notes, 10.75949368%, subject to adjustment in accordance with Section 2.02. 

“Seller’s Interest” means, at any time, a “seller’s interest” as defined in, and calculated in accordance
with, Regulation RR. 
 “Seller’s Interest Measurement Date” means the last day of each calendar month. 

“Specified Rating” means, for the Class A(2018-1) Notes, Aaa(sf) with respect to
Moody’s, AAA(sf) with respect to Standard & Poor’s and AAAsf with respect to Fitch. 
 “Stated Principal
Amount” means $625,000,000 or such higher amount as is specified in any Notice of Additional Issuance under Section 2.09. 

“Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution Date during the Accumulation
Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class A(2018-1) Notes as of the close of business on the last day of the related Due Period or
(ii) any other amount designated by the Calculation Agent on behalf of the Issuer. 
 Section 1.02 Representations and
Warranties of Issuer. The Issuer represents and warrants that: 
 (a) the Issuer has been duly formed and is validly existing as a
statutory trust in good standing under the laws of the State of Delaware, and has full power and authority to execute and deliver this Terms Document and to perform the terms and provisions hereof; 

(b) the execution, delivery and performance of this Terms Document by the Issuer have been duly authorized by all necessary limited liability
company and statutory trust proceedings of the Beneficiary and the Owner Trustee, do not require any approval or consent of any governmental agency or authority and do not and will not conflict with any material provision of the Certificate of Trust
or the Trust Agreement of the Issuer; 
 (c) this Terms Document is the valid, binding and enforceable obligation of the Issuer, except as
the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles; 

  
 6 

 (d) to the best of the Issuer’s knowledge, this Terms Document will not conflict with any
law or governmental regulation or court decree applicable to it; 
 (e) the Issuer is not required to be registered under the Investment
Company Act; 
 (f) all information heretofore furnished by the Issuer in writing to the Indenture Trustee for purposes of or in connection
with this Terms Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and accurate in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified; and 
 (g) to the best knowledge of the Issuer, there are no proceedings or
investigations pending against the Issuer before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Issuer (i) asserting the invalidity of this Terms Document,
(ii) seeking to prevent the consummation of any of the transactions contemplated by this Terms Document or (iii) seeking any determination or ruling which in the Issuer’s judgment would materially and adversely affect the performance
by the Issuer of its obligations under this Terms Document or the validity or enforceability of this Terms Document. 
 Section 1.03
Representations and Warranties of Indenture Trustee. The Indenture Trustee represents and warrants and any successor trustee shall represent and warrant that: 

(a) the Indenture Trustee is organized, existing and in good standing under the laws of the United States of America; 

(b) the Indenture Trustee has full power, authority and right to execute, deliver and perform this Terms Document, and has taken all necessary
action to authorize the execution, delivery and performance by it of this Terms Document; and 
 (c) this Terms Document has been duly
executed and delivered by the Indenture Trustee. 
 Section 1.04 Limitations on Liability. 

(a) It is expressly understood and agreed by the parties hereto that (i) this Terms Document is executed and delivered by the Owner
Trustee not individually or personally but solely as Owner Trustee under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on
the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained will be construed as
creating any liability on the Owner Trustee individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to this Terms Document and by any
Person claiming by, through or under them and (iv) under no circumstances will the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this Terms Document or any related documents. 

  
 7 

 (b) None of the Indenture Trustee, the Owner Trustee, the Calculation Agent, the Beneficiary, the
Depositor, any Master Servicer or any Servicer or any of their respective officers, directors, employees, incorporators or agents will have any liability with respect to this Terms Document, and recourse may be had solely to the Collateral pledged
to secure these Class A(2018-1) Notes under the Indenture, the Indenture Supplement and this Terms Document. 

Section 1.05 Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 

Section 1.06 Counterparts. This Terms Document may be executed in any number of counterparts, each of which when so executed will
be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 
 Section 1.07
Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as supplemented by the Indenture
Supplement and this Terms Document shall be read, taken and construed as one and the same instrument. 
 ARTICLE II 

The Class A(2018-1) Notes 

Section 2.01 Creation and Designation. There is hereby created a Tranche of Class A Notes to be issued pursuant to this Terms
Document, the Indenture and the Indenture Supplement to be known as the “DiscoverSeries Class A(2018-1) Notes.” 

Section 2.02 Adjustments to Required Subordinated Percentages and Amount. 

(a) On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class B Notes, the
Required Subordinated Percentage of Class C Notes or the Required Subordinated Percentage of Class D Notes, in each case for the Class A(2018-1) Notes, without the consent of any Noteholders;
provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

(b) On any date, the Issuer may, at the direction of the Beneficiary, replace all or a portion of the Required Subordinated Amount of
Class B Notes, the Required Subordinated Amount of Class C Notes or the Required Subordinated Amount of Class D Notes, in each case for the Class A(2018-1) Notes with a different form of
credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a collateral interest, or any combination thereof) and may add such

  
 8 

 
definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided that the
Issuer has received written confirmation from each applicable Note Rating Agency that such replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

Section 2.03 Interest Payment. For the first Interest Payment Date, April 16, 2018, the amount of interest due with respect
to the Class A(2018-1) Notes is $1,630,729.17. For each Interest Payment Date following the first Interest Payment Date for any Class A(2018-1) Note, the
amount of interest due with respect to the Class A(2018-1) Notes shall be an amount equal to 
  

					
	(i)	  	(A)	  	a fraction, the numerator of which is 30 and the denominator of which is 360, times
			
		  	(B)	  	the Note Interest Rate in effect with respect to such related Interest Accrual Period, times
		
	(ii)	  	the Outstanding Dollar Principal Amount of the Class A(2018-1) Notes determined as of the first date of such related Interest Accrual Period,

 plus any Class A Tranche Interest Allocation Shortfall for such
Class A(2018-1) Notes for the immediately preceding Distribution Date, together with interest thereon at the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated
on the basis of twelve 30-day months and a 360-day year. 

Section 2.04 [Reserved]. 

Section 2.05 Payments of Interest and Principal. 

(a) The Issuer will cause interest to be paid on each Interest Payment Date and principal to be paid on the Expected Maturity Date;
provided, however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been allocated in accordance with Section 3.01 of the Indenture
Supplement; and provided, further, that if a Class A(2018-1) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each Principal Payment
Date for the Class A(2018-1) Notes in accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the
Class A(2018-1) Notes shall be made as set forth in Section 1102 of the Indenture. 
 (b)
The right of the Class A(2018-1) Noteholders to receive payments from the Issuer will terminate on the Class A(2018-1) Termination Date. 

(c) All payments of principal, interest or other amounts to the Class A(2018-1) Noteholders will
be made pro rata based on the Stated Principal Amount of their Class A(2018-1) Notes. 

  
 9 

 Section 2.06 Form of Delivery of
Class A(2018-1) Notes; Depository; Denominations. 
 (a) The Class A(2018-1) Notes shall be delivered in the form of a Global Note which shall be a Registered Note as provided in Section 204 of the Indenture. The form of the
Class A(2018-1) Notes is attached hereto as Exhibit A. 
 (b) The Depository for the Class A(2018-1) Notes shall be The Depository Trust Company, and the Class A(2018-1) Notes shall initially be registered in the name of Cede & Co., its
nominee. 
 (c) The Class A(2018-1) Notes will be issued in minimum denominations of $5,000 and
integral multiples of $1,000 in excess of that amount. 
 Section 2.07 Delivery and Payment for the Class A(2018-1) Notes. The Issuer shall execute and deliver the Class A(2018-1) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall
deliver the Class A(2018-1) Notes when authenticated, each in accordance with Sections 203 and 303 of the Indenture. 

Section 2.08 Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to be made to the Accumulation Reserve
Subaccount for the Class A(2018-1) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount Deposit minus any
amount on deposit in the Accumulation Reserve Subaccount for the Class A(2018-1) Notes. 

Section 2.09 Additional Issuances of Notes. Subject to clauses (ii), (iii), (iv) and (v) of Section 2.02 and
Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class A(2018-1) Notes, so long as the following conditions precedent are satisfied: 

(a) the Issuer shall have given the Indenture Trustee written notice of such issuance of additional
Class A(2018-1) Notes (the “Notice of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 

 

	 	(i)	the Issuance Date of such additional Class A(2018-1) Notes; 

  

	 	(ii)	the amount of such additional Class A(2018-1) Notes being offered and the resulting Initial Dollar Principal Amount and Stated Principal Amount of Class A(2018-1) Notes; 

  

	 	(iii)	the date from which interest on such additional Class A(2018-1) Notes will accrue (which may be a date prior to the date of issuance thereof); 

 

	 	(iv)	the first Interest Payment Date on which interest will be paid on such additional Class A(2018-1) Notes; and 

 

	 	(v)	any other terms that the Issuer set forth in such notice of issuance of additional Class A(2018-1) Notes to clarify the rights of Holders of such additional Class A(2018-1) Notes or the effect of such issuance of additional Class A(2018-1) Notes on any calculations to be made with respect to the Class A(2018-1) Notes, the Class A Notes or the Issuer. 

  
 10 

 All such terms shall be incorporated into and form a part of this Terms Document on and after the effective date
of such Class A(2018-1) Notes; 
 (b) no
Class A(2018-1) Adverse Event has occurred and is continuing; and 
 (c) either (i) the
issuance of such additional Class A(2018-1) Notes would be treated as part of the same issue as the outstanding Class A(2018-1) Notes under Treasury Regulation
Sections 1.1275-1(f)(1) or 1.1275-2(k) or (ii) such additional Class A(2018-1) Notes are not issued with “original
issue discount” for purposes of Section 1273 of the Code. 
 The Issuer shall not have to satisfy the conditions set forth in
Section 310 of the Indenture in connection with an issuance of additional Class A(2018-1) Notes so long as such conditions were satisfied or waived in connection with the initial issuance of Class A(2018-1) Notes; provided, however, that the Issuer shall have to deliver to the Indenture Trustee a Master Trust Tax Opinion and an Issuer Tax Opinion with respect to such issuance. 

Section 2.10 Designation of Additional Amounts to Be Included in the Excess Spread Amount for the DiscoverSeries Notes. At any
time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group Finance Charge Collections Reallocation Account for the Master Trust
to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to such Series, multiplied by (y) a fraction, the numerator
of which is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including the Class A(2018-1) Notes) and the denominator of which is (i) the Aggregate
Investor Interest for the Master Trust minus (ii) the sum of the Series Investor Interests for all such Series that provide that the Series Principal Collections allocated to such Series will be so deposited, is hereby designated to be
included in the Excess Spread Amount and shall be treated as Series Finance Charge Amounts for the DiscoverSeries. 
 Section 2.11
Variable Accumulation Period. Notwithstanding anything to the contrary in Section 4.02 of the Indenture Supplement, the Calculation Agent on behalf of the Issuer shall, by written notice to the Indenture Trustee, delay the commencement
of the Accumulation Period for the Class A(2018-1) Notes and determine a new Accumulation Commencement Date, subject to the conditions set forth in this Section 2.11; provided, however,
that the Accumulation Period shall commence no later than the first day of the Due Period related to the Expected Maturity Date for the Class A(2018-1) Notes. Any such delay by the Calculation Agent on
behalf of the Issuer shall be made no later than the last day of the Due Period immediately preceding the first day of the first Due Period in the scheduled Accumulation Period (after giving effect to any prior delay in the commencement of the
Accumulation Period pursuant to this Section 2.11). 
 The Calculation Agent on behalf of the Issuer shall cause such delay if the
Calculation Agent determines in good faith that each of the following conditions will be satisfied: (i) the Calculation Agent on behalf of the Issuer delivers to the Indenture Trustee a certificate to the effect that the Calculation Agent on
behalf of the Issuer reasonably believes that, based on the payment rate and the anticipated availability of Series Principal Amounts and Reallocated Principal Amounts, the delay in the commencement of the Accumulation Period for the Class

  
 11 

 
A(2018-1) Notes will not result in any Tranche of Notes not being paid in full on the relevant Expected Maturity Date (as defined in the applicable Terms
Document); (ii) such delay is permitted under the Series 2007-CC Supplement or any other applicable agreement relating to any Additional Collateral Certificate; and (iii) the Accumulation Amount, the
Accumulation Commencement Date and the Accumulation Period Length shall have been adjusted. The Calculation Agent on behalf of the Issuer shall not be required to obtain confirmation from the applicable Note Rating Agencies that such delay in the
commencement of the Accumulation Period will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. The Calculation Agent on behalf of the Issuer shall provide written notice to each applicable Note Rating Agency in the
event that the commencement of the Accumulation Period for the Class A(2018-1) Notes is delayed pursuant to this Section 2.11. 

Section 2.12 Seller’s Interest to Be Included in the Monthly Statement. The Issuer shall cause the Master
Servicer to include the amount of the Seller’s Interest as of the Seller’s Interest Measurement Date on each investor certificateholder’s monthly statement delivered pursuant to the Series
2007-CC Supplement. 
 Section 2.13 Duties of the Indenture Trustee. For the avoidance
of doubt, the Indenture Trustee undertakes to perform only such duties as are specifically set forth in the Indenture, the Indenture Supplement, the Pooling and Servicing Agreement, any Series Supplement and this Agreement and as such
shall have no obligation or responsibility to monitor or enforce compliance with Regulation RR, nor shall be liable to any Person for any violation of Regulation RR; provided that nothing in this Section 2.13 shall alter the Indenture
Trustee’s duties, obligations or standard of care as set forth in the Indenture or any Indenture Supplement. It is understood and acknowledged that the Indenture Trustee has not provided any advice with respect to the acquisition of the Class A(2018-1) Notes, and has no financial interest in the acquisition of such Class A(2018-1) Notes. 

[Remainder of page intentionally blank; signature page follows] 

  
 12 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all
as of the day and year first above written. 
  

			
	DISCOVER CARD EXECUTION NOTE TRUST, as Issuer
		
	By:	 	Wilmington Trust Company,
		 	not in its individual capacity but solely as Owner Trustee
		
	By:	 	 /s/ Jennifer A. Luce

		 	Name: Jennifer A. Luce
		 	Title: Vice President
	
	U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee
		
	By:	 	 /s/ Julia Linian

		 	Name: Julia Linian
		 	Title: Vice President

 EXHIBIT A 

FORM OF CLASS A(2018-1) NOTE 

 DISCOVERSERIES CLASS A(2018-1) NOTE 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT AT ANY TIME
INSTITUTE AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, OR JOIN IN ANY INSTITUTION AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT
ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, ANY RECEIVERSHIP, INSOLVENCY, BANKRUPTCY OR SIMILAR PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY
OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE, ANY DERIVATIVE AGREEMENT, ANY SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT AND ANY SUPPLEMENTAL LIQUIDITY AGREEMENT. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, AGREE TO TREAT THE NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR MEASURED BY INCOME. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (i) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A BENEFIT PLAN INVESTOR (AS DEFINED BELOW) OR PLAN SUBJECT TO SIMILAR LAW (AS DEFINED BELOW) OR (ii) (A) THE
ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”) OR A VIOLATION OF SIMILAR LAW AND (B) IF IT IS A BENEFIT PLAN INVESTOR, THE DECISION TO ACQUIRE THIS NOTE WAS MADE BY AN AUTHORIZED FIDUCIARY THAT IS AN “INDEPENDENT FIDUCIARY WITH FINANCIAL
EXPERTISE,” AS DESCRIBED IN 29 

 
C.F.R. SECTION 2510.3-21(c)(1). FOR THESE PURPOSES, A “BENEFIT PLAN INVESTOR” INCLUDES AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION
3(3) OF ERISA THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (B) A “PLAN” DESCRIBED IN SECTION 4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE AND (C) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE
“PLAN ASSETS” OF THE FOREGOING. ”SIMILAR LAW” MEANS ANY LAW SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION SECTIONS OF ERISA OR SECTION 4975 OF THE CODE. 

					
	 REGISTERED
 No. [●]
	  	 
 
	$[●]*
 CUSIP NO. 254683 CD5
	 
  

 DISCOVER CARD EXECUTION NOTE TRUST 

3.03% 
 DISCOVERSERIES
CLASS A(2018-1) NOTE 
 DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the
laws of the State of Delaware (herein referred to as the “Issuer” or the “Note Issuance Trust”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, subject to the
following provisions, a principal sum of $[●] ([●] dollars) payable on the February 2023 Payment Date (the “Expected Maturity Date”), except as otherwise provided below or in the Indenture or the Indenture Supplement (as
defined on the reverse hereof); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the August 2025 Payment Date (the “Legal Maturity Date”). Interest will accrue on this
Note at the rate of 3.03% per annum, as more specifically set forth in the Class A(2018-1) Terms Document dated as of March 14, 2018 (the “Terms Document”), between the Issuer and
U.S. Bank National Association, as Indenture Trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), and shall be due and payable on each Interest Payment Date for the period from
and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2018-1) Notes, from and including the applicable Issuance Date) to but excluding such
Interest Payment Date. Interest will be computed on the basis of twelve 30-day months and a 360-day year (or, in the case of the first Interest Payment Date, based on a 31-day period and a 360-day year). Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof. 

The principal and interest may be payable monthly, and may be payable earlier or later than the Expected Maturity Date, following an Event of
Default or while an Early Redemption Event has occurred and is continuing. No principal or interest will be distributed on the Note following the distribution of proceeds of a Receivables Sale. 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. 
 The Initial Dollar Principal Amount of the
Class A(2018-1) Notes is $625,000,000. 
 Reference is made to the further provisions of this
Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note. 
 Unless the
certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, Indenture Supplement or the Terms Document referred to
on the reverse hereof, or be valid or obligatory for any purpose. 
  

 

	* 	 Denominations of $5,000 and in integral multiples of $1,000 in excess thereof.

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile,
by its Authorized Officer. 
  

			
	DISCOVER CARD EXECUTION NOTE TRUST, as Issuer
		
	By:	 	WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee
		
	By:	 	  

		 	Name:
		 	Title:
		
		 	Date:             , 20         

 INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Notes designated above and referred to in the within-mentioned Indenture. 

 

			
	US BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
		
	By:	 	  

		 	Name:
		 	Title:
		
		 	Date:             , 20         

 REVERSE OF NOTE 

This Note is one of the Notes of a duly authorized issue of Notes of the Issuer, designated as its 3.03%
Class A(2018-1) DiscoverSeries Notes (herein called the “Class A(2018-1) Notes”), all issued under an Amended and Restated
Indenture dated as of December 22, 2015 (such Indenture, as may be further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture”), as
supplemented by a Second Amended and Restated Indenture Supplement for the DiscoverSeries Notes, dated as of December 22, 2015 (such Indenture Supplement, as may be further amended, restated, amended and restated, supplemented, replaced or
otherwise modified from time to time, is herein called the “Indenture Supplement”), between the Issuer and Indenture Trustee, to which Indenture and Indenture Supplement reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A(2018-1) Notes are subject to all terms of the Indenture, the Indenture Supplement and the
Terms Document. All terms used in this Class A(2018-1) Note that are defined in the Indenture, the Indenture Supplement and the Terms Document shall have the meanings assigned to them in or pursuant to
the Indenture, the Indenture Supplement and the Terms Document. 
 The Class B Notes, the Class C Notes and the Class D Notes
of the DiscoverSeries and other tranches of Class A Notes of the DiscoverSeries will also be issued under the Indenture and the Indenture Supplement. 

The Class A(2018-1) Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture and the Indenture Supplement. 
 Principal of the
Class A(2018-1) Notes will be payable on the Expected Maturity Date in an amount described on the face hereof except as otherwise provided in the Indenture or the Indenture Supplement. 

As described above, the entire unpaid principal amount of this Class A(2018-1) Note shall be due
and payable on the Legal Maturity Date. Notwithstanding the foregoing, the entire unpaid principal amount of the Class A(2018-1) Notes shall be due and payable on the date on which an Event of Default
relating to the Class A(2018-1) Notes shall have occurred and be continuing and, except in the event of an insolvency related default, the Indenture Trustee or the Majority Holders of the applicable
Series, Class or Tranche of Outstanding Dollar Principal Amount of the Outstanding Notes have declared the Class A(2018-1) Notes to be immediately due and payable in the manner provided in
Section 702 of the Indenture; provided, however, that such acceleration of the entire unpaid principal amount of the Notes may be rescinded by the Majority Holders of such applicable Series, Class or
Tranche of Notes. 
 On any day occurring on or after the date on which the aggregate Nominal Liquidation Amount of any Tranche of Notes is
reduced to less than 5% of its highest Outstanding Dollar Principal Amount, the Depositor or any Affiliate thereof has the right, but not the obligation, to redeem such Tranche of Notes in whole but not in part, pursuant to
Section 1202 of the Indenture. The redemption price will be an amount equal to the Outstanding Dollar Principal Amount of such Tranche, plus accrued, unpaid and additional interest or principal accreted and unpaid on such
Tranche to but excluding the date of redemption. 

 Subject to the terms and conditions of the Indenture, the Beneficiary, on behalf of the Note
Issuance Trust, may from time to time issue, or direct the Owner Trustee, on behalf of the Note Issuance Trust, to issue, one or more Series, Classes or Tranches of Notes. 

On each Payment Date, the Paying Agent shall distribute to each Holder of Class A(2018-1) Notes
of record on the related Record Date (except for the final distribution with respect to this Class A(2018-1) Note) such Holder’s pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Payment Date to pay interest and principal on the Class A Notes. 
 Payments of interest on this Class A(2018-1) Note due and payable on each Payment Date, together with any installment of principal, if any, to the extent not in full payment of this
Class A(2018-1) Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Class A(2018-1) Note on the Note Register
as of the close of business on each Record Date, except that with respect to Class A(2018-1) Notes registered on the Record Date in the name of the nominee of the clearing agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that this Class A(2018-1) Note be submitted for notation of payment. Any reduction in the principal amount of this Class A(2018-1) Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this
Class A(2018-1) Note and of any Class A(2018-1) Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Class A(2018-1) Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed within five days of such Payment Date and the amount
then due and payable shall be payable only upon presentation and surrender of this Class A(2018-1) Note at the Indenture Trustee’s principal Corporate Trust Office or at the office of the Indenture
Trustee’s agent appointed for such purposes located in the City of New York. 
 As provided in the Indenture and subject to certain
limitations set forth therein and as set forth in the first legend on the face hereof, the transfer of this Class A(2018-1) Note may be registered on the Note Register upon surrender of this Class A(2018-1) Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member firm of a national securities exchange, and such other documents as the Indenture Trustee may require, and thereupon one or more new
Class A(2018-1) Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A(2018-1) Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange. 

 To the fullest extent permitted by applicable law, each Noteholder or Note Owner, by acceptance
of a Class A(2018-1) Note or, in the case of a Note Owner, a beneficial interest in a Class A(2018-1) Note, covenants and agrees that by accepting the benefits
of the Indenture it will not at any time institute against the Issuer, any Master Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer, or join in any institution against the Issuer, any Master
Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer of, any receivership, insolvency, bankruptcy or other similar proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, any Derivative Agreement, any Supplemental Credit Enhancement Agreement and any Supplemental Liquidity Agreement. 

By acquiring a Class A(2018-1) Note (or interest therein), each Noteholder or Note Owner (and if
each Noteholder or Note Owner is a Plan, its fiduciary) shall be deemed to represent and warrant that either: (a) it is not acquiring the Class A(2018-1) Note (or interest therein) with the assets of
(i) an “employee benefit plan” as defined in Section 3(3) of Employee Retirement Income Security Act of 1974 (“ERISA”) that is subject to Title I of ERISA, (ii) a “plan” as defined in and subject
to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (iii) an entity deemed to hold plan assets of the foregoing (each of (i), (ii) and (iii), a “Benefit Plan Investor”) or (iv) a
plan that is subject to federal, state, local or other law that is similar to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code (“Similar Law”); or (b) the acquisition and holding of
the Class A(2018-1) Note (or interest therein) will not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of any Similar Law.

 In addition, each Noteholder or Note Owner that is a Benefit Plan Investor, and the fiduciary purchasing the Class A(2018-1) Notes on behalf of a Benefit Plan Investor (the “Plan Fiduciary”), is deemed to represent and warrant by its acquisition of a
Class A(2018-1) Note (or interest therein) that the decision to acquire the Class A(2018-1) Note has been made by the Plan Fiduciary and the Plan Fiduciary is
an “independent fiduciary with financial expertise” as described in 29 C.F.R. Sec. 2510.3-21(c)(1). Specifically, this requires the Benefit Plan Investor and Plan Fiduciary to represent and warrant
that: (a) the Plan Fiduciary is independent of the Issuer, the Underwriters, the Depositor, the Owner Trustee, any Master Servicer, any Servicer and each of their affiliates (the “Transaction Parties”) and the Plan Fiduciary
either: (i) is a bank as defined in Section 202 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a U.S.
state or U.S. federal agency, (ii) is an insurance carrier which is qualified under the laws of more than one U.S. state to perform the services of managing, acquiring or disposing of assets of an employee benefit plan described in
Section 3(3) of ERISA or any plan described in Section 4975(e)(1)(A) of the Code, (iii) is an investment adviser registered under the Advisers Act, or, if not registered as an investment adviser under the Advisers Act by reason of
paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the U.S. state in which it maintains its principal office and place of business, (iv) is a broker-dealer registered under the
U.S. Securities Exchange Act of 1934, as amended or (v) holds, or 

 
has under its management or control, total assets of at least U.S. $50 million (provided that this clause (v) shall not be satisfied if the Plan Fiduciary is either (i) an
individual directing his or her own individual retirement account or relative of such individual or (ii) a participant or beneficiary of such benefit plan purchasing the Class A(2018-1) notes); (b)
the Plan Fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies, including the acquisition by the Benefit Plan Investor of the Class A(2018-1) Notes; (c) the Plan Fiduciary is a “fiduciary” with respect to the Benefit Plan Investor within the meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both,
and is responsible for exercising independent judgment in evaluating the Benefit Plan Investor’s acquisition of the Class A(2018-1) Notes, (d) none of the Transaction Parties has exercised any
authority to cause the Benefit Plan Investor to invest in the Class A(2018-1) Notes or to negotiate the terms of the Benefit Plan Investor’s investment in the
Class A(2018-1) Notes; and (e) the Plan Fiduciary has been informed by the Transaction Parties: (i) that none of the Transaction Parties are undertaking to provide impartial investment advice or
to give advice in a fiduciary capacity, and that no such entity has given investment advice or otherwise made a recommendation, in connection with the Benefit Plan Investor’s acquisition of the
Class A(2018-1) Notes and (ii) of the existence and nature of the Transaction Parties’ financial interests in the Benefit Plan Investor’s acquisition of the
Class A(2018-1) Notes. 
 Prior to the due presentment for registration of transfer of this Class A(2018-1) Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Class A(2018-1)
Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class A(2018-1) Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary. 
 The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders
of Notes representing not less than 66 2/3% of the Outstanding Dollar Principal Amount of each adversely affected Series, Class or Tranche of Notes. The Indenture also contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Dollar Principal Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Class A(2018-1) Note shall be conclusive and binding upon such Holder and upon all future Holders of this
Class A(2018-1) Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Class A(2018-1) Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 The term “Issuer” as used in this Class A(2018-1) Note includes any
successor to the Issuer under the Indenture. 

 The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate,
subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture. 
 The
Class A(2018-1) Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. 

THIS CLASS A(2018-1) NOTE AND THE INDENTURE WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE.

 No reference herein to the Indenture and no provision of this Class A(2018-1) Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Class A(2018-1) Note at the times, place, and rate, and in
the coin or currency herein prescribed. 
 No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer
on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or any successor or assign of the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the Owner Trustee has no such obligations in its individual capacity). The Holder of this Class A(2018-1) Note by the acceptance
hereof agrees that, except as expressly provided in the Indenture and the Indenture Supplement in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture
or in this Class A(2018-1) Note. 

 ASSIGNMENT 

Social Security or taxpayer I.D. or other identifying number of assignee 
  

 
 FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto 
 (name and address of assignee) 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises. 
  

									
	Dated:	 	  
	 		  	  
	 	*
		 		 		  	Signature Guaranteed:	 	

  

	*	NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

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