Document:

FIRST AMENDMENT TO ASSET PURCHASE
AGREEMENT

 

Reference is made to
that certain Asset Purchase Agreement (the “Agreement”) dated as of November 23, 2011 by and among COLORADO
GRANDE ENTERPRISES, INC., a Colorado corporation (“Seller”) and G INVESTMENTS, LLC, a Colorado limited liability
company (“Purchaser”).

 

WHEREAS, the parties
desire to amend the Agreement as set forth in this First Amendment to Asset Purchase Agreement (this “First Amendment”)
dated as of April 11, 2012.

 

NOW, THEREFORE, in
consideration of the premises and upon the terms and subject to the conditions set forth herein, the parties hereby agree to amend
the Agreement as follows:

 

1.          Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

 

2.          Seller
and Purchaser agree that the assets set forth on Schedule I attached hereto and made a part hereof (the “Defective
Slot Machines”) shall be excluded from all of the representations and warranties of Seller set forth in Article IV of
the Agreement. In furtherance of the foregoing, Seller (i) makes no representations or warranties to Purchaser with respect to
the Defective Slot Machines including, without limitation, the representations and warranties of Seller set forth in Sections 4.1.4
and 4.1.8 of the Agreement and (ii) shall not indemnify and hold harmless a Purchaser Indemnified Person under Section 7.2 of the
Agreement for any Losses, directly or indirectly, which relate to the Defective Slot Machines.

 

3.          Section
2.1 (Purchase Price and Payment) of the Agreement is hereby amended by reducing the Purchase Price amount from “$3,200,000”
to “$3,125,000”.

 

4.          The
first sentence of Section 2.1.2 of the Agreement is hereby deleted in its entirety and replaced with the following sentence:

 

“$2,325,000 to be evidenced
by and paid in accordance with a promissory note issued by Purchaser in favor of Seller bearing simple interest at 6.0% per annum
(the “Promissory Note”), in the form annexed hereto as Exhibit A, which principal amount, plus accrued
interest, shall be payable in monthly installments amortized in accordance with the Promissory Note, with each installment payment
following the Closing payable in immediately available funds by wire transfer to an account designated in writing by Seller.”

 

5.          Exhibit
A (Promissory Note) of the Agreement is hereby deleted in its entirety and replaced with the new Exhibit A attached
hereto and made a part hereof.

 

6.          Section
10.6 (Notices) of the Agreement is hereby amended by changing the address for sending a copy of all notices to Purchaser
as follows:

 

    	 

    	 

    

 

“with
a copy to:          Jonathan H. Steeler, Esq.

Ryley
Carlock & Applewhite

1700 Lincoln Street,
Suite 3500

Denver, Colorado
80203

Facsimile No.:
303-595-3159

Email: jsteeler@rcalaw.com”

 

7.          Except
as amended hereby, the Agreement remains unmodified and in full force and effect, and the same is hereby ratified and reaffirmed
in its entirety.

 

8.          This
First Amendment may be executed in one or more counterparts.

 

IN WITNESS WHEREOF,
the undersigned have executed and delivered or caused to be executed and delivered by its duly authorized officers this First Amendment
as of the date set forth above.

 

	WITNESSED:	 	SELLER:
	 	 	 	 
	 	 	COLORADO GRANDE ENTERPRISES, INC.
	 	 	 	 
	/s/ LaTonia Johnson	 	By: 	/s/ Robert B. Sturges
	 	 	Name:   Robert B. Sturges
	 	 	Title:     Chief Executive Officer
	 	 	 	 
	 	 	PURCHASER:
	 	 	 	 
	 	 	G INVESTMENTS, LLC
	 	 	 	 
	/s/ Arlene Minter	 	By:	/s/ David J. Minter
	 	 	Name:   David J. Minter
	 	 	Title:     Manager

 

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EXHIBIT A

 

Promissory Note

 

[see attached]

 

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[EXHIBIT A]

 

PROMISSORY NOTE

 

 

	$2,325,000.00	Cripple Creek, Colorado

 

[            ]
__, 2012

 

FOR VALUE RECEIVED,
the undersigned, G INVESTMENTS, LLC, a Colorado limited liability company having an address at 3030 Orion Drive, Colorado Springs,
Colorado 80906 (“Borrower”) hereinafter promises to pay to the order of COLORADO GRANDE ENTERPRISES, INC., a
Colorado corporation having an address at c/o Nevada Gold & Casinos, Inc., 50 Briar Hollow Lane, Suite 500W, Houston, Texas
77027 (hereinafter, with any subsequent holder, “Lender”) on or before [_________] 1, 2017 as provided herein
(the “Maturity Date”), the principal amount of the purchase financing loan made by Lender to Borrower equal
to TWO MILLION THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($2,325,000.00) (the “Principal Amount”), with interest
thereon, in lawful money of the United States of America in immediately available funds, at the rate of six percent (6%) per annum
for the period commencing on the date hereof through and including the Maturity Date.

 

This Note is being
issued by Borrower to Lender in partial consideration for the sale and purchase of assets of Lender by Borrower pursuant to that
certain Asset Purchase Agreement (the “Purchase Agreement”), dated as of November 23, 2011, as amended by the
First Amendment dated as of April [__], 2012, by and between Borrower and Lender.

 

INTEREST

 

Interest, which shall
be calculated on a per annum basis for the periods and at the rate set forth above, shall accrue from and including the date hereof
through and including the Maturity Date and shall be due and payable monthly on the 1st day of each month with each
installment of principal in accordance with the Loan Amortization Schedule (the “Loan Amortization Schedule”)
set forth on Schedule I attached hereto and made a part hereof. Interest shall be computed on the basis of a three hundred
sixty-five (365) day year and the actual days elapsed.

 

PRINCIPAL AMOUNT

 

Borrower shall pay
the Principal Amount, together with accrued interest thereon, as follows:

 

(i)          no
monthly installments of Principal Amount and accrued interest shall be due and payable for the first three (3) months following
the date hereof, in accordance with the Loan Amortization Schedule.

 

(ii)         one
(1) monthly installment of Principal Amount and accrued interest in the aggregate amount of FIVE THOUSAND DOLLARS AND 00/100 CENTS
($5,000.00), which shall be due and payable on the 1st day of the fourth (4th) month following the date hereof,
in accordance with the Loan Amortization Schedule.

 

    	 

    	 

    

 

(i)          eight
(8) equal monthly installments of Principal Amount and accrued interest in the aggregate amount of TWENTY THOUSAND DOLLARS AND
00/100 CENTS ($20,000.00), which shall be due and payable on the 1st day of each month, in accordance with the Loan
Amortization Schedule.

 

(ii)         twelve
(12) equal monthly installments of Principal Amount and accrued interest in the aggregate amount of THIRTY THOUSAND DOLLARS AND
00/100 CENTS ($30,000.00), which shall be due and payable on the 1st day of each month, in accordance with the Loan
Amortization Schedule.

 

(iii)        thirty-six
(36) equal monthly installments of Principal Amount and accrued interest in the aggregate amount of FORTY THOUSAND DOLLARS AND
00/100 CENTS ($40,000.00), which shall be due and payable on the 1st day of each month, in accordance with the Loan
Amortization Schedule.

 

(iv)        a
final installment of NINE HUNDRED AND SIX THOUSAND, TWO HUNDRED NINETY-EIGHT DOLLARS AND 12/100 CENTS ($906,298.12) which shall
be due and payable on the Maturity Date.

 

On the Maturity Date, any monthly installment
amount not yet paid by Borrower to Lender shall be paid in full by Borrower to Lender, and Borrower shall have no further obligations
with respect to the Note whatsoever. Any payments of Principal Amount or interest shall be made by wire transfer of immediately
available funds directly to the bank account of Lender designated by Lender in writing to Borrower.

 

LATE FEE; DEFAULT INTEREST

 

If either (a) any accrued
interest amount is not paid in full when due or (b) any principal installment amount is not paid in full on or before the due date
provided herein, then, in either event (i) Borrower shall pay to Lender a late charge equal to three percent (3%) of the required
payment, with a minimum late charge of $250.00, and (ii) the amount past due shall, until paid, accrue interest at a default rate
equal to the lesser of (A) eighteen percent (18%) per annum, or (B) the maximum rate permitted by law (the “Default Rate”).
Upon an Event of Default (as defined herein), the outstanding Principal Amount of this Note shall accrue interest at the Default
Rate.

 

SECURITY

 

As collateral security
for the payment of any and all amounts due and payable under this Note (the "Obligations") and to induce Lender
to agree to make the purchase financing loan evidenced by this Note, (i) David J. Minter, Arlene Minter and Minter Holdings LLC,
as members of Borrower, shall enter into a pledge agreement (the “Pledge Agreement”) pursuant to which such
member of Borrower shall pledge all of his, her or its membership interest in Borrower to Lender, (ii) Borrower shall execute and
deliver to Lender a security agreement (the “Security Agreement”) pursuant to which Borrower shall grant a security
interest on all of its assets to secure the Obligations hereunder in favor of Lender, and (iii) David J. Minter, individually,
shall execute and deliver to Lender a guarantee (the “Guarantee”) pursuant to which he shall personally guarantee
the Obligations hereunder in favor of Lender.

 

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PREPAYMENT

 

Borrower shall have
the right to prepay all (but not less than all) of the outstanding Principal Amount, together with any and all interest accrued
on the outstanding Principal Amount prepaid through and including the date of such prepayment, at any time without premium or penalty.

 

Any payments received
by Lender on account of this Note prior to the Maturity Date shall be applied first, to any costs, expenses, or charges then owed
Lender by Borrower, if any, second, to accrued and unpaid interest, and third, to the unpaid principal balance hereof. Any payments
so received after acceleration shall be applied in such manner as Lender may reasonably determine.

 

EVENTS OF DEFAULT

 

Lender, at its option,
may declare the entire unpaid Principal Amount of this Note and unpaid interest thereon to be immediately due and payable without
demand, notice or protest (which are hereby waived) upon the occurrence of any one or more of the following events (each, an “Event
of Default”):

 

(a)          The
failure by Borrower to pay any amount due pursuant to this Note within five (5) business days following written notice from Lender
of Borrower’s failure to make such payment when due; provided, however, that Borrower shall be in default in
the event Borrower fails to pay any amounts due under this Note on the date when due (and shall not be entitled to such five (5)
business day notice and cure period) on more than two (2) occasions;

 

(b)          any
act by, or against, Borrower, or its property or assets, which act constitutes the application for, consent to, or sufferance of
the appointment of a receiver, trustee, or other person, pursuant to court action or otherwise, over all, or any substantial part
of Borrower’s property; the granting of any trust mortgage or execution of an assignment for the benefit of the creditors
of Borrower, or the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for Borrower; adjudication
of Bankruptcy or insolvency relative to Borrower; the entry of an order for relief or similar order with respect to Borrower in
any proceeding pursuant to Title 11 of the United States Code (commonly referred to as the Bankruptcy Code) or any other federal
Bankruptcy law; the filing of any complaint, application, or petition by or against Borrower initiating any matter in which Borrower
is or may be granted any relief from the debts of Borrower pursuant to the Bankruptcy Code or any other insolvency statute or procedure;
the calling of a meeting of creditors of Borrower; the meeting by Borrower with a formal court approved creditors’ committee;
the offering by or entering into by Borrower of any composition, extension or any other arrangement seeking relief or extension
for the debts of Borrower, or the initiation of any other judicial or non-judicial proceeding or agreement by or against Borrower
which seeks or intends to accomplish a reorganization or arrangement with creditors; which, if any of the foregoing events is not
initiated by Borrower, such event is not discharged or satisfied by Borrower within ninety (90) days of its occurrence;

 

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(c)          except
for any Permitted Liens (as defined in the Purchase Agreement) or other liens on equipment acquired by Purchaser under the Purchase
Agreement, the imposition of any lien upon any assets of Borrower or the entry of any judgment against Borrower in excess of $25,000,
which lien is not bonded or discharged or judgment is not satisfied or appealed from (with execution or similar process stayed)
within thirty (30) days of its imposition or entry;

 

(d)          the
occurrence of a breach by Borrower of any of its obligations under the Purchase Agreement, which breach Borrower fails to cure
within five (5) business days of Borrower’s receipt of written notice of such breach from Lender;

 

(e)          the
occurrence of an Event of Default (after any applicable notice and cure period) under the Pledge Agreement or the Security Agreement;

 

(f)          the
occurrence of an Event of Default (after any applicable notice and cure period) under the Guarantee; or

 

(g)          the
occurrence of a default or an event of default (after any applicable notice and cure period) under any instrument, agreement, contract,
indenture or other document governing any indebtedness of Borrower to a third party.

 

RIGHT OF SETOFF

 

LENDER AND BORROWER
ACKNOWLEDGE AND AGREE THAT BORROWER HAS A RIGHT OF SETOFF AGAINST THE PAYMENT OF AMOUNTS OUTSTANDING ON THIS NOTE AS SET FORTH
IN SECTION 7.6 OF THE PURCHASE AGREEMENT. SUBJECT TO THE TERMS, CONDITIONS AND PROVISIONS OF SECTION 7.6 OF THE PURCHASE AGREEMENT,
BORROWER MAY WITHHOLD OR REDUCE THE PAYMENT OF AMOUNTS OUTSTANDING ON THIS NOTE BY ANY AMOUNTS DUE FROM LENDER TO BORROWER THEREUNDER.

 

NO WAIVER BY LENDER; ELECTION OF REMEDIES

 

No delay or omission
by Lender in exercising or enforcing any of Lender’s powers, rights, privileges, remedies, or discretions hereunder shall
operate as a waiver thereof on that occasion nor on any other occasion. No waiver of any default hereunder shall operate as a waiver
of any other default hereunder, nor as a continuing waiver. Lender, in its sole discretion, may proceed to exercise or enforce
any right, power, privilege, remedy or interest that Lender may have under this Note or applicable law whether at law, in equity,
in rem or in any other forum available under applicable law without pursuing, exhausting or otherwise exercising or enforcing any
other right, power, privilege, remedy or interest that Lender may have against Borrower or any other person. Lender may institute
one or more proceedings (which may be separate proceedings) with respect to this Note in such order and at such times as Lender
may elect in its sole discretion.

 

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COSTS OF COLLECTION

 

Borrower will pay on
demand all attorneys’ reasonable fees and out-of-pocket expenses incurred by Lender in the enforcement of the Note and Obligations
of Borrower to Lender.

 

SUCCESSORS AND ASSIGNS

 

This Note shall not
be assignable by Borrower without the prior written consent of Lender. This Note shall be binding upon Borrower and each endorser
and guarantor hereof and upon their respective heirs, successors, permitted assigns, and representatives, and shall inure to the
benefit of Lender and its successors, endorsees, and assigns.

 

JOINT AND SEVERAL

 

The liabilities of
Borrower and any guarantor of this Note are joint and several; provided, however, the release by Lender of Borrower
or any one or more guarantor shall not release any other person obligated on account of this Note. No person obligated on account
of this Note may seek contribution from any other person also obligated unless and until all liabilities, obligations and indebtedness
to Lender of the person from whom contribution is sought have been satisfied in full.

 

GOVERNING LAW; CONSENT TO JURISDICTION

 

This Note is delivered
to Lender in the State of Colorado, shall be governed by and construed in accordance with the laws of the State of Colorado, but
without giving effect to any Colorado choice of law provisions that might otherwise make the laws of a different jurisdiction govern
or apply. IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS NOTE, LENDER AND BORROWER EACH IRREVOCABLY CONSENT TO THE JURISDICTION
OF THE FEDERAL AND STATE COURTS OF TELLER COUNTY OF THE STATE OF COLORADO AND WAIVE ALL DEFENSES TO THE JURISDICTION OF EITHER
OF THE FOREGOING COURTS INCLUDING, WITHOUT LIMITATION, FORUM NON-CONVENIENS. LENDER AND BORROWER EACH ACKNOWLEDGE THAT IT HAS BEEN
INFORMED THAT THE PROVISIONS HEREOF CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED AND ARE RELYING.
LENDER AND BORROWER EACH MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF SUCH OTHER PARTY TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF TELLER COUNTY OF THE STATE OF COLORADO.

 

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WAIVERS

 

LENDER AND BORROWER
EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, ANY DOCUMENT, INSTRUMENT OR AGREEMENT EVIDENCING, GOVERNING OR SECURING THIS NOTE,
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY. THIS WAIVER CONSTITUTES
A MATERIAL INDUCEMENT FOR THE LENDER TO ACCEPT THIS NOTE AND ENTER INTO THE LOAN EVIDENCED BY THIS NOTE.

 

Borrower
waives diligence, demand, presentment for payment, notice of nonpayment (EXCEPT AS PROVIDED HEREIN), protest and notice of protest,
and Borrower further consents to the release of all or any part of the security for the payment hereof at the discretion of Lender,
or the release of any party liable for this obligation without affecting the liability of the other parties hereto. Any delay on
the part of Lender in exercising any right hereunder shall not operate as a waiver of any such right, and any waiver granted for
one occasion shall not operate as a waiver in any other event.

 

MAXIMUM INTEREST RATE

 

All agreements between
Borrower and Lender are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Lender for the use
or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible under applicable law in effect as of the
date hereof.

 

NOTICES

 

All notices, requests,
demands, claims or other communications required or permitted to be delivered, given or otherwise provided hereunder must be in
writing and must be delivered personally, delivered by a nationally recognized overnight courier service, sent by certified or
registered mail, postage prepaid or (if a facsimile number is provided below) sent by facsimile (subject to electronic confirmation
of good facsimile transmission) addressed to the party as specified below:

 

	If to Borrower:	David J. Minter
	 	3030 Orion Drive
	 	Colorado Springs, Colorado 80906
	 	Facsimile No.: (719) 473-5259

 

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	With a copy to:	Jonathan H. Steeler, Esq.
	 	Ryley Carlock & Applewhite
	 	1999 Broadway Suite 1800
	 	Denver, Colorado 80202-3025
	 	Facsimile No.: (303) 595-3159
	 	 
	 	 
	If to Lender:	Nevada Gold & Casinos, Inc.
	 	50 Briar Hollow Lane, Suite 500W
	 	Houston, Texas 77027
	 	Attention: Robert B. Sturges, Chief Executive Officer
	 	Facsimile No.: (713) 621-6919
	 	 
	With a copy to:	Wolff & Samson PC
	 	One Boland Drive
	 	West Orange, New Jersey 07052
	 	Attention: David M. Hyman, Esq.
	 	Facsimile No.: (973) 530-2209

 

Any such notice, request, demand, claim
or other communication shall be deemed to have been delivered and given (a) on the date of delivery if delivered personally, (b)
the first business day after it is deposited with such nationally recognized overnight courier service, (c) the day of sending
if sent by facsimile prior to 4:00 p.m. (Eastern time) on any business day or the next succeeding business day if sent by facsimile
after 4:00 p.m. (Eastern time) on any business day or on any day other than a business day, or (d) five (5) business days after
the date of mailing, if mailed by certified or registered mail, postage prepaid, in each case, to the above address, or, if applicable,
facsimile number, or to such other address or addresses or facsimile number or numbers as such party may subsequently designate
to the other parties by written notice given hereunder.

 

	 	BORROWER:
	 	 	 
	 	G INVESTMENTS, LLC
	 	 	 
	 	By:	 
	 	 	David J. Minter, Manager

 

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SCHEDULE I

 

Loan Amortization Schedule

 

    	8Exhibit 4.1 

 

 

 

 

 

 

 

SOLITRON DEVICES, INC.

 

AND

 

CONTINENTAL STOCK TRANSFER & TRUST
COMPANY

 

Rights Agreement

 

Dated as of May 29, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	 

    	 

    
 

 

 

TABLE OF CONTENTS

 

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

 

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

 

 

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RIGHTS AGREEMENT

 

RIGHTS AGREEMENT, dated as of May 29, 2012
(the "Agreement"), between Solitron Devices, Inc., a Delaware corporation (the "Company"), and Continental
Stock Transfer & Trust Company, a New York corporation (the "Rights Agent").

 

W I T N E S S E T H:

 

WHEREAS, the Board of Directors of the Company
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 May 29, 2012 (the "Rights Dividend Declaration Date" and the "Record Date"),
and has authorized the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock
of the Company that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration
Date (each as hereinafter defined), each Right initially representing the right to purchase one one-hundredth of a share of Series
A Junior Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the Certificate of
Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, a copy of which is attached hereto as Exhibit
A, upon the terms and subject to the conditions hereinafter set forth (the "Rights"); provided, however, that Rights
may be issued with respect to shares of Common Stock that shall become outstanding after the Distribution Date and prior to the
Expiration Date in accordance with Section 22.

 

NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1.               
Certain Definitions. For purposes of this 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 20% or more of the shares of Common Stock then outstanding, but shall not include the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan; provided, however, that

 

(i)           
if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an Acquiring Person
became the Beneficial Owner of a number of shares of Common Stock such that the Person would otherwise qualify as an Acquiring
Person inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned that number
of shares of Common Stock that would otherwise cause such Person to be an "Acquiring Person" or (B) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of changing or influencing control of the Company, then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement unless and until
such Person shall have failed to divest itself, as soon as practicable (as determined, in good faith, by the Board of Directors
of the Company), of Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer
otherwise qualify as an "Acquiring Person";

 

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(ii)           
if, as of the date hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or
becomes the Beneficial Owner of 20% or more of the shares of Common Stock outstanding, such Person shall not be deemed to be or
to become an Acquiring Person unless and until such time as such Person shall, after the first public announcement of the adoption
of this Agreement, become the Beneficial Owner of one additional share of Common Stock (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock),
unless, upon becoming the Beneficial Owner of such additional share of Common Stock, such Person is not then the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding;

  

(iii)           
no Person shall become an Acquiring Person solely as a result of any unilateral grant of any security by the Company or
through the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by the Company
to its directors, officers and employees;

 

(iv)           
no Person shall become an Acquiring Person as the result of an acquisition of shares of Common Stock by the Company which,
by reducing the number of shares outstanding, increases the proportion of the shares of Common Stock beneficially owned by such
Person to 20% or more of the Common Stock then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding by reason of such share acquisitions by the Company
and shall thereafter become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional
shares of Common Stock such Person does not beneficially own 20% or more of the shares of Common Stock then outstanding; and

  

(v)           
 no Person shall become an Acquiring Person as a result of the acquisition of Beneficial Ownership of shares of Common
Stock from an individual who, on the later of the date hereof or the first public announcement of this Agreement, is the Beneficial
Owner of 20% or more of the Common Stock then outstanding if such shares of Common Stock are received by such Person upon such
individual's death pursuant to such individual's will or pursuant to a charitable trust created by such individual for estate
planning purposes.

 

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 the 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)(1)(i) of the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof.

   

(b)              
"Act" shall mean the Securities Act of 1933, as amended.

 

(c)               
"Adverse Person" shall mean any Person declared to be an Adverse Person by the Board of Directors upon determination
that the criteria set forth in Section 11(a)(ii)(B) apply to such Person.

 

(d)              
"Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement
(the "Exchange Act").

 

(e)               
A Person shall be deemed the "Beneficial Owner" of, shall be deemed to have "Beneficial Ownership" of,
and shall be deemed to "beneficially own" any securities:

  

    	2

    	 

    
 

 

(i)           
which such Person or any of such Person's Affiliates or Associates, directly or indirectly, 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
(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, (B) securities which such Person
has a right to acquire upon exercise of Rights at any time prior to the occurrence of a Triggering Event, (C) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by 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(a) hereof in connection with an adjustment made with respect to any Original Rights, or (D) securities
acquired by a Person in business as an underwriter in connection with such Person's participation in good faith of a firm commitment
of underwriting to the Company;

 

(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), including pursuant to any agreement, arrangement or understanding, 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 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 also 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 (whether
or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso
to subparagraph (ii) of this paragraph (e)) or disposing of any voting securities of the Company; provided, however,
that nothing in this paragraph (e) shall cause a person engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such person's participation in good faith
in a firm commitment underwriting until the expiration of 25 days after the date of such acquisition.

 

(f)               
"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.

 

(g)              
"Close of Business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 P.M. New York City time, on the next succeeding Business
Day.

 

(h)              
"Common Stock" when used with reference to the Company shall mean the common stock, presently $.01 par value per
share, of the Company. "Common Stock" when used with reference to any Person other than the Company shall mean the capital
stock (or, in the case of an entity other than a corporation, the equivalent equity interest) of such Person with the greatest
voting power or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person.

 

 

    	3

    	 

    

 

(i)                
"Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(j)                
"Current Market Price" shall have the meaning set forth in Section 11(d) hereof.

 

(k)              
 "Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(l)                
"Distribution Date' shall have the meaning set for in Section 3(a) hereof.

 

(m)            
  "Exchange Act" shall have the meaning set forth in Section 1(d) hereof.

 

(n)              
 "Expiration Date" shall have the meaning set forth in Section 7(a) hereof.

 

(o)              
"Final Expiration Date" shall mean the Close of Business on May 29, 2022.

 

(p)              
 "Person" shall mean any individual, firm, corporation, limited liability company, trust, partnership or other
entity and shall include any successor in interest (by merger or otherwise) to any Person.

 

(q)              
"Preferred Stock" shall mean shares of Series A Junior Participating Preferred Stock, presently $.01 par value
per share, of the Company 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, presently $.01 par value, of the
Company designated for such purpose containing terms substantially similar to the terms of the Series A Junior Participating Preferred
Stock.

 

(r)                
"Principal Party" shall have the meaning set forth in Section 13(b) hereof.

 

(s)               
"Purchase Price" shall have the meaning set forth in Section 4(a) hereof

 

(t)                
"Record Date" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement.

 

(u)              
"Redemption Price" shall have the meaning set forth in Section 23(a) hereof.

 

(v)              
"Rights" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement.

 

(w)            
 "Rights Certificates" shall have the meaning set forth in Section 3(a) hereof.

 

(x)              
"Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii) (A) or (B) hereof.

 

(y)              
"Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(z)               
"Section 13 Event" shall mean any event described in clause (x), (y) or (z) of Section 13(a) hereof.

 

(aa)           
"Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.

 

    	4

    	 

    
 

 

(bb)          
"Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring
Person that a stockholder has become an Acquiring Person, or such earlier date as a majority of the Board of Directors of the Company
shall become aware of the existence of an Acquiring Person.

 

(cc)           
"Subsidiary" shall mean, with reference to any Person, any corporation or other entity of which securities or
other ownership interests having ordinary voting power sufficient to elect at least a majority of the directors (or persons performing
similar functions) are beneficially owned, directly or indirectly, by such Person, and any corporation or other entity that is
otherwise controlled by such Person.

 

(dd)         
"Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof.

 

 

(ee)           
"Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof.

 

(ff)            
"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 be the holders of 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.

 

Section 3.               
Issue of Rights Certificates.

 

(a)               
Until the earliest of (i) the Close of Business on the tenth Business Day after the Stock Acquisition Date, (ii) the Close
of Business on the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Company
prior to such time as any Person becomes an Acquiring Person) after the date of commencement 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, any Person or entity
organized, appointed or established by the Company for or pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of such Person (other than such excluded Persons) to commence, a tender or exchange offer, the consummation of
which would result in any Person (other than such excluded Persons) having Beneficial Ownership of or becoming the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding or (iii) the Close of Business on the tenth Business Day after the
Board of Directors of the Company determines, pursuant to the criteria set forth in Section 11(a)(ii)(B) hereof, that a Person
is an Adverse Person (the earliest of (i), (ii) and (iii) being herein referred to as the "Distribution Date"; provided,
however, that if any of such dates occur after the date of this Agreement and on or prior to the Record Date, then the Distribution
Date shall be the Record Date), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for the Common Stock registered in the names of 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 Company will prepare and execute, and the Rights Agent will countersign and the Company
will send or cause to be sent 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 (other than any Acquiring Person, Adverse Person or Affiliate or Associate thereof),
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. In the event that an adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 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 11(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional Rights (all in accordance with Section 14 (a) hereof).
As of and after the Distribution Date, the Rights will be evidenced solely by such Rights certificates.

 

    	5

    	 

    
 

 

(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.
With respect to certificates for the Common Stock outstanding as of 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. Until the earlier of the Distribution Date or 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
associates with such shares of Common Stock.

 

(c)               
Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or disposed
from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date. Rights
shall also be issued to the extent provided in Section 22 in respect of all shares of Common Stock which are issued (whether originally
issued or disposed from the Company's treasury) after the Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock in respect of which Rights are issued pursuant to the first sentence of this Section 3(c) 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 Solitron Devices,
Inc. (the "Company") and Continental Stock Transfer & Trust Company (the "Rights Agent") dated as of May
29, 2012 and as may be amended and/or restated from time to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal executive offices of 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 owned by or transferred to, any Person who is, was or becomes an Acquiring Person, an
Adverse Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), and certain transferees
thereof will become null and void and will no longer be transferable.

 

With
respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such certificates alone and registered holders of Common Stock
shall also be registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such certificates. Notwithstanding this paragraph (c), the
omission of such legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.

  

Section 4.               
Form of Rights Certificates.

 

(a)               
The Rights Certificates (and the forms of election to purchase and of 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 interdealer quotation system on which the Rights may from time to time
be listed or quoted, or to conform to usage. Subject to the provisions of this Agreement, the Rights Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein at the Purchase Price (as defined below), 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.

 

    	6

    	 

    

(b)              
Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by
any Person known to be: (i) an Acquiring Person, an Adverse Person or any Associate or Affiliate of an Acquiring Person or an Adverse
Person, (ii) a transferee of an Acquiring Person or an Adverse Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person or Adverse Person becomes such, or (iii) a transferee of an Acquiring Person or an Adverse Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person or Adverse Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person or Adverse Person to holders of equity interests in such Acquiring Person or Adverse Person or to any Person with whom such
Acquiring Person or Adverse Person has any continuing agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which
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, modified as applicable to apply to such Person:

 

The Rights represented by this
Rights Certificate are or were beneficially owned by a Person who was or became an [Acquiring] [Adverse] Person or an Affiliate
or Associate of an [Acquiring] [Adverse] Person (as such terms are defined in this 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.

 

Notwithstanding anything to
the contrary in this paragraph (b), neither the omission of, nor any defect in, such legend shall affect the enforceability of
any part of this Agreement or result in the validation or exercisability of any Rights that shall have become null and void in
accordance with this Agreement.

 

Section 5.               
Countersignature and Registration.

 

(a)               
The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its 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 shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The
Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, 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 will keep or cause to be kept, at its principal office or offices designated
as the appropriate place for surrender of the 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 and the certificate number and the
date of each of the Rights Certificates.

    	7

    	 

    
 

 

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), Section 14 and Section 24 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
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-hundredths 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 at the principal office or
offices 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 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), Section 14 and Section 24 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or Rights 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)              
Subject to the other provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date,
upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, 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), Section 23 (a) and Section 24 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 principal office or offices 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-hundredths of a share of Preferred Stock (or other 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 are redeemed as provided in Section 23 hereof, (iii) the time
at which the Rights are exchanged as provided for in Section 24 hereof, or (iv) the time at which the Rights expire pursuant to
Section 13(e) 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-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially
be $15, and shall be subject to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.

 

    	8

    	 

    
 

 

(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-hundredth of
a share of Preferred Stock (or other shares, securities or other assets, as the case may be) to be purchased as set forth herein
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-hundredths of a share of Preferred Stock to be purchased and
the company hereby irrevocably authorizes its transfer agent to comply with all 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 depositary receipts representing such number of one one-hundredths 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 will direct the depositary agent to comply with such
request, (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) shall be made (x) by certified
bank check or money order payable to the order of the Company, (y) by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of shares of Common Stock equal to the then Purchase Price
divided by the closing price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Trading Date immediately
preceding the date of such exercise or (z) a combination thereof. 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
will 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, an Adverse Person or an Associate or Affiliate of an Acquiring Person
or an Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or Adverse Person becomes such, or (iii) a transferee of an Acquiring Person or
an Adverse Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person or Adverse Person to holders of equity interests in such Acquiring Person or Adverse Person or to any
Person with whom the Acquiring Person or Adverse Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect the 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. 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 Adverse Person or any of their respective
Affiliates, Associates or transferees hereunder.

 

    	9

    	 

    
 

 

(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 exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) 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.

 

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 canceled form, or, if surrendered to the Rights Agent, shall be canceled 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 canceled Rights
Certificates to the Company, or shall, at the written request of the Company, destroy such canceled 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 of Preferred Stock (and, following the occurrence of
a Triggering Event, out of its authorized and issued shares of Common Stock and/or other securities) 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 Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be listed or admitted to trading on any national securities
exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable (but only
to the extent that it is reasonably likely that the Rights will be exercised), all shares reserved for such issuance to be listed
or admitted to trading on such exchange 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
pursuant to this Agreement (including 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 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, and (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 date of the expiration 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. 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 if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or any required registration statement has not been declared effective.

 

    	10

    	 

    
 

 

(d)              
The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-hundredths
of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered
upon the 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 which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for
a number of one one-hundredths 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 to pay any transfer tax which 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-hundredths
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 Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates
for a number of one one-hundredths 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-hundredths 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
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 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 shares 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 (or other capital stock, as the case
may be) transfer books of the Company were open, such Person would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which 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:

 

    	11

    	 

    
 

 

(A)            
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 or entity organized, appointed or established by the Company for or pursuant to the terms of any
such plan), alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreement, become an
Acquiring Person, unless the event causing such Person to become an Acquiring Person is a transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares
of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors, after receiving
advice from one or more investment banking firms, to be (a) at a price which 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, or

 

(B)             
the Board of Directors of the Company shall declare any Person to be an Adverse Person, upon a determination that such Person,
alone or together with its Affiliates and Associates, has, at any time after the date of this Agreement, become the Beneficial
Owner of an amount of Common Stock which the Board of Directors determines to be substantial (which amount shall in no event be
less than 15% of the shares of Common Stock then outstanding) and a determination by at least a majority of the Board of Directors,
after reasonable inquiry and investigation, including consultation with such Persons as such directors shall deem appropriate,
that (a) such Beneficial Ownership by such Person is intended to cause the Company to repurchase the Common Stock beneficially
owned by such Person or to cause pressure on the Company to take action or enter into a transaction or series of transactions intended
to provide such Person with short-term financial gain under circumstances where the Board of Directors determines that the best
long-term interests of the Company and its stockholders would not be served by taking such action or entering into such transactions
or series of transactions at that time or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain
its competitive position) on the business or prospects of the Company then, promptly 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"), 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,
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-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number of one one-hundredths 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"); provided,
however, that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement
to reflect any events occurring after the date of the first occurrence.

 

    	12

    	 

    
 

 

(iii)           
In the event that the number of shares of Common Stock which 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 is 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 being referred to as the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon exercise of the Rights, (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 of Directors of the Company has deemed to have the same value as shares of Common Stock (such
shares of preferred stock being referred to as "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 of Directors of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate
provision to substitute value pursuant to clause (B) above within thirty (30) days following 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 of Directors of the Company 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 stockholder approval for the authorization of such additional shares
(such period, as it may be extended, 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 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 public announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of Common Stock shall be Current Market Price per share and the value of any Common Stock
Equivalent shall be deemed to have the same value of any 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 share 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 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 of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
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
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.

 

    	13

    	 

    
 

 

(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 numerator
of which shall be the Current Market Price per share of Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights
Agent and shall be 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 per share of Preferred Stock. 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,
then, and in each such case, the "Current Market Price" shall be properly adjusted to take into account ex-dividend
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 New York Stock Exchange or The NASDAQ Stock Market
("NASDAQ") or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange or
NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed 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 low asked prices in the over-the-counter market, as reported by any 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 of Directors of the Company.
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 as determined
in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which
the principal national 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 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 of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

 

    	14

    	 

    
 

 

(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 100 (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 of Directors of
the Company, whose 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-hundredth of a share of Preferred
Stock shall be equal to the "Current Market Price" of one share of Preferred Stock divided by 100.

 

(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-thousandths
of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, 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 (3) 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 shares of capital stock other than Preferred Stock, thereafter the number of such
other shares 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) hereof, 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 shares.

 

(g)              
All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths 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-hundredths
of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
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.

 

    	15

    	 

    
 

 

(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-hundredths 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-hundredths
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 ten-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.

 

(j)                
Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths 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-hundredth of a share and the number of one one-hundredths 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-hundredths 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
fully paid and nonassessable such number of one one-hundredths of a share of 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 the 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-hundredths 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-hundredths 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.

 

    	16

    	 

    
 

 

(m)            
Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the
Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any (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 or 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 which 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, sale or transfer there are any
rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation,
merger, sale or transfer, the shareholders 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 and Associates.

 

(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 date
of this Agreement and prior to the Distribution Date (i) declare a 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 in 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 total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event.

 

 

    	17

    	 

    

 

(q)              
The failure by the Board of Directors to declare a Person to be an Adverse Person following such Person becoming (alone
or together with its Affiliates and Associates) after the date of this Agreement the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock shall not imply that such Person is not an Adverse Person or limit the Board of Directors' right or ability
at any time to declare such Person to be an Adverse Person.

 

Section 12.           
Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section
11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly 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 such 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, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with,
or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o)
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 which 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, 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 tradable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one one-hundredths of a share of Preferred Stock for which a Right
is exercisable immediately or 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-hundredths 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 by the Purchase Price
in effect immediately prior to such first occurrence), and 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 (2)
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 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.

 

    	18

    	 

    
 

 

(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; and (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.

  

(c)               
The Company shall not consummate any Section 13 Event 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 such Section 13 Event, 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; and

 

(ii)           
deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under the Exchange Act.

 

(d)              
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 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).

 

(e)               
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 who acquired shares
of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock which complies with the
provisions of Section 11(a)(ii)(A) hereof (or a wholly owned subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered 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 tender offer or exchange offer, and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration
paid pursuant to such tender offer or exchange offer. Upon consummation of any such transaction contemplated by this Section 13(e),
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(p) hereof, or to distribute Rights Certificates which 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 New York Stock Exchange or NASDAQ or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as reported by any 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 of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.

 

    	19

    	 

    
 

 

(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-hundredths of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a
share of Preferred Stock, the Company may 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-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of one one-hundredth of a share of Preferred Stock
shall be one one-hundredth 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 may 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 share of Common Stock. For purposes
of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one 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 the Rights 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, other than rights of action vested in the Rights
Agent pursuant to 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.

 

    	20

    	 

    
 

 

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 principal office or offices 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 fully completed and executed; and

 

(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 last sentence of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary.

 

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-hundredths 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.

 

Section 18.           
Concerning the Right 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.

 

    	21

    	 

    
 

 

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 or stock transfer 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.

  

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 or Adverse 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 or Section 13 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 actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of 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.

 

 

    	22

    	 

    

 

(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.

 

(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 Right 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 either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.

 

Section 21.           
Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this 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 the State of New York (or of any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of New York), in good standing, and having a principal office in the State
of New York, which is authorized under such laws to exercise corporate trust 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 $100,000,000 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 herein, 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.

 

    	23

    	 

    
 

 

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
its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. 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 (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement, or upon the exercise conversion or exchange of securities hereinafter
issued by the Company, or pursuant to a contractual obligation, in each case existing prior to the Distribution Date and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors of the company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) 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 (ii) 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.

 

Section 23.           
Redemption and Termination.

 

(a)               
The Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the Close of Business
on the tenth Business Day 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), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption price of $.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"). Notwithstanding the foregoing, the Board of
Directors of the Company may not redeem any Rights following its declaration that any Person is an Adverse Person. 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. The Company may, at is 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 deemed appropriate by the Board of Directors.

 

(b)              
Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23 (or at such later time as the Board of Directors of the Company may establish for the effectiveness of such
redemption) and without any further action and without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. The Company shall promptly
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. Notwithstanding anything to the contrary set forth herein, the failure to give,
or any defect in, any notice required by this Section 23(b) shall not affect the validity of any redemption pursuant to this Section
23.

 

Section 24.           
Exchange.

 

(a)               
The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person or Adverse
Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of Common Stock at an exchange ratio 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
of Directors 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 Subsidiary of the Company, any Person or entity organized, appointed
or established by the Company 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. From and after the occurrence
of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant to this Section 24(a)
shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a). The
exchange of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company in its sole discretion may establish. Prior to effecting an exchange pursuant
to this Section 24, the Board of Directors may direct the Company to enter into a Trust Agreement in such form and with such terms
as the Board of Directors shall then approve (the "Trust Agreement"). If the Board of Directors so directs, the Company
shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the "Trust") all of the
shares of Common Stock issuable pursuant to the exchange, and all Persons entitled to receive shares pursuant to the exchange shall
be entitled to receive such shares (and any dividends or distributions made thereon after the date on which such shares are deposited
in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement.

 

    	24

    	 

    
 

 

(b)              
Immediately upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights
pursuant to this Section 24(a) 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. Promptly after the effectiveness of the action of the
Board of Directors ordering an exchange of the Rights, the Company shall give public notice of any such exchange provided, however,
that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly
mail a notice of any such exchange to all such holders at each holder's last address a it appears upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section
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 shares of Preferred Stock (or equivalent
preferred stock, as such term is defined in Section 11(b) hereof) for shares of Common Stock exchangeable for the Rights, at the
initial rate of one one-hundredth of a share of Preferred Stock (or equivalent preferred stock) for each share of Common Stock,
as appropriately adjusted to reflect adjustments on the dividend rights of the Preferred Stock pursuant to the terms thereof.

 

(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 Common Stock or Preferred Stock for issuance upon exchange of
the Rights.

 

(e)               
The Company shall not be required to issue fractional shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders
of 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 Section
24(e), the current market value of a whole share of Common Stock shall be the closing price of a 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 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 the participation therein by the holders of the shares of Preferred Stock, whichever shall be the earlier.

 

    	25

    	 

    
 

 

(b)              
In case any 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 to Common Stock and/or,
if appropriate, other securities.

 

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:

 

Solitron Devices, Inc.

3301 Electronics Way

West Palm Beach, Florida 33407

Attention: Chief Executive Officer and Corporate
Secretary

 

Subject to the provisions of section 21
hereof, 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:

 

Continental Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, New York 10004

Attention: Compliance Department

 

Notices o 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, and
the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights,
provided that no such supplement or amendment may (i) adversely affect the interests of the holders of Rights as such (other than
an Acquiring Person, an Adverse Person or an Affiliate or Associate of an Acquiring Person or an Adverse Person), (ii) cause this
Agreement again to become amendable other than in accordance with this sentence or (iii) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the
Redemption Price. Upon the delivery of a certificate from an appropriate officer of the Company which states that the supplement
or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment, provided
that any supplement or amendment that does not amend Sections 18, 19, 20 or 21 hereof or this Section 27 in a manner adverse to
the Rights Agent shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent.

 

    	26

    	 

    
 

 

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.           
Determinations and Actions by the Board of Directors, etc. 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)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company
(or, as set forth herein, certain specified members thereof) shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, (ii) make all determinations deemed necessary or advisable for the administration of this Agreement
(including, but not limited to, a determination to redeem or not redeem the Rights, to declare that a Person is an Adverse Person
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 of Directors of the Company in good
faith, shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties.

 

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 of Directors of the Company determines in
its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close
of business on the tenth day following the date of such determination by the Board of Directors of the Company.

 

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 such State applicable to contracts made and to be performed entirely within such State.

 

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.

 

[SIGNATURES ON FOLLOWING PAGE]

 

    	27

    	 

    
 

 

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

 

	 	SOLITRON DEVICES, INC.:
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Shevach Saraf
	 	Name:	Shevach Saraf
	 	Title:	Chairman, Chief Executive
	 		Officer, President and Treasurer 
	 	 	 
	 	CONTINENTAL STOCK TRANSFER &
	 	TRUST COMPANY:
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ John W. Comer, Jr.
	 	Name:	John W. Comer, Jr.
	 	Title:	Vice President
	 	 	 

 

    	28

    	 

    
  

EXHIBIT A

 

FORM OF CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF SOLITRON DEVICES, INC.

 

Pursuant to Section 151 of the General
Corporation Law of the State of Delaware

 

I, Shevach Saraf, Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer and Treasurer of Solitron Devices, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:

 

That pursuant to the authority conferred
upon the Board of Directors by the Certificate of Incorporation of the said Corporation, the said Board of Directors adopted the
following resolution confirming the previously created series of 500,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:

 

RESOLVED, that pursuant to the authority
vested in the Board of Directors of the Corporation by the Certificate of Incorporation, the Board of Directors has previously
created a series of Junior Preferred Stock, $.01 par value, of the Corporation, to be designated "Series A Junior Participating
Preferred Stock" (hereinafter referred to as the "Series A Junior Participating Preferred Stock"), initially consisting
of 500,000 shares, and to the extent that the designations, powers, preferences and relative and other special rights and the qualifications,
limitations and restrictions of the Series A Junior Participating Preferred Stock are not stated and expressed in the Certificate
of Incorporation, does hereby fix and herein state and express such designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions thereof, as follows (all terms used herein which are defined in the
Certificate of Incorporation shall be deemed to have the meanings provided therein):

 

Section
1.                    
Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such series shall be 500,000.

 

Section
2.                    
Dividends and Distributions.

 

(a)                
Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior
and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the 15th day of March, June, September and
December 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 Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to (subject to the provision for adjustment hereinafter
set forth) 100 times the aggregate per share amount of all cash dividends, and 100 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, par value $.01 per
share, of the Corporation (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
Junior Participating Preferred Stock. In the event the Corporation shall at any time after May 29, 2012 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders
of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

 

    	 

    	 

    
 

 

(b)                
The Corporation shall declare a dividend or distribution on-the Series A Junior Participating Preferred Stock as
provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).

 

(c)                
Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating
Preferred Stock, 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
Junior Participating 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 Junior Participating 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 of Directors may fix a record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

 

Section
3.                    
Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following
voting rights:

 

(a)                
Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to such event.

 

(b)                
Except as otherwise provided herein, in the Certificate of Incorporation, in any other certificate of designation
creating a series of preferred stock or any similar stock, or by law, the holders of shares of Series A Junior Participating 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.

 

(c)                
Except as set forth herein, holders of Series A Junior Participating 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-2

    	 

    
 

 

Section
4.                    
Certain Restrictions.

 

(a)                
Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating 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 Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:

 

(i)                  
declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;

 

(ii)                
declare or pay dividends on 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 Junior Participating Preferred Stock, except dividends
paid ratably on the Series A Junior Participating 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 on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation
may at any time redeem purchase or otherwise acquire shares of any such parity 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 Junior Participating
Preferred Stock;

 

(iv)              
purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective
series or classes.

 

(b)                
The 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 Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and canceled 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 to be created by resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.

 

Section
6.                    
Liquidation, Dissolution or Winding Up.

 

(a)                
Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall
be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional distribution shall be made to the holders of shares of the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits,
stock dividends and capitalization with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number")
following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.

 

    	A-3

    	 

    
 

 

(b)                
In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series
A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available
to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common
Stock.

 

(c)                
In the event the Corporation shall at any time after the Rights Declaration Date (i) declare or pay any dividend
on Common Stock payable in shares of Common Stock, or (ii) subdivide the outstanding shares of Common Stock into a lesser number
of shares of Common Stock, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted
by multiplying such Adjustment 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.

 

Section
7.                    
Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, division,
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 the shares of Series A Junior Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 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
after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, 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 Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.

 

Section
8.                    
No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.

 

Section
9.                    
Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.

 

Section
10.                 
Amendment. The Certificate of Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Junior Participating Preferred Stock, voting separately as a class.

 

Section
11.                 
Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred
Stock.

 

 

    	A-4

    	 

    

 

IN WITNESS WHEREOF, I have executed and
subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 29th day of May
2012.

 

	 	 	 
	 	 	 
	 	By:	 
	 	Name:	Shevach Saraf
	 	Title:	Chairman of the Board of Directors, Chief Executive Officer, President, Chief Financial Officer and Treasurer

 

 

 

 

    	A-5

    	 

    
 

EXHIBIT B

 

[FORM OF RIGHTS CERTIFICATE]

 

Certificate No. R- __________ Rights

 

NOT EXERCISABLE AFTER MAY 29, 2022 OR EARLIER
IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE
PERSON OR AN AFFILIATE OR ASSOCIATE OF EITHER (AS SUCH TERMS ARE 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 (ADVERSE] PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING [ADVERSE] 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

 

Rights Certificate

 

SOLITRON DEVICES, INC.

 

This certifies that __________________________,
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entities the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated as of May 29, 2012 (the "Rights Agreement"),
between Solitron Devices, Inc., a Delaware corporation (the "Company"), and Continental Stock Transfer & Trust Company,
a New York corporation (the "Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M. (New York City
time) on May 29, 2022 at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent,
one one-hundredth of a fully paid, non-assessable share of Series A Junior Participating Preferred Stock (the "Preferred Stock")
of the Company, at a purchase price of $15.00 per one one-hundredth 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 Purchase
Price may be paid in cash or by certified bank check or money order payable to the order of the Company. The number of Rights evidenced
by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of _____________, 2012, based on the Preferred Stock as constituted
at such date.

 

Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned
by (i) an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Adverse Person, Associate or Affiliate, 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, an Adverse Person or an Affiliate or Associate of any such 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.

 

______________

1 The portion of the legend
in brackets shall be inserted only if applicable, shall be modified to apply to an Acquiring Person or an Adverse Person, as applicable,
and shall replace the preceding sentence.

 

    	 

    	 

    

 

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 Triggering Events (as such term is defined in the Rights Agreement).

 

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 above-mentioned
office of the Rights Agent and are also available upon written request to the Rights Agent.

 

This Rights Certificate, with or without
other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, 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-hundredths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder of 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 (1) (unless the Board of Directors shall have made a determination that
a Person is an Adverse Person) redeemed by the Company at its option at a redemption price of $.001 per Right at any time prior
to the earlier of the close of business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), and (ii) the Final Expiration Date or (2) exchanged, in whole or in-part, for shares of the
Company's Common Stock or 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-hundredth 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.

 

    	B-2

    	 

    
 

 

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

 

	Dated as of ________________ 

	SOLITRON DEVICES, INC.: 

	 	 	 
	 	 	 
	 	
        

        Attest:
	
        

        By:
	
        

        Title:

	Secretary

 

Countersigned:

 

CONTINENTAL STOCK TRANSFER &

TRUST COMPANY:

 

 

	 	 
	 	 	 	 
	By:	Authorized Officer	 	 

 

    	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 herein, 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:

 

 

 

    	B-4

    	 

    
 

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1) this Rights Certificate [ ] is [ ] is
not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person (as such terms are defined pursuant to the Rights Agreement);

 

(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such Person.

 

 

	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-5

    	 

    

 

FORM OF ELECTION TO PURCHASE

 

(To
be executed if holder desires to exercise Rights represented by the Rights Certificate)

 

TO:SOLITRON
DEVICES, INC.:

 

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 print name and address of transferee)

 

Please
insert social security or other identifying number: _____________________

 

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 print name and address of transferee)

 

Please
insert social security or other identifying number:______________________

 

 

	Dated: __________________	 	 
	 	 	Signature

Signature
Guaranteed:

 

 

    	B-6

    	 

    

 

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1) this Rights evidenced by this Rights
Certificates [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person, an Adverse Person
or an Affiliate or Associate of any such Person (as such terms are defined pursuant to the Rights Agreement);

 

(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was
or became an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such Person.

 

 

	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-7

    	 

    

  

EXHIBIT C

 

SUMMARY OF RIGHTS TO PURCHASE PREFERRED
STOCK

 

The Board of Directors of Solitron Devices,
Inc. (the "Company") has declared a dividend distribution of one Right for each outstanding share of Common Stock of
the Company to stockholders of record at the close of business on May 29, 2012. Each Right entitles the registered holder to purchase
from the Company a unit consisting of one one-hundredth of a share (a "Unit") of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Stock"), at a Purchase Price of $15.00 per Unit, subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement, dated as of May 29, 2012 (the "Rights Agreement"),
between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").

 

The Company's 2001 Rights Agreement, and
the rights issued thereunder, expired at the close of business on June 20, 2011.

 

Initially, the Rights will be attached to
all Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. The
Rights will not be exercisable, and will not be transferable apart from the Common Stock, until the earliest of (i) 10 days following
the date (the "Stock Acquisition Date") of a public announcement that a person or group of affiliated or associated persons
(other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company, any person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such plan or any person who beneficially owned or was
known to be the beneficial owner as of the date of the Rights Agreement of 20% or more of the Common Stock outstanding as of the
date of the Rights Agreement) has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding
shares of Common Stock (such person or group is referred to as an "Acquiring Person"), (ii) 10 business days following
the commencement of a tender offer or exchange offer that would result in a person or group (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company, any person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan or any person who beneficially owned or was known to be the beneficial owner as of
the date of the Rights Agreement of 20% or more of the Common Stock outstanding as of the date of the Rights Agreement) beneficially
owning 20% or more of such outstanding shares of Common Stock or (iii) 10 business days after the Board of Directors of the Company
shall declare any person or entity to be an Adverse Person, upon a determination that such person or entity, alone or together
with its affiliates and associates, has become the beneficial owner of an amount of Common Stock which the Board of Directors determines
to be substantial (which amount shall in no event be less than 15% of the shares of Common Stock then outstanding) and a determination
by at least a majority of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall deem appropriate, that (a) such beneficial ownership by such person
or entity is intended to cause the Company to repurchase the Common Stock beneficially owned by such person or entity or to cause
pressure on the Company to take action or enter into a transaction or series of transactions intended to provide such person or
entity with short-term financial gain under circumstances where the Board of Directors determines that the best long-term interests
of the Company and its stockholders would not be served by taking such action or entering into such transactions or series of transactions
at that time or (b) such beneficial ownership is causing or reasonably likely to cause a material adverse impact (including, but
not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position)
on the business or prospects of the Company. The earliest of (1), (2) or (3) is referred to as the "Distribution Date."

 

Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after May 29, 2012 will contain a notation incorporating the Rights Agreement by reference
and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.

 

    	 

    	 

    
 

 

The Rights are not exercisable until the
Distribution Date and will expire at the close of business on May 29, 2022, unless earlier redeemed by the Company as described
below.

 

As soon as practicable after the Distribution
Date, 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, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.

 

In the event that the Board of Directors
determines that a person or entity is an Adverse Person or a person or entity becomes the beneficial owner of more than 20% of
the then outstanding shares of Common Stock (except pursuant to an offer for all outstanding shares of Common Stock which the independent
directors determine to be fair to and otherwise in the best interests of the Company and its shareholders), each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following
the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or Adverse Person will be null and void. However, Rights
are not exercisable following the occurrence of either of the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.

 

For example, at an exercise price of $15.00
per Right, each Right not owned by an Acquiring Person or an Adverse Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase $30.00 worth of Common Stock (or other consideration,
as noted above) for $15.00.

 

In the event that, at any time following
the Stock Acquisition Date, (i) the company is acquired in a merger or other business combination transaction in which the Company
is not the surviving corporation (other than a merger described in the second preceding paragraph or a merger which follows an
offer described in the second preceding paragraph), or (ii) 50% or more 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, common stock of the acquiring company having a value equal to two times the exercise price of the Right.
The events set forth in this paragraph and in the second preceding paragraph are referred to as the "Triggering Events."

 

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 current market price of the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).

 

With certain exceptions, no adjustment to
the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional Units
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.

 

In general, the Company may redeem the Rights
in whole, but not in part, at a price of $.001 per Right, at any time until ten days following the Stock Acquisition Date. The
Company may not redeem the Rights if the Board of Directors has previously declared a person or entity to be an Adverse Person.
Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.001 redemption price.

 

    	C-2

    	 

    
 

 

In addition, at any time after a person
acquires 20% of the outstanding shares of Common Stock and prior to the acquisition by such person of 50% or more of the outstanding
shares of Common Stock, the Company may exchange the Rights (other than the Rights which have become null and void), in whole or
in part, at an exchange ratio of one share of Common Stock, or equivalent share of Preferred Stock, per Right.

 

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.
While the distribution of the Rights will 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.

 

Other than those provisions relating to
the principal economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors
of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, defect or inconsistency, to make changes which do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person, any Adverse Person or any affiliate of any such person or
entity), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment
to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable.

 

A copy of the Rights Agreement has been
filed with the Securities and Exchange Commission as an Exhibit to the Company's Annual Report on Form 10-K dated May 29, 2012.
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-3

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