Document:

tomz_ex41

 

 

Exhibit 4.1

 

 

THIS
WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS
WARRANT AND THE WARRANT SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION THEREFROM
UNDER THE ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

THIS
WARRANT MAY NOT, IN ANY EVENT, BE TRANSFERRED TO ANY PERSON OR
ENTITY THAT IS NOT AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501, PROMULGATED UNDER THE ACT.

 

	
  
No. [●]

	
  
[●] Warrants

 

Void after 5:00 p.m., New York time on [●],
20[●]

 

COMMON STOCK

PURCHASE WARRANT

 

OF

 

TOMI ENVIRONMENTAL SOLUTIONS, INC.

 

 

1. This warrant
certificate (“Warrant Certificate”) certifies that, for
value received, [●] (the
“Warrant Holder”) is the owner of the number of common
stock purchase warrants (“Warrants”) specified above,
each of which entitles the holder thereof to purchase, in the
amounts and at such times set forth in this Warrant Certificate,
one fully paid and non-assessable share of common stock, par value
$0.01 per share (“Common Stock”), of TOMI Environmental
Solutions, Inc., a Florida corporation (the “Company”),
at a purchase price of $[●] per share
(“Exercise Price”).

 

2. WARRANT; EXERCISE
PRICE.

 

2.1 Each
Warrant shall entitle the Warrant Holder the right to purchase one
share of Common Stock of the Company (individually, a
“Warrant Share” severally, the “Warrant
Shares”).

 

2.2 The Exercise Price
and number of Warrant Shares evidenced by this Warrant Certificate
are subject to adjustment as provided in Section 9.

 

 

1

 

 

 

3. EXERCISE OF WARRANT; EXPIRATION
DATES.

 

3.1   
      The Warrants shall be exercisable, solely
to the extent vested, prior to or in connection with the expiration
of this Warrant on the Expiration Dates pursuant to
Section 3.6. The Warrant Holder’s right to exercise the
Warrants is subject to the following vesting provisions:
(i) [●] of the Warrants shall be vested and exercisable
upon issuance of this Warrant Certificate; (ii) [●] of
the Warrants shall vest and become exercisable on [●]; and
(iii) [●] of the Warrants shall vest and become
exercisable on [●]. 

 

3.2           The
purchase rights represented by this Warrant Certificate may be
exercised at the election of the Warrant Holder, in whole or in
part, by: (i) the tender to the Company at its principal
office (or such other office or agency as the Company may
designate) of a notice of exercise in the form attached hereto as
Exhibit A (the
“Notice of Exercise”), duly completed and executed by
or on behalf of the Warrant Holder, together with the surrender of
this Warrant Certificate; and (ii) the payment to the Company
of an amount equal to the product of (x) the then applicable
Exercise Price, multiplied
by (y) the number of Warrant Shares being purchased upon
such exercise, by wire transfer of immediately available funds to
an account designated by the Company, or by delivery to the Company
of a certified or cashier’s check payable to the order of the
Company.

 

3.3           In
lieu of exercising the purchase rights represented by this Warrant
Certificate pursuant to Section 3.2, if the fair market value
of one Warrant Share is greater than the applicable Exercise Price
on the date of calculation as set forth below, then the Warrant
Holder may elect to receive a number of Warrant Shares equal to the
value of the Warrants being exercised by the tender to the Company
at its principal office (or such other office or agency as the
Company may designate) of a Notice of Exercise reflecting such
election, duly completed and executed by or on behalf of the
Warrant Holder, together with the surrender of this Warrant
Certificate, whereupon the Company shall issue to the Warrant
Holder that number of Warrant Shares calculated as
follows:

 

	

X

	

=

	

Y (A
– B)

	

A

 

where:

 

	

X

	

=

	

The
number of Warrant Shares to be issued to the Warrant Holder
pursuant to this Section 3.3.

 

	

Y

	

=

	

The
number of Warrant Shares that would be issuable upon the Warrants
being exercised by the Warrant Holder if such exercise were by
means of a cash exercise pursuant to Section 3.2 instead of a net
issue exercise pursuant to this Section 3.3.

 

	

A

	

=

	

The
fair market value of one Warrant Share as of the date of such
calculation, determined in accordance with the provisions of this
Section 3.3.

 

	

B

	

=

	

The
applicable Exercise Price on the date of such
calculation.

 

 

 

 

2

 

 

For
purposes of the calculations contemplated by this Section 3.3, the
fair market value of one Warrant Share shall be determined by the
Board of Directors of the Company (the “Board of
Directors”), acting in good faith; provided, however, that:

 

(i) if the Common Stock
is listed on a national securities exchange at the time of such
exercise, the fair market value per Warrant Share shall be deemed
to be equal to the arithmetic average of the closing prices of the
Common Stock on such national securities exchange for the five (5)
consecutive trading days ending on the date immediately preceding
the date on which the Notice of Exercise and this Warrant
Certificate are delivered to the Company in connection with the
exercise of the purchase rights represented by this Warrant
Certificate pursuant to this Section 3.3; and

 

(ii) if
the Common Stock is actively traded on an over-the-counter market
at the time of such exercise, the fair market value per Warrant
Share shall be deemed to be equal to the arithmetic average of the
closing bid prices of the Common Stock quoted on such
over-the-counter market for the five (5) consecutive trading days
ending on the date immediately preceding the date on which the
Notice of Exercise and this Warrant Certificate are delivered to
the Company in connection with the exercise of the purchase rights
represented by this Warrant Certificate pursuant to this
Section 3.3.

 

3.4           Any
exercise of this Warrant Certificate shall be deemed to have been
effected immediately prior to the close of business on the date on
which the Notice of Exercise and this Warrant Certificate are
delivered to the Company in connection with the exercise hereof
pursuant to Section 3.2 or Section 3.3, and the person
entitled to receive the Warrant Shares issuable upon such exercise
shall be treated for all purposes as the holder of record of such
Warrant Shares as of the close of business on such
date.

 

3.5           Within
three (3) business days after the exercise of the purchase right
represented by this Warrant Certificate, the Company at its expense
will use its best efforts to cause to be issued in the name of, and
delivered to, the Warrant Holder, or, subject to the terms and
conditions hereof, to such other individual or entity as the
Warrant Holder (upon payment by such Warrant Holder of any
applicable transfer taxes) may direct:

 

(i) a certificate or
certificates for the number of full Warrant Shares to which such
Warrant Holder shall be entitled upon such exercise plus, in lieu
of any fractional share to which such Warrant Holder would
otherwise be entitled, cash in an amount determined pursuant to
Section 10 hereof; and

 

(ii) in
case such exercise is in part only, a new Warrant Certificate
(dated the date hereof) of like tenor, reflecting the number of
Warrants stated on the face of this Warrant Certificate, minus the
sum of (x) number of Warrants exercised by the Warrant Holder
pursuant to Section 3.2 or Section 3.3, as applicable, plus
(y) the number of Warrants cancelled in consideration of the
exercise of such Warrants, if such exercise was effected pursuant
to Section 3.3.

 

3.6           The
term “Expiration Dates” shall mean the earlier of:
(i) 5:00 p.m., New York time on [●], 20[●], or if
such dates shall in the State of New York be a holiday or a day on
which banks are authorized to close, then 5:00 p.m., New York time
the next day which in the State of New York is not a holiday or a
day on which banks are authorized to close; or
(ii) immediately prior to the effectiveness of any merger,
consolidation, or sale of substantially all the assets of the
Company deemed to be a liquidation, dissolution or winding up of
the Company pursuant to the Company’s articles of
incorporation, as in effect from time to time. The Warrant Holder
shall have the right to exercise the purchase rights represented by
this Warrant Certificate commencing at such time through the
Expiration Dates into the kind and amount of shares of stock and
other securities and property (including cash) receivable by a
holder of the number of shares of Common Stock into which this
Warrant might have been exercisable immediately prior
thereto.

 

 

 

3

 

 

 

4. REGISTRATION AND TRANSFER ON COMPANY
BOOKS.

 

4.1 The Company shall
maintain books for the registration and transfer of Warrant
Certificates.

 

4.2 Prior
to due presentment for registration of transfer of this Warrant
Certificate, the Company may deem and treat the registered holder
as the absolute owner thereof.

 

4.3 The
Company shall register upon its books any transfer of a Warrant
Certificate upon surrender of same to the Company accompanied (if
so required by the Company) by a written instrument of transfer
duly executed by the registered holder or by a duly authorized
attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferees and the
surrendered Warrant Certificate shall be canceled by the Company. A
Warrant Certificate may also be exchanged, at the option of the
holder, for new Warrant Certificates representing in the aggregate
the number of Warrants evidenced by the Warrant Certificate
surrendered.

 

5. RESERVATION
OF SHARES. The Company covenants that it will at all times
reserve and keep available out of its authorized Common Stock,
solely for the purpose of issue upon exercise of the Warrants, such
number of Warrant Shares as shall be issuable upon the exercise of
all outstanding Warrants. The Company covenants that all Warrant
Shares issuable upon exercise of the Warrants shall be duly and
validly issued and fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof, and
that upon issuance such shares shall be listed on each national
securities exchange, if any, on which the other shares of
outstanding Common Stock of the Company are then
listed.

 

6. EXCHANGE,
TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF WARRANT
CERTIFICATE. This Warrant
Certificate is exchangeable, without expense, at the option of the
Warrant Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for
other warrants of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Subject to the terms of this
Section 6, upon surrender of this Warrant Certificate to the
Company at its principal office or at the office of its transfer
agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant
Certificate in the name of the assignee named in such instrument of
assignment and this Warrant Certificate shall be promptly canceled.
This Warrant may be divided or combined with other warrants which
carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent,
if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by
the Warrant Holder hereof. The term “Warrant
Certificate” as used herein includes any Warrant Certificates
into which this Warrant Certificate may be divided or exchanged.
Upon receipt by the Company of reasonable evidence of the ownership
of and the loss, theft, destruction or mutilation of this Warrant
Certificate and, in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Company, or, in the case
of mutilation, upon surrender and cancellation of the mutilated
Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate of like tenor and date
representing an equal number of Warrants.

 

 

 

4

 

 

 

7. TERMINATION
OF EMPLOYMENT. If employment is terminated, the terms of any
then outstanding warrant held by the holder shall extend for a
period ending on the earlier of the date on which such warrant
would otherwise expire or three months after such termination of
employment and the warrant shall be exercisable to the extent it
was exercisable as of the date of termination of
employment.

 

8. LIMITATION
ON SALES. Each holder of this
Warrant acknowledges that this Warrant and the Warrant Shares have
not been registered under the Securities Act, as of the date of
issuance hereof and agrees not to sell, pledge, distribute, offer
for sale, transfer or otherwise dispose of this Warrant, or any
Warrant Shares issued upon its exercise, in the absence of (i) an
effective registration statement under the Securities Act as to
this Warrant or such Warrant Shares, as the case may be, under any
applicable Blue Sky or state securities law then in effect or (ii)
an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. In addition, this
Warrant only may be transferred to a transferee who certifies in
writing to the Warrant Holder and to the Company that such
transferee is an “accredited investor” within the
meaning of Rule 501(a) promulgated by the Securities and Exchange
Commission (“Commission”) under the Securities
Act.

 

The
Company shall be under no obligation to issue the shares covered by
such exercise unless and until the Warrant Holder shall have
executed an investment letter in form and substance satisfactory to
the Company, including a warranty at the time of such exercise that
it is then an “accredited investor” within the meaning
of Rule 501(c) promulgated by the Commission under the Securities
Act, is acquiring such shares for its own account, and will not
transfer the Warrant Shares unless pursuant to an effective and
current registration statement under the Securities Act or an
exemption from the registration requirements of the Securities Act
and any other applicable restrictions, in which event the Warrant
Holder shall be bound by the provisions of a legend or legends to
such effect that shall be endorsed upon the certificate(s)
representing the Warrant Shares issued pursuant to such exercise.
In such event, the Warrant Shares issued upon exercise hereof shall
be imprinted with a legend in substantially the following
form:

 

“This
security has been acquired for investment and has not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws. This security may not be sold,
pledged or otherwise transferred in the absence of such
registration or pursuant to an exemption therefrom under said Act
and such laws, supported by an opinion of counsel, reasonably
satisfactory to the Company and its counsel, that such registration
is not required.”

 

 

 

5

 

 

 

9. ADJUSTMENT
OF PURCHASE PRICE AND NUMBER OF SHARES DELIVERABLE. The
Exercise Price and the number of Warrant Shares purchasable
pursuant to each Warrant shall be subject to adjustment from time
to time as hereinafter set forth in this Section 9:

 

(a) In
case, prior to the expiration of this Warrant Certificate by
exercise or by its terms, the Company shall issue any shares of its
Common Stock as a stock dividend or subdivide the number of
outstanding shares of its Common Stock into a greater number of
shares, then in either of such cases, the then applicable Exercise
Price per Warrant Share purchasable pursuant to this Warrant
Certificate in effect at the time of such action shall be
proportionately reduced and the number of Warrant Shares at that
time purchasable pursuant to this Warrant Certificate shall be
proportionately increased; and conversely, in the event the Company
shall reduce the number of outstanding shares of Common Stock by
combining such shares into a smaller number of shares, then, in
such case, the then applicable Exercise Price per Warrant Share
purchasable pursuant to this Warrant Certificate in effect at the
time of such action shall be proportionately increased and the
number of Warrant Shares at that time purchasable pursuant to this
Warrant Certificate shall be proportionately decreased. If the
Company shall, at any time during the life of this Warrant
Certificate, declare a dividend payable in cash on its Common Stock
and shall at substantially the same time offer to its stockholders
a right to purchase new Common Stock from the proceeds of such
dividend or for an amount substantially equal to the dividend, all
Common Stock so issued shall, for the purpose of this Warrant
Certificate, be deemed to have been issued as a stock dividend. Any
dividend paid or distributed upon the Common Stock in stock of any
other class of securities convertible into shares of Common Stock
shall be treated as a dividend paid in Common Stock to the extent
that shares of Common Stock are issuable upon conversion
thereof.

 

(b) In
case, prior to the expiration of this Warrant Certificate by
exercise or by its terms, the Company shall be recapitalized by
reclassifying its outstanding Common Stock, (other than a change in
par value to no par value), or the corporation or a successor
corporation shall consolidate or merge with or convey all or
substantially all of its or of any successor corporation’s
property and assets to any other corporation or corporations (any
such other corporations being included within the meaning of the
term “successor corporation” hereinbefore used in the
event of any consolidation or merger of any such other corporation
with, or the sale of all or substantially all of the property of
any such other corporation to, another corporation or
corporations), then, as a condition of such recapitalization,
consolidation, merger or conveyance, lawful and adequate provision
shall be made whereby the holder of this Warrant Certificate shall
thereafter have the right to purchase, upon the basis and on the
terms and conditions specified in this Warrant Certificate, in lieu
of the Warrant Shares theretofore purchasable upon the exercise of
this Warrant Certificate, such shares of stock, securities or
assets as may be issued or payable with respect to, or in exchange
for the number of Warrant Shares theretofore purchasable upon the
exercise of this Warrant Certificate, had such recapitalization,
consolidation, merger, or conveyance not taken place; and in any
such event, the rights of the Warrant Holder to any adjustment in
the number of Warrant Shares purchasable upon the exercise of this
Warrant Certificate, as hereinbefore provided, shall continue and
be preserved in respect of any stock which the Warrant Holder
becomes entitled to purchase.

 

 

 

6

 

 

(c) In
case the Company at any time while this Warrant Certificate shall
remain unexpired and unexercised shall sell all or substantially
all of its property or dissolve, liquidate, or wind up its affairs,
lawful provision shall be made as part of the terms of any such
sale, dissolution, liquidation or winding up, so that the holder of
this Warrant Certificate may thereafter receive upon exercise
hereof in lieu of each Warrant Share that it would have been
entitled to receive, the same kind and amount of any securities or
assets as may be issuable, distributable or payable upon any such
sale, dissolution, liquidation or winding up with respect to each
share of Common Stock of the Company, provided, however, that in
any case of any such sale or of dissolution, liquidation or winding
up, the right to exercise this Warrant Certificate shall terminate
on a date fixed by the Company; such date so fixed to be not
earlier than 5:00 p.m., New York time, on the forty-fifth day next
succeeding the date on which notice of such termination of the
right to exercise this Warrant Certificate has been given by mail
to the registered holder of this Warrant Certificate at its address
as it appears on the books of the Company.

 

(d) No
adjustment in the per share Exercise Price shall be required unless
such adjustment would require an increase or decrease in the
Exercise Price by at least $0.01; provided, however, that any
adjustments that by reason of this subsection are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 9 shall
be made to the nearest cent or to the nearest 1/100th of a share,
as the case may be.

 

(e) The
Company will not, by amendment of its Restated Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed
hereunder by the Company but will at all times in good faith assist
in the carrying out of all the provisions of this Section 9 and in
the taking of all such actions as may be necessary or appropriate
in order to protect against impairment of the rights of the Warrant
Holder to adjustments in the Exercise Price.

 

(f) Upon the happening
of any event requiring an adjustment of the Exercise Price
hereunder, the Company shall give written notice thereof to the
Warrant Holder stating the adjusted Exercise Price and the adjusted
number of Warrant Shares resulting from such event and setting
forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.

 

(g) The
Company may deem and treat the registered holder of the Warrant
Certificate at any time as the absolute owner hereof for all
purposes and shall not be affected by any notice to the
contrary.

 

(h) This
Warrant Certificate shall not entitle any holder thereof to any of
the rights of stockholders, and shall not entitle any holder
thereof to any dividend declared upon the Common Stock unless the
holder shall have exercised the within Warrant Certificate and
purchased the shares of Common Stock prior to the record date fixed
by the Board of Directors for the determination of holders of
Common Stock entitled to said dividend.

 

10. FRACTIONAL
SHARES. No fractional shares shall be issued upon the
exercise fraction of a share called for upon any exercise hereof.
The Company shall pay to the Warrant Holder an amount in cash on
the basis of the “last sale price” (as defined in
Section 7) on the trading day prior to the date of
exercise.

 

 

 

7

 

 

 

11. VOLUNTARY
ADJUSTMENT BY THE COMPANY. The Company may, at its option,
at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the
Board of Directors of the Company and/or extend the date of the
expiration of the Warrants.

 

12. REGISTRATION
RIGHTS OF WARRANT HOLDER. Intentionally omitted.

 

13. RIGHTS OF THE HOLDER. The
Warrant Holder shall not, by virtue hereof, be entitled to any
rights of a stockholder in the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed
in the Warrant Certificate and are not enforceable against the
Company except to the extent set forth herein.

 

14. NOTICES OF RECORD DATE. In
case:

 

(a) the Company shall
take a record of the holders of its Common Stock (or other stock or
securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive
any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of any class or any other
securities, or to receive any other right, or

 

(b) of any capital
reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company,
or

 

(c) of the voluntary or
involuntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be
mailed to the Warrant Holder a notice specifying, as the case may
be, (i) the date on which a record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days
prior to the record date or effective date for the event specified
in such notice, provided that the failure to mail such notice shall
not affect the legality or validity of any such
action.

 

15. SUCCESSORS. The rights and
obligations of the parties to this Warrant will inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, successors, assigns, pledgees, transferees and
purchasers. Without limiting the foregoing, the registration rights
referred to in Section 12 of this Warrant shall inure to the
benefit of the Warrant Holder and all the Warrant Holder’s
successors, heirs, pledgees, assignees, transferees and purchasers
of this Warrant and the Warrant Shares.

 

 

 

8

 

 

 

16. CHANGE OR WAIVER. Any term of
this Warrant may be changed or waived only by an instrument in
writing signed by the party against whom enforcement of the change
or waiver is sought.

 

17. HEADINGS. The headings in this
Warrant are for purposes of reference only and shall not limit or
otherwise affect the meaning of any provision of this
Warrant.

 

18. GOVERNING LAW. This Warrant
shall be governed by and construed in accordance with the laws of
the State of Florida as such laws are applied to contracts made and
to be fully performed entirely within that state between residents
of that state except to the extent the laws of the State of Florida
mandatorily apply because the Company is incorporated in the State
of Florida.

 

19. JURISDICTION AND VENUE. The
Company (i) agrees that any legal suit, action or proceeding
arising out of or relating to this Warrant shall be instituted
exclusively in California Superior Court, County of Los Angeles or
in the United States District Court for the Central District of
California, (ii) waives any objection to the venue of any such
suit, action or proceeding and the right to assert that such forum
is not a convenient forum, and (iii) irrevocably consents to the
jurisdiction of the California Superior Court, County of Los
Angeles or in the United States District Court for the Central
District of California in any such suit, action or proceeding, and
the Company further agrees to accept and acknowledge service or any
and all process that may be served in any such suit, action or
proceeding in California Superior Court, County of Los Angeles or
in the United States District Court for the Central District of
California in person or by certified mail addressed as provided in
the following Section.

 

20. MAILING OF NOTICES, ETC. All
notices and other communications under this Warrant (except
payment) shall be in writing and shall be sufficiently given if
delivered to the addressees in person, by Federal Express or
similar overnight courier service, or if mailed, postage prepaid,
by certified mail, return receipt requested, as
follows:

 

 

Registered
Holder: 

To his or her last
known address as indicated on the Company’s books and
records.

 

The
Company: 

TOMI Environmental
Solutions, Inc.

9454
Wilshire Blvd., Penthouse

 

Beverly Hills,
California 90212

 

Attention: Halden
S. Shane, Chief Executive Officer  

 

or to
such other address as any of them, by notice to the others, may
designate from time to time. Notice shall be deemed given (a) when
personally delivered, (b) the scheduled delivery date if sent by
Federal Express or other overnight courier service or (c) the fifth
day after sent by certified mail.

 

 

 

9

 

 

 

Executed this [●]th day of [●], 20[●].

 

 

	

 

	

Executed this [●]th day of [●], 20[●].

	

 

	

 

	

TOMI
ENVIRONMENTAL SOLUTIONS, INC.

	

 

	

 

	

 

	

 

	

 

	

	
By:  

	
/s/ 

	

 

	

 

	

 

	
Name:
[●]

	

 

	

 

	

 

	

Title:
[●]

	

 

 

 

10

 

 

NOTICE
OF EXERCISE

To Be
Executed by the Warrant Holder

In
Order to Exercise Warrants

 

The
undersigned Warrant Holder hereby irrevocably elects to exercise
_________ Warrants represented by Warrant Certificate Number
____________, and to purchase the shares of Common Stock issuable
upon the exercise of such Warrants, and requests that certificates
for such shares of Common Stock shall be issued in the name
of

 

PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

 

	
 

 

 

 

 

 

(Please
print or type name and address)

 

and be
delivered to

 

 

 

 

 

(Please
print or type name and address)

 

and if
such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and
delivered to, the registered Warrant Holder at the address stated
below.

 

The
undersigned elects to exercise the following number of Warrants
pursuant to the terms of the Warrant Certificate:

 

The
undersigned elects to exercise the purchase rights represented by
the Warrant Certificate pursuant to:

 

□ 

the cash exercise
provisions set forth in Section 3.2 of the Warrant Certificate,
and, in accordance therewith, hereby tenders to the Company payment
to the Company of an amount equal to the product of (x) the then
applicable Exercise Price, multiplied
by (y) the number of Warrant Shares being purchased upon
such exercise in accordance with Section 3.2, together with the
surrender of the Warrant Certificate; or

 

□ 

the cashless
exercise provisions set forth in Section 3.3 of the Warrant
Certificate, and, in accordance therewith, hereby surrenders to the
Company the Warrant Certificate.

 

[Remainder
of page intentionally left blank.]

 

 

11

 

 

Dated:                                           

 (Signature of
Warrant Holder)

 

 

 

 

 (Address)

 

 

 (Taxpayer
Identification Number)

 

 

 Signature
Guaranteed

 

THE
SIGNATURE ON THE EXERCISE FORM OR THE ASSIGNMENT FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL
BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK
EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.

 

 

 

 

12

 

ASSIGNMENT
FORM

To be
executed by the Warrant Holder

In
order to Assign Warrants

 

FOR
VALUE RECEIVED,________________________________ hereby sell,
assigns and transfer unto

 

PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

 

 

	
 

 

 

 

 

 

 

 

 

 

(Please
print or type name and address)

 

 

______________________
of the Warrants represented by Warrant Number _________, and hereby
irrevocably constitutes and appoints ________________________
Attorney to transfer this Warrant on the books of the Company, with
full power of substitution in the premises.

 

 

 

Dated:______________________                                                                                                                                

 (Signature of
Registered Holder)

 

 

 (Signature
Guaranteed)

 

 

THE
SIGNATURE ON THE EXERCISE FORM OR THE ASSIGNMENT FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL
BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK
EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.

 

 

CERTIFICATION
OF STATUS OF TRANSFEREE

TO
BE EXECUTED BY THE TRANSFEREE OF THIS WARRANT

 

The
undersigned transferee hereby certifies to the registered holder of
this Warrant Certificate and to TOMI Environmental Solutions, Inc.
that the transferee is an “accredited investor” within
the meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended.

 

 

 

Dated:_____________________                                                                                                                                

 (Signature of Registered
Holder)

 

 

13Exhibit
4.1

 

PILLARSTONE
CAPITAL REIT

 

And

 

AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC,

as
Rights Agent

 

RIGHTS
AGREEMENT

 

Dated
as of December 27, 2021

 

    	 

    	 

    

 

TABLE
OF CONTENTS

 

	Section
    1.	Certain
    Definitions	 1
	Section
    2.	Appointment
    of Rights Agent	 9
	Section
    3.	Issuance
    of Rights Certificates	 9
	Section
    4.	Form
    of Rights Certificates	 12
	Section
    5.	Countersignature
    and Registration	 13
	Section
    6.	Transfer,
    Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	 13
	Section
    7.	Exercise
    of Rights; Purchase Price; Expiration Date of Rights	 14
	Section
    8.	Cancellation
    and Destruction of Rights Certificates	 16
	Section
    9.	Availability
    of Preferred Shares	 17
	Section
    10.	Preferred
    Shares Record Date	 18
	Section
    11.	Adjustment
    of Purchase Price, Number and Kind of Securities or Number of Rights	 19
	Section
    12.	Certificate
    of Adjusted Purchase Price or Number of Shares	 25
	Section
    13.	Consolidation,
    Merger or Sale or Transfer of Assets or Earning Power	 25
	Section
    14.	Fractional
    Rights and Fractional Shares	 29
	Section
    15.	Rights
    of Action	 30
	Section
    16.	Agreement
    of Rights Holders	 30
	Section
    17.	Rights
    Certificate Holder Not Deemed a Shareholder	 31
	Section
    18.	Concerning
    the Rights Agent	 31
	Section
    19.	Merger
    or Consolidation or Change of Name of Rights Agent	 32
	Section
    20.	Duties
    of Rights Agent	 32
	Section
    21.	Change
    of Rights Agent	 34
	Section
    22.	Issuance
    of New Rights Certificates	 35
	Section
    23.	Redemption	 35
	Section
    24.	Exchange	 36
	Section
    25.	Notice
    of Certain Events	 37
	Section
    26.	Notices	 38
	Section
    27.	Supplements
    and Amendments	 39
	Section
    28.	Successors	 40
	Section
    29.	Determinations
    and Actions by the Company Board	 40
	Section
    30.	Benefits
    of this Agreement	 40
	Section
    31.	Severability	 40
	Section
    32.	Governing
    Law	 40
	Section
    33.	Counterparts;
    Effectiveness	 41
	Section
    34.	Force
    Majeure	 41
	Section
    35.	Headings;
    Interpretation	 41

 

Exhibits

 

	Exhibit
    A	Form
    of Articles Supplementary
	Exhibit
    B	Form
    of Rights Certificate
	Exhibit
    C	Form
    of Summary of Rights

 

    	 

    	 

    

 

RIGHTS
AGREEMENT

 

THIS
RIGHTS AGREEMENT, dated as of December 27, 2021 (this “Agreement”), between Pillarstone Capital
REIT, a Maryland real estate investment trust (the “Company”), and American Stock Transfer & Trust Company,
LLC, as rights agent (the “Rights Agent”). All capitalized terms used in this Agreement shall have the meanings
ascribed to such terms in Section 1 hereof or as otherwise defined elsewhere in this Agreement.

 

WHEREAS,
the Board of Trustees of the Company (the “Company Board”) has (a) adopted resolutions creating a series of
preferred shares of beneficial interest designated as “Series D Preferred Shares,” (b) authorized and declared a dividend
of one preferred share purchase right (a “Right”) for each Common Share outstanding as of the Close of Business
on December 27, 2021 (the “Record Date”), and (c) authorized the issuance of one Right (as such number
may hereinafter be adjusted pursuant hereto) in respect of each Common Share that shall become outstanding between the Record Date and
the earlier of the Distribution Date and the Expiration Date; provided, however, that Rights may be issued in respect of
Common Shares that shall become outstanding after the Distribution Date but before the Expiration Date in accordance with Section
22 hereof.

 

WHEREAS,
each Right initially represents the right to purchase, upon the terms and subject to the conditions hereinafter set forth, one Unit of
a Preferred Share (subject to adjustment as provided herein) having the rights, powers and preferences set forth in the form of the Rights
Certificate attached hereto as Exhibit B.

 

NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties, intending to be legally bound,
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, together with all Affiliates and Associates of such Person, who or
which is the Beneficial Owner of 5% or more of the Common Shares then outstanding, but shall not include (i) an Exempt Person or (ii)
a Passive Institutional Investor, so long as, in the case of this clause (ii), such Person is not the Beneficial Owner of 20% or more
of the Common Shares then outstanding, but subject to the provisions in the definition of “Passive Institutional Investor”;
provided, however, that:

 

(i)
if, as of the date hereof or prior to the first public announcement of the adoption of this Agreement, a Person (other than a Person
who acquires or Beneficially Owns issued and outstanding Common Shares as a result of the exercise of Partnership Unit Redemption Rights)
is or becomes the Beneficial Owner of 5% (20% in the case of a Passive Institutional Investor) or more of the Common Shares outstanding,
then such Person shall not be deemed to be or to have 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 any additional Common Shares
(other than pursuant to a dividend or other distribution paid or made by the Company on the outstanding Common Shares or pursuant to
a split or subdivision of the outstanding Common Shares or under the circumstances described under Section 1(a)(iii) hereof),
unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 5% (20%
in the case of a Passive Institutional Investor) or more of the Common Shares then outstanding;

 

    	1

     

    

 

(ii)
if the Company Board determines that a Person who would otherwise be an “Acquiring Person” became the Beneficial Owner of
a number of Common Shares such that such Person would otherwise qualify as an “Acquiring Person” (1) inadvertently (including
because (A) such Person was unaware that it beneficially owned that number of Common Shares 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 Shares but had
no actual knowledge of the consequences of such Beneficial Ownership under this Agreement), and (2) without any intention of obtaining,
changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring Person,”
unless and until such Person shall have failed to divest itself, as soon as practicable (as determined by the Company Board), of Beneficial
Ownership of a sufficient number of Common Shares so that such Person would no longer otherwise qualify as an “Acquiring Person;”

 

(iii)
no Person shall become an “Acquiring Person” solely as a result of any unilateral grant of any security by the Company to
its trustees, officers or employees or through the exercise of any options, warrants, rights or similar interests (including restricted
shares and restricted share units) granted by the Company to its trustees, officers or employees, unless and until such Person shall
thereafter become the Beneficial Owner of any additional Common Shares (other than pursuant to a dividend or other distribution paid
or made by the Company on the outstanding Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), unless,
upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 5% (20% in the case
of a Passive Institutional Investor) or more of the Common Shares then outstanding; and

 

(iv)
no Person shall become an “Acquiring Person” solely as the result of the acquisition of Common Shares by the Company which,
by reducing the number of Common Shares outstanding, increases the proportional number of Common Shares beneficially owned by such Person;
provided, however, that if (x) a Person would become an Acquiring Person (but for the operation of this subclause (iv))
as a result of the acquisition of Common Shares by the Company and (y) after such share acquisition by the Company, such Person becomes
the Beneficial Owner of any additional Common Shares (other than pursuant to a dividend or other distribution paid or made by the Company
on the outstanding Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall be deemed
an Acquiring Person unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial
Owner of 5% (20% in the case of a Passive Institutional Investor) or more of the Common Shares then outstanding.

 

Notwithstanding
the foregoing, if a bona fide swaps dealer who would otherwise be an “Acquiring Person” has become so as a result of its
actions in the ordinary course of its business that the Company Board determines were taken without the intent or effect of evading or
assisting any other Person to evade the purposes and intent of this Agreement or otherwise seeking to control or influence the management
or policies of the Company, then, and unless and until the Company Board shall otherwise determine, such Person shall not be deemed to
be an “Acquiring Person” for any purposes of this Agreement.

 

    	2

     

    

 

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

 

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

 

(i)
which such Person or any of such Person’s Affiliates or Associates is deemed to beneficially own, directly or indirectly, within
the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act (the “Exchange Act Regulations”)
as in effect on the date hereof;

 

(ii)
which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote (whether such
right is exercisable immediately or only after the passage of time, upon the satisfaction of conditions (whether or not within the control
of such Person), upon compliance with regulatory requirements, or otherwise) 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,
to have “Beneficial Ownership” of or to “beneficially own,” any securities as a result of such agreement, arrangement
or understanding if such agreement, arrangement or understanding to vote such securities (A) arises solely from a revocable proxy or
consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions
of the Exchange Act and the Exchange Act Regulations and (B) is not reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report);

 

(iii)
which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate of such other Person) with which
such first Person (or any of such first Person’s Affiliates or Associates) has (x) any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to
a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent
as described in the proviso to subclause (ii) of this paragraph (c)) or disposing of such securities, or (y) any agreement,
arrangement or understanding (whether or not in writing) to cooperate in obtaining, changing or influencing control of the issuer of
such securities;

 

(iv)
which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right or obligation to acquire
(whether such right is exercisable, or such obligation is required to be performed, immediately or only after the passage of time, upon
the satisfaction of conditions (whether or not within the control of such Person), upon compliance with regulatory requirements, or otherwise)
pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of securities) or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially own”
(A) securities tendered pursuant to a tender or exchange offer made in accordance with the Exchange Act Regulations by 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 the right to acquire upon exercise of Rights at any time prior to the occurrence of a Triggering Event, (C) securities
that may be issued upon exercise of Rights from and after the occurrence of a Triggering Event, if such Rights were acquired by such
Person or any of such Person’s Affiliates or Associates prior to the Distribution Date (or on the Distribution Date in accordance
with Section 3(g)) or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or
pursuant to Section 11(i) hereof or Section 11(n) hereof in connection with an adjustment made with respect to any Original
Rights, or (D) securities which such Person or any of such Person’s Affiliates or Associates may acquire, does or do acquire or
may be deemed to have the right to acquire, pursuant to any merger or other acquisition agreement between the Company and such Person
(or one or more of such Person’s Affiliates or Associates) if such agreement has been approved by the Company Board prior to such
Person becoming an Acquiring Person; or

 

    	3

     

    

 

(v)
which are beneficially owned, directly or indirectly, by a Counterparty (or any such Counterparty’s Affiliates or Associates) under
any Derivatives Contract (without reduction for and otherwise without regard to any short or similar position under the same or any other
Derivatives Contract) to which such Person or any of such Person’s Affiliates or Associates is a Receiving Party; provided,
however, that the number of Common Shares that a Person is deemed to beneficially own pursuant to this subclause (v) in
connection with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives
Contract; provided further, however, that the number of securities beneficially owned by each Counterparty (including its
Affiliates and Associates) under a Derivatives Contract shall for purposes of this subclause (v) be deemed to include all securities
that are beneficially owned, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates
or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates
or Associates) is a Receiving Party, with this proviso being applied to successive Counterparties as appropriate;

 

provided
further, however, that:

 

(x)
no decision reached, or action taken, by the Company Board or any committee thereof shall cause any Person (or any Affiliate or Associate
of such Person) who is a member of the Company Board or such committee to be deemed, for the purposes of this Agreement, to be the “Beneficial
Owner” of, to have “Beneficial Ownership” of, or to “beneficially own” any securities that are beneficially
owned by any other Person (or any Affiliate or Associate of such Person) who is a member of the Company Board or any committee thereof
solely by reason of such membership on the Company Board or any committee thereof or participation in the decisions or actions thereof
on the part of either or both of such Persons,

 

(y)
no Person who is an officer, director, trustee or employee of an Exempt Person shall be deemed, solely by reason of such Person’s
status or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of, or to “beneficially
own” any securities that are beneficially owned, including in a fiduciary capacity, by an Exempt Person or by any other such officer,
director, trustee or employee of an Exempt Person, and

 

(z)
no Partnership Unit Holder shall be deemed the “Beneficial Owner” of, to have “Beneficial Ownership” of, or to
“beneficially own” any securities which may be issued to such Partnership Unit Holder in exchange for such Partnership Unit
Holder’s Partnership OP Units or Partnership Preference Units pursuant to the terms and conditions of the Operating Partnership
Agreement, unless and until such Partnership Unit Holder delivers a Notice of Redemption (as defined in the Operating Partnership Agreement)
to the Operating Partnership, at which time such Partnership Unit Holder shall be deemed the “Beneficial Owner” of, to have
“Beneficial Ownership” of, and to “beneficially own” such securities.

 

    	4

     

    

 

With
respect to any Person, for all purposes of this Agreement, any calculation of the number of Common Shares outstanding at any particular
time, including for purposes of determining the particular percentage of the outstanding Common Shares of which such Person is the Beneficial
Owner, shall (x) include the number of Common Shares not outstanding at the time of such calculation that such Person is otherwise deemed
to beneficially own for purposes of this Agreement, but the number of Common Shares not outstanding that such Person is otherwise deemed
to beneficially own for purposes of this Agreement shall not be included for the purpose of computing the percentage of the outstanding
Common Shares beneficially owned by any other Person (unless such other Person is also otherwise deemed to beneficially own for purposes
of this Agreement such Common Shares not outstanding) and (y) include the number of Common Shares outstanding of which such Person beneficially
owns or attempts to beneficially own in violation of Section 7.2.1 of the Declaration of Trust, even if such Common Shares are transferred
to a charitable trust.

 

(d)
“Book Entry” shall mean an uncertificated book entry for any Common Share or Preferred Share.

 

(e)
“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in
the state of New York or Texas are authorized or obligated by law or executive order to close.

 

(f)
“Cash Amount” means the “Cash Amount” as defined in the Operating Partnership Agreement.

 

(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 Shares” when used with reference to the Company or without reference, shall mean the common shares
of beneficial interest, presently $0.01 par value per share, of the Company. “Common Shares” when used with reference
to any Person other than the Company, shall mean the common shares or common stock (or, in the case of any entity other than a corporation,
the equivalent equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned Person.

 

(i)
“Company” has the meaning given it in the preamble of this Agreement, and also means a Principal Party to the
extent provided in Section 13(b).

 

(j)
“Continuing Trustee” means any member of the Company Board (while the Person is a member of the Company Board)
who is not an Acquiring Person (or an Affiliate or Associate of an Acquiring Person) or a representative or nominee of an Acquiring Person
(or of any Affiliate or Associate of an Acquiring Person), and who either (x) was a member of the Company Board immediately prior to
the date of this Agreement or (y) on or subsequent to the date of this Agreement became a member of the Company Board and whose nomination
for election or election to the Company Board is recommended or approved by a majority of the Continuing Trustees.

 

    	5

     

    

 

(k)
“Declaration of Trust” means the Articles of Amendment and Restatement of the Declaration of Trust of the Company,
as amended and supplemented and in effect as of the date of this Agreement.

 

(l)
“Derivatives Contract” shall mean a contract between two parties (the “Receiving Party”
and the “Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that
correspond substantially to the ownership by the Receiving Party of a number of Common Shares specified or referenced in such contract
(the number corresponding to such economic benefits and risks, the “Notional Common Shares”), regardless of
whether (i) obligations under such contract are required or permitted to be settled through the delivery of cash, Common Shares or other
property or (ii) such contract conveys any voting rights in Common Shares, without reduction for and otherwise without regard to any
short or similar position under the same or any other Derivative Contract. For the avoidance of doubt, interests in broad-based index
options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal
governmental authority shall not be deemed to be Derivatives Contracts.

 

(m)
“Exempt Person” shall mean (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan
maintained by the Company or any of its Subsidiaries, (iii) any entity or trustee holding (or acting in a fiduciary capacity in respect
of) Common Shares for or pursuant to the terms of any such employee benefit plan or for the purpose of funding other employee benefits
for employees of the Company or any Subsidiary of the Company, (iv) any Charitable Trust or Charitable Trustee (each as defined in the
Declaration of Trust), or (v) any Person who or which, together with all Affiliates and Associates of such Person, at the time of the
first public announcement of this Agreement, is a Beneficial Owner of 5% or more of the Common Shares then outstanding as a result of
such Person’s Beneficial Ownership of Common Shares issued and outstanding at the time of such first public announcement, Class
A Cumulative Convertible Preferred Shares of beneficial interest, presently $0.01 par value per share, of the Company issued and outstanding
at the time of such first public announcement, and/or Class C Convertible Preferred Shares of beneficial interest, presently $0.01 par
value per share, of the Company (“Class C Preferred Shares”) issued and outstanding at the time of such first
public announcement (a “Grandfathered Shareholder”); provided, that if a Grandfathered Shareholder becomes,
after such time, the Beneficial Owner (other than pursuant to the unilateral grant of any security by the Company to its trustees, officers
or employees or through the exercise of any options, warrants, rights or similar interests (including restricted shares and restricted
share units) granted by the Company to its trustees, officers or employees under the circumstances described under Section 1(a)(iii)
hereof) of any additional Common Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease
or no change in the percentage of Common Shares then outstanding Beneficially Owned by such Grandfathered Shareholder) then such Grandfathered
Shareholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares,
such Person is not the Beneficial Owner of 5% or more of the Common Shares then outstanding; provided, further, that upon
the first decrease of a Grandfathered Shareholder’s Beneficial Ownership below 5%, such Grandfathered Shareholder shall no longer
be deemed to be a Grandfathered Shareholder and this clause (v) shall have no further force or effect with respect to such Person. For
the avoidance of doubt, in the event that after the time of the first public announcement of this Agreement, any agreement, arrangement
or understanding pursuant to which any Grandfathered Shareholder is deemed to be the Beneficial Owner of Common Shares expires, is settled
in whole or in part, terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Shareholder, any direct
or indirect replacement, extension or substitution of such agreement, arrangement or understanding with respect to the same or different
Common Shares that confers Beneficial Ownership of Common Shares shall be considered the acquisition of Beneficial Ownership of additional
Common Shares by the Grandfathered Shareholder and render such Grandfathered Shareholder an Acquiring Person for purposes of this Agreement
unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such person is not the Beneficial Owner of 5% or more
of the Common Shares then outstanding.

 

    	6

     

    

 

(n)
“Operating Partnership” means Pillarstone Capital REIT Operating Partnership LP, a Delaware limited partnership.

 

(o)
“Operating Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated as of December 8, 2016, as amended and in effect as of the date of this Agreement.

 

(p)
“Partnership Unit Redemption Rights” means the rights that a Partnership Unit Holder has to require the Company
to redeem from time to time part or all of the Partnership Unit Holder’s Partnership OP Units for the consideration set forth in
the Operating Partnership Agreement.

 

(q)
“Passive Institutional Investor” shall mean any Person (other than a Person who acquires or Beneficially Owns
Common Shares as a result of the exercise of Partnership Unit Redemption Rights) who or which has reported and is entitled to report
Beneficial Ownership of Common Shares on Schedule 13G under the Exchange Act (or any comparable or successor report), but only so long
as (i) such Person is eligible to report such ownership on Schedule 13G under the Exchange Act (or any comparable or successor report),
and (ii) such Person has not reported and is not required to report such ownership on Schedule 13D under the Exchange Act (or any comparable
or successor report) and such Person does not hold Common Shares on behalf of any other Person who is required to report Beneficial Ownership
of Common Shares on such Schedule 13D; provided that if a formerly Passive Institutional Investor should report or become required
to report Beneficial Ownership of Common Shares on Schedule 13D, then that formerly Passive Institutional Investor will not be deemed
to be or to have become an Acquiring Person if (A) at the time it reports or becomes required to report Beneficial Ownership of Common
Shares on Schedule 13D, that formerly Passive Institutional Investor has Beneficial Ownership of less than 5% of the Common Shares then
outstanding, or (B) (1) it divests as promptly as practicable (but in any event not later than ten calendar days after becoming required
to report on Schedule 13D) Beneficial Ownership of a sufficient number of Common Shares so that it would no longer be an “Acquiring
Person,” and (2) prior to reducing its Beneficial Ownership of Common Shares then outstanding to below 5%, it does not increase
its Beneficial Ownership of Common Shares then outstanding (other than by reason of share purchases by the Company) above such Person’s
lowest Beneficial Ownership of Common Shares then outstanding at any time during such ten calendar day period.

 

    	7

     

    

 

(r)
“Person” shall mean any individual, partnership, firm, limited liability company, corporation, association,
trust, unincorporated organization or other entity, and shall include any successor (by merger, consolidation or otherwise) to such entity.

 

(s)
“Preferred Shares” shall mean the Series D Preferred Shares, par value $0.01 per share, of the Company having
the rights and preferences set forth in the Form of Articles Supplementary attached hereto as Exhibit A.

 

(t)
“Share Acquisition Date” shall mean (x) the first date of public announcement (including the filing of any
report, or any amendment to any report, on Schedule 13D or Schedule 13G under the Exchange Act (or any comparable or successor report))
by the Company or an Acquiring Person that an Acquiring Person has become such or (y) such earlier date, as determined by the Company
Board, on which an Acquiring Person has become such.

 

(u)
“Shares Amount” means the “Shares Amount” as defined in the Operating Partnership Agreement.

 

(v)
“Subsidiary” shall mean, with reference to any Person, any other Person of which an amount of voting securities
or equity interests sufficient to elect at least a majority of the directors or trustees or equivalent governing body of such other Person
is beneficially owned, directly or indirectly, by such first-mentioned Person, or any other Person otherwise controlled by such first-mentioned
Person.

 

(l)
“Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event.

 

In
addition, the following terms are defined in the Sections indicated below:

 

	Defined
    Term	Section
    Number
	Adjustment
    Shares	11(a)(ii)
	Agreement	Preamble
	Authorized
    Officer	5(a)
	Class
    C Holder	3(h)
	Class
    C Preferred Shares	1(m)
	Company
    Board	Recitals
	Company	Preamble
	current
    per share market price	11(d)
	Distribution
    Date	3(a)
	Equivalent
    Preferred Shares	11(b)
	Exchange
    Ratio	24(a)
	Expiration
    Date	7(a)
	Grandfathered
    Shareholder	1(m)
	NASDAQ	11(d)(i)
	Partnership
    OP Units	3(g)
	Partnership
    Preference Units	3(g)
	Partnership
    Unit Holder	3(g)
	Post-Transferee	7(e)(ii)
	Pre-Transferee	7(e)(iii)

 

    	8

     

    

 

	Principal
    Party	13(b)
	Purchase
    Price	7(b)
	Record
    Date	Recitals
	Redemption
    Price	23(a)
	Registration
    Statement	9(c)(i)
	Right	Recitals
	Rights
    Agent	Preamble
	Rights
    Certificates	3(a)
	Section
    11(a)(ii) Event	11(a)(ii)
	Section
    13 Event	13(a)
	Section
    23(c) Event	23(c)
	Securities
    Act	9(c)(i)
	Security	11(d)(i)
	Summary
    of Rights	3(b)
	Trading
    Day	11(d)(i)
	Trust	24(a)
	Trust
    Agreement	24(a)
	Unit	7(b)

 

Section
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company 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. The Rights Agent shall have no duty to supervise, and in no event shall
be liable for, the acts or omissions of any such co-Rights Agent.

 

Section
3. Issuance of Rights Certificates.

 

(a)
Until the Close of Business on the earlier of (i) the tenth Business Day after the Share Acquisition Date, and (ii) such date, if any,
prior to the occurrence of a Section 11(a)(ii) Event, as may be determined by action of the Company Board, after the date of the commencement
by any Person (other than an Exempt Person) of, or of the first public announcement of the intention of any Person (other than an Exempt
Person) to commence, a tender offer or exchange offer the consummation of which would result in any Person (other than an Exempt Person)
being or becoming an Acquiring Person (the earlier of such dates in (i) and (ii) above being the “Distribution Date”,
provided, however, that if either of such dates occurs 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 other provisions of this Section 3) by the certificates evidencing Common Shares
registered in the names of the holders thereof (or by Book Entry Common Shares) and not by separate certificates or book entry, and the
record holders of such certificates evidencing the Common Shares (and the record holders of such Book Entry Common Shares) shall be the
record holders of the Rights evidenced thereby, and

 

(y)
the Rights will be transferable only in connection with the transfer of the underlying Common Shares, including a transfer to the Company.

 

    	9

     

    

 

As
soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially
the form of Exhibit B hereto (the “Rights Certificates”), evidencing one Right for each Common Share
so held, subject to adjustment as provided herein; provided, however, that notwithstanding anything to the contrary herein,
the Company may choose to use book entry in lieu of physical certificates, in which case “Rights Certificates” shall be deemed
to mean the uncertificated book entry evidencing the related Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

 

(b)
As promptly as practicable following the Record Date, the Company shall make available a copy of the Summary of Rights to Purchase Preferred
Shares, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), to each record
holder of Common Shares as of the Close of Business on the Record Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person) who may request it prior to the Expiration Date. With respect to certificates evidencing Common Shares (or Book
Entry Common Shares) outstanding as of the Record Date or issued subsequent to the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof (or such Book Entry Common Shares). Until the Distribution Date (or, if earlier, the Expiration Date), the surrender
for transfer of any certificate evidencing Common Shares (or any Book Entry Common Shares) outstanding as of the Record Date (whether
with or without a copy of the Summary of Rights) shall also constitute the transfer of the Rights associated with the Common Shares evidenced
thereby.

 

(c)
Rights shall, without any further action, be issued in respect of all Common Shares which are issued after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof after
the Distribution Date.

 

(d)
Certificates evidencing such Common Shares issued after the Record Date but prior to the earlier of the Distribution Date and the Expiration
Date, or in certain circumstances provided in Section 22 hereof after the Distribution Date, 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 Pillarstone
Capital REIT, a Maryland real estate investment trust (the “Company”), and American Stock Transfer & Trust
Company, LLC, as rights agent (the “Rights Agent”), dated as of December 27, 2021 (as amended 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 office of the Rights Agent. 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. UNDER CERTAIN CIRCUMSTANCES SET FORTH
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL
AND VOID AND WILL NO LONGER BE TRANSFERABLE.

 

    	10

     

    

 

With
respect to any Book Entry Common Shares, such legend shall be included in a notice to the record holder of such Common Shares in accordance
with applicable law. With respect to such certificates containing the foregoing legend, or any notice of the foregoing legend delivered
to holders of Book Entry Common Shares, until the Distribution Date, the Rights associated with the Common Shares evidenced by such certificates
or Book Entry Common Shares shall be evidenced by such certificates or Book Entry Common Shares alone, and the surrender for transfer
of any such certificate or Book Entry Common Shares, except as otherwise provided herein, shall also constitute the transfer of the Rights
associated with the Common Shares evidenced thereby.

 

Notwithstanding
this Section 3(d), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of
any holder of the Rights.

 

(e)
In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and returned so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares that are no longer outstanding.

 

(f)
Notwithstanding anything to the contrary contained herein, Common Shares, Preferred Shares and Rights (and any securities issuable on
their exercise) may be issued, evidenced and transferred by book-entry and not evidenced by physical certificates. Where Common Shares,
Preferred Shares and Rights (and any securities issuable on their exercise) are held in uncertificated form, they shall be held subject
to the terms and conditions of this Agreement applicable to certificated shares or Rights, and the Company and the Rights Agent shall
cooperate in all respects to give effect to the intent of the provisions contained herein.

 

(g)
Prior to the Distribution Date, holders (other than the Company) (a “Partnership Unit Holder”) of partnership
units in the Operating Partnership designated as “Class A Units” (“Partnership OP Units”) and/or
of any other class of partnership units in the Operating Partnership designated as other than “Class A Units” (“Partnership
Preference Units”) shall not hold, and shall not be deemed as holding, any Rights solely by reason of the Partnership Unit
Holder holding any Partnership OP Unit or Partnership Preference Unit. On the Distribution Date (or, notwithstanding the immediately
preceding sentence, such earlier time as required by the Operating Partnership Agreement), proper provision shall be made by the Company
in order to provide each Partnership Unit Holder with the number of Rights, evidenced by Rights Certificates, if any, as would be issued
to the applicable Partnership Unit Holder as if (i) the Partnership Unit Holder had exercised its Partnership Unit Redemption Rights
with respect to all Partnership OP Units (assuming that all Partnership Preference Units held by the Partnership Unit Holder, to the
extent such Partnership Preference Units were so convertible, had been converted into Partnership OP Units in accordance with the terms
of such Partnership Preference Units, any term sheets related thereto and the Operating Partnership Agreement) held by the Partnership
Unit Holder immediately prior to the Distribution Date and (ii) the Company had elected to satisfy the Partnership Unit Redemption Rights
by paying the Partnership Unit Holder the Shares Amount (rather than the Cash Amount) (such Shares Amount to be calculated without giving
effect to any issuance, exercise or exchange of any Rights) immediately prior to the Distribution Date pursuant to the terms and conditions
of the Operating Partnership Agreement. Each Partnership Unit Holder shall thereafter have all of the rights, privileges, benefits and
obligations with respect to the Rights as are provided for herein with respect to holders of Rights. Notwithstanding the foregoing, no
Rights (or Rights Certificates evidencing such Rights) shall be provided (x) to any Partnership Unit Holder who is an Acquiring Person
or an Associate or Affiliate of an Acquiring Person (including but not limited to becoming an Acquiring Person through the conversion
or redemption of Partnership OP Units and/or Partnership Preference Units) or (y) if such Rights have become null and void pursuant to
Section 7(e).

 

    	11

     

    

 

(h)
On the Distribution Date, proper provision shall be made by the Company in order to provide each holder (other than the Company) (“Class
C Holders”) of Class C Preferred Shares with the number of Rights, evidenced by Rights Certificates, as would be issued
to the applicable Class C Holder as if the Class C Holder had converted all Class C Preferred Shares (assuming that all Class C Preferred
Shares held by the Class C Holder, to the extent such Class C Shares were so convertible, had been converted into Common Shares in accordance
with the terms of such Class C Preferred Shares) held by the Class C Holder into Common Shares immediately prior to the Distribution
Date. Each Class C Holder shall thereafter have all of the rights, privileges, benefits and obligations with respect to the Rights as
are provided for herein with respect to holders of Rights. Notwithstanding the foregoing, no Rights (or Rights Certificates evidencing
such Rights) shall be provided (x) to any Class C Holder who is an Acquiring Person or an Associate or Affiliate of an Acquiring Person
or (y) if such Rights have become null and void pursuant to Section 7(e).

 

Section
4. Form of Rights Certificates. The Rights Certificates (and the forms of election to purchase and of assignment and the certificates
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 any rule
or regulation thereunder 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, whenever
distributed, shall be dated as of the Record Date (or in the case of Rights issued in respect of Common Shares issued by the Company
after the Record Date, as of the date of issuance of such Common Shares) and on their face shall entitle the holders thereof to purchase
such number of Units of a Preferred Share as shall be set forth therein at the price set forth therein, provided, however,
that the amount and type of securities or other assets that may be acquired upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.

 

    	12

     

    

 

Section
5. Countersignature and Registration.

 

(a)
Any Rights Certificates shall be executed on behalf of the Company by its president, a vice president, the chief executive officer, the
chief operating officer, the chief financial officer, the chairman of the board, or the vice chairman of the board (each, an “Authorized
Officer”), shall be attested by the secretary, assistant secretary or any other Authorized Officer of the Company, and
shall have affixed thereto the Company’s seal (if any) or a facsimile or other recorded electronic form thereof. The signature
of any of these officers on the Rights Certificates may be manual, facsimile or other recorded electronic form. The Rights Certificates
shall be countersigned (whether manually, by facsimile or other recorded electronic form) by the Rights Agent and shall not be valid
for any purpose unless 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 Certificate 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 Agreement any such Person was not such
an officer.

 

(b)
Following the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency designated for surrender of Rights
Certificates upon exercise or transfer thereof, books for registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the name and address of each holder of the Rights Certificates, the number of Rights evidenced on its face by each Rights
Certificate and the date of each Rights Certificate.

 

Section
6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

 

(a)
Subject to the provisions of this Agreement, at any time which is both after the Distribution Date and prior to the Expiration Date,
any Rights Certificate or Rights Certificates (other than Rights Certificates evidencing Rights that have become null and void pursuant
to Section 7(e)) may be transferred, split up, combined or exchanged for another Rights Certificate or Rights Certificates, entitling
the registered holder to purchase a like number of Units of a Preferred Share (or other securities or assets, as the case may be) as
the Rights Certificate or Rights 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 Rights Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred, split
up, combined or exchanged at the office or agency of the Rights Agent designated for such purpose. The Rights Certificates are transferrable
only on the registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to take any action with respect
to the transfer of any such surrendered Rights Certificate unless and until the registered holder thereof shall have properly completed
and duly executed the certificate set forth in the form of assignment on the reverse side of such Rights Certificate, shall have provided
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Rights
Certificate or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request and shall have paid a sum
sufficient to cover any tax or charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights
Certificates as required hereunder. Thereupon the Rights Agent shall, subject to the provisions of this Agreement, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested, registered in such name
or names as may be designated by the surrendering registered holder. The Rights Agent shall promptly forward any such sum collected by
it to the Company or to such Persons as the Company shall specify by written notice. The Rights Agent shall have no duty or obligation
under this Agreement that requires the payment of taxes or charges unless and until it is reasonably satisfied that all such taxes and/or
changes have been paid.

 

    	13

     

    

 

(b)
Subject to the provisions hereof, at any time which is both after the Distribution Date and prior to the Expiration Date, if a Rights
Certificate shall be mutilated, lost, stolen or destroyed, upon request by the registered holder of the Rights evidenced thereby and
upon payment to the Company and the Rights Agent of all reasonable expenses incident thereto, there shall be issued, in exchange for
and upon cancellation of the mutilated Rights Certificate, or in substitution for the lost, stolen or destroyed Rights Certificate, a
new Rights Certificate, in substantially the form of the prior Rights Certificate, of like tenor and evidencing the equivalent number
of Rights, but, in the case of loss, theft or destruction, only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested by the Company or the Rights Agent, indemnity also satisfactory
to it.

 

(c)
Notwithstanding any other provisions hereof, the Company may amend this Rights Agreement to provide for uncertificated Rights in addition
to or in place of Rights represented by Rights Certificates, to the extent permitted by applicable law.

 

Section
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

 

(a)
At any time which is both after the Distribution Date and prior to the earliest of (i) the Close of Business on December 27, 2024,
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof, (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type described in clause (D) of the proviso to subclause (iv)
of the definition of Beneficial Ownership in Section 1(c) hereof, at which time the Rights are terminated, (iv) the Business Day
immediately following the Company’s 2022 annual meeting of shareholders (including any adjournment thereof) if this Agreement shall
not have been approved, on or before such date, by the affirmative vote of the holders of a majority of the voting power present, in
person or by proxy, and entitled to vote at a meeting of the Company’s shareholders duly held in accordance with the Declaration
of Trust, the Company’s bylaws and Maryland law, and (v) the time at which the Rights are exchanged as provided in Section 24
hereof (the earliest of (i), (ii), (iii), (iv) and (v) being the “Expiration Date”), the registered holder
of any Rights Certificate may, subject to the other provisions hereof, exercise the Rights evidenced thereby, in whole or in part, upon
surrender of the Rights Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed,
to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase
Price for the number of Units of a Preferred Share (or other securities or assets, as the case may be) for which such surrendered Rights
are then exercisable.

 

(b)
The purchase price for each one one-thousandth of a Preferred Share (each such one one-thousandth of a Preferred Share being a “Unit”)
upon exercise of Rights shall be $7.00, subject to adjustment from time to time as provided in Sections 11 and 13 hereof
(such purchase price, as so adjusted, being the “Purchase Price”), and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.

 

    	14

     

    

 

(c)
Except as otherwise provided herein, upon receipt of a Rights Certificate evidencing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the aggregate Purchase Price for the number of Units of a Preferred
Share (or other securities or assets, as the case may be) to be purchased thereby and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, in cash or by certified check,
cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon:

 

(i)
promptly (A) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent
for the Preferred Shares) a certificate or certificates for the number of Units of a Preferred Share to be purchased (or, in the case
of Book Entry Shares or other uncertificated securities, requisition from a transfer agent a notice setting forth the number of shares
or other securities to be purchased for which registration will be made on the stock transfer books of the Company), 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 number of Units of a Preferred Share issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing interests in such number of Units of a Preferred Share as are to be purchased (in which
case certificates for the Units of a Preferred Share represented by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such request,

 

(ii)
promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be designated by such holder,

 

(iii)
when appropriate, requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, and

 

(iv)
when appropriate, after receipt thereof, deliver such cash referenced in clause (iii) of this Section 7(c), if any, to
or upon the order of the registered holder of such Rights Certificate.

 

(d)
Except as otherwise provided herein, 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 to the registered holder of such Rights Certificate or to such holder’s duly authorized assigns, subject to the provisions
of Section 14 hereof.

 

(e)
Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of any Section 11(a)(ii) Event, any Rights
beneficially owned by:

 

(i)
an Acquiring Person or an Associate or Affiliate of an Acquiring Person,

 

(ii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate) which becomes a transferee after the Section 11(a)(ii) Event
(a “Post-Transferee”),

 

    	15

     

    

 

(iii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Section 11(a)(ii) Event pursuant to (A) a transfer (whether or not for consideration) from the Acquiring Person (or from any such
Associate or Affiliate) to holders of equity interests in such Acquiring Person (or in any such Associate or Affiliate) or to any Person
with whom the Acquiring Person (or such Associate or Affiliate) has any continuing agreement, arrangement or understanding (whether or
not in writing) regarding the transferred Rights, Common Shares or the Company, or (B) a transfer which a majority of the Company Board
(or if during the 180-day period after the occurrence of a Section 23(c) Event (or such other maximum period then allowed under Maryland
law), a majority of the Continuing Trustees) has determined to be part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e) (a transferee described in clause (A) or (B), a “Pre-Transferee”),
or

 

(iv)
any subsequent transferee receiving transferred Rights from a Post-Transferee or Pre-Transferee, either directly or through one or more
intermediate transferees,

 

shall
in each of the cases described in clauses (i) through (iv) above be 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 ensure that the provisions of this Section 7(e) hereof are complied with, but
shall have no liability to any holder of Rights or any other Person as a result of the Company’s failure to make or delay in making
any determinations with respect to an Acquiring Person or its Affiliates or Associates or any transferee or any of them hereunder. From
and after the first occurrence of any Section 11(a)(ii) Event, no Rights Certificate shall be issued pursuant to Section 3 or
Section 6 hereof that evidences Rights that are or have become null and void pursuant to the provisions of this paragraph, and
any Rights Certificate delivered to the Rights Agent that evidences Rights that are or have become null and void pursuant to the provisions
of this paragraph shall be canceled.

 

(f)
Notwithstanding anything in this Agreement or any Rights Certificate to the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported exercise by such
registered holder unless such registered holder shall have (i) properly completed and duly executed 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) of the Rights evidenced by such Rights
Certificate or Affiliates or Associates thereof as the Company or the Rights Agent 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, and any Rights Certificate evidencing Rights that have become null and void pursuant to Section
7(e) surrendered for any purpose shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall
be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights Certificates acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the
Company. Subject to applicable law and regulation, the Rights Agent shall maintain in a retrievable database electronic records of all
canceled or destroyed Rights Certificates which have been canceled or destroyed by the Rights Agent. The Rights Agent shall maintain
such electronic records for the term of this Agreement and any additional time period required by applicable law and regulation. Upon
written request of the Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its designee copies
of such electronic records relating to Rights Certificates canceled or destroyed by the Rights Agent and shall certify to the Company
the accuracy of such records.

 

    	16

     

    

 

Section
9. Availability of Preferred Shares.

 

(a)
The Company shall cause to be kept available out of its authorized and unissued Preferred Shares the number of Preferred Shares sufficient
to permit the exercise in full of all outstanding Rights as provided in this Agreement.

 

(b)
So long as the Preferred Shares to be issued and delivered 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 the time that the Rights become exercisable,
all shares available for such issuance to be listed or admitted to trading on such exchange upon official notice of issuance upon such
exercise.

 

(c)
From and after such time as the Rights become exercisable, if then necessary to permit the issuance of Preferred Shares (or Common Shares
or other securities, as the case may be) upon exercise of Rights, the Company shall use its best efforts:

 

(i)
to file a registration statement on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”),
with respect to the securities that may be acquired upon exercise of the Rights (the “Registration Statement”),

 

(ii)
to cause the Registration Statement to become effective as soon as practicable after such filing,

 

(iii)
to cause the Registration Statement to continue to be effective (and to include a prospectus complying with the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for the securities covered by the Registration
Statement and (B) the Expiration Date, and

 

(iv)
to take as soon as practicable such action as may be required to ensure that any acquisition of securities upon exercise of the Rights
complies with any applicable state securities or “blue sky” laws (to the extent exemptions therefrom are not available).

 

    	17

     

    

 

The
Company may temporarily suspend, for a period of time not to exceed 120 days from the date the Rights become exercisable, the exercisability
of the Rights in order to prepare and file such registration statement under the Securities Act and permit it to become effective. Upon
any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this
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 a registration statement under the
Securities Act shall not have been declared effective, unless an exemption therefrom is available.

 

(d)
The Company shall take all such action as may be necessary to ensure that all Preferred Shares (or other securities of the Company) delivered
upon exercise of Rights shall, at the time of delivery of the certificates or depositary receipts therefor (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable.

 

(e)
The Company shall pay any documentary, stamp or other tax or charge imposed in connection with the issuance or delivery of the Rights
Certificates or of any Preferred Shares (or any other securities or assets, as the case may be) upon the exercise of Rights; provided,
however, the Company shall not be required to pay any such tax or charge imposed in connection with the issuance or delivery of
any Units of a Preferred Share (or any other securities or assets, as the case may be), or any certificates or depositary receipts for
such Units of a Preferred Share (or any such other securities or assets, as the case may be) to any Person other than the registered
holder of the Rights Certificates evidencing the Rights surrendered for exercise. The Company shall not be required to issue or deliver
any certificates or depositary receipts for Units of a Preferred Share (or any other securities or assets, as the case may be) to, or
in a name other than that of, the registered holder upon the exercise of any Rights until any such tax or charge shall have been paid
(any such tax or charge 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 or charge is due.

 

Section
10. Preferred Shares Record Date. Each Person in whose name any certificate (or depositary receipt) for Units of a Preferred
Share (or any other securities or assets, 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 the Units of a Preferred Share (or any other securities or assets, as the case may be) evidenced
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 any applicable taxes or charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Share (or any other securities or assets, 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 securities on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Share (or any other securities or assets, 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 shall
not be entitled to any rights of a shareholder of the Company with respect to securities for which the Rights shall be exercisable, including
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.

 

    	18

     

    

  

Section
11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights. The Purchase Price, the number and kind
of securities purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

 

(a)
(i) In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares into a larger number of Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares, or (D) issue any shares of beneficial interest of the Company
in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving entity), except as otherwise provided for in this Section 11(a), then the Purchase
Price in effect at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification,
and the number and kind of shares issuable on such date upon exercise of the Rights, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred Share transfer books of the Company were still open, such
holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification;
provided, however that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of beneficial interest of the Company issuable upon exercise of one Right. 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 hereof, in the event any Person shall become an Acquiring Person, then, immediately upon the occurrence
of such event (a “Section 11(a)(ii) Event”),

 

(A)
the Purchase Price shall be adjusted to be equal to (x) the Purchase Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event multiplied by (y) the number of Units of a Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, whether or not such Right was then exercisable, and

 

(B)
each holder of a Right (except as otherwise provided in Section 7(e) hereof and Section 11(a)(iii) hereof) shall thereafter
have the right to receive, upon exercise of such Right, at a price equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Agreement, and in lieu of Units of a Preferred Share, such number of Common Shares as shall equal the result obtained by
dividing (x) the Purchase Price (as so adjusted) by (y) 50% of the current per share market price of the Common Shares (determined pursuant
to Section 11(d) hereof) on the date of such first occurrence (such Common Shares being the “Adjustment Shares”);
provided, however, that the Purchase Price (as so adjusted) and the Adjustment Shares shall, following the Section 11(a)(ii)
Event, be subject to further adjustment as appropriate in accordance with this Section 11. From and after the occurrence of a
Section 13 Event, any Rights that have not theretofore been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only in connection with Section 13 and not pursuant to this Section 11(a)(ii).

 

(iii)
In the event that the number of Common Shares authorized but unissued is not sufficient to permit the exercise in full of the Rights
in accordance with Section 11(a)(ii), then the Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that
would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such Preferred Shares or fraction thereof.

 

    	19

     

    

  

(b)
In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling
them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Shares (or shares
having substantially the same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred Shares”))
or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per Preferred Share or Equivalent Preferred
Share (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Preferred Shares) less than
the current per share market price of the Preferred Shares (as determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be determined by multiplying:

 

(i)
the Purchase Price in effect immediately prior to such record date, by

 

(ii)
a fraction, (A) the numerator of which shall be the sum of (x) the number of Preferred Shares and Equivalent Preferred Shares outstanding
on such record date, plus (y) the number of Preferred Shares and Equivalent Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current per share market price, and (B) the denominator of which
shall be the sum of (x) the number of Preferred Shares and Equivalent Preferred Shares outstanding on such record date, plus (y) the
number of additional Preferred Shares and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);

 

provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of beneficial interest of the Company issuable upon the exercise of one Right.

 

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 by the Company Board, whose determination shall be described in a statement filed with the
Rights Agent. Preferred Shares and Equivalent Preferred Shares owned by or held for the account of the Company or any Subsidiary shall
not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.

 

(c)
In case the Company shall fix a record date for a distribution to all holders of Preferred Shares (including any such distribution made
in connection with a consolidation or merger in which the Company is the continuing or surviving entity) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) 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:

 

(i)
the Purchase Price in effect immediately prior to such record date, by

 

    	20

     

    

 

(ii)
a fraction, (A) the numerator of which shall be the difference of (x) the current per share market price of the Preferred Shares (determined
pursuant to Section 11(d) hereof) on such record date, less (y) the fair market value (as determined by the Company Board, whose
determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants in respect of one Preferred Share, and (B) the denominator of which shall
be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Shares on such record date;

 

provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of beneficial interest of the Company to be issued upon exercise of one Right.

 

Such
adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

 

(d)
For the purpose of any computation hereunder:

 

(i)
The “current per share market price” of any security (a “Security” for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security
for the thirty consecutive Trading Days immediately prior to such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A)
a dividend or other distribution on such Security payable in shares of such Security or securities convertible into such shares (other
than Rights), or (B) any subdivision, combination or reclassification of such Security, and prior to the expiration of thirty Trading
Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be:

 

(x)
the last sale price, regular way, or, in the case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported by 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 LLC (“NASDAQ”) or, if such
Security is 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 Security is listed or admitted
to trading, or

 

    	21

     

    

  

(y)
if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market, as reported by any system then in use, or

 

(z)
if not so quoted, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the
Security selected by the Company Board;

 

provided,
however, if a Security is not publicly traded as determined in good faith by the Company Board or if one or more of the closing
prices for the Trading Days in the applicable period does not reflect a bona fide transaction, bid, or ask, regardless of whether prices
are available, obtained or obtainable, or provided pursuant to Section 11(d)(i)(y) or Section 11(d)(i)(z), “current
per share market price” shall mean the closing price for such Trading Day as determined in good faith by the Company Board, whose
determination shall be described in a statement filed with the Rights Agent.

 

The
term “Trading Day” shall mean, if the Security is listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on which such Security is listed or admitted to trading is open for
the transaction of business or, if the Security is not so listed or admitted, a Business Day.

 

(ii)
If the Preferred Shares are publicly traded, the “current per share market price” of the Preferred Shares shall
be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded but
the Common Shares are publicly traded, the “current per share market price” of the Preferred Shares shall be
conclusively deemed to be an amount equal to (A) 1,000 (as such amount may be appropriately adjusted for such events as share splits,
share dividends and recapitalizations with respect to Common Shares occurring after the date of this Agreement) multiplied by (B) the
current per share market price of the Common Shares. If neither the Common Shares nor Preferred Shares are publicly traded, “current
per share market price” shall mean the fair value per share as determined by the Company Board, whose determination shall
be described in a statement filed with the Rights Agent.

 

(e)
No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments 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 one one-hundred thousandth of a Preferred Share or one one-thousandth of a Common
Share or other share or security as the case may be. Notwithstanding anything to the contrary in this Section 11, any adjustment
required by this Section 11 shall be made prior to the Expiration Date.

 

(f)
If, as a result of an adjustment made pursuant to Sections 11(a)(ii) or 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of beneficial interest of the Company other than Preferred Shares, 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 Shares contained
in Sections 11(a), (b), (c), (e), (h), (i) and (m), and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on like terms to any such
other shares.

 

    	22

     

    

 

(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 Units of a Preferred Share (or other securities or assets or combination thereof)
that may be acquired 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 Units of a Preferred
Share (calculated to the nearest one one-hundred thousandth of a Preferred Share) obtained by (i) multiplying (x) the number of one one-thousandths
of a Preferred Share to be purchased upon the exercise of a Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

 

(i)
The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights, in lieu of any adjustment
in the number of Units of a Preferred Share that may be acquired 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 Units of a Preferred Share 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 one-hundredth) obtained by dividing (x) the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the (y) 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 days later than the date of such public announcement.
If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company
may, as promptly as practicable, cause to be distributed to holders of record of 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 to be so distributed
shall be issued 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 Units of a Preferred Share issuable upon the exercise
of a Right, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of Units
of a Preferred Share which were expressed in the initial Rights Certificates issued hereunder, which shall not alter the effectiveness
of any such adjustment or change.

 

    	23

     

    

 

(k)
Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the fraction
of Preferred Share or other shares of beneficial interest of the Company issuable upon exercise of a Right, the Company shall take any
action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue such fully paid
and nonassessable Preferred Shares or other shares at such adjusted Purchase Price.

 

(l)
In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised
after such record date of that number of Units of a Preferred Share and other securities of the Company, if any, issuable upon such exercise
over and above the number of Units of a Preferred Share and other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence
of the event requiring such adjustment.

 

(m)
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 in its judgment the Company
Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly
for cash of any Preferred Shares at less than the current per share market price, (iii) issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable
in Preferred Shares or (v) issuance of rights, options or warrants hereinabove referred to in Section 11(b), hereafter made by
the Company to holders of Preferred Shares shall not be taxable to such holders.

 

(n)
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 and pay any dividend on the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of a dividend payable in Common Shares)
into a greater or lesser number of Common Shares, then, in each such case, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights thereafter associated
with each Common Share following any such event shall equal the result obtained by multiplying (A) the number of Rights associated with
each Common Share immediately prior to such event by (B) a fraction (1) the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and (2) the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 

(o)
After the earlier of the Share Acquisition Date and the Distribution Date, the Company shall 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.

 

    	24

     

    

 

Section
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11
or Section 13 hereof, the Company shall (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 Shares
and the Common Shares, a copy of such certificate, and (c) mail or make available a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 25 hereof (if so required under Section 25 hereof). Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or give such notice shall not affect the validity of such adjustment
or the force or effect of the requirement for such adjustment. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.

 

Section
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.

 

(a)
In the event that, at any time following the first occurrence of a Section 11(a)(ii) Event, directly or indirectly:

 

(x)
the Company shall effect a share exchange, consolidate with, merge with and into, or otherwise combine with any other Person,

 

(y)
any Person shall consolidate with, merge with and into, or otherwise combine with the Company, and the Company shall be the continuing
or surviving entity of such consolidation, merger or combination, or any Person or Persons shall consummate a share exchange with the
Company, and, in connection with such consolidation, merger, combination or share exchange, all or part of the Common Shares shall be
changed into or exchanged for shares or other securities of the Company or of any other Person or cash or any other property, or

 

(z)
the Company (or one or more of its Subsidiaries) shall sell or otherwise transfer (for the avoidance of doubt, in any manner whatsoever,
including by way of lease, sublease, license or sublicense and whether or not for value) to any Person or Persons (other than the Company
or any of its wholly owned Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), in one
or more transactions, assets, cash flow or earning power aggregating one-half or more of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) (any such event being a “Section 13 Event”), then, and in each
such case, proper provision shall be made so that:

 

(i)
each holder of a Right (other than Rights which have become null and void as provided in Section 7(e) hereof) shall thereafter
have the right to receive, upon the exercise thereof at a price equal to (x) the then-current Purchase Price multiplied by (y) the number
of Units of a Preferred Share for which a Right is then exercisable, in accordance with this Agreement and in lieu of Units of a Preferred
Share or Common Shares, such number of validly authorized and issued, fully paid, nonassessable and freely tradeable Common Shares of
the Principal Party, which shares shall not be subject to any liens, encumbrances, rights of call or first refusal, transfer restrictions
or other adverse claims, as shall be equal to the result obtained by:

 

(A)
multiplying (x) the then-current Purchase Price by (y) the number of Units of a Preferred Share for which a Right is then exercisable,
and

 

    	25

     

    

 

(B)
dividing that product by 50% of the current per share market price (determined pursuant to Section 11(d) hereof) of the Common
Shares of such Principal Party on the date of consummation of such Section 13 Event;

 

provided,
however, that the Purchase Price and the number of Common Shares of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring
in respect of the Common Shares of such Principal Party after the occurrence 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;

 

(iv)
such Principal Party shall take such steps (including making available a sufficient number of its Common Shares to permit exercise of
all outstanding Rights in accordance with Section 9 hereof) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions of this Agreement shall thereafter be applicable, as nearly as reasonably may be, in relation
to its Common Shares thereafter deliverable upon the exercise of the Rights; and

 

(v)
such Principal Party shall take such steps as may be necessary to assure that, upon the subsequent occurrence of any merger, consolidation,
combination, sale or transfer or other extraordinary transaction in respect of such Principal Party, each holder of a Right shall thereupon
be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Shares of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a),
and such Principal Party shall take such steps (including authorization of its shares) as may be necessary to permit the subsequent exercise
of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property.

 

(b)
“Principal Party” shall mean:

 

(i)
in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a) hereof, (A) the Person that
is the issuer of the securities into which the Common Shares are changed or converted in such Section 13 Event, or, if there is more
than one such issuer, the issuer of the Common Shares that have the greatest aggregate market value of shares outstanding and (B) if
no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or, if there
is more than one such Person, the Person the Common Shares of which have the greatest aggregate market value of shares outstanding or
(y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the consolidation or combination; and

 

    	26

     

    

 

(ii)
in the case of any transaction described in clause (z) of the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets, cash flow or earning power transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or transactions receives the same portion of the assets, cash flow or earning power
transferred pursuant to such transaction or transactions or if the Person receiving the greatest portion of the assets, cash flow or
earning power cannot be determined, whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value
of shares outstanding;

 

provided,
however, that in any such case described in the foregoing clauses (b)(i) or (b)(ii), if the Common Shares of such Person are not
at such time or have not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1)
if such Person is a direct or indirect Subsidiary of another Person the Common Shares of which are and have been so registered, the term
“Principal Party” shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares of all of which are and have been so registered, the term “Principal Party” shall refer
to whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value of shares outstanding, or (3)
if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly,
by the same Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture
as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each
such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.

 

(c)
The Company shall not consummate any Section 13 Event unless, prior to such consummation, (x) the Principal Party has a sufficient number
of authorized Common Shares which are not outstanding or otherwise available for issuance (and which shall, when issued upon exercise
of the Rights in accordance with this Agreement be duly and validly authorized and issued, fully paid and nonassessable and free of preemptive
rights, rights of first refusal or any other restriction or limitations on transfer on ownership thereof) to permit the exercise in full
of the Rights in accordance with paragraphs (a) and (b) of this Section 13, (y) a registration statement under the Securities
Act on an appropriate form with respect to the Rights and the securities purchasable upon exercise of the Rights shall be effective under
the Securities Act and (z) the Company and Principal Party shall have executed and delivered to the Rights Agent an agreement confirming
that the requirements of paragraphs (a) and (b) of this Section 13 shall promptly be performed in accordance with their terms
and that the consummation of such Section 13 Event shall not result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to paragraphs (a) and (b) of this Section 13 and providing that the Principal
Party, as soon as practicable after executing and delivering the agreement required pursuant to clause (z) of this Section 13(c),
at its own expense, shall:

 

(i)
(A) use its best efforts to cause a registration statement under the Securities Act on an appropriate form with respect to the Rights
and the securities purchasable upon exercise of the Rights to remain effective (and to include a prospectus at all times complying with
the requirements of the Securities Act) until the Expiration Date, and (B) take all such action as may be required to enable the Principal
Party to issue the securities purchasable upon exercise of the Rights and to assure that any acquisition of such securities upon the
exercise of the Rights complies with any applicable state securities or “blue sky” laws, including the registration or qualification
of such securities under all requisite securities and “blue sky” laws of the various states and the listing of such securities
on such exchanges and trading markets as may be necessary or appropriate;

 

    	27

     

    

  

(ii)
use its best efforts, if the Common Shares of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange,
NASDAQ or on another national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York Stock Exchange, NASDAQ or such other national securities exchange, or, if the
Common Shares of the Principal Party shall not be listed or admitted to trading on the New York Stock Exchange, NASDAQ or another national
securities exchange, to cause the Rights and the securities purchasable upon exercise of the Rights to be authorized for quotation on
any other system then in use;

 

(iii)
obtain waivers of any rights of first refusal or preemptive rights in respect of the Common Shares of the Principal Party subject to
purchase upon exercise of outstanding Rights; and

 

(iv)
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 (or any successor form) under the Exchange Act.

 

(d)
If the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred
to in this Section 13, Common Shares or common share equivalents of such Principal Party at less than the then current per share
market price (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Shares or
common share equivalents of such Principal Party at less than such then current per share market price or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common Shares of such Principal Party pursuant to the provisions
of this Section 13, then the Company shall not consummate any such transaction unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction.

 

(e)
The Company shall not, at any time after the Section 11(a)(ii) Event, enter into any transaction of the type described in clauses (x)
through (z) of the first sentence of Section 13(a) hereof, if (i) at the time of or immediately after such Section 13 Event 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, (ii) prior to, simultaneously with or immediately after such
Section 13 Event the shareholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section
13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates,
or (iii) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights.

 

    	28

     

    

  

(f)
The provisions of this Section 13 shall similarly apply to successive mergers, consolidations, combinations, sales or transfers
referred to in Section 13(a) hereof.

 

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(n)
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:

 

(x)
the last sale price, regular way, or, in the case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported by 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

 

(y)
if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market, as reported by any system then in use, or

 

(z)
if on any such date the Rights are not so quoted, 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 Company Board.

 

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 by the
Company Board shall be used, and such determination shall be described in a statement filed with the Rights Agent.

 

(b)
The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share) or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share) upon exercises or exchange of the Rights. Interests in fractions of Preferred Shares
which are integral multiples of one one-thousandth of a Preferred Share, may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, however, that
such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-thousandth of a Preferred Share, the Company shall pay to the registered holders of
Rights Certificates with regard to which such fractional Preferred Shares would otherwise be issuable, at the time such Rights are exercised
or exchanged as herein provided, an amount in cash equal to the same fraction of the current market value of a whole Preferred Share
(as determined in accordance with the method set forth in Section 14(a) hereof) for the Trading Day immediately prior to the date
of such exercise or exchange.

 

    	29

     

    

 

(c)
The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common
Shares upon exercise or exchange of the Rights. In lieu of such fractional Common Shares, the Company shall pay to the registered holders
of Rights Certificates with regard to which such fractional Common Shares would otherwise be issuable, at the time such Rights are exercised
or exchanged as herein provided, an amount in cash equal to the same fraction of the current market value of a whole Common Share. For
purposes of this paragraph (c), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise
or exchange.

 

(d)
The holder of a Right by the acceptance of the Right expressly waives such holder’s right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right, except as provided in 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; and any registered holder
of a Right, without the consent of the Rights Agent or of the holder of any other Right, on such holder’s own behalf and for such
holder’s own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, such holder’s right to exercise such holder’s Rights in the manner provided 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.

 

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 the Common Shares and the Right
associated with each such Common Share shall be automatically transferred upon the transfer of each such Common Share;

 

(b)
after the Distribution Date, the Rights are transferable (subject to the provisions of this Agreement) only on the registry books of
the Rights Agent if surrendered at the office or agency 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 properly completed and duly executed;

 

    	30

     

    

 

(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 Share certificate (or Book Entry Common Share))
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 Share certificate (or notices provided to holders of Book Entry Common Shares) made
by any Person other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary; and

 

(d)
notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of the inability of the Company or the Rights Agent to perform any of the Company’s
or the Rights Agent’s obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree,
judgment or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated or enacted by a governmental, regulatory or administrative agency or
commission, prohibiting or otherwise restraining performance of such obligation.

 

Section
17. Rights Certificate Holder Not Deemed a Shareholder. 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 Preferred Shares or any other securities of the Company which
may at any time be issuable on the exercise or exchange of the Rights evidenced 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 shareholder of the
Company or any right to vote for the election of trustees or upon any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any action, or to receive notice of meetings or other actions affecting shareholders (except notices to be
provided under this Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised or exchanged in accordance with the provisions hereof.

 

Section
18. Concerning the Rights Agent.

 

(a)
The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable out-of-pocket expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the exercise and performance of its duties hereunder. The Company
shall indemnify the Rights Agent for, and 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 or the exercise or performance of its duties hereunder, including the reasonable
costs and expenses of defending against a claim of liability hereunder.

 

(b)
The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in connection
with its administration of this Agreement and the exercise and performance of its duties hereunder in reliance upon any Rights Certificate
or certificate evidencing Preferred Shares or evidencing other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document reasonably
believed by it to be genuine and to have been signed, executed and, where necessary, verified or acknowledged by the proper Person or
Persons.

 

    	31

     

    

 

Section
19. Merger or Consolidation or Change of Name of Rights Agent.

 

(a)
Any entity into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated or otherwise
combined, or any entity resulting from any merger, consolidation or combination to which the Rights Agent or any successor Rights Agent
shall be a party, or any entity succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any document or any further
act on the part of any of the parties hereto; provided, however, that such entity 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 to perform 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 the identity of any Acquiring Person and the determination of current per share market price) be proved or established
by the Company prior to taking or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be specified
herein) may be deemed to be conclusively proved and established by a certificate signed by an Authorized Officer, and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.

 

    	32

     

    

 

(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 (except its countersignature thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.

 

(e)
The Rights Agent shall not be responsible for the validity of this Agreement or the execution and delivery hereof (except the due execution
and delivery hereof by the Rights Agent) or for 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 failure by the Company to satisfy conditions 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 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 availability of any Preferred Shares or any other securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any Preferred Shares or any other securities will, when so issued, be validly authorized and issued, fully paid and nonassessable.

 

(f)
The Company shall perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.

 

(g)
The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from
any Authorized Officer, and to apply to any Authorized Officer for advice or instructions in connection with its duties, and shall not
be liable for any action taken, or omitted to be taken, by it in good faith in accordance with instructions of any Authorized Officer.

 

(h)
The Rights Agent and any shareholder, 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 have a pecuniary interest 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 the 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 Person.

 

(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.

 

    	33

     

    

 

(j)
If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to
certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall
not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

 

Section
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty days’ prior notice in writing mailed to the Company and, in the event that the Rights Agent or one of
its Affiliates is not also the transfer agent for the Common Shares or Preferred Shares, to each transfer agent for the Common Shares
or Preferred Shares, by registered or certified mail, and, if such resignation occurs after the Distribution Date, to the holders of
the Rights Certificates in accordance with Section 26. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty days’ prior notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and, in the event
that the Rights Agent or one of its Affiliates is not also the transfer agent for the Common Shares or Preferred Shares, to each transfer
agent for the Common Shares or Preferred Shares, by registered or certified mail, and, if such removal occurs after the Distribution
Date, to the holders of the Rights Certificates in accordance with Section 26. In the event that the Rights Agent or one of its
Affiliates is also the transfer agent for the Common Shares or Preferred Shares and the transfer agency relationship in effect between
the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned as the Rights Agent automatically and be
discharged from its duties under this Agreement as of the effective date of such termination (subject to the appointment of a successor
Rights Agent pursuant to this Section 21), and the Company shall be responsible for sending the required notice. 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 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 such holder’s Rights Certificate for inspection by the Company), then the 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 an entity organized and doing business under the laws of
the United States of America or any state of the United States of America (so long as such entity is authorized to do business as a banking
institution in such state), in good standing, which is authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authorities and which has at the time of its appointment as Rights Agent
a combined capital and surplus, along with its Affiliates, of at least $50,000,000. 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 for the Common Shares or Preferred Shares, and, if such appointment occurs after the Distribution Date, mail a notice thereof in
writing to the registered holders of the Rights Certificates in accordance with Section 26. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

    	34

     

    

 

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 forms as may be approved by the Company Board
to reflect any adjustment or change made in accordance with the provisions of this Agreement in the Purchase Price and the number or
kind or class of shares or other securities or property that may be acquired under the Rights Certificates. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date (other than upon exercise of a Right) and prior to the Expiration
Date, the Company shall with respect to Common Shares so issued or sold (a) pursuant to the exercise of share options, (b) under any
employee benefit plan or arrangement, (c) upon the exercise, conversion or exchange of securities, notes or debentures issued by the
Company, or (d) pursuant to a contractual obligation of the Company, in the case of any of the foregoing clauses (a) through (d) as existing
prior to the Distribution Date, issue Rights Certificates evidencing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (x) no such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, (y) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof and (z) no such Rights Certificate shall be issued
to an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

 

Section
23. Redemption.

 

(a)
Subject to Section 23(c) below, the Company Board may, at its option, at any time prior to the first occurrence of a Section 11(a)(ii)
Event, redeem all, but not less than all, of the then-outstanding Rights at a redemption price of $0.0001 per Right, as such amount may
be appropriately adjusted to reflect any share split, share dividend or similar transaction occurring after the date hereof (such redemption
price being the “Redemption Price”). The Company may, at its option, by action of the Company Board, pay the
Redemption Price either in Common Shares (based on the current per share market price (as defined in Section 11(d) hereof) of
the Common Shares at the time of redemption) or cash or any other form of consideration deemed appropriate by the Company Board and the
redemption of the Rights shall be effective at such time and on the basis and with such conditions as the Company Board may establish.

 

(b)
Immediately upon the action of the Company Board ordering the redemption of the Rights as provided in Section 23(a) above (or
at such later time as the Company Board 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 public notice of such redemption and, within ten (10) days
after such action of the Company Board ordering the redemption of the Rights, shall mail a notice of redemption to the holders of the
then-outstanding Rights in accordance with Section 26, provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. 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.

 

    	35

     

    

 

(c)
Notwithstanding anything to the contrary set forth in Section 23(a) hereof, if a majority of the Company Board is not composed
of Continuing Trustees (the first occurrence of such an event, a “Section 23(c) Event”), then for a period
of 180 days following the Section 23(c) Event (or such other maximum period then allowed under Maryland law), the Rights shall not be
redeemable unless there are Continuing Trustees and a majority of the Continuing Trustees concur with the Company Board’s decision
to redeem the Rights.

 

Section
24. Exchange.

 

(a)
The Company Board may, at its option, at any time after the first occurrence of a Section 11(a)(ii) Event, exchange all or part of the
then-outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to Section 7(e)
hereof) for Common Shares at an exchange ratio of one Common Share per Right, as appropriately adjusted to reflect any share split, share
dividend or similar transaction occurring after the date hereof (such exchange ratio being the “Exchange Ratio”).
Notwithstanding the foregoing, the Company Board shall not be empowered to effect such exchange at any time after an Acquiring Person
shall have become the Beneficial Owner of 50% or more of the Common Shares then outstanding. From and after the occurrence of a Section
13 Event, 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 Company Board may be made effective at such time, on such basis and with such conditions as the Company
Board may establish. Without limiting the generality of the foregoing, in connection with effecting such an exchange, the Company Board
may direct the Company to enter into a Trust Agreement in such form and with such terms as the Company Board shall then approve (the
“Trust Agreement”). If the Company Board so directs, the Company shall enter into the Trust Agreement and shall
issue to the trust created by such agreement (the “Trust”) all or some (as designated by the Company Board)
of the Common Shares issuable pursuant to the exchange, and all or some (as designated by the Company Board) Persons entitled to receive
Common Shares pursuant to the exchange shall be entitled to receive such Common Shares (and any dividends or other distributions made
thereon after the date on which such Common Shares are deposited in the Trust) only from the Trust and solely upon compliance with the
relevant terms and provisions of the Trust Agreement.

 

In
connection with effecting an exchange pursuant to this Section 24(a) and registering Common Shares in any Person’s name,
including any nominee or transferee of a Person, the Company may enter into such arrangements or implement such procedures as it deems
necessary or appropriate to minimize the possibility that any Common Shares issuable upon exchange pursuant to this Section 24(a)
are received by Persons whose Rights are null and void pursuant to Section 7(e) hereof.

 

Any
Common Shares issued at the direction of the Company Board in connection with this Section 24(a) shall be validly issued, fully
paid and nonassessable Common Shares, and the Company shall be deemed to have received as consideration for such issuance a benefit having
a value that is at least equal to the aggregate par value of the Common Shares so issued. Approval by the Company Board of the exchange
shall constitute a determination by the Company Board that such consideration is adequate.

 

    	36

     

    

  

(b)
Immediately upon the effectiveness of the action of the Company Board authorizing the exchange of any Rights pursuant to 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 Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly provide public notice of any such exchange and shall promptly mail a notice of any
such exchange to the holders of such Rights in accordance with Section 26; provided, however, that the failure to
give or any defect in any such notice shall not affect the validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange shall state the method by
which the exchange of Common Shares 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
null and void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

 

(c)
In the event that the number of Common Shares authorized but unissued is not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 24, then the Company shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights.

 

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 shares of beneficial interest of any class to the holders of Preferred Shares or to make any other distribution
to the holders of Preferred Shares (other than a regular quarterly cash dividend),

 

(ii)
to offer to the holders of Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares
of beneficial interest of any class or any other securities, rights or options,

 

(iii)
to effect any reclassification of the Preferred Shares (other than a reclassification involving only the subdivision or combination of
outstanding Preferred Shares),

 

(iv)
to effect any share exchange, consolidation, combination or merger into or with any other Person, 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 or more transactions, of more than one-half
of the assets, cash flow 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 wholly owned Subsidiaries),

 

(v)
to effect the liquidation, dissolution or winding up of the Company, or

 

(vi)
to declare or pay any dividend on the Common Shares payable in Common Shares, or to effect a subdivision, combination or consolidation
of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares),

 

    	37

     

    

 

then,
in each such case, the Company shall give to each holder of Rights, 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 share dividend or distribution of rights
or warrants or the date on which such share exchange, consolidation, merger, sale, transfer, liquidation, dissolution, winding up, reclassification,
subdivision or combination is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred
Shares, 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 ten (10) days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier. The failure to give notice required
by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote
upon any such action.

 

(b)
In case any Triggering Event shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each
holder of Rights, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which
shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) or Section 13
hereof, as the case may be, and (ii) all references in the preceding paragraph (a) to Preferred Shares shall be deemed thereafter to
refer also to Common Shares 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 overnight delivery service or first-class mail,
postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

 

Pillarstone
Capital REIT

2600
South Gessner Road, Suite 555

Houston,
TX 77063

Attention:
President

 

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 overnight delivery service
or first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
New York 11219

Attention:
Relationship Management

 

Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right or Rights shall
be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the last address of such holder
as shown on the records of the Company, the registry books of the Rights Agent (if after the Distribution Date) or the registry books
of the transfer agent for the Common Shares (if prior to the Distribution Date).

 

    	38

     

    

 

Section
27. Supplements and Amendments.

 

(a)
Except as provided in Section 27(d) below, for so long as the Rights are then redeemable, the Company may, 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.

 

(b)
Except as provided in Section 27(d) below, if a Section 23(c) Event has occurred, then for a period of 180 days following the
Section 23(c) Event (or such other maximum period then allowed under Maryland law), the Company may, 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
if (and only if) (i) one or more Continuing Trustees are members of the Company Board and (ii) a majority of such Continuing Trustees
approve the supplement or amendment; provided, however, that if a Section 11(a)(ii) Event occurs prior to the termination
of such 180-day period (or such other maximum period then allowed under Maryland law), immediately upon the occurrence of such Section
11(a)(ii) Event, any supplements or amendments proposed to be made to this Agreement shall be governed by Section 27(c) below.

 

(c)
Except as provided in Section 27(d) below, at any time after the first occurrence of a Section 11(a)(ii) Event, the Company may,
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 Rights, provided, however, that no such supplement or amendment may (i) adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other holder of Rights that have become null and void pursuant to Section 7(e) hereof), (ii) cause this Agreement again to become
amendable other than in accordance with this sentence or (iii) cause the Rights again to become redeemable.

 

(d)
Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption
Price.

 

(e)
Upon the delivery of a certificate from an Authorized Officer 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 such supplement or
amendment does not adversely affect the rights, duties or obligations of the Rights Agent under this Agreement. The Rights Agent agrees
that time is of the essence in connection with any supplement or amendment to this Agreement that it is directed by the Company to execute
in accordance with this Section 27.

 

(f)
For the avoidance of doubt, the Company shall be entitled to adopt and implement such procedures and arrangements (including with the
Rights Agent or other third parties) as it may deem necessary or desirable to facilitate the exercise, exchange, subscription, trading,
issuance or distribution of the Rights (and Units of a Preferred Share or Common Shares), including use of book entry, as contemplated
hereby and to ensure that an Acquiring Person does not obtain the benefits thereof, and any supplement or amendment of this Agreement
in respect of the foregoing shall be deemed to not adversely affect the interests of the holders of Rights.

 

    	39

     

    

 

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 Company Board. Except as otherwise specifically provided in Section 7(e)(iii)(B)
and Section 27(b) hereof with respect to the Continuing Trustees, the Company Board shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically granted to the Company Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement, including the right and power to (i) interpret the provisions
of this Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including
a determination whether to redeem or not redeem the Rights or to amend or not amend this Agreement and whether any proposed amendment
adversely affects the interest of the holders of Rights). 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 Company Board acting in
its sole and absolute discretion, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights
and all other Persons and (y) not subject the Company Board or any member thereof to any liability to the holders of the Rights.

 

Section
30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights (and, prior to the Distribution Date, holders of Common Shares and, on the
Distribution Date, the Class C Holders) 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 (and, prior to the Distribution
Date, holders of Common Shares and, on the Distribution Date, the Class C Holders).

 

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.

 

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 Maryland and for all purposes shall be governed by, and construed in accordance with, the laws of
such State applicable to contracts to be made and performed entirely in such State, without giving effect to any choice or conflict of
laws provisions or rules that would cause the application of the laws of any jurisdiction other than such State. The laws of the State
of Maryland, including its conflicts of laws, shall govern the Rights Agent’s rights, duties and obligations hereunder. The courts
of the State of Maryland and of the United States of America located in the State of Maryland (the “Maryland Courts”)
shall have exclusive jurisdiction over any suit, action or proceeding arising out of or relating to or concerning this Agreement and
the transactions contemplated hereby, and any Person commencing or otherwise involved in any such litigation shall waive any objection
to the laying of venue of such litigation in the Maryland Courts and shall not plead or claim in any Maryland Court that such litigation
brought therein has been brought in an inconvenient forum. The Company and the registered holders of Rights Certificates (and, prior
to the Distribution Date, the registered holders of Common Shares) each hereby waive, to the fullest extent permitted by applicable law,
any objection that they now or hereafter have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding
brought in any court referred to in this Section 32 (or the appellate courts thereof). The Company and the registered holders of Rights
Certificates (and prior to the Distribution Date, the registered holders of Shares of Common Shares) each hereby agree that, to the fullest
extent permitted by applicable law, a final and non-appealable judgment in any such suit, action or proceeding brought in any such court
will be conclusive and binding upon such Persons. Notwithstanding the foregoing, the Company and the Rights Agent may mutually agree
to a jurisdiction other than Maryland for any litigation directly between the Company and the Rights Agent arising out of or relating
to this Agreement.

 

    	40

     

    

 

Section
33. Counterparts; Effectiveness. 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 one and the same instrument.
This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties
hereto. Until and unless each party hereto has received a counterpart hereof signed by the other party hereto, this Agreement shall have
no effect and no party hereto shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement
or other communication). A facsimile, .pdf signature or other electronic or digital signature delivered electronically shall constitute
an original signature for all purposes.

 

Section
34. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any
delays or failures in performance resulting from acts beyond its reasonable control, including acts of God, epidemics, pandemics, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power
failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war or civil unrest. The Rights
Agent shall provide the Company prompt notice as soon as practicable in the event that any such delay or failure in performance occurs
and keep the Company apprised of developments and mitigation effort with respect thereto.

 

Section
35. Headings; Interpretation. Headings of the Sections of this Agreement and of the exhibits hereto and the table of contents
are for convenience of the parties hereto only and shall be given no substantive or interpretative effect whatsoever. As used in this
Agreement: (a) the words “include”, “includes” or “including” shall be deemed to be followed by the
words “without limitation”; (b) the words “hereof”, “hereby”, “herein” and “hereunder”
and words of similar import when used in this Agreement, unless otherwise specified, shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; (c) whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless Business Days are specified; and (d) unless otherwise expressly provided herein, any statute defined or referred to herein
means such statute as from time to time amended, modified or supplemented, including by succession of comparable successor statutes,
and includes any rules or regulations promulgated thereunder. The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms.

 

Section
36. Administration. Without limiting any of the rights, duties, immunities and obligations of the Rights Agent, the Company
Board shall have the exclusive power and authority to administer and interpret the provisions of this Agreement and to exercise all rights
and powers specifically granted to the Company Board or the Company or as may be necessary or advisable in the administration of this
Agreement. Without limiting any of the rights, duties, immunities and obligations of the Rights Agent, all such actions, calculations,
determinations and interpretations which are done or made by the Company Board in good faith shall be final, conclusive and binding on
the Company, the Rights Agent, holders of the Rights and all other parties and shall not subject the Company Board to any liability to
the holders of the Rights. The Rights Agent shall always be entitled to assume that the Company Board acted in good faith and shall be
fully protected and incur no liability in reliance thereon.

 

[Signature
Page Follows]

 

    	41

     

    

 

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

 

	 	PILLARSTONE
    CAPITAL REIT
	 	 	                            
	 	By:	/s/ Dennis Chookaszian 
	 	Name:	Dennis
    Chookaszian
	 	Title:	Authorized
    Signatory
	 	 	 
	 	AMERICAN
    STOCK TRANSFER & TRUST COMPANY, LLC,
	 	as
    Rights Agent
	 	 	 
	 	By:	/s/
    Joseph Dooley
	 	Name:	Joseph
    Dooley
	 	Title:	Senior
    Vice President 
	 	Date:	12/27/2021

 

    	 

     

    

 

Exhibit
A

 

FORM
OF

PILLARSTONE
CAPITAL REIT

ARTICLES
SUPPLEMENTARY

FOR

SERIES
D PREFERRED SHARES

 

Pillarstone
Capital REIT, a Maryland real estate investment trust (the “Trust”), hereby certifies to the State Department
of Assessments and Taxation of Maryland that:

 

FIRST:
Under a power contained in Section 6.3 of Article VI of the Articles of Amendment and Restatement of the Declaration of Trust of the
Trust, as amended and supplemented (the “Declaration of Trust”), the Board of Trustees of the Trust (the “Board”),
by duly adopted resolutions, classified and designated one million (1,000,000) authorized but unissued preferred shares of beneficial
interest, par value $0.01 per share (“Preferred Shares”), as Series D Preferred Shares, par value $0.01 per
share, with the following preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption, which, upon any restatement of the Declaration of Trust, shall
become part of Article VI of the Declaration of Trust, with any necessary or appropriate renumbering or relettering of the Sections or
subsections hereof and thereof. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the
Declaration of Trust.

 

Series
D Preferred Shares

 

1.
Designation and Amount. A series of Preferred Shares designated as “Series D Preferred Shares” (the “Series
D Preferred Shares”) is hereby established, and the number of shares constituting the Series D Preferred Shares shall be
1,000,000. The Board, with the approval of a majority of the entire Board and without any action by the shareholders of the Trust, may
amend the Declaration of Trust from time to time to increase or decrease the number of Series D Preferred Shares; provided that
no decrease shall reduce the number of Series D Preferred Shares to a number less than the number of shares then outstanding plus the
number of shares available for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding
securities issued by the Trust convertible into or exchangeable for Series D Preferred Shares.

 

2.
Dividends and Other Distributions.

 

(A)
Subject to the prior and superior rights of the holders of any class or series of shares of beneficial interest of the Trust ranking
prior and superior to the Series D Preferred Shares with respect to dividends, the holders of Series D Preferred Shares, in preference
to the holders of common shares of beneficial interest, par value $0.01 per share, of the Trust (the “Common Shares”),
and any other class or series of shares of beneficial interest of the Trust ranking junior to the Series D Preferred Shares, shall be
entitled to receive, when, as and if authorized by the Board and declared by the Trust out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a Series D
Preferred Share or fraction of a Series D Preferred Share, in an amount per share (rounded to the nearest cent) equal to, subject to
the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in Common
Shares or a subdivision of the outstanding Common Shares (by reclassification or otherwise), in each case declared on the Common Shares
since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any Series D Preferred Shares or fraction of a Series D Preferred Share.

 

    	 

     

    

 

In
the event that the Trust shall at any time after December 27, 2021 (the “Rights Declaration Date”) declare
or pay any dividend on the Common Shares payable in Common Shares or effect a subdivision or combination or consolidation of the outstanding
Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the amount to which the holders of Series D Preferred Shares 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 Common
Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately
prior to such event.

 

(B)
No dividend or other distribution shall be paid on the Common Shares (other than a dividend payable in Common Shares) unless the Trust
shall declare a dividend or distribution on the Series D Preferred Shares as provided in paragraph (A) of this Section concurrently or
immediately after it declares such dividend or distribution on the Common Shares.

 

(C)
Dividends shall begin to accrue and be cumulative on outstanding Series D Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issuance of such shares, unless the date of issuance 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 issuance of such shares, or unless
the date of issuance is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of Series
D Preferred Shares 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 Series D Preferred Shares in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
The Board may fix a record date for the determination of holders of Series D Preferred Shares entitled to receive payment of a dividend
or other distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

 

3.
Voting Rights. The holders of Series D Preferred Shares shall have the following voting rights (subject to Sections 10
and 11 of this FIRST ARTICLE):

 

(A)
Subject to the provision for adjustment hereinafter set forth, and subject to paragraphs (B) and (C) of this Section 3 below,
each Series D Preferred Share shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders
of the Trust. In the event the Trust shall at any time after the Rights Declaration Date declare or pay any dividend on the Common Shares
payable in Common Shares, or effect a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification
or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case
the number of votes per share to which holders of Series D Preferred Share 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 Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event.

 

    	 

     

    

 

(B)
Except as otherwise provided herein or in the terms of any other class or series of preferred shares of beneficial interest of the Trust
or any similar share of beneficial interest of the Trust, the holders of Series D Preferred Shares and the holders of Common Shares and
any other shares of beneficial interest of the Trust having general voting rights shall vote together as a single class on all matters
submitted to a vote of shareholders of the Trust.

 

(C)
Except as set forth herein (including pursuant to Section 11 of this FIRST ARTICLE), holders of Series D Preferred Shares 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 Shares as set forth herein) for taking any action.

 

4.
Certain Restrictions.

 

(A)
Whenever quarterly dividends or other dividends or distributions payable on the Series D Preferred Shares as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on Series D Preferred
Shares outstanding shall have been paid in full, the Trust shall not:

 

(i)
declare or pay dividends, or make any other distributions, on or redeem or purchase or otherwise acquire for consideration any shares
of beneficial interest ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred
Shares other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of share options, warrants or similar
rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted shares, restricted share units
or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price of such options,
warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient of such award in respect
of such grant, exercise, vesting or lapse of restrictions; or (B) the repurchase, redemption, or other acquisition or retirement for
value of any such shares from employees, former employees, trustees, former trustees, consultants or former consultants of the Trust
or their respective estate, spouse, former spouse or family member, pursuant to the terms of the agreements pursuant to which such shares
were acquired;

 

(ii)
declare or pay dividends, or make any other distributions, on any shares of beneficial interest ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series D Preferred Shares, except dividends paid ratably on the Series D Preferred
Shares and all such parity shares 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)
except pursuant to provisions of the Declaration of Trust providing for limitations or restrictions on ownership of securities of the
Trust which are, expressly or by implication, included to protect the status of the Trust as a real estate investment trust under the
Internal Revenue Code, redeem or purchase or otherwise acquire for consideration any shares of beneficial interest ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Shares, provided that the Trust may
at any time redeem, purchase or otherwise acquire any such junior shares in exchange for any shares of beneficial interest of the Trust
ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series D Preferred Shares; or

 

(iv)
except pursuant to provisions of the Declaration of Trust providing for limitations or restrictions on ownership of securities of the
Trust which are, expressly or by implication, included to protect the status of the Trust as a real estate investment trust under the
Internal Revenue Code, redeem or purchase or otherwise acquire for consideration any Series D Preferred Shares, or any shares of beneficial
interest ranking on a parity with the Series D Preferred Shares, except in accordance with a purchase offer made in writing or by publication
(as determined by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.

 

    	 

     

    

 

(B)
The Trust shall not permit any subsidiary of the Trust to purchase or otherwise acquire for consideration any shares of beneficial interest
of the Trust, unless the Trust could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.

 

5.
Reacquired Shares. Any Series D Preferred Shares purchased or otherwise acquired by the Trust in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but
unissued Preferred Shares and may be reissued as part of a new class or series of Preferred Shares, subject to any conditions and restrictions
on issuance set forth herein.

 

6.
Liquidation, Dissolution or Winding Up.

 

(A)
Upon any liquidation, dissolution or winding up of the Trust, no distribution shall be made (i) to the holders of shares ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Shares, unless, prior thereto, the
holders of the Series D Preferred Shares shall have received an aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1,000 times the aggregate amount to be distributed per share to the holders of Common Shares or (ii) to the holders
of shares of beneficial interest ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the
Series D Preferred Shares, except distributions made ratably on the Series D Preferred Shares and all such parity shares in proportion
to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up.

 

(B)
In the event the Trust shall at any time after the Rights Declaration Date declare or pay any dividend on the Common Shares payable in
Common Shares, or effect a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise
than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the aggregate
amount to which holders of Series D Preferred Shares were entitled immediately prior to such event pursuant to clause (i) of paragraph
(A) of this Section 6 shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately
prior to such event.

 

7.
Consolidation, Merger, etc. In case the Trust shall enter into any consolidation, merger, combination or other transaction
in which the Common Shares are exchanged for or changed into other shares, stock, securities, cash and/or any other property, then in
any such case each Series D Preferred Share shall at the same time be similarly exchanged for or changed into an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of shares, stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each Common Share is exchanged or changed. In the event
the Trust shall at any time after the Rights Declaration Date declare or pay any dividend on the Common Shares payable in Common Shares
or effect a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of Series D Preferred Shares shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior to such event.

 

    	 

     

    

 

8.
Redemption. The Series D Preferred Shares shall not be redeemable.

 

9.
Ranking. The Series D Preferred Shares shall rank, with respect to the payment of dividends and the distribution of assets,
junior to all shares of any other class or series of Preferred Shares, unless the terms of any such other class or series shall provide
otherwise, and shall rank senior to the Common Shares as to such matters.

 

10.
Fractional Shares. The Series D Preferred Shares may be issued in fractions of a share that shall entitle the holder, in proportion
to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series D Preferred Shares on such proportionate basis.

 

11.
Amendment. At any time that any Series D Preferred Shares are outstanding, the Declaration of Trust shall not be amended in
any manner which would materially alter or change the powers, preferences or special rights of the Series D Preferred Shares so as to
affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding Series D Preferred Shares,
voting separately as a class.

 

12.
Ownership Restrictions. The Series D Preferred Shares shall be subject to the restrictions and limitations set forth in Section
7.2 of Article VII of the Declaration of Trust.

 

13.
Permissible Distributions. In determining whether a distribution (other than upon liquidation, dissolution or winding up),
whether by dividend, or upon redemption or other acquisition of shares or otherwise, is permitted under Maryland law, amounts that would
be needed, if the Trust were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of
holders of any class or series of shares of beneficial interest whose preferential rights upon dissolution are superior or prior to those
receiving the distribution shall not be added to the Trust’s total liabilities.

 

SECOND:
The Series D Preferred Shares have been classified and designated by the Board under the authority contained in the Declaration of Trust.

 

THIRD:
These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.

 

FOURTH:
The undersigned acknowledge these Articles Supplementary to be the trust act of the Trust and, as to all matters or facts required to
be verified under oath, the undersigned acknowledges that, to the best of the undersigned’s knowledge, information and belief,
these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

[Signature
page follows.]

 

    	 

     

    

 

IN
WITNESS WHEREOF, the Trust has caused these Articles Supplementary to be executed under seal in its name and on its behalf by the
authorized signatory below and attested to by the authorized signatory below on this December 27, 2021.

 

	PILLARSTONE
    CAPITAL REIT	 
	 	                     	 
	By:	 	 
	Name::	 	 
	Title:	 	 
	 	 	 
	ATTEST:	 
	 	 	 
	By:	 	 
	Name::	 	 
	Title:	 	 

 

    	 

     

    

 

Exhibit
B

 

Form
of Rights Certificate

 

Certificate
No. R-______

No.
of Rights: ______

 

NOT
EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION OR
EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.

 

Rights
Certificate

 

PILLARSTONE
CAPITAL REIT

 

This
certifies that ____________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms and conditions of the Rights Agreement, dated as of December 27, 2021 (as
amended from time to time, the “Rights Agreement”), between Pillarstone Capital REIT, a Maryland real estate
investment trust (the “Company”), and American Stock Transfer & Trust Company, LLC, as rights agent (the
“Rights Agent”), to purchase from the Company at any time after the Distribution Date (as defined in the Rights
Agreement) and prior to the earliest of (i) 5:00 P.M., New York City time, on December 27, 2024, (ii) the time at which the Rights
are redeemed pursuant to the Rights Agreement, (iii) the closing of any merger or other acquisition transaction involving the Company
pursuant to an agreement providing for such transaction that has been approved by the Board of Trustees of the Company, at which time
the Rights are terminated, (iv) the Business Day (as defined in the Rights Agreement) immediately following the Company’s 2022
annual meeting of shareholders (including any adjournment thereof) if the Rights Agreement shall not have been approved, on or before
such date, by the affirmative vote of the holders of a majority of the voting power present, in person or by proxy, and entitled to vote
at a meeting of the Company’s shareholders duly held in accordance with the Articles of Amendment and Restatement of the Declaration
of Trust of the Company, as amended and supplemented, the Company’s bylaws and Maryland law, and (v) the time at which the Rights
are exchanged pursuant to the Rights Agreement (such earliest date being the “Expiration Date”), at the office
or agency of the Rights Agent designated for such purpose, or of its successor as Rights Agent, one one-thousandth of a fully paid and
nonassessable Series D Preferred Share, par value $0.01 per share, of the Company (each, a “Preferred Share”)
at the purchase price (the “Purchase Price”) of $7.00 per one one-thousandth of a Preferred Share (each such
one one-thousandth of a Preferred Share being a “Unit”), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related certificate duly executed. The number of Rights evidenced by this Rights Certificate
(and the number of Units of a Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of December 27, 2021, based on the Preferred Shares as constituted at such date.

 

As
provided in the Rights Agreement, the Purchase Price, the number of Units of a Preferred Share (or other securities or property) which
may be purchased upon the exercise of the Rights and the number of Rights evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events.

 

    	 

     

    

 

If
the Rights evidenced by this Rights Certificate are at any time beneficially owned by or transferred to any person who is or becomes
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (each as defined in the Rights Agreement) or certain transferees
thereof, such Rights will become null and void and will no longer be transferable.

 

This
Rights Certificate is subject to all of the terms and conditions of the Rights Agreement, which terms 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.
Copies of the Rights Agreement are on file at the principal executive office of the Company and the principal office of the Rights Agent
and are available from the Company and the Rights Agent upon written request therefor.

 

This
Rights Certificate, with or without other Rights Certificates, upon surrender at the office or agency of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate
number of Rights equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. 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 Rights Certificate (i) may be redeemed by the Company at a redemption
price of $0.0001 per Right or (ii) may be exchanged, in whole or in part, for the Company’s common shares of beneficial interest,
par value $0.01 per share (the “Common Shares”).

 

No
fractional Preferred Shares or Common Shares will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other
than fractions of Preferred Shares which are integral multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depository 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
Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor
shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of trustees or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any action, or to receive notice of meetings or other actions affecting shareholders
(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 or exchanged as provided in the Rights Agreement.

 

This
Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

    	 

     

    

 

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

 

	PILLARSTONE
    CAPITAL REIT	 
	 	                           	 
	By:	 	 
	Name::	 	 
	Title:	 	 
	 	 	 
	ATTEST:	 
	 	 	 
	By:	 	 
	Name::	 	 
	Title:	 	 
	 	 	 
	Countersigned:	 
	 	 	 
	AMERICAN
                                            STOCK TRANSFER & TRUST COMPANY, LLC

    as
    Rights Agent
	 
	 
	 	 	 
	By:	 	 
	Name::	 	 
	Title:	 	 

 

    	 

     

    

 

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)

 

[all][______]
of the Rights evidenced by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _____________________________ Attorney, to transfer said Rights on the books of the within-named Company, with
full power of substitution.

 

Dated:
__________________

 

	 	 
	 	Signature

 

Signature
Guaranteed:

 

Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee
medallion program.

 

..............................................................................................................

 

The
undersigned hereby certifies that the Rights evidenced by this Rights Certificate (1) are not beneficially owned by, and are not being
sold, assigned or transferred by or on behalf of, a Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), (2) are not being sold, assigned or transferred to or on behalf of any Acquiring Person
or Affiliate or Associate thereof and (3) after due inquiry, and to the best of the knowledge of the undersigned, were not acquired from
any Person who is or was an Acquiring Person or an Affiliate or Associate thereof.

 

	 	 
	 	Signature

 

    	 

     

    

 

Form
of Reverse Side of Rights Certificate - continued

 

FORM
OF ELECTION TO PURCHASE

 

(To
be executed if the holder desires to

exercise Rights evidenced by the Rights Certificate.)

 

To:
Pillarstone Capital REIT

 

The
undersigned hereby irrevocably elects to exercise ____________________ Rights evidenced by this Rights Certificate to purchase the Units
of a Preferred Share (or such other securities or property) issuable upon the exercise of such Rights and requests that certificates
for such Units (or such other securities or property) be issued in the name of and delivered to:

 

Please
insert social security or other identifying number:_____________________________________________________

 

________________________________________________________________________________________________

(Please
print name and address)

 

_________________________________________________________________________

 

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

 

 

Please
insert social security or other identifying number: ____________________________________________________

 

_______________________________________________________________________________________________

(Please
print name and address)

 

Dated:
__________________

 

	 	 
	 	Signature

 

(Signature
must conform to holder specified on Rights Certificate)

 

Signature
Guaranteed:

 

Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee
medallion program.

 

    	 

     

    

 

Form
of Reverse Side of Rights Certificate - continued

 

..............................................................................................................

(To
be completed)

 

The
undersigned hereby certifies that the Rights evidenced by this Rights Certificate (1) are not beneficially owned by, and are not being
sold, assigned or transferred by or on behalf of, a Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), (2) are not being sold, assigned or transferred to or on behalf of any Acquiring Person
or Affiliate or Associate thereof and (3) after due inquiry, and to the best of the knowledge of the undersigned, were not acquired from
any Person who is or was an Acquiring Person or an Affiliate or Associate thereof.

 

	 	 
	 	Signature

 

	 

 

NOTICE

 

The
signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the
face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

 

In
the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as each such term is defined in the Rights Agreement) and such Assignment or Election
to Purchase will not be honored.

 

    	 

     

    

 

Exhibit
C

 

SUMMARY
OF RIGHTS TO PURCHASE

PREFERRED
SHARES

 

On
December 26, 2021, the Board of Trustees (the “Company Board”) of Pillarstone Capital REIT, a Maryland
real estate investment trust (the “Company”), authorized and the Company declared a dividend of one preferred
share purchase right (a “Right”) for each outstanding common share of beneficial interest, par value $0.01
per share, of the Company (the “Common Shares”). The dividend is payable on December 27, 2021 (the “Record
Date”), to the holders of record of Common Shares as of 5:00 P.M., New York City time, on the Record Date. The description
and terms of the Rights are set forth in a Rights Agreement, dated as of December 27, 2021 (as the same may be amended from time
to time, the “Rights Agreement”), between the Company and American Stock Transfer & Trust Company, LLC,
as rights agent (the “Rights Agent”).

 

For
those interested in a summary of the terms of the Rights Agreement, we provide the following description. Please note, however, that
this description is only a summary, does not purport to be complete and is qualified in its entirety by reference to all of the provisions
of the Rights Agreement, which is incorporated herein by reference. The Rights Agreement has been filed with the Securities and Exchange
Commission as an exhibit to a Registration Statement on Form 8-A filed on December 27, 2021. A copy of the Rights Agreement is
available free of charge from the Company upon request.

 

The
Rights

 

The
Rights will be issued in respect of all Common Shares outstanding on the Record Date. The Rights will initially trade with, and will
be inseparable from, the Common Shares, and the record holders of Common Shares will be the record holders of the Rights. The Rights
will be evidenced only by certificates (or, in the case of uncertificated shares, by notations in the book-entry account system) that
evidence Common Shares. Rights will also be issued in respect of any Common Shares issued by the Company after the Record Date and, subject
to certain exceptions specified in the Rights Agreement, prior to the earlier of the Distribution Date (as defined below) and the Expiration
Date (as defined below).

 

Exercise;
Distribution Date; Transfer of Rights; Right Certificates

 

The
Rights are not exercisable until the Distribution Date. After the Distribution Date, each Right will be exercisable to purchase from
the Company one one-thousandth (a “Unit”) of a Series D Preferred Share, par value $0.01 per share, of the
Company (each, a “Preferred Share”), at a purchase price of $7.00 per Unit (the “Purchase Price”),
subject to adjustment as provided in the Rights Agreement.

 

The
“Distribution Date” is the earlier of (i) the tenth business day after the public announcement that a person
or group of affiliated or associated persons has become an Acquiring Person (as defined below) or such earlier date, as determined by
the Company Board, on which an Acquiring Person has become such and (ii) such date (prior to such time as any person or group of affiliated
or associated persons becomes an Acquiring Person), if any, as may be determined by the Company Board following the commencement of,
or the first public announcement of an intention to commence, a tender offer or exchange offer the consummation of which would result
in any person or group of affiliated or associated persons becoming an Acquiring Person. A person or group of affiliated or associated
persons becomes an “Acquiring Person” upon acquiring beneficial ownership of 5% (20% in the case of a passive
institutional investor) or more of the outstanding Common Shares, except in certain situations specified in the Rights Agreement.

 

    	 

     

    

 

Certain
synthetic interests in securities created by derivative positions – whether or not such interests are considered to be ownership
of the underlying Common Shares or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended –
are treated as beneficial ownership of the number of Common Shares equivalent to the economic exposure created by the derivative security,
to the extent actual underlying Common Shares are directly or indirectly beneficially owned by the counterparty to such derivative security
(or by a counterparty to such first counterparty, or any other successive counterparty). Swaps dealers unassociated with any control
intent or intent to evade the purposes of the Rights Agreement are exempted from such imputed beneficial ownership.

 

Until
the Distribution Date, the Rights will be transferred with and only with the Common Shares, and any transfer of Common Shares will constitute
a transfer of associated Rights. After the Distribution Date, the Rights will separate from the Common Shares and, as soon as practicable
after the Distribution Date, separate certificates evidencing the Rights (“Rights Certificates”) will be mailed
to holders of record of the Common Shares as of the close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights.

 

On
the Distribution Date (or such earlier time as required by the Operating Partnership Agreement), proper provision shall be made by the
Company in order to provide each holder (other than the Company) (a “Partnership Unit Holder”) of partnership
units in Pillarstone Capital REIT Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”),
designated as “Class A Units” (“Partnership OP Units”) and/or of any other class of partnership
units in the Operating Partnership designated as other than “Class A Units” (“Partnership Preference Units”)
with the number of Rights, evidenced by Rights Certificates, if any, as would be issued to the applicable Partnership Unit Holder as
if (i) the Partnership Unit Holder had exercised its rights that it has to require the Company to redeem from time to time part or all
of the Partnership Unit Holder’s Partnership OP Units for the consideration set forth in the Operating Partnership Agreement (the
“Partnership Unit Redemption Rights”) with respect to all Partnership OP Units (assuming that all Partnership
Preference Units held by the Partnership Unit Holder, to the extent such Partnership Preference Units were so convertible, had been converted
into Partnership OP Units in accordance with the terms of such Partnership Preference Units, any term sheets related thereto and the
Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of December 8, 2016, as amended and in effect
as of the date of the Rights Agreement (the “Operating Partnership Agreement”) held by the Partnership Unit
Holder immediately prior to the Distribution Date and (ii) the Company had elected to satisfy the Partnership Unit Redemption Rights
by paying the Partnership Unit Holder the Shares Amount (defined as the “Shares Amount” as defined in the Operating Partnership
Agreement) (rather than the Cash Amount (defined as the “Cash Amount” as defined in the Operating Partnership Agreement))
(such Shares Amount to be calculated without giving effect to any issuance, exercise or exchange of any Rights) immediately prior to
the Distribution Date pursuant to the terms and conditions of the Operating Partnership Agreement.

 

On
the Distribution Date, proper provision shall be made by the Company in order to provide each holder (other than the Company) of Class
C Convertible Preferred Shares of beneficial interest, presently $0.01 par value per share, of the Company (“Class C Preferred
Shares”) with the number of Rights, evidenced by Rights Certificates, as would be issued to such holder as if such holder
had converted all of its Class C Preferred Shares into Common Shares immediately prior to the Distribution Date.

 

    	 

     

    

 

Expiration
Date

 

The
Rights will expire on the earliest of (i) the close of business on December 27, 2024, (ii) the time at which the Rights are redeemed
pursuant to the Rights Agreement, (iii) the closing of any merger or other acquisition transaction involving the Company that has been
approved by the Company Board, at which time the Rights are terminated, (iv) the Business Day (as defined in the Rights Agreement) immediately
following the Company’s 2022 annual meeting of shareholders (including any adjournment thereof) if the Rights Agreement shall not
have been approved, on or before such date, by the affirmative vote of the holders of a majority of the voting power present, in person
or by proxy, and entitled to vote at a meeting of the Company’s shareholders duly held in accordance with the Articles of Amendment
and Restatement of the Declaration of Trust of the Company, as amended and supplemented, the Company’s bylaws and Maryland law,
and (v) the time at which the Rights are exchanged pursuant to the Rights Agreement (such earliest date, the “Expiration
Date”).

 

Consequences
of a Person or Group Becoming an Acquiring Person

 

Flip-In
Trigger. If any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right (other than
Rights beneficially owned by an Acquiring Person, affiliates and associates of an Acquiring Person and certain transferees thereof, which
Rights will thereupon become null and void) will thereafter have the right to receive upon exercise of a Right that number of Common
Shares having a market value of two times the Purchase Price.

 

Flip-Over
Trigger. If, after any person or group of affiliated or associated persons has become an Acquiring Person, the Company is acquired
in a merger, consolidation or combination or 50% or more of its consolidated assets, cash flow or earning power are transferred, proper
provisions will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person, affiliates and associates
of an Acquiring Person and certain transferees thereof, which Rights will have become null and void) will thereafter have the right to
receive upon the exercise of a Right that number of common shares of the person (or its parent) with whom the Company has engaged in
the foregoing transaction having a market value of two times the Purchase Price.

 

Exchange
Feature. At any time after any person or group of affiliated or associated persons becomes an Acquiring Person and prior to the earlier
of one of the events described in the previous paragraph or the acquisition by an Acquiring Person of 50% or more of the outstanding
Common Shares, the Company Board may exchange the Rights (other than Rights owned by an Acquiring Person, affiliates and associates of
an Acquiring Person and certain transferees thereof, which Rights will have become null and void), in whole or in part, for Common Shares
at an exchange ratio of one Common Share per Right.

 

Redemption
of the Rights

 

At
any time before any person or group of affiliated or associated persons becomes an Acquiring Person, the Company Board may redeem the
Rights in whole, but not in part, for $0.0001 per Right (the “Redemption Price”); provided that if a
majority of the Company Board is not composed of Continuing Trustees (a “Section 23(c) Event”), then for a
period of 180 days following the first occurrence of a Section 23(c) Event (or such other maximum period then allowed under Maryland
law), the Rights cannot be redeemed unless there are Continuing Trustees (as defined below) and a majority of the Continuing Trustees
concur with the Company Board’s decision to redeem the Rights. The Redemption Price is payable, at the option of the Company, in
cash, Common Shares or such other form of consideration as the Company Board shall determine. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption
Price. The Redemption Price will be subject to adjustment in accordance with the Rights Agreement. The term “Continuing Trustee”
means any member of the Company Board who is not an Acquiring Person (or an affiliate or associate of an Acquiring Person) or a representative
or nominee of an Acquiring Person (or of an affiliate or associate of an Acquiring Person), and who either (x) was a member of the Company
Board immediately prior to the date of the Rights Agreement or (y) on or subsequent to the date of the Rights Agreement became a member
of the Company Board and whose nomination for election or election to the Company Board is recommended or approved by a majority of the
Continuing Trustees.

 

    	 

     

    

 

Amendment

 

For
so long as the Rights are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in
any manner. If a Section 23(c) Event occurs, then for a period of 180 days following the Section 23(c) Event (or such other maximum period
then allowed under Maryland law), the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner
if (i) one or more Continuing Trustees are members of the Company Board and (ii) a majority of such Continuing Trustees approve the amendment;
provided that if any person or group of affiliated or associated persons becomes an Acquiring Person prior to the termination
of such 180-day period, any proposed amendments will be governed by the following sentence. At any time after any person or group of
affiliated or associated persons becomes an Acquiring Person, the Company may, except with respect to the Redemption Price, amend the
Rights Agreement in any manner that does not adversely affect the interests of holders of the Rights (other than an Acquiring Person,
affiliates and associates of an Acquiring Person and certain transferees thereof).

 

Shareholder
Rights

 

Until
a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a shareholder of the Company by virtue of holding
such Right, including, without limitation, the right to vote and to receive dividends.

 

Anti-Dilution
Provisions

 

The
Company Board may adjust the Purchase Price, the number of Preferred Shares issuable and the number of outstanding Rights to prevent
dilution that may occur from a share dividend, a share split, a reclassification of the Preferred Shares or Common Shares or certain
other specified transactions. No adjustments to the Purchase Price of less than 1% are required to be made.

 

Description
of the Preferred Shares

 

Each
Unit of a Preferred Share, if issued:

 

	 	●	Will
    not be redeemable.
	 	●	Will
    entitle holders to quarterly dividend payments of an amount equal to the dividend paid on one Common Share.
	 	●	Will
    entitle holders upon liquidation either to receive an amount equal to the payment made on one Common Share.
	 	●	Will
    have the same voting power as one Common Share.
	 	●	If
    Common Shares are exchanged as a result of a merger, consolidation or a similar transaction, will entitle holders to a per share
    payment equal to the payment made on one Common Share.

 

The
value of one Unit of a Preferred Share should approximate the value of one Common Share.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}]]