Document:

EXECUTION
COPY 

 

RIGHTS
AGREEMENT 

 

by
and between

 

HOPTO
INC. 

 

and

 

AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC

as
Rights Agent

 

Dated
as of February 16, 2018

 

    	 	 	 

    	 

    

 

TABLE
OF CONTENTS 

 

	 	 	Page
    No.
	 	 	 
	Section
    1.	Certain
    Definitions.	1
	 	 	 
	Section
    2.	Appointment
    of the Rights Agent	8
	 	 	 
	Section
    3.	Issuance
    of Rights Certificates	8
	 	 	 
	Section
    4.	Form
    of Rights Certificates	10
	 	 	 
	Section
    5.	Countersignature
    and Registration	11
	 	 	 
	Section
    6.	Transfer,
    Split-Up, Combination, and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	12
	 	 	 
	Section
    7.	Exercise
    of Rights; Purchase Price; Expiration Date of Rights	13
	 	 	 
	Section
    8.	Cancellation
    and Destruction of Rights Certificates	15
	 	 	 
	Section
    9.	 Reservation
    and Availability of Capital Stock	15
	 	 	 
	Section
    10.	Preferred
    Shares Record Date	17
	 	 	 
	Section
    11.	Adjustment
    of Purchase Price, Number and Kind of Shares, or Number of Rights.	17
	 	 	 
	Section
    12.	Certificate
    of Adjusted Purchase Price or Number of Shares	24
	 	 	 
	Section
    13.	Consolidation,
    Merger, or Sale or Transfer of Assets, Cash Flow or Earning Power.	24
	 	 	 
	Section
    14.	Fractional
    Rights and Fractional Shares	27
	 	 	 
	Section
    15.	Rights
    of Action	29
	 	 	 
	Section
    16.	Agreement
    of Rights Holders	29
	 	 	 
	Section
    17.	Rights
    Certificate Holder Not Deemed a Stockholder	30
	 	 	 
	Section
    18.	Concerning
    the Rights Agent	30
	 	 	 
	Section
    19.	Merger
    or Consolidation or Change of Name of the Rights Agent	31
	 	 	 
	Section
    20.	Duties
    of the Rights Agent	31
	 	 	 
	Section
    21.	Change
    of the Rights Agent	34
	 	 	 
	Section
    22.	Issuance
    of New Rights Certificates	34
	 	 	 
	Section
    23.	Redemption
    and Termination	35
	 	 	 
	Section
    24.	Exchange
    of Rights	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 Board	40
	 	 	 
	Section
    30.	Benefits
    of this Agreement	40

 

    	 	 	 

    	 

    

 

	Section
    31.	Severability	40
	 	 	 
	Section
    32.	Governing
    Law.	41
	 	 	 
	Section
    33.	Counterparts;
    Facsimiles and PDFs	41
	 	 	 
	Section
    34.	Descriptive
    Headings	41
	 	 	 
	Section
    35.	Force
    Majeure	41
	 	 	 
	Section
    36.	Further
    Assurance.	41

 

	Exhibits	 
	Exhibit
    A: 	Form
    of Certificate of Designation of Series A Junior Participating Preferred Stock
	Exhibit
    B:	Form
    of Rights Certificate
	Exhibit
    C:	Summary
    of Rights to Purchase Preferred Stock

 

    	 	 	 

    	 

    

 

RIGHTS
AGREEMENT 

 

RIGHTS
AGREEMENT, dated as of February 16, 2018 (this “Agreement”), by and between hopTo Inc., a Delaware corporation
(the “Company”), and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights
Agent”).

 

RECITALS

 

WHEREAS,
on February 15, 2018 (the “Rights Dividend Declaration Date”), the Board of Directors of the Company
(the “Board”) adopted this Agreement and authorized and declared a dividend distribution of one preferred
share purchase right (each, a “Right” and collectively, the “Rights”) for
each share of Common Stock outstanding at the Close of Business (as hereinafter defined) on February 26, 2018 (the “Record
Date”), each Right initially representing the right to purchase one one-thousandth of a Preferred Share (as such
number may be adjusted pursuant to the provisions of this Agreement) and having the rights, preferences and privileges set forth
in the form of Certificate of Designation of Series A Junior Participating Preferred Stock attached hereto as Exhibit A,
upon the terms and subject to the conditions set forth herein; and

 

WHEREAS,
the Board further authorized and directed the issuance of one Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) with respect to each share of Common Stock that becomes outstanding between the Record Date
(whether originally issued or delivered from the Company’s treasury) and, except as otherwise provided in Section 22, the
earlier of the Distribution Date and the Expiration Date, each Right initially evidencing the right to purchase one one-thousandth
of a Preferred Share, upon the terms and subject to the conditions hereinafter set forth.

 

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 who or which, together with all Related Persons of such Person,
from and after the date of this Agreement, shall be the Beneficial Owner of 10% or more of the shares of Common Stock then outstanding,
but shall not include (i) an Exempt Person or (ii) a Grandfathered Stockholder.

 

Notwithstanding
the foregoing:

 

(i)
no Person shall become an “Acquiring Person” solely as a result of (A) the grant of any options, warrants,
rights or similar interests (including restricted shares and restricted stock units) by the Company to its directors, officers
and employees pursuant to any employee benefit or stock ownership plan of the Company, or the exercise or conversion of any such
securities so granted, (B) a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares
of Common Stock by the Company, or (C) a dividend or distribution paid or made by the Company on the outstanding shares
of Common Stock or pursuant to a stock split, subdivision or similar transaction effected by the Company in which all registered
holders of Common Stock are treated substantially equally, provided, however, that if, in each case,
a Person, together with all of its Related Persons, becomes the Beneficial Owner of any additional shares of Common Stock of the
Company (other than pursuant to acquiring shares of Common Stock from the Company pursuant to (A), (B), or (C) of this Section
1(a)(i)), then such Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner
of such additional shares of Common Stock, such Person, together with all of its Related Persons, does not Beneficially Own 10%
or more of the Common Stock then outstanding;

 

    	 	1	 

    	 

    

 

(ii)
if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person” has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage 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 Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement and
had no intention of changing or influencing control of the Company), and such Person divests as promptly as practicable as soon
as practicable (as determined, in good faith, by the Board) a sufficient number of Common Shares so that such Person is no longer
the Beneficial Owner of 10% or more of the Common Stock then outstanding or, in the case solely of Derivative Interests, such
Person terminates as promptly as practicable as soon as practicable (as determined, in good faith, by the Board) the subject derivative
transaction or transactions or disposes of the subject derivative security or securities as promptly as practicable as soon as
practicable (as determined, in good faith, by the Board), or establishes to the satisfaction of the Board that such Derivative
Interests are not held with any intention of changing or influencing control of the Company, then such Person shall not be deemed
to be or ever to have been an “Acquiring Person” for any purposes of this Agreement as a result of such inadvertent
acquisition;

 

(iii)
if such Person is a bona fide swaps dealer who has become an “Acquiring Person” as a result of its actions in the
ordinary course of its business that the Board determines, in its sole discretion, 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; or

 

(iv)
as the result of the acquisition of shares of Common Stock directly from the Company in one or more transactions approved by the
Board of Directors; provided however, that if a Person shall become the Beneficial Owner of more than 10% or more
of the shares of Common Stock then outstanding by reason of share purchases or issuances directly from the Company and shall,
after that date, become Beneficial Owner of any additional shares of Common Stock without the prior written consent of the Company
or as otherwise referenced in this Section 1(a) and shall then Beneficially Own more than 10% of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an “Acquiring Person”.

 

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

 

(c)
“Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(d)
“Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act; provided, however,
that no director or officer of the Company shall be deemed an Affiliate or Associate of any other director or officer of the Company
solely as a result of his or her being a director or officer of the Company.

 

    	 	2	 

    	 

    

 

(e)
“Agreement” shall have the meaning set forth in the preamble of this Agreement, as it may from time
to time be supplemented, amended, renewed, restated or extended pursuant to the applicable provisions hereof.

 

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

 

(i)
which such Person or any of such Person’s Related Persons beneficially owns, directly or indirectly (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange Act);

 

(ii)
which such Person or any of such Person’s Related Persons, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time or upon the satisfaction of one or more conditions (whether
or not within the control of such Person), compliance with regulatory requirements or otherwise) pursuant to any agreement, arrangement
or understanding (whether or not in writing and 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,
other 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 offer or exchange offer made in accordance with the General Rules and Regulations
under the Exchange Act by or on behalf of such Person or any of such Person’s Related Persons until such tendered securities
are accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or any of such Person’s Related Persons prior to the Distribution Date
or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i)
or Section 11(p) hereof in connection with an adjustment made with respect to any Original Rights;

 

(iii)
which such Person or any of such Person’s Related Persons, directly or indirectly, has the right to vote or dispose of,
including pursuant to any agreement, arrangement, or understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the “Beneficial Owner” of, to have “Beneficial Ownership” of, or to
“beneficially own,” any security as a result of an agreement, arrangement or understanding (whether or not in writing)
to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent
(as such terms are defined in Regulation 14A under the Exchange Act) given in response to a public proxy or consent solicitation
made to more than 10 holders of shares of a class of stock of the Company registered under Section 12 of the Exchange Act, (B)
is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report);
or (C) arises solely because such security has been tendered pursuant to a tender or exchange offer made by such Person
or any Related Persons thereof until such tendered security is accepted for payment or exchange;

 

(iv)
which are beneficially owned, directly or indirectly, by any other Person (or any Related Person thereof) with which such Person
(or any of such Person’s Related Persons) has any agreement, arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to Section 1(h)(iii)),
or disposing of any voting securities of the Company; provided, however, that nothing in this Section
1(h)(iv) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of,
to have “Beneficial Ownership” of, or to “beneficially own,” any securities acquired or which such Person
has the right to acquire through such Person’s participation in good faith in a firm commitment underwriting until the expiration
of forty (40) days after the date of such acquisition, and then only if such securities continue to be owned by such Person at
such expiration of forty (40) days; or

 

    	 	3	 

    	 

    

 

(v)
which are the subject of, or the reference securities for, or that underlie, any Derivative Interest of such Person or any of
such Person’s Related Persons, with the number of shares of Common Stock deemed beneficially owned being the notional or
other number of shares of Common Stock specified in the documentation evidencing the Derivative Interest as being subject to being
acquired upon the exercise or settlement of the Derivative Interest or as the basis upon which the value or settlement amount
of such Derivative Interest is to be calculated in whole or in part or, if no such number of Common Shares is specified in such
documentation, as determined by the Board in its sole discretion to be the number of shares of Common Stock to which the Derivative
Interest relates.

 

Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, for all purposes of this Agreement, the phrase “then
outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding together with the number of such securities not then actually issued
and outstanding that such Person, together with all Related Persons, would be deemed to Beneficially Own hereunder. The number
of Common Shares not outstanding that such Person, together with all Related Persons of such Person, is otherwise deemed to Beneficially
Own for purposes of this Agreement shall be deemed to be outstanding for the purpose of computing the percentage of the outstanding
number of Common Shares owned by such Person, together with all Related Persons of such Person, but shall not be deemed to be
outstanding for the purpose of computing the percentage of outstanding Common Shares owned by any other Person.

 

No
Person who is an officer, director 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” (as defined in this Section 1(h)), including, without limitation,
in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.

 

Notwithstanding
any of the foregoing, no Person shall be deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership”
of or to “Beneficially Own” any securities which such Person or any of such Person’s Related Persons would otherwise
be deemed to “Beneficially Own” pursuant to this Section 1(h) solely as a result of any merger or other acquisition
agreement between the Company and such Person (or one or more of such Person’s Related Persons), or any tender, voting or
support agreement entered into by such Person (or one or more of such Person’s Related Persons) in connection therewith,
if, prior to such Person becoming an Acquiring Person, the Board has approved such merger or other acquisition agreement, or such
tender, voting or support agreement.

 

(g)
“Board” shall have the meaning set forth in the recitals to this Agreement and also includes any duly
authorized committee thereof.

 

    	 	4	 

    	 

    

 

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

 

(i)
“Bylaws” shall mean the Company’s Bylaws, as such may be amended, modified or restated from time
to time.

 

(j)
“Certificate of Incorporation” shall mean the Company’s Certificate of Incorporation, as such
may be amended, modified or restated from time to time.

 

(k)
“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.

 

(l)
“Closing Price” of any security on any given day shall be the last sale price, regular way, of such
security or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, on the
principal trading market on which such security is then traded.

 

(m)
“Common Stock” shall mean the shares of common stock, par value $0.0001 per share, of the Company or
any other shares of capital stock of the Company into which such shares shall be reclassified or changed, except that “Common
Stock” when used with reference to any Person other than the Company shall mean the capital stock of such Person with
the greatest voting power, or the equity securities or other equity interests having power to control or direct the management
of such Person.

 

(n)
“Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(o)
“Company” shall have the meaning set forth in the preamble hereto, except as otherwise provided in Section
13(a) hereof.

 

(p)
“Current Market Price” shall have the meaning set forth in Section 11(d) hereof.

 

(q)
“Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(r)
“Derivative Interest” shall mean any derivative securities (as defined under Rule 16a-1 under the Exchange
Act) that increase in value as the value of the underlying equity increases, including, but not limited to, a long convertible
security, a long call option and a short put option position, in each case, regardless of whether (i) such interest conveys
any voting rights in such security, (ii) such interest is required to be, or is capable of being, settled through delivery
of such security or (iii) transactions hedging the economic effect of such interest.

 

(s)
“Distribution Date” shall mean the earlier of (i) the Close of Business on the 10th
Business Day (or such later date as may be determined from time to time by action of a majority of the Board prior to the Distribution
Date that would otherwise have occurred) after the Shares Acquisition Date (or, if the 10th Business Day after the Shares Acquisition
Date occurs before the Record Date, then the Close of Business on the Record Date), or (ii) the Close of Business on the
10th Business Day (or such later date as may be determined from time to time by action of the Board prior to the Distribution
Date that would otherwise have occurred) after the date of the commencement of, or first public announcement of the intent of
any Person (other than an Exempt Person) to commence (within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act) following the date hereof, a tender or exchange offer the consummation of which would result in any Person
(other than an Exempt Person) becoming an Acquiring Person; provided, however, that if a tender or exchange
offer is terminated prior to the occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. The Board may, if deferral is allowed in clause (i) or (ii) of the preceding sentence, defer the date
set forth in such clause, as applicable, to a specified later date or an unspecified later date to be determined by a subsequent
action or event.

 

    	 	5	 

    	 

    

 

(t)
“Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b) hereof.

 

(u)
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(v)
“Exchange Property” shall have the meaning set forth in Section 24(f) hereof.

 

(w)
“Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

 

(x)
“Exchange Recipients” shall have the meaning set forth in Section 24(f) hereof.

 

(y)
“Exempt Person” shall mean (i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee stock ownership plan, employee benefit plan or other compensation program or arrangement of the Company or of
any of its Subsidiaries, or any Person holding Common Shares for or pursuant to the terms of any such plan, program or arrangement
or for the purpose of funding any such plan, program or arrangement, (iv) any Person organized, appointed or established
by the Company or any of its Subsidiaries for or pursuant to the terms of any such plan, program or arrangement during the time
such Person acts in such capacity, and (v) any Person who or which the Board determines, which determination shall be made
in the sole and absolute discretion of the Board, prior to the time such Person would otherwise be an Acquiring Person, should
be exempted from the definition of Acquiring Person; provided, however, that the Board may make such
exemption subject to such conditions, if any, as the Board may determine.

 

(z)
“Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

 

(aa)
“Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

 

(bb)
“General Rules and Regulations” shall mean Part 240, Subpart A — Rules and Regulations under the
Securities Exchange Act of 1934, as amended.

 

(cc)
“Grandfathered Stockholder” shall mean any Person who or which would, as of the time of the first public
announcement by the Company of the adoption of this Rights Agreement (including any shares Beneficial Ownership of which is acquired
on the date of such announcement pursuant to orders placed prior to such announcement), be deemed an “Acquiring Person,”
unless and until such Person (together with all Related Persons) shall acquire after such announcement by the Company of the adoption
of this Rights Agreement, without the prior approval of the Board of Directors, Beneficial Ownership of any additional
shares of Common Stock (other than as a result of (i) a stock dividend, stock split, subdivision or similar transaction
effected by the Company in which all registered holders of Common Shares are treated substantially equally, (ii) the grant
or issuance by the Company to its directors, officers and employees of options, warrants, rights or similar interests to acquire
Common Stock by the Company pursuant to any employee benefit, stock incentive plan, stock option plan or stock ownership plan
of the Company adopted by the Board, and the subsequent exercise or conversion of such options, warrants, rights or similar interests,
or (iii) the grant or issuance by the Company to its directors, officers and employees of restricted Common Stock or restricted
stock units and the subsequent vesting of such shares or stock units, pursuant to a restricted stock or other compensation plan
or arrangement adopted by the Board) while such Person (together with all Related Persons) is the Beneficial Owner of 10% or more
of the Common Stock then outstanding.

 

    	 	6	 

    	 

    

 

(dd)
“NASDAQ” shall mean The NASDAQ Stock Market.

 

(ee)
“Original Rights” shall have the meaning set forth in Section 1(h)(ii) hereof.

 

(ff)
“Ownership Statement” shall have the meaning set forth in Section 3(a) hereof.

 

(gg)
“Person” shall mean any individual, firm, corporation, partnership, limited liability company, limited
liability partnership, trust, association, syndicate or other entity, and shall include any successor (by merger or otherwise)
of such entity.

 

(hh)
“Preferred Shares” shall mean shares of Series A Junior Participating Preferred Stock, par value $0.01
per share, of the Company having the rights and preferences set forth in the form of Certificate of Designation attached to this
Agreement as Exhibit A, and, to the extent that there are not a sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated
for such purpose containing terms substantially similar to the terms of the Series A Junior Participating Preferred Stock.

 

(ii)
“Principal Party” shall have the meaning set forth in Section 13(b) hereof.

 

(jj)
“Purchase Price” shall have the meaning set forth in Section 7(b) hereof.

 

(kk)
“Record Date” shall have the meaning set forth in the recital hereto.

 

(ll)
“Redemption Period” shall have the meaning set forth in Section 23(a) hereof.

 

(mm)
“Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

 

(nn)
“Related Person” shall mean, as to any Person, any Affiliates or Associates of such Person.

 

(oo)
“Right” shall have the meaning set forth in the recital to this Agreement.

 

(pp)
“Rights Agent” shall have the meaning set forth in the preamble of this Agreement, except as otherwise
provided in Section 19 and Section 21 hereof.

 

(qq)
“Rights Certificate” shall have the meaning set forth in Section 3(a) hereof.

 

(rr)
“Rights Dividend Declaration Date” shall have the meaning set forth in the recital to this Agreement.

 

(ss)
“Section 11(a)(ii) Event” shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(tt)
“Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(uu)
“Section 13 Event” shall mean any event described in Section 13(a)(i), Section 13(a)(ii) or Section
13(a)(iii) hereof.

 

(vv)
“Shares Acquisition Date” shall mean the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed or amended pursuant to Section 13(d) or Section 13(g) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or that discloses information which
reveals the existence of an Acquiring Person.

 

    	 	7	 

    	 

    

 

(ww)
“Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(xx)
“Subsidiary” shall mean, with reference to any Person, any corporation or other entity of which an amount
of voting securities (or other ownership interests having ordinary voting power) sufficient to elect at least a majority of the
directors (or other Persons performing similar functions) of such corporation or other entity is beneficially owned, directly
or indirectly, by such first mentioned Person, or otherwise controlled by such first mentioned Person.

 

(yy)
“Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(zz)
“Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

 

(aaa)
“Trading Day” shall mean a day on which the principal national securities exchange on which the Common
Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted
to trading on any national securities exchange, a Business Day.

 

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

 

Section
2. Appointment of the Rights Agent. The Company hereby appoints the Rights Agent to act as rights agent for the Company in
accordance with the express terms and conditions hereof (and not implied terms and conditions), and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable, upon
ten (10) calendar days’ prior written notice to the Rights Agent. In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agents under the provisions of this Agreement shall be as
the Company reasonably determines, and the Company shall notify, in writing, the Rights Agent and any co-Rights Agents of such
duties. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such
co-rights agent.

 

Section
3. Issuance of Rights Certificates.

 

(a)
Until the Distribution Date (i) the Rights will be evidenced (subject to Section 3(b) and Section 3(c) hereof) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) or by the book entry Common Stock registered in the name of the holders, evidenced
by current ownership statements issued with respect to uncertificated Common Stock in lieu of such certificates (“Ownership
Statements”) (which Ownership Statements shall be deemed also to be certificates for Rights) and not by separate
certificates, and the registered holders of the Common Stock shall also be the registered holders of the associated Rights, and
(ii) the Rights will be transferable only in connection with the transfer of the underlying Common Stock (including a transfer
to the Company). As soon as practicable after the Distribution Date, the Company shall prepare and execute, and upon the written
request of the Company, the Rights Agent shall countersign and the Company will send or cause to be sent (and the Rights Agent
will, if so requested and provided with all necessary information and documents will, at the expense of the Company) send, in
accordance with Section 26 hereof, to each record holder of the Common Stock as of the Close of Business on the Distribution Date
(other than an Acquiring Person or any Related Person of an Acquiring Person), one or more rights certificates, in substantially
the form of Exhibit B attached hereto (the “Rights Certificates”), evidencing one Right for each
shares of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11(i) or Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company shall not be required to issue Rights Certificates evidencing fractional Rights but may, in lieu
thereof, make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates
evidencing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights Certificates. The Company shall promptly notify the Rights
Agent in writing upon the occurrence of the Distribution Date. Until such written notice is received by the Rights Agent, the
Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred.

 

    	 	8	 

    	 

    

 

(b)
As promptly as practicable following the Record Date, the Company shall make available a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit C (the “Summary of Rights”), to each record holder of Common
Stock as of the Close of Business on the Record Date who may so request a copy from time to time prior to the Expiration Date.
With respect to Common Stock outstanding as of the Record Date, or issued subsequent to the Record Date, until the earlier of
the Distribution Date and the Expiration Date, the Rights associated with such Common Stock will be evidenced by the certificate
or Ownership Statement for such Common Stock registered in the names of the holders thereof, in each case together with the Summary
of Rights. Until the earlier of the Distribution Date and the Expiration Date, the surrender for transfer of any certificate or
Ownership Statement for Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Stock evidenced by such certificate or Ownership Statement.

 

(c)
Rights shall without any further action, be issued in respect of all shares of Common Stock that are issued (whether originally
issued or from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date and the Expiration
Date and, to the extent provided in Section 22 hereof, in respect of Common Stock issued after the Distribution Date. Certificates
and Ownership Statements evidencing such Common Stock shall have printed or otherwise affixed to them a legend in substantially
the following form:

 

“This
[certificate/statement] also evidences and entitles the registered holder hereof to certain Rights as set forth in the Rights
Agreement between hopTo Inc. (the “Company”) and American Stock Transfer & Trust Company, LLC, dated as
of February 16, 2018 (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this [certificate/statement].
The Company will mail to the registered holder of this [certificate/statement] a copy of the Rights Agreement, as in effect on
the date of mailing, without charge, promptly after receipt of a written request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights beneficially owned by any Person who is, was, or becomes an Acquiring Person or any Related Person
thereof (as such capitalized terms are defined in the Rights Agreement), whether currently beneficially owned by or on behalf
of such Person or by any subsequent beneficial owner, may become null and void.”

 

    	 	9	 

    	 

    

 

With
respect to such certificates or Ownership Statements containing the foregoing legend, until the earlier of the Distribution Date
and the Expiration Date, the Rights associated with the Common Stock evidenced by such certificates or Ownership Statements shall
be evidenced by such certificates or Ownership Statements alone and the surrender for transfer of any certificate or Ownership
Statement for Common Stock shall also constitute the transfer of the Rights associated with the Common Stock evidenced by such
certificate or Ownership Statement. Notwithstanding this Section 3(c) or anything to the contrary that may be contained elsewhere
in this Agreement, the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of
any registered holder of Rights Certificates. In the event the Company purchases or otherwise acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights associated with such shares of Common Stock that
are no longer outstanding.

 

After
the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, if new certificate(s) representing
Common Stock are issued in connection with the transfer, split-up, combination or exchange of certificate(s) representing Common
Stock or if new certificate(s) representing shares of Common Stock are issued to replace any certificate(s) that have been mutilated,
destroyed, lost, or stolen, then such new certificate(s) shall bear a legend in substantially the form of the foregoing.

 

Section
4. Form of Rights Certificates.

 

(a)
The Rights Certificates (and the forms of election to purchase and of assignment and the certificates contained therein to be
printed on the reverse thereof) shall each be substantially in the form attached hereto as Exhibit B and may have such
marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate
(but which do not affect the rights, duties, liabilities or responsibilities of the Rights Agent) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any national securities exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face shall entitle the registered holders thereof to purchase such number of
one one-thousandths of a Preferred Share as shall be set forth therein at the Purchase Price, but the amount and type of securities,
cash 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.

 

(b)
Any Rights Certificate issued pursuant hereto that represents Rights beneficially owned by: (i) an Acquiring Person or
any Related Person of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Related Person) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Related Person) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or any such Related Person)
to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which the Board,
in its sole discretion, has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent
feasible, and only if the Company has provided specific written instructions to the Rights Agent) a legend in substantially the
following form:

 

    	 	10	 

    	 

    

 

“The
Rights evidenced by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or
a Related Person of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights evidenced hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.”

 

The
Company shall give written notice to the Rights Agent promptly after it becomes aware of the existence and identity of any Acquiring
Person or any Related Person thereof. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively
for all purposes that no Person has become an Acquiring Person or a Related Person of an Acquiring Person. The Company shall instruct
the Rights Agent in writing of the Rights which should be so legended.

 

Notwithstanding
this Section 4(b) or anything to the contrary that may be contained elsewhere in this Agreement, the omission of the foregoing
legend or any legend substantially similar thereto shall not affect the enforceability of any part of this Agreement or the rights
of any registered holder of Rights Certificates.

 

Section
5. Countersignature and Registration.

 

(a)
The Rights Certificates shall be duly executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer,
its President or any Vice President of the Company, and by the Secretary, an Assistant Secretary, the Treasurer/Chief Financial
Officer or an Assistant Treasurer, either manually or by facsimile or portable document format signature. The Rights Certificates
shall be countersigned by an authorized signatory of the Rights Agent, either manually or by facsimile or portable document format
signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed
any of the Rights Certificates shall cease to be such officer of the Company before countersignature by an authorized signatory
of the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by
an authorized signatory of the Rights Agent and issued and delivered by the Company with the same force and effect as though the
Person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any Person who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Agreement any such
Person was not such an officer.

 

    	 	11	 

    	 

    

 

(b)
Following the Distribution Date, and receipt by the Rights Agent of written notice to that effect and all other relevant and necessary
information and documents referred to in Section 3(a), the Rights Agent will keep, or cause to be kept, at its office or offices
designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders
of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates, and the date of each
of the Rights Certificates.

 

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

 

(a)
Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate or Certificates (other
than Rights Certificates representing Rights that have become null and void pursuant to Section 7(e) hereof, or evidencing Rights
that have been redeemed or exchanged pursuant to Section 23 or Section 24 hereof) may be transferred, split-up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one one-thousandths
of a Preferred Share (or, following the occurrence of a Triggering Event, Common Stock, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered then entitles such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer, split-up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender, together with any required
form of assignment duly executed and properly completed, the Rights Certificate or Certificates to be transferred, split-up, combined,
or exchanged, with the form of assignment and certificate contained therein properly completed and duly executed and with all
signatures guaranteed, at the office or offices of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have properly completed and duly executed the certificate contained in the form of assignment
on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Rights Certificate or Related Persons thereof as the Company
or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require payment from a registered holder of a Rights Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split-up, combination,
or exchange of Rights Certificates. If and to the extent the Company does require payment of any such taxes or charges, the Company
shall give the Rights Agent prompt written notice thereof and the Rights Agent shall not deliver any Rights Certificate unless
and until it is satisfied that all such payments have been made, and the Rights Agent shall forward any such sum collected by
it to the Company or to such Persons as the Company specifies by written notice. The Rights Agent shall have no duty or obligation
to take any action with respect to a holder of a Rights Certificate under any Section of this Agreement which requires the payment
by such holder of a Rights Certificate of applicable taxes and/or charges unless and until it is satisfied that all such taxes
and/or charges have been paid.

 

    	 	12	 

    	 

    

 

(b)
Subject to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt
by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company will execute and deliver a new Rights Certificate
of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Rights Certificate
so lost, stolen, destroyed or mutilated.

 

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

 

(a)
Subject to Section 7(e) hereof, at any time after the Distribution Date the registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii), and Section 23(a) hereof) in whole or in part upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate contained therein properly completed and duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of one one-thousandths of a Preferred Share (or, following the occurrence of a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the Close of Business on February 16, 2021 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof, and (iii)
the time at which the Rights are exchanged in full as provided in Section 24 hereof (the earliest of (i), (ii), and (iii)
being herein referred to as the “Expiration Date”).

 

(b)
The purchase price for each one one-thousandth of a Preferred Share pursuant to the exercise of a Right initially shall be $1.00,
shall be subject to adjustment from time to time as provided in Section 11 and Section 13(a) hereof, and shall be payable in accordance
with Section 7(c) hereof (such purchase price, as so adjusted, the “Purchase Price”).

 

(c)
Upon receipt of a Rights Certificate evidencing exercisable Rights, with the form of election to purchase and the certificate
contained therein properly completed and duly executed, accompanied by payment, with respect to each Right so exercised, of the
Purchase Price (as such amount may be adjusted as provided herein) per one one-thousandth of a Preferred Share (or, following
the occurrence of a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable tax or charge, the Rights Agent shall, subject to Section 7(f) and Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent for such shares) certificates for the total number of one one-thousandths of a Preferred
Share to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B)
if, subject to Section 14 hereof, the Company shall have elected to deposit the total number of Preferred Shares issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent of depositary receipts evidencing
such number of one one-thousandths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares
evidenced by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) if necessary to comply with this Agreement, requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt
of such certificates or depositary receipts, subject to Section 7(f) below, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and
(iv) if necessary to comply with this Agreement, after receipt thereof, subject to Section 7(f) below, deliver such cash,
if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or bank draft payable to
the order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the
Company, pay cash or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary
so that such other securities, cash or other property are available for distribution by the Rights Agent, if and when necessary
to comply with this Agreement, and until so received, the Rights Agent shall have no duties or obligations with respect to such
securities, cash and/or other property. The Company reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only whole Preferred Shares would be issued.

 

    	 	13	 

    	 

    

 

(d)
In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order
of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject
to the provisions of Sections 6 and 14 hereof.

 

(e)
Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights Beneficially Owned by (i) an Acquiring Person or a Related Person of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Related Person) who becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any such Related Person) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any such Related Person) to holders of equity interests in such Acquiring Person (or any such Related
Person) or to any Person with whom the Acquiring Person (or any such Related Person) has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer that the Board, in its
sole discretion, has determined is part of a plan, arrangement or understanding (whether or not in writing) that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement, the Rights
Certificates or otherwise (including, without limitation, the rights and preferences pursuant to Sections 7, 11, 13, 23 and 24
hereof). The Company shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof
are complied with, but shall have no liability to any holder of Rights Certificates or any other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of its Related Persons or transferees hereunder.

    	 	14	 

    	 

    

 

(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 a Rights Certificate upon the occurrence of
any purported exercise as set forth in this Section 7 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 represented by the Rights Certificate or Related Persons of such Beneficial Owner as the Company
shall reasonably request.

 

Section
8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company, destroy or cause to be destroyed such cancelled
Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

 

Section
9. Reservation and Availability of Capital Stock.

 

(a)
The Company covenants and agrees that at all times prior to the Expiration Date it will cause to be reserved and kept available
out of its authorized and unissued Preferred Shares (and, following the occurrence of a Triggering Event, out of its authorized
and unissued Common Shares or other securities as may be issuable upon exercise of the Rights and/or out of its securities held
in treasury, as the case may be), the number of Preferred Shares (and, following the occurrence of a Triggering Event, Common
Stock or other securities, as the case may be) that, as provided in this Agreement, including, but not limited to, Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all of the outstanding Rights. Upon the occurrence of any events
resulting in an increase in the aggregate number of Preferred Shares (or other equity securities of the Company) issuable upon
exercise of all outstanding Rights above the number then reserved, the Company shall make appropriate increases in the number
of shares so reserved.

 

(b)
So long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Stock or other securities, as the
case may be) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange or quoted
on a quotation system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable
through the Expiration Date, all shares reserved for such issuance to be listed on such exchange or quoted on such quotation system,
as the case may be, upon official notice of issuance upon such exercise.

 

    	 	15	 

    	 

    

 

(c)
The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights
has been determined in accordance with Section 11(a) hereof, a registration statement on an appropriate form under the Act, with
respect to the securities purchasable upon exercise of the Rights, (ii) cause such registration statement to become effective
as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities, and (B) the Expiration Date. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue
a public announcement (with prompt written notice thereof to the Rights Agent; and until such written notice is received by the
Rights Agent, the Rights Agent may presume conclusively that no such suspension has occurred) 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 (with prompt written notice thereof to the Rights Agent; and until such written notice is received by the Rights Agent,
the Rights Agent may presume conclusively that such suspension is still in effect). In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the Company similarly may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been declared effective. 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 shall not
have been declared effective.

 

(d)
The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-thousandths
of a Preferred Share (and, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be)
delivered upon exercise of the Rights shall, at the time of delivery of the certificates or depositary receipts for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable.

 

(e)
The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes and charges
that may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates, entries in the
book entry account system of the transfer agent, or depositary receipts for a number of one one-thousandths of a Preferred Share
(or, following the occurrence of a Triggering Event, Common Stock or other securities, cash or other assets, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge that may be payable in respect
of any transfer or delivery of Rights Certificates or depositary receipts or entries in the book entry account system of the transfer
agent to a Person other than, or the issuance or delivery of a number of one one-thousandths of a Preferred Share (or, following
the occurrence of a Triggering Event, Common Stock or other securities, cash or other assets, as the case may be) in a name other
than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts or entries in the book entry account system of the transfer agent for a number of one
one-thousandths of a Preferred Share (or, following the occurrence of a Triggering Event, Common Stock or other securities, cash
or other assets as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such
tax or charge shall have been paid (any such tax or charge being payable by the registered holder of such Rights Certificates
at the time of surrender) or until it has been established to the Company’s or to the Rights Agent’s satisfaction
that no such tax or charge is due.

 

    	 	16	 

    	 

    

 

Section
10. Preferred Shares Record Date. Each Person in whose name any certificate or entry in the book entry account system of the
transfer agent for a number of one one-thousandths of a Preferred Share (or, following the occurrence of a Triggering Event, Common
Shares or other securities, cash or other 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 such fractional Preferred Shares (or, following the occurrence of a Triggering
Event, Common Shares or other securities, cash, or other assets as the case may be) evidenced thereby on, and such certificate
or entry shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and all applicable taxes and charges) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the Preferred Shares (or, following the occurrence of a Triggering Event,
Common Stock or other securities, cash or other 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 shares (fractional or otherwise) on, and such certificate or entry shall
be dated, the next succeeding Business Day on which the Preferred Shares (or, following the occurrence of a Triggering Event,
Common Shares or other securities, cash, or other assets as the case may be) transfer books of the Company are open and provided
further, that if delivery of the Preferred Shares is delayed pursuant to Section 9(c), when such Preferred Shares first becomes
deliverable. Prior to the exercise of the Rights evidenced thereby, the registered holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

 

Section
11. Adjustment of Purchase Price, Number and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind
of shares, or fractions thereof, 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 or pay a dividend on the Preferred
Shares payable in Preferred Shares, (B) subdivide or split the outstanding Preferred Shares, (C) combine or consolidate
the outstanding Preferred Shares into a smaller number of shares, or (D) issue any shares of its capital stock 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 corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, split, combination,
consolidation, or reclassification, and the number and kind of Preferred Shares or fractions thereof (or other capital stock,
as the case may be), issuable on such date, shall be proportionately adjusted so that the registered holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind
of Preferred Shares or fractions thereof (or other capital stock, as the case may be), which, if such Right had been exercised
immediately prior to such date (whether or not such Right was then exercisable) and at a time when the Preferred Share (or other
capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, split, combination, consolidation, or reclassification. If an
event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.

 

    	 	17	 

    	 

    

 

(ii)
In the event any Person shall become an Acquiring Person (a “Section 11(a)(ii) Event”), then, promptly
following the occurrence of such Section 11(a)(ii) Event, proper provision shall be made so that, upon expiration of the Redemption
Period, each registered holder of a Right (except as provided below in Section 11(a)(iii) and in Sections 7(e), 13 and 24 hereof)
shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-thousandths of a Preferred Share, such number of shares of Common Stock of the
Company as shall equal the result obtained by (A) multiplying the then current Purchase Price by the then number of one
one-thousandths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (B) dividing that product (which, following such first occurrence, shall thereafter be referred to
as the “Purchase Price” for each Right and for all purposes of this Agreement) by fifty percent (50%)
of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment
Shares”).

 

(iii)
In the event that (A) the number of shares of Common Stock authorized by the Certificate of Incorporation, but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights, is not sufficient to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof or (B) the Board otherwise shall determine to do so in its sole
discretion, the Company, acting by resolution of the Board, shall (1) determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the “Current Value”), and (2) with respect to each Right (subject
to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Right and
payment of the applicable Purchase Price, (u) cash, (v) a reduction in the Purchase Price, (w) shares of
Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred
stock, such as the Preferred Shares, which the Board has deemed to have essentially the same value or economic rights as Common
Shares (such shares of preferred stock being referred to as “Common Stock Equivalents”)), (x)
debt securities of the Company, (y) other assets, or (z) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; provided, however, that, if, under the circumstances
set forth in clause (A) above, the Company shall not have made adequate provision to deliver value pursuant to clause (2) above
within thirty (30) days following the later of (I) the first occurrence of a Section 11(a)(ii) Event and (II)
the date on which the Company’s right of redemption pursuant to Section 23(a) hereof expires (the later of (I) and (II)
being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Common Shares (to
the extent available) and then, if necessary, cash, which shares and cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term “Spread” shall mean the excess of the Current Value over the Purchase
Price. If the Board determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but
not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such 30 day period, as it may be extended, is herein called the “Substitution
Period”). To the extent that action is to be taken pursuant to the first or third sentences of this Section 11(a)(iii),
the Company shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and
the Company may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek such
stockholder approval for such authorization of additional shares or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue
a public announcement (with prompt written notice thereof to the Rights Agent) stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement (with prompt written notice thereof to the Rights Agent) at such
time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall
be the Current Market Price per Common Share on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any
Common Stock Equivalent shall be deemed to equal the Current Market Price per Common Share on such date.

 

    	 	18	 

    	 

    

 

(b)
In case the Company shall fix a record date for the issuance of rights, options, or warrants to all registered holders of Preferred
Shares entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record
date) Preferred Shares (or shares having 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 Market Price per Preferred Share on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date,
plus the number of Preferred Shares that the aggregate offering price of the total number of Preferred Shares or Equivalent Preferred
Shares so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares or Equivalent Preferred Shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be
paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent
and shall be binding and conclusive for all purposes on the Rights Agent and the holders of the Rights. Preferred Shares owned
by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments
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 that would then be in effect if such record date had
not been fixed.

 

    	 	19	 

    	 

    

 

(c)
In case the Company shall fix a record date for a distribution to all registered 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 corporation)
of cash (other than a regular cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Shares, but including any dividend payable in stock other than Preferred Shares) or evidences of indebtedness,
or of subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the Current Market Price per Preferred Share on such record date, less the fair market
value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent
and shall be binding and conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be
distributed, or of such subscription rights or warrants applicable to a Preferred Share, and the denominator of which shall be
such Current Market Price per Preferred Share. 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 that would
then be in effect if such record date had not been fixed.

 

(d)(i)
For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the “Current
Market Price” per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices
per share of Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the “Current Market Price” per share of Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the Current Market Price
per share of Common Stock is determined during a period following the announcement by the issuer of such share of Common Stock
of (A) a dividend or distribution on such Common Stock payable in shares of Common Stock or securities convertible into
such Common Stock (other than the Rights), or (B) any subdivision, combination, consolidation, reverse stock split or reclassification
of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination,
consolidation, reverse stock split or reclassification shall not have occurred prior to the commencement of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend trading. The Closing Price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on NASDAQ or, if the Common Stock is not listed or admitted to trading on NASDAQ, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if the Common Stock 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 on a quotation system then in use, or, if on any such date the Common Stock is not so quoted, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If
on any such date the Common Stock is not publicly held and are not so listed, admitted to trading, or quoted, and no market maker
is making a market in the Common Stock, the “Current Market Price” per share of Common Stock shall mean the
fair value per share on such date as determined in good faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be binding and conclusive for all purposes on the Rights Agent and the holders of the Rights.

 

    	 	20	 

    	 

    

 

(ii)
For the purpose of any computation hereunder, the “Current Market Price” per Preferred Share shall be determined
in the same manner as set forth above for the Common Stock in Section 11(d)(i) hereof (other than the penultimate sentence thereof).
If the Current Market Price per Preferred Share cannot be determined in the manner provided above or if the Preferred Shares are
not publicly held or listed, admitted to trading, or quoted in a manner described in Section 11(d)(i) hereof, the Current Market
Price per Preferred Share shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price per share of Common Stock. If neither the Common Stock nor the Preferred
Shares are publicly held or listed, admitted to trading, or quoted, the “Current Market Price” per Preferred
Share shall mean the fair value per share as determined in good faith by a majority of the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding and conclusive for all purposes on the Rights Agent
and the holders of the Rights. For all purposes of this Agreement, the Current Market Price of one one-thousandth of a Preferred
Share shall be equal to the Current Market Price of one Preferred Share divided by 1,000.

 

(e)
Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest
thousandth of a share of Common Stock or other share or one-millionth of a Preferred Share, as the case may be.

 

(f)
If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the registered holder of any Right
thereafter exercised shall become entitled to receive any shares of capital stock 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), (d), (e), (g), (h), (i), (j), (k), (l) 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.

 

(g)
All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a Preferred Share (or other securities
or amount of cash or combination thereof) purchasable from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.

 

(h)
Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) and Section 11(c) hereof, each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-thousandths of a Preferred Share (calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase Price.

 

    	 	21	 

    	 

    

 

(i)
The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-thousandths of a Preferred Share purchasable upon the exercise of a Right pursuant to
Section 11(h) hereof. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the
number of one one-thousandths of a 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-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement,
and notify the Rights Agent in writing, of its election to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than
the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and delivered by the Company,
and countersigned and delivered by the Rights Agent, in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement.

 

(j)
Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a Preferred Share issuable
upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase
Price per one one-thousandth of a share and the number of one one-thousandths of a share that were expressed in the initial Rights
Certificates issued hereunder.

 

(k)
Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the number
of one one-thousandths of a Preferred Share issuable upon exercise of the Rights, the Company shall take any corporate action
that may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue, fully paid and
nonassessable, such number of one one-thousandths of a Preferred Share at such adjusted Purchase Price.

 

    	 	22	 

    	 

    

 

(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 (and shall notify the Rights Agent in writing of any such election) until
the occurrence of such event the issuance to the registered holder of any Right exercised after such record date of the number
of one one-thousandths of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-thousandths of a Preferred Share and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such
holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.

 

(m)
Anything in this Section 11 to the contrary notwithstanding, prior to the Distribution Date, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board, in its good faith judgment, 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
Market Price, (iii) issuance wholly for cash of Preferred Shares or securities that by their terms are convertible into
or exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to registered holders of its Preferred Shares shall not be taxable to such
stockholders or shall reduce the taxes payable by such holders.

 

(n)
The Company covenants and agrees that in the event that a Section 11(a)(ii) Event occurs and the Rights shall then be outstanding,
it shall not, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or otherwise transfer (or permit any Subsidiary to sell or otherwise
transfer), in one transaction, or a series of related transactions, assets, cash flow or earning power aggregating fifty percent
(50%) or more of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole and calculated on
the basis of the Company’s most recent regularly prepared financial statements) to any other Person or Persons (other than
the Company or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale or transfer there are any charter or bylaw provisions,
rights, warrants or other instruments or securities outstanding or agreements in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale or transfer the stockholders of the Person who constitutes, or would constitute, the “Principal
Party” for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person
or any of its Related Persons; provided, however, that this Section 11(n) shall not affect the ability
of any Subsidiary of the Company to consolidate with, merge with or into, or sell or transfer assets or earning power to, any
other Subsidiary of the Company.

 

(o)
The Company covenants and agrees that after the Distribution Date and so long as any Rights shall then be outstanding (other than
Rights that have become null and void pursuant to Section 7(e) hereof), it will not, except as permitted by Section 23, Section
24, or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

 

    	 	23	 

    	 

    

 

(p)
Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare or pay a dividend on the outstanding Common Stock payable
in Common Shares, (ii) subdivide or split the outstanding Common Stock, (iii) combine or consolidate the outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its capital stock in a reclassification of Common
Stock (including any such reclassification in connection with a consolidation or merger in which the Company is a continuing or
surviving corporation), the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date (or issued or delivered on or after the Distribution Date pursuant to Section 22
hereof), shall be proportionately adjusted so that the number of Rights thereafter associated with each shares of Common Stock
following any such event shall equal the result obtained by multiplying the number of Rights associated with each shares of Common
Stock immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the occurrence of such event. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or reclassification
is effected. If an event occurs that would require an adjustment under Section 11(a)(ii) and this Section 11(p), the adjustments
provided for in this Section 11(p) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii).

 

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 reasonably
detailed statement of the facts, computations and methodology accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Preferred Shares and the Common Stock, a copy of such certificate and (c)
if a Distribution Date has occurred, mail a brief summary thereof to each registered holder of a Rights Certificate in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or
statement therein contained and shall have no duty or liability with respect to, and shall not be deemed to have knowledge of,
any adjustment or any such event unless and until it shall have received such a certificate.

 

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

 

(a)
In the event that, at any time after a Person has become an Acquiring Person, directly or indirectly,

 

(i)
the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation or other entity
of such consolidation or merger;

 

    	 	24	 

    	 

    

 

(ii)
any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of the outstanding Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property; or

 

(iii)
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets, cash flow or earning power aggregating fifty percent (50%) or more of the assets,
cash flow or earning power of the Company and its Subsidiaries (taken as a whole and calculated on the basis of the Company’s
most recent regularly prepared financial statements) to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o) hereof);

 

then,
and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that: (A)
each registered holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price multiplied by the number of one one-thousandths of a share of Preferred
Shares for which a Right is then exercisable in accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable Common Shares of the Principal Party, not subject to any liens, encumbrances,
rights of first refusal, transfer restrictions, preemptive rights or other adverse claims of any nature whatsoever, as shall be
equal to the result obtained by (1) multiplying the number of one one-thousandths of a Preferred Share for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately
prior to such first occurrence of a Section 11(a)(ii) Event, and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for
all purposes of this Agreement) by fifty percent (50%) of the Current Market Price per Common Share of such Principal Party on
the date of consummation of such Section 13 Event; (B) 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; (C) the term
“Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section
13 Event; (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient
number of shares of Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however, that upon the subsequent occurrence
of any merger, consolidation, sale of all or substantially all assets, recapitalization, reclassification of shares, reorganization
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, such cash, shares, rights, options warrants and other property which
such holder would have been entitled to receive had he, she or it at the time of such transaction, owned the Common Stock of the
Principal Party purchasable upon the exercise of a Right, and such Principal Party shall take such steps (including, but not limited
to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants, options and other property; and (E) the provisions of Section 11(a)(ii)
hereof shall be of no effect with respect to events occurring at any time following the first occurrence of any Section 13 Event,
and the Rights that have not theretofore been exercised shall thereafter become exercisable in the manner described in this Section
13.

 

    	 	25	 

    	 

    

 

(b)
“Principal Party” shall mean:

 

(i)
in the case of any transaction described in Section 13(a)(i) or Section 13(a)(ii) hereof, the Person (including the Company as
successor thereto or as the surviving entity) that is the issuer of any securities into which Common Shares of the Company are
converted, changed, or exchanged in such merger or consolidation or, if there is more than one such issuer, the issuer of Common
Shares of such issuer that has the highest aggregate current market price (determined pursuant to Section 11(d) hereof) and if
no securities or other equity interests are so issued, the Person (including the Company as successor thereto or as the surviving
entity) that is the other party to such merger or consolidation, or, if there is more than one such Person, the Person that is
a constituent party to such merger or consolidation, the Common Shares of such Person of which has the highest aggregate current
market price (determined pursuant to Section 11(d) hereof); and

 

(ii)
in the case of any transaction described in Section 13(a)(iii) 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 largest 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 value of shares outstanding
(as determined pursuant to Section 11(d) hereof); provided, however, that in any such case, (A)
if the Common Stock of such Person (who, but for this proviso, would be the Principal Party) are not at such time and have
not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; and (B) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stock of two or more of which are and have been so registered, “Principal Party”
shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value.

 

(c)
The Company shall not consummate a Section 13 Event unless the Principal Party shall have a sufficient number of authorized shares
of Common Stock that have not been issued or reserved or that are held in treasury for issuance to permit the exercise in full
of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that the requirements of Section 13(a) and Section 13(b)
hereof shall promptly be performed in accordance with their terms and further providing that, as soon as practicable after the
date of any such Section 13 Event, the Principal Party, as soon as practicable after the execution of such agreement, will:

 

(i)
prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;

 

    	 	26	 

    	 

    

 

(ii)
take all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise
of the Rights, including, but not limited to, the registration or qualification of such securities under all requisite securities
laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as may be
necessary or appropriate; and

 

(iii)
deliver to registered holders of the Rights historical financial statements for the Principal Party and each of its Affiliates
that comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act.

 

(d)
The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In
the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights that have
not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a) hereof.

 

(e)
In case the Principal Party that is to be a party to a transaction referred to in this Section 13 has at the time of such transaction,
or immediately following such transaction will have, a provision in any of its authorized securities or in its certificate of
incorporation or bylaws or other instrument governing its affairs, or any other agreements or arrangements, which provision would
have the effect of (i) causing such Principal Party to issue, in connection with, or as a consequence of, the consummation
of a transaction referred to in this Section 13, shares of Common Stock of such Principal Party at less than such then current
market price (other than to holders of Rights pursuant to this Section 13); (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 Section 13; or (iii) otherwise eliminating or substantially diminishing the benefits intended to be afforded by the
Rights in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13; then, in
such event, 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 cancelled, 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.

 

Section
14. Fractional Rights and Fractional Shares.

 

(a)
The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates that evidence fractional Rights. In lieu of such fractional Rights, the Company shall
pay 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 price of a whole Right. For purposes of this Section 14(a),
the current market price 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 Trading Day shall
be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on NASDAQ or, if the Rights are not listed or admitted to trading on NASDAQ, as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal
national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by a quotation system then in use or, 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 Board. If on any such date the Rights are not publicly held and are not so listed, admitted to
trading, or quoted, and no market maker is making a market in the Rights, the current market value of a Right shall mean the fair
value of a Right on such date as determined in good faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and delivered to the holders of the Rights and shall be binding and conclusive for all purposes.

 

    	 	27	 

    	 

    

 

(b)
The Company shall not be required to issue fractions of Preferred Shares (other than fractions that are integral multiples of
one one-thousandth of a Preferred Share) upon exercise of the Rights or to distribute certificates or make any entries in the
book entry account system of the transfer agent that evidence fractional Preferred Shares (other than fractions that are integral
multiples of one one-thousandth of a Preferred Share). In lieu of fractional Preferred Shares that are not integral multiples
of one one-thousandth of a Preferred Share, the Company may pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market price of one one-thousandth
of a Preferred Share. For purposes of this Section 14(b), the current market price of one one-thousandth of a Preferred Share
shall be one one-thousandth of the Closing Price of a Preferred Share or, if unavailable, the appropriate alternative price (in
each case, as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise.

 

(c)
Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates or Ownership Statements that evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one shares
of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the Closing
Price of one share of Common Stock or, if unavailable, the appropriate alternative price (in each case, as determined pursuant
to Section 11(d)(i) hereof) on the Trading Day immediately prior to the date of such exercise.

 

(d)
The registered holder of a Right by the acceptance of that Right expressly waives such holder’s right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14.

 

(e)
Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under this Agreement, the Company
shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related
to such payments and the prices and formulas utilized in calculating such payments; and (ii) provide sufficient funds to
the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying
upon such a certificate and has no duty with respect to, and will not be deemed to have knowledge of, any payment for fractional
Rights or fractional shares under any Section of this Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent has received such a certificate and sufficient monies.

 

    	 	28	 

    	 

    

 

Section
15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights
Agent hereunder, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date,
of the Common Stock); and any registered holder of any Rights Certificate (and, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the registered holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on such holder’s own behalf and for such holder’s own benefit, 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 the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the registered holders of Rights, it is specifically
acknowledged that the registered holders of Rights would not have an adequate remedy at law for any breach of this Agreement by
the Company and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder by the Company of any Person subject to this Agreement.

 

Section
16. Agreement of Rights Holders. Every registered holder of a Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other registered holder of a Right that:

 

(a)
prior to the Distribution Date, the Rights shall be evidenced by the balances indicated in Ownership Statements in the names of
the holders of Common Stock (which Common Stock shall also be deemed to represent certificates for Rights) or, in the case of
certificated shares, the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates
for shares of Common Stock also constitute certificates for Rights) and each Right will be transferable only in connection with
the transfer of shares of Common Stock;

 

(b)
after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument
of transfer and with the appropriate forms and certificates contained therein properly completed and duly executed;

 

(c)
subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose name
a Rights Certificate (or, prior to the Distribution Date, a Common Stock certificate or Ownership Statement) 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 Common Stock certificate or Ownership Statement made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof,
shall be required to be affected by any notice to the contrary; and

 

    	 	29	 

    	 

    

 

(d)
notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability
to any registered holder of a Right or other Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order, decree, judgment or ruling (whether interlocutory
or final) issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, that the Company must use its best
efforts to have any such injunction, order, decree, judgment or ruling lifted or otherwise overturned as soon as possible.

 

Section
17. Rights Certificate Holder Not Deemed a Stockholder. No registered holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the registered holder of the number of one one-thousandths of
a Preferred Share or any other securities of the Company that may at any time be issuable on the exercise of the Rights evidenced
thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the registered holder of
any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.

 

Section
18. Concerning the 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, reimbursement for its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the preparation, delivery, amendment, administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost, or expense, incurred without gross negligence,
bad faith or willful misconduct (each as determined by a final non-appealable judgment of a court of competent jurisdiction) on
the part of the Rights Agent, for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Agreement, including reasonable attorneys’ fees and expenses
and the costs and expenses of defending against any claim of liability in the premises. The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company.

 

(b)
The Rights Agent may conclusively rely upon and shall be protected and shall incur no liability for or in respect of any action
taken, suffered or omitted to be taken by it in connection with its acceptance and administration of this Agreement or the exercise
or performance of its duties hereunder in reliance upon any Rights Certificate or certificate for Common Shares or for other securities
of the Company or an Ownership Statement, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to have been signed,
executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel
as set forth herein. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice
thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in
connection therewith, unless and until it has received such notice.

 

    	 	30	 

    	 

    

 

(c)
The provisions of this Section 18, Section 20 and Section 29 hereof shall survive the termination or expiration of this Agreement,
the exercise or expiration of the Rights and the resignation, replacement or removal of the Rights Agent

 

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

 

(a)
Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any
Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or
any Person succeeding to the corporate trust, stock transfer or other stockholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; but only if such Person 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 an authorized signatory 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,
an authorized signatory of 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 of an authorized signatory under the Rights Agent’s
prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, an authorized signatory of the Rights Agent may countersign such Rights Certificates either in the prior
name of the Rights Agent or in the changed name of the Rights Agent; 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 the Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly imposed by
this Agreement (and no implied duties or obligations) upon the following terms and conditions, by all of which the Company and
the registered 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 or an employee of the Rights Agent),
and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in the absence
of bad faith, gross negligence or willful misconduct (which bad faith, gross negligence, or willful misconduct must be determined
by a final, non-appealable judgment of a court of competent jurisdiction) and in accordance with such advice or opinion.

 

    	 	31	 

    	 

    

 

(b)
Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price)
be proved or established by the Company prior to the Rights Agent taking or suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board, the Chief Executive Officer, the Chief Financial
Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection to
the Rights Agent, and the Rights Agent shall incur no liability, for or in respect of any action taken or suffered or omitted
to be taken by it in the absence of bad faith, gross negligence or willful misconduct (which bad faith, gross negligence, or willful
misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction) under the provisions of
this Agreement in reliance upon such certificate.

 

(c)
The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence,
bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction).
Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent be liable for special, punitive,
indirect, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. Any liability
of the Rights Agent under this Agreement will be limited to the amount of annual fees paid by the Company to the Rights Agent.

 

(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 and it shall not be required to verify the same (except as to a countersignature by one of its authorized
signatories on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the
Company only.

 

(e)
The Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or in respect of the validity
or execution of any Rights Certificate (except a countersignature by one of its authorized signatories on any such Rights Certificate);
nor shall it be responsible for any breach by the Company of any covenant or failure by the Company to satisfy any condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 7(e) hereof) or any adjustment required under the provisions
of Section 11, Section 13, Section 23 or Section 24 hereof or responsible for the manner, method or amount of any such change
or adjustment or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt by the Rights Agent of a certificate describing any such
adjustment, delivered pursuant to Section 12); nor shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Common Stock or Preferred Shares or any other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Shares will, when so issued,
be validly authorized and issued, fully paid and nonassessable.

 

    	 	32	 

    	 

    

 

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

 

(g)
The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and such instructions shall be full authorization and protection to the
Rights Agent and the Rights Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in the absence
of bad faith, gross negligence and willful misconduct (which bad faith, gross negligence, or willful misconduct must be determined
by a final, non-appealable judgment of a court of competent jurisdiction) in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. The Rights Agent shall be fully authorized and protected in relying
upon the most recent instructions received by any such officer.

 

(h)
The Rights Agent and any stockholder, Affiliate, director, officer or employee of the Rights Agent may buy, sell, or deal in any
of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, Affiliate, director, officer
or employee 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 (through its directors, officers, and employees) or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect, or misconduct, absent gross negligence, bad faith,
or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment
of a court of competent jurisdiction) of the Rights Agent in the selection and continued employment thereof.

 

(j)
No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent in providing
services to the Company in the ordinary course of its business as Rights Agent) or in the exercise of any of its rights or powers
if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.

 

(k)
If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or form of election to purchase, as the case may be, has either not been properly completed or duly
executed or indicates an affirmative response to clause 1 or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the Company.

 

    	 	33	 

    	 

    

 

Section
21. Change of the Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days’ prior written notice given to the Company (or such lesser notice as is acceptable
to the Company in its sole discretion) in accordance with Section 26 hereof, and to the extent that the Rights Agent or one of
its Affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Stock and Preferred Shares
by registered or certified mail. In the event the transfer agency relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement
as of the effective date of such termination, and the Company shall be responsible for sending any required notice. The Company
may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice given to the Rights Agent or successor
Rights Agent, as the case may be, in accordance with Section 26 hereof, and to each transfer agent of the Common Stock and Preferred
Shares by registered or certified mail, and, if such removal occurs after the Distribution Date, to the registered holders of
the Rights Certificates in accordance with Section 26 hereof. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving proper notice of such removal or after it has been properly notified
of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the registered holder of a Rights Certificate
(who shall, with such notice, submit such holder’s Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal business entity organized
and doing business under the laws of the United States or of any State thereof, in good standing, which is authorized under such
laws to exercise stockholder services powers and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a legal business entity described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties, and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for that purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Shares, and,
if such appointment occurs after the Distribution Date, give notice thereof to the registered holders of the Rights Certificates
in accordance with Section 26 hereof. Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

 

Section
22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a)
shall, with respect to Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan
or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, conversion, or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates
evidencing the appropriate number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.

 

    	34

     

    

 

Section
23. Redemption and Termination.

 

(a)
The Board may, at its option, at any time prior to the earlier of (i) the Close of Business on the tenth (10th) Business
Day following the Shares Acquisition Date (or, if the tenth (10th) Business Day following the Shares Acquisition Date occurs before
the Record Date, the Close of Business on the Record Date) and (ii) the Final Expiration Date (the “Redemption
Period”), direct the Company to, and if directed the Company shall, 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 stock
split, stock dividend, or similar transaction occurring after the date hereof (such redemption price, as adjusted, being hereinafter
referred to as the “Redemption Price”). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the right
of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, Common Stock (based on
the Current Market Price of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate
by the Board.

 

(b)
Immediately upon the action of the Board directing the Company to redeem the Rights, evidence of which shall have been filed with
the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the registered holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board directing the Company to make the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the registered holders of the then outstanding Rights in accordance with Section 26 hereof.
Any notice given in accordance with Section 26 hereof 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. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire, or purchase for value any Rights at any time in any manner other
than specifically set forth in this Section 23 or in Section 24 hereof, or other than in connection with the purchase of Common
Shares or the conversion or redemption of Common Stock in accordance with the applicable provisions of the Company’s Certificate
of Incorporation prior to the Distribution Date.

 

    	35

     

    

 

Section
24. Exchange of Rights.

 

(a)
The Board may, at its option, at any time after the occurrence of a Section 11(a)(ii) Event, direct the Company to, and if directed
the Company shall, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). The exchange
of the Rights by the Board may be made effective at such time, on such basis, and with such conditions as the Board in its sole
discretion may establish. Notwithstanding the foregoing, the Board shall not be empowered to direct the Company to effect such
exchange at any time after any Person (other than an Exempt Person), together with all Related Persons of such Person, becomes
the Beneficial Owner of fifty percent (50%) or more of the Common Stock then outstanding.

 

(b)
Immediately upon the action of the Board directing the Company to exchange any Rights pursuant to Section 24(a) hereof and without
any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of
a registered holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange (with
prompt written notice thereof to the Rights Agent); provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall give notice of any such
exchange to all of the registered holders of such Rights in accordance with Section 26 hereof. Any notice given in accordance
with Section 26 hereof shall be deemed given whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights that will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other
than Rights that have become null and void pursuant to the provisions of Section 7(e) hereof) held by each registered holder of
Rights.

 

(c)
In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Shares (or Equivalent Preferred
Shares) for Common Stock exchangeable for Rights, at the initial rate of one one-thousandth of a Preferred Share (or Equivalent
Preferred Shares) for each share of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends, and other
similar transactions after the date hereof.

 

(d)
In the event the number of shares of Common Stock authorized by the Certificate of Incorporation, but which are not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights, is not sufficient to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company may either take such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights or alternatively, at the option of the Board, substitute to the
extent of such insufficiency for each share of Common Stock that would otherwise be issuable upon exchange of a Right, cash, debt
securities of the Company, other assets, or any combination of the foregoing, in any event having an aggregate value, as determined
in good faith by the Board (whose determination shall be described in a statement filed with the Rights Agent and shall be binding
and conclusive for all purposes on the Rights Agent and the holders of the Rights), equal to the Current Market Price per share
of Common Stock (as determined pursuant to Section 11(d)(i)) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.

 

    	36

     

    

 

(e)
The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates or Ownership Statements
that evidence fractional shares of Common Stock . In lieu of such fractional shares of Common Stock, there shall be paid to the
registered holders of the Rights Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable,
an amount in cash equal to the same fraction of the current market price of a whole share of Common Stock. For the purposes of
this Section 24(e), the current market price of a whole share of Common Stock shall be the Closing Price of a share of Common
Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.

 

(f)
Notwithstanding anything in this Section 24 to the contrary, the exchange of the Rights may be made effective at such time, on
such basis and with such conditions as the Board in its sole discretion may establish. Without limiting the preceding sentence,
the Board may (i) in lieu of issuing shares of Common Stock or any other securities contemplated by this Section 24 to
the Persons entitled thereto in connection with the exchange (such Persons, the “Exchange Recipients,”
and such shares and other securities, together with any dividends or distributions made on such shares or other securities, the
“Exchange Property”) issue, transfer or deposit the Exchange Property to or into a trust or other entity
that may hold such Exchange Property for the benefit of the Exchange Recipients (provided that such trust or other entity may
not be controlled by the Company or any of its Related Persons and provided further that the trustee or similar fiduciary of the
trust or other entity will attempt to distribute the Exchange Property to the Exchange Recipients as promptly as practicable),
(ii) permit such trust or other entity to exercise all of the rights that a stockholder of record would possess with respect
to any shares deposited in such trust or entity and (iii) impose such procedures as are necessary to verify that the Exchange
Recipients are not Acquiring Persons or Related Persons of Acquiring Persons as of any time periods established by such trust
or entity.

 

Section
25. Notice of Certain Events.

 

(a)
In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of
any class to the registered holders of Preferred Shares or to make any other distribution to the registered holders of Preferred
Shares (other than a regular periodic cash dividend out of earnings or retained earnings of the Company), or (ii) to offer
to the registered holders of Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares
or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), or (iv)
to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one transaction or a series of related transactions, of fifty percent (50%) or more of the assets,
cash flow or earning power of the Company and its Subsidiaries (taken as a whole and calculated on the basis of the Company’s
most recent regularly prepared financial statements) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution, or winding up of the Company, then, in each such case, the Company shall give to each registered holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation
therein by the registered holders of the 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 twenty (20) days prior to the record date for determining
registered holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least twenty
(20) days prior to the date of the taking of such proposed action or the date of participation therein by the registered holders
of the Preferred Shares, whichever shall be the earlier; provided, however, that no such action shall
be taken pursuant to this Section 25(a) that will or would conflict with any provision of the Company’s Certificate of Incorporation;
provided, further, that no such notice shall be required pursuant to this Section 25, if any Subsidiary
of the Company effects a consolidation or merger with or into, or effects a sale or other transfer of assets or earning power
to, any other Subsidiary of the Company.

 

    	37

     

    

 

(b)
In case a Section 11(a)(ii) Event shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter
give to the Rights Agent, and, to the extent feasible, each registered holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences
of the event to registered holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in Section 25(a) to
Preferred Shares shall be deemed thereafter to refer to Common Stock or, if appropriate, other securities.

 

Notwithstanding
anything to the contrary that may be contained in this Section 25 or elsewhere in this Agreement, the failure to give, or any
defect in, any notice required to be given pursuant to this Section 25 shall not affect the legality or validity of the transaction
or event to which the notice requirement was applicable.

 

In
case any Section 13 Event shall occur, then the Company shall, as soon as practicable thereafter, give to each registered holder
of a Rights Certificate, to the extent feasible, and to the Rights Agent in accordance with Section 26 hereof, a written notice
of the occurrence of such event, which notice shall describe such event and the consequences of such event to the holders of Rights
under Section 13(a) hereof.

 

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 will be sufficiently given or made if in writing and sent by a recognized national overnight
delivery service, fax (when such fax is transmitted to the fax number set forth below and confirmation of transmission is received)
or first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent by the Company)
as follows:

 

hopTo,
Inc.

6
Loudon Road, Suite 200

Concord,
NH 03301

Attention:
Chief Executive Officer

 

    	38

     

    

 

with
copies (which will not constitute notice) to:

 

Manatt,
Phelps & Phillips, LLP

11355
W. Olympic Blvd.

Los
Angeles, CA 90064

Attention:
Ben Orlanski

Fax:
(310) 914-5892

 

Subject
to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the
registered holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by (i) first-class
mail, postage prepaid, (ii) a recognized national overnight delivery service, prepaid, or (iii) courier or messenger service,
in each case addressed (until another address is filed in writing by the Rights Agent with the Company) as follows:

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 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 registered holder of any
Rights Certificate (or, if prior to the Distribution Date, of the Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the
Rights Agent (or, if prior to the Distribution Date, of the transfer agent for the Common Stock).

 

Section
27. Supplements and Amendments. Prior to the Distribution Date, and except as otherwise provided in this Section 27, the Company,
by action of the Board, may from time to time, in its sole and absolute discretion, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Rights Agreement in any respect (including, without limitation, any extension
of the period in which the Rights may be redeemed, any increase in the Purchase Price and any extension of the Final Expiration
Date) without the approval of any holders of certificates representing the Common Stock. From and after the Distribution Date,
and except as otherwise provided in this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Rights Agreement without the approval of any holders of Rights in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein,
(iii) shorten or lengthen any time period hereunder, or (iv) change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable; provided, however, that no such supplement
or amendment shall adversely affect the interests of the holders of Right Certificates (other than an Acquiring Person or any
Related Person thereof), and no such amendment may cause the Rights again to become redeemable or cause this Rights Agreement
again to become amendable as to an Acquiring Person or any Related Person thereof other than in accordance with this sentence.
Any such supplement or amendment shall be evidenced by a writing executed by the Company and the Rights Agent. Upon the delivery
of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment; provided, that the
Rights Agent shall not be obligated to enter into any supplement or amendment that adversely affects the rights, duties or obligations
of the Rights Agent under this Agreement.

 

    	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 Board. For all purposes of this Agreement, any calculation of the number of shares of
Common Stock or any other class of capital stock outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board shall have
the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation,
the right and power to (a) interpret the provisions of this Agreement and (b) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend
this Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the registered holders of the Rights and all other parties, and (y) not subject
the Board, or any member thereof, to any liability to the registered holders of the Rights. The Rights Agent is entitled always
to assume the Company’s Board acted in good faith and shall be fully protected and incur no liability in reliance thereon.

 

Section
30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, of the Common Stock)
any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, of
the Common Stock).

 

Section
31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, null and void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any such excluded term, provision,
covenant or restriction shall materially and adversely affect the rights, immunities, duties or obligations of the Rights Agent,
the Rights Agent shall be entitled to resign immediately upon written notice to the Company pursuant to the requirements of Section
26 of this Agreement; and provided, further, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, null and void
or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated
and shall not expire until the Close of Business on the tenth (10th) Business Day following the date of such determination by
the Board. Without limiting the foregoing, if any provision requiring a specific group of directors of the Company to act is held
by any court of competent jurisdiction or other authority to be invalid, null and void or unenforceable, such determination shall
then be made by the Board in accordance with applicable law and the Certificate of Incorporation and the Bylaws.

 

    	40

     

    

 

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 the Delaware and for all purposes shall be governed by and construed in accordance with the
laws of such jurisdiction applicable to contracts made and to be performed entirely within such jurisdiction; provided,
however, that all provisions regarding the rights, duties, and obligations of the Rights Agent shall be governed
by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely
within such State.

 

Section
33. Counterparts; Facsimiles and PDFs. This Agreement and any supplements or amendments hereto may be executed in any number
of counterparts and each of such counterparts will for all purposes be deemed to be an original, and all such counterparts will
together constitute one and the same instrument, it being understood that all parties need not sign the same counterpart. A signature
to this Agreement executed or transmitted electronically (including by fax and .pdf) will have the same authority, effect and
enforceability as an original signature. No party hereto may raise the use of such electronic execution or transmission to deliver
a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through such electronic
transmission, as a defense to the formation of a contract, and each party forever waives any such defense, except to the extent
such defense relates to lack of authenticity.

 

Section
34. Descriptive Headings. Descriptive headings of the several sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the provisions hereof.

 

Section
35. 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, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction 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.

 

Section
36. Further Assurance. The Company shall perform, acknowledge and deliver or cause to be performed, acknowledged and delivered
all such further and other acts, documents, instruments and assurances as may be reasonably required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Agreement.

 

[SIGNATURE
PAGE FOLLOWS] 

 

    	41

     

    

 

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

 

	 	HOPTO INC.
	 	 	 
	 	By:	/s/ Jean-Louis Casabonne
	 	Name:	Jean-Louis Casabonne
	 	Title:	Interim Chief Executive Officer, Chief Financial Officer, Secretary
	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	 	 	 
	 	By:	 /s/ Michael A. Nespoli
	 	Name:	 Michael A. Nespoli
	 	Title:	 Executive Director

 

[Signature
Page to Rights Agreement]

 

    	 

     

    

 

EXHIBIT
A 

 

CERTIFICATE
OF DESIGNATION

OF

SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK

OF

HOPTO
INC.

 

(Pursuant
to Section 151 of the Delaware General Corporation Law)

 

 

 

hopTo
Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State
of the Delaware, as amended (the “DGCL”), hereby certifies that, pursuant to the authority granted by Article
IV of the Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Amended and Restated
Certificate of Incorporation”), and in accordance with Section 151 of the DGCL, the Board of Directors of the Corporation
(hereinafter being referred to as the “Board of Directors” or the “Board”), by unanimous
written consent dated February 15, 2018, has adopted the following resolution with respect to the designations, number of shares,
preferences, voting powers and other rights and the restrictions and limitations thereof, of the Series A Junior Participating
Stock:

 

RESOLVED,
that, pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Amended
and Restated Certificate of Incorporation, the designations, number of shares, preferences, voting powers and other rights and
the restrictions and limitations thereof of the Series A Junior Participating Stock are as follows:

 

1.
Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred
Stock” (the “Series A Preferred Stock”) and the number of shares constituting the Series A Preferred
Stock shall be 500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors prior to issuance;
provided, however, that no decrease shall reduce the number of shares of the Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into the Series
A Preferred Stock; provided, further, that if more than a total of 500,000 shares of Series A Preferred Stock shall be issuable
upon the exercise of Rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of February 16,
2018, by and between the Corporation and Corporate Stock Transfer, Inc., as rights agent (the “Rights Agreement”),
the Board of Directors of the Corporation, pursuant to Section 151(g) of the DGCL, shall direct by resolution or resolutions that
a certificate be properly executed, acknowledged, filed and recorded, in accordance with the provisions of Section 103 of the
DGCL, providing for the total number of shares of Series A Preferred Stock authorized to be issued to be increased (to the extent
that the Amended and Restated Certificate of Incorporation then permits) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of such Rights.

 

    	A-1

     

    

 

2.
Dividends and Distributions.

 

(a)
Subject to the rights of the holders of any shares of any series of Preferred Stock of the Corporation (the “Preferred
Stock”) (or any similar stock) ranking prior and superior to the shares of Series A Preferred Stock with respect to
dividends, the holders of shares of the Series A Preferred Stock, in preference to the holders of common stock, par value $0.0001
per share, of the Corporation (the “Common Stock”) and of any other stock of the Corporation ranking junior
to the Series A Preferred Stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds
of the Corporation legally available for the payment of dividends, quarterly dividends payable in cash on the last day of each
fiscal quarter of the Corporation in each year, or such other dates as the Board of Directors shall approve (each such date being
referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of the Series A Preferred Stock (the “Issue Date”),
in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 or (ii) 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 shares of Common Stock
or a subdivision of the outstanding shares of the Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at
any time after the Issue Date (A) declare and pay any dividend on the Common Stock payable in shares of Common Stock, or (B) effect
a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause
(ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event. In the event the Corporation shall at any time declare or pay any
dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series A Preferred Stock (by reclassification or otherwise than by payment of a dividend
in shares of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause
(ii) of the first sentence of this Section 2(a) shall be adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Series A Preferred Stock that were outstanding immediately prior to such event and the denominator
of which is the number of shares of Series A Preferred Stock outstanding immediately after such event.

 

(b)
The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (a) of this
Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); and the Corporation shall pay such dividend or distribution on the Series A Preferred Stock before the
dividend or distribution declared on the Common Stock is paid or set apart; provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless
be payable, when, as and if declared, on such subsequent Quarterly Dividend Payment Date.

 

    	A-2

     

    

 

(c)
Dividends shall begin to accrue and be cumulative, whether or not declared, on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment
thereof.

 

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

 

(a)
Subject to the provision for adjustment hereinafter set forth and except as otherwise provided in the Amended and Restated Certificate
of Incorporation or required by law, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on
all matters upon which the holders of the Common Stock of the Corporation are entitled to vote. In the event the Corporation shall
at any time after the Issue Date (i) declare or pay any dividend on the Common Stock payable in shares of Common Stock, or (ii)
effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation shall at any time declare or pay any dividend on the
Series A Preferred Stock payable in shares of Series A Preferred Stock, or effect a subdivision, combination or consolidation
of the outstanding shares of Series A Preferred Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of Series A Preferred Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Series A Preferred
Stock that were outstanding immediately prior to such event and the denominator of which is the number of shares of Series A Preferred
Stock outstanding immediately after such event.

 

    	A-3

     

    

 

(b)
Except as otherwise provided herein, in the Amended and Restated Certificate of Incorporation or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, and except as otherwise required by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

 

(c)(i)
If at any time dividends on any Series A Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon,
the holders of the Series A Preferred Stock, voting as a separate series from all other series of Preferred Stock and classes
of capital stock, shall be entitled to elect two members of the Board in addition to any Directors elected by any other series,
class or classes of securities and the authorized number of Directors will automatically be increased by two. Promptly thereafter,
the Board of the Corporation shall, as soon as may be practicable, call a special meeting of holders of Series A Preferred Stock
for the purpose of electing such members of the Board. Such special meeting shall in any event be held within forty-five (45)
days of the occurrence of such arrearage.

 

(ii)
During any period when the holders of Series A Preferred Stock, voting as a separate series, shall be entitled and shall have
exercised their right to elect two Directors, then, and during such time as such right continues, (a) the then authorized number
of Directors shall be increased by two, and the holders of Series A Preferred Stock, voting as a separate series, shall be entitled
to elect the additional Directors so provided for, and (b) each such additional Director shall serve until the next annual meeting
of stockholders for the election of Directors, or until his successor shall be elected and shall qualify, or until his right to
hold such office terminates pursuant to the provisions of this Section 3(c).

 

(iii)
A Director elected pursuant to the terms hereof may be removed with or without cause by the holders of Series A Preferred Stock
entitled to vote in an election of such Director.

 

(iv)
If, during any interval between annual meetings of stockholders for the election of Directors and while the holders of Series
A Preferred Stock shall be entitled to elect two Directors, there is no such Director in office by reason of resignation, death
or removal, then, promptly thereafter, the Board shall call a special meeting of the holders of Series A Preferred Stock for the
purpose of filling such vacancy and such vacancy shall be filled at such special meeting. Such special meeting shall in any event
be held within 45 days of the occurrence of such vacancy.

 

(v)
At such time as the arrearage is fully cured, and all dividends accumulated and unpaid on any shares of Series A Preferred Stock
outstanding are paid, and, in addition thereto, at least one regular dividend has been paid subsequent to curing such arrearage,
the term of office of any Director elected pursuant to this Section 3(c), or his successor, shall automatically terminate, and
the authorized number of Directors shall automatically decrease by two, the rights of the holders of the shares of the Series
A Preferred Stock to vote as provided in this Section 3(c) shall cease, subject to renewal from time to time upon the same terms
and conditions, and the holders of shares of the Series A Preferred Stock shall have only the limited voting rights elsewhere
herein set forth.

 

(d)
Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.

 

    	A-4

     

    

 

4.
Certain Restrictions.

 

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

 

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

 

(ii)
declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;

 

(iii)
redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that, the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock or rights, warrants or options
to acquire such junior stock; or

 

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

 

(b)
The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.

 

5.
Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued, without designation as to series until such shares
are once more designated as part of a particular series of Preferred Stock by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein, in the Amended and Restated Certificate of Incorporation,
or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required
by law.

 

    	A-5

     

    

 

6.
Liquidation, Dissolution or Winding Up. (a) Upon any liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (i) to the holders of the Common Stock or of shares of any other stock of the Corporation ranking junior, either
as to dividends or upon liquidation, dissolution or winding up, to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $1,000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment, provided that, the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (ii)
to the holders of shares of stock ranking on a parity either as to dividends or upon liquidation, dissolution or winding up with
the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Preferred Stock liquidation
preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a
parity with the Series A Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in the proportion to their respective
liquidation preferences. In the event the Corporation shall at any time after the Issue Date (A) declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or (B) effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso in clause (i) of this Section 6(a) shall
be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event. In the event the Corporation shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision, combination or consolidation of the outstanding shares
of Series A Preferred Stock (by reclassification or otherwise than by payment of a dividend in shares of Series A Preferred Stock)
into a greater or lesser number of shares of Series A Preferred Stock, then in each such case the aggregate amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of paragraph
(A) of this Section 6 shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares
of Series A Preferred Stock that were outstanding immediately prior to such event and the denominator of which is the number of
shares of Series A Preferred Stock outstanding immediately after such event.

 

(b)
Neither the merger, consolidation or other business combination of the Corporation into or with another entity nor the merger,
consolidation or other business combination of any other entity into or with the Corporation (nor the sale, lease, exchange or
conveyance of all or substantially all of the property, assets or business of the Corporation) shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section 6.

 

    	A-6

     

    

 

7.
Consolidation, Merger, etc. Notwithstanding anything to the contrary contained herein, in case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the shares of Common Stock are converted into, exchanged
for or changed into other stock or securities, cash and/or any other property (payable in kind), then in any such case each share
of Series A Preferred Stock shall at the same time be similarly converted into, 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 stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is converted
or exchanged. In the event the Corporation shall at any time after the Issue Date (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or (ii) effect a subdivision or combination or consolidation (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) of the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the conversion, exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of Series A Preferred Stock (by reclassification
or otherwise than by payment of a dividend in shares of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the amount set forth in the first sentence of this Section 7 with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Series A Preferred Stock that were outstanding immediately prior to such event and the denominator
of which is the number of shares of Series A Preferred Stock outstanding immediately after such event.

 

8.
No Redemption. The shares of Series A Preferred Stock shall not be redeemable from any holder.

 

9.
Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up of the Corporation, junior to all series of any other class of the Preferred Stock
issued either before or after the issuance of the Series A Preferred Stock, unless the terms of any such series shall provide
otherwise, and shall rank senior to the Common Stock.

 

10.
Amendment. At such time as any shares of Series A Preferred Stock are outstanding, if any proposed amendment to the Amended
and Restated Certificate of Incorporation (including this Certificate of Designation) would materially alter, change or repeal
any of the preferences, powers or special rights given to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely, then the holders of the Series A Preferred Stock shall be entitled to vote separately as a class upon such amendment,
and the affirmative vote of two-thirds of the outstanding shares of the Series A Preferred Stock, voting separately as a single
class, shall be necessary for the adoption thereof, in addition to such other vote as may be required by the DGCL.

 

11.
Fractional Shares. Series A Preferred Stock 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 A Preferred Stock.

 

    	A-7

     

    

 

IN
WITNESS WHEREOF, the undersigned have signed and attested this Certificate of Designation on the [___] day of February 2018.

 

	 	HOPTO
    INC.
	 	 	 
	 	By:	    
	 	Name:	 
	 	Title:	 

 

	Attest:	 
	 	 
	 ,
    Secretary	 

 

    	A-8

     

    

 

EXHIBIT
B 

 

[Form
of Rights Certificate] 

	 	 	 
	Certificate
    No. R-	 	Rights

 

NOT
EXERCISABLE AFTER 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY 16, 2021 UNLESS THE RIGHTS ARE EARLIER REDEEMED OR EXCHANGED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY RELATED PERSON THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT BENEFICIAL OWNER, MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY OR ON BEHALF OF A PERSON WHO IS, WAS OR BECAME
AN ACQUIRING PERSON OR A RELATED PERSON OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1

 

RIGHTS
CERTIFICATE

 

HOTPTO
INC.

 

This
certifies that _______________, or registered assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of
February 16, 2018 (the “Rights Agreement”), by and between hopTo Inc., a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC (the “Rights Agent”), to purchase from the Company after
the Distribution Date (as such term is defined in the Rights Agreement) and at any time prior to 5:00 p.m., New York City time,
on February 16, 2021 unless the Rights are previously redeemed or exchanged, at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-thousandth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company (a “Preferred Share”), at a purchase
price of $1.00 in cash per one one-thousandth of a share (such purchase price, as may be adjusted, the “Purchase Price”),
upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the number of shares that may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of the Close
of Business on February 26, 2018, based on the Preferred Shares as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole Preferred Shares will be issued. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Rights Agreement.

 

 

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

 

    	B-1

     

    

 

In
certain circumstances described in the Rights Agreement, the Rights evidenced thereby may entitle the registered holder thereof
to purchase capital stock of an entity other than the Company or receive capital stock, cash, or other assets of an entity other
than the Company, all as provided in the Rights Agreement. Upon the occurrence (whether prior to, on or after the date of this
Rights Certificate) of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an Acquiring Person or a Related Person of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person or of any such Related Person
thereof who becomes a transferee after the Acquiring Person becomes an Acquiring Person, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently with or prior to such transfer, became an Acquiring
Person, or a Related Person of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.

 

As
provided in the Rights Agreement, the Purchase Price, and the number and kind of Preferred Shares or other securities issuable
upon exercise of a Right and the number of Rights outstanding are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.

 

This
Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability
of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and are also available upon written request to the Rights Agent.

 

This
Rights Certificate, with or without other Rights Certificates, upon surrender at the office or offices of the Rights Agent designated
for such purpose, with the Form of Election and Certificate set forth on the reverse side properly completed and duly executed,
may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one one-thousandths of a Preferred Share as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.

 

    	B-2

     

    

 

Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price of $0.0001 per Right, payable in cash or other securities or property of the Company, at any time
prior to the earlier of (i) the Close of Business on the tenth (10th) Business Day (or such later date as may be determined by
the Board pursuant to clause (i) of the first sentence of Section 3(a) of the Rights Agreement with respect to the Distribution
Date) following the Shares Acquisition Date (or, if the Shares Acquisition Date shall have occurred prior to the Record Date,
the Close of Business on the tenth Business Day following the Record Date), and (ii) the Final Expiration Date. In addition, subject
to the provisions of the Rights Agreement, under certain circumstances following the occurrence of a Section 11(a)(ii) Event but
before any person acquires beneficial ownership of fifty percent (50%) or more of the Common Shares (as such term is defined in
the Rights Agreement), the Rights may be exchanged, in whole or in part, for Common Shares, Preferred Shares, or shares of other
preferred stock of the Company having essentially the same value or economic rights as such share, subject to adjustment for certain
events as provided in the Rights Agreement. Immediately upon the action of the Board of Directors of the Company authorizing any
such redemption or exchange, and without any further action or any notice, the Rights (other than Rights that are not subject
to such redemption or exchange) will terminate and the Rights will only enable holders to receive the redemption price or the
shares issuable upon such exchange, as applicable.

 

No
fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions that
are integral multiples of one one-thousandth of a Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment may 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 hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give consent to or withhold consent from any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as may otherwise be provided in the Rights Agreement), or to receive dividends
or subscription rights, or otherwise, unless and until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.

 

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

 

    	B-3

     

    

 

WITNESS
the facsimile signature or portable document format of the proper officers of the Company.

 

Dated
as of _, 201_ .

 

	 	HOPTO
    INC.
	 	 	 
	 	By:	               
	 	Name:	 
	 	Title:	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 

        Countersigned:

         

        AMERICAN
        STOCK TRANSFER & TRUST COMPANY, LLC

        as
        Rights Agent

	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	B-4

     

    

 

[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)

 

(Please
spell out and include in numerals the

number
of Rights being transferred by this Agreement)

 

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 the number of Rights indicated on the books of the within named
Company, with full power of substitution.

 

Dated
as of:  _ _, 201_

 

	SIGNATURE	 
	 	 	 
	By:	           	 
	Name:	 	 
	Title:	 	 

 

Medallion
Signature Guaranteed:

 

Signatures
must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary
public is not sufficient.

 

    	B-5

     

    

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

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

 

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

 

Dated
as of:_ _, 201_

 

	SIGNATURE	 
	 	 	 
	By:	              	 
	Name:	 	 
	Title:	 	 

 

Medallion
Signature Guaranteed:

 

Signatures
must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary
public is not sufficient.

 

NOTICE

 

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

 

    	B-6

     

    

 

[Form
of Reverse Side of Rights Certificate – Continued]

 

FORM
OF ELECTION TO PURCHASE 

 

(To
be executed by the registered holder if such holder desires to

exercise
any or all Rights evidenced by the Rights Certificate.)

 

To:
HOPTO INC.

 

The
undersigned hereby irrevocably elects to exercise _ (_) Rights evidenced by this Rights Certificate to purchase the Preferred
Shares issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable
upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to or that
such shares be credited to the book entry account of:

 

(Please
print name, address and social security,

tax
identification or other identifying number.)

 

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

 

(Please
print name, address and social security,

tax
identification or other identifying number.)

 

Dated:_
_, _

 

	SIGNATURE	 
	 	 	 
	By:	           	 
	Name:	 	 
	Title:	 	 

 

Medallion
Signature Guaranteed:

 

Signatures
must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary
public is not sufficient.

 

    	B-7

     

    

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

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

 

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

 

Dated:_
_, _

 

	SIGNATURE	 
	 	 	 
	By:	           	 
	Name:	 	 
	Title:	 	 

 

Medallion
Signature Guaranteed:

 

Signatures
must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary
public is not sufficient.

 

NOTICE

 

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

 

    	B-8

     

    

 

EXHIBIT
C 

 

HOPTO,
INC. 

 

SUMMARY
OF RIGHTS 

TO
PURCHASE PREFERRED STOCK 

 

On
February 16, 2018, the Board of Directors of hopTo Inc., a Delaware corporation (the “Company”), declared a
dividend distribution of one right (each, a “Right”) for each outstanding share of common stock, par value
$0.0001 per share, of the Company (the “Common Stock”). The dividend is payable to holders of record as of
the close of business on February 26, 2018 (the “Record Date”).

 

The
following is a summary description of the Rights. This summary is intended to provide a general description only and is subject
to the detailed terms and conditions of the Rights Agreement (the “Rights Agreement”), dated as of February
16, 2018, by and between the Company and Corporate Stock Transfer, Inc., as rights agent (the “Rights Agent”).

 

	 	1.	Issuance
    of Rights

 

Each
holder of Common Stock as of the Record Date will receive a dividend of one Right per share of Common Stock. One Right will also
be issued together with each share of Common Stock issued by the Company after the Record Date and prior to the Distribution Date
(as defined in Section 2 below), and in certain circumstances, after the Distribution Date. New certificates (or, if uncertificated,
the book entry account that evidences record ownership of such shares) for Common Stock issued after the Record Date will contain
a notation incorporating the Rights Agreement by reference.

 

Until
the Distribution Date:

 

	 	●	the
    Rights will not be exercisable; 
	 	 	 
	  	●	the
    Rights will be evidenced by the certificates for shares of Common Stock (or, if uncertificated, by the book entry account
    that evidences Stock ownership of such shares) and not by separate rights certificates; and 
	 	 	 
	  	●	the
    Rights will be transferable by, and only in connection with, the transfer of shares of Common Stock. 

 

	 	2.	Distribution
    Date; Exercise of Rights; Beneficial Ownership

 

The
Rights are not exercisable until the Distribution Date. As of and after the Distribution Date, the Rights will separate from the
Common Shares and each Right will become exercisable to purchase one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company (each whole share, a “Preferred Share”) at a purchase
price of $1.00 (such purchase price, as may be adjusted, the “Purchase Price”). This portion of a Preferred
Share would give the holder thereof approximately the same dividend, voting, and liquidation rights as would one Common Share.

 

    	C-1

     

    

 

The
“Distribution Date” is the earlier of:

 

	 	●	the
    close of business on the tenth (10th) business day following the first date of public announcement that any person, together
    with such person’s Related Persons (as defined below) (other than the Company or certain related entities), has become
    the beneficial owner of ten percent (10%) or more of the then outstanding Common Stock other than as a result of repurchases
    of Common Stock by the Company, certain stock option or restricted stock grants by the Company or the exercise or conversion
    thereof, or certain inadvertent acquisitions (such person is an “Acquiring Person”) or that discloses information
    which reveals the existence of an Acquiring Person; provided, however, that stockholders who beneficially own
    ten percent (10%) or more of the outstanding shares of Common Stock as of the date of this Rights Agreement will not be considered
    an Acquiring Person unless and until such stockholder or any of its Related Persons acquires beneficial ownership of any additional
    shares of Common Stock, subject to certain exceptions (such date being the “Shares Acquisition Date”);
    and 
	 	 	 
	  	●	the
    close of business on the tenth (10th) business day (or such later date as the Board of Directors of the Company shall determine
    prior to the occurrence of a Distribution Date) after the date of the commencement of, or first public announcement of the
    intent of any person (other than the Company or certain related entities) to commence (within the meaning of Rule 14d-2(a)
    of the General Rules and Regulations under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”),
    a tender or exchange offer that, if completed, would result in such person becoming an Acquiring Person. 

 

A
person will be deemed to “beneficially own” any shares of Common Stock if such person or any Related Person:

 

	 	●	is
    considered a “beneficial owner” of the Common Stock under Rule 13d-3 of the General Rules and Regulations under
    the Exchange Act; 
	 	 	 
	  	●	has
    the right to acquire Common Stock, either immediately or in the future, pursuant to any agreement, arrangement, or understanding
    (other than a customary underwriting agreement relating to a bona fide public offering of Common Stock) or upon the exercise
    of conversion rights, exchange rights, rights, warrants or options, or otherwise, except that a person will not be deemed
    to be a beneficial owner of (a) Common Stock tendered pursuant to a tender offer or exchange offer by or on behalf of such
    person or any affiliated or associated persons of such person until the tendered Common Stock are accepted for purchase or
    exchange, (b) securities issuable upon exercise of a Right before the occurrence of a Triggering Event (as defined in Section
    5 below), or (c) securities issuable upon exercise of a Right after the occurrence of a Triggering Event if the Rights are
    originally issued Rights or were issued in connection with an adjustment to originally issued Rights;

 

    	C-2

     

    

 

	  	●	has
    the right to vote or dispose of Common Stock pursuant to any agreement, arrangement, or understanding (other than a right
    to vote arising from the granting of a revocable proxy or consent that is not also then reportable on a Schedule 13D); or
    
	 	 	 
	  	●	has
    an agreement, arrangement, or understanding with another person who beneficially owns Common Stock and the agreement, arrangement,
    or understanding is for the purpose of acquiring, holding, voting, or disposing of any securities of the Company (other than
    customary underwriting agreements relating to a bona fide public offering of Common Stock or a right to vote arising from
    the granting of a revocable proxy or consent that is not also then reportable on a Schedule 13D). 

 

For
purposes of the Rights Agreement, a “Related Person” means, as to any person, any Affiliates or Associates
of such person. For purposes of the Rights Agreement, “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

 

Certain
synthetic interests in securities created by derivative positions — whether or not such interests are considered to be ownership
of the underlying shares of Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act —
are treated as beneficial ownership of the number of shares of Common Stock specified in the documentation evidencing the derivative
position as being subject to being acquired upon the exercise or settlement of the derivative position or as the basis upon which
the value or settlement amount of such derivative position is to be calculated in whole or in part.

 

	 	3.	Issuance
    of Rights Certificates

 

As
soon as practicable after the Distribution Date, the Rights Agent will mail rights certificates to holders of record of the shares
of Common Stock as of the close of business on the Distribution Date and, thereafter, the separate rights certificates alone will
evidence the Rights.

 

	 	4.	Expiration
    of Rights

 

The
Rights will expire on the earliest of (a) 5:00 p.m., New York City time, on February 16, 2021, (b) the time at which the Rights
are redeemed (as described in Section 6 below), and (c) the time at which the Rights are exchanged in full (as described in Section
7 below).

 

	  	5.	Change
    of Exercise of Rights Following Certain Events

 

The
following described events are referred to as “Triggering Events.”

 

    	C-3

     

    

 

(a)
“Flip-In” Event. In the event that a person becomes an Acquiring Person, each holder of a Right will thereafter
have the right to receive, upon exercise, shares of Common Stock (or, in certain circumstances, other securities, cash, or other
assets of the Company) having a value equal to two times the Purchase Price. Notwithstanding the foregoing, following the occurrence
of a person becoming an Acquiring Person, all Rights that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person (or by certain related parties) will be null and void. However, Rights are not
exercisable following the occurrence of a person becoming an Acquiring Person until such time as the Rights are no longer redeemable
by the Company as set forth in Section 6 below.

 

(b)
“Flip-Over” Events. In the event that, at any time after a person has become an Acquiring Person, (i) the Company
engages in a merger or other business combination transaction in which the Company is not the continuing or surviving corporation
or other entity, (ii) the Company engages in a merger or other business combination transaction in which the Company is the continuing
or surviving corporation and the Common Stock of the Company is changed or exchanged, or (iii) fifty percent (50%) or more of
the Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights that have previously
become null and void as set forth above) shall thereafter have the right to receive, upon exercise, common shares of the acquiring
company having a value equal to two times the Purchase Price.

 

	 	6.	Redemption

 

At
any time until ten (10) business days following the Shares Acquisition Date (as defined in Section 2 above), the Board of Directors
of the Company may direct the Company to redeem the Rights in whole, but not in part, at a price of $0.0001 per Right (payable
in cash, Common Stock, or other consideration deemed appropriate by the Board of Directors of the Company). Immediately upon the
action of the Board of Directors of the Company directing the Company to redeem the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $0.0001 redemption price.

 

	  	7.	Exchange
    of Rights

 

At
any time after a person becomes an Acquiring Person but before such person acquires beneficial ownership of fifty percent (50%)
or more of the outstanding Common Stock, the Board of Directors of the Company may direct the Company to exchange the Rights (other
than Rights owned by such person or certain related parties, which will have become null and void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment). The Company may substitute Preferred Shares (or
shares of a class or series of the Company’s preferred stock having equivalent rights, preferences, and privileges) for
Common Stock at an initial rate of one one-thousandth of a Preferred Share (or of a share of a class or series of the Company’s
preferred stock having equivalent rights, preferences, and privileges) per share of Common Stock. Immediately upon the action
of the Board of Directors of the Company directing the Company to exchange the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the number of shares of Common Stock (or one one-thousandth of a Preferred Share
or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences, and privileges)
equal to the number of Rights held by such holder multiplied by the exchange ratio.

 

    	C-4

     

    

 

	 	8.	Adjustments
    to Prevent Dilution; Fractional Shares

 

The
Board of Directors of the Company may adjust the Purchase Price, the number of Preferred Shares or other securities or assets
issuable upon exercise of a Right, and the number of Rights outstanding to prevent dilution that may occur (a) in the event of
a stock dividend on, or a subdivision, combination, or reclassification of, the Preferred Shares, (b) in the event of a stock
dividend on, or a subdivision or combination of, the Common Stock, (c) if holders of the Preferred Shares are granted certain
rights, options, or warrants to subscribe for Preferred Shares or convertible securities at less than the current market price
of the Preferred Shares, or (d) upon the distribution to holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends) or of subscription rights or warrants (other than those referred to above).

 

With
certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least one percent
(1%) of the Purchase Price. No fractional Preferred Shares will be issued (other than fractions that are integral multiples of
one one-thousandth of a Preferred Share), and in lieu thereof, an adjustment in cash may be made based on the market price of
the Preferred Shares on the last trading date prior to the date of exercise.

 

	  	9.	No
    Stockholder Rights Prior to Exercise; Tax Considerations

 

Until
a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights should not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances then existing, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or for common stock of the acquiring company or in
the event of the redemption of the Rights as set forth in Section 6 above.

 

	  	10.	Amendment
    of Rights Agreement

 

The
Company (by action of the Board of Directors) may supplement or amend any provision of the Rights Agreement in order to (a) cure
any ambiguity, (b) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent
with other provisions of the Rights Agreement, (c) shorten or lengthen any time period under the Rights Agreement, or (d) make
any other provisions with respect to the Rights that the Company deems necessary or desirable; provided, however,
that no supplement or amendment made after the time any person becomes an Acquiring Person may adversely affect the interests
of the registered holders of rights certificates (other than an Acquiring Person or any affiliated or associated person of an
Acquiring Person or certain of their transferees). Without limiting the foregoing, the Company may at any time before any person
becomes an Acquiring Person amend the Rights Agreement to make the provisions of the Rights Agreement inapplicable to a particular
transaction by which a person might otherwise become an Acquiring Person or to otherwise alter the terms and conditions of the
Rights Agreement as they may apply with respect to any such provision.

 

	 	11.	Availability
    of Rights Agreement

 

The
Company has filed a copy of the Rights Agreement with the Securities and Exchange Commission as an exhibit to a Current Report
on Form 8-K and as an exhibit to a Registration Statement on Form 8-A, each filed on February 16, 2018. In addition, a copy of
the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the complete text of the Rights Agreement.

 

    	C-5Exhibit

Exhibit 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of February 21, 2017 (this “Amendment”), amends the Amended and Restated Credit Agreement, dated as of March 6, 2015 (the “Credit Agreement”) among Portland General Electric Company (the “Borrower”), the financial institutions from time to time parties thereto as lenders (collectively, together with their respective successors and assigns, the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent for the Lenders (in such capacity, the “Agent”).  Capitalized terms used but not otherwise defined herein have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, the parties hereto desire to amend the Credit Agreement as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1    Amendments.  

(a)The following definitions are hereby added to Article I of the Credit Agreement in the appropriate alphabetical order:

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(b)Clause (d) in the definition of “Defaulting Lender” in Article I of the Credit Agreement is hereby amended to read as follows:

(d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy or similar debtor relief law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (iv) has become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
(c)The following sentence is hereby added to the end of Section 2.21(a)(iv) of the Credit Agreement to read as follows:

Subject to Section 9.16, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation.

(d)A new Section 9.16 is hereby added to the Credit Agreement to read as follows:

9.16    Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  

Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

SECTION 2    Extension.  Pursuant to Section 2.18 of the Credit Agreement, the Borrower has requested that the Scheduled Termination Date for each Lender be extended for one additional year to November 14, 2020.  By executing this Amendment, each Lender agrees to: (a) waive the timing requirements set forth in Section 2.18 of the Credit Agreement for the submission of an Extension Request and (b) extend its Scheduled Termination Date to November 14, 2020.

SECTION 3    Representations and Warranties; No Conflicts.

3.1    Representations and Warranties of all Parties.  Each party hereto represents and warrants that (a) it has taken all necessary action to authorize the execution, delivery and performance of this Amendment, (b) this Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity) and (c) no consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution or delivery by such Person of this Amendment.

3.2    Representations and Warranties of Borrower.  The Borrower represents and warrants to the Lenders that (a) the representations and warranties of the Borrower set forth in Article V of the Credit Agreement are true and correct in all material respects as of the date hereof, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier date and (b) no event has occurred and is continuing which constitutes a Default or an Unmatured Default.

3.3    No Conflicts.  Neither the execution and delivery of this Amendment, nor the consummation of the transactions contemplated herein, nor performance of and compliance with the terms and provisions hereof by the Borrower will (a) violate, contravene or conflict with any provision of its respective articles or certificate of incorporation, bylaws or other organizational or governing document or (b) violate, contravene or conflict with any law, rule, regulation, order, writ, judgment, injunction, decree, material contract or permit applicable to the Borrower.

SECTION 4    Effective Date.  This Amendment shall become effective as of the date hereof upon satisfaction of the following conditions precedent:

(a)    Receipt by the Agent of counterparts of this Amendment executed by the Borrower, the Required Lenders, each Lender extending its Scheduled Termination Date and the Agent.

(b)    Receipt by the Agent of:

(i)    Copies, certified by the Secretary or Assistant Secretary of the Borrower, of its bylaws and of its Board of Directors’ resolutions authorizing the execution of this Amendment by the Borrower.

(ii)    Evidence, in form and substance satisfactory to the Agent, that the Borrower has obtained all governmental approvals, if any, necessary for it to enter into this Amendment, including, without limitation, the approval of the Public Utility Commission of Oregon.

(c)     The Agent shall have received all fees and other amounts due and payable by the Borrower on or prior to the effective date of this Amendment, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

SECTION 5    Miscellaneous.

5.1    Continuing Effectiveness.  As hereby amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects.  After the effectiveness hereof, all references in the Credit 

Agreement or other Loan Documents to the “Agreement”, the “Credit Agreement” or similar terms shall refer to the Credit Agreement as amended hereby.  This Amendment is a Loan Document.

5.2    Counterparts.  This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment.  A counterpart hereof, or a signature page hereto, delivered to the Agent by facsimile or electronic mail (in a .pdf or similar file) shall be effective as delivery of a manually-signed counterpart hereof.

5.3    Expenses.  The Borrower agrees to pay all reasonable costs and expenses of the Agent, including reasonable fees and charges of special counsel to the Agent, in connection with the preparation, execution and delivery of this Amendment.

5.4    Governing Law.  This Amendment shall be construed in accordance with and governed by the internal laws (without regard to the conflict of laws provisions) of the State of New York.

5.5    Successors and Assigns.  This Amendment shall be binding upon the Borrower, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Lenders and the Agent and the respective successors and assigns of the Lenders and the Agent.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

PORTLAND GENERAL ELECTRIC COMPANY

By:    /s/ Christopher A. Liddle        
Name:    Christopher A. Liddle            
Title:    Assistant Treasurer            

		
	ADMINISTRATIVE AGENT:
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent 

By:    /s/ Gregory R. Gredvig            
Name:    Gregory R. Gredvig            
Title:    Director                

LENDERS:                WELLS FARGO BANK, NATIONAL ASSOCIATION, as a 
Lender and L/C Issuer

By:    /s/ Gregory R. Gredvig            
Name:    Gregory R. Gredvig            
Title:    Director                

JPMORGAN CHASE BANK, N.A., as a Lender and L/C Issuer

By:    /s/ Helen D. Davis            
Name:    Helen D. Davis                
Title:    Executive Director            

U.S. BANK NATIONAL ASSOCIATION, as a Lender and L/C Issuer

By:    /s/ Holland H. Williams            
Name:    Holland H. Williams            
Title:    Vice President                

BANK OF AMERICA, N.A., as a Lender and L/C Issuer

By:    /s/ Daryl K. Hogge            
Name:    Daryl K. Hogge                
Title:    Senior Vice President            

BARCLAYS BANK PLC, as a Lender and L/C Issuer

By:    /s/ Christopher Aitkin            
Name:    Christopher Aitkin            
Title:    Assistant Vice President            

BANK OF THE WEST, as a Lender

By:    /s/ Nicholas Orr                
Name:    Nicholas Orr                
Title:    Director, CBG                

COBANK, ACB, as a Lender

By:    /s/ Josh Batchelder            
Name:    Josh Batchelder                
Title:    Vice President                

THE NORTHERN TRUST COMPANY, as a Lender

By:    /s/ Fiyaz Khan                
Name:    Fiyaz Khan                
Title:    Vice President

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