Document:

Receivables Purchase Agreement

 EXHIBIT 10.3—RECEIVABLES PURCHASE AGREEMENT 
 [EXECUTION COPY] 
 CARMAX BUSINESS SERVICES, LLC, 
 as Seller, 
 and 
 CARMAX AUTO FUNDING LLC, 
 as Purchaser

  

 RECEIVABLES PURCHASE
AGREEMENT 
 Dated as of February 1, 2007 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	
	 ARTICLE I
 DEFINITIONS

			
	 SECTION 1.1
	  	Definitions	  	1
	 SECTION 1.2
	  	Other Definitional Provisions	  	4
	
	 ARTICLE II
 CONVEYANCE OF RECEIVABLES

			
	 SECTION 2.1
	  	Sale and Conveyance of Receivables	  	4
	 SECTION 2.2
	  	Receivables Purchase Price; Payments on the Receivables	  	5
	 SECTION 2.3
	  	Transfer of Receivables	  	5
	 SECTION 2.4
	  	Examination of Receivable Files	  	6
	 SECTION 2.5
	  	Expenses	  	6
	
	 ARTICLE III
 REPRESENTATIONS AND WARRANTIES

			
	 SECTION 3.1
	  	Representations and Warranties of the Purchaser	  	6
	 SECTION 3.2
	  	Representations and Warranties of the Seller	  	7
	
	 ARTICLE IV
 CONDITIONS

			
	 SECTION 4.1
	  	Conditions to Obligation of the Purchaser	  	13
	 SECTION 4.2
	  	Conditions to Obligation of the Seller	  	14
	
	 ARTICLE V
 COVENANTS OF THE SELLER

			
	 SECTION 5.1
	  	Protection of Right, Title and Interest in, to and Under the Receivables	  	15
	 SECTION 5.2
	  	Security Interests	  	16
	 SECTION 5.3
	  	Delivery of Payments	  	17
	 SECTION 5.4
	  	No Impairment	  	17
	 SECTION 5.5
	  	Costs and Expenses	  	17
	 SECTION 5.6
	  	Hold Harmless	  	17
	
	 ARTICLE VI
 MISCELLANEOUS PROVISIONS

			
	 SECTION 6.1
	  	Amendment	  	17
	 SECTION 6.2
	  	Termination	  	18
	 SECTION 6.3
	  	Governing Law	  	18
	 SECTION 6.4
	  	Notices	  	18
	 SECTION 6.5
	  	Severability of Provisions	  	18

					
	 	  	 	  	Page
			
	SECTION 6.6	  	Further Assurances	  	18
	SECTION 6.7	  	No Waiver; Cumulative Remedies	  	18
	SECTION 6.8	  	Counterparts	  	19
	SECTION 6.9	  	Third-Party Beneficiaries	  	19
	SECTION 6.10	  	Headings and Table of Contents	  	19
	SECTION 6.11	  	Representations, Warranties and Agreements to Survive	  	19
	SECTION 6.12	  	No Proceedings	  	19
	SECTION 6.13	  	Accountant’s Letters	  	19
	SECTION 6.14	  	Obligations of Purchaser	  	20
	
	SCHEDULES
			
	SCHEDULE A	  	Receivables Schedule	  	
	
	EXHIBITS
			
	EXHIBIT A	  	Bill of Sale and Assignment	  	
	EXHIBIT B	  	Form of Retail Installment Sale Contract	  	

 RECEIVABLES PURCHASE AGREEMENT 
 This Receivables Purchase Agreement, dated as of February 1, 2007, is between CarMax Business Services, LLC, a Delaware limited liability company
(“CarMax”), as seller (the “Seller”), and CarMax Auto Funding LLC, a Delaware limited liability company (“CarMax Funding”), as purchaser (the “Purchaser”). 
 WHEREAS, in the regular course of business, CarMax Auto Superstores, Inc., a Virginia corporation (“CarMax Auto”), and certain
affiliates of CarMax Auto originate motor vehicle retail installment sale contracts secured by new and used motor vehicles; 
 WHEREAS, the
Seller intends to convey all of its right, title and interest in and to contracts having an aggregate outstanding principal balance of $606,515,066.04 as of the close of business on December 31, 2006 (the “Receivables”) to the
Purchaser and, concurrently with its purchase of the Receivables, the Purchaser intends to convey all of its right, title and interest in and to the Receivables to CarMax Auto Owner Trust 2007-1, as issuer (the “Issuer”), pursuant
to a Sale and Servicing Agreement, dated as of February 1, 2007 (the “Sale and Servicing Agreement”), among the Issuer, CarMax Funding, as depositor, and CarMax, as servicer; and 
 WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant to which the Receivables are to be sold by the Seller to the Purchaser;

 NOW, THEREFORE, in consideration of the mutual terms and covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 SECTION 1.1 Definitions.
Whenever used in this Agreement, the following words and phrases shall have the following meanings: 
 “Agreement” shall mean
this Receivables Purchase Agreement and all amendments hereof and supplements hereto. 
 “Base Prospectus” shall mean the
prospectus, dated January 19, 2007, of the Purchaser relating to the public offering by the Purchaser of the Notes. 
 “Bill of
Sale” shall mean the Bill of Sale and Assignment, substantially in the form attached as Exhibit A. 
 “CarMax”
shall mean CarMax Business Services, LLC, a Delaware limited liability company, and its successors. 
 “CarMax Auto” shall
mean CarMax Auto Superstores, Inc., a Virginia corporation, and its successors. 

 “CarMax Funding” shall mean CarMax Auto Funding LLC, a Delaware limited liability
company, and its successors. 
 “CarMax Funding II” shall mean CarMax Funding II, LLC, a Delaware limited liability company,
and its successors. 
 “Class A Notes” shall mean the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes issued pursuant to the Indenture. 
 “Class B Notes” shall mean the Class B Notes issued
pursuant to the Indenture. 
 “Class C Notes” shall mean the Class C Notes issued pursuant to the Indenture. 
 “Closing Date” shall mean February 1, 2007. 
 “Cutoff Date” shall mean December 31, 2006. 
 “Delaware Trustee”
shall mean The Bank of New York (Delaware), a Delaware banking corporation, as Delaware trustee under the Trust Agreement, and its successors in such capacity. 
 “Depositor” shall mean CarMax Funding, in its capacity as Depositor under the Trust Agreement, and its successors in such capacity. 
 “Indenture” shall mean the Indenture, dated as of February 1, 2007, between the Issuer and the Indenture Trustee, as amended,
supplemented or otherwise modified and in effect from time to time. 
 “Indenture Trustee” shall mean Wells Fargo Bank,
National Association, a national banking association, as indenture trustee under the Indenture, and its successors in such capacity. 
 “Initial Reserve Account Deposit” shall mean $3,032,575.33. 
 “Issuer” shall mean CarMax Auto
Owner Trust 2007-1, a Delaware statutory trust, and its successors. 
 “Noteholders” shall mean the registered holders of
the Notes. 
 “Notes” shall mean the Class A Notes, the Class B Notes and the Class C Notes. 
 “Owner Trustee” shall mean The Bank of New York, a New York banking corporation, as owner trustee under the Trust Agreement, and its
successors in such capacity. 
 “Prospectus Supplement” shall mean the final prospectus supplement, dated January 23,
2007, of the Purchaser relating to the public offering by the Purchaser of the Notes. 
 “Prospectus” shall mean the
Prospectus Supplement and the Base Prospectus. 
  

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 “Purchaser” shall mean CarMax Funding, in its capacity as purchaser of the Receivables
under this Agreement, and its successors in such capacity. 
 “Receivables” shall mean the motor vehicle retail installment
sale contracts sold by the Seller to the Purchaser pursuant to this Agreement and identified on the Receivables Schedule. 
 “Receivables Purchase Price” shall mean $624,710,518.02. 
 “Receivables Schedule” shall mean the
schedule of receivables attached as Schedule A, as amended, supplemented or otherwise modified and in effect from time to time. 
 “Representative” shall mean J.P. Morgan Securities Inc., a Delaware corporation, as representative of the Underwriters. 
 “Sale and Servicing Agreement” shall have the meaning specified in the recitals. 
 “Seller” shall
mean CarMax, in its capacity as seller of the Receivables under this Agreement, and its successors in such capacity. 
 “State” shall mean any of the 50 states of the United States or the District of Columbia. 
 “Transaction
Documents” shall mean this Agreement, the Trust Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement and the other documents and certificates delivered in connection therewith, in each case as amended,
supplemented or otherwise modified and in effect from time to time. 
 “Trust Agreement” shall mean the Trust Agreement,
dated as of October 20, 2006, among CarMax Funding, the Delaware Trustee and the Owner Trustee, as amended and restated by the Amended and Restated Trust Agreement, dated as of February 1, 2007, among CarMax Funding, the Delaware Trustee
and the Owner Trustee. 
 “Trustee” shall mean either the Owner Trustee or the Indenture Trustee, as the context requires.

 “UCC” shall mean the Uniform Commercial Code as in effect in the applicable jurisdiction. 
 “Underwriters” shall mean the underwriters named in Schedule A to the Underwriting Agreement. 
 “Underwriting Agreement” shall mean the Underwriting Agreement, dated January 23, 2007, among CarMax Funding, CarMax and the
Representative, relating to the purchase of the Notes by the Underwriters from CarMax Funding. 
  

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 SECTION 1.2 Other Definitional Provisions. 
 (a) Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement. 

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this Agreement; Section, subsection, Schedule and Exhibit references contained in this Agreement are references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; the term “proceeds” shall have the meaning set forth in the applicable UCC; and the word “including” shall mean including without limitation. 
 ARTICLE II 
 CONVEYANCE OF RECEIVABLES

 SECTION 2.1 Sale and Conveyance of Receivables. 
 (a) On the Closing Date, subject to the terms and conditions of this Agreement, the Seller hereby agrees to sell, transfer, assign, set over and otherwise convey to the Purchaser, and the Purchaser hereby agrees to
purchase from the Seller, without recourse (subject to the Seller’s obligations hereunder and the satisfaction of the conditions set forth in Section 4.1), all of the right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following: 
 (i) the Receivables; 
 (ii) all amounts received on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant
to Section 3.2(f)) after the Cutoff Date; 
 (iii) the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles; 
 (iv) all proceeds from
claims on or refunds of premiums of any physical damage or theft insurance policies covering the Financed Vehicles and any proceeds or refunds of premiums of any credit life or credit disability insurance policies relating to the Financed Vehicles
or the Obligors; 
 (v) the Receivable Files; 
 (vi) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a
Receivable and have been repossessed by or on behalf of the Issuer; and 
 (vii) all present and future claims, demands,
causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, 

  

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including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property; all accounts, general intangibles, chattel
paper, instruments, documents, money, investment property, deposit accounts, letters of credit, letter-of-credit rights, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations; and all other
property which at any time constitutes all or part of or is included in the proceeds of any of the foregoing. 
 (b) The parties hereto
intend that the conveyance of the Receivables and related property hereunder be a sale and not a loan. In the event that the conveyance hereunder is not for any reason considered a sale, the Seller hereby grants to the Purchaser a first priority
perfected security interest in all of the Seller’s right, title and interest in, to and under the Receivables and all other property conveyed hereunder and listed in this Section and all proceeds of any of the foregoing. The parties intend
that this Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder, including the Receivables Purchase Price. If such conveyance is for any reason considered to be a
loan and not a sale, the Seller consents to the Purchaser transferring such security interest in favor of the Indenture Trustee and transferring the obligations secured thereby to the Indenture Trustee. 
 (c) The Seller agrees to treat the transfer of the Receivables and the related property contemplated by this Section for all purposes (including tax
and financial accounting purposes) as an absolute transfer on all relevant books, records, tax returns, financial statements and other applicable documents. 
 SECTION 2.2 Receivables Purchase Price; Payments on the Receivables. 
 (a) On the Closing Date, in
exchange for the Receivables and other assets described in Section 2.1, the Purchaser shall pay to the Seller the Receivables Purchase Price. An amount equal to $605,136,182.15 of the Receivables Purchase Price shall be paid by the Purchaser to
the Seller in cash or immediately available funds. The remainder of the Receivables Purchase Price shall be paid by crediting the Seller with a contribution to the capital of the Purchaser. The Purchaser shall deposit, from funds it receives from
the issuance of the Notes, an amount equal to the Initial Reserve Account Deposit into the Reserve Account, which amount shall be an asset of the Issuer. 
 (b) The Purchaser shall be entitled to, and shall convey such right to the Owner Trustee pursuant to the Sale and Servicing Agreement, all payments of principal and interest on or in respect of the Receivables
received after the Cutoff Date. 
 SECTION 2.3 Transfer of Receivables. Pursuant to the Sale and Servicing Agreement, the Purchaser
will assign all of its right, title and interest in, to and under the Receivables and other assets described in Section 2.1 to the Issuer. The parties hereto acknowledge that the Issuer will pledge its rights in, to and under the Receivables
and other assets described in Section 2.1 to the Indenture Trustee pursuant to the Indenture. The Purchaser has the right to assign its interest under this Agreement as may be required to effect the purposes of the Sale and Servicing Agreement,
without the consent of the Seller, and the Owner Trustee as assignee shall succeed to the rights and obligations hereunder of the Purchaser. 
  

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 SECTION 2.4 Examination of Receivable Files. The Seller will make the Receivable Files available
to the Purchaser or its agent for examination during normal business hours at the Seller’s offices or such other location as otherwise shall be agreed upon by the Purchaser and the Seller. 
 SECTION 2.5 Expenses. The Seller will reimburse the Purchaser for expenses of the Purchaser in connection with the sale of the Notes, including
expenses which are reimbursable to the Underwriters by the Purchaser pursuant to the Underwriting Agreement. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 SECTION 3.1
Representations and Warranties of the Purchaser. The Purchaser hereby makes the following representations and warranties to the Seller as of the date of this Agreement and as of the Closing Date: 
 (a) Organization and Good Standing. The Purchaser is a limited liability company duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and shall have, power,
authority and legal right to acquire, own and sell the Receivables. 
 (b) Power and Authority; Binding Obligation. The Purchaser has
the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Purchaser by all necessary action. This Agreement constitutes the
legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles. 
 (c) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the limited liability company agreement
or certificate of formation of the Purchaser, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the
Purchaser is a party or by which it may be bound. 
 (d) No Proceedings. There are no proceedings or investigations pending, or, to
the knowledge of the Purchaser, threatened, against the Purchaser before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Purchaser or its properties (i) asserting
the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that, in the 

  

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reasonable judgment of the Purchaser would materially and adversely affect the performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement or the Receivables. 
 SECTION 3.2 Representations and Warranties of the Seller. 
 (a) The Seller hereby makes the following representations and warranties to the Purchaser as of the date of this Agreement and as of the Closing Date:

 (i) Organization and Good Standing. The Seller is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority and legal right to acquire, own and sell the Receivables. 
 (ii) Power and Authority;
Binding Obligation. The Seller has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary
action. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to general equitable principles. 
 (iii) No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the certificate of formation or limited liability company agreement of the Seller, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the Seller is a party or by which it may be bound. 
 (iv) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of the Seller, threatened, against the Seller before any court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking
any determination or ruling that, in the reasonable judgment of the Seller would materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or the Receivables.

 (v) No Tax Liens. The Seller is not aware of any material judgment or tax lien filings against the Seller.

 (b) The Seller hereby makes the following representations and warranties to the Purchaser as of the date of this Agreement and as of the
Closing Date, which representations and warranties shall remain operative and in full force and effect, shall survive the transfer 

  

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and conveyance of the Receivables and other assets described in Section 2.1 by the Seller to the Purchaser and by the Purchaser to the Issuer and shall
inure to the benefit of the Purchaser, the Trustees and the Noteholders: 
 (i) Characteristics of Receivables. Each
Receivable (i) has been originated by CarMax Auto or an Affiliate of CarMax Auto in the ordinary course of business in connection with the sale of a new or used motor vehicle and has been fully and properly executed by the parties thereto,
(ii) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security, (iii) provides for level monthly payments that
fully amortize the Amount Financed by maturity (except that the period between the date of such Receivable and the date of the first Scheduled Payment may be less than or greater than one month and the amount of the first and last Scheduled Payments
may be less than or greater than the level payments) and yield interest at the related APR, (iv) provides for, in the event that such Receivable is prepaid, a prepayment that fully pays the Principal Balance of such Receivable with interest at
the related APR through the date of payment, (v) is a retail installment sale contract substantially in the form of Exhibit B, (vi) is secured by a new or used motor vehicle that had not been repossessed as of the Cutoff Date,
(vii) is a Simple Interest Receivable, (viii) relates to an Obligor who has made at least one payment under such Receivable as of the Cutoff Date and (ix) relates to an Obligor whose mailing address is located in any State.

 (ii) Receivable Schedule. The information set forth in the Receivable Schedule was true and correct in all material
respects as of the opening of business on the Cutoff Date, and no selection procedures believed to be adverse to the Depositor and/or the Noteholders were utilized in selecting the Receivables from those retail installment sale contracts which met
the criteria contained in this Agreement. The information set forth in the compact disk or other listing regarding the Receivables made available to the Depositor and its assigns (which compact disk or other listing is required to be delivered as
specified herein) is true and correct in all material respects. 
 (iii) Compliance with Law. Each Receivable and the
sale of the related Financed Vehicle complied, at the time such Receivable was originated and complies, as of the Closing Date, in all material respects with all requirements of applicable federal, State and local laws, and regulations thereunder,
including usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve
Board’s Regulations B and Z, the Servicemembers Civil Relief Act, State adaptations of the National Consumer Act and the Uniform Consumer Credit Code and any other consumer credit, equal opportunity and disclosure laws applicable to such
Receivable and sale. 
 (iv) Binding Obligation. Each Receivable represents the genuine, legal, valid and binding
payment obligation in writing of the related Obligor, enforceable by the holder thereof in all material respects in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation or other
similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. 
  

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 (v) No Government Obligor. No Receivable is due from the United States or any
State or from any agency, department or instrumentality of the United States or any State. 
 (vi) Security Interest in
Financed Vehicles. Immediately prior to the transfer of the Receivables by the Seller to the Depositor, each Receivable was secured by a valid, binding and enforceable first priority perfected security interest in favor of the Seller in the
related Financed Vehicle, which security interest has been validly assigned by the Seller to the Depositor. The Servicer has received, or will receive within 180 days after the Closing Date, the original certificate of title for each Financed
Vehicle (other than any Financed Vehicle that is subject to a certificate of title statute or motor vehicle registration law that does not require that the original certificate of title for such Financed Vehicle be delivered to the Seller).

 (vii) Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, nor has any Financed
Vehicle been released in whole or in part from the Lien granted by the related Receivable. 
 (viii) No Waiver. No
provision of any Receivable has been waived in such a manner that such Receivable fails to meet all of the representations and warranties made by the Seller in this Section 3.2(b) with respect thereto. 
 (ix) No Defenses. No Receivable is subject to any right of rescission, setoff, counterclaim or defense, including the defense of
usury, and the operation of any of the terms of any Receivable, or the exercise of any right thereunder, will not render such Receivable unenforceable in whole or in part or subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and the Seller has no knowledge of any such right of rescission, setoff, counterclaim or defense being asserted or threatened with respect to any Receivable. 
 (x) No Liens. The Seller has no knowledge of any liens or claims that have been filed, including liens for work, labor or materials
or for unpaid State or federal taxes, relating to any Financed Vehicle that are prior to, or equal or coordinate with, the security interest in such Financed Vehicle created by the related Receivable. 
 (xi) No Default. Except for payment defaults continuing for a period of not more than 30 days, the Seller has no knowledge that any
default, breach, violation or event permitting acceleration under the terms of any Receivable has occurred or that any continuing condition that with notice or the lapse of time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable has arisen, and the Seller has not waived any such event or condition. 
 (xii) Title. The Seller intends that the transfer of the Receivables contemplated by Section 2.1 constitute a sale of the Receivables from the Seller to the Depositor and that the beneficial interest in, and title to, the
Receivables not be part of the 

  

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Seller’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. The Seller has not sold,
transferred, assigned or pledged any Receivable to any Person other than the Depositor. Immediately prior to the transfer of the Receivables contemplated by Section 2.1, the Seller had good and marketable title to the Receivables free and clear
of any Lien, claim or encumbrance of any Person and, immediately upon such transfer, the Depositor shall have good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person. 
 (xiii) Security Interest Matters. This Agreement creates a valid and continuing “security interest” (as defined in the
Relevant UCC) in the Receivables in favor of the Depositor, which security interest is prior to all other Liens and is enforceable as such against creditors of and purchasers from the Seller. With respect to each Receivable, the Seller has taken all
steps necessary to perfect its security interest against the related Obligor in the related Financed Vehicle. The Receivables constitute “tangible chattel paper” (as defined in the Relevant UCC). The Seller has caused or will cause prior
to the Closing Date the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law necessary to perfect the security interest in the Receivables granted to the Depositor under
this Agreement. Other than the security interest granted to the Depositor under this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Receivables. The Seller has not authorized
the filing of and is not aware of any financing statements against the Seller that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Depositor under the
Sale and Servicing Agreement or that has been terminated. The motor vehicle retail installment sale contracts that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Depositor, the Issuer or the Indenture Trustee. The Seller is not aware of any judgment or tax lien filings against the Seller. 
 (xiv) Financing Statements. All financing statements filed or to be filed against the Seller in favor of the Indenture Trustee (as
assignee of the Depositor and the Issuer) contain a statement substantially to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture
Trustee.” 
 (xv) Valid Assignment. No Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, assignment and conveyance of such Receivable under this Agreement or the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture is unlawful, void or voidable or under which such
Receivable would be rendered void or voidable as a result of any such sale, transfer, assignment, conveyance or pledge. The Seller has not entered into any agreement with any account debtor that prohibits, restricts or conditions the assignment of
the Receivables. 
 (xvi) One Original. There is only one original executed copy of each Receivable. 
  

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 (xvii) Principal Balance. Each Receivable had an original Principal Balance of not
more than $65,000 and a remaining Principal Balance as of the Cutoff Date of not less than $500. 
 (xviii) No Bankrupt
Obligors. As of the Cutoff Date, no Receivable was due from an Obligor that was the subject of a proceeding under the Bankruptcy Code of the United States or was bankrupt. 
 (xix) New and Used Vehicles. As of the Cutoff Date, approximately 2.92% of the Pool Balance related to Receivables secured by new
Financed Vehicles and approximately 97.08% of the Pool Balance related to Receivables secured by used Financed Vehicles. 
 (xx) Origination. Each Receivable was originated after October 1, 2001. 
 (xxi) Term to Maturity.
Each Receivable had an original term to maturity of not more than 72 months and not less than 12 months and a remaining term to maturity as of the Cutoff Date of not more than 71 months and not less than three months. 
 (xxii) Weighted Average Remaining Term to Maturity. As of the Cutoff Date, the weighted average remaining term to maturity of the
Receivables was approximately 61.10 months. 
 (xxiii) Annual Percentage Rate. Each Receivable has an APR of at least
4.45% and not more than 25.00%. 
 (xxiv) Location of Receivable Files. The Receivable Files are maintained at the
location listed in Schedule 2 to the Sale and Servicing Agreement. 
 (xxv) Simple Interest Method. All payments with
respect to the Receivables have been allocated consistently in accordance with the Simple Interest Method. 
 (xxvi) No
Delinquent Receivables. As of the Cutoff Date, no payment due under any Receivable was more than 30 days past due. 
 (xxvii) Insurance. Each Obligor has obtained or agreed to obtain physical damage insurance (which insurance shall not be force placed insurance) covering the related Financed Vehicle in accordance with the Seller’s normal
requirements. 
 (xxviii) Fair Market Value. The Receivables Purchase Price represents the fair market value of the
Receivables. 
  

 11 

 (xxix) Custodial Agreements. Immediately prior to the transfer of the Receivables
by the Seller to the Depositor, the Seller or an Affiliate of the Seller had possession of the Receivable Files and there were no, and there will not be any, custodial agreements in effect materially adversely affecting the right or ability of the
Seller to make, or cause to be made, any delivery required under this Agreement. 
 (xxx) Bulk Transfer Laws. The
transfer of the Receivables and the Receivable Files by the Seller to the Depositor pursuant to this Agreement is not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction. 
 (c) The Seller shall indemnify the Purchaser and hold the Purchaser harmless against any losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and other costs and expenses resulting from any third party claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Seller’s representations and warranties set forth in
Section 3.2(b). The Trustees shall also have the remedies provided in the Sale and Servicing Agreement. 
 (d) Any cause of action
against the Seller relating to or arising out of the breach of any of its representations and warranties set forth in Section 3.2(b) shall accrue as to any Receivable upon (i) discovery of such breach by the Purchaser or either
Trustee or notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to cure such breach and (iii) demand upon the Seller by the Purchaser for all amounts payable in respect of such Receivable under this Agreement.

 (e) The Purchaser or the Seller, as the case may be, shall inform the other parties promptly, in writing, upon discovery of any breach of
the Seller’s representations and warranties set forth in Section 3.2(b) which materially and adversely affects the interests of the Noteholders in any Receivable. 
 (f) If a breach of any representation or warranty set forth in Section 3.2(b) which materially and adversely affects the interests of the Purchaser,
the Issuer or the Noteholders in any Receivable shall not have been cured by the close of business on the last day of the Collection Period which includes the thirtieth day after the date on which the Seller becomes aware of, or receives written
notice from the Servicer, the Purchaser or the Owner Trustee of, such breach or failure, the Seller shall repurchase such Receivable from the Purchaser on the Distribution Date following such Collection Period. In consideration for the repurchase of
any such Receivable, the Seller shall remit the Purchase Amount of such Receivable to the Purchaser. Upon any such repurchase, the Purchaser shall, without further action, be deemed to transfer, assign, set-over and otherwise convey to the Seller,
without recourse, representation or warranty, all the right, title and interest of the Purchaser in, to and under such repurchased Receivable and all other related assets described in Section 2.1. The Purchaser shall execute such documents and
instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Seller to effect the conveyance of such Receivable pursuant to this Section. The sole remedy of the Purchaser with respect to a breach of the
Seller’s representations and warranties set forth in Section 3.2(b) shall be to require the Seller to repurchase the related Receivables pursuant to this Section. 
  

 12 

 ARTICLE IV 
 CONDITIONS 
 SECTION 4.1 Conditions to Obligation of the Purchaser. The obligation of the Purchaser
to purchase the Receivables from the Seller on the Closing Date is subject to the satisfaction of the following conditions: 
 (a)
Representations and Warranties True. The representations and warranties of the Seller contained herein and in the other Transaction Documents shall be true and correct on the Closing Date with the same effect as if made on the Closing Date,
and each of the Seller and the Servicer shall have performed all obligations to be performed by it hereunder and under the other Transaction Documents on or before the Closing Date. 
 (b) Computer Files Marked. The Seller shall, at its own expense, on or before the Closing Date, indicate in its computer files that the
Receivables have been sold to the Purchaser pursuant to this Agreement and deliver to the Purchaser the Receivables Schedule, certified by an officer of the Seller to be true, correct and complete. 
 (c) Release of Lenders. The Seller shall obtain executed release agreements and UCC partial releases with respect to the Receivables from Bank of
America, N.A. (and certain other parties) and CarMax Funding II, in each case in form and substance satisfactory to the Purchaser. 
 (d)
Documents to be Delivered. The Purchaser shall have received the following, all of which shall be dated as of the Closing Date or such other date as specified: 
 (i) the Receivables Schedule; 
 (ii) an Officer’s Certificate of the Seller, in form and substance previously approved by the Purchaser and its counsel, as to, among other things, the representations and warranties of the Seller and
satisfaction of conditions precedent; 
 (iii) an opinion or opinions of counsel for the Seller, in form and substance
previously approved by the Purchaser and its counsel, addressed to the Purchaser; 
 (iv) [RESERVED]; 
 (v) copies of resolutions of the manager of the Seller approving the execution, delivery and performance of the Transaction Documents to
which the Seller is a party, and the performance of the transactions contemplated hereunder and thereunder, certified by the Secretary or an Assistant Secretary of the Seller; 
  

 13 

 (vi) copies of the certificate of formation of the Seller, together with all amendments,
revisions and supplements thereto, certified by the Delaware Secretary of State as of a recent date, and a certificate of good standing from the Delaware Secretary of State, dated as of a recent date, to the effect that the Seller has been duly
formed, is in good standing and has a legal existence; 
 (vii) UCC search reports from the appropriate offices in Delaware as
to the Seller; 
 (viii) reliance letters to each opinion of counsel to the Seller or the Servicer delivered to
Standard & Poor’s or Moody’s in connection with the purchase of the Receivables hereunder or the issuance or sale of the Notes; 
 (ix) a financing statement to be filed with the Delaware Secretary of State, naming the Seller, as seller or debtor, the Purchaser, as purchaser or secured party, and the Issuer as assignee, naming the Receivables and
the related property described in Section 2.1 as collateral and meeting the requirements of the laws of each such jurisdiction and in such manner as is necessary to perfect the sale, transfer, assignment and conveyance of the Receivables to the
Purchaser; 
 (x) the Bill of Sale; and 
 (xi) such other documents, certificates and opinions as may be reasonably requested by the Purchaser or its counsel. 
 (e) Execution of Transaction Documents. The Transaction Documents shall have been executed and delivered by the parties thereto. 
 (f) Rating of the Notes. Moody’s and Standard & Poor’s, respectively, shall have assigned ratings of
(i) “Prime-1” and “A-1+” to the Class A-1 Notes, (ii) “Aaa” and “AAA” to the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, (iii) “A2” and
“A” to the Class B Notes and (iv) “Baa3” and “BBB” to the Class C Notes. 
 (g) No Unsolicited
Ratings. There shall not have been issued an unsolicited rating of any Class of Notes by any nationally recognized statistical rating agency at a level that is lower than the ratings for such Class of Notes from Moody’s or
Standard & Poor’s specified in Section 4.1(f). 
 (h) Other Transactions. The transactions contemplated by the
Transaction Documents and the Underwriting Agreement shall be consummated on the Closing Date. 
 SECTION 4.2 Conditions to Obligation of
the Seller. The obligation of the Seller to sell the Receivables to the Purchaser on the Closing Date is subject to the satisfaction of the following conditions: 
  

 14 

 (a) Representations and Warranties True. The representations and warranties of the Purchaser
contained herein and in the other Transaction Documents shall be true and correct on the Closing Date with the same effect as if then made, and the Purchaser shall have performed all obligations to be performed by it hereunder and under the other
Transaction Documents on or before the Closing Date. 
 (b) Payment of Receivables Purchase Price. In consideration of the sale of the
Receivables from the Seller to the Purchaser as provided in Section 2.1, on the Closing Date the Purchaser shall have paid to the Seller the Receivables Purchase Price. 
 (c) Opinions of Purchaser. An opinion or opinions of counsel for the Purchaser addressed to the Seller and the Underwriters shall have been
delivered. 
 ARTICLE V 
 COVENANTS
OF THE SELLER 
 SECTION 5.1 Protection of Right, Title and Interest in, to and Under the Receivables. 
 (a) The Seller, at its expense, shall cause all financing statements and continuation statements and any other necessary documents covering the
Purchaser’s right, title and interest in, to and under the Receivables and other property conveyed by the Seller to the Purchaser hereunder to be promptly authorized, recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Purchaser hereunder to the Receivables and such other property. The Seller shall deliver to the
Purchaser file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Purchaser shall cooperate fully with the Seller in
connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this subsection. 
 (b) Within five days after the Seller makes any change in its name, identity or organizational structure which would make any financing statement or continuation statement filed in accordance with Section 4.1(d)
seriously misleading within the meaning of the UCC as in effect in the applicable State, the Seller shall give the Purchaser notice of any such change and, within 30 days after such change, shall authorize and file such financing statements or
amendments as may be necessary to continue the perfection of the Purchaser’s security interest in the Receivables and the proceeds thereof. 
 (c) The Seller shall give the Purchaser written notice within five days of any relocation of the State of organization of the Seller or any office in which the Seller keeps records concerning the Receivables and whether, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and, within 30 days after such relocation, shall authorize and
file such financing statements or amendments as may be necessary to continue the perfection of the interest of the Purchaser in the Receivables and the proceeds thereof. The Seller shall at all times maintain its State of organization, its principal
place of business and its chief executive office and the location of the office where the Receivables Files and any accounts and records relating to the Receivables are kept within the United States. 
  

 15 

 (d) The Seller shall maintain accounts and records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable. 
 (e) The Seller shall maintain its computer systems so that, from and after the time of the transfer of
the Receivables to the Purchaser pursuant to this Agreement, the Seller’s master computer records (including any back-up archives) that refer to a Receivable shall indicate clearly and unambiguously that such Receivable is owned by the
Purchaser (or, upon transfer of the Receivables to the Issuer, by the Issuer). Indication of the Purchaser’s ownership of a Receivable shall be deleted from or modified on the Seller’s computer systems when, and only when, such Receivable
shall have been paid in full or repurchased by the Seller. 
 (f) If at any time the Seller shall propose to sell, grant a security interest
in or otherwise transfer any interest in any motor vehicle retail installment sale contract to any prospective purchaser, lender or other transferee, the Seller shall give to such prospective purchaser, lender or other transferee computer tapes,
compact disks, records or print-outs (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly and unambiguously that such Receivable has been sold and is owned by the
Purchaser (or, upon transfer of the Receivables to the Issuer, the Issuer), unless such Receivable has been paid in full or repurchased by the Seller. 
 (g) The Seller shall permit the Purchaser and its agents at any time during normal business hours to inspect, audit and make copies of and abstracts from the Seller’s records regarding any Receivable. 

(h) If the Seller has repurchased one or more Receivables from the Purchaser or the Issuer pursuant to Section 3.2(f), the Seller shall, upon
request, furnish to the Purchaser, within ten days, a list of all Receivables (by receivable number and name of Obligor) then owned by the Purchaser, together with a reconciliation of such list to the Receivables Schedule. 
 SECTION 5.2 Security Interests. Except for the conveyances hereunder, the Seller covenants that it will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Receivable, whether now existing or hereafter created, or any interest therein; the Seller will immediately notify the Purchaser of the existence of any Lien on any
Receivable and, in the event that the interests of the Noteholders in such Receivable are materially and adversely affected, such Receivable shall be repurchased from the Purchaser by the Seller in the manner and with the effect specified in
Section 3.2(f), and the Seller shall defend the right, title and interest of the Purchaser in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Seller.

  

 16 

 SECTION 5.3 Delivery of Payments. The Seller covenants and agrees to deliver in kind upon receipt
to the Servicer under the Sale and Servicing Agreement all payments received by the Seller in respect of the Receivables as soon as practicable after receipt thereof by the Seller. 
 SECTION 5.4 No Impairment. The Seller covenants that it shall take no action, nor omit to take any action, which would impair the rights of the
Purchaser in any Receivable, nor shall it, except as otherwise provided in this Agreement or the Sale and Servicing Agreement, reschedule, revise or defer payments due on any Receivable. 
 SECTION 5.5 Costs and Expenses. The Seller shall pay all reasonable costs and expenses incurred in connection with the perfection of the
Purchaser’s right, title and interest in, to and under the Receivables. 
 SECTION 5.6 Hold Harmless. The Seller shall protect,
defend, indemnify and hold the Purchaser and the Issuer and their respective assigns and their attorneys, accountants, employees, officers and directors harmless from and against all losses, costs, liabilities, claims, damages and expenses of every
kind and character, as incurred, resulting from or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (ii) any legal
action, including any counterclaim, that has either been settled by the litigants (which settlement, if the Seller is not a party thereto shall be with the consent of the Seller) or has proceeded to judgment by a court of competent jurisdiction, in
either case to the extent it is based upon alleged facts that, if true, would constitute a breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (iii) any actions or omissions of the Seller or any
employee or agent of the Seller occurring prior to the Closing Date with respect to any Receivable or Financed Vehicle or (iv) any failure of a Receivable to be originated in compliance with all requirements of law. These indemnity obligations
shall be in addition to any obligation that the Seller may otherwise have. 
 ARTICLE VI 
 MISCELLANEOUS PROVISIONS 
 SECTION 6.1
Amendment. 
 (a) This Agreement may be amended from time to time by a written amendment duly executed and delivered by the Purchaser
and the Seller, without the consent of any Noteholder, to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Sale and Servicing Agreement; provided, however, that any such amendment shall not, as evidenced by an Opinion of Counsel to the
Seller delivered to the Indenture Trustee, adversely affect in any material respect the interests of the Noteholders. 
 (b) This Agreement
may also be amended from time to time for any other purpose by a written amendment duly executed and delivered by the Seller and by the Purchaser; provided, however, that any such amendment that materially adversely affects the
interests of the Noteholders under the Indenture, the Sale and Servicing Agreement or the Trust Agreement must be consented to by the Holders of Notes evidencing not less than 51% of the Note Balance of the Controlling Class. 
  

 17 

 (c) Promptly after the execution of any amendment to this Agreement, the Seller shall furnish written
notification of the substance of such amendment to the Owner Trustee, the Indenture Trustee and the Rating Agencies. 
 SECTION 6.2
Termination. The respective obligations and responsibilities of the Seller and the Purchaser created hereby shall terminate, except for the indemnity obligations of the Seller as provided herein, upon the termination of the Issuer as provided
in the Trust Agreement. 
 SECTION 6.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 SECTION 6.4 Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered at or sent by telecopier, overnight courier or mailed by registered mail, return receipt requested, in the case of (i) the Purchaser, to CarMax Auto Funding LLC, 12800 Tuckahoe Creek Parkway, Suite 400, Richmond,
Virginia 23238, Attention: Treasurer, and (ii) the Seller, to CarMax Business Services, LLC, 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238, Attention: Treasury Department; or, as to either of such Persons, at such other address as
shall be designated by such Person in a written notice to the other Person. 
 SECTION 6.5 Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements,
provisions and terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions and terms of this Agreement or any amendment or supplement hereto. 
 SECTION 6.6 Further Assurances. The Seller and the Purchaser agree to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the other party hereto or by the Issuer or the Indenture Trustee more fully to effect the purposes of this Agreement, including the execution of any financing statements, amendments,
continuation statements or releases relating to the Receivables for filing under the provisions of the UCC or other law of any applicable jurisdiction. 
 SECTION 6.7 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Purchaser, the Issuer or the Seller, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial 

  

 18 

 
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. 
 SECTION 6.8 Counterparts. This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and the same instrument. 
 SECTION 6.9 Third-Party
Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Issuer and the Indenture Trustee for the benefit of the Noteholders, who shall be considered to be third-party beneficiaries hereof. Except as
otherwise provided in this Agreement, no other Person will have any right or obligation hereunder. 
 SECTION 6.10 Headings and Table of
Contents. The Table of Contents and headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. 
 SECTION 6.11 Representations, Warranties and Agreements to Survive. The respective agreements, representations, warranties and other statements by
the Seller and by the Purchaser set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the closing hereunder of the transfers and assignments by the Seller to the Purchaser and by the Purchaser to the
Issuer and shall inure to the benefit of the Purchaser, the Trustees and the Noteholders. 
 SECTION 6.12 No Proceedings. The Seller
covenants and agrees that so long as this Agreement is in effect, and for one year plus one day following its termination, it will not file any involuntary petition or otherwise institute any bankruptcy, reorganization arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or State bankruptcy law or similar law against the Issuer or the Owner Trustee. 
 SECTION 6.13 Accountant’s Letters. 
 (a) The Seller shall cause a firm of independent certified public accountants (who
may also render other services to the Seller) to perform certain procedures regarding the characteristics of the Receivables described in the Receivables Schedule and to compare those characteristics to the information with respect to the
Receivables contained in the Prospectus. The Seller shall cooperate with the Purchaser and such accountants in making available all information and taking all steps reasonably necessary to permit such accountants to complete such procedures and to
deliver the letters required of them under the Underwriting Agreement. 
 (b) The Seller shall cause a firm of independent certified public
accountants (who may also render other services to the Seller) to deliver to the Purchaser a letter dated January 19, 2007 and a letter dated February 1, 2007, each in the form previously agreed to by the Seller and the Purchaser, with
respect to the financial and statistical information contained in the Prospectus under the caption “CarMax—Delinquency, Credit Loss and Recovery Information” and with respect to such other information as may be agreed in the forms of
such letters. 
  

 19 

 SECTION 6.14 Obligations of Purchaser. The obligations of the Purchaser under this Agreement shall
not be affected by reason of any invalidity, illegality or irregularity of any Receivable. 
 [SIGNATURE PAGE FOLLOWS] 
  

 20 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written. 
  

			
	CARMAX BUSINESS SERVICES, LLC,
	    as Seller
		
	By:	 	/s/ Keith D. Browning
	Name:	 	Keith D. Browning
	Title:	 	Chief Financial Officer
	
	CARMAX AUTO FUNDING LLC,
	    as Purchaser
		
	By:	 	/s/ Thomas W. Reedy
	Name:	 	Thomas W. Reedy
	Title:	 	Treasurer

  

 S-1 

 SCHEDULE A 
 RECEIVABLES SCHEDULE 
 [ON FILE WITH THE SERVICER] 
  

 SA-1 

 EXHIBIT A 
 BILL OF SALE AND ASSIGNMENT 
 For value received, in accordance with the receivables purchase agreement,
dated as of February 1, 2007 (the “Receivables Purchase Agreement”), between the undersigned and CarMax Auto Funding LLC (the “Purchaser”), the undersigned does hereby sell, assign, transfer and otherwise
convey unto the Purchaser, without recourse, all right, title and interest of the undersigned in and to (i) the Receivables listed on Schedule A hereto (the “Receivables”); (ii) all amounts received on or in respect
of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant to the Receivables Purchase Agreement) after the Cutoff Date; (iii) the security interests in the Financed Vehicles granted by the Obligors pursuant
to the Receivables and any other interest of the undersigned in such Financed Vehicles; (iv) all proceeds from claims on or refunds of premiums of any physical damage or theft insurance policies covering the Financed Vehicles and any proceeds
or refunds of premiums of any credit life or credit disability insurance policies relating to the Financed Vehicles or the Obligors; (v) the Receivable Files; (vi) the right to realize upon any property (including the right to receive
future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer; and (vii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property,
all accounts, general intangibles, chattel paper, instruments, documents, money, investment property, deposit accounts, letters of credit, letter-of-credit rights, insurance proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations, and all other property which at any time constitutes all or part of or is included in the proceeds of any of the foregoing. 
 This Bill of Sale and Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Receivables Purchase Agreement and is to be governed by the
Receivables Purchase Agreement. 
 Capitalized terms used and not otherwise defined herein shall have the meaning assigned to them in the
Receivables Purchase Agreement. 
 IN WITNESS WHEREOF, the undersigned has caused this Bill of Sale and Assignment to be duly executed as of
February 1, 2007. 
  

			
	CARMAX BUSINESS SERVICES, LLC
		
	By:	 	  
		 	Name:
		 	Title:

  

 A-1Rights Agreement

 EXHIBIT 4.1 
  

 RIGHTS AGREEMENT 
 WCI COMMUNITIES, INC. 
 and 
 COMPUTERSHARE TRUST COMPANY, N.A., 
 as Rights Agent 
 Dated as of January 30, 2007 
  

 TABLE OF CONTENTS 
  

			
	 	  	Page
	 Section 1. Certain Definitions
	  	1
		
	 Section 2. Appointment of Rights Agent
	  	4
		
	 Section 3. Issuance of Right Certificates
	  	5
		
	 Section 4. Form of Right Certificates
	  	6
		
	 Section 5. Countersignature and Registration
	  	7
		
	 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates
	  	7
		
	 Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights
	  	8
		
	 Section 8. Cancellation and Destruction of Right Certificates
	  	9
		
	 Section 9. Availability of Shares of Series A Preferred Stock
	  	9
		
	 Section 10. Series A Preferred Stock Record Date
	  	10
		
	 Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights
	  	11
		
	 Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	  	18
		
	 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power
	  	18
		
	 Section 14. Fractional Rights and Fractional Shares
	  	22
		
	 Section 15. Rights of Action
	  	23
		
	 Section 16. Agreement of Right Holders
	  	23
		
	 Section 17. Right Certificate Holder Not Deemed a Stockholder
	  	24
		
	 Section 18. Concerning the Rights Agent
	  	24
		
	 Section 19. Merger or Consolidation or Change of Rights Agent
	  	25
		
	 Section 20. Duties of Rights Agent
	  	25
		
	 Section 21. Change of Rights Agent
	  	27
		
	 Section 22. Issuance of New Right Certificates
	  	28

  

 -i- 

			
	 	  	Page
		
	 Section 23. Redemption
	  	28
		
	 Section 24. Exchange
	  	29
		
	 Section 25. Notice of Certain Events
	  	30
		
	 Section 26. Notices
	  	30
		
	 Section 27. Supplements and Amendments
	  	31
		
	 Section 28. Successors
	  	31
		
	 Section 29. Benefits of this Rights Agreement
	  	31
		
	 Section 30. Determinations and Actions by the Board of Directors
	  	32
		
	 Section 31. Severability
	  	32
		
	 Section 32. Governing Law
	  	32
		
	 Section 33. Counterparts
	  	32
		
	 Section 34. Descriptive Headings
	  	32
		
	 Section 35. Force Majeure
	  	32

 EXHIBITS 
 Exhibit A – Form of Certificate of Designations 
 Exhibit B – Form of Right Certificate 
 Exhibit C – Form of Summary of Rights 
  

 -ii- 

 INDEX OF DEFINED TERMS 
  

			
	 	  	Page
	 Acquiring Person
	  	1
	 Affiliate
	  	2
	 Associate
	  	2
	 Authorized Officer
	  	26
	 Beneficial Owner
	  	2
	 Beneficial Ownership
	  	2
	 beneficially own
	  	2
	 Business Day
	  	3
	 close of business
	  	3
	 Common Stock
	  	3
	 Common Stock equivalents
	  	13
	 Company
	  	1
	 Current Value
	  	13
	 Distribution Date
	  	5
	 equivalent preferred shares
	  	14
	 Exchange Act
	  	2
	 Exchange Ratio
	  	29
	 Exempted Entity
	  	4
	 Expiration Date
	  	8
	 Final Expiration Date
	  	8
	 invalidation time
	  	12
	 Nasdaq
	  	4
	 NYSE
	  	4
	 Original Rights
	  	2
	 Person
	  	4
	 Principal Party
	  	20
	 Purchase Price
	  	8
	 Record Date
	  	1
	 Redemption Date
	  	8
	 Redemption Price
	  	29
	 Right
	  	1
	 Right Certificate
	  	5
	 Rights Agent
	  	1
	 Rights Agreement
	  	1
	 Section 11(a)(ii) Trigger Date
	  	13
	 Securities Act
	  	4
	 Security
	  	15
	 Series A Preferred Stock
	  	4
	 Spread
	  	13
	 Stock Acquisition Date
	  	4
	 Subsidiary
	  	5
	 Substitution Period
	  	14
	 Summary of Rights
	  	5
	 then outstanding
	  	2
	 Trading Day
	  	16

  

 -iii- 

 RIGHTS AGREEMENT 
 Rights Agreement, dated as of January 30, 2007 (as amended, supplemented or otherwise modified from time to time, the “Rights Agreement”) between WCI Communities, Inc., a Delaware
corporation (the “Company”), and Computershare Trust Company, N.A. (the “Rights Agent”). 
 W I T N E S S E
T H 
 WHEREAS, the Board of Directors of the Company has on January 30, 2007, authorized and declared a dividend of one preferred share
purchase right (a “Right”) for each share of Common Stock (as defined below) of the Company outstanding as of the close of business (as defined below) on February 9, 2007 (the “Record Date”), each Right
representing the right to purchase one one-thousandth (subject to adjustment) of a share of Series A Preferred Stock (as defined below), upon the terms and subject to the conditions herein set forth, and the Board of Directors has further authorized
and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (as
such terms are hereinafter defined); provided, however, that Rights may be issued with respect to shares of Common Stock that shall become outstanding after the Distribution Date and prior to the Expiration Date in accordance with
Section 22. 
 NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as
follows: 
 Section 1. Certain Definitions. For purposes of this Rights Agreement, the following terms have the meaning indicated:

 (a) “Acquiring Person” shall mean any Person (as defined below) who or which shall be the Beneficial Owner (as defined
below) of 15% or more of the shares of Common Stock then outstanding, but shall not include an Exempted Entity (as defined below); provided, however, that if the Board of Directors of the Company determines in good faith that a Person
who would otherwise be an “Acquiring Person” has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such
Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Rights Agreement) and
without any intention of changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this Rights Agreement unless and until such Person shall have
failed to divest itself, as soon as practicable, if the Company so requests, of Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer otherwise qualify as an “Acquiring Person”.
Notwithstanding the foregoing, no Person shall be deemed an “Acquiring Person” as the result of an acquisition of shares of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the shares of Common Stock then 

 
outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and thereafter becomes the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding
Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be an “Acquiring Person,” subject to the proviso set forth in the first sentence of this Section 1(a), unless
upon the consummation of the acquisition of such additional shares of Common Stock such Person does not beneficially own 15% or more of the shares of Common Stock then outstanding. The phrase “then outstanding”, when used with
reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder. 
 (b) “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of the Agreement (the “Exchange Act”). 
 (c) A Person shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial Ownership” of and shall be
deemed to “beneficially own” any securities: 
 (i) which such Person or any of such Person’s Affiliates
or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Rights Agreement; 
 (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering
of securities), written or otherwise, or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (x) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase
or exchange, (y) securities which such Person has a right to acquire on the exercise of Rights at any time prior to the time a Person becomes an Acquiring Person or (z) securities issuable upon exercise of Rights from and after the time a
Person becomes an Acquiring Person if such Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to Section 3 or Section 22 hereof (the “Original
Rights”) or pursuant to Section 11(i) or Section 11(n) with respect to an adjustment to the Original Rights; or (B) the right to vote pursuant to any agreement, arrangement or understanding, written or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such 

  

 - 2 - 

 
Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or 
 (iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to this Section 1(c)(ii)(B)) or disposing of such securities of the Company; 

provided, however, that (x) that nothing in this Section 1(c) shall cause a Person engaged in business as an underwriter of securities to be
the “Beneficial Owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such
acquisition, and then only if such securities continue to be owned by such Person at such expiration of forty days; (y) no Person who is an officer, director, or employee of an Exempted Entity shall be deemed, solely by reason of such
Person’s status or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially own” any securities that are “beneficially owned” (as defined in this
Section 1(c)), including, without limitation, in a fiduciary capacity, by an Exempted Entity or by any other such officer, director or employee of an Exempted Entity; and (z) a Person shall not be deemed the Beneficial Owner of, to have
“Beneficial Ownership” of or to beneficially own, shares of Common Stock (or securities convertible into, exchangeable into or exercisable for Common Stock) held by such Person in trust accounts, managed accounts and the like, or otherwise
held in a fiduciary capacity, that are Beneficially Owned by third Persons who are not Affiliates or Associates of such Person. 
 (d)
“Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York, or the State in which the principal office of the Rights Agent is located, are authorized or
obligated by law or executive order to close. 
 (e) “close of business” on any given date shall mean 5:00 P.M., New York,
New York time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York, New York time, on the next succeeding Business Day. 
 (f) “Common Stock” when used with reference to the Company shall mean the common stock, par value $0.01, of the Company. “Common
Stock” when used with reference to any Person other than the Company shall mean the capital stock (or, in the case of an unincorporated entity, the equivalent equity interest) with the greatest voting power of such other Person or, if such
other Person is a subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 
 (g)
“Exempted Entity” shall mean (1) the Company, (2) any Subsidiary (as defined below) of the Company (in the case of subclauses (1) and (2) including, without limitation, in its fiduciary capacity), (3) any
employee benefit plan of the Company or of any Subsidiary of the Company, (4) any entity or trustee holding Common Stock for or pursuant to 

  

 - 3 - 

 
the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary
of the Company and (5) any HW Entity; provided, however, that any HW Entity shall only be deemed to be an Exempted Entity for so long as it beneficially owns no more than 16% of the outstanding Common Stock; and provided,
further, that any HW Entity shall cease to be an Exempted Entity as of the date that such HW Entity ceases to beneficially own 15% or more of the shares of the then outstanding Common Stock. 
 (h) “HW Entity” means Hotchkis and Wiley Capital Management, LLC, a Delaware limited liability company, or any Affiliate thereof that
has beneficial ownership of the shares of Common Stock held by Hotchkis and Wiley Capital Management, LLC as of the date hereof or directly or indirectly acquires beneficial ownership of 15% or more of the shares of the then outstanding Common
Stock, except for the Company and its Subsidiaries. 
 (i) “Nasdaq” shall mean The Nasdaq Stock Market’s National
Market. 
 (j) “NYSE” shall mean the New York Stock Exchange, Inc. 
 (k) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity. 
 (l) “Securities Act” shall mean the Securities Act of
1933, as amended. 
 (m) “Series A Preferred Stock” shall mean the Series A Junior Participating Preferred Stock, par value
$0.01 per share, of the Company having the rights and preferences set forth in the Certificate of Designations attached to this Rights Agreement as Exhibit A and, to the extent that there are not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated for such purpose containing terms substantially similar to the terms of the Series A Junior
Participating Preferred Stock. 
 (n) “Stock Acquisition Date” shall mean the first date of public announcement (which for
purposes of this definition shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or such earlier date as a majority of
the Board of Directors shall become aware of the existence of an Acquiring Person. 
 (o) “Subsidiary” of any Person shall
mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by such Person. 
 Section 2.
Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders
of Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such 

  

 - 4 - 

 
appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior notice
to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for the acts or omissions of any such co-Rights Agent. 
 Section 3. Issuance of Right Certificates. (a) Until the close of business on the earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than an Exempted Entity) of, or of the first public announcement of the
intention of such Person (other than an Exempted Entity) to commence, a tender or exchange offer the consummation of which would result in any Person (other than an Exempted Entity) becoming the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding (including, in the case of both clause (i) and (ii), any such date which is after the date of this Rights Agreement and prior to the issuance of the Rights) (the earlier of such dates being herein referred to as
the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock registered in the names of the holders thereof and not by separate Right
Certificates (as defined below), and (y) the Rights will be transferable only in connection with the transfer of Common Stock. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 
 (b) As promptly as practicable following the Record Date, the Company will send a copy of a Summary of Rights to Purchase Shares of Series A Preferred
Stock, in substantially the form of Exhibit C hereto (the “Summary of Rights”), by electronic mail, to each record holder of Common Stock as of the close of business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company; provided, however, the Company will send a copy of the Summary of Rights by first-class, postage-prepaid mail to each
record holder who so requests upon receipt of the electronic mail. With respect to shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights associated with such shares will be evidenced by the share
certificate for such shares of Common Stock registered in the names of the holders thereof together with the Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. 
 (c) Rights shall be issued in respect of all shares of Common Stock issued or disposed of (including, without limitation, upon disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the 

  

 - 5 - 

 
Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof, after
the Distribution Date. Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock, disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but
unissued shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 
 “This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between WCI Communities, Inc.
and Computershare Trust Company, N.A., as Rights Agent, dated as of January 30, 2007, as the same may be amended, supplemented or otherwise modified from time to time (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal executive offices of WCI Communities, Inc. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. WCI Communities, Inc. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth
in the Rights Agreement, Rights owned by or transferred to any Person who is or becomes an Acquiring Person (as defined in the Rights Agreement) and certain transferees thereof will become null and void and will no longer be transferable.”

 With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or otherwise acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated with the shares of Common Stock which are no longer outstanding. 
 Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights. 
 Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of NYSE or of any other stock exchange or 

  

 - 6 - 

 
automated quotation system on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Sections 11 and 22
hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths of a share of Series A Preferred Stock as shall be set forth therein at the Purchase Price (as determined pursuant to Section 7),
but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. 
 Section 5. Countersignature and Registration. (a) The Right Certificates shall be executed on behalf of the Company by the Chief Executive Officer, the President, any of the Vice Presidents or the Treasurer of
the Company, either manually or by facsimile signature, shall have affixed thereto the Company’s seal or a facsimile thereof and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any Person who, at
the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such Person was not such an officer. 

(b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates. 
 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) Subject to the provisions of this Rights Agreement, at any time after the close of business on the Distribution Date, and prior to the close of business on the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Series A
Preferred Stock (or, following such time, other securities, cash or assets as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at
the office or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent, subject to the provisions of this Rights Agreement, shall countersign and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right
Certificates. 
  

 - 7 - 

 (b) Subject to the provisions of this Rights Agreement, at any time after the Distribution Date and prior
to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 
 Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights. (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon
surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the Purchase
Price for each one one-thousandth of a share of Series A Preferred Stock (or other securities, cash or assets, as the case may be) as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the time (the
“Expiration Date”) that is the earliest of (i) the close of business on January 30, 2009 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. 
 (b) The purchase price (the “Purchase Price”) shall be initially $70.00 for each one one-thousandth of a share of Series A Preferred Stock purchasable upon the exercise of a Right. The Purchase Price and the number of one
one-thousandths of a share of Series A Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) of this Section 7. 
 (c) Except as otherwise provided
herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the aggregate Purchase Price for the number of shares of Series A Preferred Stock to be
purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 6 hereof, in cash or by certified check, cashier’s check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Series A Preferred Stock or make available if the Rights Agent is the transfer agent for the Series A Preferred Stock
certificates for the number of shares of Series A Preferred Stock to be purchased (and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests), or (B) requisition from the depositary agent appointed by the
Company depositary receipts representing interests in such number of one one-thousandths of a share of Series A Preferred Stock as are to be purchased, in which case certificates for the Series A Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent (and the Company hereby directs the depositary agent to comply with such request), (ii) when 

  

 - 8 - 

 
appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. 
 (d) Except as otherwise provided herein, in case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
exercisable Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof. 
 (e) Notwithstanding anything in this Rights Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7 unless such registered holder shall have (i) completed and signed
the certificate contained in the form of assignment or election to purchase set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. 
 Section 8. Cancellation and Destruction
of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy or cause to be destroyed such cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

 Section 9. Availability of Shares of Series A Preferred Stock. (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Series A Preferred Stock or any shares of Series A Preferred Stock held in its treasury, the number of shares of Series A Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights. 
 (b) So long as the shares of Series A Preferred Stock (and, following the time that a Person
becomes an Acquiring Person, shares of Common Stock and other securities) issuable upon the exercise of Rights may be listed or admitted to trading on the NYSE or listed on any other national securities exchange or quotation system, the Company
shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on the NYSE or listed on any other exchange or quotation system upon official
notice of issuance upon such exercise. 
  

 - 9 - 

 (c) From and after such time as the Rights become exercisable, the Company shall use its best efforts, if
then necessary to permit the issuance of shares of Series A Preferred Stock (and following the time that a Person first becomes an Acquiring Person, shares of Common Stock and other securities) upon the exercise of Rights, to register and qualify
such shares of Series A Preferred Stock (and following the time that a Person first becomes an Acquiring Person, shares of Common Stock and other securities) under the Securities Act and any applicable state securities or “Blue Sky” laws
(to the extent exemptions therefrom are not available), cause such registration statement and qualifications to become effective as soon as possible after such filing and keep such registration and qualifications effective until the earlier of
(x) the date as of which the Rights are no longer exercisable for such securities and (y) the Expiration Date. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days, the exercisability of the Rights
in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this Rights Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification or exemption in such jurisdiction shall have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective. 
 (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Series A Preferred Stock (and,
following the time that a Person becomes an Acquiring Person, shares of Common Stock and other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates therefor (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable shares. 
 (e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Series A Preferred Stock (or shares of Common Stock or other
securities) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax or charge which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the Series A Preferred Stock (or shares of Common Stock or other securities) in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates or depositary receipts for Series A Preferred Stock (or shares of Common Stock or other securities) upon the exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge
being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or charge is due. 
 Section 10. Series A Preferred Stock Record Date. Each Person in whose name any certificate for Series A Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of the shares of Series A Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and 

  

 - 10 - 

 
any applicable transfer taxes or charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the
Series A Preferred Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which such transfer books are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Series A Preferred Stock for which the Rights shall be exercisable, including, without limitation, the
right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 
 Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights. The Purchase Price, the number of shares of Series A
Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
 (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock payable
in shares of Series A Preferred Stock, (B) subdivide the outstanding shares of Series A Preferred Stock, (C) combine the outstanding shares of Series A Preferred Stock into a smaller number of shares of Series A Preferred Stock or
(D) issue any shares of its capital stock in a reclassification of the shares of Series A Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, as the case may be,
and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. 
 (ii) Subject to Section 24 of this Rights Agreement and
except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii), in the event that any Person becomes an Acquiring Person, each holder of a Right shall thereafter have the right to receive, upon exercise thereof at a price
equal to the then-current Purchase Price, in accordance with the terms of this Rights Agreement and in lieu of shares of Series A Preferred Stock, such number of shares of Common Stock (or at the option of the Company, such number of one
one-thousandths of a share of Series A Preferred Stock) as shall equal the result obtained by (x) multiplying the then-current Purchase Price by the number of one one-thousandths of a share of Series A Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the then-current per share market price of the Company’s Common Stock (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event; provided,
however, that the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon 

  

 - 11 - 

 
exercise of a Right shall thereafter be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything
in this Rights Agreement to the contrary, however, from and after the time (the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights that are beneficially owned by (x) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the invalidation time or (z) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or concurrently with the invalidation time pursuant to either (I) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding, written or otherwise, regarding the transferred Rights or (II) a transfer that the Board of Directors has determined is part of a plan, arrangement or understanding, written or otherwise, which has the
purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be void without any further action and any holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights
under any provision of this Rights Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the invalidation time, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become void
pursuant to the provisions of this paragraph shall be cancelled. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii). 
 (iii)
The Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) such number or fractions of shares of Series A Preferred Stock having an aggregate
current market value equal to the current per share market price of a share of Common Stock. In the event that there shall be an insufficient number of Common Stock authorized but unissued (and unreserved) to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Board of Directors shall, with respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party
(A) determine the excess of (x) the value of the shares of Common Stock issuable upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the “Current Value”) over (y) the then-current
Purchase Price multiplied by the number of one one-thousandths of shares of Series A Preferred Stock for which a Right was exercisable immediately prior to the time that the Acquiring Person became such (such excess, the “Spread”),
and (B) with respect to each Right (other than Rights which have become void pursuant to Section 11(a)(ii)), make adequate provision to substitute for the shares of Common Stock issuable in accordance with subparagraph (ii) upon
exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in such Purchase Price, (3) shares of 

  

 - 12 - 

 
Series A Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock which, by
virtue of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board of Directors to have substantially the same value as the shares of Common Stock (such
shares of preferred stock and shares or fractions of shares of preferred stock are hereinafter referred to as “Common Stock equivalents”), (4) debt securities of the Company, (5) other assets or (6) any combination of
the foregoing, having a value which, when added to the value of the shares of Common Stock actually issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase
Price), where such aggregate value has been determined by the Board of Directors upon the advice of a nationally recognized investment banking firm selected in good faith by the Board of Directors; provided, however, if the Company
shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the date that the Acquiring Person became such (the “Section 11(a)(ii) Trigger Date”), then the Company
shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Series A Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If within the thirty (30) day period referred to above the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in
full of the Rights, then, if the Board of Directors so elects, such thirty (30) day period may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is hereinafter called the “Substitution Period”). To the extent that the Company determines that
some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that
such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the shares of Common Stock shall be the current per share market price (as
determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any Common Stock equivalent shall be deemed to equal the current per share market price of the Common Stock. The Board
of Directors of the Company may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii). 

 

 - 13 - 

 (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all
holders of Series A Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Series A Preferred Stock (or shares having similar rights, privileges and preferences as the
Series A Preferred Stock (“equivalent preferred shares”)) or securities convertible into Series A Preferred Stock or equivalent preferred shares at a price per share of Series A Preferred Stock or equivalent preferred shares (or
having a conversion price per share, if a security convertible into shares of Series A Preferred Stock or equivalent preferred shares) less than the then-current per share market price of the Series A Preferred Stock (determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Series A Preferred Stock and equivalent preferred shares outstanding on such record date plus the number of shares of Series A Preferred Stock and equivalent preferred shares which the aggregate offering price of the
total number of such shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of
Series A Preferred Stock and equivalent preferred shares outstanding on such record date plus the number of additional shares of Series A Preferred Stock and/or equivalent preferred shares to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and which shall be binding on the Rights Agent. Shares of Series A Preferred Stock and equivalent preferred shares owned by or
held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (c) In case the Company shall fix a record date for the making of a distribution to all holders of the Series A Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Series A Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the
then-current per share market price of the Series A Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of such assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Series A Preferred Stock, and the denominator of which shall be such current per share market price of the Series A Preferred Stock; provided, however, that in no event shall the consideration to be paid

  

 - 14 - 

 
upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed. 
 (d) (i) Except as otherwise provided herein, for the purpose of any computation hereunder, the
“current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported by (w) the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, (x) if the
Security is not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or
admitted to trading or, if (y) the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use, or, (z) if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the Company. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. 
 (ii) For the purpose of any computation hereunder, if the Series A Preferred Stock is publicly traded, the “current per share market price” of the Series A Preferred Stock shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Series A Preferred Stock is not publicly traded but the Common Stock is publicly traded, the “current per share market price” of the Series A Preferred Stock shall be conclusively
deemed to be the current per share market price of the Common Stock, as determined pursuant to Section 11(d)(i), multiplied by one thousand (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof). If neither the Common Stock nor the Series A Preferred Stock is publicly traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be 

  

 - 15 - 

 
described in a statement filed with the Rights Agent and shall be binding on the Rights Agent. 
 (e) No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments not required to be made by reason of this Section 11(e) shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one ten-thousandth of a share of Series A Preferred Stock or share of Common Stock or other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the Expiration Date. 
 (f) If as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than the Series A Preferred Stock, thereafter the Purchase Price and the number of such other shares so receivable upon exercise of a Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Series A Preferred Stock contained in Section 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Series A Preferred Stock shall apply on like terms to any such other shares. 
 (g) All Rights originally issued
by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Series A Preferred Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 
 (h) Unless the Company shall have
exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a share of Series A Preferred Stock (calculated to the nearest one ten- thousandth of a share of Series A Preferred Stock) obtained by
(i) multiplying (x) the number of one one-thousandths of a share of Series A Preferred Stock purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 
 (i) The Company may elect on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in substitution for any adjustment in the number of one
one-thousandths of a share of Series A Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a share of
Series A Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by 

  

 - 16 - 

 
dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company may, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled as a result of such adjustment.
Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public
announcement. 
 (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a share of Series
A Preferred Stock issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a share of Series A Preferred Stock which were
expressed in the initial Right Certificates issued hereunder. 
 (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the shares of Series A Preferred Stock or other shares of capital stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of Series A Preferred Stock or other such shares at such adjusted Purchase Price. 
 (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date the Series A Preferred Stock, Common Stock or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Series A Preferred Stock, Common Stock or other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event
requiring such adjustment. 
 (m) Notwithstanding anything in this Section 11 to the contrary, the Company shall be entitled to make
such adjustments in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision
of the Series A Preferred 

  

 - 17 - 

 
Stock, issuance (wholly for cash) of any shares of Series A Preferred Stock at less than the current market price, issuance (wholly for cash) of Series A
Preferred Stock or securities which by their terms are convertible into or exchangeable for Series A Preferred Stock, dividends on Series A Preferred Stock payable in shares of Series A Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to holders of its Series A Preferred Stock shall not be taxable to such stockholders. 
 (n) Notwithstanding anything in this Rights Agreement to the contrary, in the event that at any time after the date of this Rights Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of a dividend payable in Common Stock) into a greater
or lesser number of shares of Common Stock, then in any such case, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator
of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the
occurrence of such event. 
 (o) The Company agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will
not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits
intended to be afforded by the Rights. 
 Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Stock or the Series A Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if so
required under Section 25 hereof). The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate. 
 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power. (a) In the
event, directly or indirectly, at any time after any Person has become an Acquiring Person, (i) the Company shall merge with and into any other Person (other than one or more of its wholly-owned Subsidiaries), (ii) any Person (other than
one or more of its wholly-owned Subsidiaries), shall consolidate with the Company, or any Person (other than one or more of its wholly-owned Subsidiaries), shall merge with and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any other property, or (iii)

  

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the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating to 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or more of its wholly-owned Subsidiaries), then, and in each such case,
proper provision shall be made so that: 
 (A) each holder of record of a Right (other than Rights which have become void pursuant to
Section 11(a)(ii)) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then-current Purchase Price multiplied by the number of one one-thousandths of a share of Series A Preferred Stock for which a
Right was exercisable (whether or not such Right was then exercisable) immediately prior to the time that any Person first became an Acquiring Person (each as subsequently adjusted thereafter pursuant to Section 11(a)(i), 11(b), 11(c), 11(f),
11(h), 11(i) and 11(m)), in accordance with the terms of this Rights Agreement and in lieu of Series A Preferred Stock, such number of validly issued, fully paid and non-assessable and freely tradeable shares of Common Stock of the Principal Party
(as defined below) not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then-current Purchase Price by the number of one one-thousandths of a
share of Series A Preferred Stock for which a Right was exercisable immediately prior to the time that any Person first became an Acquiring Person (as subsequently adjusted thereafter pursuant to Section 11(a)(i), 11(b), 11(c), 11(f), 11(h),
11(i) and 11(m)) and (2) dividing that product by 50% of the then-current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d)(i) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; provided that the Purchase Price and the number of shares of Common Stock of such Principal Party issuable upon exercise of each Right shall be further adjusted as provided in Section 11(f) of
this Rights Agreement to reflect any events occurring in respect of such Principal Party after the date of such consolidation, merger, sale or transfer; 
 (B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Rights Agreement;

 (C) the term “Company” as used herein shall thereafter be deemed to refer to such Principal Party; and 
 (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of its Common Stock)
in connection with such consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party, each holder of a Right
shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive
had such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited
to, 

  

 - 19 - 

 
reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property. 
 (b) “Principal Party” shall mean: 
 (i) in the case of any transaction described in clauses (i) or (ii) of the first sentence of Section 13(a) hereof:
(A) the Person that is the issuer of the securities into which the shares of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer of the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or, if there is more than one such Person, the Person
the shares of Common Stock of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the
Company if it survives) or (z) the Person resulting from the consolidation; and 
 (ii) in the case of any transaction
described in clause (iii) of the first sentence in Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market value of shares outstanding; 
 provided, however, that in any such
case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if
such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term “Principal Party” shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, and the Common Stock of all of such persons have been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of Common Stock having the greatest aggregate
market value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in clauses
(1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear
the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such interests. 
 (c) The Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the Principal Party involved therein shall have executed and delivered to the
Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed in accordance with their terms and that such consolidation, merger, sale or transfer of assets shall 

  

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not result in a default by the Principal Party under this Rights Agreement as the same shall have been assumed by the Principal Party pursuant to Sections
13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the Principal Party will: 
 (i) prepare and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date, and similarly comply with applicable state securities laws; 
 (ii) use its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the NYSE or on another
national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the NYSE or such securities exchange, or, if the Common Stock of the Principal Party
shall not be listed or admitted to trading on the NYSE or a national securities exchange, to cause the Rights and the securities receivable upon exercise of the Rights to be reported by such other system then in use; 
 (iii) deliver to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the Exchange Act; and 
 (iv) obtain waivers of any
rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of outstanding Rights. 
 (d) In case the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its affairs, which provision would have the effect of
(i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common
Stock or Common Stock equivalents of such Principal Party at less than the then-current market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock or Common
Stock equivalents of such Principal Party at less than such then-current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to
the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction. 
  

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 (e) The Company covenants and agrees that it shall not, at any time after a Person first becomes an
Acquiring Person enter into any transaction of the type contemplated by Sections 13(a)(i)-(iii) hereof if (x) at the time of or immediately after such consolidation, merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or (z) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. 
 Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights (except prior to the
Distribution Date in accordance with Section 11(n) hereof) or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported by (w) the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on the NYSE or, (x) if the Rights are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which
the Rights are listed or admitted to trading or, (y) if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use or, (z) if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used. 
 (b) The Company shall not be required to issue fractions of shares of Series A Preferred
Stock (other than fractions which are integral multiples of one one-thousandth of a share of Series A Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Series A Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of Series A Preferred Stock). Interests in fractions of Series A Preferred Stock in integral multiples of one one-thousandth of a share of Series A Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, that such agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Series A Preferred Stock represented by such depositary receipts. In lieu of fractional shares 

  

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of Series A Preferred Stock that are not integral multiples of one one-thousandth of a share of Series A Preferred Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised for shares of Series A Preferred Stock as herein provided an amount in cash equal to the same fraction of the current market value of one share of Series A Preferred
Stock. For the purposes of this Section 14(b), the current market value of a share of Series A Preferred Stock shall be the closing price of a share of Series A Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise. 
 (c) The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common Stock upon the exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right
Certificates at the time such Rights are exercised or exchanged for shares of Common Stock as herein provided an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock (as determined in accordance with
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise or exchange. 
 (d) The holder of a Right by
the acceptance of the Right expressly waives the right to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right (except as provided above). 
 Section 15. Rights of Action. All rights of action in respect of this Rights Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock), on such holder’s own behalf and for such
holder’s own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate
(or, prior to the Distribution Date, such Common Stock) in the manner provided in such Right Certificate and in this Rights Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Rights Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement. 
 Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
 (i) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock; 
  

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 (ii) after the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and 
 (iii) the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution
Date, the Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to Section 7(e) hereof, shall be affected by any notice to the contrary. 
 Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the Series A Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in this Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. 
 Section
18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of this Rights Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Rights
Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly. 
 (b) The
Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Rights Agreement in reliance upon any Right Certificate or certificate for
the Series A Preferred Stock or Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or
document reasonably believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 

 

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 Section 19. Merger or Consolidation or Change of Rights Agent. (a) Any corporation into which
the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the Right Certificates shall have been countersigned but not delivered, such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent
or in the name of such successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Rights Agreement. 
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Rights Agreement. 
 Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 
 (a)
The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion. 
 (b) Whenever in the performance of its duties under this Rights Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by any one of the Chief Executive Officer, President, any Vice President, the Treasurer or the Secretary of the Company (each, an “Authorized Officer”)
and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Rights Agreement in reliance upon such certificate. 

(c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct.

  

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 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals
contained in this Rights Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 

(e) The Rights Agent shall not be under any responsibility in respect of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12, describing such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Series A Preferred Stock or other securities to be issued pursuant to this Rights Agreement or any Right Certificate or as to whether any shares of Series A Preferred Stock or other securities will, when
issued, be validly authorized and issued, fully paid and nonassessable. 
 (f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Rights Agreement. 
 (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any person reasonably believed by the Rights Agent to be one of the Authorized Officers, and to apply to such Authorized Officers for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance with instructions of any such Authorized Officer or for any delay in acting while waiting for those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this Rights Agreement and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any Authorized Officer of the Company actually receives such application, unless any such Authorized Officer shall have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted. 
  

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 (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Rights Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. 
 (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 
 (j) If, with respect to any Right
Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the
holder is not an Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

 Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock or the Series A Preferred Stock by registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to resign automatically on the effective date of such
termination; and any required notice will be sent by the Company. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock or the Series A Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (A) a corporation
organized and doing business under the laws of the United States or any State thereof, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (B) an affiliate of a corporation described in clause (A) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it 
  

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hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or the Series A Preferred Stock, and, following the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be. 
 Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Rights Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such forms as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of Common Stock following the Distribution Date and prior to the Expiration Date, the Company may with respect to shares of Common Stock so issued or sold pursuant to (i) the exercise of stock options, (ii) under any
employee plan or arrangement, (iii) the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (iv) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue
Right Certificates representing the appropriate number of Rights in connection with such issuance or sale. 
 Section 23. Redemption.
(a) The Board of Directors of the Company may, at any time prior to such time as any Person first becomes an Acquiring Person, redeem all but not less than all the then-outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the current market price of the Common Stock at the time of redemption as
determined pursuant to Section 11(d)(i) hereof) or any other form of consideration deemed appropriate by the Board of Directors. 
 (b)
Immediately upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights (or such later time as the Board of Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders of the then-outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. 
  

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 Section 24. Exchange. (a) The Board of Directors of the Company may, at its option, at any time
after any Person first becomes an Acquiring Person, exchange all or part of the then-outstanding and exercisable Rights (which shall not include Rights that have not become effective or that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock (or one-thousandth of a share of Series A Preferred Stock) per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such amount per Right being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effectuate such
exchange at any time after an Acquiring Person becomes the Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares of Common Stock then outstanding. From and after the occurrence of an event specified in Section 13(a)
hereof, any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange of the
Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. 
 (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of the Rights so exchanged at their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights. 
 (c) The Company may at its option substitute and, in the event that there
shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued (and unreserved) to permit an exchange of Rights as contemplated in accordance with this Section 24, the Company shall substitute to the extent
of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Series A Preferred Stock or fraction thereof (or equivalent preferred shares as such term is defined in
Section 11(b)) such that the current per share market price (determined pursuant to Section 11(d) hereof) of one share of Series A Preferred Stock (or equivalent preferred share) multiplied by such number or fraction is equal to the
current per share market price of one share of Common Stock (determined pursuant to Section 11(d) hereof) as of the date of such exchange. 
  

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 Section 25. Notice of Certain Events (a) In case the Company shall at any time after the earlier
of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend payable in stock of any class to the holders of its Series A Preferred Stock or to make any other distribution to the holders of its Series A Preferred Stock
(other than a regular quarterly cash dividend), (ii) to offer to the holders of its Series A Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Series A Preferred Stock or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification of its Series A Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding Series A Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the Company, or (v) to declare or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend, or distribution or offering of rights or warrants, or the date on which such liquidation, dissolution, reclassification, subdivision, combination, consolidation or winding up is
to take place and the date of participation therein by the holders of the Common Stock and/or Series A Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining holders of the Series A Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the Common Stock and/or Series A Preferred Stock, whichever shall be the earlier. 
 (b) In case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to each holder of a Right Certificate (or if occurring prior to
the Distribution Date, the holders of the Common Stock) in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under
Section 11(a)(ii) and Section 13 hereof. 
 Section 26. Notices. Notices or demands authorized by this Rights Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows: 
 WCI Communities, Inc. 
 24301 Walden Center Drive 
 Bonita Springs, Florida 34134 
 Attention: General Counsel 
 Subject to the provisions of
Section 21 hereof, any notice or demand authorized by this Rights Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 
 Computershare Trust Company, N.A.

 2 N. LaSalle Street 
 Chicago,
IL 60602 
 Attention: Relationship Management 
  

 - 30 - 

 Notices or demands authorized by this Rights Agreement to be given or made by the Company or the Rights Agent to the
holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 
 Section 27. Supplements and Amendments. Except as otherwise provided in this Section 27, for so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Rights Agreement in any respect without the approval of any holders of the Rights. At any time when the
Rights are no longer redeemable, except as otherwise provided in this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend this Rights Agreement without the approval of any holders of Rights in
order to (i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) shorten or lengthen any time period hereunder, or
(iv) change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable; provided, however, that no such supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such amendment may cause the Rights again to become redeemable or cause this Rights Agreement again to become amendable other than in
accordance with this sentence. Notwithstanding anything contained in this Rights Agreement to the contrary, no supplement or amendment shall be made which decreases the Redemption Price. Upon the delivery of a certificate from an appropriate officer
of the Company which states that the supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment; provided that any supplement or amendment that does not amend
Sections 18, 19, 20 or 21 hereof in a manner adverse to the Rights Agent shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent. 
 Section 28. Successors. All the covenants and provisions of this Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 29. Benefits of this Rights Agreement.
Nothing in this Rights Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock). 
  

 - 31 - 

 Section 30. Determinations and Actions by the Board of Directors. The Board of Directors of the
Company shall have the exclusive power and authority to administer this Rights Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary or advisable in
the administration of this Rights Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Rights Agreement and (ii) make all determinations deemed necessary or advisable for the administration
of this Rights Agreement (including, without limitation, a determination to redeem or not redeem the Rights or to amend this Rights Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) that are done or made by the Board of Directors of the Company in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights,
as such, and all other parties, and (y) not subject the Board of Directors to any liability to the holders of the Rights. 
 Section 31.
Severability. If any term, provision, covenant or restriction of this Rights Agreement or applicable to this Rights Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Rights Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated (with prompt notice to the Rights Agent) and shall not expire until the close of business on
the tenth Business Day following the date of such determination by the Board. Without limiting the foregoing, if any provision requiring a specific group of Directors of the Company to act is held to by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then be made by the Board in accordance with applicable law and the Company’s Articles of Incorporation and Bylaws. 
 Section 32. Governing Law. This Rights Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws
of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 
 Section 33. Counterparts. This Rights Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
 Section 34.
Descriptive Headings. Descriptive headings of the several Sections of this Rights Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
 Section 35. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or
failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of
data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 
  

 - 32 - 

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

									
		 		 		 	WCI COMMUNITIES, INC.
					
	Attest:	 	/s/ Vivien Hastings	 		 	By:	 	/s/ Jerry Starkey
		 		 		 	Name:	 	Jerry Starkey
		 		 		 	Title:	 	President & Chief Executive Officer
				
		 		 		 	COMPUTERSHARE TRUST COMPANY, N.A.
					
	Attest:	 	/s/ Sally A. Cohen	 		 	By:	 	/s/ Dennis V. Moccia
		 		 		 	Name:	 	Dennis V. Moccia
		 		 		 	Title:	 	Managing Director

 [WCI Communities, Inc. – Rights Agreement] 

 EXHIBIT A 
 FORM 
 OF 
 CERTIFICATE OF DESIGNATIONS 
 OF 
 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 
 OF 
 WCI COMMUNITIES, INC. 
 (Pursuant to
Section 151 of the 
 General Corporation Law of the State of Delaware) 
  

 WCI Communities, Inc., a corporation
organized and existing under the General Corporation Law of the State of Delaware (the “Company”), hereby certifies that the following resolution was duly adopted by the Board of Directors of the Company as required by
Section 151 of the General Corporation Law of the State of Delaware on January 30, 2007: 
 RESOLVED, that pursuant to the
authority vested in the Board of Directors of the Company (hereinafter being referred to as the “Board of Directors” or the “Board”) in accordance with the provisions of the Company’s Restated Certificate of
Incorporation (hereinafter being referred to as the “Certificate of Incorporation”), the Board of Directors hereby creates a series of preferred stock, par value $0.01 per share, of the Company, to be designated the “Series A
Junior Participating Preferred Stock” and hereby adopts the resolution establishing the designations, number of shares, preferences, voting powers and other rights and the restrictions and limitations thereof, of the shares of such series as
set forth below: 
 Section 1. Designation and Amount. The shares of such series shall be designated as “Series A Junior
Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting the Series A Preferred Stock shall be 115,000. Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series A Preferred Stock. 
 Section 2. Dividends and Distributions 
 (A) Subject to the rights of the holders of
any shares of any series of preferred stock of the Company (the “Preferred Stock”) (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of common stock, par 

  

 A-1 

 
value $0.01 per share, of the Company (the “Common Stock”) and of any other stock of the Company ranking junior to the Series A Preferred
Stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July, and October in each year (each such
date being referred to herein as a “Dividend Payment Date”), commencing on the first Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock (the “Issue Date”),
in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock, declared on the Common Stock since the immediately preceding Dividend Payment Date or, with
respect to the first Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Company shall at any time after the Issue Date declare and pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such
event. 
 (B) The Company shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Dividend Payment Date and the next subsequent Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable, when, as and if declared, on such
subsequent Dividend Payment Date. 
 (C) Dividends shall begin to accrue and be cumulative, whether or not earned or declared,
on outstanding shares of Series A Preferred Stock from the Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by- 

  

 A-2 

 
share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. 
 Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights: 
 (A) Subject to the provision for adjustment hereinafter set forth and except as otherwise provided in the Certificate of Incorporation or
required by law, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters upon which the holders of the Common Stock of the Company are entitled to vote. In the event the Company shall at any time after
the Issue Date declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. 
 (B) Except as otherwise provided herein, in the Certificate of Incorporation
or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, and except as otherwise required by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company. 
 (C) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
 (D) If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share or shares of Series A Preferred Stock are in default, the number of directors constituting the Board of Directors of the Company shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Company, the holders of record of the Series A Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Series A Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of
the Company, the holders of any Series A Preferred Stock being entitled to cast a number of votes per share of Series A Preferred Stock as is specified in paragraph (A) of this Section 3. Each 

  

 A-3 

 
such additional director shall serve until the next annual meeting of stockholders for the election of directors, or until his successor shall be elected and
shall qualify, or until his right to hold such office terminates pursuant to the provisions of this Section 3(D). Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the provisions of this Section 3(D) may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall
cease to exist, the holders of the Series A Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the
foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(D) shall be in addition to any other voting rights granted to the holders of the Series A Preferred Stock in this Section 3. 
 Section 4. Certain Restrictions. 
 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not earned or declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not: 
 (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; 

(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled; 
 (iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Company ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the Series A Preferred Stock or rights, warrants or options to acquire such junior stock; or 
  

 A- 4 

 (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 
 (B) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner. 
 Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein. 
 Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made
(A) to the holders of the Common Stock or of shares of any other stock of the Company ranking junior, upon liquidation, dissolution or winding up, to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or
(B) to the holders of shares of stock ranking on a parity upon liquidation, dissolution or winding up with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Preferred
Stock liquidation preference and the liquidation preferences of all other classes and series of stock of the Company, if any, that rank on a parity with the Series A Preferred Stock in respect thereof, then the assets available for such distribution
shall be distributed ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in the proportion to their respective liquidation preferences. In the event the Company shall at any time after the Issue Date declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in 

  

 A-5 

 
clause (A) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 Neither the merger or consolidation of the Company into or with another entity nor the merger or consolidation of any other entity into or with the Company (nor the sale of all or substantially all of the assets of
the Company) shall be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 6. 
 Section 7. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are converted into, exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly converted into, exchanged for or changed into an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is converted, exchanged or
converted. In the event the Company shall at any time after the Issue Date declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the
conversion, exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 Section 8. No
Redemption. The shares of Series A Preferred Stock shall not be redeemable from any holder. 
 Section 9. Rank. The Series A
Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of the Company, junior to all other series of Preferred Stock and senior to the Common Stock. 

Section 10. Amendment. If any proposed amendment to the Certificate of Incorporation (including this Certificate of Designations) would alter,
change or repeal any of the preferences, powers or special rights given to the Series A Preferred Stock so as to affect the Series A Preferred Stock adversely, then the holders of the Series A Preferred Stock shall be entitled to vote separately as
a class upon such amendment, and the affirmative vote of two-thirds of the outstanding shares of the Series A Preferred Stock, voting separately as a class, shall be necessary for the adoption thereof, in addition to such other vote as may be
required by the General Corporation Law of the State of Delaware. 
 Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of
Series A Preferred Stock. 
  

 A-6 

 IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Company by
                    , [Title of Signatory] of the Company on January 30, 2007. 
  

	
	
	
	   
	Name:
	Title:

  

 A-7 

 EXHIBIT B 
 FORM OF RIGHT CERTIFICATE 
  

			
	Certificate No. R-             	 	             Rights

 NOT EXERCISABLE AFTER JANUARY 30, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 
 Right
Certificate 
 WCI COMMUNITIES, INC. 
 This certifies that                      or registered assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of January 30, 2007, as the same may be amended from time to time (the “Rights Agreement”), between WCI
Communities, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A. (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York City time, on January 30, 2009 at the office or agency of the Rights Agent designated for such purpose, or of its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), of the Company, at a purchase price of $70.00 per one one-thousandth of a share of Series A Preferred
Stock (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a share of Series A Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of January 30, 2007, based on the Series A
Preferred Stock as constituted at such date. As provided in the Rights Agreement, the Purchase Price, the number of one one-thousandths of a share of Series A Preferred Stock (or other securities or property) which may be purchased upon the exercise
of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 
 This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a 

  

 B-1 

 
full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without charge after receipt of a written
request therefor. 
 This Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights
Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Series A Preferred Stock as the
Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not exercised. 
 Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in whole or in part for shares of Series A Preferred Stock or shares of the Company’s Common
Stock, par value $0.01 per share. 
 No fractional shares of Series A Preferred Stock or Common Stock will be issued upon the exercise or
exchange of any Right or Rights evidenced hereby (other than fractions of Series A Preferred Stock which are integral multiples of one one-thousandth of a share of Series A Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 
 No holder of this Right
Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Series A Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise or exchange
hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement) or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by this Right certificate shall have been exercised or exchanged as provided in the Rights Agreement. 
 This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
  

 B-2 

 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of
                 ,     . 
  

									
	ATTEST:	 		 	WCI COMMUNITIES, INC.
					
	By:	 	  	 		 	By:	 	  

  

			
	
	Countersigned:
	
	COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent
		
	By:	 	  
		 	Authorized Signatory

  

 B-3 

 Form of Reverse Side of Right Certificate 
 FORM OF ASSIGNMENT 
 (To be executed by the registered holder if such

 holder desires to transfer the Right Certificate) 
 FOR VALUE RECEIVED                      hereby sells, assigns and transfer
unto                      
  

 (Please print name and address of transferee) 
  

 Rights represented by this Right Certificate,
together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                      Attorney, to
transfer said Rights on the books of the within-named Company, with full power of substitution. 
 Dated:
                ,      
  

	
	
	   
	Signature

 Signature Guaranteed: 
 Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. 
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being sold, assigned or transferred to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 
  

	
	
	   
	Signature

  

 B-4 

 Form of Reverse Side of Right Certificate — continued 
 FORM OF ELECTION TO PURCHASE 
 (To
be executed if holder desires to exercise 
 Rights represented by the Rights Certificate) 
 To the Rights Agent: 
 The undersigned hereby irrevocably
elects to exercise                      Rights represented by this Right Certificate to purchase the shares of Series A Junior Participating
Preferred Stock (or other securities or property) issuable upon the exercise of such Rights and requests that certificates for such shares of Series A Junior Participating Preferred Stock (or such other securities) be issued in the name of:

  

 (Please print
name and address) 
  

 If such
number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: 
  

			
	 Please insert social security
 or other identifying number:
	  	  

  
  

 (Please print name and address) 
  

 Dated:                 ,
     
  

	
	
	   
	 Signature
 (Signature must conform to holder
 specified on Right Certificate)

 Signature Guaranteed: 
 Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. 
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being sold, assigned or transferred to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 
  

	
	
	   
	Signature

  

 B-5 

 Form of Reverse Side of Right Certificate — continued 
 NOTICE 
 The signature in the Form of
Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. 
 In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored. 
  

  

 B-6 

 EXHIBIT C 
 UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE. 
 SUMMARY OF RIGHTS TO PURCHASE 
 Shares of Series A Junior Participating Preferred Stock 
 On January 30, 2007, the
Board of Directors of WCI Communities, Inc., a Delaware corporation (the “Company”), declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01
per share, of the Company (the “Common Stock”). The dividend is payable on February 9, 2007, to the stockholders of record as of the close of business on February 9, 2007 (the “Record Date”). Each Right
entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), of the Company at a price of
$70.00 per one one-thousandth of a share of Series A Preferred Stock (as the same may be adjusted, the “Purchase Price”). The description and terms of the Rights are set forth in a Rights Agreement, dated as of January 30, 2007
(as the same may be amended from time to time, the “Rights Agreement”), between the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”). 
 Until the close of business on the earlier of (i) the tenth day after the first date of a public announcement that a person (other than an Exempted
Entity (as defined below)) or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 15% or more of the shares of Common Stock then outstanding or (ii) the tenth business day (or
such later date as may be determined by action of the Board of Directors prior to such time as any person or group of affiliated persons becomes an Acquiring Person) after the date of commencement of, or the first public announcement of an intention
to commence, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person (other than an Exempted Entity) or group of 15% or more of the shares of Common Stock then outstanding (the earlier of such
dates being herein referred to as the “Distribution Date”), the Rights will be evidenced by the shares of Common Stock represented by certificates for Common Stock outstanding as of the Record Date, together with a copy of the
summary of rights disseminated in connection with the original dividend of Rights. 
 “Exempted Entity” shall mean
(1) the Company, (2) any Subsidiary (as defined below) of the Company (in the case of subclauses (1) and (2) including, without limitation, in its fiduciary capacity), (3) any employee benefit plan of the Company or of any
Subsidiary of the Company, (4) any entity or trustee holding Common Stock for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any
Subsidiary of the Company, and (5) any HW Entity (as defined in the Rights Agreement); provided, however, that any HW Entity shall only be deemed to be an Exempted Entity for so long as it beneficially owns no more than 16% of the
outstanding Common Stock; and provided, further, that any HW Entity shall cease to be an Exempted Entity as of the date that such HW Entity ceases to beneficially own 15% or more of the shares of the then outstanding Common Stock.

  

 C-1 

 The Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of
the Rights), the Rights will be transferable only in connection with the transfer of Common Stock. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without a notation incorporating the Rights Agreement by reference or a copy of this Summary of Rights, will also constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. 
 The Rights are not exercisable
until the Distribution Date. The Rights will expire on January 30, 2009 (the “Final Expiration Date”), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each
case as described below. The Rights Agreement is effective as of January 30, 2007. 
 The Purchase Price payable, and the number of
shares of Series A Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock, (ii) upon the grant to holders of the Series A Preferred Stock of certain rights or warrants to subscribe for or purchase Series A Preferred Stock at a price, or securities convertible into
Series A Preferred Stock with a conversion price, less than the then-current market price of the Series A Preferred Stock or (iii) upon the distribution to holders of the Series A Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Series A Preferred Stock) or of subscription rights or warrants (other than those referred to above). 
 The Rights are also subject to adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any
such case, prior to the Distribution Date. 
 Shares of Series A Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of the greater of (a) $1 per share and (b) an amount equal to 1,000 times the dividend
declared per share of Common Stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred Stock will be entitled to a minimum preferential liquidation payment of $1,000 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate 1,000 times the payment made per share of Common Stock. Each share of Series A Preferred Stock will have 1,000 votes, voting together with the Common Stock. Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock are converted or exchanged, each share of Series A Preferred Stock will be entitled to receive 1,000 times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions. 
  

 C-2 

 Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the
value of the one one-thousandth interest in a share of Series A Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of Common Stock. 
 In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, that number of shares of Common Stock having a market value of two
times the Purchase Price. 
 In the event that, after a person or group has become an Acquiring Person, the Company is acquired in a merger
or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise thereof at the then-current exercise price of the Right, that number of shares of common stock of the person with whom the Company has engaged in the foregoing transaction (or
its parent), which number of shares at the time of such transaction will have a market value of two times the Purchase Price. 
 At any time
after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding shares of Common Stock or the occurrence of an event described in the prior paragraph, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will have become void), in whole or in part, at an exchange ratio of one share of Common Stock, or a fractional share of Series A Preferred Stock
(or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). 
 With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares of Series A Preferred Stock will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Series A Preferred Stock, which may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on the market price of the Series A Preferred Stock on the last trading day prior to the date of exercise. 
 At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 
 For so long as the Rights are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner. After the Rights are no longer redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights Agreement in any manner that does not adversely affect the interests of holders of the Rights. 
  

 C-3 

 Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or to receive dividends. 
 A copy of the Rights Agreement has
been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated January 31, 2007. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by reference. 
  

 C-4

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