Document:

EX-4.3

 Exhibit 4.3 
  

 
 JOHN DEERE OWNER TRUST
20[        ] 
 TRUST AGREEMENT 

between 
 JOHN DEERE RECEIVABLES
LLC 
 Depositor 
 and 

[        ] 

Owner Trustee 
 Dated as of
[            ], 20[        ] 
  

 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I
	  			
		
	 DEFINITIONS
	  			
			
	 SECTION 1.01
	 	Capitalized Terms	  	 	1	 
	 SECTION 1.02
	 	Other Definitional Provisions	  	 	3	 
		
	 ARTICLE II
	  			
		
	 ORGANIZATION
	  			
			
	 SECTION 2.01
	 	Name	  	 	4	 
	 SECTION 2.02
	 	Office	  	 	4	 
	 SECTION 2.03
	 	Purposes and Powers	  	 	4	 
	 SECTION 2.04
	 	Appointment of Owner Trustee	  	 	5	 
	 SECTION 2.05
	 	Initial Capital Contribution of Trust Estate	  	 	5	 
	 SECTION 2.06
	 	Declaration of Trust	  	 	5	 
	 SECTION 2.07
	 	Liability of the Owner	  	 	5	 
	 SECTION 2.08
	 	Title to Trust Property	  	 	6	 
	 SECTION 2.09
	 	Situs of Trust	  	 	6	 
	 SECTION 2.10
	 	Representations and Warranties of the Depositor	  	 	6	 
		
	 ARTICLE III
	  			
		
	 CERTIFICATE AND TRANSFER OF INTERESTS
	  			
			
	 SECTION 3.01
	 	Initial Ownership	  	 	7	 
	 SECTION 3.02
	 	The Certificate	  	 	7	 
	 SECTION 3.03
	 	Authentication of the Certificate	  	 	7	 
	 SECTION 3.04
	 	Exchange of the Certificate	  	 	7	 
	 SECTION 3.05
	 	Mutilated, Destroyed, Lost or Stolen Certificate	  	 	8	 
	 SECTION 3.06
	 	Persons Deemed Owners	  	 	8	 
	 SECTION 3.07
	 	Access to Certificateholder’s Name and Address	  	 	8	 
	 SECTION 3.08
	 	Maintenance of Office or Agency	  	 	8	 
	 SECTION 3.09
	 	Appointment of Paying Agent	  	 	9	 
	 SECTION 3.10
	 	Depositor as Certificateholder	  	 	9	 
	 SECTION 3.11
	 	Non-transferability of the Certificate(s)	  	 	9	 
	 SECTION 3.12
	 	Regarding the Certificate	  	 	9	 
	 SECTION 3.13
	 	Restrictions on Note Acquisitions	  	 	10	 

  
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	 ARTICLE IV
	  			
		
	 ACTIONS BY OWNER TRUSTEE
	  			
			
	 SECTION 4.01
	 	Prior Notice to Owner with Respect to Certain Matters	  	 	10	 
	 SECTION 4.02
	 	Action by the Owner with Respect to Certain Matters	  	 	11	 
	 SECTION 4.03
	 	Action by the Owner with Respect to Bankruptcy	  	 	11	 
	 SECTION 4.04
	 	Restrictions on the Owner’s Power	  	 	11	 
		
	 ARTICLE V
	  			
		
	 APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
	  			
			
	 SECTION 5.01
	 	Establishment of Trust Account	  	 	11	 
	 SECTION 5.02
	 	Application of Trust Funds	  	 	12	 
	 SECTION 5.03
	 	Method of Payment	  	 	12	 
	 SECTION 5.04
	 	No Segregation of Monies; No Interest	  	 	13	 
	 SECTION 5.05
	 	Accounting and Reports to the Owner, the Internal Revenue Service and Others	  	 	13	 
		
	 ARTICLE VI
	  			
		
	 AUTHORITY AND DUTIES OF OWNER TRUSTEE
	  			
			
	 SECTION 6.01
	 	General Authority	  	 	14	 
	 SECTION 6.02
	 	General Duties	  	 	14	 
	 SECTION 6.03
	 	Action upon Instruction	  	 	14	 
	 SECTION 6.04
	 	No Duties Except as Specified in This Agreement or in Instructions	  	 	15	 
	 SECTION 6.05
	 	No Action Except Under Specified Documents or Instructions	  	 	15	 
	 SECTION 6.06
	 	Restrictions	  	 	16	 
		
	 ARTICLE VII
	  			
		
	 CONCERNING THE OWNER TRUSTEE
	  			
	 SECTION 7.01
	 	Acceptance of Trusts and Duties	  	 	16	 
	 SECTION 7.02
	 	Furnishing of Documents	  	 	19	 
	 SECTION 7.03
	 	Representations and Warranties	  	 	19	 
	 SECTION 7.04
	 	Reliance; Advice of Counsel	  	 	20	 
	 SECTION 7.05
	 	Not Acting in Individual Capacity	  	 	20	 
	 SECTION 7.06
	 	Owner Trustee Not Liable for Certificate or Receivables	  	 	20	 
	 SECTION 7.07
	 	Owner Trustee May Own Notes	  	 	21	 
		
	 ARTICLE VIII
	  			
		
	 COMPENSATION OF OWNER TRUSTEE
	  			
			
	 SECTION 8.01
	 	Owner Trustee’s Fees and Expenses	  	 	21	 

  
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	 SECTION 8.02
	 	Indemnification	  	 	21	 
	 SECTION 8.03
	 	Payments to the Owner Trustee	  	 	22	 
		
	 ARTICLE IX
	  			
		
	 TERMINATION OF TRUST AGREEMENT
	  			
			
	 SECTION 9.01
	 	Termination of Trust Agreement	  	 	22	 
	 SECTION 9.02
	 	Dissolution upon Bankruptcy of the Depositor	  	 	23	 
	 ARTICLE X
	  			
		
	 SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER
TRUSTEES
	  			
			
	 SECTION 10.01
	 	Eligibility Requirements for Owner Trustee	  	 	23	 
	 SECTION 10.02
	 	Resignation or Removal of Owner Trustee	  	 	24	 
	 SECTION 10.03
	 	Successor Owner Trustee	  	 	25	 
	 SECTION 10.04
	 	Merger or Consolidation of Owner Trustee	  	 	25	 
	 SECTION 10.05
	 	Appointment of Co-Trustee or Separate Trustee	  	 	25	 
		
	 ARTICLE XI
	  			
		
	 MISCELLANEOUS
	  			
			
	 SECTION 11.01
	 	Supplements and Amendments	  	 	27	 
	 SECTION 11.02
	 	No Legal Title to Owner Trust Estate in the Owner	  	 	28	 
	 SECTION 11.03
	 	Limitations on Rights of Others	  	 	28	 
	 SECTION 11.04
	 	Notices	  	 	28	 
	 SECTION 11.05
	 	Severability	  	 	28	 
	 SECTION 11.06
	 	Separate Counterparts	  	 	29	 
	 SECTION 11.07
	 	Successors and Assigns	  	 	29	 
	 SECTION 11.08
	 	Covenant of the Depositor	  	 	29	 
	 SECTION 11.09
	 	No Petition	  	 	29	 
	 SECTION 11.10
	 	No Recourse	  	 	29	 
	 SECTION 11.11
	 	Headings	  	 	30	 
	 SECTION 11.12
	 	GOVERNING LAW	  	 	30	 
	 SECTION 11.13
	 	WAIVER OF JURY TRIAL	  	 	30	 
	 SECTION 11.14
	 	Depositor Payment Obligation	  	 	30	 
	 SECTION 11.15
	 	Administrator	  	 	30	 
	 SECTION 11.16
	 	Communication with Rating Agencies	  	 	30	 
	 SECTION 11.17
	 	USA PATRIOT Act Compliance	  	 	31	 
			
	 EXHIBIT A
	 	Form of Certificate	  	 	A-1	 
	 EXHIBIT B
	 	Certificate of Trust of John Deere Owner Trust 20[            ]	  	 	B-1	 

  
 iii 

 TRUST AGREEMENT, dated as of
[            ], 20[    ], between John Deere Receivables LLC, a Nevada limited liability company, as Depositor, and
[                        ], a
[                        ], as Owner Trustee. 

ARTICLE I 

DEFINITIONS 

SECTION 1.01 Capitalized Terms. For all purposes of this Agreement, the following terms shall have the meanings set forth below:

 “Administration Agreement” means the Administration Agreement to be dated as of
[            ], 20[        ], among the Administrator, the Trust and the Indenture Trustee, as the same may be amended, modified or
supplemented from time to time. 
 “Administrator” means John Deere Capital Corporation, a Delaware corporation, or any successor
Administrator under the Administration Agreement. 
 “Agreement” shall mean this Trust Agreement, as the same may be amended and
supplemented from time to time. 
 “Basic Documents” shall mean the Purchase Agreement, the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Depository Agreement, the Asset Representations Review Agreement and the other documents and certificates delivered in connection therewith. 

“Certificate” shall mean a certificate evidencing the beneficial interest of the Owner in the Trust, substantially in the form
attached hereto as Exhibit A. 
 “Certificate Distribution Account” shall have the meaning assigned to such term in
Section 5.01. 
 “Certificate of Trust” shall mean the Certificate of Trust in the form of Exhibit B to be filed for the
Trust pursuant to Section 3810(a) of the Trust Statute. 
 “Certificate Register” and “Certificate Registrar” shall
mean the register mentioned and the registrar appointed pursuant to Section 3.04. 
 “Certificateholder” shall mean the
Depositor. 
 “Code” shall mean the Internal Revenue Code of 1986, as amended. 

“Corporate Trust Office” shall mean, (i) with respect to the Owner Trustee, the corporate trust office of the Owner Trustee
located at [                            ], Attention:
[                            ]; or at such other address as the Owner Trustee may designate by notice
to the Owners and the Depositor, or the principal corporate trust office of any successor Owner Trustee (the address of which the successor owner trustee will notify the Owners and the Depositor) and (ii) means with respect to the Paying Agent
and the Certificate Registrar, the office [of the Indenture Trustee at which at any particular time its corporate trust business shall be administered which office at the date of the execution of this

 
Agreement is] located at [                        ], Attention:
[                        ], facsimile No.:
[            ], or at such other address as the Paying Agent and the Certificate Registrar may designate from time to time by notice to the Owners and the Depositor, or the corporate
trust office of any successor Paying Agent or the Certificate Registrar (the address of which the successor paying agent and the certificate registrar will notify the Owners and the Depositor). 

“Depositor” shall mean John Deere Receivables LLC, in its capacity as Depositor hereunder. 

“Depository Agreement” means the agreement executed by the Trust and delivered to The Depository Trust Company, dated on or about
the Closing Date, substantially in the form of Exhibit C to the Indenture. 
 “Expenses” shall have the meaning assigned to such
term in Section 8.02. 
 “Indenture” shall mean the Indenture, to be dated as of
[            ], 20[        ], between the Trust and the Indenture Trustee, as the same may be amended and supplemented from time to
time. 
 “Indenture Trustee” shall mean
[                    ], not in its individual capacity but solely as Indenture Trustee under the Indenture. 

“JDCC” shall mean John Deere Capital Corporation, a Delaware corporation. 

“Owner” shall mean the Certificateholder. 

“Owner Trust Estate” shall mean all right, title and interest of the Trust in and to the property and rights assigned to the Trust
pursuant to Article II of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and the Certificate Distribution Account and all other property of the Trust from time to time, including any rights of the
Owner Trustee and the Trust pursuant to the Sale and Servicing Agreement and the Administration Agreement. 
 “Owner Trustee”
shall mean [            ] a [            ], not in its individual capacity but solely as owner trustee under this
Agreement, and any successor Owner Trustee hereunder. 
 “Paying Agent” shall mean any paying agent or co-paying agent appointed pursuant to Section 3.09 and shall initially be [        ], a
[            ]. 
 “Purchase Agreement” shall mean the Purchase
Agreement, to be dated as of [            ], 20[        ], between JDCC and the Depositor, as the same may be amended, modified or
supplemented from time to time. 
 “Record Date” shall mean, with respect to any Payment Date, the close of business on the last
day of the calendar month immediately preceding the calendar month in which the Payment Date occurs. 
 “Representatives” means
[            ] and [        ], in their capacity as the representatives under the Underwriting Agreement. 

  
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 “Responsible Officer” means, with respect to the Owner Trustee, any officer within
the Corporate Trust Office of the Owner Trustee who shall have direct responsibility for the administration of the Trust Agreement and the other Basic Documents on behalf of the Owner Trustee, including any Vice President, Assistant Vice President,
Assistant Treasurer, Assistant Secretary, or any other officer of the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject. 
 “Sale and
Servicing Agreement” shall mean the Sale and Servicing Agreement among the Trust, the Depositor, as seller, and JDCC, as servicer, to be dated as of [            ],
20[        ], as the same may be amended, modified or supplemented from time to time. 

“Secretary of State” shall mean the Secretary of State of the State of Delaware. 

“Treasury Regulations” shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. 

“Trust” shall mean the trust established by this Agreement. 

“Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be
amended from time to time. 
 “Underwriting Agreement” means the Underwriting Agreement dated
[            ], 20[        ], among JDCC, the Depositor and the Representatives, each on their own behalf and as representatives of the
underwriters set forth on the signature pages thereto. 
 SECTION 1.02 Other Definitional Provisions. 

(a) Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Sale and Servicing Agreement or, if not
defined therein, in the Indenture. 
 (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined therein. 
 (c) As used in this Agreement and in any
certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles in the United States. To the extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles in the United States, the definitions contained in this Agreement or in any such certificate or other document shall
control. 

  
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 (d) The words “hereof,” “herein,” “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 and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.” 
 (e)
The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. 

ARTICLE II 

ORGANIZATION 

SECTION 2.01 Name. The Trust created hereby shall be known as “John Deere Owner Trust
20[            ]” in which name the Owner Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be
sued. 
 SECTION 2.02 Office. The office of the Trust shall be in care of the Owner Trustee at the Corporate Trust Office or at
such other address as the Owner Trustee may designate by written notice to the Owners and the Depositor. 
 SECTION 2.03 Purposes
and Powers. The purpose of the Trust is to engage in the following activities: 
 (a) to issue the Notes pursuant to the Indenture and
to sell the Notes upon the written order of the Depositor, and pursuant to this Agreement to issue a Certificate to the Depositor upon the written order of the Depositor; 

(b) with the proceeds of the sale of the Notes and the issuance of the Certificate, to pay the Depositor the amounts owed pursuant to
Section 2.01 of the Sale and Servicing Agreement, by directing the Representatives to wire transfer such proceeds in accordance with instructions received from the Depositor; 

(c) with the proceeds from capital contributions from the Depositor, to pay organizational and transactional expenses of the Trust; 

(d) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate (as defined in the Indenture) pursuant to the Indenture and to
hold, manage and distribute to the Owner pursuant to the terms of the Sale and Servicing Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture; 

(e) to enter into and perform its obligations under the Basic Documents to which it is to be a party; 

(f) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing
or are incidental thereto or connected therewith; and 

  
 4 

 (g) subject to compliance with the Basic Documents, to engage in such other activities as
may be required in connection with conservation of the Owner Trust Estate and the making of distributions to the Owner and the Noteholders. 

The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of
this Agreement or the Basic Documents. 
 SECTION 2.04 Appointment of Owner Trustee. The Depositor hereby appoints the Owner
Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein. 

SECTION 2.05 Initial Capital Contribution of Trust Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over
to the Owner Trustee, as of the date hereof, the sum of $1.00. The Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Owner Trust Estate and
shall be deposited in the Certificate Distribution Account. The Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses
paid by the Owner Trustee. 
 SECTION 2.06 Declaration of Trust. The Owner Trustee hereby declares that it will hold the Owner
Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Owner, subject to the obligations of the Trust under the Basic Documents. It is the intention of the parties hereto that the Trust constitute a
statutory trust under the Trust Statute and that this Agreement constitute the governing instrument of such statutory trust. It is the intention of the parties that the Trust will be disregarded as an entity separate from the Owner for U.S. federal
income tax purposes as provided by Treasury Regulation Section 301.7701-3(b)(1)(ii). In the event, however, that during its term the Trust has more than one beneficial owner or member, then the parties
agree, for U.S. federal income tax purposes, to treat the Trust as a partnership and to take no action inconsistent with the treatment of the Trust as a partnership. In such event, the parties agree that, unless otherwise required by appropriate tax
authorities, the Trust will elect to be treated as a partnership and will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as a partnership for such tax purposes
and in accordance with Section 5.05 herein. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Trust Statute with respect to accomplishing the purposes of the Trust. In no
event shall the Trust elect to be treated as an association taxable as a corporation. 
 SECTION 2.07 Liability of the Owner.

 (a) The Depositor shall be liable directly to and will indemnify the injured party for all losses, claims, damages, liabilities and
expenses of the Trust (including Expenses, to the extent not paid out of the Owner Trust Estate) to the extent that the Depositor would be liable if the Trust were a partnership under the Delaware Revised Uniform Limited Partnership Act in which the
Depositor were a general partner; provided, however, that the Depositor shall not be liable for any losses incurred by a Certificateholder in the capacity of an investor in the Certificate or a Noteholder in the capacity of an investor in the Notes.
In addition, any 

  
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third-party creditors of the Trust (other than in connection with the obligations described in the preceding proviso, for which the Depositor shall not be
liable) shall be deemed third-party beneficiaries of this paragraph. The obligations of the Depositor under this paragraph shall be evidenced by the Certificate described in Section 3.10. 

(b) The Owner, other than to the extent set forth in paragraph (a), shall not have any personal liability for any liability or obligation of
the Trust. 
 SECTION 2.08 Title to Trust Property. Legal title to all the Owner Trust Estate shall be vested at all times in
the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee, a
co-trustee and/or a separate trustee, as the case may be. 
 SECTION 2.09 Situs of
Trust. The Trust will be located in the State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Delaware. The Trust shall not have any employees in any State other than
Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware. 

SECTION 2.10 Representations and Warranties of the Depositor. The Depositor hereby represents and warrants to the Owner Trustee
that: 
 (a) the Depositor is duly organized and validly existing as a limited liability company in good standing under the laws of the
State of Nevada, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted; 

(b) the Depositor is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the failure to so qualify or to obtain such license or approval would render any Receivable unenforceable that would otherwise be enforceable by the Depositor, the
Sub-Servicer or the Owner Trustee; 
 (c) the Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Trust and the Depositor shall have duly authorized such sale and
assignment and deposit to the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary limited liability company action; and 

(d) the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of organization or limited liability company agreement of the Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to
the Basic Documents); 

  
 6 

 
nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court or of any Federal or State regulatory body,
administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. 
 ARTICLE III

 CERTIFICATE AND TRANSFER OF INTERESTS 

SECTION 3.01 Initial Ownership. Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.05
and until the termination of the Trust, the Depositor shall be the sole beneficiary of the Trust. 
 SECTION 3.02 The
Certificate. The Certificate shall be issued in a registered, definitive, physical certificate substantially in the form of Exhibit A. The Certificate shall be indivisible and represent one hundred percent (100%) of the beneficial interest
in the Trust. The Certificate shall be executed on behalf of the Trust by manual or facsimile signature of a Trust Officer of the Owner Trustee. The Certificate bearing the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall, when authenticated pursuant to Section 3.03, be validly issued and entitled to the benefits of this Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the authentication and delivery of the Certificate or did not hold such offices at the date of authentication and delivery of the Certificate. 

SECTION 3.03 Authentication of the Certificate. Concurrently with the initial sale of the Receivables to the Trust pursuant to the
Sale and Servicing Agreement, the Owner Trustee shall cause the Certificate to be executed on behalf of the Trust, authenticated and delivered to the Depositor. The Certificate shall not entitle its holder to any benefit under this Agreement, or be
valid for any purpose, unless there shall appear on such Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or the Owner Trustee’s authentication agent, by manual
signature; such authentication shall constitute conclusive evidence that such Certificate shall have been duly authenticated and delivered hereunder. The Certificate shall be dated the date of its authentication. 

SECTION 3.04 Exchange of the Certificate. The Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.08, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Owner Trustee shall provide for the registration of the Certificate and of exchanges of the Certificate as
herein provided. [__] shall be the initial Certificate Registrar. 
 At the option of the Certificateholder, the Certificate may be
exchanged for other Certificates representing the same undivided beneficial interest in the Trust upon surrender of the Certificate to be exchanged at the office or agency maintained pursuant to Section 3.08. 

  
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 Every Certificate presented or surrendered for exchange shall be accompanied by a written
instrument of exchange in a form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Certificateholder or its attorney duly authorized in writing. Each Certificate surrendered for registration of exchange shall be
cancelled and subsequently disposed of by the Owner Trustee in accordance with its customary practice. 
 No service charge shall be made
for any registration of transfer or exchange of the Certificate, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer
or exchange of the Certificate. 
 No transfer of a Certificate or any interest therein shall be made unless the holder of such Certificate
shall have first surrendered such Certificate to the Certificate Registrar for registration of transfer, or if such Certificate shall have been mutilated, destroyed, lost or stolen, the holder of such Certificate shall first comply with
Section 3.05 hereof. 
 SECTION 3.05 Mutilated, Destroyed, Lost or Stolen Certificate. If (a) any mutilated
Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there shall be delivered to the Certificate
Registrar and the Owner Trustee such security or indemnity as may be required by them to hold each of them harmless, then in the absence of notice that such Certificate shall have been acquired by a protected purchaser, the Owner Trustee on behalf
of the Trust shall execute and the Owner Trustee, or the Owner Trustee’s authenticating agent, shall authenticate and deliver, in exchange for, or in lieu of, any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate under this Section, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. 
 SECTION 3.06 Persons Deemed Owners. The Owner Trustee or the Certificate Registrar or any Paying
Agent may treat the Person in whose name any Certificate shall be registered in the Certificate Register as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever,
and none of the Owner Trustee, the Certificate Registrar or any Paying Agent shall be bound by any notice to the contrary. 

SECTION 3.07 Access to Certificateholder’s Name and Address. The Owner Trustee shall furnish or cause to be
furnished to the Servicer and the Depositor, within 15 days after receipt by the Owner Trustee of a request therefor from the Servicer or the Depositor in writing, the name and address of the Certificateholder as of the most recent Record Date. 

SECTION 3.08 Maintenance of Office or Agency. The Owner Trustee shall maintain an office or offices or agency or agencies where
the Certificate may be surrendered for registration of exchange and where notices and demands to or upon the Owner Trustee in respect of the Certificate and the Basic Documents may be served. The Owner Trustee initially designates the Corporate
Trust Office of the Certificate Registrar as the office where the Certificate may be surrendered for exchange or transfer. The Owner Trustee shall give prompt written notice to the Depositor and to the Certificateholder of any change in the location
of the Certificate Register or any such office or agency. 

  
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 SECTION 3.09 Appointment of Paying Agent. The Paying Agent shall make
distributions to the Certificateholder from the Certificate Distribution Account pursuant to Section 5.02 and shall report the amounts of such distributions to the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw funds
from the Certificate Distribution Account for the purpose of making the distributions referred to above. The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement in any material respect. The Paying Agent shall initially be
[                            ], and any co-paying agent chosen
by the Paying Agent and acceptable to the Owner Trustee. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Owner Trustee and the Depositor. In the event that
[                        ] shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholder in trust
for the benefit of the Certificateholder until such sums shall be paid to the Certificateholder. The Paying Agent shall return all unclaimed funds to the Owner Trustee (subject to applicable escheatment laws) and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Owner Trustee. The provisions of Sections 7.01, 7.03 and 7.04 hereof and Section 6.07 of the Indenture shall apply to
[                        ] or any affiliate thereof in its role as Paying Agent or Certificate Registrar for so long as
[                    ] or any affiliate thereof shall act as Paying Agent or Certificate Registrar, and to the extent applicable, to any other
certificate registrar or paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. 

SECTION 3.10 Depositor as Certificateholder. On the Closing Date, the Depositor shall acquire the Certificate representing the
undivided beneficial interest in the Trust and, thereafter, shall retain beneficial and record ownership of the Certificate representing such undivided beneficial interest in the Trust. Any attempted transfer of any Certificate that would reduce
such interest of the Depositor shall be void. The Owner Trustee shall cause any Certificate issued to the Depositor to contain a legend stating “THIS CERTIFICATE IS NOT TRANSFERABLE”. 

SECTION 3.11 Non-transferability of the Certificate(s). To the fullest extent
permitted by law, notwithstanding anything herein to the contrary, the Certificate is not transferable and shall remain registered in the name of John Deere Receivables LLC. 

SECTION 3.12 Regarding the Certificate. Each Certificateholder, by its acceptance of a Certificate issued hereunder, represents
that it has, independently and without reliance on the Owner Trustee or any other Person, and based on such documents and information as it has deemed appropriate, made its own investment decision in respect of the Certificate. Each
Certificateholder also represents that it will, independently and without reliance on the Owner 

  
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Trustee or any other Person, and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this
Trust Agreement and in connection with the Certificate. Except for notices, reports and other documents expressly required to be furnished to the Certificateholders by the Owner Trustee hereunder, the Owner Trustee shall not have any duty or
responsibility to provide any Certificateholder with any other information concerning the transactions contemplated hereby, the Trust, the Depositor or any other parties hereto or to any related documents which may come into the possession of the
Owner Trustee or any of its officers, directors, employees, agents, representatives or attorneys-in-fact. 

SECTION 3.13 Restrictions on Note Acquisitions. Neither a member of any “expanded group” (as defined in Treasury
Regulation Section 1.385-1(c)(4)) that includes the Trust or a beneficial owner of a Certificate nor a “controlled partnership” (as defined in Treasury Regulation
Section 1.385-1(c)(1)) of such expanded group shall acquire any Notes from the Trust, any Affiliate, or through the marketplace prior to obtaining an Opinion of Counsel stating that (i) the
acquisition or reacquisition of such Note will not cause the Trust, initially upon such acquisition or subsequent to the acquisition, to be classified as an association or publicly traded partnership treated as a corporation for federal income tax
purposes and will not cause the Note to be recharacterized as stock pursuant to Treasury Regulations under section 385 of the Code. The preceding sentence shall not apply to (i) any U.S. corporate member of the same U.S. corporate affiliated
group (as defined in Section 1504 of the Code) filing a consolidated federal income tax return that includes the Trust or every applicable beneficial owner of a Certificate (the “Trust Consolidated Group”) or (ii) a partnership
all of the partners of which are U.S. corporate members of the Trust Consolidated Group. No member of any “expanded group” that includes the Trust or a beneficial owner of a Certificate (as defined in Treasury Regulation Section 1.385-1(c)(4)) or “controlled partnership” of such expanded group (as defined in Treasury Regulation Section 1.385-1(c)(1)) shall transfer any
Notes outside the expanded group prior to obtaining an Opinion of Counsel stating that the transfer of such Note will not cause the Trust to be classified as an association or publicly traded partnership treated as a corporation for federal income
tax purposes and will not cause the Note to be recharacterized as stock pursuant to Treasury Regulations under section 385 of the Code. 

ARTICLE IV 

ACTIONS BY OWNER TRUSTEE 

SECTION 4.01 Prior Notice to Owner with Respect to Certain Matters. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the Owner Trustee shall have notified the Certificateholder in writing of the proposed action and the Owner shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that the Owner has withheld consent or provided alternative direction: 
 (a) the initiation of any
claim or lawsuit by the Trust (other than an action to collect on a Receivable) and the compromise of any action, claim or lawsuit brought by or against the Trust (other than an action to collect on a Receivable); 

  
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 (b) the election by the Trust to file an amendment to the Certificate of Trust; 

(c) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required; 

(d) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Owner; 
 (e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner that would not materially adversely affect the interests of the Owner; or 

(f) the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement
of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of its obligations under the Indenture or this Agreement, as applicable. 

SECTION 4.02 Action by the Owner with Respect to Certain Matters. The Owner Trustee shall not have the power, except upon the
written direction of the Owner and the Holders of not less than a majority of the Outstanding Amount of the Notes, to (a) remove the Administrator under the Administration Agreement pursuant to Section 8 thereof, (b) appoint a
successor Administrator pursuant to Section 8 of the Administration Agreement, (c) remove the Servicer under the Sale and Servicing Agreement pursuant to Section 8.01 thereof or (d) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Owner. 

SECTION 4.03 Action by the Owner with Respect to Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the prior written approval of the Owner and the Holders of not less than a majority of the Outstanding Amount of the Notes and the delivery to the Owner Trustee by the Owner of a certificate
certifying that the Owner reasonably believes that the Trust is insolvent. 
 SECTION 4.04 Restrictions on the
Owner’s Power. The Owner shall not direct the Owner Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any
of the Basic Documents or would be contrary to Section 2.03 nor shall the Owner Trustee be obligated to follow any such direction, if given. 

ARTICLE V 

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES 

SECTION 5.01 Establishment of Trust Account. The Paying Agent, for the benefit of the Certificateholder, shall establish and
maintain in the name of the Trust an Eligible Deposit Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholder. 

  
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 The Paying Agent shall possess all right, title and interest in all funds on deposit from
time to time in the Certificate Distribution Account and in all proceeds thereof. Except as otherwise provided herein, the Certificate Distribution Account shall be under the sole dominion and control of the Paying Agent for the benefit of the
Certificateholder. If, at any time, the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Paying Agent (or the Depositor on behalf of the Paying Agent, if the Certificate Distribution Account is not then held by the
Paying Agent or an affiliate thereof) shall within 10 Business Days following notification of such occurrence (or such longer period, not to exceed 30 calendar days, as to which the Rating Agency Condition is satisfied) establish a new Certificate
Distribution Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Certificate Distribution Account. 

SECTION 5.02 Application of Trust Funds. 

(a) On each Payment Date, the Paying Agent will distribute to the Certificateholder amounts deposited in the Certificate Distribution Account
pursuant to Sections 5.04 and 5.05 of the Sale and Servicing Agreement on such Payment Date. 
 (b) On each Payment Date, the Paying Agent
shall make available on its website at [            ] for the benefit of the Certificateholder the statement provided to the Indenture Trustee by the Servicer pursuant to
Section 5.06(a) of the Sale and Servicing Agreement on such Payment Date. 
 (c) Any Certificateholder shall be required to deliver to
the Paying Agent, the Depositor and the Trust prior to the first Payment Date and at any time or times required by applicable law, (i) a correct, complete and properly executed U.S. Internal Revenue Service Form
W-9, W-8BEN, W-8BEN-E, W-8ECI, W-8IMY or W-8EXP (with appropriate attachments), as applicable and (ii) any documentation that is required under FATCA or is otherwise necessary (in the sole
determination of the Trust, the Depositor, the Paying Agent or other agent of the Trust, as applicable), to enable the Trust, the Depositor, the Paying Agent and any other agent of the Trust to determine their duties and liabilities with respect to
any taxes they may be required to withhold pursuant to such Code sections in respect of such Certificate or the Certificateholder of such Certificate or beneficial interest therein. In addition, each holder of a Certificate will be deemed to
understand that the Paying Agent has the right to withhold on amounts payable with respect to the Certificate or beneficial interest therein. In addition, each holder of a Certificate will be deemed to understand that the Paying Agent has the right
to withhold on amounts payable with respect to the Certificate (without any corresponding gross-up) if required. The Depositor hereby covenants with the Paying Agent that the Depositor will use reasonable
efforts to provide the Paying Agent with sufficient information so as to enable the Paying Agent to determine whether or not the Paying Agent is obliged to make any FATCA withholding tax in respect of any payments with respect to a Certificate (and
if applicable, to use reasonable efforts to provide the necessary detailed information to effectuate the FATCA withholding tax, such as setting forth applicable amounts to be withheld). 

  
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 SECTION 5.03 Method of Payment. Subject to Section 9.01(c), distributions
required to be made to the Certificateholder on any Payment Date shall be made to the Certificateholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of the Certificateholder at a bank
or other entity having appropriate facilities therefor, if the Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Payment Date or, if not, by check mailed to
the Certificateholder at the address of the Certificateholder appearing in the Certificate Register. 
 SECTION 5.04 No Segregation
of Monies; No Interest. Subject to Sections 5.01 and 5.02, monies received by the Paying Agent hereunder need not be segregated in any manner except to the extent required by law or the Sale and Servicing Agreement and may be deposited under
such general conditions as may be prescribed by law, and the Paying Agent shall not be liable for any interest thereon. 
 SECTION 5.05
Accounting and Reports to the Owner, the Internal Revenue Service and Others. 
 (a) The Owner Trustee (or the Administrator on its
behalf pursuant to the Administration Agreement) shall (a) maintain (or cause to be maintained) the books of the Trust on a fiscal year basis using a 52 or 53 week fiscal year ending on the last Sunday in the reporting period (or such other
period as may be required by applicable law or as otherwise determined by the Trust), with the first year being a short year ending October 28, 20XX, and on the accrual method of accounting, (b) deliver to the Owner, as may be required by
the Code and applicable Treasury Regulations, such information as may be required to enable the Owner to prepare its federal and state income tax returns, (c) file such tax returns relating to the Trust as directed by the Owner and make such
elections as directed by the Owner as may from time to time be required or appropriate under any applicable State or federal statute or rule or regulation thereunder so as to maintain the Trust’s characterization as disregarded as a separate
entity from the Owner for U.S. federal income tax purposes, and (d) in the event that during its term the Trust has more than one beneficial owner or member as determined for such purposes, deliver to each beneficial owner or member and file
such returns as directed by the Owner to treat the Trust as a partnership. 
 (b) By acceptance of its ownership interest in the
Certificate, each beneficial owner agrees that in the event that the Trust is classified as a partnership for federal income tax purposes, the Depositor, for as long as it is the Owner, and thereafter, the largest percentage beneficial owner of the
Certificate, shall be (i) the “tax matters partner” (within the meaning of Code Section 6231(a)(7) prior to the effectiveness of P.L. 114-74, the Bipartisan Budget Act of 2015) for
applicable state and local tax purposes and (ii) the “partnership representative” within the meaning of Section 6223 of the Code, and the Trust will make the election described in Section 6226 of the Code. If the Trust
is obligated to pay any amount to a governmental agency or body or to any other Person (or otherwise makes a payment) because of a Certificateholder’s status or otherwise specifically attributable to a Certificateholder (including any taxes
arising under P.L. 114-74, the Bipartisan Budget Act of 2015, and changes to the Code relating thereto), then such Certificateholder shall, at the Trust’s sole election, either (i) pay the entire
amount (including any interest, penalties and expenses associated with such payment) the Trust is obligated to pay because of such Certificateholder’s status or attributable to such Certificateholder to the Trust at least five days prior to the
due date for such payment by the Trust, or (ii) promptly reimburse the Trust in full for the entire amount any and all such amounts paid by or on behalf of the Trust (including any interest, penalties and expenses associated with such payment).

  
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 ARTICLE VI 

AUTHORITY AND DUTIES OF OWNER TRUSTEE 

SECTION 6.01 General Authority. The Owner Trustee is authorized and directed to execute and deliver the Basic Documents to which
the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party, or any amendment thereto or other agreement, in each case, in such form as the
Depositor shall approve as evidenced conclusively by the delivery of such certificates and documents to the Owner Trustee for the Owner Trustee’s execution thereof. In addition to the foregoing, the Owner Trustee is authorized, but shall not be
obligated, to take all actions required of the Trust pursuant to the Basic Documents. The Owner Trustee is further authorized from time to time to take such action as the Administrator directs in writing with respect to the Basic Documents and
shall, upon the written direction of the Administrator, execute and deliver any amendments to this Agreement or any Basic Documents presented by the Administrator for execution and delivery by the Owner Trustee. 

SECTION 6.02 General Duties. It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the Basic Documents and to administer the Trust in the interest of the Owner, subject to the Basic Documents and in accordance with the provisions of this Agreement. Notwithstanding the
foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Basic Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Basic Document, and the Owner Trustee shall not be liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement. 

SECTION 6.03 Action upon Instruction. 

(a) Subject to Article IV, the Owner may, by written instruction, direct the Owner Trustee in the management of the Trust. Such direction
may be exercised at any time by written instruction of the Owner pursuant to Article IV. 
 (b) The Owner Trustee shall not be required
to take any action hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Basic Document or is otherwise contrary to law. 
 (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this Agreement or any Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Owner requesting instruction
as to the course of action to be adopted, and to the extent the 

  
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Owner Trustee acts in good faith in accordance with any written instruction of the Owner received, the Owner Trustee shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instruction within ten days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no
duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interest of the Owner, and shall have no liability to any Person for such action or inaction. 

(d) In the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course
of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Owner requesting written instruction and, to the
extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such written instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person. If the Owner Trustee
shall not have received appropriate written instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no
duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Owner, and shall have no liability to any Person for such action or inaction. 

SECTION 6.04 No Duties Except as Specified in This Agreement or in Instructions. The Owner Trustee shall not have any duty or
obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Owner Trustee pursuant to Section 6.03; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner Trustee. 
 The Owner Trustee shall have no responsibility for the
preparation, correctness, accuracy, existence, validity or perfection of any financing statement (or similar filing) or for filing any financing or continuation statement (or similar filing) in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee that are not related to the
ownership or the administration of the Owner Trust Estate. 

  
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 SECTION 6.05 No Action Except Under Specified Documents or Instructions. The
Owner Trustee shall not manage, control, use, sell, dispose of, or otherwise deal with, any part of the Owner Trust Estate except (a) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (b) in accordance with the Basic Documents and (c) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 6.03. 

SECTION 6.06 Restrictions. The Owner Trustee shall not take any action (a) that is inconsistent with the purposes of the
Trust set forth in Section 2.03 or (b) that, to the actual knowledge of a Responsible Officer of the Owner Trustee, would result in the Trust’s becoming taxable as a corporation for federal income tax purposes or (c) that
is not in accordance with applicable law. The Owner shall not direct the Owner Trustee to take action that would violate the provisions of this Section. In no event shall the Trust elect to be treated as an association taxable as a corporation. No
transfer of a Certificate shall be made to any Person unless the Depositor and the Certificate Registrar has received (A) a certificate from such Person to the effect that such Person is a United States Person within the meaning of
Section 7701(a)(30) of the Code and (B) the Depositor, the Certificate Registrar, and the Indenture Trustee shall have received an opinion of counsel (which counsel is independent from the Depositor and the Trust) that such action shall
not cause the Trust to be treated as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes and such transferee or assignee shall agree to take positions for tax purposes consistent with the tax.

 ARTICLE VII 

CONCERNING THE OWNER TRUSTEE 

SECTION 7.01 Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except for (i) its own willful misconduct or negligence or (ii) the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence): 

(a) the Owner Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Owner Trustee; 

(b) the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction or
instructions of the Administrator, the Depositor, the Indenture Trustee or the Owner; 
 (c) no provision of this Agreement or any Basic
Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Basic Document if the Owner Trustee shall have determined that
repayment of such funds or indemnity reasonably satisfactory to the Owner Trustee against such risk or liability is not reasonably assured or provided to it; 

  
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 (d) under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by
or arising under any of the Basic Documents, including the principal of and interest on the Notes; 
 (e) the Owner Trustee shall not be
responsible or personally liable for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, accuracy, value or validity of any of the
Owner Trust Estate or for or in respect of the validity or sufficiency of the Owner Trust Estate, the Basic Documents, the Certificate, other than the certificate of authentication on the Certificate, or any other related document supplied to the
Owner Trustee and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder, the Owner, the Depositor or any other Person other than as expressly provided for herein and in the Basic Documents; 

(f) the Owner Trustee shall not be responsible or personally liable for or in respect of the enforceability of the Certificate; 

(g) the Owner Trustee shall not be responsible or personally liable for recording this Agreement or any Basic Document, for preparing or
filing any financing or continuation statement in any public office at any time or otherwise perfecting or maintaining the perfection of any ownership or security interest or lien or for preparing or filing any tax, qualification to do business or
securities law filing or report; 
 (h) the Owner Trustee shall not be liable for, and shall have no duty to supervise or monitor, the
action or inaction, default, misconduct or negligence of the Administrator, the Depositor, the Indenture Trustee or the Servicer or any agent appointed by any of them under any of the Basic Documents or otherwise and the Owner Trustee may assume
performance by each of such parties absent written notice or actual knowledge of a Responsible Officer to the contrary, and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Servicer under the Sale and Servicing Agreement; 

(i) the Owner Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any disclosure litigation under this Agreement or otherwise or in relation to this Agreement or any Basic Document, at the request, order or direction of the Owner, unless the Owner has offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee shall not be answerable for such act other than its negligence or willful misconduct in the performance of any such act; 

(j) notwithstanding any Person’s right to instruct the Owner Trustee, except as required by law or regulation, neither the Owner Trustee
nor any agent, employee, director or officer of the Owner Trustee shall have any obligation to execute any certificates or other documents required pursuant to the Sarbanes-Oxley Act of 2002 or the rules and
regulations promulgated thereunder, and the refusal to comply with any such instructions shall not constitute a default or breach under any Basic Document; 

  
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 (k) in no event shall the Owner Trustee be liable for any damages in the nature of special,
punitive, indirect or consequential losses or damages, however styled, including, without limitation, lost profits, or for any losses due to forces beyond the control of the Owner Trustee, including, without limitation, strikes, work stoppages, acts
of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services provided by unaffiliated third parties to
the Owner Trustee; 
 (l) the Owner Trustee shall not be deemed to have knowledge or notice of any event or information, including any
Default or Event of Default, or be required to act upon any event or information (including the sending of any notice), unless written notice of such event or information is received by a Responsible Officer and such notice references the event or
information. Absent written notice in accordance with this Section, the Owner Trustee may conclusively assume that no such event has occurred. The Owner Trustee shall have no obligation to inquire into, or investigate as to, the occurrence of any
such event (including any Default or Event of Default). For purposes of determining the Owner Trustee’s responsibility and liability hereunder, whenever reference is made in this Trust Agreement to any event (including, but not limited to, a
Default or Event of Default), such reference shall be construed to refer only to such event of which the Owner Trustee has received written notice as described in this Section. Knowledge of the Owner Trustee shall not be attributed or imputed to the
Owner Trustee’s other roles in the transaction; 
 (m) the Owner Trustee shall not be required to investigate any claims of an alleged
breach by any Person of a representation or warranty under any of the Basic Documents; 
 (n) in connection with the duty of the Owner
Trustee to enforce the obligations of JDCC under the Purchase Agreement pursuant to Section 3.02 of the Sale and Servicing Agreement, the Owner Trustee shall have no obligation to take any action or omit to take any action unless it is directed
to do so by the Depositor and the Depositor shall have offered to the Owner Trustee security or indemnity satisfactory to it against the reasonable costs, expenses, disbursements and advances that might be incurred by it, its agents and its counsel
in compliance with such direction; and 
 (o) In no event shall the Owner Trustee have any responsibility to monitor compliance with or
enforce compliance with the credit risk retention requirements for asset-backed securities or other rules or regulations relating to risk retention. The Owner Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any
Noteholder, Certificateholder, the Depositor, the Servicer or any other Person for violation of such rules now or hereafter in effect. The Owner Trustee shall not be required to monitor, initiate or conduct any proceedings to enforce the obligations
of the Trust, the Depositor, the Servicer or any other Person with respect to any breach of representation or warranty under any transaction document and the Owner Trustee shall not have any duty to conduct any investigation as to the occurrence of
any condition requiring the repurchase or substitution of any Receivable by any Person pursuant to any transaction document. 

  
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 SECTION 7.02 Furnishing of Documents. 

(a) The Owner Trustee shall furnish to the Owner, promptly upon receipt of a written reasonable request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee and in its possession under the Basic Documents. 

(b) The Owner Trustee shall provide prompt notice to the John Deere Parties of all demands communicated to the Owner Trustee for the
repurchase or replacement of any Receivable for breach of the representations and warranties concerning such Receivable. The Owner Trustee shall, upon written request of either John Deere Party, provide notification to the John Deere Parties with
respect to any actions taken by the Owner Trustee or determinations made by the Owner Trustee, in each case with respect to any such demand communicated to the Owner Trustee in respect of any Receivables, such notifications to be provided by the
Owner Trustee as soon as practicable and in any event within five Business Days of such request or such other time frame as may be mutually agreed to by the Owner Trustee and the applicable John Deere Party. Such notices shall be provided to the
John Deere Parties at (i) John Deere Capital Corporation, 10587 Double R Blvd, Suite 100, Reno, Nevada 89521, Attention: Manager (775-786-5527), and in each case,
with a copy to Assistant Treasurer, Deere & Company, One John Deere Place, Moline, Illinois 61265-8098 (309-748-5252),
or at such other address or by such other means of communication as may be specified by John Deere Capital Corporation to the Owner Trustee from time to time, and (ii) John Deere Receivables LLC, 10587 Double R Blvd, Suite 100, Reno, Nevada
89521, Attention: Manager (775-786-5527), and in each case, with a copy to Assistant Treasurer, Deere & Company, One John Deere Place, Moline, Illinois 61265-8098 (309-748-5252), or at such other address or by such other means of communication as may be specified by John Deere
Receivables LLC to the Owner Trustee from time to time. 
 The Owner Trustee acknowledges and agrees that the purpose of this
Section 7.02(b) is to facilitate compliance by the John Deere Parties with the Repurchase Rules and Regulations. The Owner Trustee acknowledges that interpretations of the requirements of the Repurchase Rules and Regulations may change over
time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply
with reasonable requests made by the John Deere Parties in good faith for delivery of information under these provisions on the basis of evolving interpretations of the Repurchase Rules and Regulations. The Owner Trustee shall cooperate fully with
the John Deere Parties to deliver any and all records and any other information necessary in the good faith determination of the John Deere Parties to permit them to comply with the provisions of the Repurchase Rules and Regulations. 

SECTION 7.03 Representations and Warranties. The Owner Trustee hereby represents and warrants to the Depositor, for the benefit of
the Owner, that: 
 (a) it is a
[                    ] duly organized and validly existing in good standing under the laws of the United States of America and it has all
requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; 

  
 19 

 (b) it has taken all corporate action necessary to authorize the execution and delivery by
it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf; and 

(c) neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby, nor
compliance by it with any of the terms or provisions hereof, will contravene any federal or Delaware law, governmental rule or regulation governing the
[                    ] or trust powers of the Owner Trustee, or constitute any default under its charter documents or by-laws. 
 SECTION 7.04 Reliance; Advice of Counsel. 

(a) The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, direction, notice, resolution, request,
consent, order, certificate, report, opinion, bond, or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of the determination of which
is not specifically prescribed herein, the Owner Trustee may for all purposes hereof request and rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. 

(b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys
if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it. The Owner Trustee
shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons and not contrary to this Agreement or any Basic Document. 

SECTION 7.05 Not Acting in Individual Capacity. Except as provided in this Article VII, in accepting the trusts hereby
created, [                    ] acts solely as Owner Trustee hereunder and not in its individual capacity and all Persons having any claim
against the Owner Trustee by reason of the transactions contemplated by this Agreement or any Basic Document shall look only to the Owner Trust Estate for payment or satisfaction thereof. 

SECTION 7.06 Owner Trustee Not Liable for Certificate or Receivables. The recitals contained herein and in the Certificate (other
than the signature of the Owner Trustee on the Certificate and its representations and warranties in Section 7.03) shall be taken as the statements of the Depositor and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, of any Basic Document or of the Certificate (other than the signature of the Owner Trustee on 

  
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the Certificate) or the Notes, or of any Receivable or related documents. The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any security interest created by any Receivable in any Financed Equipment or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the
Owner Trust Estate or its ability to generate the payments to be distributed to the Certificateholder under this Agreement or the Noteholders under the Indenture, including, without limitation: the existence, condition and ownership of any Financed
Equipment; the existence and enforceability of any insurance thereon; the existence and contents of any Receivable on any computer or other record thereof; the validity of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the performance or enforcement of any Receivable; the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action or inaction of the Administrator, the Indenture Trustee or the Servicer or any sub-servicer taken in the name of the Owner Trustee. 

SECTION 7.07 Owner Trustee May Own Notes. The Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may deal with the Depositor, the Administrator, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not the Owner Trustee. 

ARTICLE VIII 

COMPENSATION OF OWNER TRUSTEE 

SECTION 8.01 Owner Trustee’s Fees and Expenses. The Owner Trustee shall receive as compensation for its
services hereunder such fees as have been separately agreed upon before the date hereof between the Depositor and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including any and all costs related to amendments, supplements and petitioning any court and the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties hereunder. 
 SECTION 8.02 Indemnification. The
Depositor shall be liable as primary obligor for, and shall indemnify the Owner Trustee and its successors, assigns, agents (including the Certificate Registrar and the Paying Agent) and servants (collectively, the “Indemnified Parties”)
from and against, any and all liabilities, obligations, losses, costs, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including any reasonable legal fees, costs, and expenses incurred in
connection with any enforcement (including any action, claim, or suit brought) by an Indemnified Party of any indemnification or other obligation of the Depositor) of any kind and nature whatsoever (collectively, “Expenses”) which may at
any time be imposed on, incurred by, or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or
the action or inaction of the Owner Trustee or any other Indemnified Party hereunder, except only that the Depositor shall 

  
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not be liable for or required to indemnify the Owner Trustee from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 7.01. The
indemnities contained in this Section shall survive the resignation or removal of the Owner Trustee or the termination or assignment of this Agreement. In any event of any claim, action or proceeding for which indemnity will be sought pursuant to
this Section, the Owner Trustee’s choice of legal counsel shall be subject to the approval of the Depositor, which approval shall not be unreasonably withheld. 

SECTION 8.03 Payments to the Owner Trustee. Any amounts paid to the Owner Trustee pursuant to this Article VIII shall be
deemed not to be a part of the Owner Trust Estate immediately after such payment. 
 ARTICLE IX 

TERMINATION OF TRUST AGREEMENT 

SECTION 9.01 Termination of Trust Agreement. 

(a) The Trust shall dissolve and terminate in accordance with Sections 3808(d) and (e) of the Trust Statute (i) upon the final
distribution by the Owner Trustee of all moneys or other property or proceeds of the Owner Trust Estate in accordance with the terms of the Indenture, the Sale and Servicing Agreement and Article V or (ii) at the time provided in
Section 9.02. Any money or other property held as part of the Owner Trust Estate following such distribution (and following a final distribution of proceeds from a sale under Section 9.02) shall be distributed to the Depositor. 

(b) Except as provided in Section 9.01(a), neither the Depositor nor the Owner shall be entitled to revoke or terminate the Trust. 

(c) Notice of any dissolution of the Trust, specifying the Payment Date upon which the Certificateholder shall surrender its Certificate to
the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholder mailed within five Business Days of receipt of notice of such termination from the Servicer given
pursuant to Section 9.01(c) of the Sale and Servicing Agreement, stating (i) the Payment Date upon or with respect to which final payment of the Certificate shall be made upon presentation and surrender of the Certificate at the office of
the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the
Certificate at the office of the Paying Agent therein specified. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to the Certificateholder.
Upon presentation and surrender of the Certificate, the Paying Agent shall cause to be distributed to the Certificateholder amounts distributable on such Payment Date pursuant to Section 5.02. 

In the event that the Certificateholder shall not surrender its Certificate for cancellation within six months after the date specified in the
above mentioned written notice, the Owner Trustee shall give a second written notice to the Certificateholder to surrender its Certificate for 

  
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cancellation and receive the final distribution with respect thereto. If within one year after the second notice the Certificate shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the Certificateholder concerning surrender of its Certificate, and the cost thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Any funds remaining in the Trust after exhaustion of such remedies shall be distributed by the Owner Trustee to the Depositor (subject to applicable escheatment laws). 

(d) Upon the winding up of the Trust and satisfaction of all obligations in accordance with Section 3808 of the Trust Statute, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 of the Trust Statute and the Trust shall terminate and this
Agreement (other than Article VIII) shall be of no further force or effect. 
 SECTION 9.02 Dissolution upon Bankruptcy of the
Depositor. In the event that an Insolvency Event shall occur with respect to the Depositor, the Trust shall be dissolved in accordance with Section 9.01 90 days after the date of such Insolvency Event, unless, before the end of such 90-day period, the Owner Trustee shall have received written instructions from each of the Noteholders, to the effect that each such party disapproves of the liquidation of the Receivables and termination of the
Trust. Promptly after the occurrence of any Insolvency Event with respect to the Depositor, (i) the Depositor shall give the Indenture Trustee and the Owner Trustee written notice of such Insolvency Event, (ii) the Owner Trustee shall,
upon the receipt of such written notice from the Depositor, give prompt written notice to the Certificateholder and the Indenture Trustee of the occurrence of such event and (iii) the Indenture Trustee shall, upon receipt of written notice of
such Insolvency Event from the Owner Trustee or the Depositor, give prompt written notice to the Noteholders of the occurrence of such event; provided, however, that any failure to give a notice required by this sentence shall not prevent or delay,
in any manner, a dissolution of the Trust pursuant to the first sentence of this Section 9.02. Upon a dissolution pursuant to this Section, the Owner Trustee shall direct the Indenture Trustee promptly to sell the assets of the Trust (other
than the Trust Accounts) in a commercially reasonable manner and on commercially reasonable terms. The proceeds of such a sale of the assets of the Trust shall be treated as collections under the Sale and Servicing Agreement. 

ARTICLE X 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 

SECTION 10.01 Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times be a Person satisfying the
provisions of Section 3807(a) of the Trust Statute; authorized to exercise corporate trust powers; and having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authorities. If
such Person shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee
shall resign immediately in the manner and with the effect specified in Section 10.02. 

  
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 SECTION 10.02 Resignation or Removal of Owner Trustee. The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator; provided, however, that such resignation and discharge shall only be effective upon the appointment of a successor Owner Trustee.
The Owner Trustee shall provide to the Seller in writing and in form and substance reasonably satisfactory to the Seller, all information reasonably requested by the Seller in order to comply with its reporting obligation under the Exchange Act with
respect to the resignation of the Owner Trustee. Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Owner Trustee and one copy to the successor Owner Trustee. If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner
Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee. 
 If at any time the Owner
Trustee shall cease to be eligible in accordance with the provisions of Section 10.01 and shall fail to resign after written request therefor by the Administrator, or if at any time the Owner Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner Trustee. If at any time the Owner Trustee shall fail to comply with any of its obligations under Section 10.02 or Section 10.04 of this Agreement or Section 4.16
of the Sale and Servicing Agreement during the period that the Seller is required to file Exchange Act Reports with respect to the Trust and such failure is not remedied within the lesser of ten calendar days and the period of time in which the
related Exchange Act Report is required to be filed (without taking into account any extensions), then the Seller may remove the Owner Trustee. If the Administrator or Seller shall remove the Owner Trustee under the authority of the two immediately
preceding sentences, the Administrator shall promptly appoint a successor Owner Trustee, by written instrument, in triplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed, one copy to the successor Owner
Trustee, and one copy to the Seller, together with the basis for removal and shall pay all fees owed to the outgoing Owner Trustee. 
 Any
resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to
Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee. The Administrator shall provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies. 

The Depositor shall pay all expenses associated with replacing the Owner Trustee with a successor owner trustee, unless the removal is a
result of the willful misconduct or negligence of the Owner Trustee, in which case, such expenses will be the responsibility of the replaced Owner Trustee. 

  
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 SECTION 10.03 Successor Owner Trustee. Any successor Owner Trustee appointed
pursuant to Section 10.02 shall execute, acknowledge and deliver to the Administrator and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement and deliver to the Seller in writing and in form and
substance reasonably satisfactory to the Seller, all information reasonably requested by the Seller in order to comply with its reporting obligation under the Exchange Act with respect to the successor Owner Trustee, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor under
this Agreement and the Sale and Servicing Agreement, with like effect as if originally named as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties, and obligations. 
 No successor Owner Trustee shall accept
appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 10.01. 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Administrator shall mail notice of the successor of
such Owner Trustee to all Certificateholders, the Indenture Trustee, the Noteholders and shall make such notice available to the Rating Agencies. If the Administrator shall fail to mail such notice within 10 days after acceptance of appointment by
the successor Owner Trustee, the Depositor shall cause such notice to be mailed at the expense of the Administrator. 
 SECTION 10.04
Merger or Consolidation of Owner Trustee. Any Person into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Owner Trustee
shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided that such Person shall be eligible pursuant to
Section 10.01, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided further that the Owner Trustee shall mail notice of such
merger or consolidation to the Administrator, which shall make such notice available to the Rating Agencies, and that the Owner Trustee will provide the Seller in writing and in form and substance reasonably satisfactory to the Seller, all
information reasonably requested by the Seller in order to comply with its reporting obligation under the Exchange Act with respect to the successor Owner Trustee. 

SECTION 10.05 Appointment of Co-Trustee or Separate Trustee. Notwithstanding any
other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate or any Financed Equipment may at the time be located, or for enforcement or conflict
of interest matters, the Administrator and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Owner Trustee to act as

  
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co-trustee, jointly with the Owner Trustee, or separate trustee or separate trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Owner Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 10.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03. A co-trustee or separate trustee appointed hereunder is not an agent of the Owner Trustee.

 Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act
subject to the following provisions and conditions: 
 (a) all rights, powers, duties, and obligations conferred or imposed upon the Owner
Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties, and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the written direction of the Owner Trustee; 

(b) no trustee under this Agreement shall be personally liable by reason of the appointment or any act or omission of any other trustee under
this Agreement; and 
 (c) the Administrator and the Owner Trustee acting jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee. 
 Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Administrator. 

Any separate trustee or co-trustee may at any time appoint the Owner Trustee, as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.
If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner
Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. 

  
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 ARTICLE XI 

MISCELLANEOUS 

SECTION 11.01 Supplements and Amendments. This Agreement may be amended by the Depositor and the Owner Trustee, without the
consent of any of the Noteholders or the Certificateholder, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholder; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder or the Certificateholder, provided further that 10 days’ (or, in the case of Fitch, 10 Business Days’) prior written notice of any such amendment be made available to each Rating Agency by the Administrator and,
if Moody’s notifies the Owner Trustee that such amendment will result in a downgrading or withdrawal of the then-current rating of any class of the Notes, such amendment shall become effective with the
consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes; provided further that any solicitation of such consent shall disclose the downgrading or withdrawal that would result from such amendment.

 This Agreement may also be amended from time to time by the Depositor and the Owner Trustee, with prior written notice made available to
the Rating Agencies by the Administrator, with the consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes and the consent of the Certificateholder (which consents will not be unreasonably withheld)
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholder; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the
Certificateholder or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment or eliminate the consent of the Certificateholder to any such amendment, without the consent of the
holders of all the outstanding Notes and the Certificate. 
 Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or consent to the Certificateholder, the Indenture Trustee and the Administrator, which shall make such notification available to each of the Rating Agencies. 

It shall not be necessary for the consent of the Certificateholder, the Noteholders or the Indenture Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. 

Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State. 

  
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 Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the
Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to the execution of such amendment have been
satisfied. The Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise. 

SECTION 11.02 No Legal Title to Owner Trust Estate in the Owner. The Owner shall not have legal title to any part of the Owner
Trust Estate. The Owner shall be entitled to receive distributions with respect to its undivided ownership interest therein only in accordance with Articles V and IX. No transfer, by operation of law or otherwise, of any right, title, and interest
of the Owner to and in its ownership interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate. 
 SECTION 11.03 Limitations on Rights of Others. Except for Section 2.07, the provisions of this Agreement
are solely for the benefit of the Owner Trustee, the Depositor, the Owner, the Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 

SECTION 11.04 Notices. 

(a) Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given upon
receipt by the intended recipient or three Business Days after mailing if mailed by certified mail, postage prepaid (except that notice to the Owner Trustee shall be deemed given only upon actual receipt by the Owner Trustee), if to the Owner
Trustee, addressed to the address set forth in clause (i) of the definition of Corporate Trust Office; if to the Certificate Registrar or Paying Agent, addressed to the address set forth in clause (ii) of the definition of Corporate Trust
Office, such notice deemed given only upon receipt; if to the Depositor, addressed to John Deere Receivables LLC, 10587 Double R Blvd, Suite 100, Reno, Nevada 89521, Attention of Manager, and in each case, with a copy to Deere & Company,
One John Deere Place, Moline, Illinois 61265, Attention: Treasury Department, Assistant Treasurer, or, as to each party, at such other address as shall be designated by such party in a written notice to each other party. 

(b) Any notice required or permitted to be given to the Certificateholder shall be given by first class mail, postage prepaid, at the address
of the Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice. 

SECTION 11.05 Severability. Any provision of this Agreement or the Certificate that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction. 

  
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 SECTION 11.06 Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

SECTION 11.07 Successors and Assigns. All covenants and agreements contained herein shall be binding upon, and inure to the
benefit of, the Depositor, the Owner Trustee and its successors and the Owner and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by the Owner shall bind the
successors and assigns of the Owner. 
 SECTION 11.08 Covenant of the Depositor. In the event that any litigation with claims in
excess of $1,000,000 to which the Depositor is a party which shall be reasonably likely to result in a material judgment against the Depositor that the Depositor will not be able to satisfy shall be commenced by the Owner (when the Owner is not the
Depositor), during the period beginning nine months following the commencement of such litigation and continuing until such litigation is dismissed or otherwise terminated (and, if such litigation has resulted in a final judgment against the
Depositor, such judgment has been satisfied) the Depositor shall not pay any dividend to JDCC, or make any distribution on or in respect of its capital stock to JDCC, or repay the principal amount of any indebtedness of the Depositor held by JDCC,
unless (i) after giving effect to such payment, distribution or repayment, the Depositor’s liquid assets shall not be less than the amount of actual damages claimed in such litigation or (ii) the Rating Agency Condition shall have
been satisfied with respect to any such payment, distribution or repayment. The Depositor further agrees that prior to the termination of the Trust, it shall not revoke, modify or otherwise amend any agreements with JDCC in effect on the Closing
Date in any manner that would adversely affect the rights of the Depositor to receive from JDCC contributions of capital or payments on demand pursuant to such agreements. The Depositor further covenants and agrees that it will not enter into any
transaction or take any action (other than any transaction or action contemplated by this Agreement or any of the Basic Documents) if, as a result of such transaction or action, any rating of either the Notes or the Certificate by any of the Rating
Agencies would be downgraded or withdrawn. 
 SECTION 11.09 No Petition. The Owner Trustee on behalf of the Trust, the
Certificateholder, by accepting a Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor, or join in any
institution against the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any U.S. federal or State bankruptcy or similar law in connection with any obligations relating to
the Certificate, the Notes, this Agreement or any of the Basic Documents. 
 SECTION 11.10 No Recourse. The Certificateholder,
by accepting a Certificate, acknowledges that such Certificateholder’s Certificate represents beneficial interests in the Trust only and does not represent interests in or obligations of the Seller, the Servicer, the Administrator, the Owner
Trustee, the Indenture Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificate or the Basic Documents. 

  
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 SECTION 11.11 Headings. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 
 SECTION 11.12
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. 

SECTION 11.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

SECTION 11.14 Depositor Payment Obligation. The Depositor shall be responsible for payment of the Administrator’s fees under
the Administration Agreement and shall reimburse the Administrator for all expenses and liabilities of the Administrator incurred thereunder. 

SECTION 11.15 Administrator. The Administrator is authorized to execute on behalf of the Trust all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the Trust to prepare, file or deliver pursuant to the Basic Documents. Upon request, the Owner Trustee shall execute and deliver to the Administrator a power of attorney
appointing the Administrator the agent and attorney in fact of the Trust to execute all such documents, reports, filings, instruments, certificates and opinions. 

SECTION 11.16 Communication with Rating Agencies. If the Owner Trustee shall receive any written or oral communication from any
Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, the Owner Trustee agrees to refrain from communicating
with such Rating Agency and to promptly (and, in any event, within one Business Day) notify the Administrator of such communication. The Owner Trustee agrees to coordinate with the Administrator with respect to any communication to a Rating Agency
and further agrees that in no event shall the Owner Trustee engage in any oral communication with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes with any Rating Agency (or any of
their respective officers, directors or employees) without the participation of the Administrator. 
 The Owner Trustee will not be
responsible for delays attributable to the Administrator’s failure to deliver any information related to any communication with a Rating Agency (with respect to this section, the “Information”), defects in the Information supplied to
the Rating Agency or Administrator or other circumstances beyond the control of the Owner Trustee. The Owner Trustee shall be under no obligation to make any determination as to the veracity or applicability of any Information provided to it, or
whether any such Information is required to be maintained on a website or other public medium. 

  
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 SECTION 11.17 USA PATRIOT Act Compliance. The parties hereto and each
Certificateholder acknowledge that in accordance with the Customer Identification Program (CIP) requirements under The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(“USA PATRIOT Act”) and its implementing regulations, the Owner Trustee and the Paying Agent, in order to help fight the funding of terrorism and money laundering, are required to obtain, verify, and record information that identifies each
person or legal entity that establishes a relationship or opens an account with the Owner Trustee or the Paying Agent. Each party hereto and each Certificateholder by its acceptance of a Certificate agrees that it shall provide the Owner Trustee and
the Paying Agent with such information as the Owner Trustee or the Paying Agent may request that will help the Owner Trustee and the Paying Agent to identify and verify each party’s identity, including without limitation each party’s name,
physical address, tax identification number, organizational documents, certificates of good standing, licenses to do business or other pertinent identifying information. 

  
 31 

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

			
	[                    ],	 	
	as Owner Trustee,
		
	By:	 	  

		 	Name:
		 	Title:
	
	JOHN DEERE RECEIVABLES LLC, as Depositor,
		
	By:	 	  

		 	Name:
		 	Title:

  

			
	Acknowledged, Accepted and Agreed:
	
	[                    ],
not in its individual capacity but solely as Certificate Registrar and Paying
Agent,
		
	By:	 	  

		 	Name:
		 	Title:

 EXHIBIT A 

NUMBER 
 R-1 

SEE REVERSE FOR CERTAIN DEFINITIONS 

JOHN DEERE OWNER TRUST 20[__] 

ASSET BACKED CERTIFICATE 
 evidencing an
undivided beneficial interest in the Trust, as defined below, the property of which includes a pool of equipment retail installment sale and loan contracts secured by new and used agricultural and construction equipment and sold to the Trust (as
defined below) by John Deere Receivables LLC. 
 (This Certificate does not represent an interest in or obligation of John Deere Receivables LLC, John Deere
Capital Corporation, Deere & Company or any of their respective affiliates, except to the extent described below.) 
 THIS CERTIFIES THAT John
Deere Receivables LLC is the registered owner of the undivided beneficial interest in John Deere Owner Trust 20[__] (the “Trust”) formed by John Deere Receivables LLC, a Nevada corporation (the “Seller”). 

THIS CERTIFICATE IS NOT TRANSFERABLE. 

CERTIFICATE OF AUTHENTICATION 
 This is the
Certificate referred to in the within-mentioned Trust Agreement. 
  

	
	 [__], as Owner Trustee
  

	By:                                     
                   
	
	or
	
	[__],
as Certificate Registrar and Paying Agent
	
	By:                                     
                   

  
 A-1 

 The Trust was created pursuant to a Trust Agreement dated as of
[                    ], 20[        ] (the “Trust Agreement”), between the Depositor
and [                    ], as owner trustee (the “Owner Trustee”), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Trust Agreement or the Sale and Servicing Agreement to be dated as of
[                    ], 20[        ] (the “Sale and Servicing Agreement”), among the
Trust, the Seller and John Deere Capital Corporation, as servicer (the “Servicer”), as applicable. 
 This Certificate is the duly authorized
Certificate designated as the “Asset Backed Certificate” (herein called the “Certificate”). Also issued under the Indenture, to be dated as of
[                    ], 20[        ], between the Trust and
[                    ], as Indenture Trustee, are the Class A-1
[                    ]% Asset Backed Notes, the Class A-2[A]
[                    ]% Asset Backed Notes, [the Class A-2B [LIBOR] plus
[                    ]% Floating Rate Asset Backed Notes,] the Class A-3
[                    ]% Asset Backed Notes [and/,] the Class A-4
[                    ]% Asset Backed Notes [and the Class B
[                    ]% Asset Backed Notes] (collectively, the “Notes”). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Certificate by virtue of the acceptance hereof assents and by which such holder is bound. The property of the Trust includes a pool of retail
installment sale and loan contracts for agricultural and construction equipment (the “Receivables”), all monies received on or after
[                    ], 20[        ] from payments on the Receivables, security interests in
the equipment financed thereby, certain bank accounts and the proceeds thereof, proceeds from claims on certain insurance policies and certain other rights under the Trust Agreement and the Sale and Servicing Agreement, all right, title, and
interest of the Seller in and to the Purchase Agreement, to be dated as of [                    ],
20[        ], between John Deere Capital Corporation and the Seller and all proceeds of the foregoing. The rights of the holders of the Certificate are subordinated to the rights of the holders of the
Notes, as set forth in the Sale and Servicing Agreement. 
 Under the Trust Agreement, there will be distributed on the 15th day of each month or, if such
day is not a Business Day, the next Business Day (the “Payment Date”), commencing on [                    ],
20[        ], to the person in whose name this Certificate is registered at the close of business on the last day of the month (the “Record Date”) immediately preceding the month in which such
Payment Date occurs the Certificateholder’s undivided interest in the amount to be distributed to the Certificateholder on such Payment Date. 
 The
holder of this Certificate acknowledges and agrees that its rights to receive distributions in respect of this Certificate are subordinated to the rights of the Noteholders as described in the Sale and Servicing Agreement and the Indenture. 

It is the intention of the parties that the Trust will be disregarded as an entity separate from the Certificateholder for U.S. federal income tax purposes.

 The Certificateholder, by its acceptance of a Certificate, covenants and agrees that the Certificateholder will not at any time institute against the
Seller, or join in any institution against the Seller of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any U.S. federal or State bankruptcy or similar law in connection with any
obligations relating to the Certificate, the Notes, the Trust Agreement or any of the Basic Documents. 

  
 A-2 

 Distributions on this Certificate will be made as provided in the Trust Agreement by the Owner Trustee by
wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Certificate or the making of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency
maintained for the purpose by the Owner Trustee. 
 Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as if set forth at this place. 
 Unless the certificate of authentication hereon shall
have been executed by an authorized officer of the Owner Trustee, by manual signature, this Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.

 THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. 

IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Certificate to be duly
executed. 
  

							
		 		 	JOHN DEERE OWNER TRUST 20[                    ]
			
		 		 	By: [                    ],
		 		 	not in its individual capacity but solely
		 		 	as Owner Trustee
			
	Dated: [                    ], [__]	 		 	By:
                                         
                                         
  

  
 A-3 

 (Reverse of Certificate) 

The Certificate does not represent an obligation of, or an interest in, the Seller, the Servicer, Deere & Company, the Indenture Trustee, the Owner
Trustee or any affiliates of any of them and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein or in the Trust Agreement or the Basic Documents. In addition, this Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections with respect to the Receivables (and certain other amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. The Certificate is limited in right of payment to certain collections and recoveries respecting the Receivables, all as more specifically set forth in the Sale and Servicing Agreement. A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined during normal business hours at the principal office of the Seller, and at such other places, if any, designated by the Seller, by the Certificateholder upon written request. 

The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Seller
and the rights of the Certificateholder under the Trust Agreement at any time by the Seller and the Owner Trustee with the consent of the holders of the Notes voting as a class evidencing not less than a majority of the outstanding Notes and the
consent of the Certificateholder (which consents shall not be unreasonably withheld). Any such consent by the holder of this Certificate shall be conclusive and binding on the holder of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the
holder of the Certificate. 
 As provided in the Trust Agreement, this Certificate is nontransferable. The initial Certificate Registrar appointed under the
Trust Agreement is [                    ]. 
 The
Certificate is issuable only as a registered Certificate without coupons. As provided in the Trust Agreement and subject to certain limitations therein set forth, the Certificate is exchangeable for new Certificates evidencing the same undivided
beneficial interest in the Trust, as requested by the holder surrendering the same. No service charge will be made for any such exchange, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith. 
 The Owner Trustee, the Certificate Registrar and any agent of the Owner Trustee or the Certificate
Registrar may treat the person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary. 

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to the Certificateholder of
all amounts required to be paid to it pursuant to the Trust Agreement and the Sale and Servicing Agreement and the disposition of all property held as part of the Trust. The Servicer of the Receivables may at its option purchase the corpus of the
Trust at a price specified in the Sale and Servicing Agreement, and such purchase of the Receivables and other property of the Trust will effect early retirement of the Certificate; however, such right of purchase is exercisable only as of the last
day of any Collection Period as of which the note value is less than or equal to 10% of the initial note value of the Receivables. 

  
 A-4 

 EXHIBIT B 

CERTIFICATE OF TRUST 
 OF 

JOHN DEERE OWNER TRUST 20[        ] 

THIS Certificate of Trust of John Deere Owner Trust 20[        ] (the “Trust”) is being duly executed
and filed by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, Section 3801 et seq.) (the “Act”). 

1. Name. The name of the statutory trust formed hereby is John Deere Owner Trust 20[        ].

 2. Delaware Trustee. The name and address of the trustee of the Trust with a principal place of business in the State of Delaware are
[                    ], [__]. 

3. This Certificate of Trust shall be effective upon filing. 

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act. 

 

			
	[                    ],	 	
	not in its individual capacity but solely as trustee of the Trust.

 
			
		
	By:	 	  

		 	Name:
		 	Title:

  
 B-1Exhibit 10.1

 

 

BRAINSWAY LTD.

2014 SHARE INCENTIVE PLAN

 

 

Unless otherwise defined, terms used herein shall have the meaning ascribed to them in Section 2 hereof.

 

1.                            PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

 

1.1.         Purpose.  The purpose of this 2014 Share Incentive Plan (as amended, this “Plan”) is to afford an incentive to Service Providers of Brainsway Ltd., an Israeli company (together with any successor corporation thereto, the “Company”), or any Affiliate of the Company, which now exists or hereafter is organized or acquired by the Company, to continue as Service Providers, to increase their efforts on behalf of the Company or its Affiliates and to promote the success of the Company’s business, by providing such Service Providers with opportunities to acquire a proprietary interest in the Company by the issuance of Shares or restricted Shares (“Restricted Shares”) of the Company, and by the grant of options to purchase Shares (“Options”), Restricted Share Units (“RSUs”) and other Share-based Awards pursuant to Sections 11 through 13 of this Plan.

 

1.2.         Types of Awards.  This Plan is intended to enable the Company to issue Awards under various tax regimes, including:

 

(i)            pursuant and subject to the provisions of Section 102 of the Ordinance (or the corresponding provision of any subsequently enacted statute, as amended from time to time), and all regulations and interpretations adopted by any competent authority, including the Israeli Income Tax Authority (the “ITA”), including the Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003 or such other rules so adopted from time to time (the “Rules”) (such Awards that are intended to be (as set forth in the Award Agreement) and which qualify as such under Section 102 of the Ordinance and the Rules, “102 Awards”);

 

(ii)           pursuant to Section 3(9) of the Ordinance or the corresponding provision of any subsequently enacted statute, as amended from time to time (such Awards, “3(9) Awards”);

 

(iii)          Incentive Stock Options within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted United States federal tax statute, as amended from time to time, to be granted to Employees who are deemed to be residents of the United States, for purposes of taxation (such Awards that are intended to be (as set forth in the Award Agreement) and which qualify as an incentive stock option within the meaning of Section 422(b) of the Code, “Incentive Stock Options”); and

 

(iv)          Awards not intended to be (as set forth in the Award Agreement) or which do not qualify as an Incentive Stock Option to be granted to Service Providers who are deemed to be residents of the United States for purposes of taxation (“Nonqualified Stock Options”).

 

In addition to the issuance of Awards under the relevant tax regimes in the United States of America and the State of Israel, and without derogating from the generality of Section 25, this Plan contemplates issuances to Grantees in other jurisdictions or under other tax regimes with respect to which the Committee is empowered to make the requisite adjustments in this Plan and set forth the relevant conditions in an appendix to this Plan or in the Company’s agreement with the Grantee in order to comply with the requirements of such other tax regimes.

 

 

1.3.         Company Status. This Plan contemplates the issuance of Awards by the Company, both as a private and public company.

 

1.4.         Construction.  To the extent any provision herein conflicts with the conditions of any relevant tax law, rule or regulation which are relied upon for tax relief in respect of a particular Award to a Grantee, the Committee is empowered, but is not required, hereunder to determine that the provisions of such law, rule or regulation shall prevail over those of this Plan and to interpret and enforce such prevailing provisions.

 

2.                            DEFINITIONS.

 

2.1.         Terms Generally.  Except when otherwise indicated by the context, (i) the singular shall include the plural and the plural shall include the singular; (ii) any pronoun shall include the corresponding masculine, feminine and neuter forms; (iii) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth therein or herein), (iv) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof shall refer to it as amended from time to time and shall include any successor thereof, (v) reference to a “company” or “entity” shall include a, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof, and reference to a “person” shall mean any of the foregoing or an individual, (vi) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Plan in its entirety, and not to any particular provision hereof, (vii) all references herein to Sections shall be construed to refer to Sections to this Plan; (viii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; and (ix) use of the term “or” is not intended to be exclusive.

 

2.2.         Defined Terms.  The following terms shall have the meanings ascribed to them in this Section 2:

 

2.3.         “Affiliate” shall mean, (i) with respect to any person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such person (with the term “control” or “controlled by” within the meaning of Rule 405 of Regulation C under the Securities Act), including, without limitation, any Parent or Subsidiary, or (ii) for the purpose of 102 Awards, “Affiliate” shall only mean an “employing company” within the meaning and subject to the conditions of Section 102(a) of the Ordinance.

 

2.4.         “Applicable Law” shall mean any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange, over-the-counter market or trading system on which the Company’s shares are then traded or listed.

 

2.5.         “Award” shall mean any Option, Restricted Share, RSUs or any other Share-based award granted under this Plan.

 

2.6.         “Board” shall mean the Board of Directors of the Company.

 

2.7.         “Code” shall mean the United States Internal Revenue Code of 1986, and any applicable regulations promulgated thereunder, all as amended.

 

2.8.         “Committee” shall mean a committee established or appointed by the Board to

 

2

 

administer this Plan, subject to Section 3.1.

 

2.9.         “Companies Law” shall mean the Israel Companies Law, 5759-1999, and the regulations promulgated thereunder, all as amended from time to time.

 

2.10.       “Controlling Shareholder” shall have the meaning set forth in Section 32(9) of the Ordinance.

 

2.11.       “Disability” shall mean (i) the inability of a Grantee to engage in any substantial gainful activity or to perform the major duties of the Grantee’s position with the Company or its Affiliates by reason of any medically determinable physical or mental impairment, as determined by a qualified doctor acceptable to the Company, (ii) if applicable, a “permanent and total disability” as defined in Section 22(e)(3) of the Code or Section 409A(a)(2)(c)(i) of the Code, as amended from time to time, or (iii) as defined in a policy of the Company that the Committee deems applicable to this Plan, or that makes reference to this Plan, for purposes of this definition.

 

2.12.       “Employee” shall mean any person treated as an employee (including an officer or a director who is also treated as an employee) in the records of the Company or any of its Affiliates (and in the case of 102 Awards, subject to Section 9.3 or in the case of Incentive Stock Options, who is an employee for purposes of Section 422 of the Code); provided, however, that neither service as a director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of this Plan.  The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be.  For purposes of a person’s rights, if any, under this Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.

 

2.13.       “employment”, “employed” and words of similar import shall be deemed to refer to the employment of Employees or to the services of any other Service Provider, as the case may be.

 

2.14.       “exercise” “exercised” and words of similar import, when referring to an Award that does not require exercise or that is settled upon vesting (such as may be the case with RSUs or Restricted Shares, if so determined in their terms), shall be deemed to refer to the vesting of such an Award (regardless of whether or not the wording included reference to vesting of such an Awards explicitly).

 

2.15.       “Exercise Period” shall mean the period, commencing on the date of grant of an Award, during which an Award shall be exercisable, subject to any vesting provisions thereof (including any acceleration thereof, if any) and subject to the termination provisions hereof.

 

2.16.       “Exercise Price” shall mean the exercise price for each Share covered by an Option or the purchase price for each Share covered by any other Award.

 

2.17.       “Fair Market Value”  shall mean, as of any date, the value of a Share or other property as determined by the Board, in its discretion, subject to the following: (i) if, on such date, the Shares are listed on any securities exchange, the average closing sales price per Share on which the Shares are principally traded over the thirty (30) day calendar period preceding the subject date (utilizing all trading days during such 30 calendar day period), as reported in The Wall Street Journal or such other source as the Company deems reliable; (ii) if, on such date, the Shares are then quoted in an over-the-counter market, the average of the closing bid and asked prices for the Shares in that market during the thirty (30) day calendar period preceding the subject date

 

3

 

(utilizing all trading days during such 30 calendar day period), as reported in The Wall Street Journal or such other source as the Company deems reliable; (iii) if, on such date, the Shares are not then listed on a securities exchange or quoted in an over-the-counter market, or in case of any other property, such value as the Committee, in its sole discretion, shall determine, with full authority to determine the method for making such determination and which determination shall be conclusive and binding on all parties, and shall be made after such consultations with outside legal, accounting and other experts as the Committee may deem advisable; provided, however, that, if applicable, the Fair Market Value of the Shares shall be determined in a manner that satisfies the applicable requirements of and subject to Section 409A of the Code, and with respect to Incentive Stock Options, in a manner that satisfies the applicable requirements of and subject to Section 422 of the Code, subject to Section 422(c)(7) of the Code.  The Committee shall maintain a written record of its method of determining such value.  If the Shares are listed or quoted on more than one established stock exchange or over-the-counter market, the Committee shall determine the principal such exchange or market and utilize the price of the Shares on that exchange or market (determined as per the method described in clauses (i) or (ii) above, as applicable) for the purpose of determining Fair Market Value.

 

2.18.       “Grantee” shall mean a person who has been granted an Award(s) under this Plan.

 

2.19.       “Ordinance” shall mean the Israeli Income Tax Ordinance (New Version) 1961, and the regulations and rules (including the Rules) promulgated thereunder, all as amended from time to time.

 

2.20.       “Parent” shall mean any company (other than the Company), which now exists or is hereafter organized, (i) in an unbroken chain of companies ending with the Company if, at the time of granting an Award, each of the companies (other than the Company) owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable and for purposes of Incentive Stock Options, as defined in Section 424(e) of the Code.

 

2.21.       “Retirement” shall mean a Grantee’s retirement pursuant to Applicable Law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its Affiliates in which the Grantee participates or is subject to.

 

2.22.       “Securities Act” shall mean the U.S.  Securities Act of 1933, and the rules and regulations promulgated thereunder, all as amended from time to time.

 

2.23.       “Service Provider” shall mean an Employee, director, officer, consultant, advisor and any other person or entity who provides services to the Company or any Parent, Subsidiary or Affiliate thereof.  Service Providers shall include prospective Service Providers to whom Awards are granted in connection with written offers of an employment or other service relationship with the Company or any Parent, Subsidiary or any Affiliates thereof, provided however that such employment or service shall have actually commenced.

 

2.24.       “Shares” shall mean Ordinary Shares, par value NIS 0.04, of the Company (as adjusted for stock split, reverse stock split, bonus shares, combination or other recapitalization events), or shares of such other class of shares of the Company as shall be designated by the Board in respect of the relevant Award(s).  “Shares” include any securities or property issued or distributed with respect thereto.

 

2.25.       “Subsidiary” shall mean any company (other than the Company), which now exists or is hereafter organized or acquired by the Company, (i) in an unbroken chain of companies beginning

 

4

 

with the Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable and for purposes of Incentive Stock Options, as defined in Section 424(f) of the Code.

 

2.26.       “Ten Percent Shareholder” shall mean a Grantee who, at the time an Award is granted to the Grantee, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary, within the meaning of Section 422(b)(6) of the Code.

 

2.27.       “Trustee” shall mean the trustee appointed by the Committee to hold the Awards (and, in relation with 102 Awards, approved by the ITA), if so appointed.

 

2.28.       Other Defined Terms.  The following terms shall have the meanings ascribed to them in the Sections set forth below:

 

	
Term
    	
 
    	
Section
    
	
102 Awards
    	
 
    	
1.2(i)
    
	
102 Capital Gains Track Awards
    	
 
    	
9.1
    
	
102 Non-Trustee Awards
    	
 
    	
9.2
    
	
102 Ordinary Income Track Awards
    	
 
    	
9.1
    
	
102 Trustee Awards
    	
 
    	
9.1
    
	
3(9) Awards
    	
 
    	
1.2(ii)
    
	
Award Agreement
    	
 
    	
6
    
	
Cause
    	
 
    	
6.6.4.4
    
	
Company
    	
 
    	
1.1
    
	
Effective Date
    	
 
    	
24.1
    
	
Election
    	
 
    	
9.2
    
	
Eligible 102 Grantees
    	
 
    	
9.3.1
    
	
Incentive Stock Options
    	
 
    	
1.2(iii)
    
	
ISO Share Issuance Limit
    	
 
    	
5
    
	
ITA
    	
 
    	
1.1(i) 
    
	
Market Stand-Off
    	
 
    	
17.1
    
	
Market Stand-Off Period
    	
 
    	
17.1
    
	
Merger/Sale
    	
 
    	
14.2
    
	
Nonqualified Stock Options
    	
 
    	
1.2(iv) 
    
	
Plan
    	
 
    	
1.1
    
	
Recapitalization
    	
 
    	
14.1
    
	
Required Holding Period
    	
 
    	
9.5
    
	
Restricted Period
    	
 
    	
11.2
    
	
Restricted Share Agreement
    	
 
    	
11
    
	
Restricted Share Unit Agreement
    	
 
    	
12
    

 

5

 

	
Restricted Shares
    	
 
    	
1.1
    
	
RSUs
    	
 
    	
1.1
    
	
Rules
    	
 
    	
1.1(i)
    
	
Securities
    	
 
    	
17.1
    
	
Successor Corporation
    	
 
    	
14.2.1
    
	
Withholding Obligations
    	
 
    	
18.5
    

 

3.                            ADMINISTRATION.

 

3.1.             To the extent permitted under Applicable Law, the Articles of Association and any other governing document of the Company, this Plan shall be administered by the Committee.  In the event that the Board does not appoint or establish a committee to administer this Plan, this Plan shall be administered by the Board.  In the event that an action necessary for the administration of this Plan is required under Applicable Law to be taken by the Board without the right of delegation, or if such action or power was explicitly reserved by the Board in appointing, establishing and empowering the Committee, then such action shall be so taken by the Board.  In any such event, all references herein to the Committee shall be construed as references to the Board.  Even if such a Committee was appointed or established, the Board may take any action that are stated to be vested in the Committee, and shall not be restricted or limited from exercising all rights, powers and authorities under this Plan or Applicable Law.

 

3.2.             The Board shall appoint the members of the Committee, may from time to time remove members from, or add members to, the Committee, and shall fill vacancies in the Committee, however caused, provided that the composition of the Committee shall at all times be in compliance with any mandatory requirements of Applicable Law, the Articles of Association and any other governing document of the Company.  The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall determine.  The Committee may appoint a Secretary, who shall keep records of its meetings, and shall make such rules and regulations for the conduct of its business as it shall deem advisable and subject to mandatory requirements of Applicable Law.

 

3.3.             Subject to the terms and conditions of this Plan, any mandatory provisions of Applicable Law and any provisions of any Company policy required under mandatory provisions of Applicable Law, and in addition to the Committee’s powers contained elsewhere in this Plan, the Committee shall have full authority, in its discretion, from time to time and at any time, to determine any of the following, or to recommend to the Board any of the following if it is not authorized to take such action according to Applicable Law:

 

(i)              eligible Grantees,

 

(ii)             grants of Awards and setting the terms and provisions of Award Agreements (which need not be identical) and any other agreements or instruments under which Awards are made, including, but not limited to, the number of Shares underlying each Award,

 

(iii)            the time or times at which Awards shall be granted,

 

(iv)            the terms, conditions and restrictions applicable to each Award (which need not be identical) and any Shares acquired upon the exercise or (if applicable) vesting thereof, including, without limitation, (1) designating Awards under Section 1.2; (2) the vesting schedule, the acceleration thereof and terms and conditions upon which Awards may be exercised or become vested, (3) the Exercise Price, (4) the method of payment for Shares purchased upon the exercise or (if applicable) vesting of the Awards, (5) the method for satisfaction of any tax

 

6

 

withholding obligation arising in connection with the Awards or such Shares, including by the withholding or delivery of Shares, (6) the time of the expiration of the Awards, (7) the effect of the Grantee’s termination of employment with the Company or any of its Affiliates, and (8) all other terms, conditions and restrictions applicable to the Award or the Shares not inconsistent with the terms of this Plan,

 

(v)             to accelerate, continue, extend or defer the exercisability of any Award or the vesting thereof, including with respect to the period following a Grantee’s termination of employment,

 

(vi)            the interpretation of this Plan and the meaning, interpretation and applicability of terms referred to in Applicable Laws,

 

(vii)           policies, guidelines, rules and regulations relating to and for carrying out this Plan, and any amendment, supplement or rescission thereof, as it may deem appropriate,

 

(viii)          to adopt supplements to, or alternative versions of, this Plan, including, without limitation, as it deems necessary or desirable to comply with the laws of, or to accommodate the tax regime or custom of, foreign jurisdictions whose citizens or residents may be granted Awards,

 

(ix)            the Fair Market Value of the Shares or other property,

 

(x)             the tax track (capital gains, ordinary income track or any other track available under the Section 102 of the Ordinance) for the purpose of 102 Awards,

 

(xi)            the authorization and approval of conversion, substitution, cancellation or suspension under and in accordance with this Plan of any or all Awards or Shares,

 

(xii)           the amendment, modification, waiver or supplement of the terms of each outstanding Award (with the consent of the applicable Grantee, if such amendments refers to the increase of the Exercise Price of Awards or reduction of the number of Shared underlying an Award (but, in each case, other than as a result of an adjustment or exercise of rights in accordance with Section 14)) unless otherwise provided under the terms of this Plan,

 

(xiii)          without limiting the generality of the foregoing, and subject to the provisions of Applicable Law, to grant to a Grantee the holder of an outstanding Award, in exchange for the cancellation of such Award, a new Award having an Exercise Price lower than that provided in the Award so canceled and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of this Plan or to set a new Exercise Price for the same Award lower than that previously provided in the Award,

 

(xiv)          to correct any defect, supply any omission or reconcile any inconsistency in this Plan or any Award Agreement and all other determinations and take such other actions with respect to this Plan or any Award as it may deem advisable to the extent not inconsistent with the provisions of this Plan or Applicable Law, and

 

(xv)           any other matter which is necessary or desirable for, or incidental to, the administration of this Plan and any Award thereunder.

 

3.4.             The authority granted hereunder includes the authority to modify Awards to eligible individuals who are foreign nationals or are individuals who are employed outside Israel to recognize differences in local law, tax policy or custom, in order to effectuate the purposes of this Plan but without amending this Plan.

 

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3.5.             The Board and the Committee shall be free at all times to make such determination and take such actions as they deem fit.  The Board and the Committee need not take the same action or determination with respect to all Awards, with respect to certain types of Awards, with respect to all Service Providers or any certain type of Service Providers and actions and determinations may differ as among the Grantees, and as between the Grantees and any other holders of securities of the Company.

 

3.6.             All decisions, determinations, and interpretations of the Committee, the Board and the Company under this Plan shall be final and binding on all Grantees (whether before or after the issuance of Shares pursuant to Awards), unless otherwise determined by the Committee, the Board or the Company, respectively.  The Committee shall have the authority (but not the obligation) to determine the interpretation and applicability of Applicable Laws to any Grantee or any Awards.  No member of the Committee or the Board shall be liable to any Grantee for any action taken or determination made in good faith with respect to this Plan or any Award granted hereunder.

 

3.7.             Any officer of the Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, determination or election.

 

4.                            ELIGIBILITY.

 

Awards may be granted to Service Providers of the Company or any Affiliate thereof, taking into account the qualification under each tax regime pursuant to which such Awards are granted.  A person who has been granted an Award hereunder may be granted additional Awards, if the Committee shall so determine, subject to the limitations herein.  However, eligibility in accordance with this Section 4 shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted an additional Award.

 

Awards may differ in number of Shares covered thereby, the terms and conditions applying to them or on the Grantees or in any other respect (including, that there should not be any expectation (and it is hereby disclaimed) that a certain treatment, interpretation or position granted to one shall be applied to the other, regardless of whether or not the facts or circumstances are the same or similar).

 

5.                            SHARES.

 

The maximum aggregate number of Shares that may be issued under this Plan shall initially be 1,500,000 authorized but unissued Shares (the “Pool”) (except and as adjusted pursuant to Section 14.1 of this Plan), or such other number as the Board may determine from time to time (without the need to amend the Plan in case of such determination).  However, except as adjusted pursuant to Section 14.1, in no event shall more than such number of Shares included in the Pool be available for issuance pursuant to the exercise of Incentive Stock Options (the “ISO Share Issuance Limit”).

 

Any Share underlying an Award granted hereunder that has expired or was cancelled, terminated, forfeited or repurchased, for any reason, without having been exercised, shall, automatically and without any further action on the part of the Company or any Grantee, again be available for grant of Awards and Shares issued upon exercise of (if applicable) vesting thereof for the purposes of this Plan (unless this Plan shall have been terminated) or unless the Board determines otherwise.  Such Shares may, in whole or in part, be authorized but unissued Shares, treasury shares (dormant shares) or Shares otherwise that shall have been or may be repurchased by the Company (to the extent permitted pursuant to the Companies Law).  Any Shares under the Pool that are not subject to outstanding or exercised Awards at the termination of this Plan shall cease to be reserved for the purpose of this Plan.

 

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6.                            TERMS AND CONDITIONS OF AWARDS.

 

Each Award granted pursuant to this Plan shall be evidenced by a written agreement between the Company and the Grantee or a written notice delivered by the Company (the “Award Agreement”), in substantially such form or forms and containing such terms and conditions, as the Committee shall from time to time approve.  The Award Agreement shall comply with and be subject to the following general terms and conditions and the provisions of this Plan (except for any provisions applying to Awards under different tax regimes), unless otherwise specifically provided in such Award Agreement, or the terms referred to in other Sections of this Plan applying to Awards under such applicable tax regimes, or terms prescribed by Applicable Law.  Award Agreements need not be in the same form and may differ in the terms and conditions included therein.

 

6.1.             Number of Shares.  Each Award Agreement shall state the number of Shares covered by the Award.

 

6.2.             Type of Award.  Each Award Agreement may state the type of Award granted thereunder, provided that the tax treatment of any Award, whether or not stated in the Award Agreement, shall be as determined in accordance with Applicable Laws.

 

6.3.             Exercise Price.  Each Award Agreement shall state the Exercise Price, which shall not be less than NIS 0.1.  Unless otherwise set forth in this Plan, an Exercise Price of an Award of less than the par value of the Shares shall comply with Section 304 of the Companies Law, 1999, as amended.  Subject to Section 3 and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Award, on terms and subject to such conditions as it deems advisable.  The Exercise Price shall also be subject to adjustment as provided in Section 14 hereof.

 

6.4.             Manner of Exercise.  An Award may be exercised, as to any or all Shares as to which the Award has become exercisable, by written notice delivered in person or by mail (or such other methods of delivery prescribed by the Company) to the Chief Financial Officer of the Company or to such other person as determined by the Committee, or in any other manner as the Committee shall prescribe from time to time, specifying the number of Shares with respect to which the Award is being exercised (which may be equal to or lower than the aggregate number of Shares that have become exercisable at such time, subject to the last sentence of this Section), accompanied by payment of the aggregate Exercise Price for such Shares in the manner specified in the following sentence.  The Exercise Price shall be paid in full with respect to each Share, at the time of exercise, either in (i) cash, (ii) if the Company’s shares are listed for trading on any securities exchange or over-the-counter market, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company or the Trustee, (iii) if the Company’s shares are listed for trading on any securities exchange or over-the-counter market, and if the Committee so determines, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company or the Trustee, or (iv) in such other manner as the Committee shall determine, which may include procedures for cashless exercise. A Grantee may not exercise Awards unless the aggregate Exercise Price thereof is equal to or in excess of the lower of: (a) the aggregate Exercise Price for all Shares as to which the Award has become exercisable at such time; or (b) US$2,000.

 

Notwithstanding the above, as long as the Company’s Shares are listed for trading on Tel-Aviv Stock Exchange Ltd. conversion shall not be executed on the record date for the distribution of bonus shares, offer by way of rights, distribution of a dividend, consolidation of capital, splitting of capital or reduction of capital (each of the aforesaid hereinafter referred to as “company event”).

 

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6.5.             Term and Vesting of Awards.

 

6.5.1.            Each Award Agreement shall provide the vesting schedule for the Award as determined by the Committee.  The Committee shall have the authority to determine the vesting schedule and accelerate the vesting of any outstanding Award at such time and under such circumstances as it, in its sole discretion, deems appropriate.  Unless otherwise resolved by the Committee and stated in the Award Agreement, and subject to Sections 6.6 and 6.7 hereof, Awards  shall vest and become exercisable under the following schedule: twenty-five percent (25%) of the Shares covered by the Award, on the first anniversary of the vesting commencement date determine by the Committee (and in the absence of such determination, of date on which such Award was granted), and six and one-quarter percent (6.25%) of the Shares covered by the Award at the end of each subsequent three-month period thereafter over the course of the following three (3) years; provided that the Grantee remains continuously as a Service Provider of the Company or its Affiliates throughout such vesting dates.

 

6.5.2.            The Award Agreement may contain performance goals and measurements (which, in case of 102 Awards, shall, if then required, be subject to obtaining a specific tax ruling or determination from the ITA), and the provisions with respect to any Award need not be the same as the provisions with respect to any other Award.  Such performance goals may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee.  The Committee may adjust performance goals pursuant to Awards previously granted to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or the exclusion of the impact of extraordinary or unusual items, events or circumstances.

 

6.5.3.            The Exercise Period of an Award will be 10 years from the date of grant of the Award, unless otherwise determined by the Committee, but subject to the vesting provisions described above and the early termination provisions set forth in Sections 6.6 and 6.7 hereof.  At the expiration of the Exercise Period, any Award, or any part thereof, that has not been exercised within the term of the Award and the Shares covered thereby not paid for in accordance with this Plan and the Award Agreement shall terminate and become null and void, and all interests and rights of the Grantee in and to the same shall expire.

 

6.6.             Termination.

 

6.6.1.            Unless otherwise determined by the Committee, and subject to Section 6.7 hereof, an Award may not be exercised unless the Grantee is then a Service Provider of the Company or an Affiliate thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed since the date of grant of the Award and throughout the vesting dates.

 

6.6.2.            In the event that the employment or service of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Awards of such Grantee that are unvested at the time of such termination shall terminate on the date of such termination, and all Awards of such Grantee that are vested and exercisable at the time of such termination may be exercised within up to three (3) months after the date of such termination (or such different period as the Committee shall prescribe), but in any event no later than the date of expiration of the Award’s term as set forth in the Award Agreement or pursuant to this Plan; provided, however, that if the Company (or the Subsidiary or Affiliate, when applicable) shall terminate the Grantee’s employment or service for Cause (as defined below) or if at any time during the Exercise Period (whether prior to and after termination of employment or service, and whether or not the Grantee’s employment or service is terminated by either party as a result thereof), facts or circumstances arise or are discovered with

 

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respect to the Grantee that would have constituted Cause, all Awards theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination (or on such subsequent date on which such facts or circumstances arise or are discovered, as the case may be) unless otherwise determined by the Committee.

 

6.6.3.            Notwithstanding anything to the contrary, the Committee, in its absolute discretion, may, on such terms and conditions as it may determine appropriate, extend the periods for which Awards held by any Grantee may continue to vest and be exercisable; it being clarified that such Awards may lose their entitlement to certain tax benefits under Applicable Law as a result of the modification of such Awards and/or in the event that the  Award is exercised beyond the later of: (i) three (3) months after the date of termination of the employment or service relationship; or (ii) the applicable period under Section 6.7 below with respect to a termination of the employment or service relationship because of the death, Disability or Retirement of Grantee.

 

6.6.4.            For purposes of this Plan:

 

6.6.4.1.       a termination of employment or service of a Grantee shall not be deemed to occur in case of (i) a transition or transfer of a Grantee among the Company and its Affiliates, (ii) a change in the capacity in which the Grantee is employed or renders service to the Company or any of its Affiliates or a change in the identity of the employing or engagement entity among the Company and its Affiliates, provided, in case of (i) and (ii) above, that the Grantee has remained continuously employed by and/or in the service of the Company and its Affiliates since the date of grant of the Award and throughout the vesting period; (iii) if the Grantee takes any unpaid leave as set forth in Section 6.8(i) below.

 

6.6.4.2.       An entity or an Affiliate thereof assuming an Award or issuing in substitution thereof in a transaction to which Section 424(a) of the Code applies or in a Merger/Sale in accordance with Section 14 shall be deemed as an Affiliate of the Company for purposes of this Section 6.6, unless the Committee determines otherwise.

 

6.6.4.3.       In the case of a Grantee whose principal employer or service recipient is a Subsidiary or Affiliate, the Grantee’s employment shall also be deemed terminated for purposes of this Section 6.6 as of the date on which such principal employer or service recipient ceases to be a Subsidiary or Affiliate.

 

6.6.4.4.       The term “Cause” shall mean  (irrespective of, and in addition to, any definition included in any other agreement or instrument applicable to the Grantee, and unless otherwise determined by the Committee) any of the following: (i) any theft, fraud, embezzlement, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, falsification of any documents or records of the Company or any of its Affiliates, felony or similar act by the Grantee (whether or not related to the Grantee’s relationship with the Company); (ii) an act of moral turpitude by the Grantee, or any act that causes significant injury to, or is otherwise adversely affecting, the reputation, business, assets, operations or business relationship of the Company (or a Subsidiary or Affiliate, when applicable); (iii) any breach by the Grantee of any material agreement with or of any material duty of the Grantee to the Company or any Subsidiary or Affiliate thereof (including breach of confidentiality, non-disclosure, non-use non-competition or non-solicitation covenants towards the Company or any of its Affiliates) or failure to abide by code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); or (iv) any act which constitutes a breach of a Grantee’s fiduciary duty towards the Company or an Affiliate or Subsidiary, including disclosure of confidential or proprietary information thereof or acceptance or solicitation to receive unauthorized or undisclosed benefits, irrespective of their nature, or funds, or promises to receive either, from individuals, consultants or corporate entities that the Company or a Subsidiary does business with; (v) the

 

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Grantee’s unauthorized use, misappropriation, destruction, or diversion of any tangible or intangible asset or corporate opportunity of a Company or any of its Affiliates (including, without limitation, the improper use or disclosure of confidential or proprietary information); or (vi) any circumstances that constitute grounds for termination for cause under the Grantee’s employment or service agreement with the Company or Affiliate, to the extent applicable.  For the avoidance of doubt, the determination as to whether a termination is for Cause for purposes of this Plan, shall be made in good faith by the Committee and shall be final and binding on the Grantee.

 

6.7.             Death, Disability or Retirement of Grantee.

 

6.7.1.            If a Grantee shall die while employed by, or performing service for, the Company or its Affiliates, or within the three (3) month period (or such longer period of time as determined by the Board, in its discretion) after the date of termination of such Grantee’s employment or service (or within such different period as the Committee may have provided pursuant to Section 6.6 hereof), or if the Grantee’s employment or service shall terminate by reason of Disability, all Awards theretofore granted to such Grantee may (to the extent otherwise vested and exercisable and unless earlier terminated in accordance with their terms) be exercised by the Grantee or by the Grantee’s estate or by a person who acquired the legal right to exercise such Awards by bequest or inheritance, or by a person who acquired the legal right to exercise such Awards in accordance with applicable law in the case of Disability of the Grantee, as the case may be, at any time within one (1) year (or such longer period of time as determined by the Board, in its discretion) after the death or Disability of the Grantee (or such different period as the Committee shall prescribe), but in any event no later than the date of expiration of the Award’s term as set forth in the Award Agreement or pursuant to this Plan.  In the event that an Award granted hereunder shall be exercised as set forth above by any person other than the Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or proof satisfactory to the Committee of the right of such person to exercise such Award.

 

6.7.2.            In the event that the employment or service of a Grantee shall terminate on account of such Grantee’s Retirement, all Awards of such Grantee that are exercisable at the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after the date of such Retirement (or such different period as the Committee shall prescribe).

 

6.8.             Suspension of Vesting.  Unless the Committee provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence, other than in the case of any (i) leave of absence which was pre-approved by the Company explicitly for purposes of continuing the vesting of Awards, or (ii) transfers between locations of the Company or any of its Affiliates, or between the Company and any of its Affiliates, or any respective successor thereof.  For clarify, for purposes of this Plan, military leave, statutory maternity or paternity leave or sick leave are not deemed unpaid leave of absence.

 

6.9.             Securities Law Restrictions.  Except as otherwise provided in the applicable Award Agreement or other agreement between the Service Provider and the Company, if the exercise of an Award following the termination of the Service Provider’s employment or service (other than for Cause) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act or equivalent requirements under equivalent laws of other applicable jurisdictions, then the Award shall remain exercisable and terminate on the earlier of (i) the expiration of a period of three (3) months (or such longer period of time as determined by the Board, in its discretion) after the termination of the Service Provider’s employment or service during which the exercise of the Award would not be in such violation, or (ii) the expiration of the term of the Award as set forth in the Award Agreement or pursuant to this Plan.  In addition, unless otherwise provided in a

 

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Grantee’s Award Agreement, if the sale of any Shares received upon exercise or (if applicable) vesting of an Award following the termination of the Grantee’s employment or service (other than for Cause) would violate the Company’s insider trading policy, then the Award shall terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Grantee’s employment or service during which the exercise of the Award would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Award as set forth in the applicable Award Agreement or pursuant to this Plan.

 

6.10.          Voting Proxy.  Until immediately after the listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s) shares, the Shares subject to an Award or to be issued pursuant to an Award or any other Securities, shall, unless otherwise determined by the Committee, be subject to an irrevocable proxy and power of attorney by the Grantee or the Trustee (if so requested from the Trustee), as the case may be, to the Company, which shall designate such person or persons (with a right of substitution) from time to time as determined by the Committee (and in the absence of such determination, the CEO or Chairman of the Board, ex officio).  The Trustee is deemed to be instructed by the Grantee to sign such proxy, as requested by the Company.  The proxy shall entitle the holder thereof to receive notices, vote and take such other actions in respect of the Shares or other Securities.  Any person holding or exercising such voting proxies shall do so solely in his capacity as the proxy holder and not individually.  All Awards granted hereunder shall be conditioned upon the execution of such irrevocable proxy in substantially the form prescribed by the Committee from time to time.  So long as any such Shares are subject to such irrevocable proxy and power of attorney or held by a Trustee (and unless a proxy was given by the Trustee as aforesaid), (i) in any shareholders meeting or written consent in lieu thereof, such Shares shall be voted by the proxy holder, unless directed otherwise by the Board, in the same proportion as the result of the vote at the shareholders’ meeting (or written consent in lieu thereof) in respect of which the Shares are being voted (whether an extraordinary or annual meeting), and (ii) or in any act or consent of shareholders under the Company’s Articles of Association or otherwise, such Shares shall be cast by the proxy holder, unless directed otherwise by the Board, in the same proportion as the result of the shareholders’ act or consent.  The provisions of this Section shall apply to the Grantee and to any purchaser, assignee or transferee of any Shares.

 

6.11.          Other Provisions.  The Award Agreement evidencing Awards under this Plan shall contain such other terms and conditions not inconsistent with this Plan as the Committee may determine, at or after the date of grant, including provisions in connection with the restrictions on transferring the Awards or Shares covered by such Awards, which shall be binding upon the Grantees and any purchaser, assignee or transferee of any Awards, and other terms and conditions as the Committee shall deem appropriate.

 

7.                            NONQUALIFIED STOCK OPTIONS.

 

Awards granted pursuant to this Section 7 are intended to constitute Nonqualified Stock Options and shall be subject to the general terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations.  In the event of any inconsistency or contradictions between the provisions of this Section 7 and the other terms of this Plan, this Section 7 shall prevail.

 

7.1.             Eligibility for Awards.  Nonqualified Stock Options may not be granted to Service Providers who is deemed to be a resident of the United States for purposes of taxation and who are providing services only to a “parent” of the Company, as such term is defined in Rule 405 of Regulation C under the Securities Act, unless the Shares underlying such Awards are treated as “service recipient stock” under Section 409A of the Code because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards comply with the distribution

 

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requirements of Section 409A of the Code.

 

7.2.             Exercise Price.  The Exercise Price of a Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of the Shares on the date of grant unless the Committee specifically indicates that the Awards will have a lower Exercise Price and the Award complies with Section 409A of the Code.  Notwithstanding the foregoing, Nonqualified Stock Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Award is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code.

 

8.                            INCENTIVE STOCK OPTIONS.

 

Awards granted pursuant to this Section 8 are intended to constitute Incentive Stock Options and shall be granted subject to the following special terms and conditions, the general terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations.  In the event of any inconsistency or contradictions between the provisions of this Section 8 and the other terms of this Plan, this Section 8 shall prevail.

 

8.1.             Eligibility for Awards.  Incentive Stock Options may be granted only to Employees of the Company, or to Employees of a Parent or Subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code).  Any person who is not an Employee on the effective date of the grant of an Award to such person may be granted only a Nonqualifed Stock Option.  An Incentive Stock Option granted to a prospective Employee upon the condition that such person become an Employee shall be deemed granted effective on the date such person commences employment, with an exercise price determined as of such date in accordance with Section 8.2.

 

8.2.             Exercise Price.  The Exercise Price of Incentive Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares covered by the Awards on the date of grant or such other price as may be determined pursuant to the Code.  No Incentive Stock Option granted to any Ten-Percent Shareholder shall have an Exercise Price less than 110% of the Fair Market Value of a Share covered by the Awards on the effective date of grant.  Notwithstanding the foregoing, Incentive Stock Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Award is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code.

 

8.3.             Date of Grant.  Incentive Stock Option shall be granted within 10 years from the date this Plan is adopted, or the date this Plan is approved by the shareholders, whichever is earlier.

 

8.4.             Exercise Period.  No Incentive Stock Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Award, subject to Section 8.6.  No Incentive Stock Option granted to a prospective Employee may become exercisable prior to the date on which such person commences employment.

 

8.5.             Value of Shares.  The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options granted under this Plan and all other option plans of any Parent or Subsidiary or Affiliate become exercisable for the first time by each Grantee during any calendar year shall not exceed one hundred thousand United States dollars ($100,000) with respect to such Grantee.  To the extent that the aggregate Fair Market Value of Shares with respect to which the Incentive Stock Options are exercisable for the first time by any Grantee during any calendar years as mentioned above exceeds one hundred thousand United States dollars ($100,000), such Awards shall be treated as Nonqualified Stock Options.  The foregoing shall be applied by taking Awards into account in the order in which they were granted, and the Fair Market Value

 

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of any Share to be determined at the time of the grant of the Awards.  If the Code is amended to provide for a different limitation from that set forth in this Section 8.5, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Awards as required or permitted by such amendment to the Code.  If an Award is treated as an Incentive Stock Option in part and as a Nonqualifed Stock Option in part by reason of the limitation set forth in this Section 8.5, the Grantee may designate which portion of such Award the Grantee is exercising.  In the absence of such designation, the Grantee shall be deemed to have exercised the Incentive Stock Option portion of the Award first.  Separate certificates representing each such portion may be issued upon the exercise of the Award.

 

8.6.             Ten Percent Shareholder.  In the case of an Incentive Stock Option granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Shares on the date of grant of such Incentive Stock Option, and (ii) the Exercise Period shall not exceed five (5) years from the effective date of grant of such Incentive Stock Option.

 

8.7.             Incentive Stock Option Lock-Up Period.  No disposition of Shares received pursuant to the exercise of Incentive Stock Options, shall be made by the Grantee within 2 years from the date of grant, nor within 1 year after the transfer of such Shares to him.  To the extent that the Grantee violates the aforementioned limitations, the Incentive Stock Options shall be deemed to be Nonqualified Stock Options.

 

8.8.             Approval.  To the extent required by Applicable Law, the status of any Shares issued upon exercise of Incentive Stock Options shall be subject to approval of this Plan and any amendment thereto by the Company’s shareholders, such approval to be provided 12 months before or after the date of adoption of this Plan or its amendment (if applicable), as the case may be, by the Board.

 

8.9.             Leave of Absence.  Notwithstanding Section 6.8, a Grantee’s employment shall not be deemed to have terminated if the Grantee takes any leave as set forth in Section 6.8(i); provided, however, that if any such leave exceeds ninety (90) days, on the one hundred eighty-first (181st) day following the commencement of such leave any Incentive Stock Option held by the Grantee shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonqualifed Stock Option, unless the Grantee’s right to return to employment is guaranteed by statute or contract.

 

8.10.          Exercise Following Termination for Disability.  Notwithstanding anything else in this Plan to the contrary, Incentive Stock Options that are not exercised within three (3) months following termination of Grantee’s employment with the Company or its Parent or Subsidiary or a corporation or a Parent or Subsidiary of such corporation issuing or assuming a Award in a transaction to which Section 424(a) of the Code applies, or within one year in case of termination of Grantee’s employment with the Company or its Parent or Subsidiary due to a disability (within the meaning of Section 22(e)(3) of the Code), shall be deemed to be Nonqualified Stock Options.

 

8.11.          Adjustments to Incentive Stock Options.  Any Awards Agreement providing for the grant of Incentive Stock Options shall indicate that adjustments made pursuant to this Plan with respect to Incentive Stock Options could constitute a “modification” of such Incentive Stock Options (as that term is defined in Section 424(h) of the Code) or could cause adverse tax consequences for the holder of such Incentive Stock Options and that the holder should consult with his or her tax advisor regarding the consequences of such “modification” on his or her income tax treatment with respect to the Incentive Stock Option.

 

8.12.           Notice to Company of Disqualifying Disposition.  Each Grantee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Grantee makes a Disqualifying Disposition of any Shares received pursuant to the exercise of Incentive Stock Options.  A

 

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“Disqualifying Disposition” is any disposition (including any sale) of such Shares before the later of (i) two years after the date the Grantee was granted the Incentive Stock Option, or (ii) one year after the date the Grantee acquired Shares by exercising the Incentive Stock Option.  If the Grantee dies before such Shares are sold, these holding period requirements do not apply and no disposition of the Shares will be deemed a Disqualifying Disposition.

 

9.                            102 AWARDS.

 

Awards granted pursuant to this Section 9 are intended to constitute 102 Awards and shall be granted subject to the following special terms and conditions, the general terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations.  In the event of any inconsistency or contradictions between the provisions of this Section 9 and the other terms of this Plan, this Section 9 shall prevail.

 

9.1.             Tracks.  Awards granted pursuant to this Section 9 are intended to be granted pursuant to Section 102 of the Ordinance pursuant to either (i) Section 102(b)(2) thereof, under the capital gain track (“102 Capital Gain Track Awards”), or (ii) Section 102(b)(1) thereof under the ordinary income track (“102 Ordinary Income Track Awards”, and together with 102 Capital Gain Track Awards, “102 Trustee Awards”).  102 Trustee Awards shall be granted subject to the special terms and conditions contained in this Section 9, the general terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Options under different tax laws or regulations.

 

9.2.             Election of Track.  Subject to Applicable Law, the Company may grant only one type of 102 Trustee Awards at any given time to all Grantees who are to be granted 102 Trustee Awards pursuant to this Plan, and shall file an election with the ITA regarding the type of 102 Trustee Awards it elects to grant before the date of grant of any 102 Trustee Awards (the “Election”).  Such Election shall also apply to any other securities, including bonus shares, received by any Grantee as a result of holding the 102 Trustee Awards.  The Company may change the type of 102 Trustee Awards that it elects to grant only after the expiration of at least 12 months from the end of the year in which the first grant was made in accordance with the previous Election, or as otherwise provided by Applicable Law.  Any Election shall not prevent the Company from granting Awards, pursuant to Section 102(c) of the Ordinance without a Trustee (“102 Non-Trustee Awards”).

 

9.3.             Eligibility for Awards.

 

9.3.1.            Subject to Applicable Law, 102 Awards may only be granted to an “employee” within the meaning of Section 102(a) of the Ordinance (which as of the date of the adoption of this Plan means (i) individuals employed by an Israeli company being the Company or any of its Affiliates, and (ii) individuals who are serving and are engaged personally (and not through an entity) as “office holders” by such an Israeli company), but may not be granted to a Controlling Shareholder (“Eligible 102 Grantees”).  Eligible 102 Grantees may receive only 102 Awards, which may either be granted to a Trustee or granted under Section 102 of the Ordinance without a Trustee.

 

9.4.             102 Award Grant Date.

 

9.4.1.            Each 102 Award will be deemed granted on the date determined by the Committee, subject to Section 9.4.2, provided that (i) the Grantee has signed all documents required by the Company or pursuant to Applicable Law, and (ii) with respect to 102 Trustee Award, the Company has provided all applicable documents to the Trustee in accordance with the guidelines published by the ITA.

 

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9.4.2.            Unless otherwise permitted by the Ordinance, any grants of 102 Trustee Awards that are made on or after the date of the adoption of this Plan or an amendment to this Plan, as the case may be, that may become effective only at the expiration of thirty (30) days after the filing of this Plan or any amendment thereof (as the case may be) with the ITA in accordance with the Ordinance shall be conditional upon the expiration of such 30-day period, such condition shall be read and is incorporated by reference into any corporate resolutions approving such grants and into any Award Agreement evidencing such grants (whether or not explicitly referring to such condition), and the date of grant shall be at the expiration of such 30-day period, whether or not the date of grant indicated therein corresponds with this Section.  In the case of any contradiction, this provision and the date of grant determined pursuant hereto shall supersede and be deemed to amend any date of grant indicating in any corporate resolution or Award Agreement.

 

9.5.             102 Trustee Awards.

 

9.5.1.            Each 102 Trustee Award, each Share issued pursuant to the exercise of any 102 Trustee Award, and any rights granted thereunder, including bonus shares, shall be issued to and registered in the name of the Trustee and shall be held in trust for the benefit of the Grantee for the requisite period prescribed by the Ordinance or such longer period as set by the Committee (the “Required Holding Period”).  In the event that the requirements under Section 102 of the Ordinance to qualify an Award as a 102 Trustee Award are not met, then the Award may be treated as a 102 Non-Trustee Award or 3(9) Award, all in accordance with the provisions of the Ordinance.  After termination of the Required Holding Period, the Trustee may release such 102 Trustee Awards and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA that the Grantee has paid any applicable taxes due pursuant to the Ordinance, or (ii) the Trustee and/or the Company and/or its Affiliate withholds all applicable taxes and compulsory payments due pursuant to the Ordinance arising from the 102 Trustee Awards and/or any Shares issued upon exercise or (if applicable) vesting of such 102 Trustee Awards.  The Trustee shall not release any 102 Trustee Awards or Shares issued upon exercise or (if applicable) vesting thereof prior to the payment in full of the Grantee’s tax and compulsory payments arising from such 102 Trustee Awards and/or Shares or the withholding referred to in (ii) above.

 

9.5.2.            Each 102 Trustee Award shall be subject to the relevant terms of the Ordinance, the Rules and any determinations, rulings or approvals issued by the ITA, which shall be deemed an integral part of the 102 Trustee Awards and shall prevail over any term contained in this Plan or Award Agreement that is not consistent therewith.  Any provision of the Ordinance, the Rules and any determinations, rulings or approvals by the ITA not expressly specified in this Plan or Award Agreement that are necessary to receive or maintain any tax benefit pursuant to Section 102 of the Ordinance shall be binding on the Grantee.  The Grantee granted a 102 Trustee Awards shall comply with the Ordinance and the terms and conditions of the Trust Agreement entered into between the Company and the Trustee.  The Grantee shall execute any and all documents that the Company and/or its Affiliates and/or the Trustee determine from time to time to be necessary in order to comply with the Ordinance and the Rules.

 

9.5.3.            During the Required Holding Period, the Grantee shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable upon the exercise or (if applicable) vesting of a 102 Trustee Awards and/or any securities issued or distributed with respect thereto, until the expiration of the Required Holding Period.  Notwithstanding the above, if any such sale, release or other action occurs during the Required Holding Period it may result in adverse tax consequences to the Grantee under Section 102 of the Ordinance and the Rules, which shall apply to and shall be borne solely by such Grantee.  Subject to the foregoing, the Trustee may, pursuant to a written request from the Grantee, but subject to the terms of this Plan, release and transfer such

 

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Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes and compulsory payments required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and the Company, and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, any agreement governing the Shares, this Plan, the Award Agreement and any Applicable Law.

 

9.5.4.            If a 102 Trustee Award is exercised or (if applicable) vested, the Shares issued upon such exercise or (if applicable) vesting shall be issued in the name of the Trustee for the benefit of the Grantee.

 

9.5.5.            Upon or after receipt of a 102 Trustee Award, if required, the Grantee may be required to sign an undertaking to release the Trustee from any liability with respect to any action or decision duly taken and executed in good faith by the Trustee in relation to this Plan, or any 102 Trustee Awards or Share granted to such Grantee thereunder.

 

9.6.             102 Non-Trustee Awards.  The foregoing provisions of this Section 9 relating to 102 Trustee Awards shall not apply with respect to 102 Non-Trustee Awards, which shall, however, be subject to the relevant provisions of Section 102 of the Ordinance and the applicable Rules.  The Committee may determine that 102 Non-Trustee Awards, the Shares issuable upon the exercise or (if applicable) vesting of a 102 Non-Trustee Awards and/or any securities issued or distributed with respect thereto, shall be allocated or issued to the Trustee, who shall hold such 102 Non-Trustee Awards and all accrued rights thereon (if any), in trust for the benefit of the Grantee and/or the Company, as the case may be, until the full payment of tax arising from the 102 Non-Trustee Awards, the Shares issuable upon the exercise or (if applicable) vesting of a 102 Non-Trustee Awards and/or any securities issued or distributed with respect thereto.  The Company may choose, alternatively, to force the Grantee to provide it with a guarantee or other security, to the satisfaction of each of the Trustee and the Company, until the full payment of the applicable taxes.

 

9.7.             Israeli Index Base for 102 Awards.  Each 102 Award will be subject to the Israeli index base of the Value of Benefit, as defined in Section 102(a) of the Ordinance, as determined by the Committee in its discretion, pursuant to the Rules, from time to time.  The Committee may amend (which may have a retroactive effect) the Israeli index base, pursuant to the Ordinance, without the Grantee’s consent.

 

9.8.             Written Grantee Undertaking.  To the extent and with respect to any 102 Trustee Award, and as required by Section 102 of the Ordinance and the Rules, by virtue of the receipt of such Award, the Grantee is deemed to have undertaken and confirm in writing the following (and such undertaking is deemed incorporated into any documents signed by the Grantee in connection with the employment or service of the Grantee and/or the grant of such Award).  The following written undertaking shall be deemed to apply and relate to all Awards granted to the Grantee, whether under this Plan or other plans maintained by the Company, and whether prior to or after the date hereof.

 

9.8.1.            The Grantee shall comply with all terms and conditions set forth in Section 102 of the Ordinance with regard to the “Capital Gain Track” or the “Ordinary Income Track”, as applicable, and the applicable rules and regulations promulgated thereunder, as amended from time to time;

 

9.8.2.            The Grantee is familiar with, and understand the provisions of, Section 102 of the Ordinance in general, and the tax arrangement under the “Capital Gain Track” or the “Ordinary Income Track” in particular, and its tax consequences; the Grantee agrees that the Awards and

 

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Shares that may be issued upon exercise or (if applicable) vesting of the Awards (or otherwise in relation to the Awards), will be held by a trustee appointed pursuant to Section 102 of the Ordinance for at least the duration of the “Holding Period” (as such term is defined in Section 102) under the “Capital Gain Track” or the “Ordinary Income Track”, as applicable.  The Grantee understands that any release of such Awards or Shares from trust, or any sale of the Share prior to the termination of the Holding Period, as defined above, will result in taxation at marginal tax rate, in addition to deductions of appropriate social security, health tax contributions or other compulsory payments; and

 

9.8.3.            The Grantee agrees to the trust deed signed between the Company, his employing company and the trustee appointed pursuant to Section 102 of the Ordinance.

 

10.                     3(9) AWARDS.

 

Awards granted pursuant to this Section 10 are intended to constitute 3(9) Awards and shall be granted subject to the general terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations.  In the event of any inconsistency or contradictions between the provisions of this Section 10 and the other terms of this Plan, this Section 10 shall prevail.

 

10.1.          To the extent required by the Ordinance or the ITA or otherwise deemed by the Committee to be advisable, the 3(9) Awards and/or any shares or other securities issued or distributed with respect thereto granted pursuant to this Plan shall be issued to a Trustee nominated by the Committee in accordance with the provisions of the Ordinance.  In such event, the Trustee shall hold such Awards and/or any shares or other securities issued or distributed with respect thereto in trust, until exercised or (if applicable) vested by the Grantee and the full payment of tax arising therefrom, pursuant to the Company’s instructions from time to time as set forth in a trust agreement, which will have been entered into between the Company and the Trustee.  If determined by the Board or the Committee, and subject to such trust agreement, the Trustee shall be responsible for withholding any taxes to which a Grantee may become liable upon issuance of Shares, whether due to the exercise or (if applicable) vesting of Awards.

 

10.2.           Shares pursuant to a 3(9) Award shall not be issued, unless the Grantee delivers to the Company payment in cash or by bank check or such other form acceptable to the Committee of all withholding taxes due, if any, on account of the Grantee acquired Shares under the Award or gives other assurance satisfactory to the Committee of the payment of those withholding taxes.

 

11.                     RESTRICTED SHARES.

 

The Committee may award Restricted Shares to any eligible Grantee, including under Section 102 of the Ordinance.  Each Award of Restricted Shares under this Plan shall be evidenced by a written agreement between the Company and the Grantee (the “Restricted Share Agreement”), in such form as the Committee shall from time to time approve.  The Restricted Shares shall be subject to all applicable terms of this Plan, which in the case of Restricted Shares granted under Section 102 of the Ordinance shall include Section 9 hereof, and may be subject to any other terms that are not inconsistent with this Plan.  The provisions of the various Restricted Shares Agreements entered into under this Plan need not be identical.  The Restricted Share Agreement shall comply with and be subject to Section 6 and the following terms and conditions, unless otherwise specifically provided in such Agreement and not inconsistent with this Plan, or Applicable Law:

 

11.1.          Purchase Price.  Section 6.4 shall not apply.  Each Restricted Share Agreement shall state an amount of Exercise Price to be paid by the Grantee, if any, in consideration for the issuance of the Restricted Shares and the terms of payment thereof, which may include, payment in cash or by issuance

 

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of promissory notes or other evidence of indebtedness on such terms and conditions as determined by the Committee.

 

11.2.          Restrictions.  Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution (in which case they shall be transferred subject to all restrictions then or thereafter applicable thereto), until such Restricted Shares shall have vested (the period from the date on which the Award is granted until the date of vesting of the Restricted Share thereunder being referred to herein as the “Restricted Period”).  The Committee may also impose such additional or alternative restrictions and conditions on the Restricted Shares, as it deems appropriate, including the satisfaction of performance criteria.  Such performance criteria may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee or pursuant to the provisions of any Company policy required under mandatory provisions of Applicable Law.  Certificates for shares issued pursuant to Restricted Share Awards shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares in contravention of such restrictions shall be null and void and without effect.  Such certificates may, if so determined by the Committee, be held in escrow by an escrow agent appointed by the Committee, or, if a Restricted Share Award is made pursuant to Section 102 of the Ordinance, by the Trustee.  In determining the Restricted Period of an Award the Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded Restricted Shares on successive anniversaries of the date of such Award.  To the extent required by the Ordinance or the ITA, the Restricted Shares issued pursuant to Section 102 of the Ordinance shall be issued to the Trustee in accordance with the provisions of the Ordinance and the Restricted Shares shall be held for the benefit of the Grantee for such period as may be required by the Ordinance.

 

11.3.          Forfeiture; Repurchase.  Subject to such exceptions as may be determined by the Committee, if the Grantee’s continuous employment with or service to the Company or any Affiliate thereof shall terminate for any reason prior to the expiration of the Restricted Period of an Award or prior to the timely payment in full of the Exercise Price of any Restricted Shares, any Shares remaining subject to vesting or with respect to which the purchase price has not been paid in full, shall thereupon be forfeited, transferred to, and redeemed, repurchased or cancelled by, as the case may be, in any manner as set forth in Section 6.6.2(i) thought (v), subject to Applicable Laws and the Grantee shall have no further rights with respect to such Restricted Shares.

 

11.4.          Ownership.  During the Restricted Period the Grantee shall possess all incidents of ownership of such Restricted Shares, subject to Section 6.10 and Section 11.2, including the right to vote and receive dividends with respect to such Shares.  All securities, if any, received by a Grantee with respect to Restricted Shares as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Award.

 

12.                     RESTRICTED SHARE UNITS.

 

An RSU is an Award covering a number of Shares that is settled, if vested and (if applicable) exercised, by issuance of those Shares.  An RSU may be awarded to any eligible Grantee, including under Section 102 of the Ordinance, provided that, to the extent required by Applicable Laws, a specific ruling is obtained from the ITA to grant RSUs as 102 Trustee Awards.  The Award Agreement relating to the grant of RSUs under this Plan (the “Restricted Share Unit Agreement”), shall be in such form as the Committee shall from time to time approve.  The RSUs shall be subject to all applicable terms of this Plan, which in the case of RSUs granted under Section 102 of the Ordinance shall include Section 9 hereof, and may be subject to any other terms that are not inconsistent with this Plan.  The provisions of the various Restricted Share Unit Agreements entered into under this Plan need not be identical.  RSUs may be granted in consideration of a reduction in the recipient’s other compensation.

 

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12.1.                               Exercise Price.  No payment of Exercise Price shall be required as consideration for RSUs, unless included in the Award Agreement or as required by Applicable Law (including, Section 304 of the Companies Law, 1999, as amended), and Section 6.4 shall apply, if applicable.

 

12.2.                               Shareholders’ Rights.  The Grantee shall not possess or own any ownership rights in the Shares underlying the RSUs and no rights as a shareholder shall exist prior to the actual issuance of Shares in the name of the Grantee.

 

12.3.                               Settlements of Awards.  Settlement of vested RSUs shall be made in the form of Shares.  Distribution to a Grantee of an amount (or amounts) from settlement of vested RSUs can be deferred to a date after settlement as determined by the Committee.  The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents.  Until the grant of RSUs is settled, the number of Shares underlying such RSUs shall be subject to adjustment pursuant hereto.

 

12.4.                               Section 409A Restrictions.  Notwithstanding anything to the contrary set forth herein, any RSUs granted under this Plan that are not exempt from the requirements of Section 409A of the Code shall contain such restrictions or other provisions so that such RSUs will comply with the requirements of Section 409A of the Code, if applicable to the Company.  Such restrictions, if any, shall be determined by the Committee and contained in the Restricted Share Unit Agreement evidencing such RSU.  For example, such restrictions may include a requirement that any Shares that are to be issued in a year following the year in which the RSU vests must be issued in accordance with a fixed, pre-determined schedule.

 

13.                     OTHER SHARE OR SHARE-BASED AWARDS.

 

13.1.                               The Committee may grant other Awards under this Plan pursuant to which Shares (which may, but need not, be Restricted Shares pursuant to Section 11 hereof), cash (in settlement of Share-based Awards) or a combination thereof, are or may in the future be acquired or received, or Awards denominated in stock units, including units valued on the basis of measures other than market value.

 

13.2.                               The Committee may also grant stock appreciation rights without the grant of an accompanying option, which rights shall permit the Grantees to receive, at the time of any exercise of such rights, cash equal to the amount by which the Fair Market Value of all Shares in respect to which the right was granted exceed the exercise price thereof.

 

13.3.                               Such other Share-based Awards as set forth above may be granted alone, in addition to, or in tandem with any Award of any type granted under this Plan.

 

14.                    EFFECT OF CERTAIN CHANGES.

 

14.1.                               General.  In the event of a divisions or subdivision of the outstanding share capital of the Company, any distribution of bonus shares (stock split), consolidation or combination of share capital of the Company (reverse stock split), reclassification with respect to the Shares or any similar recapitalization events (each, a “Recapitalization”), reorganization (which may include a combination or exchange of shares, spin-off or other corporate divestiture or division, or other similar occurrences) then (i) the number of Shares reserved and available for grants of Awards and (ii) the number of Shares covered by outstanding Awards, , will be proportionately adjusted.  Any fractional shares resulting from such adjustment shall be treated as determined by the Committee, and in the absence of such determination shall be rounded to the nearest whole share, and the Company shall have no obligation to make any cash or other payment with respect to such fractional shares.  No adjustment shall be made by reason of the distribution of subscription rights or rights offering to outstanding shares or distribution of dividends to outstanding shareholders or other issuance of shares by the Company, unless the Committee determines otherwise.  The adjustments determined pursuant to this Section 14.1 (including a

 

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determination that no adjustment is to be made) shall be final, binding and conclusive.

 

14.2.                               Merger/Sale of Company.  In the event of (i) a sale of all or substantially all of the assets of the Company, or a sale (including an exchange) of all or substantially all of the shares of the Company, to any person, or a purchase by a shareholder of the Company or by an Affiliate of such shareholder, of all the shares of the Company held by all or substantially all other shareholders or by other shareholders who are not Affiliated with such acquiring party; (ii) a merger (including, a reverse merger and a reverse triangular merger), consolidation, amalgamation or like transaction of the Company with or into another corporation; (iii) a scheme of arrangement for the purpose of effecting such sale, merger, consolidation, amalgamation or other transaction; or (iv) such other transaction or set of circumstances that is determined by the Board, in its discretion, to be a transaction subject to the provisions of this Section 14.2; excluding any of the above transactions in clauses (i) through (iii) if the Committee determines that such transaction should be excluded from the definition hereof and the applicability of this Section 14.2 (such transaction, a “Merger/Sale”), then, without derogating from the Committee’s general authority and power under this Plan, without the Grantee’s consent and action and without any prior notice requirement:

 

14.2.1.                             Unless otherwise determined by the Committee in its sole and absolute discretion, any Award then outstanding shall be assumed or be substituted by the Company, or by the successor corporation in such Merger/Sale or by any parent or Affiliate thereof, as determined by the Committee in its discretion (the “Successor Corporation”), under terms as determined by the Committee or the terms of this Plan applied by the Successor Corporation to such assumed or substituted Awards;

 

For the purposes of this Section 14.2.1, the Award shall be considered assumed or substituted if, following a Merger/Sale, the Award confers on the holder thereof the right to purchase or receive, for each Share underlying an Award immediately prior to the Merger/Sale, either (i) the consideration (whether stock, cash, or other securities or property, or any combination thereof) distributed to or received by holders of Shares in the Merger/Sale for each Share held on the effective date of the Merger/Sale (and if holders were offered a choice or several types of consideration, the type of consideration as determined by the Committee), or (ii) regardless of the consideration received by the holders of Shares in the Merger/Sale, solely shares or any type of Awards (or their equivalent) of the Successor Corporation at a value to be determined by the Committee in its discretion, or a certain type of consideration (whether stock, cash, or other securities or property, or any combination thereof) as determined by the Committee.  Any of the above consideration referred to clauses (i) and (ii) shall be subject to the same vesting and expiration terms of the Awards applying immediately prior to the Merger/Sale, unless the Committee determines in its discretion that the consideration shall be subject to different vesting and expiration terms, or other terms.  The foregoing shall not limit the Committee’s authority to determine, in its sole discretion, that in lieu of such assumption or substitution of Awards for Awards of the Successor Corporation, such Award will be substituted for any other type of asset or property, including as set forth in Section 14.2.2 hereunder.

 

14.2.2.                             Regardless of whether or not Awards are assumed or substituted, the Committee may (but shall not be obligated to), in its sole discretion:

 

14.2.2.1.               provide for the Grantee to have the right to exercise the Award in respect of Shares covered by the Award which would otherwise be exercisable or vested, under such terms and conditions as the Committee shall determine, and the cancellation of all unexercised and unvested Awards upon or immediately prior to the closing of the Merger/Sale, unless the Committee provides for the Grantee to have the right to exercise the Award, or otherwise for the acceleration of vesting of such Award, as to all or part of the Shares covered by the Award which would not otherwise be exercisable or vested, under such terms and conditions as the Committee

 

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shall determine; and/or

 

14.2.2.2.               provide for the cancellation of each outstanding Award at or immediately prior to the closing of such Merger/Sale, and payment to the Grantee of an amount in cash, shares of the Company, the acquiror or of a corporation or other business entity which is a party to the Merger/Sale or other property, as determined by the Committee to be fair in the circumstances, and subject to such terms and conditions as determined by the Committee.  The Committee shall have full authority to select the method for determining the payment (being the Black-Scholes model or any other method).  The Committee’s determination may further provide that payment shall be set to zero if the value of the Shares is determined to be less than the Exercise Price or in respect of Shares covered by the Award which would not otherwise be exercisable or vested, or that payment may be made only in excess of the Exercise Price.

 

14.2.3.                             The Committee may determine that any payments made in respect of Awards shall be made or delayed to the same extent that payment of consideration to the holders of the Shares in connection with the Merger/Sale is made or delayed as a result of escrows, indemnification, earn outs, holdbacks or any other contingencies; and the terms and conditions applying to the payment made to the Grantees, including participation in escrow, indemnification, releases, earn-outs, holdbacks or any other contingencies.

 

14.2.4.                             Notwithstanding the foregoing, in the event of a Merger/Sale, the Committee may determine, in its sole discretion that upon completion of such Merger/Sale the terms of any Award be otherwise amended, modified or terminated, as the Committee shall deem in good faith to be appropriate and without any liability to the Company or its Affiliates and to their respective its officers, directors, employees and representatives and the respective successors and assigns of any of the foregoing in connection with the method of treatment or chosen course of action permitted hereunder.

 

14.2.5.                             Neither the authorities and powers of the Committee under this Section 14.2, nor the exercise or implementation thereof, shall (i) be restricted or limited in any way by any adverse consequences (tax or otherwise) that may result to any holder of an Award, and (ii) as, inter alia, being a feature of the Award upon its grant, be deemed to constitute a change or an amendment of the rights of such holder under this Plan, nor shall any such adverse consequences (as well as any adverse tax consequences that may result from any tax ruling or other approval or determination of any relevant tax authority) be deemed to constitute a change or an amendment of the rights of such holder under this Plan, and may be effected without consent of any Grantee and without any liability to the Company or its Affiliates and to their respective its officers, directors, employees and representatives and the respective successors and assigns of any of the foregoing.  The Committee need not take the same action with respect to all Awards or with respect to all Service Providers.  The Committee may take different actions with respect to the vested and unvested portions of an Award.  The Committee may determine an amount or type of consideration to be received or distributed in a Merger/Sale which may differ as among the Grantees, and as between the Grantees and any other holders of shares of the Company.

 

14.2.6.                             The Committee’s determinations pursuant to this Section 14 shall be conclusive and binding on all Grantees.

 

14.2.7.                             If determined by the Committee, the Grantees shall be subject to the definitive agreement(s) in connection with the Merger/Sale as applying to holders of Shares including, such terms, conditions, representations, undertakings, liabilities, limitations, releases, indemnities, participating in transaction expenses and escrow arrangement, in each case as determined by the Committee.  Each Grantee shall execute such separate agreement(s) or instruments as may be requested by the Company, the Successor Corporation or the acquiror in connection with such in such Merger/Sale and in the form required by them.  The execution of such separate agreement(s)

 

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may be a condition to the receipt of assumed or substituted Awards, payment in lieu of the Award or the exercise of any Award.

 

14.3.                               Reservation of Rights.  Except as expressly provided in this Section 14 (if any), the Grantee of an Award hereunder shall have no rights by reason of any Recapitalization of shares of any class, any increase or decrease in the number of shares of any class, any dissolution, liquidation, reorganization (which may include a combination or exchange of shares, spin-off or other corporate divestiture or division, or other similar occurrences), Merger/Sale.  Any issue by the Company of shares of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of shares subject to an Award.  The grant of an Award pursuant to this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or part of its business or assets or engage in any similar transactions.

 

15.                     NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.

 

15.1.                               All Awards granted under this Plan by their terms shall not be transferable otherwise than by will or by the laws of descent and distribution, unless otherwise determined by the Committee or under this Plan, provided that with respect to Shares issued upon exercise or (if applicable) the vesting of Awards the restrictions on transfer shall be the restrictions referred to in Section 16 (Conditions upon Issuance of Shares) hereof.  Subject to the above provisions, the terms of such Award, this Plan and any applicable Award Agreement shall be binding upon the beneficiaries, executors, administrators, heirs and successors of such Grantee.  Awards may be exercised or otherwise realized, during the lifetime of the Grantee, only by the Grantee or by his guardian or legal representative, to the extent provided for herein.  Any transfer of an Award not permitted hereunder (including transfers pursuant to any decree of divorce, dissolution or separate maintenance, any property settlement, any separation agreement or any other agreement with a spouse) and any grant of any interest in any Award to, or creation in any way of any direct or indirect interest in any Award by, any party other than the Grantee shall be null and void and shall not confer upon any party or person, other than the Grantee, any rights.  Notwithstanding the foregoing, upon the request of the Grantee and subject to Applicable Law the Committee, at its sole discretion, may permit the Grantee to transfer the Award to a trust whose beneficiaries are the Grantee and/or the Grantee’s immediate family members (all or several of them).

 

15.2.                               As long as the Shares are held by the Trustee in favor of the Grantee, all rights possessed by the Grantee over the Shares are personal, and may not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.

 

15.3.                               The provisions of this Section 15 shall apply to the Grantee and to any purchaser, assignee or transferee of any Shares.

 

16.                     CONDITIONS UPON ISSUANCE OF SHARES; GOVERNING PROVISIONS.

 

16.1.                               Legal Compliance.  The grant of Awards and the issuance or Shares upon exercise or settlement of Awards shall be subject to compliance with all Applicable Laws as determined by the Company, including, applicable requirements of federal, state and foreign law with respect to such securities.  The Company shall have no obligations to issue Shares pursuant to the exercise or settlement of an Award and Awards may not be exercised or settled, if the issuance of Shares upon exercise or settlement would constitute a violation of any Applicable Laws as determined by the Company, including, applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Shares may then be listed.  In addition, no Award may be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise or

 

24

 

settlement of the Award be in effect with respect to the shares issuable upon exercise of the Award, or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, if any, deemed by the Company to be necessary to the lawful issuance and sale of any Shares hereunder, and the inability to issue Shares hereunder due to non-compliance with any Company policies with respect to the sale of Shares, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority or compliance shall not have been obtained or achieved.  As a condition to the exercise of an Award, the Company may require the person exercising such Award to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any Applicable Law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company, including to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, all in form and content specified by the Company.

 

16.2.                               Provisions Governing Shares.  Shares issued pursuant to an Award shall be subject to the Articles of Association of the Company, any limitation, restriction or obligation included in any shareholders agreement applicable to all or substantially all of the holders of shares (regardless of whether or not the Grantee is a formal party to such shareholders agreement), any other governing documents of the Company, all policies, manuals and internal regulations adopted by the Company from time to time, in each case, as may be amended from time to time, including any provisions included therein concerning restrictions or limitations on disposition of Shares (such as, but not limited to, right of first refusal and lock up/market stand-off) or grant of any rights with respect thereto, forced sale and bring along provisions, any provisions concerning restrictions on the use of inside information and other provisions deemed by the Company to be appropriate in order to ensure compliance with Applicable Laws.  Each Grantee shall execute such separate agreement(s) as may be requested by the Company relating to matters set forth in this Section 16.2.  The execution of such separate agreement(s) may be a condition by the Company to the exercise of any Award.

 

16.3.                               Forced Sale.  In the event the that Board approves a Merger/Sale effected by way of a forced or compulsory sale (whether pursuant to the Company’s Articles of Association or pursuant to Section 341 of the Companies Law), then, without derogating from such provisions and in addition thereto, the Grantee shall be obligated, and shall be deemed to have agreed to the offer to effect the Merger/Sale on the terms approved by the Board (and the Shares held by or for the benefit of the Grantee shall be included in the shares of the Company approving the terms of such Merger/Sale for the purpose of satisfying the required majority), and shall sell all of the Shares held by or for the benefit of the Grantee on the terms and conditions applying to the holders of Shares, in accordance with the instructions then issued by the Board, whose determination shall be final.  No Grantee shall contest, bring any claims or demands, or exercise any appraisal rights related to any of the foregoing.  The proxy pursuant to Section 6.10 includes an authorization of the holder of such proxy to sign, by and on behalf of any Grantee, such documents and agreements as are required to affect the sale of Shares in connection with such Merger/Sale.

 

17.                     MARKET STAND-OFF

 

17.1.                               In connection with any underwritten public offering of equity securities of the Company pursuant to an effective registration statement filed under the Securities Act or equivalent law in another jurisdiction, the Grantee shall not directly or indirectly, without the prior written consent of the Company or its underwriters, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares or other Awards, any securities of the Company

 

25

 

(whether or not such Shares were acquired under this Plan), or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Shares or securities of the Company and any other shares or securities issued or distributed in respect thereto or in substitution thereof (collectively, “Securities”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clauses (i) or (ii) is to be settled by delivery of Securities, in cash or otherwise.  The foregoing provisions of this Section 17.1 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement.  Such restrictions (the “Market Stand-Off”) shall be in effect for such period of time (the “Market Stand-Off Period”): (A) following the first public filing of the registration statement relating to the underwritten public offering until the extirpation of 180 days following the effective date of such registration statement relating to the Company’s initial public offering or 90 days following the effective date of such registration statement relating to any other public offering, in each case, provided, however, that if (1) during the last 17 days of the initial Market Stand-Off Period, the Company releases earnings results or announces material news or a material event or (2) prior to the expiration of the initial Market Stand-Off Period, the Company announces that it will release earnings results during the 15-day period following the last day of the initial Market Stand-Off Period, then in each case the Market Stand-Off Period will be automatically extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the announcement of the material news or material event; or (B) such other period as shall be requested by the Company or the underwriters.  Notwithstanding anything herein to the contrary, if the underwriter(s) and the Company agree on a termination date of the Market Stand-Off Period in the event of failure to consummation a certain public offering, then such termination shall apply also to the Market Stand-Off Period hereunder with respect to that particular public offering.

 

17.2.                               In the event of a subdivision of the outstanding share capital of the Company, the distribution of any securities (whether or not of the Company), whether as bonus shares or otherwise, and whether as dividend or otherwise, a recapitalization, a reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.

 

17.3.                               In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable Market Stand-Off period.

 

17.4.                               The underwriters in connection with a registration statement so filed are intended third party beneficiaries of this Section 17 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.  Each Grantee shall execute such separate agreement(s) as may be requested by the Company or the underwriters in connection with such registration statement and in the form required by them, relating to Market Stand-Off (which need not be identical to the provisions of this Section 17, and may include such additional provisions and restrictions as the underwriters deem advisable) or that are necessary to give further effect thereto.  The execution of such separate agreement(s) may be a condition by the Company to the exercise of any Award.

 

17.5.                               Without derogating from the above provisions of this Section 17 or elsewhere in this Plan, the provisions of this Section 17 shall apply to the Grantee and the Grantee’s heirs, legal representatives, successors, assigns, and to any purchaser, assignee or transferee of any Awards or Shares.

 

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18.                     AGREEMENT REGARDING TAXES; DISCLAIMER.

 

18.1.                               If the Committee shall so require, as a condition of exercise of an Award, the release of Shares by the Trustee or the expiration of the Restricted Period, a Grantee shall agree that, no later than the date of such occurrence, the Grantee will pay to the Company (or the Trustee, as applicable) or make arrangements satisfactory to the Committee and the Trustee (if applicable) regarding payment of any applicable taxes and compulsory payments of any kind required by Applicable Law to be withheld or paid.

 

18.2.                                TAX LIABILITY.  ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED HEREUNDER OR ISSUED UPON EXERCISE OR (IF APPLICABLE) THE VESTING OF ANY AWARD, THE ASSUMPTION, SUBSTITUTION, CANCELLATION OR PAYMENT IN LIEU OF AWARDS OR FROM ANY OTHER ACTION IN CONNECTION WITH THE FOREGOING (INCLUDING WITHOUT LIMITATION ANY TAXES AND COMPULSORY PAYMENTS, SUCH AS SOCIAL SECURITY OR HEALTH TAX PAYABLE BY THE GRANTEE OR THE COMPANY IN CONNECTION THEREWITH) SHALL BE BORNE AND PAID SOLELY BY THE GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PAYMENT OR ANY PENALTY, INTEREST OR INDEXATION THEREON.  EACH GRANTEE AGREES TO, AND UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY.

 

18.3.                               NO TAX ADVISE.  THE GRANTEE IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING, EXERCISING OR DISPOSING OF AWARDS HEREUNDER.  THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE GRANTEE ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE RESPONSIBILITY OF THE GRANTEE.

 

18.4.                               TAX TREATMENT.  THE COMPANY DOES NOT UNDERTAKE OR ASSUME ANY LIABILITY OR RESPONSIBILITY TO THE EFFECT THAT ANY AWARD SHALL QUALIFY WITH ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT, OR BENEFIT FROM ANY PARTICULAR TAX TREATMENT OR TAX ADVANTAGE OF ANY TYPE AND THE COMPANY SHALL BEAR NO LIABILITY IN CONNECTION WITH THE MANNER IN WHICH ANY AWARD IS EVENTUALLY TREATED FOR TAX PURPOSES, REGARDLESS OF WHETHER THE AWARD WAS GRANTED OR WAS INTENDED TO QUALIFY UNDER ANY PARTICULAR TAX REGIME OR TREATMENT.  THIS PROVISION SHALL SUPERSEDE ANY TYPE OF AWARDS OR TAX QUALIFICATION INDICATED IN ANY CORPORATE RESOLUTION OR AWARD AGREEMENT, WHICH SHALL AT ALL TIMES BE SUBJECT TO THE REQUIREMENTS OF APPLICABLE LAW.  THE COMPANY DOES NOT UNDERTAKE AND SHALL NOT BE REQUIRED TO TAKE ANY ACTION IN ORDER TO QUALIFY THE AWARD WITH THE REQUIREMENT OF ANY PARTICULAR TAX TREATMENT AND NO INDICATION IN ANY DOCUMENT TO THE EFFECT THE ANY AWARD IS INTENDED TO QUALIFY FOR ANY TAX TREATMENT SHALL IMPLY SUCH AN UNDERTAKING.  NO ASSURANCE IS MADE BY THE COMPANY OR ANY OF ITS AFFILIATES THAT ANY PARTICULAR TAX TREATMENT ON THE DATE OF GRANT WILL CONTINUE TO EXIST OR THAT THE AWARD WOULD QUALIFY AT THE TIME OF EXERCISE OR DISPOSITION THEREOF WITH ANY PARTICULAR TAX TREATMENT. THE COMPANY AND ITS AFFILIATES SHALL NOT HAVE ANY LIABILITY OR OBLIGATION OF ANY NATURE IN THE EVENT THAT AN AWARD DOES NOT QUALIFY FOR ANY PARTICULAR TAX

 

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TREATMENT, REGARDLESS WHETHER THE COMPANY COULD HAVE OR SHOULD HAVE TAKEN ANY ACTION TO CAUSE SUCH QUALIFICATION TO BE MET AND SUCH QUALIFICATION REMAINS AT ALL TIMES AND UNDER ALL CIRCUMSTANCES AT THE RISK OF THE GRANTEE.  THE COMPANY DOES NOT UNDERTAKE OR ASSUME ANY LIABILITY TO CONTEST A DETERMINATION OR INTERPRETATION (WHETHER WRITTEN OR UNWRITTEN) OF ANY TAX AUTHORITIES, INCLUDING IN RESPECT OF THE QUALIFICATION UNDER ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT. IF THE AWARDS DO NOT QUALIFY UNDER ANY PARTICULAR TAX TREATMENT IT COULD RESULT IN ADVERSE TAX CONSEQUENCES TO THE GRANTEE.

 

18.5.                               The Company or any Subsidiary or Affiliate may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding of any taxes and compulsory payments which the Trustee, the Company or any Subsidiary or Affiliate is required by any Applicable Law to withhold in connection with any Awards (collectively, “Withholding Obligations”).  Such actions may include (i) requiring a Grantees to remit to the Company in cash an amount sufficient to satisfy such Withholding Obligations and any other taxes and compulsory payments, payable by the Company in connection with the Award or the exercise or (if applicable) the vesting thereof; (ii) subject to Applicable Law, allowing the Grantees to provide Shares to the Company, in an amount that at such time, reflects a value that the Committee determines to be sufficient to satisfy such Withholding Obligations; (iii) withholding Shares otherwise issuable upon the exercise of an Award at a value which is determined by the Committee to be sufficient to satisfy such Withholding Obligations; or (iv) any combination of the foregoing.  The Company shall not be obligated to allow the exercise of any Award by or on behalf of a Grantee until all tax consequences arising from the exercise of such Award are resolved in a manner acceptable to the Company.

 

18.6.                               Each Grantee shall notify the Company in writing promptly and in any event within ten (10) days after the date on which such Grantee first obtains knowledge of any tax bureau inquiry, audit, assertion, determination, investigation, or question relating in any manner to the Awards granted or received hereunder or Shares issued thereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating to such matter, and shall allow the Company and its representatives to participate in any proceedings and discussions concerning such matters.  Upon request, a Grantee shall provide to the Company any information or document relating to any matter described in the preceding sentence, which the Company, in its discretion, requires.

 

18.7.                               With respect to 102 Non-Trustee Options, if the Grantee ceases to be employed by the Company or any Affiliate, the Grantee shall extend to the Company and/or its Affiliate with whom the Grantee is employed a security or guarantee for the payment of taxes due at the time of sale of Shares, all in accordance with the provisions of Section 102 of the Ordinance and the Rules.

 

18.8.                               For the purpose hereof “tax(es)” means (a) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all income, capital gains, transfer, withholding, payroll, employment, social security, national security, health tax, wealth surtax, stamp, registration and estimated taxes, customs duties, fees, assessments and charges of any similar kind whatsoever (including under Section 280G of the Code), (b) all interest, indexation differentials, penalties, fines, additions to tax or additional amounts imposed by any taxing authority in connection with any item described in clause (a), (c) any transferee or successor liability in respect of any items described in clauses (a) or (b) payable by reason of contract, assumption, transferee liability, successor liability, operation of Applicable Law, or as a result of any express or implied obligation to assume Taxes or to indemnify any other person, and (d) any liability for the payment of any amounts of the type described in clause (a) or (b) payable as a result of being a member of an affiliated, consolidated, combined, unitary or

 

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aggregate group for any taxable period, including under U.S.  Treasury Regulations Section 1.1502-6(a) (or any predecessor or successor thereof of any analogous or similar provision under Law) or otherwise.

 

19.                     RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.

 

19.1.                               Subject to Section 11.4, a Grantee shall have no rights as a shareholder of the Company with respect to any Shares covered by an Award until the Grantee shall have exercised the Award, paid the Exercise Price therefor and becomes the record holder of the subject Shares.  In the case of 102 Awards or 3(9) Awards (if such Awards are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Grantee’s benefit, and the Grantee shall not be deemed to be a shareholder and shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Grantee and the transfer of record ownership of such Shares to the Grantee (provided however that the Grantee shall be entitled to receive from the Trustee any cash dividend or distribution made on account of the Shares held by the Trustee for such Grantee’s benefit, subject to any tax withholding and compulsory payment).  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date on which the Grantee or Trustee (as applicable) becomes the record holder of the Shares covered by an Award, except as provided in Section 14 hereof.

 

19.2.                               With respect to all Awards issued in the form of Shares hereunder or upon the exercise or (if applicable) the vesting of Awards hereunder, any and all voting rights attached to such Shares shall be subject to Section 6.9, and the Grantee shall be entitled to receive dividends distributed with respect to such Shares, subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable Law.

 

19.3.                               The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other Applicable Law.

 

20.                     NO REPRESENTATION BY COMPANY.

 

By granting the Awards, the Company is not, and shall not be deemed as, making any representation or warranties to the Grantee regarding the Company, its business affairs, its prospects or the future value of its Shares.  The Company shall not be required to provide to any Grantee any information, documents or material in connection with the Grantee’s considering an exercise of an Award.  To the extent that any information, documents or materials are provided, the Company shall have no liability with respect thereto.  Any decision by a Grantee to exercise an Award shall solely be at the risk of the Grantee.

 

21.                    NO RETENTION RIGHTS.

 

Nothing in this Plan, any Award Agreement or in any Award granted or agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of, or be in the service of the Company or any Subsidiary or Affiliate thereof as a Service Provider or to be entitled to any remuneration or benefits not set forth in this Plan or such agreement, or to interfere with or limit in any way the right of the Company or any such Subsidiary or Affiliate to terminate such Grantee’s employment or service (including, any right of the Company or any of its Affiliates to immediately cease the Grantee’s employment or service or to shorten all or part of the notice period, regardless of whether notice of termination was given by the Company or its Affiliates or by the Grantee).  Awards granted under this Plan shall not be affected by any change in duties or position of a Grantee, subject to Sections 6.6 through 6.8.  No Grantee shall be entitled to claim and the Grantee hereby waives any claim against the Company or any Subsidiary or Affiliate that he or she was prevented from continuing to vest Awards as of the date

 

29

 

of termination of his or her employment with, or services to, the Company or any Subsidiary or Affiliate.  No Grantee shall be entitled to any compensation in respect of the Awards which would have vested had such Grantee’s employment or engagement with the Company (or any Subsidiary or Affiliate) not been terminated.

 

22.                     PERIOD DURING WHICH AWARDS MAY BE GRANTED.

 

Awards may be granted pursuant to this Plan from time to time within a period of ten (10) years from the Effective Date, which period may be extended from time to time by the Board.  From and after such date (as extended) no grants of Awards may be made and this Plan shall continue to be in full force and effect with respect to Awards or Shares issued thereunder that remain outstanding.

 

23.                     AMENDMENT OF THIS PLAN.

 

23.1.                               The Board at any time and from time to time may suspend, terminate, modify or amend this Plan, whether retroactively or prospectively.  Any amendment effected in accordance with this Section shall be binding upon all Grantees and all Awards, whether granted prior to or after the date of such amendment, and without the need to obtain the consent of any Grantee.  No termination or amendment of this Plan shall affect any then outstanding Award unless expressly provided by the Board.

 

23.2.                               Subject to changes in Applicable Law that would permit otherwise, without the approval of the Company’s shareholders, there shall be (i) no increase in the maximum aggregate number of Shares that may be issued under this Plan as Incentive Stock Options (except by operation of the provisions of Section 14.1), (ii) no change in the class of persons eligible to receive Incentive Stock Options, and (iii) no other amendment of this Plan that would require approval of the Company’s shareholders under any Applicable Law.  Unless not permitted by Applicable Law, if the grant of an Award is subject to approval by shareholders, the date of grant of the Award shall be determined as if the Award had not been subject to such approval.  Failure to obtain approval by the shareholders shall not in any way derogate from the valid and binding effect of any grant of an Award, which is not an Incentive Stock Option.  Upon approval of an amendment to this Plan by the shareholders of the Company as set forth above, all Incentive Stock Options granted under this Plan on or after such amendment shall be fully effective as if the shareholders of the Company had approved the amendment on the same date.

 

24.                    APPROVAL.

 

24.1.                               This Plan shall take effect upon its adoption by the Board (the “Effective Date”).

 

24.2.                               Solely with respect to grants of Incentive Stock Options, this Plan shall also be subject to shareholders’ approval, within one year of the Effective Date, by the required majority (however, if the grant of an Award is subject to approval by shareholders, the date of grant of the Award shall be determined as if the Award had not been subject to such approval).  Failure to obtain approval by the shareholders shall not in any way derogate from the valid and binding effect of any grant of an Award, which is not an Incentive Stock Option.  Upon approval of this Plan by the shareholders of the Company as set forth above, all Incentive Stock Options granted under this Plan on or after the Effective Date shall be fully effective as if the shareholders of the Company had approved this Plan on the Effective Date.

 

24.3.                               102 Awards are conditional upon the filing with or approval by the ITA, if required, as set forth in Section 9.49.  Failure to so file or obtain such approval shall not in any way derogate from the valid and binding effect of any grant of an Award, which is not an 102 Award.

 

25.                     RULES PARTICULAR TO SPECIFIC COUNTRIES; SECTION 409A.

 

25.1.                               Notwithstanding anything herein to the contrary, the terms and conditions of this Plan

 

30

 

may be supplemented or amended with respect to a particular country or tax regime by means of an appendix to this Plan, and to the extent that the terms and conditions set forth in any appendix conflict with any provisions of this Plan, the provisions of such appendix shall govern.  Terms and conditions set forth in such appendix shall apply only to Awards granted to Grantees under the jurisdiction of the specific country or such other tax regime that is the subject of such appendix and shall not apply to Awards issued to a Grantee not under the jurisdiction of such country or such other tax regime.  The adoption of any such appendix shall be subject to the approval of the Board or the Committee, and if determined by the Committee to be required in connection with the application of certain tax treatment, pursuant to applicable stock exchange rules or regulations or otherwise, then also the approval of the shareholders of the Company at the required majority.

 

25.2.                               The Company intends that this Plan comply with Section 409A of the Code, including any amendments or replacements of such section, and this Plan shall be so construed.  To the extent applicable, this Plan and any agreement hereunder shall be interpreted in accordance with Section 409A of the Code.  Notwithstanding any provision of this Plan to the contrary, in the event that, following the Effective Date, the Board determines that any Award may be subject to Section 409A of the Code, the Board may adopt such amendments to this Plan and such agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award or (b) comply with the requirements of Section 409A of the Code.

 

26.                     GOVERNING LAW; JURISDICTION.

 

This Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Israel, except with respect to matters that are subject to tax laws, regulations and rules of any specific jurisdiction, which shall be governed by the respective laws, regulations and rules of such jurisdiction.  Certain definitions, which refer to laws other than the laws of such jurisdiction, shall be construed in accordance with such other laws.  The competent courts located in Tel-Aviv-Jaffa, Israel shall have exclusive jurisdiction over any dispute arising out of or in connection with this Plan and any Award granted hereunder.  By signing any Award Agreement or any other agreement relating to an Award, each Grantee irrevocably submits to such exclusive jurisdiction.

 

27.                     NON-EXCLUSIVITY OF THIS PLAN.

 

The adoption of this Plan shall not be construed as creating any limitations on the power or authority of the Company to adopt such other or additional incentive or other compensation arrangements of whatever nature as the Company may deem necessary or desirable or preclude or limit the continuation of any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Affiliate now has lawfully put into effect, including any retirement, pension, savings and stock purchase plan, insurance, death and disability benefits and executive short-term or long-term incentive plans.

 

28.                     MISCELLANEOUS.

 

28.1.                               Survival.  The Grantee shall be bound by and the Shares issued upon exercise or (if applicable) the vesting of any Awards granted hereunder shall remain subject to this Plan after the exercise or (if applicable) the vesting of Awards, in accordance with the terms of this Plan, whether or not the Grantee is then or at any time thereafter employed or engaged by the Company or any of its Affiliates.

 

28.2.                               Additional Terms.  Each Award awarded under this Plan may contain such other terms and conditions not inconsistent with this Plan as may be determined by the Committee, in its sole

 

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discretion.

 

28.3.                               Fractional Shares.  No fractional Share shall be issuable upon exercise or vesting of any Award and the number of Shares to be issued shall be rounded down to the nearest whole Share, with in any Share remaining at the last vesting date due to such rounding to be issued upon exercise at such last vesting date.

 

28.4.                               Severability.  If any provision of this Plan, any Award Agreement or any other agreement entered into in connection with an Award shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.  In addition, if any particular provision contained in this Plan, any Award Agreement or any other agreement entered into in connection with an Award shall for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable to fullest extent compatible with Applicable Law as it shall then appear.

 

28.5.                               Captions and Titles.  The use of captions and titles in this Plan or any Award Agreement or any other agreement entered into in connection with an Award is for the convenience of reference only and shall not affect the meaning or interpretation of any provision of this Plan or such agreement.

 

*                                         *                                         *

 

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