Document:

Exhibit 4.4

 

ZYNERBA PHARMACEUTICALS, INC.

 

and

 

                    , as Trustee

 

INDENTURE

 

Dated as of             ,

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE 1   DEFINITIONS AND INCORPORATION BY REFERENCE
    	
1
    
	
1.1
    	
DEFINITIONS
    	
1
    
	
1.2
    	
OTHER DEFINITIONS
    	
4
    
	
1.3
    	
INCORPORATION BY   REFERENCE OF TRUST INDENTURE ACT
    	
4
    
	
1.4
    	
RULES OF CONSTRUCTION
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE 2   THE SECURITIES
    	
5
    
	
2.1
    	
ISSUABLE IN SERIES
    	
5
    
	
2.2
    	
ESTABLISHMENT OF TERMS   OF SERIES OF SECURITIES
    	
5
    
	
2.3
    	
EXECUTION AND   AUTHENTICATION
    	
7
    
	
2.4
    	
REGISTRAR AND PAYING   AGENT
    	
8
    
	
2.5
    	
PAYING AGENT TO HOLD   ASSETS IN TRUST.
    	
8
    
	
2.6
    	
SECURITYHOLDER LISTS
    	
9
    
	
2.7
    	
TRANSFER AND EXCHANGE
    	
9
    
	
2.8
    	
REPLACEMENT SECURITIES
    	
9
    
	
2.9
    	
OUTSTANDING SECURITIES
    	
10
    
	
2.10
    	
WHEN TREASURY   SECURITIES DISREGARDED; DETERMINATION OF HOLDERS’ ACTION
    	
10
    
	
2.11
    	
TEMPORARY SECURITIES
    	
10
    
	
2.12
    	
CANCELLATION
    	
10
    
	
2.13
    	
PAYMENT OF INTEREST;   DEFAULTED INTEREST; COMPUTATION OF INTEREST.
    	
11
    
	
2.14
    	
CUSIP NUMBER
    	
11
    
	
2.15
    	
PROVISIONS FOR GLOBAL   SECURITIES
    	
11
    
	
2.16
    	
PERSONS DEEMED OWNERS
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 3   REDEMPTION
    	
12
    
	
3.1
    	
NOTICES TO TRUSTEE
    	
12
    
	
3.2
    	
SELECTION BY TRUSTEE OF   SECURITIES TO BE REDEEMED
    	
13
    
	
3.3
    	
NOTICE OF REDEMPTION
    	
13
    
	
3.4
    	
EFFECT OF NOTICE OF   REDEMPTION
    	
14
    
	
3.5
    	
DEPOSIT OF REDEMPTION   PRICE
    	
14
    
	
3.6
    	
SECURITIES REDEEMED IN   PART
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE 4   COVENANTS
    	
14
    
	
4.1
    	
PAYMENT OF SECURITIES
    	
14
    
	
4.2
    	
SEC REPORTS
    	
14
    
	
4.3
    	
WAIVER OF STAY,   EXTENSION OR USURY LAWS
    	
15
    
	
4.4
    	
COMPLIANCE CERTIFICATE
    	
15
    
	
4.5
    	
CORPORATE EXISTENCE
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE 5   SUCCESSOR CORPORATION
    	
16
    
	
5.1
    	
LIMITATION ON   CONSOLIDATION, MERGER AND SALE OF ASSETS
    	
16
    
	
5.2
    	
SUCCESSOR PERSON   SUBSTITUTED
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 6   DEFAULTS AND REMEDIES
    	
16
    
	
6.1
    	
EVENTS OF DEFAULT
    	
16
    
	
6.2
    	
ACCELERATION
    	
17
    
	
6.3
    	
REMEDIES
    	
18
    
	
6.4
    	
WAIVER OF PAST DEFAULTS   AND EVENTS OF DEFAULT
    	
18
    
	
6.5
    	
CONTROL BY MAJORITY
    	
18
    
	
6.6
    	
LIMITATION ON SUITS
    	
18
    
	
6.7
    	
RIGHTS OF HOLDERS TO   RECEIVE PAYMENT
    	
19
    
	
6.8
    	
COLLECTION SUIT BY   TRUSTEE
    	
19
    
	
6.9
    	
TRUSTEE MAY FILE   PROOFS OF CLAIM
    	
19
    
	
6.10
    	
PRIORITIES
    	
19
    
	
6.11
    	
UNDERTAKING FOR COSTS
    	
20
    

 

i

 

	
ARTICLE 7   TRUSTEE
    	
20
    
	
7.1
    	
DUTIES OF TRUSTEE
    	
20
    
	
7.2
    	
RIGHTS OF TRUSTEE
    	
21
    
	
7.3
    	
INDIVIDUAL RIGHTS OF   TRUSTEE
    	
21
    
	
7.4
    	
TRUSTEE’S DISCLAIMER
    	
22
    
	
7.5
    	
NOTICE OF DEFAULT
    	
22
    
	
7.6
    	
REPORTS BY TRUSTEE TO   HOLDERS
    	
22
    
	
7.7
    	
COMPENSATION AND   INDEMNITY
    	
22
    
	
7.8
    	
REPLACEMENT OF TRUSTEE
    	
23
    
	
7.9
    	
SUCCESSOR TRUSTEE BY   CONSOLIDATION, MERGER OR CONVERSION
    	
23
    
	
7.10
    	
ELIGIBILITY;   DISQUALIFICATION
    	
23
    
	
7.11
    	
PREFERENTIAL COLLECTION   OF CLAIMS AGAINST COMPANY
    	
24
    
	
7.12
    	
PAYING AGENTS
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 8   AMENDMENTS, SUPPLEMENTS AND WAIVERS
    	
24
    
	
8.1
    	
WITHOUT CONSENT OF   HOLDERS
    	
24
    
	
8.2
    	
WITH CONSENT OF HOLDERS
    	
24
    
	
8.3
    	
COMPLIANCE WITH TRUST   INDENTURE ACT
    	
25
    
	
8.4
    	
REVOCATION AND EFFECT   OF CONSENTS
    	
25
    
	
8.5
    	
NOTATION ON OR EXCHANGE   OF SECURITIES
    	
26
    
	
8.6
    	
TRUSTEE TO SIGN   AMENDMENTS, ETC.
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE 9   DISCHARGE OF INDENTURE; DEFEASANCE
    	
26
    
	
9.1
    	
DISCHARGE OF INDENTURE
    	
26
    
	
9.2
    	
LEGAL DEFEASANCE
    	
27
    
	
9.3
    	
COVENANT DEFEASANCE
    	
27
    
	
9.4
    	
CONDITIONS TO LEGAL   DEFEASANCE OR COVENANT DEFEASANCE
    	
27
    
	
9.5
    	
DEPOSITED MONEY AND   U.S. AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER   MISCELLANEOUS PROVISIONS
    	
28
    
	
9.6
    	
REINSTATEMENT
    	
29
    
	
9.7
    	
MONEYS HELD BY PAYING   AGENT
    	
29
    
	
9.8
    	
MONEYS HELD BY TRUSTEE
    	
29
    
	
 
    	
 
    	
 
    
	
ARTICLE 10   MISCELLANEOUS
    	
29
    
	
10.1
    	
TRUST INDENTURE ACT   CONTROLS
    	
29
    
	
10.2
    	
NOTICES
    	
30
    
	
10.3
    	
COMMUNICATIONS BY   HOLDERS WITH OTHER HOLDERS
    	
31
    
	
10.4
    	
CERTIFICATE AND OPINION   AS TO CONDITIONS PRECEDENT
    	
31
    
	
10.5
    	
STATEMENT REQUIRED IN   CERTIFICATE AND OPINION
    	
31
    
	
10.6
    	
RULES BY TRUSTEE AND   AGENTS
    	
31
    
	
10.7
    	
BUSINESS DAYS; LEGAL   HOLIDAYS; PLACE OF PAYMENT
    	
31
    
	
10.8
    	
GOVERNING LAW
    	
32
    
	
10.9
    	
NO ADVERSE   INTERPRETATION OF OTHER AGREEMENTS
    	
32
    
	
10.10
    	
SUCCESSORS
    	
32
    
	
10.11
    	
MULTIPLE COUNTERPARTS
    	
32
    
	
10.12
    	
TABLE OF CONTENTS,   HEADINGS, ETC.
    	
32
    
	
10.13
    	
SEVERABILITY
    	
32
    
	
10.14
    	
SECURITIES IN A FOREIGN   CURRENCY OR IN EUROS
    	
32
    
	
10.15
    	
JUDGMENT CURRENCY
    	
33
    

 

ii

 

CROSS-REFERENCE TABLE

 

	
TIA SECTION
    	
 
    	
INDENTURE SECTION
    
	
310(a)(1)(2)(5)
    	
 
    	
7.10
    
	
310(a)(3)(4)
    	
 
    	
Inapplicable
    
	
310(b)
    	
 
    	
7.8; 7.10
    
	
310(c)
    	
 
    	
Inapplicable
    
	
311(a)(b)
    	
 
    	
7.11
    
	
311(c)
    	
 
    	
Inapplicable
    
	
312(a)
    	
 
    	
2.6
    
	
312(b)(c)
    	
 
    	
10.3
    
	
313(a)(b)
    	
 
    	
7.6
    
	
313(c)
    	
 
    	
7.6; 10.2
    
	
313(d)
    	
 
    	
7.6
    
	
314(a)
    	
 
    	
4.2; 4.4; 10.2
    
	
314(b)
    	
 
    	
N/A
    
	
314(c)(1)(2)
    	
 
    	
10.4; 10.5
    
	
314(c)(3)
    	
 
    	
Inapplicable
    
	
314(d)
    	
 
    	
Inapplicable
    
	
314(e)
    	
 
    	
10.5
    
	
314(f)
    	
 
    	
Inapplicable
    
	
315(a)
    	
 
    	
7.1, 7.2
    
	
315(b)
    	
 
    	
7.5; 10.2
    
	
315(c)
    	
 
    	
7.1
    
	
315(d)
    	
 
    	
7.1; 7.2
    
	
315(e)
    	
 
    	
6.11
    
	
316(a)(last sentence)
    	
 
    	
2.10
    
	
316(a)(1)(A)
    	
 
    	
6.5
    
	
316(a)(1)(B)
    	
 
    	
6.4
    
	
316(a)(2)
    	
 
    	
8.2
    
	
316(b)
    	
 
    	
6.7
    
	
316(c)
    	
 
    	
8.4
    
	
317(a)(1)
    	
 
    	
6.8
    
	
317(a)(2)
    	
 
    	
6.9
    
	
317(b)
    	
 
    	
2.5; 7.12
    
	
318(a)
    	
 
    	
10.1
    

 

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.

 

iii

 

INDENTURE, dated as of ,                , by and between Zynerba Pharmaceuticals, Inc., a Delaware corporation, as Issuer (the “Company”), and                     , a                     organized under the laws of                     , as Trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”), as herein provided, up to such principal amount as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors or by supplemental indenture.

 

All things necessary to make this Indenture a valid agreement of the Company in accordance with its terms have been done, and the execution and delivery thereof have been in all respects duly authorized by the parties hereto.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of a Series thereof, as follows:

 

ARTICLE 1
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

1.1                               DEFINITIONS.

 

“Affiliate” of any specified Person means any other Person which, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, such specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

“Agent” means any Registrar, Paying Agent, co-registrar or agent for service of notices and demands.

 

“Board of Directors” means the Board of Directors of the Company or any committee duly authorized to act therefor.

 

“Board Resolution” means a copy of a resolution certified pursuant to an Officers’ Certificate to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification which has been delivered to the Trustee.

 

“Capital Stock” means, with respect to any Person, any and all shares or other equivalents (however designated) of capital stock, partnership interests or any other participation, right or other interest in the nature of an equity interest in such Person or any option, warrant or other security convertible into any of the foregoing.

 

“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces such party pursuant to Article 5 of this Indenture, and thereafter means the successor and any other primary obligor on the Securities.

 

“Company Order” means a written order signed in the name of the Company by two of the Company’s executive Officers, one of whom must be its Chief Executive Officer or its Chief Financial Officer.

 

“Company Request” means any written request signed in the name of the Company by its Chief Executive Officer, its President, any Vice President, its Chief Financial Officer or its Treasurer and attested to by its Secretary or any Assistant Secretary.

 

1

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered.

 

“Default” means any event that is, or that with the passing of time or giving of notice or both would be, an Event of Default.

 

“Depository” means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act, until a successor Depository shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depository” shall mean each Person who is then a Depository hereunder, and if at any time there is more than one such Person, such Persons.

 

“Dollars” means the currency of the United States of America.

 

“Euro” means the single currency of participating member states of the economic and monetary union as contemplated in the Treaty on European Union.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Foreign Currency” means any currency or currency unit issued by a government other than the government of the United States of America.

 

“Foreign Government Obligations” means, with respect to Securities that are denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by, or acting as an agency or instrumentality of, such government, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) and (ii), are not callable or redeemable at the option of the issuer thereof.

 

“GAAP” means generally accepted accounting principles consistently applied as in effect in the United States of America from time to time.

 

“Global Security” or “Global Securities” means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2, evidencing all or part of a Series of Securities issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee, and bearing the legend set forth in Section 2.15(c) (or such other legend(s) as may be applied to such Securities in accordance with Section 2.2(x).

 

“Holder” or “Securityholder” means the Person in whose name a Security is registered on the Registrar’s books.

 

“Indebtedness” means (without duplication), with respect to any Person, any indebtedness at any time outstanding, secured or unsecured, contingent or otherwise, which is for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments, or representing the balance deferred and unpaid of the purchase price of any property (excluding any balances that constitute accounts payable or trade payables, and other accrued liabilities arising in the ordinary course of business), if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP.

 

“Indenture” means this Indenture as amended, restated or supplemented from time to time.

 

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

“Lien” means, with respect to any property or assets of any Person, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect

 

2

 

to such property or assets (including, without limitation, any capitalized lease obligation, conditional sales or other title retention agreement having substantially the same economic effect as any of the foregoing).

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security, or an installment of principal, becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect payment or otherwise.

 

“Officer” means the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer or the Secretary of the Company, or any other officer designated by the Board of Directors, as the case may be.

 

“Officers’ Certificate” means, with respect to any Person, a certificate signed by the Chairman, Chief Executive Officer, President or any Senior or Executive Vice President and the Chief Financial Officer or any Treasurer of such Person, that shall comply with applicable provisions of this Indenture.

 

“Opinion of Counsel” means a written opinion from legal counsel, which counsel is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.

 

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof).

 

“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption pursuant to this Indenture.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the corporate trust department or division of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“SEC” means the United States Securities and Exchange Commission as constituted from time to time, or any successor performing substantially the same functions.

 

“Securities” means the securities that are issued under this Indenture, as amended or supplemented from time to time pursuant to this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Series” or “Series of Securities” means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.1 and 2.2.

 

“Significant Subsidiary” means (i) any direct or indirect Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof, or (ii) any group of direct or indirect Subsidiaries of the Company that, taken together as a group, would be a “significant subsidiary” as defined in -Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security, or such installment of principal or interest, is due and payable, and when used with respect to any other Indebtedness, means the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness, or any installment of interest thereon, is due and payable.

 

3

 

“Subsidiary” of any specified Person means any corporation, limited liability company, partnership, joint venture, association or other business entity, whether now existing or hereafter organized or acquired, (i) in the case of a corporation, of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is held, directly or indirectly, by such Person or any of its Subsidiaries; or (ii) in the case of a partnership, joint venture, association or other business entity, with respect to which such Person or any of its Subsidiaries has the power to direct or cause the direction of the management and policies of such entity by contract or otherwise, or if in accordance with GAAP such entity is consolidated with such Person for financial statement purposes.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in Section 8.3).

 

“Trustee” means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture, and thereafter means the successor, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

 

“U.S. Government Obligations” means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which obligation or guarantee the full faith and credit of the United States of America is pledged.

 

1.2                               OTHER DEFINITIONS.

 

The definitions of the following terms may be found in the sections indicated as follows:

 

	
TERM
    	
 
    	
DEFINED IN SECTION
    
	
“Bankruptcy Law”
    	
 
    	
6.1
    
	
“Business Day”
    	
 
    	
10.7
    
	
“Covenant Defeasance”
    	
 
    	
9.3
    
	
“Custodian”
    	
 
    	
6.1
    
	
“Event of Default”
    	
 
    	
6.1
    
	
“Journal”
    	
 
    	
10.14
    
	
“Judgment Currency”
    	
 
    	
10.15
    
	
“Legal Defeasance
    	
 
    	
9.2
    
	
“Legal Holiday”
    	
 
    	
10.7
    
	
“Market Exchange Rate”
    	
 
    	
10.14
    
	
“New York Paying Agent”
    	
 
    	
2.4
    
	
“Paying Agent”
    	
 
    	
2.4
    
	
“Place of Payment”
    	
 
    	
10.7
    
	
“Registrar”
    	
 
    	
2.4
    
	
“Required Currency”
    	
 
    	
10.15
    
	
“Service Agent”
    	
 
    	
2.4
    

 

1.3                               INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

 

Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture securityholder” means a Holder or Securityholder.

 

4

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor on the indenture securities” means the Company.

 

All other terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings therein assigned to them.

 

1.4                               RULES OF CONSTRUCTION.

 

Unless the context otherwise requires:

 

(a)         a term has the meaning assigned to it herein, whether defined expressly or by reference;

 

(b)         an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)          “or” is not exclusive;

 

(d)         words in the singular include the plural, and in the plural include the singular;

 

(e)          words used herein implying any gender shall apply to each gender; and

 

(f)           the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE 2
 THE SECURITIES

 

2.1                               ISSUABLE IN SERIES.

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is $[•]. The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers’ Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers’ Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, Stated Maturity, record date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters, PROVIDED, that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.

 

2.2                               ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.

 

At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2(1) and either as to such Securities within the Series or as to the Series generally in the case of Subsections 2.2(2) through 2.2(24)) by a Board Resolution, a supplemental indenture or an Officers’ Certificate, in each case, pursuant to authority granted under a Board Resolution:

 

(a)         the title of the Series (which shall distinguish the Securities of that particular Series from the Securities of any other Series);

 

(b)         any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 8.5);

 

5

 

(c)          the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued;

 

(d)         the date or dates on which the principal of the Securities of the Series is payable;

 

(e)          the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any Interest Payment Date;

 

(f)           the place or places where the principal of, and interest and premium, if any, on, the Securities of the Series shall be payable, or the method of such payment, if by wire transfer, mail or other means;

 

(g)          if applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part, at the option of the Company;

 

(h)         the obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(i)             the dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the option of the Holders thereof, and other detailed terms and provisions of such repurchase obligations;

 

(j)            if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable;

 

(k)         the forms of the Securities of the Series in bearer (if to be issued outside of the United States of America) or fully registered form (and, if in fully registered form, whether the Securities will be issuable as Global Securities);

 

(l)             if other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.2;

 

(m)     the currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, including, but not limited to, the Euro, and, if such currency of denomination is a composite currency other than the Euro, the agency or organization, if any, responsible for overseeing such composite currency;

 

(n)         the designation of the currency, currencies or currency units in which payment of the principal of, and interest and premium, if any, on, the Securities of the Series will be made;

 

(o)         if payments of principal of, or interest or premium, if any, on, the Securities of the Series are to be made in one or more currencies or currency units other than that or those in which such Securities are denominated, the manner in which the exchange rate with respect to such payments will be determined;

 

(p)         the manner in which the amounts of payment of principal of, or interest and premium, if any, on, the Securities of the Series will be determined, if such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index;

 

(q)         the provisions, if any, relating to any collateral provided for the Securities of the Series;

 

(r)            any addition to or change in the covenants set forth in Article 4 or Article 5 that applies to Securities of the Series;

 

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(s)           any addition to or change in the Events of Default which applies to any Securities of the Series, and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;

 

(t)            the terms and conditions, if any, for conversion of the Securities into or exchange of the Securities for shares of common stock or preferred stock of the Company that apply to Securities of the Series;

 

(u)         any depositories, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of such Series if other than those appointed herein;

 

(v)         the terms and conditions, if any, upon which the Securities shall be subordinated in right of payment to other Indebtedness of the Company;

 

(w)       if applicable, that the Securities of the Series, in whole or any specified part, shall be defeasible pursuant to Article 9; and

 

(x)         any other terms of the Securities of the Series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 8.1, but which may modify or delete any provision of this Indenture insofar as it applies to such Series).

 

All Securities of any one Series need not be issued at the same time, and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture or Officers’ Certificate referred to above, however, the authorized principal amount of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise provided in such Board Resolution, supplemental indenture or Officers’ Certificate.

 

2.3                               EXECUTION AND AUTHENTICATION.

 

The Securities shall be executed on behalf of the Company by two Officers of the Company or an Officer and an Assistant Secretary of the Company. Each such signature may be either manual or facsimile. The Company’s seal may be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form.

 

If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officers’ Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing. Each Security shall be dated the date of its authentication.

 

The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8.

 

Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.1) shall be fully protected in relying on: (a) the Board Resolution, supplemental indenture hereto or Officers’ Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers’ Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

The Trustee shall have the right to decline to authenticate and deliver any Securities of any Series: (a) if the Trustee, being advised in writing by outside counsel, determines that such action may not lawfully be taken; or (b) if the

 

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Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors and/or vice-presidents shall reasonably determine that such action would expose the Trustee to personal liability, or cause it to have a conflict of interest with respect to Holders of any then outstanding Series of Securities.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Any appointment shall be evidenced by an instrument signed by an authorized officer of the Trustee, a copy of which shall be furnished to the Company. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

2.4                               REGISTRAR AND PAYING AGENT.

 

The Company shall maintain in each Place of Payment for any Series of Securities (i) an office or agency where such Securities may be presented for registration of transfer or for exchange (“Registrar”), (ii) an office or agency where such Securities may be presented for payment (“Paying Agent”) (PROVIDED that the Company shall at all times maintain a Paying Agent in the Borough of Manhattan, City of New York, State of New York (the “New York Paying Agent”), and PROVIDED, FURTHER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the register for the Securities maintained by the Registrar), and (iii) an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served (“Service Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office, or to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee as set forth in Section 10.2. If the Company acts as Paying Agent, it shall segregate the money held by it for the payment of principal of, and interest and premium, if any, on, the Securities and hold it as a separate trust fund. The Company may change any Paying Agent, Registrar, co-registrar or any other Agent without notice to any Securityholder.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes, and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any Series for such purposes. The Company hereby initially designates the Corporate Trust Office of the Trustee as such office of the Company. The Company shall give prompt written notice to the Trustee of such designation or rescission, and of any change in the location of any such other office or agency.

 

The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or agent for service of notices and demands, or fails to give the foregoing notice, the Trustee shall act as such. The Company hereby appoints the Trustee as the initial Registrar, Paying Agent and Service Agent for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued. The Company designates    , as the New York Paying Agent, with offices at    .

 

2.5                               PAYING AGENT TO HOLD ASSETS IN TRUST.

 

The Trustee as Paying Agent shall, and the Company shall require each Paying Agent other than the Trustee to agree in writing that each Paying Agent shall, hold in trust for the benefit of the Holders of any Series of Securities or the Trustee all assets held by the Paying Agent for the payment of principal of, or interest or premium, if any, on, such Series of Securities (whether such assets have been distributed to it by the Company or any other obligor on such Series of Securities), and the Company and the Paying Agent shall notify the Trustee in writing of any Default by the Company (or any other obligor on such Series of Securities) in making any such payment. The Company at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed, and the Trustee may, at any time during the continuance of any payment default with respect to any

 

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Series of Securities, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon distribution to the Trustee of all assets that shall have been delivered by the Company to the Paying Agent, the Paying Agent shall have no further liability for such assets.

 

2.6                               SECURITYHOLDER LISTS.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of Securities. If the Trustee is not the Registrar, the Company shall furnish to the Trustee as of each regular record date for the payment of interest on the Securities of a Series and before each related Interest Payment Date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders of each Series of Securities.

 

2.7                               TRANSFER AND EXCHANGE.

 

When Securities of a Series are presented to the Registrar with a request to register the transfer thereof, the Registrar shall register the transfer as requested if the requirements of applicable law are met, and when such Securities of a Series are presented to the Registrar with a request to exchange them for an equal principal amount of other authorized denominations of Securities of the same Series, the Registrar shall make the exchange as requested. To permit transfers and exchanges, upon surrender of any Security for registration of transfer at the office or agency maintained pursuant to Section 2.4, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request.

 

If Securities are issued as Global Securities, the provisions of Section 2.15 shall apply.

 

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

 

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Registrar or a co-registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar or a co-registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

 

Any exchange or transfer shall be without charge, except that the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Section 2.11, 3.6 or 8.5. The Trustee shall not be required to register transfers of Securities of any Series, or to exchange Securities of any Series, for a period of 15 days before the record date for selection for redemption of such Securities. The Trustee shall not be required to exchange or register transfers of Securities of any Series called or being called for redemption in whole or in part, except the unredeemed portion of such Security being redeemed in part.

 

2.8                               REPLACEMENT SECURITIES.

 

If a mutilated Security is surrendered to the Trustee, or if the Holder of a Security presents evidence to the satisfaction of the Company and the Trustee that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. An indemnity bond may be required by the Company or the Trustee that is sufficient in the reasonable judgment of the Company or the Trustee, as the case may be, to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced. The Company may charge such Holder for the Company’s out-of-pocket expenses in replacing a Security, including the fees and expenses of the Trustee. Every replacement Security shall constitute an original additional obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any

 

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time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.

 

2.9                               OUTSTANDING SECURITIES.

 

Securities outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.9 as not outstanding.

 

If a Security is replaced pursuant to Section 2.8 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding until the Company and the Trustee receive proof satisfactory to each of them that the replaced Security is held by a bona fide purchaser. A mutilated Security ceases to be outstanding upon surrender of such Security and replacement thereof pursuant to Section 2.8.

 

If a Paying Agent holds on a Redemption Date or the Stated Maturity money sufficient to pay the principal of, premium, if any, and accrued interest on, Securities payable on that date, and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture (PROVIDED, that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made), then on and after that date such Securities cease to be outstanding and interest on them ceases to accrue.

 

A Security does not cease to be outstanding solely because the Company or an Affiliate holds the Security.

 

2.10                        WHEN TREASURY SECURITIES DISREGARDED; DETERMINATION OF HOLDERS’ ACTION.

 

In determining whether the Holders of the required aggregate principal amount of the Securities of any Series have concurred in any direction, waiver or consent, the Securities of any Series owned by the Company or any other obligor on such Securities, or by any Affiliate of any of them, shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities of such Series which the Trustee actually knows are so owned shall be so disregarded. Securities of such

 

Series so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Securities of such Series and that the pledgee is not the Company or any other obligor on the Securities of such Series, or an Affiliate of any of them.

 

2.11                        TEMPORARY SECURITIES.

 

Until definitive Securities are ready for delivery, the Company may prepare and execute, and the Trustee shall authenticate, temporary Securities. Temporary Securities shall be substantially in the form, and shall carry all rights, of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and execute, and the Trustee shall authenticate, definitive Securities in exchange for temporary Securities without charge to the Holder.

 

2.12                        CANCELLATION.

 

All Securities surrendered for payment, redemption or registration of transfer or exchange, or for credit against any sinking fund payment, shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for cancellation. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, shall cancel, and at the written request of the Company shall dispose of, all Securities surrendered for transfer, exchange, payment or cancellation. If the Company shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the

 

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Indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.12. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section 2.12, except as expressly permitted by this Indenture.

 

2.13                        PAYMENT OF INTEREST; DEFAULTED INTEREST; COMPUTATION OF INTEREST.

 

Except as otherwise provided as contemplated by Section 2.2 with respect to any Series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the regular record date for such interest, as provided in the Board Resolution, supplemental indenture hereto or Officers’ Certificate establishing the terms of such Series.

 

If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted amounts, plus any interest payable on defaulted amounts pursuant to Section 4.1, to the Persons who are Securityholders on a subsequent special record date, which date shall be the 15th day next preceding the date fixed by the Company for the payment of defaulted interest, or

 

the next succeeding Business Day if such date is not a Business Day. At least 15 days before the special record date, the Company shall mail or cause to be mailed to each Securityholder, with a copy to the Trustee, a notice that states the special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.

 

Except as otherwise specified as contemplated by Section 2.2 for Securities of any Series, interest on the Securities of each Series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

2.14                        CUSIP NUMBER.

 

The Company in issuing the Securities may use one or more “CUSIP” numbers, and, if the Company does so, the Trustee shall use the CUSIP number(s) in notices of redemption or exchange as a convenience to Holders, PROVIDED, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number(s) printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities, and that any such redemption or exchange shall not be affected by any defect in or omission of any such numbers.

 

2.15                        PROVISIONS FOR GLOBAL SECURITIES.

 

(a)         A Board Resolution, a supplemental indenture hereto or an Officers’ Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities, and the Depository for such Global Securities or Securities.

 

(b)         Notwithstanding any provisions to the contrary contained in Section 2.7 and in addition thereto, if, and only if the Depository (i) at any time is unwilling or unable to continue as Depository for such Global Security or ceases to be a clearing agency registered under the Exchange Act and (ii) a successor Depository is not appointed by the Company within 90 days after the date the Company is so informed in writing or becomes aware of the same, the Company promptly will execute and deliver to the Trustee definitive Securities, and the Trustee, upon receipt of a Company Request for the authentication and delivery of such definitive Securities (which the Company will promptly execute and deliver to the Trustee) and an Officers’ Certificate to the effect that such Global Security shall be so exchangeable, will authenticate and deliver definitive Securities, without charge, registered in such names and in such authorized denominations as the Depository shall direct in writing (pursuant to instructions from its direct and indirect participants or otherwise) in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms. Upon the exchange of a Global Security for definitive Securities, such Global Security shall be canceled by the Trustee. Unless and until it is exchanged in whole or in part for definitive Securities, as provided in this Section 2.15(b), a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository

 

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to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

(c)          Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

(d)         “This Security is a Global Security within the meaning of the Indenture hereinafter referred to, and is registered in the name of the Depository or a nominee of the Depository. This Security is exchangeable for Securities registered in the name of a Person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.”

 

(e)          The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

 

(f)           Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the principal of, and interest and premium, if any, on, any Global Security shall be made to the Depository or its nominee in its capacity as the Holder thereof.

 

(g)          Except as provided in Section 2.15(e) above, the Company, the Trustee and any Agent shall treat a Person as the Holder of such principal amount of outstanding Securities of any Series represented by a Global Security as shall be specified in a written statement of the Depository (which may be in the form of a participants’ list for such Series) with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture, PROVIDED, that until the Trustee is so provided with a written statement, it may treat the Depository or any other Person in whose name a Global Security is registered as the owner of such Global Security for the purpose of receiving payment of the principal of, and any premium and (subject to Section 2.13) any interest on, such Global Security and for all other purposes whatsoever, and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

2.16                        PERSONS DEEMED OWNERS.

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee, the Registrar and any agent of the Company, the Registrar or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of the principal of, and any premium and (subject to Section 2.13) any interest on, such Security and for all other purposes whatsoever, and none of the Company, the Trustee, the Registrar or any agent of the Company, the Trustee or the Registrar shall be affected by notice to the contrary.

 

ARTICLE 3
 REDEMPTION

 

3.1                               NOTICES TO TRUSTEE.

 

The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities, or may covenant to redeem and pay the Series of Securities or any part thereof, prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities or the related Board Resolution, supplemental indenture or Officers’ Certificate. If a Series of Securities is redeemable and the Company elects to redeem all or part of such Series of Securities, it shall notify the Trustee of the Redemption Date and the principal amount of Securities to be redeemed at least 45 days (unless a shorter notice shall be satisfactory to the Trustee) before the Redemption Date. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder, and shall thereby be void and of no effect.

 

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3.2                               SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

 

Unless otherwise indicated for a particular Series of Securities by a Board Resolution, a supplemental indenture or an Officers’ Certificate, if fewer than all of the Securities of a Series are to be redeemed, the Trustee shall select the Securities of a Series to be redeemed pro rata, by lot or by any other method that the Trustee considers fair and appropriate (unless the Company specifically directs the Trustee otherwise) and, if such Securities are listed on any securities exchange, by a method that complies with the requirements of such exchange.

 

The Trustee shall make the selection from Securities of a Series outstanding and not previously called for redemption, and shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed at least 35 but not more than 60 days before the Redemption Date. Securities of a Series in denominations of $1,000 may be redeemed only in whole. The Trustee may select for redemption portions of the principal of Securities of a Series that have denominations larger than $1,000. Securities of a Series and portions of them it selects shall be in amounts of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.2(j), the minimum principal denomination for each Series and integral multiples thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption.

 

3.3                               NOTICE OF REDEMPTION.

 

Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, at least 30 days, and no more than 60 days, before a Redemption Date, the Company shall mail, or cause to be mailed, a notice of redemption by first-class mail to each Holder of Securities to be redeemed at his or her last address as the same appears on the registry books maintained by the Registrar. The notice shall identify the Securities to be redeemed and shall state:

 

(a)         the Redemption Date;

 

(b)         the redemption price, and that such redemption price shall become due and payable on the Redemption Date;

 

(c)          if any Security of a Series is being redeemed in part, the portion of the principal amount of such Security of a Series to be redeemed and that, after the Redemption Date and upon surrender of such Security of a Series, a new Security or Securities in principal amount equal to the unredeemed portion will be issued;

 

(d)         the name and address of the Paying Agent;

 

(e)          that Securities of a Series called for redemption must be surrendered to the Paying Agent to collect the redemption price, and the place or places where each such Security is to be surrendered for such payment;

 

(f)           that, unless the Company defaults in making the redemption payment, interest on the Securities of a Series called for redemption ceases to accrue on the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the redemption price upon surrender to the Paying Agent of the Securities redeemed;

 

(g)          if fewer than all of the Securities of a Series are to be redeemed, the identification of the particular Securities of a Series (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities of a Series to be redeemed and the aggregate principal amount of Securities of a Series to be outstanding after such partial redemption.

 

(h)         the CUSIP number, if any, printed on the Securities being redeemed; and

 

(i)             that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities.

 

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At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s sole expense.

 

3.4                               EFFECT OF NOTICE OF REDEMPTION.

 

Once the notice of redemption described in Section 3.3 is mailed, Securities of a Series called for redemption become due and payable on the Redemption Date and at the redemption price, plus interest, if any, accrued to the Redemption Date. Upon surrender to the Trustee or Paying Agent, such Securities of a Series shall be paid at the redemption price, plus accrued interest, if any, to the Redemption Date; PROVIDED, that if the Redemption Date is after a regular interest payment record date and on or prior to the next Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Securities registered on the relevant record date, as specified by the Company in the notice to the Trustee pursuant to Section 3.1.

 

3.5                               DEPOSIT OF REDEMPTION PRICE.

 

On or prior to the Redemption Date (but no later than 11:00 A.M. Eastern Time on such date), the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation.

 

On and after any Redemption Date, if money sufficient to pay the redemption price of, and accrued interest on, Securities called for redemption shall have been made available in accordance with the preceding paragraph and the Company and the Paying Agent are not prohibited from paying such moneys to Holders, the Securities called for redemption will cease to accrue interest and the only right of the Holders of such Securities will be to receive payment of the redemption price of and, subject to the proviso in Section 3.4, accrued and unpaid interest on such Securities to the Redemption Date. If any Security called for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Security and any interest or premium, if any, not paid on such unpaid principal, in each case, at the rate and in the manner provided in the Securities.

 

3.6                               SECURITIES REDEEMED IN PART.

 

Upon surrender of a Security of a Series that is redeemed in part, the Company shall execute, and the Trustee shall authenticate, for a Holder a new Security of the same Series equal in principal amount to the unredeemed portion of the Security surrendered.

 

ARTICLE 4
 COVENANTS

 

4.1                               PAYMENT OF SECURITIES.

 

The Company shall pay the principal of, and interest and premium, if any, on, each Series of Securities on the dates and in the manner provided in such Securities and this Indenture.

 

An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date money designated for and sufficient to pay such installment and is not prohibited from paying such money to the Holders pursuant to the terms of this Indenture or otherwise.  The Company shall pay interest on overdue principal, and overdue interest, to the extent lawful, at the rate specified in the Series of Securities.

 

4.2                               SEC REPORTS.

 

The Company will deliver to the Trustee within 15 days after the filing of the same with the SEC, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; PROVIDED, HOWEVER, that each such report or document will be deemed to be so delivered to the Trustee if the Company files such report or

 

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document with the SEC through the SEC’s EDGAR database no later than the time such report or document is required to be filed with the SEC pursuant to the Exchange Act. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC, to the extent permitted, and provide the Trustee with, such quarterly and annual reports and such information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will also comply with the other provisions of TIA Section 314(a).

 

4.3                               WAIVER OF STAY, EXTENSION OR USURY LAWS.

 

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension, usury or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, and/or interest and premium, if any, on, the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and the Company hereby expressly waives (to the extent that they may lawfully do so) all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

4.4                               COMPLIANCE CERTIFICATE.

 

(a)         (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers’ Certificate which complies with TIA Section 314(a)(4) stating that a review of the activities of the Company and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and that there is no default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of, or interest or premium, if any, on, the Securities is prohibited, or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

 

(b)         (i) If any Default or Event of Default has occurred and is continuing or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a claimed Default under this Indenture or the Securities, within five Business Days after the Company becoming aware of such occurrence the Company shall deliver to the Trustee an Officers’ Certificate specifying such event, notice or other action and what action the Company is taking or proposes to take with respect thereto.

 

4.5                               CORPORATE EXISTENCE.

 

Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, in accordance with the organizational documents (as the same may be amended from time to time) of the Company and the rights (charter and statutory), licenses and franchises of the Company; PROVIDED, HOWEVER, that the Company shall not be required to preserve any such right, license or franchise, or its corporate existence, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not adverse in any material respect to the Holders.

 

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ARTICLE 5
 SUCCESSOR CORPORATION

 

5.1                               LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS.

 

(a)         The Company will not, in any transaction or series of transactions, merge or consolidate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person or Persons, unless at the time of and after giving effect thereto (i) either (A) if the transaction or series of transactions is a merger or consolidation, the Company shall be the surviving Person of such merger or consolidation, or (B) the Person formed by such consolidation or into which the Company is merged or to which the properties and assets of the Company are transferred (any such surviving Person or transferee Person being the “Surviving Entity”) shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, or a corporation or comparable legal entity organized under the laws of a foreign jurisdiction and shall expressly assume by a supplemental indenture executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Company (including, without limitation, the obligation to pay the principal of, and premium and interest, if any, on, the Securities and the performance of the other covenants) under the Securities of each Series and this Indenture, and in each case, this Indenture shall remain in full force and effect; and (ii) immediately before and immediately after giving effect to such transaction or series of transactions on a pro forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing.

 

(b)         In connection with any consolidation, merger or transfer of assets contemplated by this Section 5.1, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer, and the supplemental indenture in respect thereto, comply with this Section 5.1, and that all conditions precedent herein provided for relating to such transaction or transactions have been complied with.

 

5.2                               SUCCESSOR PERSON SUBSTITUTED.

 

Upon any consolidation, merger or transfer of all or substantially all of the assets of the Company in accordance with Section 5.1 above, the successor corporation formed by such consolidation, or into which the Company is merged or to which such transfer is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter (except with respect to any such transfer which is a lease) the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

6.1                               EVENTS OF DEFAULT.

 

“Events of Default,” wherever used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution, supplemental indenture or Officers’ Certificate, it is provided that such Series shall not have the benefit of said Event of Default:

 

(a)         there is a default in the payment of any principal of, or premium, if any, on, the Securities when the same becomes due and payable at Maturity, upon acceleration, redemption or otherwise;

 

(b)         there is a default in the payment of any interest on any Security of a Series when the same becomes due and payable, and the Default continues for a period of 30 days;

 

(c)          the Company defaults in the observance or performance of any other covenant in the Securities of a Series or in this Indenture for 60 days after written notice from the Trustee or the Holders of not less than 25% in the aggregate

 

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principal amount of the Securities of such Series then outstanding, which notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default”;

 

(d)         the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(1)         commences a voluntary case,

 

(2)         consents to the entry of an order for relief against it in an involuntary case,

 

(3)         consents to the appointment of a Custodian of it or for all or substantially all of its property,

 

(4)         makes a general assignment for the benefit of its creditors, or

 

(5)         generally is not paying its debts as they become due;

 

(e)          a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(1)         is for relief against the Company or any Significant Subsidiary in an involuntary case;

 

(2)         appoints a Custodian of the Company or any Significant Subsidiary, or for all or substantially all of the property of the Company or any Significant Subsidiary; or

 

(3)         orders the liquidation of the Company or any Significant Subsidiary, and the order or decree remains unstayed and in effect for 90 consecutive days; or

 

(f)           any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, in accordance with Section 2.2(s).

 

The term “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Trustee may withhold notice of any Default (except in the payment of the principal of, or interest or premium, if any, on, the Securities) to the Holders of the Securities of any Series in accordance with Section 7.5. When a Default is cured, it ceases to exist.

 

6.2                               ACCELERATION.

 

If an Event of Default with respect to Securities of any Series at the time outstanding (other than an Event of Default arising under Section 6.1(d)(4) or 6.1(d)(5)) occurs and is continuing, the Trustee by written notice to the Company, or the Holders of not less than 25% in aggregate principal amount of the Securities of that Series then outstanding by written notice to the Company and the Trustee, may declare that the entire principal amount of all the Securities of that Series then outstanding plus accrued and unpaid interest to the date of acceleration are immediately due and payable, in which case such amounts shall become immediately due and payable; PROVIDED, HOWEVER, that after such acceleration but before a judgment or decree based on such acceleration is obtained by the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Securities of that Series may rescind and annul such acceleration and its consequences if (i) all existing Events of Default, other than the nonpayment of accelerated principal, interest or premium, if any, that has become due solely because of the acceleration, have been cured or waived, (ii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid and (iii) the rescission would not conflict with any judgment or decree. No such rescission shall affect any subsequent Default or impair any right consequent thereto. In case an Event of Default specified in Section 6.1(d)(4) or 6.1(d)(5) with respect to the Company occurs, such principal, premium, if any, and interest amount with respect to all of the Securities of that Series shall be due and payable immediately without any declaration or other act on the part of the Trustee or the Holders of the Securities of that Series.

 

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6.3                               REMEDIES.

 

If an Event of Default with respect to Securities of any Series at the time outstanding occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of the principal of, or interest and premium, if any, on, the Securities of that Series, or to enforce the performance of any provision of the Securities of that Series or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Securities of that Series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

 

6.4                               WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT.

 

Subject to Sections 6.2, 6.7 and 8.2, the Holders of a majority in principal amount of the Securities of any Series then outstanding have the right to waive any existing Default or Event of Default with respect to such Series or compliance with any provision of this Indenture (with respect to such Series) or the Securities of such Series. Upon any such waiver, such Default with respect to such Series shall cease to exist, and any Event of Default with respect to such Series arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. This Section 6.4 shall be in lieu of TIA Section 316(a)(1)(B), and TIA Section 316(a)(1)(B) is hereby expressly excluded from this Indenture and Section as permitted by the TIA.

 

6.5                               CONTROL BY MAJORITY.

 

Subject to Sections 6.2, 6.7 and 8.2, the Holders of a majority in principal amount of the Securities of any Series then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by this Indenture with respect to such Series. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture, or that the Trustee determines may be unduly prejudicial to the rights of another Securityholder, or that may involve the Trustee in personal liability; PROVIDED, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. This Section 6.5 shall be in lieu of TIA Section 316(a)(1)(A), and TIA Section 316(a)(1)(A) is hereby expressly excluded from this Indenture and Section as permitted by the TIA.

 

6.6                               LIMITATION ON SUITS.

 

Subject to Section 6.7, a Securityholder may not institute any proceeding or pursue any remedy with respect to this Indenture or the Securities of a Series unless:

 

(a)         the Holder gives to the Trustee written notice of a continuing Event of Default with respect to the Securities of that Series;

 

(b)         the Holders of at least 25% in aggregate principal amount of the Securities of such Series then outstanding make a written request to the Trustee to pursue the remedy;

 

(c)          such Holder or Holders offer to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense to be incurred in compliance with such request;

 

(d)         the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

 

(e)          no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Securities of such Series then outstanding.

 

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A Securityholder may not use this Indenture to prejudice the rights of another Securityholder, or to obtain a preference or priority over another Securityholder.

 

6.7                               RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Security of a Series to receive payment of the principal of, and interest and premium, if any, on, the Security of such Series on or after the respective due dates expressed in the Security of such Series, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional, and shall not be impaired or affected without the consent of the Holder.

 

6.8                               COLLECTION SUIT BY TRUSTEE.

 

If an Event of Default in payment of principal, interest or premium, if any, specified in Section 6.1(d)(1) or 6.1(d)(2)with respect to Securities of any Series at the time outstanding occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company (or any other obligor on the Securities of that Series) for the whole amount of unpaid principal and premium, if any, and accrued interest remaining unpaid, together with interest on overdue principal and premium, if any, and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate then borne by the Securities of that Series, and such further amounts as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as set forth in Section 7.7.

 

6.9                               TRUSTEE MAY FILE PROOFS OF CLAIM.

 

The Trustee may file such proofs of claim and other papers or documents, and take other actions (including sitting on a committee of creditors), as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company (or any other obligor on the Securities), any of their respective creditors or any of their respective property, and the Trustee shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings, and any custodian in any such judicial proceeding is hereby authorized by each Securityholder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to, or accept or adopt on behalf of any Securityholder, any plan of reorganization, arrangement, adjustment or composition affecting the Securities of a Series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceedings.

 

6.10                        PRIORITIES.

 

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

FIRST: to the Trustee for amounts due under Section 7.7;

 

SECOND: to Securityholders for amounts then due and unpaid for the principal of, and interest and premium, if any, on, the Securities in respect of which, or for the benefit of which, such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities; for principal and any premium and interest, respectively; and

 

THIRD: to the Company.

 

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The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each Securityholder a notice that states the record date, the payment date and amount to be paid.

 

6.11                        UNDERTAKING FOR COSTS.

 

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in principal amount of the Securities of a Series then outstanding.

 

ARTICLE 7
 TRUSTEE

 

7.1                               DUTIES OF TRUSTEE.

 

(a)         If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the same circumstances in the conduct of his own affairs.

 

(b)         Except during the continuance of an Event of Default:

 

(1)         The Trustee need perform only those duties that are specifically set forth in this Indenture, and no covenants or obligations shall be implied in this Indenture against the Trustee.

 

(2)         In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

 

(c)          The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(1)         This paragraph does not limit the effect of paragraph 7.1(b) of this Section 7.1.

 

(2)         The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

 

(3)         The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 6.2 and 6.5.

 

(d)         No provision of this Indenture shall require the Trustee to expend or risk its own funds, or otherwise incur any financial liability, in the performance of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

 

(e)          Whether or not therein expressly so provided, paragraph (a), (b), (c) and (d) of this Section 7.1 shall govern every provision of this Indenture that in any way relates to the Trustee.

 

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(f)           The Trustee and Paying Agent shall not be liable for interest on any money received by either of them, except as the Trustee and Paying Agent may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law.

 

(g)          The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections, immunities and standard of care set forth in paragraphs (a), (b), (c), (d) and (f) of this Section 7.1 and in Section 7.2 with respect to the Trustee.

 

7.2                               RIGHTS OF TRUSTEE.

 

(a)         Subject to Section 7.1:

 

(1)         The Trustee may rely on, and shall be protected in acting or refraining from acting upon, any document reasonably believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

 

(2)         Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 10.5. The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

 

(3)         The Trustee may act through agents and attorneys, and shall not be responsible for the misconduct or negligence of any agent appointed by it with due care.

 

(4)         The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers.

 

(5)         The Trustee may consult with counsel reasonably acceptable to the Trustee, which may be counsel to the Company, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(6)         The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby.

 

(7)         The Trustee shall not be deemed to have knowledge of any fact or matter (including, without limitation, a Default or Event of Default) unless such fact or matter is known to a Responsible Officer of the Trustee.

 

(8)         Unless otherwise expressly provided herein or in the Securities of a Series or the related Board Resolution, supplemental indenture or Officers’ Certificate, the Trustee shall not have any responsibility with respect to reports, notices, certificates or other documents filed with it hereunder, except to make them available for inspection, at reasonable times, by Securityholders, it being understood that delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (except as set forth in Section 4.4).

 

7.3                               INDIVIDUAL RIGHTS OF TRUSTEE.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities, and may make loans to, accept deposits from, perform services for or otherwise deal with the Company, or any Affiliate thereof, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11.

 

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7.4                               TRUSTEE’S DISCLAIMER.

 

The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities (except that the Trustee represents that it is duly authorized to execute and deliver this Indenture and authenticate the Securities and perform its obligations hereunder), and the Trustee shall not be accountable for the Company’s use of the proceeds from the sale of Securities or any money paid to the Company pursuant to the terms of this Indenture, and the Trustee shall not be responsible for any statement in the Securities other than its certificates of authentication.

 

7.5                               NOTICE OF DEFAULT.

 

If a Default or an Event of Default occurs and is continuing with respect to the Securities of any Series, and if it is known to the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series notice of the Default or the Event of Default, as the case may be, within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of such Default or Event of Default (except if such Default or Event of Default has been validly cured or waived before the giving of such notice). Except in the case of a Default or an Event of Default in payment of the principal of, or interest or premium, if any, on, any Security of any Series, the Trustee may withhold the notice if and so long as the Board of Directors of the Trustee, the executive committee or any trust committee of such board and/or its Responsible Officers in good faith determine(s) that withholding the notice is in the interests of the Securityholders of that Series.

 

7.6                               REPORTS BY TRUSTEE TO HOLDERS.

 

If and to the extent required by the TIA, within 60 days after April 1 of each year, commencing the April 1 following the date of this Indenture, the Trustee shall mail to each Securityholder a brief report dated as of such April 1 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and 313(c).

 

A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and any stock exchange on which the Securities of that Series are listed. The Company shall promptly notify the Trustee when the Securities of any Series are listed on any stock exchange or any delisting thereof, and the Trustee shall comply with TIA Section 313(d).

 

7.7                               COMPENSATION AND INDEMNITY.

 

The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee’s compensation shall not be limited by any provision of law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee within 45 days after receipt of request for all reasonable out-of-pocket disbursements and expenses incurred or made by it in connection with its duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify the Trustee for, and hold it harmless against, any and all loss or liability incurred by it in connection with the acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which it may seek indemnity.

 

The failure by the Trustee to so notify the Company shall not however relieve the Company of its obligations. Notwithstanding the foregoing, the Company need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by the Trustee through its negligence or bad faith. To secure the payment obligations of the Company in this Section 7.7, the Trustee shall have a Lien prior to the Securities of any Series on all money or property held or collected by the Trustee except such money or property held in trust to pay the principal of, interest and premium, if any, on particular Securities of that Series.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(d)(4)or 6.1(d)(5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

For purposes of this Section 7.7, the term “Trustee” shall include any trustee appointed pursuant to this Article 7.

 

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7.8                               REPLACEMENT OF TRUSTEE.

 

The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company in writing at least 90 days in advance of such resignation.

 

The Holders of a majority in principal amount of the outstanding Securities of any Series may remove the Trustee with respect to that Series by notifying the removed Trustee in writing and may appoint a successor Trustee with respect to that Series with the consent of the Company, which consent shall not be unreasonably withheld. The Company may remove the Trustee with respect to that Series at its election if:

 

(a)         the Trustee fails to comply with, or ceases to be eligible under, Section 7.10;

 

(b)         the Trustee is adjudged a bankrupt or an insolvent, or an order for relief is entered with respect to the Trustee, under any Bankruptcy Law;

 

(c)          a Custodian or other public officer takes charge of the Trustee or its property; or

 

(d)         the Trustee otherwise becomes incapable of acting.

 

(e)          If the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee, with respect to any Series of Securities for any reason, the Company shall promptly appoint, by Board Resolution, a successor Trustee.

 

If a successor Trustee with respect to the Securities of one or more Series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the outstanding Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee with respect to the Securities of one or more Series fails to comply with Section 7.10, any Securityholder of the applicable Series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately following such delivery, (i) the retiring Trustee with respect to one or more Series shall, subject to its rights under Section 7.7, transfer all property held by it as Trustee with respect to such Series to the successor Trustee, (ii) the resignation or removal of the retiring Trustee shall become effective and (iii) the successor Trustee with respect to such Series shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee with respect to the Securities of one or more Series shall mail notice of its succession to each Securityholder of such Series.

 

7.9                               SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION.

 

If the Trustee, or any Agent, consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another corporation, subject to Section 7.10, the successor corporation without any further act shall be the successor Trustee or Agent, as the case may be.

 

7.10                        ELIGIBILITY; DISQUALIFICATION.

 

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5) in every respect. The Trustee (or in the case of a Trustee that is a Person included in a bank holding company system, the related bank holding company) shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b), including the provision in Section 310(b)(1). In addition, if the Trustee is a Person included in a bank holding company system, the Trustee, independently of such bank holding company, shall meet the capital requirements of TIA Section 310(a)(2). If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.10, it shall resign immediately in the manner and with the effect specified in this Article 7.

 

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7.11                        PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

 

The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

 

7.12                        PAYING AGENTS.

 

The Company shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.12:

 

(a)         that it will hold all sums held by it as agent for the payment of the principal of, or interest or premium, if any, on, the Securities (whether such sums have been paid to it by the Company or by any obligor on the Securities) in trust for the benefit of Holders of the Securities or the Trustee;

 

(b)         that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and

 

(c)          that it will give the Trustee written notice within three Business Days after any failure of the Company (or by any obligor on the Securities) in the payment of any installment of the principal of, or interest or premium, if any, on, the Securities when the same shall be due and payable.

 

ARTICLE 8
 AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

8.1                               WITHOUT CONSENT OF HOLDERS.

 

The Company, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without notice to or consent of any Securityholder:

 

(a)         to comply with Section 5.1;

 

(b)         to provide for certificated Securities in addition to uncertificated Securities;

 

(c)          to comply with any requirements of the SEC under the TIA;

 

(d)         to cure any ambiguity, defect or inconsistency, or to make any other change herein or in the Securities that does not materially and adversely affect the rights of any Securityholder;

 

(e)          to provide for the issuance of, and establish the form and terms and conditions of, Securities of any Series as permitted by this Indenture; or

 

(f)           to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series, and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee.

 

The Trustee is hereby authorized to join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture, and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects its own rights, duties or immunities under this Indenture.

 

8.2                               WITH CONSENT OF HOLDERS.

 

(a)         The Company, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or the Securities of one or more Series with the written consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities of such Series affected by such amendment or

 

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supplement without notice to any Securityholder. The Holders of not less than a majority in aggregate principal amount of the outstanding Securities of each such Series affected by such amendment or supplement may waive compliance by the Company in a particular instance with any provision of this Indenture or the Securities of such Series without notice to any Securityholder. Subject to Section 8.4, without the consent of each Securityholder affected, however, an amendment, supplement or waiver may not:

 

(1)         reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver to this Indenture or the Securities;

 

(2)         reduce the rate of, or change the time for payment of, interest on any Security;

 

(3)         reduce the principal, or change the Stated Maturity, of any Security, or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;

 

(4)         make any Security payable in money other than that stated in the Security;

 

(5)         change the amount or time of any payment required by the Securities, or reduce the premium payable upon any redemption of the Securities, or change the time before which no such redemption may be made;

 

(6)         waive a Default or Event of Default in the payment of the principal of, or interest or premium, if any, on, any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration);

 

(7)         waive a redemption payment with respect to any Security, or change any of the provisions with respect to the redemption of any Securities;

 

(8)         make any changes in Section 6.6 or this Section 8.2, except to increase any percentage of Securities the Holders of which must consent to any matter; or

 

(9)         take any other action otherwise prohibited by this Indenture to be taken without the consent of each Holder affected thereby.

 

(b)         Upon the request of the Company, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Securityholders as aforesaid and of the documents described in Section 8.6, the Trustee shall join with the Company in the execution of such supplemental indenture, unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

(c)          It shall not be necessary for the consent of the Holders under this section to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment or supplement under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment or supplement. Any failure of the Company to mail any such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any supplemental indenture.

 

8.3                               COMPLIANCE WITH TRUST INDENTURE ACT.

 

Every amendment to, or supplement of, this Indenture or the Securities shall comply with the TIA as then in effect.

 

8.4                               REVOCATION AND EFFECT OF CONSENTS.

 

Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Security is a continuing consent conclusive and binding upon such Holder and every subsequent Holder of the same Security

 

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or portion thereof, and of any Security issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Security. Any such Holder or subsequent Holder, however, may revoke the consent as to his Security or portion of a Security, if the Trustee receives the notice of revocation before the date the amendment, supplement, waiver or other action becomes effective.

 

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver, which record date shall be at least 30 days prior to the first solicitation of such consent. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement or waiver, or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.

 

After an amendment, supplement, waiver or other action becomes effective, it shall bind every Securityholder, unless it makes a change described in any of clauses (1) through (9) of Section 8.2. In that case, the amendment, supplement, waiver or other action shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security; PROVIDED, that any such waiver shall not impair or affect the right of any Holder to receive payment of the principal of, and interest and premium, if any, on, a Security, on or after the respective due dates expressed in such Security, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

 

8.5                               NOTATION ON OR EXCHANGE OF SECURITIES.

 

If an amendment, supplement or waiver changes the terms of a Security of any Series, the Trustee may request the Holder of such Security to deliver it to the Trustee. In such case, the Trustee shall place an appropriate notation on such Security about the changed terms and return it to the Holder. Alternatively, the Company, in exchange for such Security, may issue, and the Trustee shall authenticate, a new security that reflects the changed terms. Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver.

 

8.6                               TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 8 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, supplement or waiver the Trustee shall be entitled to receive and, subject to Section 7.1, shall be fully protected in relying upon an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture. The Company may not sign an amendment or supplement until the Board of Directors of the Company approves it.

 

ARTICLE 9
 DISCHARGE OF INDENTURE; DEFEASANCE

 

9.1                               DISCHARGE OF INDENTURE.

 

The Company may terminate its obligations under the Securities of any Series and this Indenture with respect to such Series, except the obligations referred to in the last paragraph of this Section 9.1, if there shall have been canceled by the Trustee, or delivered to the Trustee for cancellation, all Securities of such Series theretofore authenticated and delivered (other than any Securities of such Series that are asserted to have been destroyed, lost or stolen and that shall have been replaced as provided in Section 2.8) and the Company has paid all sums payable by it hereunder or deposited all required sums with the Trustee.

 

After such delivery the Trustee upon request shall acknowledge in a writing prepared by or on behalf of the Company the discharge of the Company’s obligations under the Securities of such Series and this Indenture, except for those surviving obligations specified below.

 

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Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company in Sections 7.7, 9.5 and 9.6 shall survive.

 

9.2                               LEGAL DEFEASANCE.

 

The Company may at its option, by Board Resolution, be discharged from its obligations with respect to the Securities of any Series on the date upon which the conditions set forth in Section 9.4 below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Securities of such Series and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall, subject to Section 9.6, execute proper instruments acknowledging the same, as are delivered to it by the Company), except for the following, which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of outstanding Securities of such Series to receive solely from the trust funds described in Section 9.4 and as more fully set forth in such section, payments in respect of the principal of, and interest and premium, if any, on, the Securities of such Series when such payments are due, (B) the Company’s obligations with respect to the Securities of such Series under Sections 2.4, 2.5, 2.6, 2.7, 2.8 and 2.9, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.7) and (D) this Article 9. Subject to compliance with this Article 9, the Company may exercise its option under this Section 9.2 with respect to the Securities of any Series notwithstanding the prior exercise of its option under Section 9.3 below with respect to the Securities of such Series.

 

9.3                               COVENANT DEFEASANCE.

 

At the option of the Company, pursuant to a Board Resolution, the Company shall be released from its obligations with respect to the outstanding Securities of any Series under Sections 4.2 through 4.5, inclusive, and Section 5.1, with respect to the outstanding Securities of such Series, on and after the date the conditions set forth in Section 9.4 are satisfied (hereinafter, “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified section or portion thereof, whether directly or indirectly by reason of any reference elsewhere herein to any such specified Section or portion thereof or by reason of any reference in any such specified section or portion thereof to any other provision herein or in any other document, but the remainder of this Indenture and the Securities of any Series shall be unaffected thereby.

 

9.4                               CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

 

The following shall be the conditions to application of Section 9.2 or Section 9.3 to the outstanding Securities of a Series:

 

(a)         the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 7.10 who shall agree to comply with the provisions of this Article 9 applicable to it) as funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities, (A) money in an amount, or (B) U.S. Government Obligations or Foreign Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of, and accrued interest and premium, if any, on, the outstanding Securities of such Series at the Stated Maturity of such principal, interest or premium, if any, or on dates for payment and redemption of such principal, interest and premium, if any, selected in accordance with the terms of this Indenture and of the Securities of such Series;

 

(b)         no Event of Default or Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit, or shall have occurred and be continuing at any time during the period ending on the 91st day after the date of such deposit or, if longer, ending on the day following the expiration of the longest preference period under any Bankruptcy Law applicable to the Company in respect of such deposit as specified in

 

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the Opinion of Counsel identified in paragraph (8) below (it being understood that this condition shall not be deemed satisfied until the expiration of such period);

 

(c)          such Legal Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest for purposes of the TIA with respect to any securities of the Company;

 

(d)         such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute default under, any other agreement or instrument to which the Company is a party or by which it is bound;

 

(e)          the Company shall have delivered to the Trustee an Opinion of Counsel stating that, as a result of such Legal Defeasance or Covenant Defeasance, neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended;

 

(f)           in the case of an election under Section 9.2, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the effect that or (ii) there has been a change in any applicable Federal income tax law with the effect that, and such opinion shall confirm that, the Holders of the outstanding Securities of such Series or Persons in their positions will not recognize income, gain or loss for Federal income tax purposes solely as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner, including as a result of prepayment, and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(g)          in the case of an election under Section 9.3, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the outstanding Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance, and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(h)         the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Article 9 relating to either the Legal Defeasance under Section 9.2 or the Covenant Defeasance under Section 9.3 (as the case may be) have been complied with;

 

(i)             the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit under clause (1) was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

 

(j)            the Company shall have paid, or duly provided for payment under terms mutually satisfactory to the Company and the Trustee, all amounts then due to the Trustee pursuant to Section 7.7.

 

9.5                               DEPOSITED MONEY AND U.S. AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.

 

All money, U.S. Government Obligations and Foreign Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.4 in respect of the outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal, accrued interest and premium, if any, but such money need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations and Foreign Government Obligations deposited pursuant to Section 9.4 or the principal, interest and premium, if any, received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities.

 

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Anything in this Article 9 to the contrary notwithstanding, but subject to payment of any of its outstanding fees and expenses, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money, U.S. Government Obligations or Foreign Government Obligations held by the Trustee as provided in Section 9.4 which, in the opinion of a nationally-recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

9.6                               REINSTATEMENT.

 

If the Trustee or Paying Agent is unable to apply any money, U.S. Government Obligations or Foreign Government Obligations in accordance with Section 9.1, 9.2, 9.3 or 9.4 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent is permitted to apply all such money, U.S. Government Obligations or Foreign Government Obligations, as the case may be, in accordance with Section 9.1, 9.2, 9.3 or 9.4; PROVIDED, HOWEVER, that if the Company has made any payment of principal of, or accrued interest or premium, if any, on, any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money, U.S. Government Obligations or Foreign Government Obligations held by the Trustee or Paying Agent.

 

9.7                               MONEYS HELD BY PAYING AGENT.

 

In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee, or, if sufficient moneys have been deposited pursuant to Section 9.1, to the Company, and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

9.8                               MONEYS HELD BY TRUSTEE.

 

Any moneys deposited with the Trustee or any Paying Agent or then held by the Company in trust for the payment of the principal of, or interest or premium, if any, on, any Security that are not applied but remain unclaimed by the Holder of such Security for two years after the date upon which the principal of, or interest or premium, if any, on, such Security shall have respectively become due and payable shall be repaid to the Company upon Company Request, or if such moneys are then held by the Company in trust, such moneys shall be released from such trust; and the Holder of such Security entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or any such Paying Agent, before being required to make any such repayment, may, at the expense of the Company, either mail to each Securityholder affected, at the address shown in the register of the Securities maintained by the Registrar, or cause to be published once a week for two successive weeks, in a newspaper published in the English language, customarily published each Business Day and of general circulation in the City of New York, New York, a notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such moneys then remaining will be repaid to the Company. After payment to the Company or the release of any money held in trust by the Company, Securityholders entitled to the money must look only to the Company for payment as general creditors, unless applicable abandoned property law designates another Person.

 

ARTICLE 10
 MISCELLANEOUS

 

10.1                        TRUST INDENTURE ACT CONTROLS.

 

If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. If any provision of this Indenture

 

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modifies or excludes any provision of the TIA which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

10.2                        NOTICES.

 

Any notice or communication shall be given in writing and delivered in Person, sent by facsimile (and receipt confirmed by telephone or electronic transmission report), delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

 

If to the Company:

 

Zynerba Pharmaceuticals, Inc.

80 W. Lancaster Avenue, Suite 300

Devon, PA 19333

Attention: Chief Financial Officer

 

Copy to:

 

Hogan Lovells US LLP

1835 Market Street, 29th Floor

Philadelphia, PA 19103

Fax: 267-675-4601

Attention: Rachel M. Bushey, Esq.

 

If to the Trustee:

 

The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is confirmed by telephone or electronic transmission report, if sent by facsimile; and three Business Days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

 

Any notice or communication mailed to a Securityholder shall be mailed to such Securityholder by first-class mail, postage prepaid, at such Securityholder’s address shown on the register kept by the Registrar.

 

Failure to mail, or any defect in, a notice or communication to a Securityholder shall not affect its sufficiency with respect to other Securityholders. If a notice or communication to a Securityholder is mailed in the manner provided above, it shall be deemed duly given, three Business Days after such mailing, whether or not the addressee receives it.

 

In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.

 

In the case of Global Securities, notices or communications to be given to Securityholders shall be given to the Depository, in accordance with its applicable policies as in effect from time to time.

 

In addition to the manner provided for in the foregoing provisions, notices or communications to Securityholders shall be given by the Company by release made to Reuters Economic Services and Bloomberg Business News.

 

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10.3                        COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.

 

Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or any other Series. The Company, the Trustee, the Registrar and any other Person shall have the protection of TIA Section 312(c).

 

10.4                        CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

 

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)         an Officers’ Certificate (which shall include the statements set forth in Section 10.5 below) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)         an Opinion of Counsel (which shall include the statements set forth in Section 10.5 below) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

10.5                        STATEMENT REQUIRED IN CERTIFICATE AND OPINION.

 

Each certificate and opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than pursuant to Section 4.4) shall include:

 

(a)         a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(b)         a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)          a statement that, in the opinion of such Person, it or he has made such examination or investigation as is necessary to enable it or him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)         a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.

 

10.6                        RULES BY TRUSTEE AND AGENTS.

 

The Trustee may make reasonable rules for action by or at meetings of Securityholders. The Registrar and Paying Agent may make reasonable rules for their functions.

 

10.7                        BUSINESS DAYS; LEGAL HOLIDAYS; PLACE OF PAYMENT.

 

A “Business Day” is a day that is not a Legal Holiday. A “Legal Holiday” is a Saturday, a Sunday, a federally-recognized holiday or a day on which banking institutions are not authorized or required by law, regulation or executive order to be open in the State of New York.

 

If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. “Place of Payment” means the place or places where the principal of, and interest and premium, if any, on, the Securities of a Series are payable as specified as contemplated by Section 2.2. If the regular record date is a Legal Holiday, the record date shall not be affected.

 

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10.8                        GOVERNING LAW.

 

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

10.9                        NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

 

This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Company or any Subsidiary thereof. No such indenture, loan, security or debt agreement may be used to interpret this Indenture.

 

A director, officer, employee, shareholder or incorporator, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture. Each Securityholder by accepting a Security waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of the Securities.

 

10.10                 SUCCESSORS.

 

All covenants and agreements of the Company in this Indenture and the Securities shall bind the Company’s successors and assigns, whether so expressed or not. All agreements of the Trustee, any additional trustee and any Paying Agents in this Indenture shall bind their respective successors and assigns.

 

10.11                 MULTIPLE COUNTERPARTS.

 

The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

 

10.12                 TABLE OF CONTENTS, HEADINGS, ETC.

 

The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

10.13                 SEVERABILITY.

 

Each provision of this Indenture shall be considered separable, and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and a Holder shall have no claim therefor against any party hereto.

 

10.14                 SECURITIES IN A FOREIGN CURRENCY OR IN EUROS.

 

Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate delivered pursuant to Section 2.2 with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including Euros), then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section 10.14, “Market Exchange Rate” shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; PROVIDED, HOWEVER, in the case of Euros, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the “Journal”). If such

 

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Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of Euros, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or, in the case of Euros, rates of exchange from one or more major banks in New York City or in the country of issue of the currency in question or, in the case of Euros, in Luxembourg or such other quotations or, in the case of Euros, rates of exchange as the Trustee, upon consultation with the Company, shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in the Trustee’s sole discretion, and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders.

 

10.15                 JUDGMENT CURRENCY.

 

The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of, or interest or premium, if any, or other amount on, the Securities of any Series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a Business Day, in which instance, the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)) in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

 

	
 
    	
ZYNERBA PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

33Exhibit

Exhibit 10.1

CARMAX, INC.
SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (“Agreement”) is entered into as of September 1, 2016 (“Effective Date”) between CarMax, Inc., a Virginia corporation, and its affiliated companies (collectively, the “Company”), and William D. Nash (the “Executive”).  
WHEREAS, the Company recognizes the Executive’s intimate knowledge and experience in the business of the Company, and has appointed the Executive as President and Chief Executive Officer;
WHEREAS, the Executive will develop and come in contact with the Company’s proprietary and confidential information that is not readily available to the public, and that is of great importance to the Company and that is treated by the Company as secret and confidential information;
WHEREAS, the Company and the Executive desire to agree upon the terms, conditions, compensation and benefits of the Executive’s future employment; and
WHEREAS, upon execution of this Agreement, any prior employment or severance agreement between the Executive and the Company, whether oral or written, will have no force and effect with respect to the terms and conditions of Executive’s employment and will be replaced and superseded by the terms of this Agreement.
NOW, THEREFORE, in consideration of the Executive’s appointment and continued employment by the Company, and of the premises, mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
Article 1.Employment Acceptance
The Company hereby agrees to employ the Executive and the Executive hereby accepts employment as President and Chief Executive Officer of the Company, in accordance with the terms and conditions set forth herein.
Article 2.    Position and Responsibilities
During the term of the Executive’s employment with the Company (“Term”), the Executive agrees to serve as President and Chief Executive Officer of the Company.  In his capacity as President and Chief Executive Officer, the Executive shall report directly to the Company’s Board of Directors (“Board”) and shall have the duties and responsibilities of President and Chief Executive Officer and such other duties and responsibilities not inconsistent with the performance of his duties as President and Chief Executive Officer of the Company.  

The Executive’s principal work location shall be the corporate headquarters of the Company located in the Richmond, Virginia metropolitan area.
Article 3.    Standard of Care
3.1    General.  During the Term, the Executive shall devote his full business time, attention, knowledge and skills to the Company’s business and interests.  The Executive covenants, warrants, and represents that he shall:
		
	(a)
	Devote his best efforts and talents to the performance of his employment obligations and duties for the Company;

		
	(b)
	Exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties;

		
	(c)
	Observe and conform to the Company’s bylaws and other rules, regulations, and policies established or issued by the Company; and

		
	(d)
	Refrain from taking advantage, for himself or others, of any corporate opportunities of the Company.

3.2    Forfeiture and Return of Incentive Compensation.  It is the Company’s expectation that the Executive will discharge his duties hereunder with utmost attention to the standards set forth in Section 3.1.  In the event the Board determines that the Executive has engaged in conduct constituting Cause (as defined in Section 7.6(a)), which conduct directly results in the filing of a restatement of any financial statement previously filed with the Securities and Exchange Commission (or other governmental agency) under the Federal securities laws, the Executive shall immediately (a) forfeit all unpaid Affected Compensation (as defined below) and (b) upon demand by the Company repay to the Company all Affected Compensation received or realized by the Executive together with interest at the prime rate in effect from time to time as reported in The Wall Street Journal; provided, however, that the forfeiture and repayment provisions of this Section 3.2 shall not apply to conduct constituting “gross negligence” under Section 7.6(a)(ii) or to conduct under Section 7.6(a)(iii), Section 7.6(a)(vii) or Section 7.6(a)(viii).  “Affected Compensation” means any payment to the Executive, any award or vesting of any equity or other short-term or long-term incentive compensation to the Executive, or any before-tax proceeds of a sale of previously awarded equity compensation realized by the Executive, in any instance in which (i) the payment, award or vesting of the foregoing was expressly conditioned upon the achievement of certain financial results that were subsequently the subject of such restatement, and (ii) a lesser amount of payment, award or vesting or before-tax proceeds of a sale of any of the foregoing would have been made to, vested in or otherwise earned or realized by, the Executive based upon such restated financial results.

	
			
	 
	 
	 

Article 4.    Other Activities
During the Term, the Executive shall comply with the provisions of Article 8 herein.  Furthermore, during his employment, the Executive agrees to obtain the written consent of the Board before entering into any other occupation, even if dissimilar to that of the Company, including, without limitation, service as a member of a board of directors of one or more other companies.  Such consent may be granted or withheld, in the Board’s sole discretion.  The Executive may participate on charitable and civic boards, and in educational, professional, community and industry affairs, without Board consent, provided that such participation does not interfere with the performance of his duties.
Article 5.    Compensation and Benefits
As remuneration for all services to be rendered by the Executive during the Term, and as consideration for complying with the covenants herein during and after the termination or expiration of the Term, the Company shall pay and provide to the Executive the following compensation and benefits:
5.1    Base Salary.  During the Term, the Company shall pay the Executive a base salary (“Base Salary”) in an amount established and approved by the Compensation and Personnel Committee of the Board (“Compensation Committee”); provided, however, that such Base Salary shall be established at a rate of not less than $1,000,000 per year, except as otherwise provided in this Section 5.1 below.  This Base Salary shall be subject to all appropriate federal and state withholding taxes and payable in accordance with the normal payroll practices of the Company.  The Compensation Committee shall review and adjust the Base Salary as it deems appropriate at least annually during the Term; provided, however, that the Executive’s Base Salary shall not be decreased without the Executive’s written consent, other than across-the-board reductions applicable to all senior officers of the Company.  If adjusted, the Base Salary shall be so adjusted for all purposes of this Agreement.  
5.2    Annual Bonus.  In addition to his Base Salary, the Executive shall be entitled to participate in the Company’s Annual Performance-Based Bonus Plan (“Annual Bonus Plan”), as such Annual Bonus Plan may exist from time to time during the Term.  Under the Company’s Annual Bonus Plan, the Executive has the opportunity to earn an annual bonus with respect to any fiscal year of the Company (“Annual Bonus”).  The Annual Bonus will be determined by a formula approved each fiscal year by the Compensation Committee (the “Annual Bonus Formula”) in its sole discretion.  At the beginning of each fiscal year, the Compensation Committee will authorize, in accordance with the Annual Bonus Plan, the Executive’s Annual Bonus for that fiscal year, which shall be targeted at one hundred and thirty percent (130%) of the Executive’s Base Salary for that fiscal year (“Target Bonus Rate”).  The specified Target Bonus Rate may be increased from time to time by the Compensation Committee but shall not be decreased without the Executive’s written consent.  Depending upon the actual financial performance recorded by the Company for any given fiscal year, the Executive’s Annual Bonus may be increased or decreased solely in accordance with the Annual Bonus Formula and otherwise in accordance with the Annual Bonus Plan.

	
			
	 
	 
	 

5.3    Long-Term Incentives. During the Term, the Executive shall be eligible to participate in the Company’s 2002 Stock Incentive Plan, as amended and restated (or any successor incentive plan thereto), to the extent that the Compensation Committee, in its sole discretion, determines is appropriate.  The Compensation Committee will make its determination consistent with the methodology used by the Company for compensating the Executive’s peer executives.  Additionally, the Executive shall be entitled to participate in all other incentive plans, whether equity-based or cash-based, applicable generally to his peer executives within the Company.
5.4    Retirement and Deferred Compensation Plans.  During the Term, the Executive shall be entitled to participate in all tax-qualified and nonqualified retirement and deferred compensation plans, policies and programs applicable generally to his peer executives within the Company, subject to the eligibility and participation requirements of such plans, policies and programs.
5.5    Welfare Benefit Plans.  During the Term, the Executive and the Executive’s family will be entitled to participate in all welfare benefit plans, policies and programs, including those defined under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, provided by the Company to his peer executives within the Company, subject to the eligibility requirements and other provisions of such plans, policies and programs.
5.6    Fringe Benefits.  During the Term, the Executive will be entitled to fringe benefits in accordance with the plans, policies and programs of the Company in effect for his peer executives within the Company.
5.7    Vacation.  During the Term, the Executive will be entitled to participate in the Company’s Time Away paid time off program for salaried employees (or successor paid time off program) as that program is administered by the Company and as it may be amended or modified from time to time; provided, in all events, the Executive will be entitled to not less than 30 days of paid vacation each fiscal year.
5.8    Right to Change Plans.  By reason of Sections 5.4, 5.5, 5.6 and 5.7 herein, the Company shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, policy or program, so long as such changes are similarly applicable to the Executive’s peer executives.
Article 6.    Expenses
During the Term, the Company shall pay or reimburse the Executive for all ordinary and necessary expenses, in a reasonable amount, that the Executive incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional, business, and civic associations and societies in which the Company finds that the Executive’s participation is in the best interests of the Company.  The payment or reimbursement of expenses shall be subject to such rules concerning documentation of expenses and the type or 

	
			
	 
	 
	 

magnitude of such expenses as the Compensation Committee or the Company, as applicable, may establish from time to time.
Article 7.    Employment Termination
7.1    Date of Termination.  The Company or the Executive may terminate the Executive’s employment in accordance with the provisions of this Article 7.  The “Date of Termination” of the Executive’s employment shall be as determined in Sections 7.2, 7.3, 7.4, 7.5, 7.6, and 7.7 below. 
7.2    Termination Due to Retirement or Death.  
(a)    In the event the Executive’s employment ends by reason of Retirement (as defined below), the Date of Termination shall be the date set forth in a notice by the Executive, which notice shall be given to the Company at least ninety (90) days prior to such date.  In the event of the Executive’s death, the Date of Termination shall be the date of death.  In either case, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance and other applicable plans and programs of the Company then in effect.  For the purposes of this Agreement, “Retirement” shall mean the Executive’s voluntary termination of employment at a time during which he is eligible for “Normal Retirement” or “Early Retirement” as such terms are defined in the CarMax, Inc. Pension Plan as of the Effective Date.
(b)    Upon the Date of Termination due to the Executive’s Retirement or death, the Company shall be obligated to pay the Executive or, if applicable, the Executive’s beneficiary or estate, the following “Accrued Obligations”: (i) any Base Salary that was accrued but not yet paid as of the Date of Termination; (ii) the unpaid Annual Bonus, if any, earned with respect to the fiscal year preceding the Date of Termination; (iii) any compensation previously deferred by the Executive by his own election; and (iv) all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination in accordance with the terms of the applicable plan or plans.  The Accrued Obligations payable under the above clauses (i) and (ii) shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations payable under clauses (iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due.  
(c)    Upon the Date of Termination due to the Executive’s Retirement, the Executive shall be entitled to a pro rata share of the Annual Bonus based on actual performance for the fiscal year in which the Date of Termination occurs (such proration to be based on the fraction, the numerator of which is the number of full completed days of employment during the fiscal year through the Date of Termination, and the denominator of which is 365) (“Pro Rata Actual Bonus”).  The Pro Rata Actual Bonus, if any, shall be paid to the Executive when annual bonuses are paid to other senior officers of the Company for such fiscal year.

	
			
	 
	 
	 

(d)    Upon the Date of Termination due to the Executive’s death, the Executive’s beneficiary or estate shall be entitled to a pro rata share of the Annual Bonus at the Target Bonus Rate for the fiscal year in which the Date of Termination occurs (such proration to be based on the fraction, the numerator of which is the number of full completed days of employment during the fiscal year through the Date of Termination, and the denominator of which is 365) (“Pro Rata Target Bonus”).  The Pro Rata Target Bonus shall be paid to the Executive’s beneficiary or estate in a lump sum cash payment within ten (10) days after the date of the Executive’s death or as soon as practicable thereafter.  
(e)    Upon the termination of the Executive’s employment due to his Retirement or death, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.2.

7.3    Termination Due to Disability.  

(a)    The Company shall have the right to terminate the Executive’s employment for his Disability (as defined below).  The Date of Termination due to Disability shall be the date set forth in a notice to the Executive, which notice shall be given by the Company at least thirty (30) days prior to such date.  For the purposes of this Agreement, “Disability” or “Disabled” shall mean any physical or mental illness or injury that causes the Executive (i) to be considered “disabled” for the purpose of eligibility to receive income-replacement benefits in accordance with the Company’s long-term disability plan in which the Executive is a participant, or (ii) if the Executive does not participate in any such plan, to be unable to substantially perform the duties of his position for 180 days in the aggregate during any period of twelve (12) consecutive months and a physician selected by the Company (and reasonably acceptable to the Executive) shall have furnished to the Company certification that the return of the Executive to his normal duties is impossible or improbable.  The Board shall review the foregoing information and shall determine in good faith if the Executive is Disabled.  The Board’s decision shall be binding on the Executive.  Notwithstanding the foregoing, if the Executive incurs a physical or mental illness or injury that does not constitute a Disability, such physical or mental illness or injury shall not constitute a failure by the Executive to perform his duties hereunder and shall not be deemed a breach or default of this Agreement by the Executive.

(b)    Upon the Date of Termination due to the Executive’s Disability, the Executive shall be entitled to his Accrued Obligations and a Pro Rata Target Bonus.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon as practicable thereafter.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due.

	
			
	 
	 
	 

(c)    Upon the termination of the Executive’s employment due to his Disability, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.3.
7.4    Voluntary Termination by the Executive Without Good Reason.  The Executive may terminate his employment at any time without Good Reason (as defined in Section 7.7) by giving the Company at least forty five (45) days notice, which notice shall state the Date of Termination.  The Company reserves the right to require the Executive not to work during the notice period but shall pay the Executive his accrued and unpaid Base Salary, at the rate then in effect provided in Section 5.1 herein, through the Date of Termination (but not to exceed forty-five (45) days), and such payment shall be made to the Executive within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Company shall also pay the Executive any compensation previously deferred by the Executive by his own election and all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination, all in accordance with the terms of the applicable plan or plans under which they are due.  In the event of the Executive’s voluntary termination of employment without Good Reason, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.4. 
7.5    Involuntary Termination by the Company Without Cause.  Upon notice to the Executive, the Company may terminate the Executive’s employment at any time for any reason other than for Cause and other than due to Disability (“Involuntary Termination Without Cause”).  The Date of Termination shall be the date stated in such notice.
(a)    In the event of the Executive’s Involuntary Termination Without Cause, which occurs prior to the occurrence of, or after the conclusion of, a Change in Control Employment Period (defined at Section 11.4) that relates to a “Change in Control Event” (as defined in Section 11.5(b)), the Executive shall receive the following payments and benefits:
(i)    The Company shall pay to the Executive, in equal monthly installments over the twenty-four (24) month period beginning on the 60th day following the Executive’s “Separation from Service” (as such term is defined in the Internal Revenue Code of 1986, as amended (“Code”) Section 409A), an amount equal to the product of two (2) times the sum of (x) the Executive’s Base Salary and (y) the amount of the last Annual Bonus for the Executive as determined by the Compensation Committee in accordance with the Annual Bonus Plan, regardless of the Date of Termination.   
(ii)    The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination 

	
			
	 
	 
	 

occurs.  The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the Company’s health, dental and vision plans and applicable COBRA requirements.  If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months.  The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise paid for such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee.  If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination. 
(iii)    The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000.  Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service.
(iv)    The Executive shall be entitled to his Accrued Obligations and a Pro Rata Actual Bonus.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due.  The Pro Rata Actual Bonus, if any, shall be paid to the Executive when annual bonuses are paid to other senior officers of the Company for such fiscal year.
(v)    The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.5.  
(b)    Amounts payable under this Section 7.5 shall be in lieu of any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company.
(c)    In the event that the Company terminates the Executive’s employment at any time for any reason (i) other than for Cause and other than due to Disability and (ii) after the Executive has attained age 65 or higher, such termination shall not be deemed an Involuntary Termination Without Cause.

	
			
	 
	 
	 

7.6    Termination For Cause.  The Company may terminate the Executive’s employment at any time for Cause, without notice or liability for doing so.  The Date of Termination shall be the date that Cause is determined as provided below.
(a)    For purposes of this Agreement, “Cause” means a good faith determination by the Board that one (1) or more of the following has occurred:
(i)    The Executive has committed a material breach of this Agreement, which breach was not cured or waived by the Company, within ten (10) days of receipt by the Executive of notice from the Company specifying the breach;
(ii)    The Executive has committed gross negligence in the performance of his duties hereunder, intentionally fails to perform his duties, engages in intentional misconduct or intentionally refuses to abide by or comply with the directives of the Board or the Company’s policies and procedures, as applicable, which actions continued for a period of ten (10) days after receipt by the Executive of notice of the need to cure or cease;
(iii)    The Executive has willfully and continuously failed to perform substantially his duties (other than any such failure resulting from the Executive’s Disability or incapacity due to bodily injury or physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board that specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties;
(iv)    The Executive has willfully violated a material requirement of the Company’s code of conduct or breached his fiduciary duty to the Company;   
(v)    The Executive’s conviction of (or a plea of guilty or nolo contendere to) a felony or any crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; 
(vi)    The Executive has engaged in illegal conduct, embezzlement or fraud with respect to the business or affairs of the Company;
(vii)    The Executive has failed to disclose to the Board a conflict of interest of which the Executive knew or with reasonable diligence should have known in connection with any transaction entered into on behalf of the Company; or
(viii)    The Executive has failed to agree to a modification of the Agreement pursuant to Section 17.3 hereof when the purpose of the modification is to comply with applicable federal, state or local laws or regulations, or when such modification is designed to further define the restrictions of Article 8 or otherwise enhance the enforcement of Article 8 without increasing the duration or scope of the Article 8 restrictions.

	
			
	 
	 
	 

No act or failure to act on the Executive’s part will be considered “willful” if conducted by the Executive in good faith and with a reasonable belief that the Executive’s act or omission was in, and not opposed to, the best interests of the Company.
(b)    If the Executive’s employment is terminated for Cause during the Term, this Agreement will terminate without further obligation of the Company to the Executive other than (i) the payment to the Executive of his accrued and unpaid Base Salary through the Date of Termination, and (ii) the payment of any compensation previously deferred by the Executive by his own election and all other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination, all in accordance with the terms of the applicable plan or plans under which they are due.  In the event of the Executive’s termination of employment for Cause, the terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.6. 
7.7    Termination for Good Reason.  At any time during the Term, the Executive may terminate his employment for Good Reason (as defined below) upon notice to the Company.  Such notice shall state the intended Date of Termination and shall be given to the Company at least forty-five (45) days prior to such date and shall set forth in detail the facts and circumstances claimed to provide grounds for such termination.  The Company shall have the right to cure the facts and circumstances giving rise to such grounds for termination for Good Reason.  If the Company does not so cure within such forty-five (45) day notice period, then the Executive’s employment shall terminate on the Date of Termination stated in the notice.  
(a)    For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one (1) or more of the following:
(i)    A reduction in the Executive’s Base Salary (other than, prior to the occurrence of a Change in Control or Asset Sale, a reduction across-the-board affecting all senior officers in substantially like percentages of their base salaries) or Target Bonus Rate;
(ii)    A material reduction in the Executive’s duties or authority as President and Chief Executive Officer of the Company, or any removal of the Executive from or any failure to reappoint or reelect the Executive to such positions (except in connection with the termination of the Executive’s employment for Cause or Disability, as a result of the Executive’s death or Retirement or by the Executive other than for Good Reason); 
(iii)    The Executive being required to relocate to a principal place of employment more than 35 miles from the Company’s headquarters except, prior to the occurrence of a Change in Control or Asset Sale, in connection with the relocation of 

	
			
	 
	 
	 

substantially all senior Company executives pursuant to the relocation of the Company’s headquarters; or
(iv)    The failure of the Company to obtain an agreement from any successor to all or substantially all of the assets or business of the Company to assume and agree to perform this Agreement within fifteen (15) days after a merger, consolidation, sale or similar transaction.
(b)    In the event of the Executive’s voluntary termination of employment for Good Reason, which occurs prior to the occurrence of, or after the conclusion of, a Change in Control Employment Period that relates to a Change in Control Event, the Executive shall receive the following payments and benefits:    
(i)    The Company shall pay to the Executive, in equal monthly installments over the twenty-four (24) month period beginning on the 60th day  following the Executive’s Separation from Service, an amount equal to the product of two (2) times the sum of (x) the Executive’s Base Salary and (y) the amount of the last Annual Bonus for the Executive as determined by the Compensation Committee in accordance with the Annual Bonus Plan, regardless of the Date of Termination.   
(ii)    The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination occurs.  The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the Company’s health, dental and vision plans and applicable COBRA requirements.  If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months. The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise paid for such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee.  If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination. 
(iii)    The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000.  Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service.
(iv)    The Executive shall be entitled to his Accrued Obligations.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) shall be paid to the 

	
			
	 
	 
	 

Executive in a lump sum cash payment on the tenth day after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due.  
(v)    The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 7.7.
(vi)    The Executive shall be entitled to a one-time payment in an amount equal to the Executive’s Base Salary on the Date of Termination multiplied by one hundred and thirty percent (130%).  This one-time payment shall be paid to the Executive in a lump sum cash payment on the tenth day after the Date of Termination or as soon thereafter as may be practicable.
(c)    The Executive’s right to terminate his employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness not constituting a Disability.  Amounts payable under this Section 7.7 shall be in lieu of any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company.
7.8    Conditions on Company Obligations.  All payments and benefits made or provided pursuant to Article 7 are subject to the Executive’s:
(a)    Compliance with the provisions of Article 8, Article 9, Article 10 and Section 17.2 hereof; 
(b)    Except with respect to payment of the Executive’s Accrued Obligations, delivery to the Company of an executed Agreement and General Release without the Executive having revoked such agreement, which shall be substantially in the form attached hereto as Exhibit A (with such changes or additions as needed under then applicable law to give effect to its intent and purpose) (“Agreement and General Release”), satisfactory to the Company by the appropriate deadlines specified by the Company, provided that all such steps must be completed prior to the 60th day (or for purposes of Section 11.5(b), the 45th day) following the Executive’s Separation from Service; and
(c)    Compliance with Code Section 409A.  Notwithstanding anything herein to the contrary, distributions under Section 7.5(a)(i), 7.7(b)(i), 7.7(b)(vi), or 11.5(b) may not be made to a Key Employee (as defined below) upon his or her Separation from Service before the date which is six months after the date of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key Employee) (the “Key Employee Delay”).  Any payments that would otherwise be made during this period of delay shall be accumulated and paid on the first day of the seventh month following the Executive’s Separation from Service (or, if earlier, the first day of the month after the Executive’s death).  For purposes of this Section 7.8(c), “Key 

	
			
	 
	 
	 

Employee” means an executive who, as of December 31st of a calendar year, meets the requirements of Code Section 409A(a)(2)(B)(i) to be treated as a “specified employee” of the Company; i.e., a key employee (as defined in Code Section 416(i)(1)(A)(i), (ii) or (iii) applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)).  An executive who meets the criteria in the preceding sentence will be considered a Key Employee for purposes of this Agreement for the 12-month period commencing on the next following April 1.
After payment of all amounts and benefits under this Article 7, the Company thereafter shall have no further obligation under this Agreement. 
Article 8.    Covenant Not to Compete
The terms and provisions contained in this Article 8 comprise a covenant not to compete (the “Covenant Not to Compete”).  The Executive acknowledges and agrees as follows:
8.1    CarMax operates a unique business concept regarding the sale and servicing of new and used vehicles in a highly competitive industry.

8.2    CarMax’s competitors have attempted to duplicate CarMax’s business concept in various markets throughout the United States, including markets where CarMax does not currently have a business location, and may continue to do so.

8.3    In connection with the Executive’s employment with CarMax, he will receive access to, and training regarding, CarMax’s business concept and will, accordingly, acquire commercially valuable knowledge of and insight into CarMax’s operations and CarMax’s proprietary and confidential information, any of which if made available to any Competitor (as defined below) could place CarMax at a competitive disadvantage.  

8.4    In order to protect CarMax’s legitimate business interests from Competitors (as defined below) and to protect CarMax’s critical interest in its proprietary and confidential information, the Executive covenants and agrees as follows:

During the Executive’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Executive’s employment (the “Restricted Period”), the Executive will not, directly or indirectly, compete with CarMax by acting “in a competitive capacity” (as defined below), for, or on behalf of, any person or entity operating or developing, during the Restricted Period, a business that provides or intends to provide activities, products or services that are the same or substantially similar to, and competitive with, the business of CarMax as of Executive’s last day of employment with CarMax (each, a “Competitor”) within any Metropolitan Statistical Area (as defined by the United States Office of Management and Budget) in which CarMax has a retail store site as of Executive’s last day of employment.  Such Competitors include, but are not limited to: Sonic Automotive, Inc.; Lithia Motors, Inc.; Group 1 Automotive, Inc.; AutoNation, Inc.; Penske Automotive Group, Inc.; Asbury Automotive Group, Inc.; 

	
			
	 
	 
	 

Hendrick Automotive Group;  Auction Direct USA, L.P.; Car Sense Inc.; AutoAmerica, Inc.; Left Gate Property Holding, Inc. d/b/a Texas Direct Auto; Off Lease Only, Inc.; Carvana, LLC; Carvana Group, LLC; AutoMatch USA, LLC; DriveTime Car Sales Company, LLC; DriveTime Automotive Group, Inc.; CarLotz, Inc.; Hertz Global Holdings, Inc.; Enterprise Holdings, Inc.; Avis Budget Group, Inc.; Cox Automotive, Inc.; Classified Ventures, LLC; TrueCar, Inc.; Edmunds.com, Inc.; Dealertrack Technologies, Inc.; Dealer Dot Com, Inc.; CarGurus, LLC; Blinker, Inc.; and Beepi, Inc., and any automotive retail operation affiliated with, owned, operated, or controlled by Berkshire Hathaway Inc.; Home Depot, Inc.; Lowe’s Companies, Inc.; Target Corporation; Wal-Mart Stores, Inc.; Sears Holdings Corporation; Carrefour S.A.; Costco Wholesale Corporation; Royal Dutch Shell plc; Exxon Mobil Corporation; Chevron Corporation; and/or Gulliver International Co., Ltd.

8.5    A business, including any Competitor, or any of its respective subsidiaries or affiliates, will not be considered to be in competition with CarMax for purposes of Article 8 if the business, or operating unit of the business, or its respective subsidiaries or affiliates, by which the Executive will be or is employed (i) does not have within the twenty-four (24) months preceding the Executive’s termination of employment with CarMax, annual gross revenues (calculated on a rolling 12-month basis) of at least $5,000,000 derived from the sale and servicing of new or used vehicles; or (ii) is not projected (by the business or operating unit of the business) to have within the twenty-four (24) months following the Executive’s termination of employment with CarMax, annual gross revenues (regardless of how calculated) of at least $5,000,000 derived from the sale and servicing of new or used vehicles.
8.6    Acting “in a competitive capacity” shall mean providing to a Competitor, directly or indirectly, the same or substantially similar services that the Executive provided to CarMax at any time during Executive’s last twenty-four (24) months of employment.  
8.7    Nothing herein shall prevent or restrict the Executive from working for any person in any role or in any capacity that is not in competition with CarMax.
8.8    Notwithstanding the foregoing, nothing herein shall be deemed to prevent or limit the right of the Executive to invest in the capital stock or other securities of any corporation whose stock or securities are regularly traded on any public exchange.
8.9    Intellectual Property.  The Executive understands and acknowledges that any writing, invention, design, system, process, development or discovery (collectively, “Intellectual Property”) conceived, developed, created or made by the Executive, alone or with others, both during the Term of this Agreement and in the course of the Executive’s employment prior to the Term, is the sole and exclusive property of the Company to the extent such Intellectual Property is related to the Executive’s duties or is within the scope of the Company’s actual or anticipated business. The Executive agrees to assign to the Company any and all of his right, title, and interest in and to such Intellectual Property, including, but not limited to, patent, trademark and other rights. The Executive further agrees to cooperate fully with the Company to secure, maintain, enforce, or defend the Company’s ownership of and rights in such Intellectual 

	
			
	 
	 
	 

Property.  The rights and remedies of this Section 8.9 are in addition to any rights and remedies available under applicable law.
8.10    The Executive and CarMax have examined in detail the Covenant Not to Compete contained in this Article 8 and each agrees that the restraint imposed upon the Executive is reasonable in light of the legitimate business interests of CarMax and is not unduly harsh or burdensome with respect to the Executive’s ability to earn a livelihood.  If any provision of the Covenant Not to Compete relating to the time period, geographic area or scope of restricted activities shall be declared by a court of competent jurisdiction to exceed the maximum time period, geographic area or scope of activities, as applicable, that such court deems reasonable and enforceable, then such time period, geographic area or scope of activities shall be deemed to be, and thereafter shall become, the maximum time period, scope of activities or largest geographic area that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination.
8.11    The Executive and CarMax acknowledge that the Executive’s services are of a special, extraordinary, and intellectual character that gives the Executive unique value, and that CarMax’s business is highly competitive, and that violation of the Covenant Not to Compete provided herein would cause immediate, immeasurable, and irreparable harm, loss, and damage to CarMax not adequately compensable by a monetary award.  In the event of any breach or threatened breach by the Executive of the Covenant Not to Compete, CarMax shall be entitled to such equitable and injunctive relief as may be available to restrain the Executive from violating the provisions hereof.  Nothing herein shall be construed as prohibiting CarMax from pursuing any other remedies available at law or in equity for such breach or threatened breach, including the recovery of damages and the immediate termination of the employment of the Executive hereunder for Cause.
Article 9.     Non-Solicitation of Employees
The Executive agrees that during the Executive’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Executive’s employment, the Executive shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of CarMax with whom the Executive had material business-related contact on behalf of CarMax, to leave employment with CarMax for any reason whatsoever (the “Covenant Not to Solicit”).  For purposes of this Article 9, employee shall mean any individual employed by CarMax.

Article 10.    Confidentiality
The terms and provisions contained in this Article 10 comprise a covenant of confidentiality (the “Covenant of Confidentiality”).

The Executive understands and agrees that any and all Protected Information is the property of CarMax and is essential to the protection of CarMax’s goodwill and to the 

	
			
	 
	 
	 

maintenance of CarMax’s competitive position and accordingly should be kept secret.  For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of or about CarMax, and any other information of CarMax, including technical data, processes, know‐how, financial data, analyses, forecasts, plans, operations information and data, customer lists (including potential customers) and information, marketing plans, materials and information, product and service information, accounts and billings information, sales transaction data, sales documents and information, discoveries, ideas, concepts, designs, drawings, specifications, techniques, models, information systems data and materials, computer software or hardware, data analyses and compilations, source code, object code, documentation, diagrams, flow charts, research, procedures, methods, systems, programs, price lists, pricing policies, supplier and distributor information, sources of supply, internal memoranda, promotional plans, internal policies, purchasing information, operating methods and procedures, training materials, and any products and services which may be developed from time to time by CarMax and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by CarMax or lawfully obtained from third parties who are not bound by a confidentiality agreement with CarMax, is not Protected Information.
CarMax has advised the Executive and the Executive acknowledges that it is the policy of CarMax to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost to and effort by CarMax.  The Executive agrees to hold in strict confidence and safeguard any and all Protected Information accessed or accessible by the Executive during the Executive’s employment.  The Executive shall not, without the prior written consent of CarMax, at any time, directly or indirectly, divulge, furnish, use, disclose or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with CarMax), any Protected Information, or cause any such Protected Information to enter the public domain.
Nothing contained in this Article 10 is intended to reduce in any way the protection available to CarMax pursuant to the Uniform Trade Secrets Act as adopted in Virginia or any other state or other applicable laws that prohibit the misuse or disclosure of confidential or proprietary information.  Unless lengthened by the application of the Virginia Uniform Trade Secrets Act or other applicable law, the restrictions in Article 10 shall remain in effect during Associate’s employment and for five (5) years thereafter.

Article 11.    Change in Control; Sale of Assets
11.1    Purpose.  The Company recognizes that the possibility of a Change in Control or Asset Sale exists, and the uncertainty and questions that it may raise among management may result in the departure or distraction of management personnel to the detriment of the Company.  Accordingly, the purpose of this Article 11 is to encourage the Executive to continue employment after a Change in Control or Asset Sale by providing reasonable employment 

	
			
	 
	 
	 

security to the Executive and to recognize the prior service of the Executive in the event of a termination of employment under certain circumstances after a Change in Control or Asset Sale.  This Article 11 shall not become effective, and the Company shall have no obligation hereunder, if the employment of the Executive with the Company terminates before a Change in Control or Asset Sale.
11.2    Definitions.
(a)    “Change in Control” of the Company means the occurrence of either of the following events: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes, or obtains the right to become, the beneficial owner of Company securities having twenty percent (20%) or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors to the Board of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business); or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the Company before such transactions shall cease to constitute a majority of the board or of the board of directors of any successor to the Company.
(b)    “Asset Sale” shall mean a sale of all or substantially all of the assets of the Company in a single transaction or a series of related transactions.
11.3    Long-Term Incentive Compensation.  The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences to the Executive upon the occurrence of a Change in Control or an Asset Sale or upon a termination of the Executive’s employment thereafter.  
11.4    Continued Employment Following Change in Control or an Asset Sale.  If a Change in Control or an Asset Sale occurs and the Executive is employed by the Company on the date the Change in Control or Asset Sale occurs (the “Change in Control Date”), the period beginning on the Change in Control Date and ending on the second (2nd) anniversary of such date shall be the “Change in Control Employment Period.”
11.5    Termination of Employment During Change in Control Employment Period.  The Executive will be entitled to the compensation and benefits described in this Section 11.5 if, during the Change in Control Employment Period, (a) the Company terminates his employment for any reason other than for Cause or due to Disability, or (b) the Executive voluntarily terminates his employment with the Company for Good Reason.  The compensation and benefits described in this Section 11.5 are in lieu of, and not in addition to, any compensation and benefits provided to the Executive pursuant to Sections 7.5 and 7.7 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the 

	
			
	 
	 
	 

Company.  Upon such a termination of employment, the Executive shall receive the following payments and benefits:
(a)    The Executive shall be entitled to his Accrued Obligations and a Pro Rata Target Bonus.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid to the Executive in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due.
(b)    The Company shall pay to the Executive an amount equal to 2.99 times the Executive’s Final Compensation.  For purposes of this Agreement, “Final Compensation” means the Base Salary in effect at the Date of Termination, plus the higher Annual Bonus paid or payable for the two (2) most recently completed fiscal years.  If the Change in Control Employment Period relates to an event that also qualifies as a Change in Control Event, this payment will be paid to the Executive in a lump sum cash payment on the forty-fifth (45th) day following the Executive’s Separation from Service.  Otherwise, such payment shall be paid at the time and in the form set forth in Section 7.5.  For purposes of this Section 11.5(b), a “Change in Control Event” means an event described in IRS regulations or other guidance under Code Section 409A(a)(2)(A)(v).
(c)    The Executive’s participation in the Company’s health, dental, and vision plans will end on the last day of the month in which the Date of Termination occurs. The Executive may elect to continue coverage under the health, dental and/or vision plans for himself and his eligible dependents in accordance with the terms and procedures of COBRA.  If the Executive elects COBRA coverage, the Executive shall be responsible for remitting the COBRA premium to the Company (or to a COBRA administrator designated by the Company) in accordance with the terms of the health, dental and vision plans and applicable COBRA requirements.  If the Executive elects COBRA coverage, the Company shall reimburse the Executive for a portion of the cost of such coverage until the end of the COBRA coverage period, up to a maximum period of eighteen (18) months. The amount of the Company’s reimbursement shall be equal to the sum of (1) the amount the Company would have otherwise paid for such coverage if the Executive had remained an active employee of the Company, and (2) the COBRA administration fee.  If the Executive does not elect COBRA coverage, the Company shall have no obligation to the Executive with respect to health, dental and vision benefits following the Date of Termination.
(d)    The Company shall provide the Executive with reasonable outplacement services not to exceed a cost of $50,000.  Such services shall be provided no later than the expiration of the two-year period following the Executive’s Separation from Service.
11.6    Death, Disability or Retirement Termination During Change In Control Employment Period.  If the Executive’s employment ends by reason of Retirement, the Executive’s death, or as a result of Disability during the Change in Control Employment Period, 

	
			
	 
	 
	 

this Agreement will terminate without any further obligation on the part of the Company under this Agreement other than: 
(a)    The Executive (or his beneficiary or his estate in the event of his death) will be entitled to the payment of the Executive’s Accrued Obligations and a Pro Rata Target Bonus.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) and the Pro Rata Target Bonus shall be paid in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due; and
(b)    The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 11.6. 
The compensation and benefits described in this Section 11.6 are in lieu of, and not in addition to, any compensation and benefits provided to the Executive pursuant to Sections 7.2 and 7.3 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company.
11.7    Termination for Cause and Termination Other Than For Good Reason Following a Change in Control.  
(a)    If the Executive’s employment is terminated for Cause during the Change in Control Employment Period, this Agreement will terminate without further obligation to the Executive other than the payment to the Executive of his accrued and unpaid Base Salary through the Date of Termination, as well as any deferred compensation and other employee welfare and retirement benefits to which the Executive is entitled on the Date of Termination in accordance with the terms of the applicable plan or plans under which they are due.  The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 11.7(a).  The compensation and benefits described in this Section 11.7 are in lieu of, and not in addition to, any compensation and benefits provided to the Executive pursuant to Sections 7.4 and 7.6 herein and any amounts otherwise payable under any severance plan or agreement covering senior officers of the Company.
(b)    If the Executive terminates employment during the Change in Control Employment Period other than for Good Reason, this Agreement will terminate without further obligation to the Executive other than:  

	
			
	 
	 
	 

(i)    The Executive (or his beneficiary or his estate in the event of his death) will be entitled to the payment of the Executive’s Accrued Obligations.  The Accrued Obligations provided under Section 7.2(b)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days after the Date of Termination or as soon thereafter as may be practicable.  The Accrued Obligations provided under Section 7.2(b)(iii) and (iv) shall be paid in accordance with the terms of the plan under which they are due; and
(ii)     The terms and conditions of the awards and agreements applicable to the Executive’s outstanding stock options, stock grants, stock appreciation rights, performance-based grants, and all other forms of long-term incentive compensation, regardless of whether such compensation is equity or cash based, will govern the consequences of the termination of the Executive’s employment under this Section 11.7(b). 
11.8    Conditions on Company Obligations.  All payments and benefits made or provided pursuant to Article 11 are subject to the provisions of Section 7.8 (including the Key Employee Delay in Section 7.8(c)).  After payment of all amounts and benefits under this Article 11, the Company thereafter shall have no further obligation under this Agreement.
Article 12.    Assignment
12.1    Assignment by Company.  This Agreement may and shall be assigned or transferred to, and shall be binding upon and shall inure to the benefit of, any successor of the Company, and any such successor shall be deemed substituted for all purposes of the “Company” under the terms of this Agreement.  As used in this Agreement, the term “successor” shall mean any person, firm, corporation, or business entity which, at any time, whether by merger, purchase, or otherwise, acquires all or substantially all, or control of all or substantially all, of the assets or the business of the Company.  Except as provided herein, the Company may not otherwise assign this Agreement.
12.2    Assignment by the Executive.  The services to be provided by the Executive to the Company hereunder are personal to the Company and the Executive’s duties may not be assigned by the Executive; provided, however, that this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, and administrators, successors, heirs, distributees, devisees, and legatees.  If the Executive dies while any amounts payable to the Executive hereunder remain outstanding, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, in the absence of such designee, to the Executive’s estate.  
Article 13.    Dispute Resolution
Except for actions initiated by CarMax to enjoin a breach by the Executive, and/or recover damages from the Executive, related to the Covenant Not to Compete (Article 8), the Covenant Not to Solicit (Article 9) or the Covenant of Confidentiality (Article 10) (collectively, the “Restrictive 

	
			
	 
	 
	 

Covenants”), which action(s) CarMax may bring in an appropriate court of law or equity, any disagreement between the Executive and CarMax concerning anything covered by this Agreement or concerning other terms or conditions of the Executive’s employment or the termination of the Executive’s employment will be settled by final and binding arbitration pursuant to CarMax’s Dispute Resolution Rules and Procedures in effect at the time the disagreement or dispute arises or at the time of termination in the event the Executive’s employment terminated.  The decision of the arbitrator will be final and binding on both the Executive and CarMax and may be enforced in a court of appropriate jurisdiction.  
Article 14.    Litigation By Third Parties
All litigation or inquiries by third parties (including, but not limited to, those by the Company’s shareholders or by government agencies) arising out of or in connection with the Executive’s performance under this Agreement, against either the Company or the Executive or both, shall be jointly defended or opposed by the parties hereto to support this Agreement.  The Company shall appoint legal counsel for the parties and shall bear the costs, reasonable legal fees and expenses related to such litigation or inquiry.  
Article 15.    Indemnity; Limitation of Liability
As an officer of the Company, the Executive shall be entitled to indemnity and limitation of liability as provided pursuant to the Company’s Articles of Incorporation, bylaws and any other governing document, as the same shall be amended from time to time.
Article 16.    Notice
Any notices, requests, demands, or other communications provided for by this Agreement shall be in writing, and given by delivery in person or by registered or certified mail, postage prepaid (in which case notice will be deemed to have been given on the third day after mailing) or by overnight delivery by a reliable overnight courier service (in which case notice will be deemed to have been given on the day after delivery to such courier service).  Notices to the Executive shall be directed to the last address he has filed in writing with the Company.  Notices to the Company shall be directed to the Secretary of the Company.
Article 17.    Miscellaneous
17.1    Entire Agreement.  This Agreement supersedes any prior agreements or understandings, oral or written, between the parties hereto, with respect to the subject matter hereof, and constitutes the entire agreement of the parties with respect thereto.  Without limiting the generality of the foregoing sentence, this Agreement completely supersedes any and all prior employment and severance agreements entered into by and between the Company, and the Executive, and all amendments thereto, in their entirety.
17.2    Return of Materials.  Upon the termination of the Executive’s employment with the Company, however such termination is effected, the Executive shall promptly deliver to the 

	
			
	 
	 
	 

Company all property (including Intellectual Property), records, materials, documents, and copies of documents concerning the Executive’s business and/or its customers (hereinafter collectively “Company Materials”) which the Executive has in his possession or under his control at the time of termination of his employment.  The Executive further agrees not to take or extract any portion of Company Materials in written, computer, electronic or any other reproducible form without the prior written consent of the Board.
17.3    Modification.  This Agreement shall not be varied, altered, modified, canceled, changed, or in any way amended except by mutual agreement of the parties in a written instrument executed by the parties hereto or their legal representatives.
17.4    Severability.  It is the intention of the parties that the provisions of the restrictive covenants herein shall be enforceable to the fullest extent permissible under the applicable law.  If any clause or provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the Term hereof, then the remainder of this Agreement shall not be affected thereby, and in lieu of each clause or provision of this Agreement that is illegal, invalid or unenforceable, there shall be added, as a part of this Agreement, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and as may be legal, valid and enforceable.
17.5    Attorney’s Fees.  In any action arising under this Agreement, CarMax, so long as it prevails, shall be entitled to recover its reasonable attorney’s fees and costs.
17.6    Section 409A.  Notwithstanding any other provision of this Agreement, (i) to the extent applicable, this Agreement will be interpreted, operated and administered in accordance with the requirements of Code Section 409A, and (ii) if either the Company or the Executive determines that any provision of this Agreement may cause compensation payable to the Executive to be classified as income under Code Section 409A(a) or (b) and thereby results in tax penalties to the Executive, the Company or the Executive, as the case may be, shall notify the other party and the parties will amend the Agreement to avoid penalties under Code Section 409A.
17.7    Counterparts.  This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.
17.8    Tax Withholding.  The Company may withhold from any benefits payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.
17.9    Restrictive Covenants of the Essence.  The Restrictive Covenants in Articles 8, 9 and 10 of the Agreement are of the essence of this Agreement.  In the event that the Executive has a claim or cause of action against CarMax (whether related to this Agreement or not), such claim or cause of action, including but not limited to a breach of this Agreement by CarMax, shall not prevent or otherwise constitute a defense to CarMax’s enforcement of the Restrictive 

	
			
	 
	 
	 

Covenants and shall not excuse the Executive’s performance of the Restrictive Covenants.  CarMax shall at all times maintain the right to seek enforcement of the Restrictive Covenants whether or not CarMax has previously refrained from seeking enforcement of any such Restrictive Covenant as to the Executive or any other peer Executive who has signed an agreement with similar covenants.  Notwithstanding any provision contained within this Agreement, the obligations of the Executive under Articles 8, 9, 10, 13 and 17 of this Agreement shall continue after the termination of this Agreement and the Executive’s employment and shall be binding on the Executive’s heirs, executors, legal representatives and assigns.
17.10    Beneficiaries.  The Executive may designate one (1) or more persons or entities as the primary or contingent beneficiaries of any amounts to be received under this Agreement.  Such designation must be in the form of a signed writing acceptable to the Company’s chief legal officer.  The Executive may make or change such designation at any time.
17.11    Full Settlement.  Except as set forth in this Agreement, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including without limitation, set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others, except to the extent any amounts are due the Company or its subsidiaries or affiliates pursuant to a judgment against the Executive; provided, however, in no event shall any judgment result in the offset of amounts subject to Code Section 409A.  In no event shall the Executive be obligated to seek other employment in mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by another employer; provided, that continued health, dental and vision benefit plan participation pursuant to Section 7.5(a)(ii) or Section 11.5(c) herein shall be reduced to the extent that the Executive becomes eligible to such benefits from a subsequent employer.
17.12    Contractual Rights to Benefits.  This Agreement establishes and vests in the Executive a contractual right to the benefits to which he is entitled hereunder.  However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets in trust or otherwise to provide for any payments to be made or required hereunder.
17.13    Resignations.  Upon the termination of the Executive’s employment, however such termination is effected, he shall be deemed to have resigned as of the date of such termination all offices and directorships he may have held with the Company and all subsidiaries.
Article 18.    Governing Law
This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to conflicts of laws principles thereof.  In the event of any litigation between CarMax and Executive related to the enforcement or enforceability of the Restrictive Covenants, the parties agree that the Circuit Court for the 

	
			
	 
	 
	 

County of Henrico, Virginia, shall have mandatory and exclusive jurisdiction and venue of any such action.
Article 19.    Protected Rights
Notwithstanding any other terms and conditions of this Agreement: 

Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit Executive’s right to receive an award for information provided to any Government Agencies.

[Signature Page Follows]

	
			
	 
	 
	 

IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of September 1, 2016.
	
		
	 
	CARMAX, INC.: 
 
By: /s/ Eric M. Margolin 
Eric M. Margolin 
Executive Vice President, General Counsel and Corporate Secretary

	 
	EXECUTIVE: 
 
/s/ William D. Nash   
William D. Nash
President and Chief Executive Officer

	
			
	 
	 
	 

EXHIBIT A

[Form of Release]

AGREEMENT AND GENERAL RELEASE

This Agreement and General Release (the “Agreement and General Release”), dated as of _______ __, 20__, is made by and between CarMax, Inc., for itself and its affiliates, subsidiaries, divisions, successors and assigns in such capacity, and the current, future and former employees, officers, directors, trustees and agents thereof (collectively referred to throughout this Agreement as the “Company”) and _______________________ (“Executive”), for him/herself and his/her heirs, executors, administrators, successors and assigns (together with Executive, collectively referred to throughout this Agreement and General Release as “Employee”) agree:

1.    Last Day of Employment.  The Executive’s last day of employment with the Company is ____________, 20__.  In addition, effective as of ____________, 20__, the Executive resigns from the Executive’s position as President and Chief Executive Officer of the Company, and will not be eligible for any benefits or compensation after ____________, 20__, other than as specifically provided in Articles 7 or 11, as applicable, of the Severance Agreement between the Company and the Executive dated as of __________ __, 20__ (“Severance Agreement”) and the Executive’s continued right to indemnification and directors and officers liability insurance.  In addition, effective as of ____________, 20__, the Executive resigns from all offices, directorships, trusteeships, committee memberships and fiduciary capacities held with, or on behalf of, the Company or any benefit plans of the Company.  These resignations will become irrevocable as set forth in Section 3 below.
2.    Consideration.  The parties acknowledge that this Agreement and General Release is being executed in accordance with Article 7 or Article 11 of the Severance Agreement, as applicable, and that this Agreement and General Release is a condition to the receipt by Employee of all payments and benefits thereunder.
3.    Revocation.  The Executive may revoke this Agreement and General Release for a period of seven (7) calendar days following the day the Executive executes this Agreement and General Release.  Any revocation within this period must be submitted, in writing, to the Company and state, “I hereby revoke my acceptance of our Agreement and General Release.”  The revocation must be personally delivered to the Company’s _______________, or his/her designee, or mailed to the Company, _______________________________ and postmarked within seven (7) calendar days of execution of this Agreement and General Release.  This Agreement and General Release shall not become effective or enforceable until the revocation period has expired.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Virginia, then the revocation period shall not expire until the next following day that is not a Saturday, Sunday, or legal holiday.
4.    General Release of Claims.  Employee knowingly and voluntarily releases and forever discharges the Company from any and all claims, rights, causes of action, demands, damages, 

	
			
	 
	 
	 

fees, costs, expenses, including attorneys’ fees, and liabilities of any kind whatsoever, whether known or unknown, against the Company, that Employee has, has ever had or may have as of the date of execution of this Agreement and General Release, including, but not limited to, any alleged violation of:
●    The Age Discrimination in Employment Act of 1967, as amended;
●    The Older Workers Benefit Protection Act of 1990;
●    Title VII of the Civil Rights Act of 1964, as amended;
●    The Civil Rights Act of 1991;
●    Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
●    The Employee Retirement Income Security Act of 1974, as amended;
●    The Immigration Reform and Control Act, as amended;
●    The Americans with Disabilities Act of 1990, as amended;
●    The Worker Adjustment and Retraining Notification Act, as amended;
●    The Occupational Safety and Health Act, as amended;
●    The Family and Medical Leave Act of 1993;
		
	●
	All other federal, state or local civil or human rights laws, whistleblower laws, or any other local, state or federal law, regulations and ordinances; 

●    All public policy, contract, tort, or common laws; and
		
	●
	All allegations for costs, fees, and other expenses including attorneys’ fees incurred in these matters.

Notwithstanding anything herein to the contrary, the sole matters to which the Agreement and General Release do not apply are: (i) Employee’s rights of indemnification and directors and officers liability insurance coverage to which the Executive was entitled immediately prior to __________ __, 20__ with regard to the Executive’s service as an officer and director of the Company (including, without limitation, under Article 15 of the Severance Agreement); (ii) Employee’s rights under any tax-qualified pension plan or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement maintained by the Company or under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (iii) Employee’s rights under Article 7 or Article 11 of the Severance Agreement, as the case may be; (iv) Employee’s rights as a stockholder of the Company; (v) Employee’s right to file charges or complaints with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health 

	
			
	 
	 
	 

Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), although Employee waives the Executive’s right to recover any damages or other relief in any claim or suit brought by or through the Government Agencies on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law, provided, however, this Agreement and General Release does not limit Employee’s right to receive an award for information provided to any Government Agencies; and (vi) Employee’s rights that cannot be released by private agreement under applicable law.
5.    Affirmations.  Employee affirms that the Executive has been paid or has received all compensation, wages, bonuses, commissions, and/or benefits to which the Executive may be entitled and no other compensation, wages, bonuses, commissions and benefits are due to the Executive, except as provided in Article 7 or Article 11 of the Severance Agreement, as applicable.  The Employee also affirms the Executive has no known workplace injuries.
6.    Return of Property.  Employee represents that the Executive has returned to the Company all property belonging to the Company, including but not limited to any vehicle, laptop, cell phone, keys, access cards, phone cards and credit cards, and all Protected Information as defined in Article 10 of the Severance Agreement.
7.    Cooperation.  Employee agrees to reasonably cooperate with the Company to provide truthful and accurate information in connection with any administrative proceeding, arbitration, or litigation relating to any matter that occurred during the Associate’s employment with the Company in which the Associate was involved or of which the Associate has knowledge.  Employee further understands that this Agreement and General Release does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.
8.    Governing Law and Interpretation.  This Agreement and General Release shall be governed and construed in accordance with the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law statutes or decisions.  In the event Employee or the Company breaches any provision of this Agreement and General Release, Employee and the Company acknowledge that either may institute an action to specifically enforce any term or terms of this Agreement and General Release pursuant to the dispute resolution provisions of Article 13 of the Severance Agreement.  Should any provision of this Agreement and General Release be declared illegal or unenforceable by any court of competent jurisdiction and should the provision be incapable of being modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement and General Release in full force and effect.  Nothing herein, however, shall operate to void or nullify any enforceable general release language contained in this Agreement and General Release. 
9.    No Admission of Wrongdoing.  Employee agrees neither this Agreement and General Release nor the furnishing of the consideration for this Agreement and General Release shall be 

	
			
	 
	 
	 

deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind.
10.    Amendment.  This Agreement and General Release may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement and General Release.
11.    Entire Agreement.  This Agreement and General Release sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties; provided, however, that notwithstanding anything in this Agreement and General Release, the provisions in the Severance Agreement that are intended to survive termination of the Severance Agreement, including but not limited to those contained in Articles 8, 9 and 10, 13 and in Section 17.2 thereof, shall survive and continue in full force and effect.  Employee acknowledges the Executive has not relied on any representations, promises, or agreements of any kind made to the Executive in connection with the Executive’s decision to accept this Agreement and General Release.
EMPLOYEE HAS BEEN ADVISED THAT EXECUTIVE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE. 
EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD.  
HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE SEVERANCE AGREEMENT, TO WHICH EMPLOYEE WOULD NOT OTHERWISE BE ENTITLED, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST THE COMPANY AS SET FORTH HEREIN.
[Signature Page Follows]

	
			
	 
	 
	 

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement and General Release as of the date set forth below:
	
		
	 
	CARMAX, INC.: 

By:________________________________ 
Name: _____________________________ 
Title: ______________________________

	 
	EXECUTIVE/EMPLOYEE:

__________________________________________
Name: _____________________________

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