LOCK-UP AND REDEMPTION AGREEMENT

THIS LOCK-UP AND REDEMPTION AGREEMENT (the “Agreement”) is made and entered into
as of the date set forth on the signature page below, between SENTRY POWER
TECHNOLOGY, INC., a Nevada corporation (“Sentry Power”), POWER TECHNOLOGY, INC.,
a Nevada corporation (“Power”) and SENTRY POWER SYSTEMS, LLC, a Delaware limited
liability company (the “Holder”).
 
RECITALS:

WHEREAS, the Holder has agreed to exchange certain assets associated or used in
connection with the operation of its automotive battery backup systems to
provide emergency power to residential and business property in exchange for
6,075,949 shares of Power common stock (the “Power Shares”) pursuant to an Asset
Purchase Agreement dated April 11, 2006, as Amended on May 1, 2006 and May 12,
2006 (the “Purchase Agreement”); and

WHEREAS, the Holder shall be entitled to receive the Power Shares upon the
closing of the Purchase Agreement (the “Closing Date”) which is conditioned
upon, among other things, the execution and delivery of this Agreement; and

WHEREAS, the Holder has agreed to enter into this Agreement to restrict the
sale, assignment, transfer, conveyance, or hypothecation of the Power Shares and
to provide for certain redemption and exchange rights between the parties, all
on the terms set forth below; and

WHEREAS, any capitalized terms not defined herein shall have the meaning set for
in the Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1.  The Holder agrees that it may not sell, pledge, hypothecate, transfer,
assign or in any other manner dispose of the Power Shares for a period of
twenty-four (24) months from the Closing Date, except for 1,582,279 Power Shares
which the Holder has agreed to pledge to Power as collateral for a Guaranty
Stock Pledge Agreement as provided for in the Purchase Agreement,. The Holder
acknowledges that the certificates representing the Power Shares will contain
certain restrictive legends reflecting this resale restriction.

2.  The restrictions set forth in Paragraph 1 above shall terminate and this
Agreement shall be of no further force or effect if Sentry Power is not “Cash
Flow Positive” as defined below twelve (12) months after the Closing Date and
Power exercises its right, by written notice to Holder within fifteen (15) days
of the end of the twelve (12) months period to call for redemption and exchange
of all of the Power Shares held by the Holder in exchange for 65% of the shares
then outstanding of Sentry Power (the “Power Redemption and Exchange Right”). In
the event that Power elects to exercise the Power Redemption and Exchange Right
then it shall have the right, but not the obligation, to require the Holder to
file, at Power’s expense, a Registration Statement with the Securities and
Exchange Commission (the “SEC”) to register for resale the 35% remaining shares
of Sentry Power then held by Power (or its shareholders).
 

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3. In the event that Power does not elect to exercise the Power Redemption and
Exchange Right, then after twenty-four (24) months from the Closing Date the
restrictions set forth in Paragraph 1 shall terminate and Holder shall own the
Power Shares free and clear of any of the restrictions imposed by this Agreement
or the Purchase Agreement. In addition, for a period of fifteen (15) days
commencing twenty-four (24) months after the Closing Date, Holder shall have the
right, with written notice to Power, to require Power to exchange 65% of the
shares then outstanding of Sentry Power for all of the Power Shares (the “Holder
Exchange Right”). In the event that the Holder elects to exercise the Holder
Exchange Right then Power shall have the right, but not the obligation, to
demand that Sentry Power file, at Sentry Power’s expense, a Registration
Statement with the SEC to register for resale the 35% remaining shares of Sentry
Power held by Power (or its shareholders).

4. For purposes of this Agreement Sentry Power shall be considered “Cash Flow
Positive” where, in the preceding twelve months, Sentry Power has accrued
positive earnings when earnings are calculated in accordance with generally
accepted accounting procedures (1) before the deduction of interest and the
amortization of principal due on the Promissory Note in the amount of $235,000,
payable to CSI Business Finance, Inc.; (2) before the deduction of Federal
Income Taxes payable by Sentry Power; and (3) before the deduction of
depreciation expense. 

5. The Holder agrees that it will not engage in any short selling of Power
Shares during the term of this Agreement.

6. Except as otherwise provided in this Agreement or any other agreements
between the parties, the Holder shall be entitled to its beneficial rights of
ownership of the Power Shares, including the right to vote the Power Shares for
any and all purposes.

7. The resale restrictions on the Power Shares set forth in this Agreement shall
be in addition to all other restrictions on transfer imposed by applicable
United States and state securities laws, rules and regulations.

8. If Power, Sentry Power, or the Holder fails to fully adhere to the terms and
conditions of this Agreement, such party shall be liable to every other party
for any damages suffered by any party by reason of any such breach of the terms
and conditions hereof. The parties agree that in the event of a breach of any of
the terms and conditions of this Agreement, that in addition to all other
remedies that may be available in law or in equity to the non-defaulting
parties, a preliminary and permanent injunction and an order of a court
requiring the defaulting party to cease and desist from violating the terms and
conditions of this Agreement and specifically requiring the party to perform its
obligations hereunder is fair and reasonable by reason of the inability of the
other parties to this Agreement to presently determine the type, extent or
amount of damages that they may suffer as a result of any breach or continuation
thereof. In the event of default hereunder, the non-defaulting parties shall be
entitled to recover reasonable attorney's fees incurred in the enforcement of
this Agreement.
 

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9. This Agreement sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof, and may not be amended except by a written
instrument executed by the parties hereto.

10. This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas; and all of the parties hereto agree that any action
based upon this Agreement may be brought in the federal or state courts located
in Harris County, Texas only, and each submits itself to the jurisdiction of
such courts for all purposes hereunder.

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as of the day and year first above written.
 
 

       
SENTRY POWER TECHNOLOGY, INC.
 
   
   
  Date: May 16, 2006 By:   /s/ Bernard J. Walter  

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Bernard J. Walter, President          

                   
POWER TECHNOLOGY, INC.
 
   
   
    By:   /s/ Bernard J. Walter  

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Bernard J. Walter, President  

                    SENTRY POWER SYSTEMS, LLC  
   
   
    By:   /s/ Michael Julian  

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Michael Julian, Manager

           
   
   
   
Number of Power Shares Subject to this Agreement:
1,582,279