Document:

Amended and Restated Program Participation Agreement

 Exhibit 10.1 
 LOYALTYONE, INC. 
 - and - 
 BANK OF MONTREAL 
  

	
	AMENDED AND RESTATED PROGRAM PARTICIPATION AGREEMENT

 Dated as of November 1, 2008 

 AMENDED AND RESTATED 
 PROGRAM PARTICIPATION AGREEMENT 
 THIS AMENDED AND RESTATED PROGRAM PARTICIPATION AGREEMENT is
made as of November 1, 2008 between LoyaltyOne, Inc. and Bank of Montreal. 
 RECITALS: 
 A. The Parties entered into the 2003 PPA dated as of November 1, 2003 and now wish to amend and restate the 2003 PPA in its entirety, except as
expressly provided in Section 12.11 hereof. 
 B. Capitalized terms used herein have the meanings set out in Annex A, and the rules of
interpretations set out in Annex A apply to this Agreement. 
 NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows: 
 ARTICLE 1 
 RIGHT TO ISSUE 
 1.1 Participation in
Program. 
 (a) Right to Issue. Subject to the provisions hereof, LM hereby grants the Bank a right to issue AM in Canada to
Customers of the Bank or, subject to Section 1.1(b), any Bank Affiliate during the period commencing on the Launch Date and ending (but subject to Section 4.5): (i) with respect to Retail Services, on termination of the Retail
Services Term, (ii) with respect to BankCards, on termination of the BankCard Term, and (iii) with respect to all Categories, on the Termination Date. Except as otherwise expressly stated herein, such right is exclusive to the Categories
and the Bank will ensure that no Bank Party will issue AM otherwise than in connection with the provision by it in Canada to a Customer of services falling entirely within the scope of a Category. The Bank shall ensure that no Bank Party issues AM
otherwise than as expressly provided in this Section 1.1. 
 (b) Issuance by Bank Affiliates and Others. All AM issued by, or in
respect of the activities of, a Bank Affiliate shall be conclusively deemed for all purposes hereof to have been issued by the Bank, and the Bank shall be responsible for ensuring that each Bank Affiliate complies with all provisions hereof as if it
was a party hereto with LM. For greater certainty, any reference herein to the Bank being obligated to do or not do any matter or thing, shall be deemed to include the obligation of the Bank to ensure that each other Bank Party does or does not do
the particular matter or thing, and any reference to the Bank being entitled to any right, matter or thing, shall be deemed to include a reference to any Bank Affiliate being entitled to such right, matter, or thing, but only for so long as such
Bank Affiliate continues to be a Bank Affiliate. Notwithstanding the foregoing or anything else contained herein, if at any time or from time to time the Bank or any Bank Affiliate wishes to issue AM in connection with the activities of a Bank
Affiliate which does not operate under a name which includes either “Bank 

  

 - 2 - 

 
of Montreal”, “BMO”, or any other trade-mark commonly associated with the Bank as of the date hereof, the Bank must obtain
LM’s prior written consent, which shall not be unreasonably withheld; provided that no such consent shall be required for the issuance of AM (i) by any Bank Affiliate listed in Schedule 1.1(b) hereto or (ii) in connection with any
business of a Bank Affiliate which was, immediately prior to the proposed issuance of AM by such Bank Affiliate, carried out by the Bank and in respect of which the Bank issued AM as permitted hereunder; but in the case of clause (ii), if LM
believes that the name of such Bank Affiliate conflicts with another Sponsor or its exclusivity (such as, for example, by incorporating the name or style of a competitor of a Sponsor), the Bank will, in good faith, discuss the matter with LM to
determine what solutions might be available. The Bank will not issue AM in respect of the activities or the goods and services of any Person (including any Affiliate of the Bank) which is not a Bank Affiliate nor otherwise permit or authorize any
such Person to issue AM itself. 
 (c) Third Party Offers and Vendor Programs. Except with LM’s prior written consent, which in
the case of Original Retail Services, will not be unreasonably withheld, the Bank will not issue AM in respect of Retail Services by reference to or in connection with any particular Person, or the goods, services or activities of any particular
Person (other than a Bank Party), including as part of a promotion or offer designed to encourage the obtaining of goods or services by reference to any particular Person. By way of example, but without limiting the foregoing, the Bank would be in
breach of this Section 1.1(c) if it issued AM to Customers in connection with car loans to acquire cars manufactured by one particular automobile manufacturer (as opposed to any such manufacturer). For greater certainty, however, the issuance
of AM by the Bank in connection with the use of a BankCard does not, by itself, constitute the issuance of AM in connection with the activities of another Person, notwithstanding that the BankCard may have been used to acquire goods or services from
some other Person. If LM has consented to a particular program, the Bank may charge the applicable other Person a fee or other compensation for each such AM issued by the Bank, so long as (i) such fee or other compensation is not, directly or
indirectly, less (or effectively less) than $0.15 or more (or effectively more) than $0.45 per AM (and if the Bank charges such other Person a fee or other compensation in connection with the issuance of such AM that is not measured on a per AM
basis, the Bank shall, acting reasonably, determine the net effective amount per AM to which such fee or other compensation is equivalent and use such equivalent amount for purposes of this Section 1.1(c)), (ii) without limiting
Section 11.3, no disclosure is made to such other Person of the actual amounts payable hereunder in connection with the issuance of AM, including the Non-BankCard Fee, and (iii) no such other Person is a Sponsor or an Affiliate, franchisee
or dealer of a Sponsor, or a competitor of a Sponsor in respect of goods or services for which such Sponsor is authorized to issue AM. At LM’s request from time to time (but no more than once per calendar year) the Bank shall provide LM with a
certificate signed on behalf of the Bank by an officer to the effect that the Bank has been in compliance with the previous sentence during the period since the last such certificate (or in the case of the first such certificate, since the date
hereof), or if not, particulars thereof. 
 (d) Employee Incentive AM. In addition to the rights granted elsewhere in this
Section 1.1, the Bank may issue AM during the Term to any employee in Canada of a Bank Party pursuant to AM-related employee incentive programs established and operated by such Bank Party (such AM is referred to as “Employee Incentive
AM”). For each such AM issued by the Bank in a particular month, the Bank will pay LM, as soon as possible and in any event not later 

  

 - 3 - 

 
than the last Business Day of the next following month, the then effective Non-BankCard Fee. However, AM issued by the Bank pursuant to any such program
shall not be considered AM for purposes of Section 6 of Schedule 2.1 or Section 2 of Schedule 4.3 and shall be subject to Section 5.5(f). Any such right to issue AM is non-exclusive and may therefore be granted by LM to any other
Person. 
 (e) Approval of Offers. Intentionally deleted. 
 (f) Mutual Funds. Without limiting Section 1.1(c) or Exhibit E, the Bank may not provide bonus or tactical AM offers in connection with
mutual funds or otherwise promote the sale thereof by reference to any particular Person, unless the mutual funds in question are owned and operated by the Bank or any of its Affiliates or such bonus or tactical offers are applied to all mutual
funds then sold by the Bank or its Affiliates (whether or not owned and operated by the Bank or any of its Affiliates). This Section 1.1(f) is not intended to expand the rights the Bank may otherwise have hereunder to issue AM in connection
with mutual funds. 
 (g) New Products. If at any time the Bank wishes to add additional financial services to Retail Services, it may
request permission from LM to do so. LM agrees to consider any such request in good faith, to respond as soon as practicable in the circumstances to such request, and to use reasonable efforts to respond within 90 days unless not practicable. LM has
no obligation to approve any such request and any such approval may be subject to such additional terms and conditions as LM may specify. 
 (h) Agricultural Products. If at any time, the Bank elects (and is entitled hereunder) to issue AM in connection with any Restricted Farm Products on or after July 1, 2002, it must first provide LM with 90 days prior written
notice of its intention to launch the related offer of AM in connection therewith. For greater certainty, the foregoing portions of this Section 1.1(h) do not preclude the Bank from offering AM to farmers, or targeting offers of AM to farmers,
in connection with general financing products that are available to other Small Businesses as well. Notwithstanding anything else contained herein, the Bank may not issue AM in connection with the leasing to Small Businesses or, without
limitation, farmers, of farm, garden or lawn care equipment at any time. 
 1.2 Termination of Right to Issue for OARS (Other Additional Retail
Services). If at any time LM has entered into or provided an agreement, letter of intent, term sheet or similar arrangement or document (whether or not binding) with another Person under which such Person is granted or it is contemplated
that they will be granted exclusivity or other rights with respect to all or any part of the goods or services included in OARS, such that the Bank’s continuation of issuance of AM in connection with such OARS would be in breach of such rights,
LM may notify the Bank thereof and 90 days after receiving such notice, the Bank will cease to issue (and will no longer have the right to issue) AM hereunder in connection with such OARS. LM confirms that it is its strong preference to work with
the Bank with respect to any OARS, and to enter into arrangements with the Bank formalizing a continuing right to issue AM in connection with such matters on an exclusive basis, in exchange for MFC and similar payments on a mutually agreeable basis,
and in the event LM does not reach agreements with the Bank with respect thereto, to first seek to enter into such agreements with third parties who are not competitors of the Bank with respect to Core Original Retail Services. The Bank
acknowledges, 

  

 - 4 - 

 
however, that the foregoing sentence is intended solely to record LM’s preference, but does not and is not intended to provide any legally enforceable
rights in favour of the Bank, whether in the nature of a first right of refusal, right to negotiate, or otherwise whatsoever, and LM may engage in negotiations with and reach agreements with any third party regarding such matters without notice or
other commitments to or in favour of the Bank. 
 1.3 Protection of AM Program. The Bank will ensure that no Bank Party issues, gives or
otherwise distributes Coupons, calls, options or other rights with respect to or convertible into AM except as expressly permitted herein; provided however that the Bank may issue documents in the form of coupons which merely evidence the
availability at the Bank of certain AM offers, but are not themselves convertible, exchangeable or redeemable into AM. The Bank acknowledges that one of the intrinsic and essential characteristics of the AM Program is that LM shall at all times
maintain control over AM and that any unauthorized sale, exchange, redemption, distribution or other disposition or use of AM, Coupons, calls, options or other rights with respect thereto, would impair the AM Program. The Bank therefore agrees to
co-operate with LM as reasonably necessary to prevent attempts to effect any such unauthorized sale, exchange, redemption, distribution or other disposition or use. For greater certainty, the Bank agrees that no Bank Party, nor any of its employees
or agents, will attempt to sell, exchange or redeem any AM, but will utilize AM solely for the purpose of requesting LM to credit AM to AM Accounts, all as contemplated in this Agreement; provided that this sentence shall not prohibit any such
employee or agent from becoming a Collector and exercising his or her rights as such. 
 1.4 Injunctive Relief. Each Party acknowledges that
the provisions of this Article 1, Article 2, and of Article 11 and Sections 3.1, 8.1, 8.3 and 8.5(b) are only such as are reasonably necessary for the protection of each Party’s rights under or in respect of the AM Program. Each Party agrees
that there is no adequate remedy at law for the irreparable injury that would result from violation of such provisions and that injunctive or similar relief shall be available to a Party aggrieved by any such violation. The provisions of this
Section 1.4 shall not limit any other rights that an aggrieved Party may have at law or in equity. 
 1.5 Contests. During the Term, the
Bank may conduct contests from time to time offering AM as a prize, subject to the following terms and conditions:. 
  

	 	(i)	Each such contest must either relate to a Category (and to goods and services within such Category) in respect of which the Bank is then offering (and entitled to offer) AM or
promote the Bank’s participation in the AM Program generally. 

  

	 	(ii)	The goods or services in question must be solely those of a Bank Party, and, without limiting Section 1.1(c), may not relate to or refer to any other Person.

  

	 	(iii)	Any reference to AM or any other trade-mark or other intellectual property of LM in connection with any such contest shall comply with the terms hereof and any licence agreement
between the Bank and LM relating to the use of intellectual property. 

  

 - 5 - 

	 	(iv)	The Bank shall ensure that all such contests comply with all federal, provincial and local laws and regulations and applicable industry standard and self-regulatory codes.

  

	 	(v)	The Bank shall, prior to the commencement of any such contest, submit to LM for its review and approval, copies of all advertising, contest rules and regulations, a summary of the
contest rules and all other promotional materials in connection therewith. The Bank shall not publish or distribute any such advertising, rules or other promotional materials in respect of which LM has notified the Bank in writing of its objections.
Where required to disclose the value of the AM offered as the prize or prizes in any such contest, the Bank shall disclose only such value as LM shall specify. The Bank shall not be required to submit any such materials to LM in respect of any
contest that is substantially similar to a contest in respect of which the Bank has previously submitted materials to which LM has not objected in writing. 

  

	 	(vi)	Without limiting the foregoing, the Bank shall indemnify LM and each of its Representatives and hold them harmless from and against any and all Costs which they may suffer or incur
or be subject to and which may be caused by or arise directly or indirectly, by reason of the failure of the Bank or any other Bank Party to comply with the foregoing terms or with Applicable Law. Section 4.7 of the Agreement shall not apply to
this indemnity or any breach by the Bank of its obligations in this Section 1.5. For greater certainty, any AM issued pursuant to a contest permitted by this Section 1.5 shall constitute Non-BankCard AM or BankCard AM (and to the extent
constituting Non-BankCard AM, shall be deemed to have been issued in connection with a particular Category of Retail Services) depending on the nature of the goods or services in respect of which such contest primarily relates. The Bank acknowledges
that LM has no obligation to review the Bank’s material for accuracy or compliance with Applicable Laws, regulations, standards or codes, assumes no responsibility for such compliance and LM’s failure to comment on any such materials shall
not affect or reduce any of the Bank’s other obligations hereunder. The Bank assumes all responsibility for such compliance, and without limitation, the Bank maintains sole responsibility to ensure that advertising material does not contain any
statements, claims or representations that are misleading or inaccurate or that are not supported by adequate and proper tests and are otherwise in compliance with Applicable Laws, regulations, standards or codes. 

 1.6 Agreements Regarding Special Arrangements. The Exhibits hereto set out agreements which the Parties have entered into relating to this Agreement. All
matters set out in such Exhibits constitute binding agreements between the Parties in accordance with their terms. The Parties may at any time enter into additional such agreements and upon execution of any such agreements by both Parties, they
shall be deemed to be appended as additional Exhibits hereto. 
  

 - 6 - 

 ARTICLE 2 
 EXCLUSIVITY 
 2.1 Bank Exclusivity for Retail Services. LM will comply with the provisions of
Schedule 2.1 with respect to the issuance of AM in connection with Retail Services. 
 2.2 Exclusivity for BankCards. Except as permitted by
Schedule 2.2 or with the prior written approval of the Bank, LM will not grant any issuer of credit cards or charge cards (“Cards”) or any association of such issuers the right to issue AM in Canada during the BankCard Term in
connection with the use of any Cards. 
 2.3 Targeting. 
 (a) LM will not target competing offers to, or divulge to any competitors of the Bank the names of, those Customers who are Collectors. For purposes hereof but subject to the following proviso, LM will have breached
the restrictions on “targeting” in this Section 2.3 if, but only if, during the Term it deliberately sends any information or material promoting, advertising, discussing or explaining an offer of goods or services by any such
competitor as part of any mailing specifically aimed at Customers (i) who hold AM BankCards; (ii) addresses for which were compiled using in whole or in part, information obtained from the Bank and relating to its Customers, acquired by LM
as a result of the Bank’s participation in the AM Program, or (iii) the selection criteria for which was, in whole or in part, being a Customer who is a Collector, or holding an AM BankCard; provided that in any event, LM shall not be in
breach of this Section 2.3 with respect to any offer or any divulging of information which is made in compliance with paragraph (e) of the Database Principles as in effect on July 1, 2001. 
 (b) LM will not allow Amex Bank of Canada to target specifically Collectors who are Customers of the Bank, but LM may allow Amex Bank of Canada to target
groups of Collectors, including Collectors who are Customers of the Bank, as long as the Collectors in the targeted groups include customers of at least four Sponsors, at least two of which are major national or regional Sponsors (so long as the
Bank is not one of the major national or regional Sponsors). 
 (c) LM will not allow the Bank to target specifically Collectors who are
Customers of Amex Bank of Canada, but LM will allow the Bank to target groups of Collectors, including Collectors who are Customers of Amex Bank of Canada, as long as the Collectors in the targeted groups include customers of at least four Sponsors,
at least two of which are major national or regional Sponsors (so long as Amex Bank of Canada is not one of the major national or regional Sponsors). 
 (d) In the event of any conflict between the provisions of this Section and the Database Principles, the provisions of this Section shall prevail. 
 (e) If at any time or from time to time Amex Bank of Canada (for the purpose of this Section 2.3(e), “Amex Bank of Canada” includes any
Person that replaces Amex Bank of Canada as an AM issuer pursuant to Schedule 2.2 makes a request to LM and LM is obligated pursuant to an existing agreement between Amex Bank of Canada to provide Amex Bank of Canada with a list of names and/or
addresses of Business Collectors in order to allow Amex 

  

 - 7 - 

 
Bank of Canada to solicit applications from such Business Collectors for a credit card or charge card issued by Amex Bank of Canada that is designed to be
used primarily by a business, then LM shall make its best efforts to exclude from any such list the names of any Business Collectors who initially became Business Collectors as a direct result of applying for an AM BankCard. 
 2.4 Exclusivity in Favour of LM. The Bank will comply with provision of Schedule 2.4 with respect to Competing Programs for Retail Services 
 2.5 No Other Exclusivity. Except as expressly provided in Section 2.1 and in Schedule 2.5, (i) neither of the Parties is entitled to any
exclusivity in connection with any Retail Services, and (ii) in particular, but without limitation, LM may grant any Person the right to issue AM in connection with any goods or services, and the Bank may market its goods and services in any
manner it chooses. 
 ARTICLE 3 
 AM PROGRAM 
 3.1 Minimum Description of AM Program. Schedule 3.1
sets out certain features of the AM Program. LM shall not change any such feature of the AM Program so as to materially adversely affect Customers, in either case without the Bank’s prior written approval, such approvals not to be unreasonably
withheld or delayed. Every notice of a proposed change shall be in writing and sent by pre-paid courier service to the Senior Vice President, Card & Retail Payment Services at 12th
 Floor, West Tower, 3300 Bloor Street West, Toronto, Ontario M8X 2X2 and Senior Vice President, Marketing, Personal & Commercial Banking Canada, 16th Floor, 55 Bloor Street West, Toronto, Ontario M4W 3N5, with a copy to Deputy General Counsel, Personal & Commercial Banking Canada at 21st Floor, First Canadian Place, Toronto, Ontario M5X 1A1. The Bank’s written approval of any such change shall be deemed to have been given if, within 20 Business Days after the
later of the date on which LM notifies the Bank of the change in question or the date on which LM provides the Bank with such additional information concerning the change in question as the Bank may have requested, acting reasonably, the Bank does
not notify LM of the Bank’s disapproval of such change. If within the time limited in the previous sentence the Bank notifies LM of the Bank’s disapproval of the change in question, then the Bank shall, at the request of LM meet and confer
with LM with regard to the reasons for the Bank’s disapproval with a view to achieving a resolution of LM’s request and the Bank’s concerns within 20 Business Days at the earliest opportunity, both parties acting reasonably.
Notwithstanding the foregoing provisions of this Section 3.1, the Bank’s approval shall not be required for any such change (including any suspension or termination of all or part of the AM Program, generally or in any part or parts of
Canada) if LM determines, acting reasonably, after receiving legal advice, that, unless such change is made, there is a reasonable likelihood that LM, a Sponsor or the operation of the AM Program will be in violation of Applicable Law or subject to
prosecution or civil proceedings. LM shall provide the Bank with a copy of or opportunity to review such opinion no less than five days prior to implementing any change in the AM Program contemplated as a result of the advice contained in such
opinion. Changes made to the AM Program in response to a possible violation of Applicable Law shall be only those which are necessary to alleviate such possible violation. With respect to such changes, LM shall minimize (in the context of addressing
the particular violation of Applicable Law) the impact of such changes insofar as the Bank is concerned. 
  

 - 8 - 

 3.2 Terms and Conditions of the AM Program. Subject to the provisions of Section 3.1 and this
Section 3.2, LM shall determine the form, scope and content of the Terms and Conditions in its sole discretion, and may effect any additions, deletions or other modifications thereto as it may determine in its sole discretion. Prior to
effecting any such addition, deletion or modification which will substantially alter the rights of the Customers, LM will advise the Bank thereof and review same with the “Senior Sponsor Advisory Board” operated by LM. 
 3.3 Treatment of Collectors. Except as otherwise provided herein or with LM’s prior written approval, the Bank will not, and will ensure that no
Affiliate of the Bank will (i) impose terms, conditions, fees or expenses on Customers or any other Persons in connection with any offer of AM which, individually or taken as a whole, are different than the Bank or its Affiliates imposed on
their Customers prior to their offer of AM or impose on their Customers which do not or cannot receive AM, (ii) charge Customers any fees or other charges or expenses in connection with the issuance of AM, or (iii) with respect to the
Retail Services Category, require Collectors to choose between AM and some other benefit; provided that the Bank may require Collectors to make such a choice in connection with Short Term Programs with appropriate value comparisons (as determined by
LM, acting reasonably) between AM and such other benefits, so long as it obtains LM’s consent thereto, not to be unreasonably withheld. 
 ARTICLE 4 
 TERM OF AGREEMENT 
 4.1 Term. 
 (a) The term of this Agreement commenced on September 25, 1991 and, unless
earlier terminated in accordance herewith, shall continue until both the BankCard Term and the Retail Services Term have ended. Upon termination of both the BankCard Term and the Retail Services Term, this Agreement shall be deemed to have
terminated and such date shall be the effective date of termination hereof, notwithstanding that certain provisions hereof may survive such termination, whether pursuant to Section 4.5, or as otherwise expressly provided herein. For greater
certainty, upon termination of this Agreement in accordance herewith, both the BankCard Term and the Retail Services Term shall terminate, and if both the BankCard Term and the Retail Services Term shall have terminated, then this Agreement shall be
conclusively deemed to have terminated on the date of the last of any such termination. 
 (b) The Bank may, in its sole discretion, by
giving LM not less than 12 months’ and not more than 18 months’ prior notice, elect that the BankCard Term and the Retail Services Term shall terminate on the last day of the BankCard Term and the Retail Service Term or as at the end of
any Additional BankCard Term and Additional Retail Services Term specified in such notice, as applicable, in which case the BankCard Term and the Retail Services Term shall terminate on the applicable date, unless in either case the relevant term
has terminated earlier in accordance in accordance with the provisions of this Agreement. 
  

 - 9 - 

 (c) If at any time the Bank gives LM any notice contemplated by Section 4.1(b), or for any other
reason the BankCard Term, the Retail Services Term or this Agreement otherwise terminates (except for termination of this Agreement under Section 4.4 [Termination for Cause]) then, until 90 days prior to the effective date of termination of the
BankCard Term, the Retail Services Term, or this Agreement, as applicable, the Bank shall, and shall cause each of its Representatives to, maintain in confidence the fact that the BankCard Term, the Retail Services Term or this Agreement will
terminate, or any matter relating thereto, and in particular, but without limitation, shall not make any public announcements concerning such termination or its withdrawal from the AM Program, except: 
  

	 	(i)	with the consent in writing of LM; 

  

	 	(ii)	if disclosure is required by Applicable Law, in which case Section 11.3(b) shall apply mutatis mutandis; or 

  

	 	(iii)	if such information becomes generally available to the public other than as a result of disclosure by the Bank or any of its Representatives. 

 Unless such information becomes generally available to the public other than as a result of disclosure by LM or any of its Representatives, until such 90th day, LM shall
not disclose the fact of any such termination or any matter relating thereto to its Collectors, other than any Collectors which are professional advisers or consultants to LM and are advised of the confidential nature of such information, or other
Representatives of LM, or Sponsors or prospective Sponsors, including, as part of any communication to its Collectors, and to the extent that LM discloses any circumstances relating to such termination to any other Sponsor or prospective Sponsor, it
shall use its best efforts to obtain the commitment of such actual or prospective Sponsor to keep such information confidential. 
 4.2 Program-Related
Rights of Termination of the Bank. If any of the following events or circumstances shall occur or exist, the Bank shall, at any time after the occurrence and during the continuance thereof, have the right to terminate this Agreement upon
written notice to LM: 
 (a) the AM Program ceases to operate (other than as a result of a force majeure as defined in Section 4.6(b))
and LM is not making all reasonable efforts to recommence operations; it being agreed that for the purposes of this clause (a) and Section 4.6, the term “ceases to operate” shall mean the inability on the part of LM, for a period
of 30 consecutive days, to issue or redeem AM; or 
 (b) at any time, on 30 days’ notice to LM, if LM has intentionally carried out any
fraudulent or illegal conduct that materially affects the Bank’s financial position in respect of the AM Program. 
 4.3 Program-Related Rights of
Termination by LM. LM may terminate the Retail Services Term or the Bank Card Term in the circumstances set out in Schedule 4.3. 
 4.4
Termination for Cause. Either Party (the “Notifying Party”) may, at any time and upon at least one Business Day’s prior written notice to the other Party (the “Defaulting Party”), terminate this Agreement if
any of the following events or circumstances shall occur and be continuing: 
 (a) the Defaulting Party defaults in the payment when due of
any amount owing to the Notifying Party hereunder and such default continues for a period of 20 Business Days following receipt by the Defaulting Party from the Notifying Party of notice of such default; 
  

 - 10 - 

 (b) the Defaulting Party, which, in the case of the Bank, includes any Bank Party, defaults in the
performance or observance of any obligation hereunder or under any document delivered pursuant hereto (including any trade-mark licence and/or registered user agreement and/or participation agreement), other than any obligation referred to in
Section 4.4(a), and such default continues for a period of 30 Business Days following receipt by the Defaulting Party from the Notifying Party of notice of such default; or 
 (c) the Defaulting Party makes an assignment for the benefit of its creditors, is adjudged bankrupt, files or consents to the filing of a petition in
bankruptcy, consents to the appointment of a receiver (which term as used in this Section 4.4(c) shall include a receiver-manager, a sequestrator, a liquidator, or any other official having powers similar to those of a receiver, sequestrator or
liquidator) of itself or of all or substantially all of its property; or if the Defaulting Party shall propose a compromise or arrangement under the Companies Creditors Arrangement Act (Canada); or a receiver is appointed without its consent
of itself or of all or substantially all of its properties and is not discharged within l20 days of such appointment; or the Defaulting Party ceases to maintain its corporate existence or has any resolution passed therefor (other than as a result of
an amalgamation). 
 4.5 Effect of Termination. 
 (a) Upon and notwithstanding termination of this Agreement, the following provisions shall apply: 
  

	 	(i)	The Bank will ensure that no Bank Party issues AM following termination except as provided in Section 4.5(a)(ii). 

  

	 	(ii)	 Notwithstanding termination, a Bank Party may, in accordance with Section 4.5(d), during the six month period subsequent to termination, issue any AM (not
previously issued) in respect of which a Fee was paid prior to termination. In addition, and without limiting Section 4.5(c), notwithstanding termination of the Retail Services Term or the BankCard Term (whether or not coincident with
termination of this Agreement), for any reason other than a termination pursuant to Section 4.3, the Bank may continue to issue AM in accordance with this Agreement in respect of any Categories for which AM was issued prior to such termination,
but only during the first 12 months following termination of this Agreement; provided however that, for greater certainty (A) the Bank shall continue to pay LM in accordance with Sections 5.1, 5.2 and 5.5 all Fees with respect to each such
AM so issued by it after termination of this Agreement, and shall pay the MFC for such Categories for each month in such 12 month 

  

 - 11 - 

	 	 
period in accordance with Section 5.5(a) (provided, however, that for purposes of this Section 4.5(a)(ii), the MFC for such Categories for each
such month shall be the greater of such amount as the Bank shall estimate to LM prior to the beginning of each such month, and an amount equal to the actual amount payable by the Bank for issuances of AM during the immediately preceding month), and
(B) the Bank may apply any AM BankCard Credit Amount or AM Retail Services Credit Amount resulting from payments during such 12-month period, not only as a credit to reduce amounts that would thereafter otherwise be payable pursuant to
Section 5.5(b), but also as a credit against any related MFCs payable during such 12-month period, and upon any such reduction, the AM BankCard Credit Amount and the AM Retail Services Credit Amount shall be correspondingly reduced. If at the
end of such 12 month period, there is still any such AM BankCard Credit Amount or AM Retail Services Credit Amount resulting from payments during such 12 month period which has not been so applied, LM shall forthwith refund the amount thereof to the
Bank and the AM BankCard Credit Amount and the AM Retail Services Credit Amount shall be reduced to nil. 

  

	 	(iii)	Except to the extent required in connection with the issuance of AM in accordance with Section 4.5(a)(ii), the Bank shall ensure that no Bank Party will, following the
Termination Date, hold itself out as a Sponsor in the AM Program. 

  

	 	(iv)	The Bank shall ensure that each Bank Party will, following termination, provide LM with such information and assistance as LM shall reasonably request with respect to AM which have
been issued by a Bank Party or redeemed, or which are claimed by a Collector to have been so issued or redeemed. 

  

	 	(v)	The termination of this Agreement shall not affect or discharge any obligation of either Party outstanding on the Termination Date or the Bank’s obligation pursuant to Sections
1.1(d) [Employee Incentive AM], 5.1, 5.2, 5.3 and 5.5 to pay Fees or other amounts subsequent to the Termination Date in respect of AM issued at any time by a Bank Party. 

  

	 	(vi)	Each Party shall cease to utilize the other Party’s intellectual property after the expiry of the period contemplated in clause (ii) above. 

  

	 	(vii)	Notwithstanding the termination of this Agreement, the provisions of Sections 1.3 [Protection of AM Program], 4.5 [Effect of Termination], 4.7 [Limitation of Liability], 5.4
[Taxes], 10.2 [Customer Credits], 11.2 [Data Ownership and Access] and 11.3 [Confidentiality] shall survive termination indefinitely. 

  

 - 12 - 

 (b) In the event that either the BankCard Term or the Retail Services Term (but not both) shall have
terminated, Section 4.5(a) shall apply to AM with respect to BankCards or Retail Services, as applicable, on the following basis: 
  

	 	(i)	clauses (i), (ii) and (iv) of Section 4.5(a) shall apply mutatis mutandis to AM with respect to BankCards or Retail Services, as applicable; and

  

	 	(ii)	notwithstanding such termination of the BankCard Term or Retail Services Term, as applicable, each Party shall continue to be subject to this Agreement in all other respects.

 (c) In order to determine, for the purposes of Section 4.5(a)(ii), the number, if any, of AM in respect of which a Fee
was paid prior to termination, the following provisions will apply: 
  

	 	(i)	the aggregate number, if any, of AM that the Bank Parties shall be entitled to issue with respect to BankCards pursuant to the first sentence of Section 4.5(a)(ii) shall be the
aggregate of the individual results obtained when each AM BankCard Credit Amount (or portion thereof) then still outstanding as at the Termination Date (or the date of termination of such Category, as applicable) is divided by the Issuance Fee which
was in effect during the month in which such AM BankCard Credit Amount was accrued pursuant to Section 5.5(d); and 

  

	 	(ii)	the aggregate number, if any, of AM that the Bank Parties shall be entitled to issue with respect to Retail Services pursuant to Section 4.5(a)(ii) shall be the aggregate of
the individual results obtained when each AM Retail Services Credit Amount (or portion thereof) then still outstanding as at the Termination Date (or the date of termination of the Retail Services Term, as applicable) is divided by the Issuance Fee
which was in effect during the month in which such AM Retail Services Credit Amount was accrued pursuant to Section 5.5(e). 

 (d) For the purposes of Section 4.5(c), on-going applications of AM BankCard Credit Amounts and AM Retail Services Credit Amounts pursuant to Sections 5.5(d) and (e), respectively, shall occur on a first-in, first-out basis so
that older AM BankCard Credit Amounts (if any) and older AM Retail Services Credit Amounts (if any) shall be reduced before newer amounts of the same. 
 4.6
Force Majeure. 
 (a) Failure to perform any obligation under this Agreement, or the occurrence or existence of an event or
circumstance under Section 4.2 or 4.4, as a result of force majeure shall not constitute non-compliance or a default or a cause for termination under this Agreement for the purposes of Section 4.2 or 4.4. Neither Party shall be under any
liability to the other as a result of any delay or default in carrying out its obligations hereunder which is due in whole or in part to any force majeure. Notwithstanding the foregoing, force majeure shall in no event exempt any Party from any
obligation to pay, or excuse any failure to pay, any amount payable hereunder when due. A Party who contends that its obligation is suspended or its performance is otherwise excused by reason of force majeure must give prompt written notice to the
other Party specifying the condition or event constituting the same. 
  

 - 13 - 

 (b) For the purposes hereof, “force majeure” shall mean any of the following: lightning,
storms, earthquakes, floods, droughts, fires, explosions, expropriation, action of any government or governmental body or court, acts of God or any other cause, whether similar to or dissimilar from the foregoing, beyond the control of the Party
seeking to take advantage of force majeure and affecting performance by such Party. 
 (c) Notwithstanding the foregoing paragraphs of this
Section 4.6, if any force majeure is such that it causes the AM Program to cease to operate (within the meaning specified in Section 4.2(a)), then the Bank’s payment obligations under Section 5.5(a) shall be suspended, commencing
on the date of commencement of such cessation for a period equivalent to the period during which such cessation continues. Upon such cessation stopping, the Bank’s payment obligations under Section 5.5(a) shall revive forthwith. If a force
majeure which causes the AM Program to cease to operate occurs which either Party relies upon, and such force majeure continues for a period of 270 consecutive days, then the other Party may provide such Party with not less than 30 days prior
written notice of its intention to terminate this Agreement, and this Agreement shall terminate effective upon the expiry of such 30 day period unless, prior thereto, such force majeure (or such Party’s reliance thereon under this
Section 4.6) has ceased. 
 4.7 Limitation of Liability. The Parties acknowledge that no Party shall be under any liability to the other
for damages for loss of profit or consequential or indirect damages resulting from any breach hereof. LM’s maximum liability for damages under this Agreement for breach of any term hereof shall be limited in the aggregate to not more than the
total of (x) all amounts theretofore paid by the Bank to LM under this Agreement and (y) all amounts actually due hereunder to LM but unpaid by the Bank as at the time a claim for damages is first made by the Bank against LM, except that
the foregoing limitation shall be inapplicable in respect of damages arising as a result of LM’s fraud or wilful dishonesty. The foregoing shall not preclude any Party’s right to seek any available equitable remedy such as specific
performance or injunctive relief. 
 4.8 Implementation of Transfer Period. 
 (a) During any Transfer Period (as defined in Section 4.8(h)), the Bank may, at its own expense and provided that LM and the Bank have agreed on the
applicable pricing under Section 4.8(g), notify its Customers who are Collectors that they may, by notice to either LM or the Bank, elect to transfer any AM issued by the Bank and then outstanding in their AM Account (“Bank AM”) to
any other award program which the Bank then has in effect or plans to introduce. If any such Collector who has been so notified by the Bank in accordance with this Section 4.8(a), notifies LM in writing during the Transfer Period of their wish
to make such a transfer, LM will cancel all of such Collector’s Bank AM and will facilitate the transfer thereof in accordance with the following. Any such notice from a Collector shall be in form acceptable to LM, acting reasonably and shall
provide, at a minimum, an express statement by the Collector that they wish their Bank AM to be so transferred and understand that upon such transfer their Bank AM will be cancelled and they will have no further rights with respect to such AM.

  

 - 14 - 

 (b) LM shall determine the number of Bank AM at any time during the Transfer Period outstanding in the AM
Account of any Collector based on the total number of Bank AM issued by the Bank to such Collector, and the number thereof which have been redeemed, and shall determine the number thereof which have been redeemed on a proportionate basis comparable
to that provided for in Section 5.1(c). 
 (c) In addition to accepting the written notice of Collectors in accordance with
Section 4.8(a) above, LM will also accept notice from the Bank as to which Collectors who have been notified by the Bank in accordance with Section 4.8(a), wish to have their Bank AM so transferred. In giving any such notice, the Bank will
only reference Collectors who have actually notified the Bank in writing of their wish to have their Bank AM so transferred, and in particular, may not rely on any negative options, whereby the failure of a Collector to notify the Bank that they do
not want their Bank AM so transferred is deemed to constitute their consent to such a transfer. If the Bank gives any such notice to LM, LM shall be entitled, at its own expense, to verify the accuracy of the information contained therein and the
Bank shall co-operate reasonably with LM in that regard, including providing LM access to all or any group identified by LM of the actual responses provided by Collectors who have responded to the Bank. Any such notice from the Bank shall be given
by the Bank at its own expense, and shall be in such electronic or computer readable form as LM, acting reasonably, shall approve at the time in question, the intention being that the form used must be easily readable by LM’s computer systems.

 (d) If an Insolvency Event (as defined below) has occurred and is continuing and LM fails to cancel a Collector’s Bank AM or
facilitate the transfer thereof to the extent required under this Section 4.8 or fails to comply with any of its other obligations under this Section 4.8, and in either event has not cured such failure within 5 Business Days of the Bank
notifying LM of such failure, referring to this Section 4.8 and requiring that such failure be cured, the Bank shall be entitled to direct LM’s database outsourcer (currently ADS Alliance Data Systems, Inc.) to take such action on behalf
of LM, and LM hereby irrevocably consents to the Bank so directing such outsourcer, provided that any such direction to such outsourcer shall be in writing and a copy thereof shall be concurrently provided to LM and provided further that any
expenses incurred by the Bank in so directing any such outsourcer or paying any amounts which such outsourcer requires to be paid in connection with performing the actions directed by the Bank, shall be for the Bank’s own account and must be
paid by the Bank. The only information which the Bank shall be entitled to obtain from such outsourcer shall be such information as the Bank requires in order to provide the notices described in Section 4.8(a), and apart from such information,
the Bank shall not be entitled to receive any information from such database outsourcer regarding LM or its Collectors. 
 (e) If the Bank
notifies LM to transfer any such Bank AM or directs LM’s outsourcer to take any action on behalf of LM, the Bank shall indemnify and save LM and each of its Representatives harmless from and against any and all Costs which LM shall suffer or
incur, whether directly or indirectly, as a result of effecting such transfer or cancelling such AM or such outsourcer taking the action so directed, including, any damages or other expenses suffered 

  

 - 15 - 

 
as a result of any Collector asserting that their AM should not have been cancelled, but excluding any damages or other expenses suffered as a direct result
of LM’s own negligence or wilful default. Section 4.7 as well as any other limitations on liability in this Agreement, shall not apply to the indemnity provided for in this Section 4.8(e). 
 (f) Before making any announcement of the type referred to in Section 4.8(a) above, the Bank shall, at its own expense, put in place and establish
all electronic and other interfaces between LM (or its outsourcer, as determined by LM) as shall be necessary or desirable to allow and facilitate to the greatest extent reasonably practicable in the circumstances the easy transfer of data between
LM (or such outsourcer, as applicable) and the Bank to allow for such a transfer of AM. All such interfaces must be approved of by LM, acting reasonably. 
 (g) The Bank shall reimburse LM for any out-of-pocket costs incurred by LM in connection with the matters contemplated by this Section 4.8. In addition, for each transaction whereby Bank AM of a particular
Collector are transferred to a Bank program as contemplated by this Section 4.8, the Bank will pay LM such amounts as the Bank and LM agree upon in advance of the Bank providing any notices under Section 4.8(a). The Parties shall negotiate
with each other at the time in question in good faith regarding the settling of such amounts, it being acknowledged that the amounts to be paid by the Bank may differ depending on whether LM is notified by Collectors in writing, or the Bank provides
the notice to LM referred to in Section 4.8(c). The Bank shall not be entitled to provide any such notices under Section 4.8(a) or otherwise transfer AM of its Customers, and LM shall have no obligation hereunder to cancel any
Collector’s Bank AM or facilitate the transfer thereof, in either event until such time as the amount to be paid has been settled in accordance with the foregoing. All such amounts to be paid by the Bank in respect of transactions which take
place in any month, shall be payable by no later than the 15th day of the following month. Notwithstanding Section 5.9(b) hereof, if any of the Bank AM being transferred by LM in a particular transaction are not BankCard AM, the Bank may deduct
from any amounts otherwise payable to LM under this Section 4.8(g) in respect of such transaction (the “gross amount”), an amount equal to the lesser of (i) the gross amount and (ii) an amount equal to the net aggregate cash
amount initially deposited to LM’s reserve fund in respect of the eventual redemption of such Bank AM which are not BankCard AM, to the extent such amounts are still on deposit therein, all as determined by LM, acting reasonably. If, at the
time in question, LM is not able to determine with reasonable accuracy which Bank AM in a particular Collector’s account are BankCard AM and which are not BankCard AM, LM and the Bank shall work together in good faith to determine a mechanism
to make such determinations. 
 (h) For purposes of this Section 4.8, the “Transfer Period” shall be the earlier to occur of
either (i) the last three months of an Orderly Wind-down Period (as defined below) (or if the Orderly Wind-down Period is less than three months long, the entire Orderly Wind-down Period); provided that if at any earlier time in an Orderly
Wind-down Period, LM has become routinely unable to redeem AM for any period in excess of 5 Business Days, for any reason other than force majeure (as defined in Section 4.6), the Transfer Period shall thereupon commence and last until the
earlier of the expiry of three months, and the expiry of the Orderly Wind-down Period; or (ii) the period from the occurrence of an Insolvency Event to and including the earlier of (A) the expiry of three months from such occurrence and
(B) the time when an Insolvency Event ceases to be continuing. For purposes of this Section 4.8, if at any 

  

 - 16 - 

 
time LM publicly announces that, effective as of a certain date specified in such announcement, LM shall cease to permit the issuance of AM, and that
effective as of a later date also specified in such announcement, LM shall cease to permit the redemption of AM, an “Orderly Wind-down Period” shall commence as of the date so specified in such announcement on which LM shall cease to
permit AM to be issued, and shall continue until the date so specified in such announcement on which LM shall cease to permit the redemption of AM. LM shall give the Bank as much prior notice of any such public announcement as reasonably practicable
in the circumstances. For purposes of this Section 4.8, an “Insolvency Event” shall occur if (i) proceedings are commenced by LM for its dissolution, liquidation or winding up; (ii) LM shall make an assignment in bankruptcy
for the benefit of its creditors or files or consents to the filing of a petition in bankruptcy; (iii) any Person commences proceedings against LM seeking its bankruptcy and either LM has not taken any steps to oppose such proceedings within 10
days of LM receiving notice of such commencement, or such proceedings have not been dismissed or otherwise successfully defended within 60 days of LM receiving notice of such commencement; (iv) LM is adjudged or declared bankrupt or insolvent
and either LM has not taken any steps to oppose such adjudgement or declaration within 10 days of LM receiving notice thereof, or such adjudgement or declaration is not reversed or set aside within 30 days; or (v) the AM program ceases to
operate (within the meaning of Section 4.2(a) hereof), other than as a result of force majeure (as defined in Section 4.6(b)) or the occurrence of an Orderly Wind-down Period, and LM is not making all reasonable efforts to recommence
operations, but in any event shall not include the making of any proposal by LM under the Bankruptcy and Insolvency Act (Canada) or making of any proposal or seeking of an arrangement under the Companies’ Creditors Arrangement
Act or any comparable law. 
 ARTICLE 5 
 PAYMENTS 
 5.1 BankCard Fees For every BankCard AM issued by a Bank Party of which the Bank
notifies LM on or after the Effective Date in accordance with the provisions of Section 10.2, the Bank shall pay LM, at the time specified in Section 5.5, the Issuance Fee in effect at the time such AM is issued. 
 5.2 Non-BankCard Fees. For every Non-BankCard AM issued by a Bank Party of which the Bank notifies LM on or after the Effective Date in accordance with the
provisions of Section 10.2, the Bank shall pay LM, at the time specified in Section 5.5, the Issuance Fee in effect at the time such AM is issued. 
 5.3 Fee Adjustment. The Issuance Fee shall be adjusted from time to time in accordance with the provisions of Schedule 5.3. 
 5.4
Taxes. The Bank shall, within the time prescribed by Applicable Law, pay all Taxes, whether now or hereafter in effect, which are or become payable by the Bank under Applicable Law in respect of any amount payable by the Bank
hereunder. 
  

 - 17 - 

 5.5 Payment Dates and Payment of MFC. 
 (a) The Bank will, on or before the first Business Day of each month: 
  

	 	(i)	during the BankCard Term, pay LM an amount equal to the MFC for BankCards for such month; and 

  

	 	(ii)	during the Retail Services Term, pay LM an amount equal to the MFC for Original Retail Services for such month. 

 Each such payment shall be non-refundable, shall be considered the minimum fee payable hereunder for the applicable Category and shall not depend upon the number of AM
which any Bank Party has issued or may issue. 
 (b) The Bank will pay LM the amount payable pursuant to Section 5.1 with respect to AM
issued in a particular month as soon as practicable and, in any event, not later than the last Business Day of the month following such particular month. If the amount so payable with respect to AM issued in a particular month is equal to or less
than the MFC for BankCards payable pursuant to Section 5.5(a) on the first Business Day of such month, such amount will be deemed to have been paid; and if such amount exceeds the MFC for BankCards so payable, the Bank will pay to LM an amount
equal to the excess on or before the payment day determined pursuant to the preceding sentence. 
 (c) The Bank will pay LM the amount
payable pursuant to Section 5.2 with respect to AM issued in a particular month as soon as practicable and, in any event, not later than the last Business Day of the month following such particular month. If the amount so payable with
respect to AM issued in a particular month in connection with Retail Services is equal to or less than the MFC payable pursuant to Section 5.5(a) on the first Business Day of such month, such amount will be deemed to have been paid; and if such
amount exceeds the MFC so payable for BankCards, the Bank will pay to LM an amount equal to the excess on or before the payment day determined pursuant to the preceding sentence. 
 (d) If the amount payable pursuant to Section 5.1 with respect to AM issued in a particular month is less than the MFC for BankCards payable for
such month, such differential amount (the “AM BankCard Credit Amount”) will, from time to time, be applied (and, to the extent so applied, will be reduced) as a credit to reduce the amounts which would thereafter otherwise be
payable pursuant to Section 5.5(b). 
 (e) If the amount payable pursuant to Section 5.2 with respect to AM issued in a particular
month is less than the MFC for such month for Retail Services, such differential amount (the “AM Retail Services Credit Amount”) will, from time to time, be applied (and, to the extent so applied, will be reduced) as a credit to
reduce the amounts which would thereafter otherwise be payable pursuant to Section 5.5(c); provided that all such credits for the Retail Services Category shall terminate on the earlier of termination of the Retail Services Term and the Bank
ceasing to have the right to issue AM in connection with the Retail Services Category. 
 (f) For purposes of this Section 5.5, any
Employee Incentive AM issued in any month shall be deemed to have been issued in connection with Retail Services (unless the 

  

 - 18 - 

 
circumstances are such that it is manifestly clear that such AM relate to BankCards, in which case they shall be deemed to have been issued in connection
with the BankCards); provided that in any event, any Employee Incentive AM which may be counted for such purposes as having been issued in any month in connection with any particular Category shall not be applied to the MFC for such Category and the
Bank shall pay the Issuance Fee therefor without taking into account any MFC or any credits described in this Section 5.5. 
 5.6 Agreements with
Other Sponsors. 
 LM agrees that, from and after June 1, 2008, it will not enter into any agreement with any Sponsor (other than a charitable
organization, including a registered charity under the Income Tax Act (Canada)) which issues AM in Ontario, Quebec, Alberta and British Columbia and whose participation agreement with LM provides for such Sponsor to issue AM for a period
which exceeds six months at the time of consideration, which does not comply with the provisions of Schedule 5.6. 
 5.7 Annual Payment. On
November 1 in each year of the BankCard Term the Bank will pay LM a portion of its merchant discount revenue calculated in accordance with the provisions of Schedule 5.7. 
 5.8 Interest. If any Party shall default in the payment when due of any amount (including interest) payable to the other Party hereunder, such defaulting Party shall pay to the other Party interest
calculated daily and compounded monthly at a rate per annum equal to the Prime Rate. All such interest shall be payable on the last Business Day of each month. 
 5.9 General Provisions as to Payment. 
 (a) The Bank shall ensure that all amounts payable by it hereunder are
received by and available to LM in same day funds, not later than 11:00 o’clock a.m. (Toronto time) on the due date, by deposit to such account with the Bank as LM shall specify in writing or that irrevocable payment instructions are
transmitted to any other financial institution for the account specified from time to time by LM in a written notice to the Bank for payment on the due date. 
 (b) The Bank’s obligation to pay the amounts payable by it hereunder shall be absolute and unconditional and shall not, except as otherwise permitted by the succeeding sentences in this paragraph (b), be subject
to any abatement, deduction, set-off or withholding for any reason whatsoever, including, by reason of any counterclaim, present or future Taxes, or otherwise whatsoever. The Bank shall have the right to withhold any Taxes required as a result of
any enactment of Applicable Law occurring after September 25, 1991 which requires the Bank to do so provided (i) the Bank shall have first notified LM of the requirement to withhold such Taxes from any payment due to LM hereunder,
(ii) the Bank remits such withholding to the appropriate revenue authority pursuant to such Applicable Law within the time periods prescribed by such Applicable Law and provides evidence, satisfactory to LM, that it has so remitted such Taxes,
and (iii) the Bank co-operates with LM, as LM may reasonably require, in any reasonable dispute by LM with any relevant authority as to the requirement for such withholding. The Bank hereby agrees that LM shall, provided it acts reasonably,
have the right to contest any alleged requirement that the Bank withhold Taxes from any amount due to LM hereunder either in its own name or in the name of the Bank, and any refunds the Bank receives of any such withheld Taxes shall be forthwith
paid to LM by the Bank. 
  

 - 19 - 

 (c) LM agrees to provide the Bank with such reasonable information on its invoices and other billings to
the Bank as the Bank may reasonably request regarding federal and provincial goods and services taxes payable to enable the Bank to claim any input tax or similar credits available to the Bank with respect to such taxes. 
 (d) Unless specifically directed otherwise by the Bank at the time of payment, payments received by LM from the Bank may be applied by LM to amounts
owing hereunder by the Bank in such order of application as LM may select. 
 5.10 Characterization of AM for Multi-Use Cards. If a particular
BankCard can also be used for other purposes (for example, as a debit or stored value card), then AM issued in connection with the issuance or use of such card shall be characterized as BankCard AM or Non-BankCard AM, in accordance with this
Section 5.10: 
  

	 	(i)	to the extent any such AM is issued in connection with the use of such BankCard as a credit or charge card, it shall be considered BankCard AM and such AM shall be considered to
have been issued in connection with the BankCard Category; 

  

	 	(ii)	to the extent any such AM is issued in connection with the use of such card in some other fashion (including as a debit or stored value card), then such AM shall be considered to be
Non-BankCard AM; and 

  

	 	(iii)	if the Bank wishes to issue any AM in connection with any such multi-use card, where it is unclear whether such AM will be issued as contemplated in clause (i) or clause
(ii) (for example, AM issued simply on the issuance of any such multi-use card), such AM shall be considered Non-BankCard AM unless otherwise agreed by the Parties in writing. 

 ARTICLE 6 
 CIRCUIT BREAKERS

 Intentionally Deleted 
 ARTICLE 7 
 MFC 
 Intentionally Deleted 
  

 - 20 - 

 ARTICLE 8 
 PROGRAM DESIGN 
 8.1 Bank’s Obligations. 
 (a) General. The Bank shall use its best efforts to design, develop and implement marketing programs in respect of each Category in order to
promote awareness of the AM Program among Customers, to maximize the issuance of AM to Customers and otherwise maximize the benefits of the AM Program to itself, LM and all Sponsors. All Bank marketing programs relating to the promotion of the AM
Program shall be available for LM’s prior review. All uses by the Bank of any intellectual property of LM, including any of its trademarks or logos, and any description of the AM Program, in any materials produced or distributed by the Bank,
must be pre-approved by LM and, without limitation, must comply with LM’s graphic standards. 
 (b) BankCards. Throughout the
BankCard Term, the Bank shall make available for issuance throughout Canada, and shall issue, at least four types of AM BankCard, as follows: 
  

	 	(i)	three BankCards intended for use by individuals for purchases of goods and services for personal use featuring Award Amounts of $15, $20 and $40 respectively (as selected by the
Customer); and 

  

	 	(ii)	a BankCard intended for use by Persons for purchases of goods and services for use in business featuring an Award Amount of $20. 

 (c) Minimum Award Amount. Except with the prior written consent of LM, no Award Amount for an AM BankCard shall be greater than $40 and the Bank
may not impose a limit with respect to any AM BankCard on the Net Purchase Amount, above which the Bank will not issue AM. 
 (d) Minimum
Activation Bonus. Except with the prior written consent of LM, the Bank shall offer an Activation Bonus: 
  

	 	(i)	of at least 100 AM in connection with each AM BankCard with an Award Amount of $20 in respect of which the Bank charges a Cardholder Fee; and 

  

	 	(ii)	of at least 150 AM in connection with each AM BankCard with an Award Amount of $15 in respect of which the Bank charges a Cardholder Fee. 

 (e) Cardholder Fee. During the BankCard Term, the Bank shall make available at least one AM BankCard intended for use by individuals for purchases
of goods and services for personal use that has no Cardholder Fee. 
 (f) Enhanced Flight Reward Benefit. Beginning on August 1,
2008 and for the remainder of the BankCard Term, the Bank may, in accordance with the terms set out in Schedule 8.1(f), make available at least one AM BankCard intended for use by individuals for purchases of goods and services for personal use
having the features described in Schedule 8.1(f). Until July 31, 2008, the Bank shall offer such AM BankCard pursuant to the terms of the letter agreement between the Parties dated April 1, 2008. 
  

 - 21 - 

 (g) Other BankCard Features. The Bank shall have the sole and exclusive right to establish the
terms of any agreements with cardholders, rates of interest and credit limits. Subject to the provisions of Section 8.3, the Bank may, in its sole discretion, introduce, modify or withdraw, any feature associated with a BankCard from time to
time. 
 (h) BankCard Bonus Offers. In addition to the Bank’s obligations to offer an Activation Bonus in respect of any
particular AM BankCard, the Bank may from time to time offer AM by way of bonus in connection with the use of an AM BankCard based on such factors as the Bank may, in its discretion, determine from time to time including, without limitation, first
use and annual aggregate Net Purchase Amount, subject to the following provisions: 
  

	 	(i)	The Bank may offer BankCard AM by reference to a specific Person that is a Sponsor on prior notice to LM but without LM’s prior written consent, provided that the Bank:

  

	 	(A)	provides LM with details of each offer prior to implementing the offer; 

  

	 	(B)	establishes a separate code approved by LM for the offer to permit LM to track the issuance of BankCard AM issued by the Bank in connection with the offer; and

  

	 	(C)	ceases to issue BankCard AM in connection with the offer as soon a practicable (and in any case not later than 90 days) following notice from LM that such Person has ceased to be a
Sponsor; 

  

	 	(ii)	The Bank shall not, without LM’s prior written consent, offer BankCard AM by reference to a specific Person (including any merchant) that is not a Sponsor or by reference to
specific goods or services; if LM has consented to a particular offer, then the Bank may charge the other Person a fee or other compensation for each BankCard AM issued by the Bank in connection with the offer, so long as: 

 

	 	(A)	the fee or other compensation is not, directly or indirectly, less (or effectively less) than $0.20 or more (or effectively more) than $0.45 per BankCard AM (and if the Bank charges
the other Person a fee or other compensation in connection with the issuance of such BankCard AM that is not measured on a per AM basis, then the Bank shall, acting reasonably, determine the net effective amount per AM to which the fee or other
compensation is equivalent and use the equivalent amount for purposes of this Section); and 

  

	 	(B)	without limiting Section 11.3, the Bank does not disclose to the other Person the actual amounts payable by the Bank under the Program Participation Agreement in connection
with the issuance of BankCard AM; 

  

 - 22 - 

	 	(iii)	the Bank shall not impose an additional fee on holders of AM BankCards in connection with any bonus offer of BankCard AM related to the use of a BankCard without the prior written
consent of LM; 

  

	 	(iv)	for each BankCard AM issued by the Bank in connection with the offer, the Bank shall pay LM in accordance with the provisions of Section 5.1 the Issuance Fee in effect at the
time such BankCard AM is issued, at the times specified in Section 5.5, unless, in connection with an offer made under Section 8.1(h)(i), the Sponsor has agreed in writing with LM to pay to LM an amount per BankCard AM issued by the Bank
in connection with the offer that is equal to the amount that the Sponsor is required to pay LM for AM issued by the Sponsor pursuant to the agreement by which the Sponsor is licensed to issue AM, in which case the Bank shall not be liable to pay to
LM the Issuance Fee in respect of any BankCard AM issued by the Bank in connection with the offer; and 

  

	 	(v)	the Bank shall comply with such directions and guidelines as LM may reasonably require in connection with the promotion, duration and administration of the offer.

 8.2 Co-Branded Cards. If the Bank issues a BankCard (in this Section 8.2, referred to as “Card”) on or after
the Launch Date to a Person who immediately prior to the Launch Date was not a holder of a BankCard and such Person requests that such Card be registered in the AM Program, the Card issued to such Person shall be co-branded (i.e., shall have the AIR
MILES logo as well as any logo of the Bank desired by the Bank). The Bank shall issue such a co-branded Card to each of its existing Card holders who choose to add the AM feature to his Card upon the earlier of (i) the date that a new Card
would be issued to such holder in accordance with the Bank’s regular card replacement cycle and (ii) the second anniversary of the Launch Date. In addition, any debit or stored value cards issued by the Bank after the date hereof and which
provide for the issuance of AM shall also be co-branded with the AIR MILES logo. All such co-branded cards shall be in a form satisfactory to each of the Bank and LM and shall be consistent with any agreement between the Parties relating to
trade-marks and copyrights. 
 8.3 BankCard Award. 
 (a) Award Amount. The Bank shall, each month, issue to each holder of an AM BankCard that number of AM which is equal to the whole number, if any, obtained (disregarding fractions) when the Net Purchase Amount
in relation to such month’s statement for such AM BankCard is divided by the Award Amount in effect on the date of such statement. At all times during the Term, the AM so issued shall be recorded on such statement. The Bank shall notify LM of
all AM issued so that LM may record, as appropriate, such AM in the applicable AM Account and the Bank shall, in addition, record on such statement that such number of AM have been issued. Notwithstanding the foregoing provisions of this
Section 8.3, 

  

 - 23 - 

 
the Bank shall have the right at any time not to issue AM with respect to a BankCard holder who is not in good standing at such time under his cardholder
agreement with the Bank. The Bank may not issue AM with respect to any BankCard except on the basis described in this Section 8.3 or on some other basis which has been approved of in writing by LM. 
 (b) Definitions. For purposes hereof, a “Major Change” in relation to a AM BankCard shall mean: 
  

	 	(i)	a reduction or elimination of the Award Amount; 

  

	 	(ii)	a reduction or elimination of the Activation Bonus required by Section 8.1(d); or, 

  

	 	(iii)	the cancellation or withdrawal from the market of the AM BankCard. 

 (c) Major Changes to BankCard. The Bank may not make any Major Change in relation to an AM BankCard without the prior written approval of LM, which LM shall not unreasonably delay or withhold. LM may in its
complete discretion decline to approve a proposed Major Change in respect of which LM has previously provided its approval within the 24 months preceding the date of receipt from the Bank of the notice of such proposed Major Change. 
 (d) Notice. If at any time the Bank wishes to make any Major Change, it shall provide LM with written notice of: 
  

	 	(i)	the details of the proposed Major Change, including a statement of the business reason for the proposed Major Change, sufficient to enable LM to make an assessment of the impact of
the proposed Major Change on the AM Program; 

  

	 	(ii)	the details of the Bank’s plans for the communication of the proposed Major Change; and 

  

	 	(iii)	the details of the Bank’s plans for the marketing of the AM BankCards after implementation of the proposed Major Change. 

 (e) LM Approval. LM shall notify the Bank whether or not LM has approved the proposed Major Change within 90 days after receipt from the Bank of
the notice of the proposed Major Change. If LM approves the Major Change or does not respond to the Bank within such time limit, then the Bank shall be entitled to implement the Major Change in accordance with the details thereof contained in the
notice. If within such time limit LM requests the Bank (i) to provide additional details of the proposed Major Change or of the Bank’s plans in respect thereof or (ii) to modify any aspect of the proposed Major Change or the
Bank’s plans in respect thereof, then LM shall notify the Bank whether or not LM has approved the proposed Major Change within 30 days after receipt from the Bank of the additional details requested by LM or details of the modifications thereto
proposed by the Bank. 
  

 - 24 - 

 (f) Other Changes. The Bank shall give LM reasonable prior written notice of every change that is
not a Major Change to any feature associated with a BankCard that relates to the AM Program. 
 8.4 Retail Services. 
 (a) Existing Retail Services Offers. Attached as Schedule 8.4(a) is a description of all of the current Bank offers for Retail Services as of the
Effective Date. 
 (b) Definitions. For purposes hereof, a “Major Retail Change” in relation to a Retail Service
shall mean: 
  

	 	(i)	a reduction or elimination of the number of AM issued by the Bank shown under the heading “Debit Cards” in Schedule 8.4(a); 

  

	 	(ii)	the elimination of any category shown under the heading “Additional Product Multiplier Plan” in Schedule 8.4(a); or 

  

	 	(iii)	a reduction of the multiplier percentage for a category shown under the heading “Additional Product Multiplier Plan” in Schedule 8.4(a); 

  

	 	(iv)	a reduction or elimination of the number of AM issued for any of the following offers appearing under the heading “Business Banking” in Schedule 8.4(a): (A) each
direct channel electronic bill payment, (B) each service-chargeable pre-authorized direct debit/payment or credit, and (C) each ABM deposit. 

 (c) Major Retail Changes. The Bank may not make any Major Retail Change without the prior written approval of LM, which LM shall not unreasonably delay or withhold. LM may in its complete discretion decline to
approve a proposed Major Retail Change in respect of which LM has previously provided its approval within the 24 months preceding the date of receipt from the Bank of the notice of such proposed Major Retail Change. 
 (d) Notice. If at any time the Bank wishes to make any Major Retail Change, it shall provide LM with written notice of: 
  

	 	(i)	the details of the proposed Major Retail Change, including a statement of the business reason for the proposed Major Retail Change, sufficient to enable LM to make an assessment of
the impact of the proposed Major Retail Change on the AM Program; 

  

	 	(ii)	the details of the Bank’s plans for the communication of the proposed Retail Major Change; and 

  

	 	(iii)	the details of the Bank’s plans for the marketing of the Retail Services affected by the proposed Major Retail Change after implementation of the proposed Major Retail Change.

  

 - 25 - 

 (e) LM Approval. LM shall notify the Bank whether or not LM has approved the proposed Major Retail
Change within 90 days after receipt from the Bank of the notice of the proposed Major Retail Change. If LM approves the Major Retail Change or does not respond to the Bank within such time limit, then the Bank shall be entitled to implement the
Major Retail Change in accordance with the details thereof contained in the notice. If within such time limit LM requests the Bank (i) to provide additional details of the proposed Major Retail Change or of the Bank’s plans in respect
thereof or (ii) to modify any aspect of the proposed Major Retail Change e or the Bank’s plans in respect thereof, then LM shall notify the Bank whether or not LM has approved the proposed Major Retail Change within 30 days after receipt
from the Bank of the additional details requested by LM or details of the modifications thereto proposed by the Bank. 
 (f) Other
Changes. The Bank shall give LM reasonable prior written notice of every change that is not a Major Retail Change to any Retail Service that relates to the AM Program. 
 8.5 Additional Bank Rights and Obligations. 
 (a) No Point Conversions. Without limiting
the generality of Section 1.1, each issuance of AM by a Bank Party shall be directly to the Collector as a result of the provision of goods or services within the scope of a Category or as otherwise expressly permitted hereby, and not, for
example, as a result of the conversion of points accumulated by the Collector with or through a Bank Party. 
 (b) Multi Award
Programs. Notwithstanding Section 8.5(a), if at any time or from time to time the Bank or any other Bank Party commences a multi-award program whereby such Bank Party provides goods or services or any other award or value, to Persons in
connection with such Persons’ use or purchase of products or services, the Bank may, subject to Section 1.1 and in addition to the offers it is otherwise required to provide under this Agreement, offer AM as one of the awards for
redemption, but only if LM has first approved such inclusion, including the offer under which the AM will be issued and only so long as AM are still issued only in compliance with this Agreement (other than Section 8.5(a) hereof).
Notwithstanding the foregoing or anything else contained in this Agreement, the Bank shall not offer AM as a redemption option under any points conversion program which is promoted by reference to the fact that points earned thereunder can be
redeemed for flights on or with Air Canada. 
 (c) New Loyalty Programs. If at any time or from time to time the Bank or any of its
Affiliates develops or is presented with any ideas for a Competing Program to operate within Canada, the Bank shall, subject to the following, give LM full details of the proposed program structure and consumer rewards (which for greater certainty,
need not include actual costs) relating to such ideas and, after such details have been given, the full opportunity of making a presentation to the Bank no less than 30 days thereafter on how LM could incorporate such idea into the AM Program or
otherwise operate such Competing Program for the benefit of the Bank. The Bank will, in good faith, hear and consider any such presentation by LM but has no obligation to accept it. LM recognizes that the Bank may, insofar as ideas presented by
third parties, be bound by confidentiality obligations regarding the disclosure of such ideas, and the 

  

 - 26 - 

 
Bank need only disclose such information as it legally is entitled to disclose; however, the Bank shall use its reasonable efforts to obtain the right to
disclose all such ideas to LM. In any event, not less than ninety days prior to the commencement of its operation or participation in any such Competing Program, the Bank shall notify LM of its intention to commence operation or participation in
such Competing Program and of full details concerning the program structure and consumer rewards (which for greater certainty, need not include actual costs) of such program. 
 (d) No Limits on Section 2.4. For greater certainty, this Section 8.5 is without limitation of Section 2.4, and does not suggest
any greater right on the part of the Bank or any of its Affiliates to promote, enter into or participate in any Competing Program. 
 8.6 Cancellation
of BankCard AM. 
 (a) Cancellation of BankCard AM. At the direction of the Bank, LM shall cancel BankCard AM previously issued
by the Bank to a Collector who is the holder of the AM BankCard and who is Not in Good Standing at the date of the direction. When directing LM to cancel any BankCard AM, the Bank shall follow the procedures agreed to by the parties from time to
time. The Bank shall not direct LM to cancel BankCard AM issued to Collectors who were Not in Good Standing prior to the Effective Date. 
 (b) “Not in Good Standing”. For the purposes of this Section 8.6, a Collector who is the holder of an AM BankCard who has a minimum payment that remains unpaid for three or more billing periods or whose AM BankCard has
been suspended from further activity or has been cancelled is Not in Good Standing. The Bank may at any time and from time to time change the definition of “Not in Good Standing”. The Bank shall provide reasonable advance notice to LM of
every such change. 
 (c) Limits on Cancellation. LM shall not be required to cancel a number of BankCard AM issued to a particular
Collector that is greater than the number of AM standing to the credit of the Collector’s AM Account at the date of receipt by LM from the Bank of the direction to cancel, with the result that LM shall not be required to reduce the total number
of AM standing to the credit of the Collector’s AM Account to less than zero. 
 (d) Restoration of Cancelled AM. The Bank shall
re-issue all BankCard AM issued to a Collector in connection with the use of an AM BankCard which the Bank has directed LM to cancel if and when the Collector restores to good standing the AM BankCard in accordance with such procedures and within
such time as the Bank may determine in its discretion. The Bank may at any time and from time to time change such procedures and times. The Bank shall provide reasonable advance notice to LM of every such change. 
 (e) Collector Communications. The Bank shall be responsible for all communications with Collectors in respect of whom the Bank has directed LM to
cancel any BankCard AM, including all associated costs and expenses. The Bank shall notify each such Collector of the cancellation of any BankCard AM previously issued to such Collector at the time and in the manner agreed upon by both parties. LM
shall refer all Collector inquiries relating to the cancellation of BankCard AM to the Bank using the messages agreed upon by both parties. LM shall display the message agreed upon by both parties to identify the cancellation of BankCard AM in the
transaction detail of Collector summary statements. 
  

 - 27 - 

 (f) Financial Arrangements. 
  

	 	(i)	Upon the cancellation of each BankCard AM, to a maximum of 10,000,000 BankCard AM in a calendar year (subject, if the BankCard Term begins or ends part way through a calendar year,
to reduction in the same proportion as the number of days in the Term in such year bears to 365) LM shall afford the Bank a credit in the amount of 70% of the Issuance Fee in effect at the time the BankCard AM is cancelled. LM shall not be required
to afford the Bank a credit in respect of the cancellation of AM from more than three monthly periods in any calendar quarter. 

  

	 	(ii)	Upon the re-issuance of any BankCard AM previously cancelled by LM at the direction of the Bank, the Bank will pay to LM, at the time specified in Section 5.5 of the Agreement,
the Issuance Fee in effect at the time the BankCard AM is re-issued. 

 (g) Indemnity. The Bank shall indemnify LM in
respect of all costs, charges and expenses, including legal fees and amounts paid to settle an action or to satisfy a judgment, reasonably incurred by LM in respect of any civil, administrative or criminal action or proceeding to which LM is made a
party by reason of or pertaining to the cancellation of any BankCard AM. 
 ARTICLE 9 
 MARKETING 
 9.1 Definitions. For
the purposes of Sections 9.2 and 9.3, expenditures by the Bank on any advertisement that promotes the ability to collect AM in connection with both Retail Services and AM BankCards shall be divided equally between the RS Marketing Amount commitment
and the BankCard Marketing Amount commitment. 
 9.2 BMO Retail Services Marketing Commitment. 
 (a) During each calendar year during the Retail Services Term, the Bank will, in addition to and without limiting any of its other obligations hereunder,
spend an amount equal to at least the RS Marketing Amount at such time to actively promote its participation as a Sponsor offering AM in respect of Retail Services, including building awareness of the Bank as a Sponsor in respect of Retail Services
and the ability to collect AM at the Bank for Retail Services. If the Retail Services Term ends before the expiry of any such calendar year, the Bank will only be required to spend a portion of such RS Marketing Amount equal to the portion of the
calendar year in question up to and including the date of termination of the Retail Services Term. Efforts by the Bank to promote its participation as a Sponsor in respect of Retail Services shall, at a minimum, include each of the following:

  

	 	(i)	including a prominent reference to the participation of the Bank in the AM Program (including the AM logo) on all statements and other similar communications sent to Customers of
Retail Services provided such statements or other communications relate to goods or services for which such Customers have earned AM, and on the BMO.com internet website operated by the Bank or any successor or similar website hereafter operated by
the Bank, but only on such portions thereof which refer to any Retail Services in respect of which the Bank is then issuing AM; (and without limiting Section 8.1, the Bank shall submit the designs for such statements and communications to LM
for review and approval before production and publication); 

  

 - 28 - 

	 	(ii)	placing AM decals on either a door or window (or if none, other prominent location) of each physical location of the Bank and of any other Bank Party in Canada from which any goods
or services are offered in respect of which AM is being issued, including all Bank retail branches (except to the extent that to do so would breach the terms of any lease in respect of such facility in effect on the date hereof), prominently
displaying posters in each such location, containing a prominent reference to the ability to earn AM, continuously throughout the year and having AM brochures available in each such location communicating ways to collect AM in respect of Retail
Services for which the Bank is then issuing AM, (without limiting Section 8.1, the Bank shall submit the designs for such posters and brochures to LM for review and approval before production and publication); and 

  

	 	(iii)	directing, through sales process design and training, all Bank staff serving Customers for Retail Services to identify and use opportunities where it would be appropriate to ask
Customers if they are Collectors or otherwise promote the Bank’s involvement of the AM Program or to communicate to such Collectors the potential of earning AM through the Bank and encourage them to sign up for relevant AM offers.

  

	 	(iv)	Expenditures by the Bank will only count towards the RS Marketing Amount required under this Section 9.2(a) to the extent such amounts are spent in bona fide out-of-pocket
payments by the Bank to third parties (which may include LM) in each case or bona fide internal cross charges imposed by other portions of the Bank or any other Bank Party at no more than market rates. 

 (b) Of the RS Marketing Amount to be spent each calendar year, (i) at least 90% must be spent on advertisements, marketing or promotional materials
targeted directly at consumers and the balance can be used for other purposes contemplated by Section 9.2(a) or this Section 9.2(b) which result, directly or indirectly, in communications to consumers by the Bank regarding the AM Program,
and (ii) at least 10% must be paid to LM for participation in AM Marketing Program initiatives that are primarily focused on the availability of AM for Original Retail Services at the Bank or specific Original Retail Services at the Bank for
which AM may be earned. 
  

 - 29 - 

 (c) If for any reason the Bank does not spend the full RS Marketing Amount as contemplated by
Section 9.2(a) in any calendar year (or portion thereof in the case of any partial calendar year during the Retail Services Term), the Bank will forthwith pay LM the difference between the RS Marketing Amount (or such other amount) and the
amount which was so spent by the Bank in respect of such period. LM shall use the amount so paid by the Bank exclusively on promoting the issuance of AM by the Bank in respect of Retail Services. 
 (d) The Bank will consult regularly with LM on the development of AM related product initiatives and promotions and will involve LM on such matters to
the extent reasonably possible in the circumstances. LM shall work with the Bank on such matters and attempt to provide advice on steps the Bank may take to improve the effectiveness thereof. 
 (e) The Bank will, within 30 days following the end of each calendar quarter, provide a detailed written report to LM as to the expenditures made by the
Bank during such quarter in connection with the matters referred to in this Section 9.2 and the other steps taken by the Bank to comply with its obligations under this Section 9.2, including the steps taken in connection with its
obligations under Section 9.2(a)(i), (ii) and (iii). Within 60 days after the end of each calendar year, the Bank will provide LM with a summary of the marketing expenditures of the Bank in the calendar year. 
 9.3 BMO BankCard Marketing Commitment. In each calendar year during the BankCard Term, the Bank will, in addition to and without limitation of any of its
other obligations to LM, spend at least the BankCard Marketing Amount to promote the AM BankCards. If the BankCard Term ends before the expiry of any such calendar year, the Bank will only be required to spend a portion of the BankCard Marketing
Amount equal to the proportion of the calendar year in question up to and including the date of termination of the BankCard Term. Of the BankCard Marketing Amount to be spent each year (i) at least 90% must be spent in bona fide out-of-pocket
payments by the Bank to third parties (which may include LM) at no more than market rates on the promotion of the retention and utilization of the AM BankCards intended for use by consumers and the growth in the number of cardholders thereof, and
(ii) at least 10% must be paid to LM for participation in AM Marketing Program initiatives that are primarily focused on the promotion of the retention and utilization of the AM BankCards intended for use by consumers. The Bank’s
obligation to spend the BankCard Marketing Amount will be additional to other marketing spending, and, without limitation, may not be used to off-set expenditures in connection with other AIR MILES coalition initiatives, including any expenditures
required hereunder in connection with Retail Services (including the amount required under Section 9.2(a)), or coalition mailings participations. The Bank will meet and consult with LM at least quarterly with respect to the implementation of
the Bank’s spending commitments pursuant to this Section. Within 60 days following the end of each calendar year, the Bank will provide LM with a summary of the marketing expenditures of the Bank in the calendar year. If for any reason, the
Bank has not spent at least the BankCard Marketing Amount during such calendar year (or portion thereof in the case of any partial year during the BankCard Term) on marketing activities designed to promote AM BankCards, then the Bank will forthwith
pay LM the difference between the BankCard Marketing Amount (or such other amount) and the amount 

  

 - 30 - 

 
which has been so spent by the Bank during such calendar year, as shown in the Bank’s summary, and LM shall spend the difference on marketing activities
designed to promote AM BankCards. 
 9.4 BankCard and Retail Services Marketing. For so long as this Agreement is in effect, the Bank shall pay
LM the Marketing Fee each year to be spent by LM on marketing the AM Program generally. The Bank shall pay the Marketing Fee to LM by no later than April 30 of each such year. 
 9.5 Advertising. Each of the Parties shall be free to advertise the AM Program, subject to the provisions hereof, in any advertising media selected by it. All advertising carried out under the
AM Marketing Program in Quebec shall, to the extent reasonably appropriate, be in English and French. 
 9.6 National Roll-Out. The
Bank’s AM-based programs will be made available by it throughout Canada and LM will provide appropriate support to enable AM Collector enrolment throughout Canada as and from the Launch Date. 
 9.7 Marketing Advisory Board. The Bank shall be entitled to be a member of the Marketing Advisory Board at all times during the Term. The purpose of the
Marketing Advisory Board shall be to provide advice on marketing initiatives and to share ideas and experiences with respect to the AM Program. 
 9.8
LM Marketing Commitment. 
 (a) In each calendar year during the Term, LM will promote the Bank’s participation in the AM Program
continuously throughout the year in print and electronic promotional materials distributed by LM to Collectors totalling at least 33,000,000 impressions (subject, if the Term begins or ends part way through a calendar year, to reduction in the same
proportion as the number of days in the Term in such year bears to 365); and, for the purposes of this Agreement, each mention of the Bank, display of a Bank trade-mark and display of an AM BankCard image shall count as one impression. Mentions and
displays of a type granted by LM to all Sponsors without charge, including without limitation the printing of the Bank’s name in Collector statements and lists of Sponsors, will not be counted as impressions. 
 (b) On or before the last Business Day in the month of October in each year during the Term, LM shall deliver to the Bank a proposed calendar of publication of the print
and electronic materials to be distributed by LM to Collectors in the following calendar year. At this time the Parties shall meet for the purpose of reviewing the calendar and developing a program of marketing initiatives for the Bank that will
promote the Bank’s participation in the AM Program as contemplated by this provision. 
 (c) LM and the Bank shall hold quarterly meetings on the first
Business Day of February, May, August and November in each year during the Term, beginning in February, 2009 or on such other days as the Parties may agree, for the purpose of developing a strategy for marketing BankCard and Retail Services to
Collectors. The Bank shall make every reasonable effort to ensure the attendance of one or more representatives from each of the Bank’s Retail Services, BankCard and Corporate Marketing divisions at every meeting. 
  

 - 31 - 

 (d) As long as the Bank offers the New 1/$15 Flight Reward Benefit referred to in Schedule 8.1(f), LM will make
reasonable efforts to prominently display an impression approved by the Bank: 
  

	 	(i)	on any printed Flight reward/redemption matrices that LM makes available to Collectors; and 

  

	 	(ii)	in the special travel offers section (if any) of the AM Program website. 

 ARTICLE 10 
 OPERATIONS AND ADMINISTRATION 
 10.1 AM Accounts. LM shall maintain in its books and records, in respect of each Customer that is a Collector, an AM Account in which LM shall record all
credits and debits of AM accruing in favour of or utilized by the Collector. Each Party shall maintain all support and accounting systems and records and shall dedicate sufficient management personnel and operating employees to fulfil its
obligations under this Article Ten. 
 10.2 Customer Credits. 
 (a) For each issuance by a Bank Party of AM to any Collector other than as described in Section 10.2(b), the Bank shall forthwith notify LM of such
issuance, which notification shall include notification as to the Collector’s name and Collector number, the number of AM issued and all such other details as LM may reasonably require from time to time (such details to be communicated by LM to
the Bank as soon as practicable) and including, starting on January 1, 2001 (or, in the case of offer code by individual product offer and location code, by no later than December 31, 2001) for each Non-BankCard AM, Sponsor code
(by line of business), offer code (by individual product offer or specific promotional bonus) and location code, except in each case to the extent the provision of such information by the Bank would be illegal or violate any agreements with
customers to which the Bank is a party. LM shall credit such Customer’s or employee’s AM Account with the notified number of AM. The Bank represents and warrants to LM that, to the best of the Bank’s knowledge, the provision of such
information by the Bank to LM, including the separation of chequing and savings account balance based AM earned, will not be illegal or violate any such agreement. To the extent nonetheless, that the Bank determines that it may only provide such
information with the consent of a Collector, the Bank will use all reasonable efforts to obtain such consent, consistent with its approach generally to the obtaining of similar consents for other purposes from its Customers. Nothing contained in
this Section 10.2(a) shall (i) prohibit the Bank from amending the terms of its agreements with its Customers from time to time, even if to do so would create a restriction applicable to the provision of information to LM that did not
exist prior thereto, so long as any such amendment by the Bank is made generally and not with a focus specifically related to the provision of information to LM or information of the type which would otherwise have been provided to LM, or
(ii) require the Bank to provide information to LM where provision of such information would be illegal. If at any time or from time to time the Bank provides any information to LM in breach of any law or any such agreement, the Bank will
indemnify and 

  

 - 32 - 

 
save LM and its Representatives harmless from and against any and all Costs suffered or incurred by them as a result of its receipt of such information in
violation of such law or agreement or otherwise in connection therewith. 
 (b) In connection with the issuance of AM to any Customer in
connection with the use of such Customer’s BankCards, the Bank will forthwith notify LM of such issuance, which notification shall include notification as to the Customer’s name and Collector number, the number of AM issued and all such
other details as LM may reasonably require from time to time (such details to be communicated by LM to the Bank as soon as practicable) and including, starting on the Product Launch Date, the offer code for the Award Amount associated with the
Customer’s BankCard. The Bank will also provide LM from time to time with the Collector numbers of those Collectors who, in the determination of the Bank, are eligible to obtain the New 1/$15 Flight Reward Benefit. 
 10.3 Collector Communications. 
 (a) LM will
make available to the Bank at least six opportunities in each calendar year to communicate to Collectors messages or offers regarding the Bank’s participation in the AM Program, such as having inserts included in LM statement mailings or having
presence in a magazine or LM’s website. The form and content of such communications shall be subject to LM’s sole discretion, including requirements as to size, weight and format. LM may charge the Bank for such communications provided
that the rate is “cost effective” to the Bank. For purposes hereof, a “cost effective” rate is a rate, which, based on LM’s knowledge of the direct mail industry in Canada, is less than the rate a Person would typically pay
an independent arm’s length third party for comparable communication vehicles in comparable circumstances, but in any event, LM need not charge below its own costs. LM will ensure that at least 50% of Collectors have reasonable means to access
information with respect to their Collector balance and transaction information when provided by LM. 
 (b) The Bank shall ensure that the AM
brand name and trade-mark are used when identifying AM on its BankCard statements. 
 10.4 Customer Service Lines. Each of the Bank and LM
agrees that customer services to be offered by it will be offered in at least English and French (including telephone services/customer statements/Terms and Conditions, but not necessarily other communications). LM shall maintain a customer service
line for redemptions and inquiries relating to the AM Program in general and to discuss operational problems. The Bank shall maintain a customer service line for Collectors to discuss questions relating to the Bank and, to the extent inquiries
relate to goods or services in respect of which the Bank offers AM, its particular involvement in the AM Program. 
 10.5 Interfaces.

 (a) The Bank and LM shall maintain electronic interfaces between each other (including, if appropriate, a manual delivery system for tapes
reasonably acceptable to LM and the Bank) to accommodate recording, statementing and redemption of AM and Collector set-up all as outlined in this Agreement and as may be further required for the efficient functioning of 

  

 - 33 - 

 
the AM Program. Without limiting the generality of the foregoing, such electronic interfaces and systems shall be such as to ensure the timely recording
of all credits, debits and transfers of AM to or from AM Accounts and to accommodate the redemption of AM and the enrolment of Customers in the AM Program. 
 (b) The Bank may not utilize any paper based means to issue or record the issuance of AM except with LM’s prior approval, which approval shall not be unreasonably withheld. The incremental costs occasioned by any
such paper based means shall be paid by the Bank unless such paper based means are used as a result of LM’s inability to accept electronic interfaces provided all electronic interfaces proposed or used by the Bank are not of an unusual sort and
type. LM will take such security precautions as it considers appropriate to protect the value and integrity of all such paper based means approved by it. Each Party shall bear its own information processing costs internal to its operations and each
shall co-operate as necessary to ensure that each Party’s systems are compatible with the other’s system. 
 ARTICLE 11

 INTELLECTUAL PROPERTY AND CONFIDENTIALITY 
 11.1 Trade Marks and Copyrights. The Parties acknowledge that they have entered into such trade mark licence agreements and agreements with respect to the protection of any copyright of either of the
Bank or LM in any materials or documents as are reasonably necessary in the judgement of each Party (acting reasonably) including agreements relating to all trade marks of the Bank and LM which are to be or have been licensed by the Bank to LM or by
LM to the Bank and any agreement as LM shall reasonably require in order to protect its copyright in any enrolment kit to be distributed by LM to Customers, provided, however, that (i) LM may require any Bank Affiliate in respect of whose
activities the Bank issues AM hereunder to sign a licence agreement substantially similar to the licence agreement signed by the Bank, or to become Party to that licence agreement, and (ii) LM may require the Bank and such Bank Affiliate to
comply with its trademark usage manual from time to time in effect. In addition, but without limitation, the Bank may not use the name “Air Canada” or any variation thereof or any other trade-marks or business styles of Air Canada in its
marketing or promotional materials relating to the AM Program, and the Bank acknowledges that the Air Canada name will not appear on the same page as the name of the Bank in any marketing or promotional materials produced by LM. 
 11.2 Data Ownership and Access. LM will have ownership of all data collected or received by LM. LM will provide the Bank with access to its Collector data
base at pricing in accordance with Schedule 11.2, but in any event to be cost effective to the Bank (within the meaning set out in Section 10.3). The Bank will comply with the provisions of Schedule 11.2 in connection with any access
to information from LM’s Collector database. LM will not segregate or identify in any LM database Customers participating in the AM Program (as opposed to other Collectors) when providing such information to others. LM will not disclose to
anyone (other than a Bank Party) the names of those Collectors who are Customers; provided that so long as LM is complying with paragraph (e) of the Database Principles as in effect on July 1, 2001, it will not be in breach of this
Section 11.2. LM will not sell the AM Program customer list to any Financial Institution in respect of any Category during the Term for so long as, in the case of any Retail Services Category, the Retail Services Term has not terminated, and in
the case of the BankCard Category, the BankCard Term has not terminated. 
  

 - 34 - 

 11.3 Confidentiality. 
 (a) Each Party shall, and shall cause each of its Representatives to, hold in confidence and not use in any manner whatsoever, other than as expressly contemplated by this Agreement, any Confidential Information of
the other Party. Forthwith following the termination of this Agreement, each Party shall (and shall cause each of its Representatives to) promptly, following a request therefor from the other Party, return to the requesting Party, and/or destroy,
all copies of any tangible items (other than this Agreement), if any, which are or which contain Confidential Information of the requesting Party, including any summaries or analyses containing or analysing any such Confidential Information,
provided that if to destroy any such material would breach any applicable law, the Party in question may return such material to the other Party, and if to return such material would breach any applicable law, the Party shall retain such material in
confidence thereafter until such time as it may, under applicable law, return and/or destroy same, at which time it will do so and confirm having done so to the other Party. 
 (b) Notwithstanding the foregoing, neither Party shall be obligated in respect of the disclosure of any Confidential Information where such disclosure is
required by Applicable Law. In such event, the Party so required to disclose shall, as soon as possible in the circumstances, notify the other Party of such requirement to disclose, so that the other Party may, if it wishes to, take action to
challenge such requirement. In addition, LM shall be entitled to disclose the terms of this Agreement for financing purposes and the existence and duration of this Agreement to potential Sponsors for the purposes of obtaining greater participation
in the Program, provided in each case that Persons to whom disclosure is made agree to keep all matters so disclosed confidential, and shall also be entitled to disclose the names and other information regarding Customers to the extent it does so in
compliance with paragraph (e) of the Database Principles as in effect on July 1, 2001. 
 11.4 Reporting. In addition to any
other reports required by this Agreement, LM will provide the Bank with collector-level summary information to help the Bank understand Collectors’ overall involvement with the AM Program and trending with respect thereto. The objectives of the
reporting are to: 
  

	 	1.	support the Bank’s measurement of the level of success of the Retail Services program redesign; and 

  

	 	2.	provide information that will allow the Bank to initiate future adjustments to the use of AM. 

 LM will work with the Bank to develop monthly and quarterly reports containing the information required to support the above objectives. The content and format of the reports will be prepared by LM and reviewed by the
Bank to ensure that the information provided satisfies the Bank’s objectives. The report content and format will be completed and approved no later than 90 days from the date hereof. 
  

 - 35 - 

 ARTICLE 12 
 REPRESENTATIONS, WARRANTIES AND 
 MISCELLANEOUS OBLIGATIONS 
 12.1 Representations and Warranties. Each Party represents and warrants to the other Party that it is duly subsisting under the laws of the jurisdiction of
its corporate governance, that it has power and capacity to execute and deliver this Agreement and to perform its obligations hereunder, that all necessary action to authorize the execution and delivery of this Agreement and the performance of its
obligations hereunder have been taken, and that this Agreement constitutes a legal, valid and binding obligation of the Party enforceable against it in accordance with its terms. LM further represents that it is not a non-resident of Canada for the
purposes of the Income Tax Act (Canada), and agrees that until termination of this Agreement, LM shall remain resident in Canada for such purposes. 
 12.2 Other Commitments. 
 (a) Capitalized terms used in this Section 12.2 and not otherwise defined herein, shall
have the meanings ascribed to them in the Redemption Reserve Agreement, unless otherwise provided herein. The “Redemption Reserve Agreement” means the Amended and Restated Redemption Reserve Agreement dated December 31, 2001
between LM and RBC Dexia Investor Services Trust, as amended, supplemented, restated or otherwise modified from time to time. 
 (b) LM will
at all times during the Term retain a reserve for future redemption liability in accordance with the terms of Schedule 12.2 and the Redemption Reserve Agreement. LM shall maintain such reserves in one or more segregated accounts (not to be
co-mingled with other funds), in Canada. Such accounts are or will be made subject to security interest in favour of the Trustee (or its successors) as trustee for the benefit of Collectors. LM shall not grant, pledge or otherwise create a security
interest in favour of any third party in any of the securities, cash or other assets in the Reserve Fund. If at any time LM makes any material changes to the nature of such reserve arrangement, from the manner in which it exists on December 31,
2007, it will promptly advise the Bank thereof. 
 (c) The Parties agree that the Bank is required to comply with the rules of the
International MasterCard Association. Accordingly, if any of such rules change after the date hereof such that the Bank would be precluded from performing any particular obligation hereunder, the Parties shall negotiate in good faith so as to
incorporate herein those minimum amendments necessary to permit the Bank to comply with such changes, provided that: 
  

	 	(i)	if the Parties are unable to agree on such changes within a reasonable period in the circumstances or the changes to the International MasterCard Association rules are such that the
Bank’s obligations hereunder are altered in LM’s discretion (acting reasonably), in a material respect, LM shall have the right to terminate this Agreement upon 30 Business Days’ notice to the Bank; and 

  

 - 36 - 

	 	(ii)	if the Parties are unable to agree on such changes within a reasonable period in the circumstances or the changes to the International MasterCard Association rules are such that the
Bank’s obligations hereunder are increased in a material respect, the Bank shall have the right to terminate this Agreement upon 30 Business Days’ notice to LM. 

 12.3 Product Liability. The Bank agrees to indemnify LM and its Representatives and hold them harmless from and against any and all Costs which they may suffer or incur or be subject to and which may be
caused by or arise, directly or indirectly, by reason of or otherwise in connection with any goods or services provided by the Bank or any of its Affiliates. Section 4.7 shall not apply to this indemnity. 
 12.4 Entire Agreement. Except as provided in Section 12.11, this Agreement (including the Annexes, Schedules and Exhibits hereto), together with any
documents or instruments required to be entered into hereunder, constitutes the entire agreement between the Parties, and except as stated in this Agreement and in such documents and instruments, contains all of the representations, warranties and
undertakings of the Parties. In particular, this Agreement supersedes any confidentiality agreement, term sheet and any agreement providing the Bank with exclusive negotiating rights, executed prior to the date hereof. There are no oral
representations, warranties or undertakings between the Parties of any kind. This Agreement may not be amended or modified in any respect except by written instrument signed by both Parties. 
 12.5 Nature of Relationship; Third Party Beneficiaries. The relationship between LM, on the one hand, and the Bank and its Bank Affiliates, on the other,
shall be that of independent parties, and neither LM nor the Bank (nor any of its Bank Affiliates), nor any of their respective Representatives or other agents, contractors and employees, shall under any circumstances be, or be deemed to be,
partners of or joint venturers with one another. Neither Party nor their respective Representatives or other agents, contractors and employees shall have any right to enter into any contract or commitment in the name of the other, or to incur an
obligation, create any liability or bind the other in any respect whatsoever. No other Person, including other Sponsors, may rely upon or enforce any provision hereof, and in particular, but without limitation, none of the rights accruing to any
Party are held in trust for any other Person. 
 12.6 Rights Reserved. Title to the AM Program, the rights represented by AM and all rights
related thereto are reserved at all times to LM. LM’s title to such rights is subject to the participation rights granted to the Bank hereunder which include only the right to issue AM to Collectors upon the understanding that the
Collector’s sole right with respect to AM is to present AM to LM for redemption as contemplated by the Terms and Conditions. 
 12.7
Notices. Any notice, certification or other communication required or permitted to be given hereunder shall be in writing and shall be (i) delivered personally or (ii) sent by prepaid courier service in either case to the
address set out opposite the signature of the Parties below. Any notice, certification or other communication so given shall be deemed conclusively to have been given and received only upon actual receipt. Any Party may change any particulars of its
address for notice by notice to the other in the manner aforesaid. 
  

 - 37 - 

 12.8 Exclusion. LM shall have no liability to the Bank, any Bank Party or any other Person whatsoever
(including any Collector) for any loss, damage or expense suffered or incurred, whether directly or indirectly, as a result of any delay (other than inordinate delay) by LM in crediting AM to an AM Account, or in effecting any redemption or transfer
of AM. 
 12.9 Miscellaneous. This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and
permitted assigns. Neither Party may assign any of its rights or obligations hereunder without the prior written consent of the other Party except that LM may assign any of its rights hereunder for the purpose of financing. This Agreement shall be
governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. The Parties acknowledge that it is the intention of the Bank to issue AM under the AM Program from the province of Alberta.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement. Each Party shall be responsible for its own legal fees and other
expenses incurred in connection with the negotiation of this Agreement or the performance of any of its obligations hereunder. 
 12.10 Public
Announcements. Any public announcement regarding the Bank’s involvement in the AM Program shall be subject to the Bank’s and LM’s prior written approval. 
 12.11 Effectiveness of this Agreement. Except as provided below, this Agreement is effective as of June 1, 2008, and the Original PPA, the 2003 PPA, and any other agreements which may have been
entered into between the Parties in connection with the Original PPA and the 2003 PPA and which were not included or referenced herein, are replaced in their entirety and superseded by this Agreement, except that (i) all rights and obligations
of the Parties under the Original PPA for all matters up to and including December 31, 2000, remain in effect in accordance with the terms of the Original PPA, unless stipulated to the contrary in the 2003 PPA; (ii) all rights and
obligations of the Parties under the 2003 PPA for all matters up to and including such effective date, remain in effect in accordance with the terms of the 2003 PPA, unless stipulated to the contrary in this Agreement; (iii) the Canada.com
Letter and the Data Exchange Letter between the Parties dated November 16, 2001 (the “Data Exchange Letter”) each remain in effect, subject to the matters set out below in this Section 12.11, (iv) all rights and obligations
of the Parties under the trade-mark license agreements entered into by the Parties pursuant to Section 11.1 of this Agreement and (v) any arrangements between the parties as to the issuance of AM by other MasterCard issuers, such as HSBC
Bank Canada, shall continue in accordance with their terms. References in the Canada.com Letter or the Data Exchange Letter to (x) sections of the Original PPA shall refer to the corresponding section of this Agreement; (y) the term
“Members” shall refer to Collectors and (z) the term “Participants” shall refer to Sponsors, and any AM issued pursuant to the Canada.com Letter shall constitute BankCard AM. For greater certainty, but without limitation,
all amounts owing under the Original PPA and the 2003 PPA as of the date hereof will continue to be owing in accordance with the terms of the Original PPA and the 2003 PPA, respectively, unless stipulated to the contrary in this Agreement, and any
rights that the Parties may have in respect of any breach or failure to comply under the Original PPA and the 2003 PPA at such time shall continue to be effective. 
  

 - 38 - 

 IN WITNESS WHEREOF this Agreement has been executed by the Parties by their authorized signing
officers as of the date first above-mentioned. 
  

									
	LoyaltyOne, Inc.	 	LOYALTYONE, INC.
	Suite 600, 438 University Avenue	 		 		 	
	Toronto, Ontario M5G 2L1	 	By:	 	 /s/ Bryan A. Pearson

		 		 	Name:	 	Bryan A. Pearson
	Attention:    President	 		 	Title:	 	President & CEO
		 		 		 	Alliance Data | LoyaltyOne	 	
	with a copy to:	 		 		 	
		 	By:	 	 /s/ Michael L. Kline

	LoyaltyOne, Inc.	 	Name:	 	Michael L. Kline
	 Suite 600, 438 University Avenue
 Toronto,
Ontario M5G 2L1
	 	Title:	 	 SVP Legal Services and Secretary
 Alliance
Data | LoyaltyOne

		 		 		 	
	Attention:    General Counsel	 		 		 		 	
		 		 		 		 	
	Bank of Montreal	 	BANK OF MONTREAL
	Card & Retail Payment Services	 		 	
	3300 Bloor Street West	 	By:	 	 /s/ Michael Kitchen

	12th Floor, West Tower	 	Name:	 	Michael Kitchen
	Toronto, Ontario	 	Title:	 	SVP, Card & Retail Payment Services
	M8X 2X2	 		 	
	Attention:    Senior Vice President	 		 	By:	 	 /s/ Maurice Hudon

	Telecopy:    (416) 232-6112	 		 	Name:	 	Maurice Hudon
		 		 	Title:	 	SGVP
	with a copy to:	 		 	
		 		 	
	Bank of Montreal	 		 		 	
	Law Department	 		 		 	
	First Canadian Place, 21st Floor	 		 		 	
	Toronto, Ontario M5X 1A1	 		 		 	
	Attention:    Deputy General Counsel	 		 		 		 	
	Personal & Commercial Banking Canada	 		 		 	
	Telecopy:    (416) 867-7191	 		 		 		 	

  

 - 39 -Rights Agreement

 Exhibit 4.1 
  
  
 RIGHTS AGREEMENT 
 between 
 Icagen, Inc.

 and 
 American
Stock Transfer & Trust Company LLC, 
 as Rights Agent 
 Dated December 2, 2008 
  
  

 Table of Contents 
  

					
	Section 1.	  	Certain Definitions	  	1
			
	Section 2.	  	Appointment of Rights Agent	  	6
			
	Section 3.	  	Issuance of Rights	  	6
			
	Section 4.	  	Form of Rights Certificates	  	9
			
	Section 5.	  	Countersignature and Registration	  	9
			
	Section 6.	  	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	  	10
			
	Section 7.	  	Exercise of Rights; Purchase Price; Expiration Date of Rights	  	11
			
	Section 8.	  	Cancellation and Destruction of Rights Certificates	  	13
			
	Section 9.	  	Reservation and Availability of Capital Stock	  	13
			
	Section 10.	  	Preferred Stock Record Date	  	14
			
	Section 11.	  	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	  	15
			
	Section 12.	  	Certificate of Adjusted Purchase Price or Number of Shares	  	22
			
	Section 13.	  	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	  	22
			
	Section 14.	  	Fractional Rights and Fractional Shares	  	25
			
	Section 15.	  	Rights of Action	  	26
			
	Section 16.	  	Agreement of Rights Holders	  	27
			
	Section 17.	  	Rights Certificate Holder Not Deemed a Stockholder	  	27
			
	Section 18.	  	Concerning the Rights Agent	  	28
			
	Section 19.	  	Merger or Consolidation or Change of Name of Rights Agent	  	28
			
	Section 20.	  	Duties of Rights Agent	  	29
			
	Section 21.	  	Change of Rights Agent	  	31
			
	Section 22.	  	Issuance of New Rights Certificates	  	31

  

 -i- 

					
			
	Section 23.	  	Redemption	  	32
			
	Section 24.	  	Exchange	  	32
			
	Section 25.	  	Notice of Certain Events	  	34
			
	Section 26.	  	Notices	  	35
			
	Section 27.	  	Supplements and Amendments	  	35
			
	Section 28.	  	Successors	  	36
			
	Section 29.	  	Actions by the Board, etc	  	36
			
	Section 30.	  	Benefits of this Agreement	  	36
			
	Section 31.	  	Severability	  	36
			
	Section 32.	  	Governing Law	  	37
			
	Section 33.	  	Counterparts	  	37
			
	Section 34.	  	Descriptive Headings	  	37

 RIGHTS AGREEMENT 
 RIGHTS AGREEMENT, dated December 2, 2008 (the “Agreement”), between Icagen, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company LLC, a New York Limited Liability
Company, as Rights Agent (the “Rights Agent”). 
 W I T N E S S E T
H 
 WHEREAS, on December 2, 2008 the Board of Directors of the Company (the “Board”) authorized and declared a dividend distribution
of one Right for each share of Common Stock (as hereinafter defined) of the Company outstanding at the close of business on December 15, 2008 (the “Record Date”), and authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(i) or Section 11(p) hereof) for each share of Common Stock of the Company issued between the Record Date (whether originally issued or delivered from the Company’s
treasury) and the earlier of the Distribution Date or the Expiration Date, each Right initially representing the right to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company having the rights,
powers and preferences set forth in the form of Certificate of Designations attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (the “Rights”); 
 NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 
 Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: 
 (a) “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company,
(iv) any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or (v) an Exempted Person. Notwithstanding the foregoing, (x) no Person shall become an “Acquiring Person” as
the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more of the shares of Common Stock of the
Company then outstanding; provided, however that if a Person shall become the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding as the result of an acquisition of Common Stock by the Company and shall,
following written notice from, or public disclosure by the Company of such share purchases by the Company become the Beneficial Owner of any additional Common Stock of the Company and shall then beneficially own 15% or more of the shares of Common
Stock then outstanding, then such Person shall be deemed to be an “Acquiring Person” and (y) if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” 

 
as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable (as
determined in good faith by the Board of Directors), but in any event within 15 Business Days, following receipt of written notice from the Company of such event, of Beneficial Ownership of a sufficient number of shares of Common Stock so that such
Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement unless
and until such Person shall again become an “Acquiring Person.” 
 (b) “Act” shall mean the Securities Act of 1933, as
amended. 
 (c) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as in effect on the date of this Agreement. 
 (d) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii). 
 (e) A Person
shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own,” any securities: 
 (i) which such
Person or any of such Person’s Affiliates or Associates, directly or indirectly, owns or has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities or agreements with or between Persons and the Company with respect to any other bona
fide issuance of securities by the Company to such Persons for resale within 40 days, including without limitation pursuant to Section 4(2) of the Act or Rule 144A or Regulation S promulgated under the Act), whether or not in writing, or upon
the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,”
(A) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights; 
 (ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act, or any comparable or successor rule), including
pursuant to any agreement, arrangement or understanding (other than 

  

 -2- 

 
customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities or agreements with or
between Persons and the Company with respect to any other bona fide issuance of securities by the Company to such Persons for resale within 40 days, including without limitation pursuant to Section 4(2) of the Act or Rule 144A or Regulation S
promulgated under the Act), whether or not in writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor
report); or 
 (iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public
offering of securities or agreements with or between Persons and the Company with respect to any other bona fide issuance of securities by the Company to such Persons for resale within 40 days, including without limitation pursuant to
Section 4(2) of the Act or Rule 144A or Regulation S promulgated under the Act) whether or not in writing, for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any voting securities of the Company. 
 For all purposes of this Agreement, any calculation of
the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and Regulations under the Exchange Act. 
 (f)
“Board” shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
 (g) “Business Day”
shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. 
 (h) “Close of business” on any given date shall mean 5:00 p.m., New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day. 
 (i) “Common Stock” shall mean
the common stock, $.001 par value, of the Company, except that “Common Stock” when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the management, of such Person. 
  

 -3- 

 (j) “Common stock equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof. 
 (k) “Company” shall have the meaning set forth in the introductory paragraph hereof. 
 (l) “Current market price” shall have the meaning set forth in Section 11(d)(i) hereof. 
 (m) “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof. 
 (n) “Distribution Date” shall have the meaning set forth in Section 3(a) hereof. 
 (o) “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b) hereof. 
 (p) “Exchange Act” shall have the meaning set forth in Section 1(c) hereof. 
 (q) “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof. 
 (r) “Exempted Person” shall mean Pfizer Inc (“Pfizer”), which as of the date hereof, beneficially owns an aggregate of 8,536,125
shares of the Company’s Common Stock, representing approximately 18% of the Common Stock outstanding as of the date hereof, unless and until such time as Pfizer, together with its Affiliates and Associates, directly or indirectly, becomes the
Beneficial Owner of 20% or more of the Common Stock then outstanding (other than under circumstances described in the second sentence of Section 1(a) hereof (replacing for this purpose all references in Section 1(a) to 15% with 20%)), in
which event, Pfizer immediately shall cease to be an Exempted Person. 
 (s) “Expiration Date” shall have the meaning set forth in
Section 7(a) hereof. 
 (t) “Final Expiration Date” shall mean the earlier of (i) the close of business on
December 2, 2018 or (ii) the close of business on December 2, 2009, if the Stockholder Approval shall not have been obtained by the close of business on December 2, 2009. 
 (u) “Permitted Offer” shall mean a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms
determined, prior to the consummation of such tender offer or exchange offer, by directors constituting at least 75% of all of the members of the Board, after receiving advice from a nationally recognized investment banking firm selected by the
Board, to be (a) at a price that is fair to stockholders (taking into account all factors which such members of the Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its stockholders. 
  

 -4- 

 (v) “Person” shall mean any individual, firm, corporation, partnership, trust, association,
limited liability company or other entity. 
 (w) “Preferred Stock” shall mean shares of Series A Junior Participating Preferred
Stock, $.001 par value, of the Company having the rights and preferences set forth in the form of Certificate of Designations attached to this Agreement as Exhibit A and, to the extent that there is not a sufficient number of shares of Series
A Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of Preferred Stock, $.001 par value, of the Company designated for such purpose containing terms substantially similar to the terms of the
Series A Junior Participating Preferred Stock. 
 (x) “Principal Party” shall have the meaning set forth in Section 13(b)
hereof. 
 (y) “Purchase Price” shall have the meaning set forth in Section 4(a) hereof. 
 (z) “Record Date” shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
 (aa) “Redemption Date” shall have the meaning set forth in Section 7(a) hereof. 
 (bb) “Redemption Price” shall have the meaning set forth in Section 23(a) hereof. 
 (cc) “Rights” shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
 (dd) “Rights Agent” shall have the meaning set forth in the introductory paragraph hereof. 
 (ee) “Rights Certificates” shall have the meaning set forth in Section 3(a) hereof. 
 (ff) “Section 11(a)(ii) Event” shall mean an acquisition of Common Stock described in the first sentence of Section 11(a)(ii) hereof.

 (gg) “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof. 
 (hh) “Section 13 Event” shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof. 
 (ii) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof. 
 (jj) “Stock Acquisition Date” shall mean the later of (i) the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or (ii) the first date on which an executive officer of the
Company has actual knowledge that an Acquiring Person has become such; provided, however that, if such Person is deemed not to be an Acquiring Person pursuant to clause (y) of Section 1(a) hereof, no Stock Acquisition Date
shall be deemed to have occurred. 
  

 -5- 

 (kk) “Stockholder Approval” shall mean the approval of this Agreement by the affirmative vote
of the holders of shares of Common Stock having a majority of the votes cast by the holders of all of the shares of Common Stock present or represented and voting on the proposal to approve this Agreement at a meeting of stockholders of
the Company duly held in accordance with applicable law. 
 (ll) “Subsidiary” shall mean, with reference to any Person, any
corporation or other entity of which an amount of voting securities sufficient to elect at least a majority of the directors (or comparable body) of such corporation or other entity is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person. 
 (mm) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii)
hereof. 
 (nn) “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof. 
 (oo) “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event. 
 Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such Co-Rights Agent. 
 Section 3. Issuance of Rights. 
 (a) Until the earlier of (i) the close of business on the tenth Business Day (or such later date as may be determined by the Board) after the Stock
Acquisition Date (or, if the tenth Business Day after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date), or (ii) the close of business on the tenth Business Day (or such later date as may be
determined by action of the Board) after the date that a tender or exchange offer (other than a Permitted Offer) by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2 of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, or, in the case of an Exempted Person, 20% or more of the shares of Common Stock then outstanding,
(the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced by the certificates for the Common Stock registered in the names of 

  

 -6- 

 
the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the “Rights Certificates”), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. With respect to certificates for the Common Stock
outstanding as of the close of business on the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of
the associated Rights. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (i) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or under any employee benefit plan or arrangement, or upon the exercise, conversion or exchange of securities granted or issued by the Company prior to the Distribution Date,
and (ii) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (x) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (y) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Sections 11(i) or 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.

 (b) As promptly as practicable following the Record Date, the Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit C, by first-class, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Record Date, at the address of such holder shown on the records of
the Company. The failure to send a copy of the Summary of Rights shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights. 
 (c) Rights shall be issued (i) in respect of all shares of Common Stock that are issued (either as an original issuance or from the Company’s
treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date and (ii) in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights (x) with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee benefit plan or arrangement, or upon the exercise, conversion or exchange of securities,
granted or issued by the Company prior to the Distribution Date and (y) with respect to shares of Common Stock so issued or sold in any other case, if deemed 

  

 -7- 

 
necessary or appropriate by the Board. Certificates representing such shares of Common Stock (including, without limitation, certificates issued upon
transfer or exchange of Common Stock) shall also be deemed to be certificates for Rights, and shall bear the following legend: 
 This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Icagen, Inc. (the “Company”) and American Stock Transfer & Trust Company LLC (the “Rights Agent”)
dated December 2, 2008, as the same may be amended, restated or renewed from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices
of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void. 
 With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date and (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights. Notwithstanding this
Section 3(c), the omission of a legend shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights. 
 (d) Until the earlier of the Distribution Date and the Expiration Date, the transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock. In the event that the Company purchases or acquires any shares of Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the shares of Common Stock which are no longer outstanding. 
  

 -8- 

 Section 4. Form of Rights Certificates. 
 (a) The Rights Certificates (and the forms of election to purchase, certification and assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or over-the-counter market on which the Rights
may from time to time be listed, or to conform to usage. Subject to the provisions of Sections 7, 11 and 22 hereof, the Rights Certificates, whenever distributed, shall entitle the holders thereof to purchase such number of one one-thousandths
of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one one-thousandth of a share, the “Purchase Price”), but the amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. 
 (b) Any Rights Certificate issued pursuant
to Section 3, Section 11(i) or Section 22 hereof that represents Rights beneficially owned by persons known to be: (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any
Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or
understanding (whether or not in writing) that has as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend: 
 The
Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Agreement. 
 The
provisions of Section 7(e) hereof shall be operative whether or not the foregoing legend is contained on any such Rights Certificate. 
 Section 5. Countersignature and Registration. 
 (a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof, which 

  

 -9- 

 
shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. 
 (b) Following the Distribution Date, the Rights Agent shall keep or cause to be kept, at its office designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates, the Rights Certificate number and the date of each of the Rights Certificates. 
 Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. 
 (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing Rights that have become void pursuant to Section 7(e) hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or, following a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate appropriately executed, at the office of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer
of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights 

  

 -10- 

 
Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. 
 (b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. 
 Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. 
 (a) Subject to
Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23 hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-thousandths of a share of Preferred
Stock (or other shares, securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earliest of (i) the Final Expiration Date, (ii) the time at which the Rights expire
as provided in Section 13(d) hereof, (iii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”) and (iv) the time at which such Rights are exchanged as provided in
Section 24 hereof (the earliest of (i), (ii), (iii) and (iv) being herein referred to as the “Expiration Date”). 
 (b) The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $7.50 and shall be subject to adjustment from time to time as provided in Sections 11 and 13(a) hereof
and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 
 (c) Upon receipt of a
Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one one-thousandths of a share of Preferred
Stock to be purchased and the Company hereby authorizes its transfer agent to comply with such requests, or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent 

  

 -11- 

 
depositary receipts representing such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such requests, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified bank check or money order payable to the order of the Company. In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company shall make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when appropriate. 
 (d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof. 
 (e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which
the Board has determined is part of a plan, arrangement or understanding (whether or not in writing) that has as a primary purpose or effect avoidance of this Section 7(e), shall become null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Rights Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Rights Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence shall be cancelled. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. 
  

 -12- 

 (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company
shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported transfer or exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set forth on the reverse side of the Rights Certificate surrendered for such assignment or exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or any Affiliates or Associates thereof as the Company shall reasonably request. 
 Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company. 
 Section 9. Reservation and Availability of Capital Stock. 
 (a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights.

 (b) So long as the shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange or automated quotation system, the Company shall use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be so listed upon official notice of issuance upon such exercise. 
 (c) The Company
shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii) hereof, or as soon as is required by law following the Distribution Date, as the case may be, a 

  

 -13- 

 
registration statement under the Act, with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such filing, (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such securities, and (B) the Expiration Date, and (iv) obtain such other regulatory approvals as may be necessary for it to issue securities purchasable upon the
exercise of the Rights. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective or to obtain any other required regulatory approval in connection with the exercisability of the Rights. Upon any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite registration or qualification in such jurisdiction shall have been effected or obtained. 
 (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-thousandths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable. 
 (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one one-thousandths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required (i) to pay any transfer tax that may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in respect of a name other than that of, the registered holder of the Rights Certificate evidencing Rights surrendered for exercise or
(ii) to issue or deliver any certificates for a number of one one-thousandths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of
any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax is due. 
 Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock
and/or 

  

 -14- 

 
other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered with the forms of election and certification duly executed and payment of the Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate, as such, shall not be entitled to any rights of a stockholder of the Company with respect to securities for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 
 Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
 (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof. 
 (ii) Subject to Section 24 of this Agreement, in the event
that any Person, alone or together with its Affiliates or Associates, becomes an Acquiring Person (other than pursuant to a Permitted Offer), then, promptly following the first occurrence of such event, 

  

 -15- 

 
proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to
receive (subject to the last sentence of Section 23(a)), upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such
number of shares of Common Stock of the Company that equals the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and for all
purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment Shares”). 

(iii) In the event that the number of shares of Common Stock that are authorized by the Company’s Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company
shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Purchase Price (such excess, the “Spread”), and (B) with
respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have the same value as shares of Common Stock (such shares of preferred stock, “common stock equivalents”)), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the
“Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such period, as it may be extended in accordance with this sentence until up to ninety (90) days after the Section 11(a)(ii) Trigger Date, the “Substitution
Period”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period 

  

 -16- 

 
in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any “common stock equivalent” shall be deemed to have the same value as the Common Stock on such date. 
 (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock (“equivalent preferred stock”)) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. Shares of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (c) In case the Company shall fix
a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than
a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the

  

 -17- 

 
numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed. 
 (d) (i) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the “current market price” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the “current market price” per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification occurs, then, and in each such case, the “current market
price” shall be properly adjusted to take into account ex-dividend or post record date trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and the low
asked prices in the over-the-counter market, as reported by The Nasdaq Stock Market, Inc. (“Nasdaq”) or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. All references in this Section to closing prices, last quoted prices or other stock prices mean prices during
regular trading hours, without giving effect to any after-hours or extended hours trading. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date shall be as determined in good faith by
the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean a day on which Nasdaq or any national 

  

 -18- 

 
securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on Nasdaq or any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, “current market price” per share shall mean the fair value per
share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
 (ii) For the purpose of any computation hereunder, the “current market price” per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the current market price per share of Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the “current market price” per share of Preferred Stock shall be conclusively deemed to be an amount equal to
1000 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the current market price per share
of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, “current market price” per share of the Preferred Stock shall mean the fair value per share as determined in good faith by
the Board, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the “current market price” of one one-thousandth of a share of
Preferred Stock shall be equal to the “current market price” of one share of Preferred Stock divided by 1000. 
 (e) Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however, that
any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-millionth of a share of Preferred Stock, or hundred-thousandth of a share of Common Stock or other security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date. 
 (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any securities other than Preferred Stock, thereafter the number of such other securities so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to any such other securities; provided, however, that the Company shall not be liable for its inability to reserve and keep available for issuance upon exercise of the
Rights pursuant to Section 11(a)(ii) a number of shares of Common Stock greater than the number then authorized by the Company’s Certificate of Incorporation but not outstanding or reserved for other purposes. 
  

 -19- 

 (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein. 
 (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-thousandths of a share of Preferred Stock (calculated to the nearest ten-millionth) obtained by (i) multiplying (x) the number of one one-thousandths of a share covered by a Right immediately prior to this adjustment, by
(y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 
 (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-hundred-
thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date
specified in the public announcement. 
  

 -20- 

 (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths
of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-thousandth of a share and the number of one one-thousandths of a
share which were expressed in the initial Rights Certificates issued hereunder. 
 (k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if any, of the number of one one-thousandths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally issue such number of one one-thousandths of a share of fully paid and nonassessable Preferred Stock at such adjusted Purchase Price. 
 (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above the number of one one-thousandths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. 
 (m) Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the
Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders. 
 (n) The
Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction that complies with Section 11(o) hereof),
(ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction,
or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any charter or bylaw provisions or any rights, warrants or
other instruments or securities outstanding or agreements in effect that would substantially diminish or 

  

 -21- 

 
otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates. The Company shall not consummate any consolidation, merger, sale or transfer described in clause (i), (ii) or (iii) of the prior sentence unless prior thereto the Company and such other Person shall have executed
and delivered to the Rights Agent a supplemental agreement evidencing compliance with this Section 11(n). 
 (o) The Company covenants
and agrees that, after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. 
 (p)
Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Record Date and prior to the Distribution Date (i) declare or pay any dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
the occurrence of such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately following the occurrence of such event. 
 Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or Section 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing shares of Common Stock) in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any adjustment unless and until it shall have received such certificate. 
 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 
 (a) In the event that, at any time after a Person has become an Acquiring Person, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that complies with Section 11(o) 

  

 -22- 

 
hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then, and in each such case and except as
contemplated by Section 13(d) hereof, proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined),
which shall not be subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one one-thousandths of a share
of Preferred Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such one one-thousandths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and
(2) dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended
that, subject to clause (v) below, the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event. 
  

 -23- 

 (b) “Principal Party” shall mean 
 (i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and 
 (ii) in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such transaction or transactions; 
 provided, however, that in any
such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so registered, “Principal Party” shall refer to such other Person; (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of two or more of which are and have been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a “Subsidiary” of both or all of such joint ventures and the Principal Parties in each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the total of such interests. 
 (c) The Company shall not consummate
any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will 
 (i) prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; 
 (ii) use its best efforts to qualify or register the Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such jurisdictions as may be necessary or appropriate; and 
  

 -24- 

 (iii) deliver to holders of the Rights historical financial statements for the Principal Party and each
of its Affiliates that comply in all respects with the requirements for registration on Form 10 under the Exchange Act. 
 The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at the same time as, or at any time after, the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a). 
 (d) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is consummated with
a Person or Persons (or a wholly owned subsidiary of any such Person or Persons) who acquired shares of Common Stock pursuant to a Permitted Offer, (ii) the price per share of Common Stock paid in such transaction is not less than the price per
share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased pursuant to such Permitted Offer, and (iii) the form of consideration paid in such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire. 
 Section 14. Fractional Rights and Fractional Shares. 
 (a) The Company shall not be required to
issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(i) or (p) hereof, or to distribute Rights Certificates that evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and the low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board. All references in this Section to closing prices, last quoted prices or
other stock prices means prices during regular trading hours, without giving effect to any after-hours or extended hours trading. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board shall be used, which determination shall be described in a statement filed with Rights Agent and shall be conclusive for all purposes. 
  

 -25- 

 (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock). Fractional shares of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts;
provided, however, that holders of such depositary receipts shall have all of the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions to which they are entitled as beneficial owners of the shares
of Preferred Stock represented by such depositary receipts. In lieu of fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock), the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one one-thousandth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise. 
 (c) Following the occurrence of a Triggering Event, the Company shall not be required
to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company shall pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market price of one (1) share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise. 
 (d) The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14. 
 Section 15. Rights of Action. All rights of action in respect of this Agreement, except the rights of action expressly given to the Rights Agent in Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement. 
  

 -26- 

 Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
 (a) prior to the Distribution Date,
the Rights will be transferable only in connection with the transfer of Common Stock; 
 (b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates duly completed and fully executed; 
 (c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the penultimate sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and 
 (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to prevent the issuance
of any such order, decree or ruling and to have any such order, decree or ruling lifted or otherwise overturned as soon as possible. 
 Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. 
  

 -27- 

 Section 18. Concerning the Rights Agent. 
 (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. 
 (b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 
 Section 19. Merger or Consolidation or Change of Name of Rights Agent. 
 (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, however, that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement. 
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and
in this Agreement. 
  

 -28- 

 Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: 
 (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 
 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of
“current market price”) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 
 (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. 
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only. 
 (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11, Section 13 or Section 24 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after receipt of a certificate describing any such adjustment, delivered
pursuant to Section 12); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable. 
  

 -29- 

 (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

 (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its duties or obligations under this Rights Agreement and the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance with a proposal included in any such application on or after the date specified therein (which date shall not be less than five Business Days after the date any such
officer actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking or omitting any such action, the Rights Agent has received written instructions in response to such
application specifying the action to be taken or omitted. 
 (h) The Rights Agent and any stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. 
 (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the selection and continued employment thereof. 
 (j) No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable
grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. 
 (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has not been completed, the
Company and the Rights Agent will deem the beneficial owner of the rights evidenced by such Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof and such assignment or election to purchase will not be honored.

  

 -30- 

 Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a corporation organized and doing business
under the laws of the United States (or of any state of the United States) in good standing, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a corporation described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 
 Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. 
  

 -31- 

 Section 23. Redemption. 
 (a) The Board may, at its option, at any time prior to the earlier of (i) the close of business on the tenth Business Day (or such later date as may
be determined by the Board pursuant to clause (i) of the first sentence of Section 3(a) with respect to the Distribution Date) following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth Business Day following the Record Date) and (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $0.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights by the
Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the “current
market price,” as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration, or any combination of any of the foregoing, deemed appropriate by the Board. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company’s right of redemption hereunder has expired. 
 (b) Immediately upon the action of the Board ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of
the Board ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder’s last address as it
appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 
 (c) In the event of a redemption of the Rights in accordance with this Agreement, the Company may, at its option, discharge all of its obligations with respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing payment of the Redemption Price to the registered holders of the Rights at their last addresses as they appear on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent of the Common Stock, and upon such action, all outstanding Rights and Right Certificates shall be null and void without any further action by the Company. 
 Section 24. Exchange. 
 (a) The
Board may, at its option, at any time after a Section 11(a)(ii) Event, exchange all or part of the then outstanding and exercisable Rights (which (i) shall not include Rights that have become void pursuant to the provisions of
Section 7(e) hereof, and (ii) shall include, without limitation, any Rights issued after the Distribution Date) for shares of Common Stock at an exchange ratio 

  

 -32- 

 
of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding. 
 (b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24, evidence of which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
exchange shall state the method by which the exchange of shares of Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 
 (c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or equivalent preferred stock, as such term is defined in Section 11(b) hereof) for shares of
Common Stock exchangeable for Rights, at the initial rate of one one-thousandth of a share of Preferred Stock (or equivalent preferred stock) for each share of Common Stock, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock pursuant to Section 3(A) of the Certificate of Designations attached hereto as Exhibit A, so that the fraction of a share of Preferred Stock (or equivalent preferred stock) delivered in lieu of each share of
Common Stock shall have the same voting rights as one share of Common Stock. 
 (d) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or Preferred Stock for issuance upon exchange of the Rights. 
 (e) The Company shall not be required to
issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, there shall be paid to the registered holders of 

  

 -33- 

 
the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the purposes of this subsection (e), the current market value of a whole share of Common Stock shall be the closing price per share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 
 Section 25. Notice of Certain Events. 
 (a) In case the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of
the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case
of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock, whichever shall be the earlier. 
 (b) In case a Section 11(a)(ii) Event shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer also to Common Stock and/or, if appropriate, other securities; provided that the failure to give such
notice shall not affect the validity of such consent. 
  

 -34- 

 Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as
follows: 
 Icagen, Inc. 
 4222
Emperor Boulevard, Suite 350 
 Durham, North Carolina 27703 
 Attention: Chief Executive Officer 
 with a copy to: 
 WilmerHale 
 60 State Street 
 Boston, MA 02109 
 Attention: David E.
Redlick, Esq. 
 Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 
 American Stock Transfer & Trust Company LLC 
 59 Maiden Lane 
 New York, New York 10038 
 Attention: Corporate Trust 
 Notices or demands authorized
by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 
 Section 27. Supplements and Amendments. Except as provided in the penultimate sentence of this Section 27, for so long as the Rights are then redeemable, the Company may, in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights are no longer redeemable, except as
provided in the penultimate sentence of this Section 27, the Company may, by approval of at least 75% of the members of the Board, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights in order (i) to cure any ambiguity or (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, provided that no such supplement or amendment
shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate officer of the Company which 

  

 -35- 

 
states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Any supplement or amendment that the Rights Agent is required to sign pursuant to this Section 27 shall be effective upon execution by the Company (whether or not then executed by the Rights Agent or the certificate referred to in
the immediately preceding sentence has been delivered). Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption Price. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock. 
 Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 29. Actions by the Board, etc. The Board shall have the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board to any liability to the holders of the Rights. 
 Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock). 
 Section 31.
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid, void or unenforceable language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the tenth day following the date of such determination by the Board. 

 

 -36- 

 Section 32. Governing Law. This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of Delaware applicable to contracts made and to be performed entirely within
Delaware. 
 Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
 Section 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

  

 -37- 

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

									
	Attest:	 		 	ICAGEN, INC.
					
	By:	 	  
	 		 	By:	 	  

	Name:	 	  
	 		 	Name:	 	  

	Title:	 	  
	 		 	Title:	 	  

			
	Attest:	 		 	AMERICAN STOCK TRANSFER & TRUST COMPANY LLC
					
	By:	 	  
	 		 	By:	 	  

	Name:	 	  
	 		 	Name:	 	  

	Title:	 	  
	 		 	Title:	 	  

  

 -38- 

 Exhibit A 
 FORM OF 
 CERTIFICATE OF DESIGNATIONS 
 OF 
 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 
 OF 
 ICAGEN, INC. 
  
  
 Icagen, Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation at a meeting duly called and held on December 2, 2008: 
 RESOLVED: That pursuant to the authority granted to and vested in
the Board of Directors of the Corporation (hereinafter called the “Board”) in accordance with the provisions of the Certificate of Incorporation, as amended, the Board hereby creates a series of Preferred Stock, $.001 par value per share
(the “Preferred Stock”), of the Corporation and hereby states the designation and number of shares, and fixes the relative rights, preferences and limitations thereof as follows: 
 Series A Junior Participating Preferred Stock: 
 Section 1. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the
number of shares constituting the Series A Preferred Stock shall be one hundred and twenty thousand (120,000). Such number of shares may be increased or decreased by resolution of the Board prior to issuance; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock. 
 Section 2.
Dividends and Distributions. 
 (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, par value $.001 per share (the “Common
Stock”), of the Corporation, and of any other junior stock, 

  

 A-1 

 
shall be entitled to receive, when, as and if declared by the Board out of funds of the Corporation legally available for the payment of dividends, quarterly
dividends payable in cash on the last day of each fiscal quarter of the Corporation in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10 or (b) subject to the provision for adjustment hereinafter
set forth, 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. In the event the Corporation shall at any time
declare or pay any dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Series A Preferred Stock (by reclassification or otherwise
than by payment of a dividend in shares of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the first sentence of this Section 2(A) shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Series A Preferred Stock that were
outstanding immediately prior to such event and the denominator of which is the number of shares of Series A Preferred Stock outstanding immediately after such event. 
 (B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock) and the Corporation shall pay such dividend or distribution on the Series A Preferred Stock before the dividend or distribution declared on the Common Stock is paid or set
apart; provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10 per
share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 
  

 A-2 

 (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred
Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof. 
 Section 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting rights: 
 (A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number
by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. In the
event the Corporation shall at any time declare or pay any dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Series A Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number of shares of Series A Preferred Stock outstanding immediately after such event. 
 (B) Except as otherwise provided herein, in the Certificate of Incorporation or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. 
  

 A-3 

 (C) (i) If at any time dividends on any Series A Preferred Stock shall be in arrears in an amount equal
to six quarterly dividends thereon, the holders of the Series A Preferred Stock, voting as a separate series from all other series of Preferred Stock and classes of capital stock, shall be entitled to elect two members of the Board in addition to
any Directors elected by any other series, class or classes of securities and the authorized number of Directors will automatically be increased by two. Promptly thereafter, the Board of the Corporation shall, as soon as may be practicable, call a
special meeting of holders of Series A Preferred Stock for the purpose of electing such members of the Board. Such special meeting shall in any event be held within 45 days of the occurrence of such arrearage. 
 (ii) During any period when the holders of Series A Preferred Stock, voting as a separate series, shall be entitled and shall have exercised their right
to elect two Directors, then, and during such time as such right continues, (a) the then authorized number of Directors shall be increased by two, and the holders of Series A Preferred Stock, voting as a separate series, shall be entitled to
elect the additional Directors so provided for, and (b) each such additional Director shall not be a member of any existing class of the Board, but shall serve until the next annual meeting of stockholders for the election of Directors, or
until his successor shall be elected and shall qualify, or until his right to hold such office terminates pursuant to the provisions of this Section 3(C). 
 (iii) A Director elected pursuant to the terms hereof may be removed with or without cause by the holders of Series A Preferred Stock entitled to vote in an election of such Director. 
 (iv) If, during any interval between annual meetings of stockholders for the election of Directors and while the holders of Series A Preferred Stock
shall be entitled to elect two Directors, there is no such Director in office by reason of resignation, death or removal, then, promptly thereafter, the Board shall call a special meeting of the holders of Series A Preferred Stock for the purpose of
filling such vacancy and such vacancy shall be filled at such special meeting. Such special meeting shall in any event be held within 45 days of the occurrence of such vacancy. 
 (v) At such time as the arrearage is fully cured, and all dividends accumulated and unpaid on any shares of Series A Preferred Stock outstanding are
paid, and, in addition thereto, at least one regular dividend has been paid subsequent to curing such arrearage, the term of office of any Director elected pursuant to this Section 3(C), or his successor, shall automatically terminate, and the
authorized number of Directors shall automatically decrease by two, the rights of the holders of the shares of the Series A Preferred Stock to vote as provided in this Section 3(C) shall cease, subject to renewal from time to time upon the same
terms and conditions, and the holders of shares of the Series A Preferred Stock shall have only the limited voting rights elsewhere herein set forth. 
 (D) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
  

 A-4 

 Section 4. Certain Restrictions. 
 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not: 
 (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; 
 (ii) declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 
 (iii) redeem or
purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

 (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 
 (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 
 Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law. 
  

 A-5 

 Section 6. Liquidation, Dissolution or Winding Up. 
 (A) Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. 
 (B) Neither the consolidation, merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease, exchange or conveyance of all or any part of the property, assets or business of the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this Section 6. 
 (C) In the event the Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of paragraph (A) of this
Section 6 shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event. In the event the Corporation shall at any time declare or pay any dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series A Preferred Stock (by reclassification or otherwise than by payment of a dividend in shares of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in
each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of paragraph (A) of this Section 6 shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of shares of Series A Preferred Stock that were outstanding immediately prior to such event and the denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event. 
  

 A-6 

 Section 7. Consolidation, Merger, etc. Notwithstanding anything to the contrary contained
herein, in case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or consolidation of the outstanding shares of Series A Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in each such case the amount set forth in the first sentence of this
Section 7 with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Series A Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number of shares of Series A Preferred Stock outstanding immediately after such event. 
 Section 8. No Redemption. The shares of Series A Preferred Stock shall not be redeemable. 
 Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Preferred Stock issued either before or after the
issuance of the Series A Preferred Stock, unless the terms of any such series shall provide otherwise. 
 Section 10. Amendment.
At such time as any shares of Series A Preferred Stock are outstanding, the Certificate of Incorporation, as amended, of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. 
 Section 11. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion
to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and have the benefit of all other rights of holders of Series A Preferred Stock. 
  

 A-7 

 IN WITNESS WHEREOF, this Certificate of
Designations is executed on behalf of the Corporation by its Chief Executive Officer this 2nd day of December, 2008. 
  

			
	ICAGEN, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 A-8 

 Exhibit B 
 [Form of Rights Certificate] 
  

			
	Certificate No. R-	  	             Rights

 NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1 
 ICAGEN, INC. 
 Rights Certificate 
 This certifies that                     , or registered
assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated December 2, 2008 (the “Rights
Agreement”), between Icagen, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company LLC (the “Rights Agent”), to purchase from the Company after the Distribution Date (as such term
is defined in the Rights Agreement) and at any time prior to 5:00 p.m. (New York time), on the earlier of (a) December 2, 2018, or (b) December 2, 2009 if the Stockholder Approval (as such term is defined in the Rights Agreement)
shall not have been obtained by December 2, 2009, at the office of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series A Junior Participating
Preferred Stock (the “Preferred Stock”) of the Company, $.001 par value per share, at a purchase price of $7.50 in cash per one one-thousandth of a share (the “Purchase Price”), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of one one-thousandth of a share of Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of the close of business on December 15, 2008, based on the Preferred Stock as constituted at such date. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Rights Agreement. 
  

	1	The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. 

  

 B-1 

 Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate who becomes
a transferee after the Acquiring Person becomes an Acquiring Person, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, concurrently with or after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event. 
 As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Section 11(a)(ii) Events. 
 This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal offices of the Company and
are available upon written request to the Company. 
 This Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the
Rights Agent designated for such purpose, with the Form of Election and Certificate set forth on the reverse side duly executed, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-thousandths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised. 
 Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.001
per Right at any time prior to the earlier of (i) the close of business on the tenth Business Day (or such later date as may be determined by the Board pursuant to clause (i) of the first sentence of Section 3(a) with respect to the
Distribution Date) following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth Business Day following the Record Date) and (ii) the Final Expiration
Date. 
  

 B-2 

 Subject to the provisions of the Rights Agreement, the Company may, at its option, at any time after a
Section 11(a)(ii) Event, exchange all or part of the Rights evidenced by this Certificate for shares of the Company’s Common Stock or for Preferred Stock (or shares of a class or series of the Company’s preferred stock having the same
rights, privileges and preferences as the Preferred Stock). 
 No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement. 
 No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement. 
 This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent. 
 WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. 
 Dated as of
                     
  

									
	ATTEST:	 		 	ICAGEN, INC.
				
	  
	 		 	By:	 	  

	Secretary	 		 	Title:	 	  

				
	COUNTERSIGNED:	 		 		 	
				
	 AMERICAN STOCK TRANSFER & TRUST
 COMPANY
LLC, as Rights Agent
	 		 		 	
					
	By:	 	  
	 		 		 	
				
	Authorized Signature	 		 		 	

  

 B-3 

 [Form of Reverse Side of Rights Certificate] 
 FORM OF ASSIGNMENT 
 (To be executed by the registered holder if such 
 holder desires to transfer the Rights Certificate.) 
  

					
	FOR VALUE RECEIVED	 	  
	 	 hereby sells,

					
	assigns and transfers unto  	 	  

  
  
 (Please print name and address of transferee) 
                                        
                                         
                     this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and
appoint
                                        
Attorney, to transfer the within Rights Certificate on the books of the within-named Company, with full power of substitution. 
  
 Dated:                      
  

	
	  

	Signature

 Signature Guaranteed: 
 Certificate 
 The undersigned hereby certifies that the Rights evidenced by this Rights Certificate are not beneficially
owned by, or being assigned to, an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined pursuant to the Rights Agreement). 
 Dated:                      
  

	
	  

	Signature

 Signature Guaranteed: 
 NOTICE 
 The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. 
  

 B-4 

 FORM OF ELECTION TO PURCHASE 
 (To be executed if holder desires to exercise 
 Rights represented by the Rights Certificate.) 
 To:    American Stock Transfer & Trust Company LLC 
 The undersigned hereby irrevocably elects to exercise                      Rights represented by this Rights Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in
the name of and delivered to: 
 Please insert social security 
  

			
	or other identifying number	  	  

  
  
 (Please print name and address) 
  
  
  
 If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to: 
 Please insert social security 
  

			
	or other identifying number	  	  

  
  
 (Please print name and address) 
  
  
  
 Dated:                      
  

	
	  

	Signature

 Signature Guaranteed: 
  

 B-5 

 Certificate 
 The undersigned hereby certifies by checking the appropriate boxes that: 
 (1) the Rights evidenced by this
Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined pursuant to the Rights Agreement); 
 (2) after due inquiry and to the best knowledge of the undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate thereof. 
 Dated:
                     
  

	
	  

	Signature

 Signature Guaranteed: 
 NOTICE 
 The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. 
  

 B-6 

 Exhibit C 
 SUMMARY OF RIGHTS TO 
 PURCHASE PREFERRED STOCK 
 On December 2, 2008, the Board of Directors of Icagen, Inc. (the “Company”), declared a dividend of one Right for each outstanding share of the
Company’s Common Stock to stockholders of record at the close of business on December 15, 2008 (the “Record Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A
Junior Participating Preferred Stock, $.001 par value per share (the “Preferred Stock”), at a Purchase Price of $7.50 in cash, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement dated
December 2, 2008 (the “Rights Agreement”) between the Company and American Stock Transfer & Trust Company LLC, as Rights Agent. 
 Initially, the Rights are not exercisable and will be attached to all certificates representing outstanding shares of Common Stock, and no separate Rights Certificates will be distributed. The Rights will separate from the Common Stock, and
the Distribution Date will occur, upon the earlier of (i) 10 business days following the later of (a) the first date of a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has
acquired, or obtained the right to acquire, beneficial ownership of 15% (or in the case of an Exempted Person, as defined below, 20%) or more of the outstanding shares of Common Stock or (b) the first date on which an executive officer of the
Company has actual knowledge that an Acquiring Person has become such (the “Stock Acquisition Date”), or (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group
beneficially owning 15% (or in the case of an Exempted Person, 20%) or more of the outstanding shares of Common Stock. The Distribution Date may be deferred in circumstances determined by the Board of Directors. In addition, certain inadvertent
acquisitions will not trigger the occurrence of the Distribution Date. Until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the Rights will be evidenced by the Common Stock certificates outstanding on the Record
Date, together with this Summary of Rights, or by new Common Stock certificates issued after the Record Date which contain a notation incorporating the Rights Agreement by reference, (ii) the Rights will be transferred with and only with such
Common Stock certificates; and (iii) the surrender for transfer of any certificates for Common Stock outstanding (with or without a copy of this Summary of Rights or such notation) will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. 
 For purposes of the Rights Agreement, “Exempted Person” shall mean Pfizer Inc
(“Pfizer”), unless and until such time as Pfizer, together with its affiliates and associated persons, either (i) directly or indirectly, acquires or obtains the right to acquire beneficial ownership of 20% or more of the Common Stock
then outstanding (other than certain inadvertent acquisitions), or (ii) commences a tender or exchange offer the consummation of which would result in Pfizer, together with its affiliates and associated persons, owning 20% or more of the Common
Stock then outstanding, in which event Pfizer immediately shall cease to be an Exempted Person. 
  

 C-1 

 The Rights are not exercisable until the Distribution Date and will expire upon the close of business on the earlier of
(a) December 2, 2018, or (b) December 2, 2009, if the Company’s stockholders do not approve the Rights Agreement by the close of business on December 2, 2009 (such earlier date, the “Final Expiration Date”)
unless earlier redeemed or exchanged as described below. As soon as practicable after the Distribution Date, separate Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, and except for shares of Common Stock issued upon exercise, conversion or exchange of then outstanding
options, convertible or exchangeable securities or other contingent obligations to issue shares or pursuant to any employee benefit plan or arrangement, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.

 In the event that any Person becomes an Acquiring Person, unless the event causing the 15% threshold to be crossed is a Permitted Offer (as defined in the
Rights Agreement), then, promptly following the first occurrence of such event, each holder of a Right (except as provided below and in Section 7(e) of the Rights Agreement) shall thereafter have the right to receive, upon exercise, that number
of shares of Common Stock of the Company (or, in certain circumstances, cash, property or other securities of the Company) which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement)
per share of Common Stock at the date of the occurrence of such event. However, Rights are not exercisable following such event until such time as the Rights are no longer redeemable by the Company as described below. Notwithstanding any of the
foregoing, following the occurrence of such event, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. The event summarized in this paragraph
is referred to as a “Section 11(a)(ii) Event.” 
 For example, at an exercise price of $7.50 per Right, each Right not owned by an Acquiring Person
(or by certain related parties) following a Section 11(a)(ii) Event would entitle its holder to purchase for $7.50 such number of shares of Common Stock (or other consideration, as noted above) as equals $7.50 divided by one-half of the current
market price (as defined in the Rights Agreement) of the Common Stock. Assuming that the Common Stock had a market price of $1.00 per share at such time, the holder of each valid Right would be entitled to purchase fifteen shares of Common Stock,
having a market value of 15 x $1.00, or $15.00, for $7.50. 
 In the event that, at any time after any Person becomes an Acquiring Person, (i) the
Company is consolidated with, or merged with and into, another entity and the Company is not the surviving entity of such consolidation or merger (other than a consolidation or merger which follows a Permitted Offer) or if the Company is the
surviving entity, but shares of its outstanding Common Stock are changed or exchanged for stock or securities (of any other person) or cash or any other property, or (ii) more than 50% of the Company’s assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, that number of shares of common stock of the acquiring 

  

 C-2 

 
company which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) of such common stock at
the date of the occurrence of the event. The events summarized in this paragraph are referred to as “Section 13 Events.” A Section 11(a)(ii) Event and Section 13 Events are collectively referred to as “Triggering
Events.” 
 For example, at an exercise price of $7.50 per Right, each valid Right following a Section 13 Event would entitle its holder to
purchase for $7.50 such number of shares of common stock of the acquiring company as equals $7.50 divided by one-half of the current market price (as defined in the Rights Agreement) of such common stock. Assuming that such common stock had a market
price of $2.50 per share at such time, the holder of each valid Right would be entitled to purchase six shares of common stock of the acquiring company, having a market value of 6 x $2.50, or $15.00, for $7.50. 
 At any time after the occurrence of a Section 11(a)(ii) Event, when no person owns a majority of the Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person which have become void), in whole or in part, at an exchange ratio of one share of Common Stock, or one one-thousandth of a share of Preferred Stock (or of a share of a class or
series of the Company’s preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment). 
 The Purchase Price
payable, and the number of units of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the then-current market price (as
defined in the Rights Agreement) of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends paid out of earnings or retained
earnings) or of subscription rights or warrants (other than those referred to above). The number of Rights associated with each share of Common Stock is also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date. 
 With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred Stock) will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of
exercise. 
 Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors, a minimum preferential quarterly dividend payment of $10 per share or, if greater, an aggregate dividend of 1000 times the dividend declared per share of Common Stock. In the event of liquidation, the

  

 C-3 

 
holders of the Preferred Stock will be entitled to a minimum preferential liquidation payment of $1000 per share, plus an amount equal to accrued and unpaid
dividends, and will be entitled to an aggregate payment of 1000 times the payment made per share of Common Stock. Each share of Preferred Stock will have 1000 votes, voting together with the Common Stock. In the event of any merger, consolidation or
other transaction in which Common Stock is changed or exchanged, each share of Preferred Stock will be entitled to receive 1000 times the amount received per share of Common Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock’s dividend, liquidation and voting rights, the value of one one-thousandth of a share of Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of Common
Stock. 
 At any time prior to the earlier of the tenth Business Day (or such later date as may be determined by the Board of Directors of the Company) after
the Stock Acquisition Date and the Final Expiration Date, the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”), payable in cash or stock. Immediately upon the redemption of
the Rights or such earlier time as established by the Board in the resolution ordering the redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 
 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to
receive dividends. Although the distribution of the Rights should not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of the acquiring company as set forth above. 
 Any provision of the Rights
Agreement, other than the redemption price, may be amended by the Board prior to such time as the Rights are no longer redeemable. Once the Rights are no longer redeemable, the Board’s authority to amend the Rights is limited to correcting
ambiguities or defective or inconsistent provisions in a manner that does not adversely affect the interest of holders of Rights. 
 The Rights are intended
to protect the stockholders of the Company in the event of an unfair or coercive offer to acquire the Company and to provide the Board with adequate time to evaluate unsolicited offers. The Rights may have anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the Company without conditioning the offer on a substantial number of Rights being acquired. The Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and its stockholders, as determined by the Board. The Rights should not interfere with any merger or other business combination approved by the Board. 
 A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to the Company’s Current Report on Form 8-K filed on
December 5, 2008. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference. 
  

 C-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]