Document:

Exhibit 4.1

 

 

 

SECTION
382 RIGHTS AGREEMENT

 

by
and between

 

SPECIAL
DIVERSIFIED OPPORTUNITIES INC.

 

and

 

AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC,

 

as
Rights Agent

 

Dated
as of April 28, 2016

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	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	10
	 	 	 
	Section 6.	Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	11
	 	 	 
	Section 7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	12
	 	 	 
	Section 8.	Cancellation and Destruction of Rights Certificates	13
	 	 	 
	Section 9.	Company Covenants Concerning Securities and Rights	14
	 	 	 
	Section 10.	Record Date	16
	 	 	 
	Section 11.	Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights	16
	 	 	 
	Section 12.	Certificate of Adjusted Purchase Price or Number of Shares	24
	 	 	 
	Section 13.	Fractional Rights and Fractional Shares	24
	 	 	 
	Section 14.	Rights of Action	25
	 	 	 
	Section 15.	Agreement of Rights Holders	26
	 	 	 
	Section 16.	Rights Certificate Holder Not Deemed a Stockholder	27
	 	 	 
	Section 17.	Concerning the Rights Agent	27
	 	 	 
	Section 18.	Merger, Consolidation or Change of Name of the Rights Agent	28
	 	 	 
	Section 19.	Duties of the Rights Agent	28
	 	 	 
	Section 20.	Change of the Rights Agent	31

 

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TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	Section 21.	Issuance of New Rights Certificates	32
	 	 	 
	Section 22.	Redemption.	32
	 	 	 
	Section 23.	Exchange	33
	 	 	 
	Section 24.	Notice of Certain Events	34
	 	 	 
	Section 25.	Notices	34
	 	 	 
	Section 26.	Supplements and Amendments	36
	 	 	 
	Section 27.	Successors	36
	 	 	 
	Section 28.	Determinations and Actions by the Board	36
	 	 	 
	Section 29.	Benefits of this Agreement	37
	 	 	 
	Section 30.	Severability	37
	 	 	 
	Section 31.	Governing Law	37
	 	 	 
	Section 32.	Counterparts; Facsimiles and PDFs	37
	 	 	 
	Section 33.	Descriptive Headings	37
	 	 	 
	Section 34.	Force Majeure	37

 

EXHIBITS

 

	Exhibit A:	Form of Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred Stock
	 	 
	Exhibit B:	Form of Rights Certificate
	 	 
	Exhibit C:	Summary of Rights

 

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SECTION
382 RIGHTS AGREEMENT

 

SECTION 382 RIGHTS
AGREEMENT, dated as of April 28, 2016 (the “Agreement”), between Special Diversified Opportunities Inc., a Delaware
corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights
Agent”).

 

W I T N
E S S E T H

 

WHEREAS, the Company
and certain of its Subsidiaries (as hereinafter defined) have generated net operating losses for United States federal income tax
purposes (“NOLs”);

 

WHEREAS, the NOLs may
potentially provide valuable Tax Benefits (as hereinafter defined) to the Company;

 

WHEREAS, the Company
desires to avoid an “ownership change” within the meaning of Section 382 of the Code (as hereinafter defined) and,
in furtherance of such objective, the Company wishes to enter into this Agreement;

 

WHEREAS, on April 27,
2016 (the “Rights Dividend Declaration Date”), the Board of Directors of the Company authorized and declared
a dividend distribution of one right (a “Right”) for each share of common stock, par value $0.001 per share,
of the Company (the “Common Stock”) outstanding at the Close of Business (as hereinafter defined) on May 16,
2016 (the “Record Date”), each Right initially representing the right to purchase one one-thousandth of a share
of Preferred Stock (as hereinafter defined) of the Company, upon the terms and subject to the conditions hereinafter set forth,
and further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share
of Common Stock issued or delivered by the Company after the Record Date but prior to the earlier of the Distribution Date (as
hereinafter defined) and the Expiration Date (as hereinafter defined) or as provided in Section 21 hereof.

 

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

 

Section
1.             Certain definitions. For purposes of this
agreement, the following terms shall have the meanings indicated:

 

(a)          “4.9%
Stockholder” shall mean a Person (other than the Company, any Related Person or any Exempt Person) who Beneficially Owns
4.9% or more of the then-outstanding Common Stock.

 

     

     

    

 

(b)          “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, is or becomes
a 4.9% Stockholder, regardless of whether or not such Person continues to be a 4.9% Stockholder; provided, however,
that an “Acquiring Person” shall not include (i) the Company, (ii) a Related Person, (iii) an Exempt Person, or (iv)
an Existing Holder. Notwithstanding the foregoing: (A) no Person shall become an “Acquiring Person” solely as a result
of (x) a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company,
(y) a dividend or distribution paid or made by the Company on the outstanding shares of Common Stock or pursuant to a split or
subdivision of the outstanding shares of Common Stock, and/or (z) an Exempt Transaction; and (B) if the Board determines in good
faith that a Person who would otherwise be an “Acquiring Person” has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of shares of Common Stock so that such Person would no longer be an “Acquiring
Person,” then such Person shall not be deemed to be or have become an “Acquiring Person” at any time for any
purposes of this Agreement. The Board shall not be required to make any determination with respect to a potential Acquiring Person,
including whether the potential Acquiring Person is an Exempt Person or whether the change of Beneficial Ownership of the potential
Acquiring Person has resulted from an Exempt Transaction, until five Business Days after the date on which all Board members first
received actual notice of the change of Beneficial Ownership at issue. Notwithstanding the foregoing, the Board may, in its sole
discretion, determine that any Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.

 

(c)          “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act as in effect on the date of this Agreement, and to the extent not included within the foregoing
clause of this Section 1(c), shall also include, with respect to any Person, any other Person (other than a Related Person or an
Exempt Person) whose shares of Common Stock would be deemed constructively owned by such first Person, owned by a single “entity”
(as defined in Section 1.382-3(a)(1) of the Treasury Regulations) or otherwise aggregated with shares owned by such first Person
pursuant to the provisions of Section 382 of the Code, or any successor provision or replacement provision, and the Treasury Regulations
thereunder, provided, however, that a Person shall not be deemed to be the Affiliate or Associate of another Person solely because
either or both Persons are or were directors of the Company.

 

(d)          “Agreement”
shall have the meaning set forth in the preamble of this Agreement.

 

(e)          “Authorized
Officer” shall mean the President and Chief Executive Officer, Chief Financial Officer or any Vice President of the Company.

 

(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:

 

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(i)          which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly owns or has the right to acquire (whether
such right is exercisable immediately or only after the passage of time or upon the satisfaction of one or more conditions (whether
or not in the control of such Person), compliance with regulatory requirements or otherwise) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise, or the obligation to acquire as a result of such Person’s ownership or beneficial
ownership of the Company’s outstanding equity units or any purchase contract originally issued as part of an equity unit);
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;

 

(ii)         which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of
or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding (whether or not in writing) to vote such security if such agreement, arrangement
or understanding (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act and (B) is not
reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report);

 

(iii)        which
are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with respect to which
such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso
to subparagraph (ii) of this paragraph (f)) or disposing of any voting securities of the Company; or

 

(iv)        which
such Person actually owns (directly or indirectly) or would be deemed to actually or constructively own pursuant to Section 382
of the Code, or any successor provision or replacement provision, and the Treasury Regulations promulgated thereunder.

 

Notwithstanding the foregoing, nothing
in this paragraph (f) shall cause a Person engaged in business as an underwriter of securities to be the Beneficial Owner of, or
to Beneficially Own, any securities acquired through such Person’s participation in good faith in a firm commitment underwriting
until the expiration of forty 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 days.

 

Notwithstanding anything in this definition
of Beneficial Ownership to the contrary, 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 which such Person would be deemed to own beneficially
hereunder.

 

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(g)          “Board”
shall have the meaning set forth in the recitals of this Agreement.

 

(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)          “Common
Stock” shall have the meaning set forth in the preamble of this Agreement.

 

(j)          “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.

 

(k)          “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

(l)          “Company”
shall have the meaning set forth in the preamble of this Agreement.

 

(m)          “Company’s
Bylaws” shall mean the Amended and Restated Bylaws of the Company, as the same may be amended after the date hereof.

 

(n)          “Company’s
Charter” shall mean the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended
after the date hereof.

 

(o)          “Current
Per Share Market Price” shall have the meaning set forth in Section 11(d)(i) or Section 11(d)(ii) hereof, as applicable.

 

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

 

(q)          “Distribution
Date” shall mean the earliest of (i) the Close of Business on the 10th Business Day after the Stock Acquisition Date
and (ii) the Close of Business on the 10th Business Day (or, such later date as may be specified by the Board prior to such time
as any Person becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of any Person (other
than the Company, any Related Person or any Exempt Person), if upon the consummation thereof such Person would become 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.

 

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

 

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

 

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(t)          “Exchange
Ratio” shall have the meaning set forth in Section 23(a) hereof.

 

(u)          “Exempt
Person” shall mean any Person (together with its Affiliates and Associates) whose status as a 4.9% Stockholder, as determined
by the Board in its sole and absolute discretion, (i) would not jeopardize or endanger in any material respect the availability
to the Company of its Tax Benefits, or (ii) is otherwise in the best interests of the Company, provided, however, that, such a
Person shall cease to be an Exempt Person if the Board, in its sole discretion, makes a contrary determination based on the potential
effect of such Person’s status as a 4.9% Stockholder (together with all Affiliates and Associates of such Person) regardless
of the reason therefor.

 

(v)         “Exempt
Transaction” shall mean any transaction that the Board determines, in its sole discretion, is exempt from this Agreement,
which determination shall be made in the sole and absolute discretion of the Board, including, without limitation, if the Board
determines that (i) neither the Beneficial Ownership of shares of Common Stock by such Person, directly or indirectly, as a result
of such transaction nor any other aspect of such transaction would jeopardize or endanger the availability to the Company of the
Tax Benefits, or (ii) such transaction is otherwise in the best interests of the Company.

 

(w)          “Existing
Holder” shall mean any Person that, as of the date hereof, is the Beneficial Owner of 4.9% or more of the shares of Common
Stock outstanding unless and until such Existing Holder acquires Beneficial Ownership of additional shares of Common Stock (other
than as a result of a dividend or distribution paid or made by the Company on the outstanding shares of Common Stock or pursuant
to a split or subdivision of the outstanding shares of Common Stock) representing 1% or more of the then outstanding shares of
Common Stock unless, upon becoming the Beneficial Owner of such additional share(s), such Existing Holder is not then the Beneficial
Owner of 4.9% or more of the then outstanding shares of Common Stock.

 

(x)          “Expiration
Date” shall mean the earliest of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed as provided
in Section 22 hereof, (iii) the time at which the Rights are exchanged in full as provided in Section 23 hereof, (iv) the date
that the Board determines that this Agreement is no longer necessary for the preservation of material valuable Tax Benefits, (v)
the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward, and (vi)
a determination by the Board, prior to the time any Person becomes an Acquiring Person, that this Agreement and the Rights are
no longer in the best interests of the Company and its stockholders.

 

(y)          “Final
Expiration Date” shall be April 27, 2017.

 

(z)          “NOLs”
shall have the meaning set forth in the Recitals to this Agreement.

 

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

 

(bb)         “Person”
shall mean any individual, firm, corporation, partnership, limited liability company, limited liability partnership, trust or other
legal entity, or any group of persons making a “coordinated acquisition” of shares or otherwise treated as an entity
within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise for purposes of Section 382 of the Code, or
any successor provision or replacement provision, and includes any successor (by merger or otherwise) of such individual or entity.

 

(cc)         “Preferred
Stock” shall mean the shares of Series B 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, Preferences and Rights of Series B Junior
Participating Preferred Stock attached hereto as Exhibit A.

 

(dd)         “Purchase
Price” shall mean initially $5.00 per one one-thousandth of a share of Preferred Stock, subject to adjustment from time
to time as provided in this Agreement.

 

(ee)         “Record
Date” shall have the meaning set forth in the recitals to this Agreement.

 

(ff)         “Redemption
Price” shall mean $0.001 per Right, subject to adjustment of the Company to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof.

 

(gg)         “Related
Person” shall mean (i) any Subsidiary of the Company or (ii) any employee benefit or stock ownership plan of the Company
or of any Subsidiary of the Company or any entity organized, appointed or established by the Company for or pursuant to the terms
of such plan.

 

(hh)         “Rights”
shall have the meaning set forth in the recitals to this Agreement.

 

(ii)         “Rights
Agent” shall have the meaning set forth in the preamble of this Agreement except as otherwise provided in Section 18
and Section 20 hereof.

 

(jj)         “Rights
Certificates” shall mean certificates evidencing the Rights, in substantially the form attached hereto as Exhibit
B.

 

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

 

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

 

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

 

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

 

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

 

(pp)         “Stock
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, or such earlier date as a majority of the Board becomes aware of the existence of an Acquiring Person.

 

(qq)         “Subsidiary”
shall mean, with reference to any Person, any corporation or other entity of which an amount of securities or other ownership interest
having ordinary voting power sufficient to elect at least a majority of the directors or other Persons having similar functions
of such corporation or other entity are at the time, directly or indirectly, Beneficially Owned, or otherwise controlled by such
Person.

 

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

 

(ss)         “Summary
of Rights” shall mean a copy of a summary of the terms of the Rights, in substantially the form attached hereto as Exhibit
C.

 

(tt)         “Tax
Benefits” shall mean the net operating loss carry-overs, capital loss carry-overs, general business credit carry-overs,
alternative minimum tax credit carry-overs and foreign tax credit carry-overs, as well as any loss or deduction attributable to
a “net unrealized built-in loss” within the meaning of Section 382 of the Code, or any successor provision or replacement
provision, and the Treasury Regulations promulgated thereunder, of the Company or any direct or indirect Subsidiary thereof.

 

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

 

(vv)         “Treasury
Regulations” shall mean final, temporary and proposed regulations of the Department of the Treasury promulgated under
the Code and any successor regulation, including any amendments thereto.

 

(ww)         “Trust”
shall have the meaning set forth in Section 23(a) hereof.

 

(xx)        “Trust
Agreement” shall have the meaning set forth in Section 23(a) hereof.

 

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Section 2.             Appointment
of the Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable, upon ten (10) days’ prior written notice to the Rights Agent. The Rights Agent
shall have no duty to supervise, and shall in no event be liable for, the acts or omission of any such co-rights agent. Prior to
the appointment of a co-rights agent, the specific duties and obligations of each such co-rights agents shall be set forth in writing
and delivered to the Rights Agent and the proposed co-rights agent. Any actions which may be taken by the Rights Agent pursuant
to the terms of this Agreement may be taken by any such co-rights agent. To the extent that any co-rights agent takes any action
pursuant to this Agreement, such co-rights agent shall be entitled to all of the rights and protections of, and subject to all
of the applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement.

 

Section 3.             Issuance
of Rights Certificates.

 

(a)          Until
the Distribution Date, (i) the Rights shall be evidenced (subject to Section 3(b) and Section 3(c) hereof) by the certificates
representing the shares of Common Stock in the names of the record holders thereof (which certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights) or by the current ownership statements issued with respect
to uncertificated shares of Common Stock in lieu of such certificates (“Ownership Statements”) (which Ownership Statements
shall be deemed also to be certificates for Rights) and (ii) the Rights shall be transferable only in connection with the transfer
of the underlying shares of Common Stock.

 

(b)          On
or as promptly as practicable after the Record Date, the Company shall send, in accordance with Section 25 hereof, to each record
holder of shares of Common Stock as of the Close of Business on the Record Date, a copy of a Summary of Rights. With respect to
shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights associated with such shares of
Common Stock will be evidenced by the certificate or Ownership Statement for such shares of Common Stock registered in the names
of the holders thereof, in each case together with the Summary of Rights. Until the Distribution Date, the surrender for transfer
of any certificate or Ownership Statement for shares of 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 shares of Common Stock represented
by such certificate or Ownership Statement.

 

(c)          Rights
shall be issued by the Company in respect of all shares of Common Stock (other than any shares of Common Stock that may be issued
upon the exercise or exchange of any Right) issued or delivered by the Company after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date, and, to the extent provided in Section 21 hereof, after the Distribution Date. Certificates
and Ownership Statements representing such shares of Common Stock shall have stamped on, impressed on, printed on, written on,
or otherwise affixed to them a legend in substantially the following form or such similar legend as the Company may deem appropriate
and is not inconsistent with the provisions of this Agreement and as do not affect the rights, duties or responsibilities of the
Rights Agent, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or transaction reporting system on which the shares of Common Stock may from time
to time be listed or quoted:

 

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“This
[certificate/statement] also evidences and entitles the holder hereof to certain Rights as set forth in the Section 382 Rights
Agreement between Special Diversified Opportunities Inc. and American Stock Transfer & Trust Company, LLC, dated as of April
28, 2016 and as amended from time to time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive offices of Special Diversified Opportunities Inc.
The Rights are not exercisable prior to the occurrence of certain events specified in the Rights Agreement. Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be evidenced
by separate certificates and no longer be evidenced by this [certificate/statement]. Special Diversified Opportunities Inc. shall
mail to the 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 as set forth in the Rights Agreement,
Rights that are or were beneficially owned by an Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement) may become null and void.”

 

With respect to such
certificates or Ownership Statements containing the foregoing legend, until the Distribution Date, the Rights associated with the
shares of Common Stock represented by such certificates or Ownership Statements shall be represented by such certificates or Ownership
Statements alone and the surrender for transfer of any certificate or Ownership Statement for shares of Common Stock shall also
constitute the transfer of the Rights associated with the shares of Common Stock represented by such certificate or Ownership Statement.

 

(d)          As
promptly as practicable after the Distribution Date, the Company shall prepare and execute, the Rights Agent shall countersign
and the Company shall send or cause to be sent (and the Rights Agent will, if requested, and if provided with all necessary information,
send), in accordance with Section 25 hereof, to each record holder of shares of Common Stock, as of the Close of Business on the
Distribution Date (other than an Acquiring Person or any Associate or Affiliate of an Acquiring Person), a Rights Certificate representing
one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to Section 11(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 13(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 shall be represented solely by such Rights Certificates. The Company shall promptly
notify the Rights Agent in writing upon the occurrence of the Distribution Date and, if such notification is given orally, the
Company shall confirm same in writing on or prior to the next Business Day. Until such notice is received by the Rights Agent,
the Rights Agent may presume conclusively that the Distribution Date has not occurred.

 

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(e)          In
the event that 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 shares of Common Stock shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock so purchased or acquired.

 

Section
4.            Form of Rights Certificates. The Rights
Certificates (and the form of election to purchase and the form 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 with such changes and marks of identification
or designation, and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange or transaction reporting system on which
the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the provisions of Section 21 hereof,
the Rights Certificates, whenever distributed shall entitle the holders thereof to purchase such number of one one-thousandths
of a share of Preferred Stock as is set forth therein at the Purchase Price; provided, however, that the Purchase Price, the number
and kind of securities issuable upon exercise of each Right and the number of Rights outstanding shall be subject to adjustment
as provided in this Agreement.

 

Section 5.             Countersignature
and Registration.

 

(a)          The
Rights Certificates shall be executed on behalf of the Company by any Authorized Officer, either manually or by facsimile signature,
and shall have affixed thereto the Company’s seal or a facsimile thereof, which shall be attested by any other Authorized
Officer, either manually or by facsimile signature. The Rights Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature
by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to
sign such Rights Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

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(b)          Following
the Distribution Date, upon receipt by the Rights Agent of written notice of the occurrence of the Distribution Date pursuant to
Section 3(d) hereof, the Rights Agent shall keep or cause to be kept, at its office or offices designated for such purposes and
at such other offices as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange or any transaction reporting system on which the rights may from time to time
be listed or quoted, 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 11(a)(ii) and Section 13 hereof, at any time after the Close of Business on the Distribution Date,
and prior to the Expiration Date, any Rights Certificate(s) (other than Rights Certificates representing Rights that have been
redeemed or exchanged pursuant to Section 22 or Section 23 hereof) representing exercisable Rights may be transferred, split-up,
combined or exchanged for another Rights Certificate(s), entitling the registered holder to purchase a like number of one one-thousandths
of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as the Rights Certificate(s) surrendered
then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer,
split-up, combine or exchange any such Rights Certificate(s) must make such request in writing delivered to the Rights Agent, and
must surrender the Rights Certificate(s) to be transferred, split-up, combined or exchanged, with the forms of assignment and certificate
contained therein duly executed, at the office or offices of the Rights Agent designated for such purpose. The Rights Certificates
are transferable only on the registry books of the Rights Agent. 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 (i) completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate,
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner and the Affiliates and
Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent shall reasonably request and
(iii) paid a sum sufficient to cover any tax or charge that may be imposed in connection with any transfer, split-up, combination
or exchange or Rights Certificates as required by Section 9(d) hereof. Thereupon the Rights Agent shall, subject to Section 11(a)(ii),
Section 13 and Section 23 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested registered in such name or names as may be designated by the surrendering registered holder.
The Rights Agent shall promptly forward any such sum collected by it to the Company or to such Person or Persons as the Company
shall specify by written notice. The Rights Agent shall have no duty or obligation unless and until it is satisfied that all such
taxes and charges have been paid.

 

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(b)          Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company shall execute and deliver a new Rights Certificate
of like tenor to the Rights Agent and the Rights Agent will countersign and deliver such new Rights Certificate 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 11(a)(ii) hereof, at any time after the Distribution Date and prior to the Expiration 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 as set forth in Section 9(e), Section 11(a)(iii), Section 22(a) 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 on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for
such purpose, together with payment of the Purchase Price (including any applicable tax or charge required to be paid by the holder
of such Rights Certificate in accordance with the provisions of Section 9(d) hereof) for each one one-thousandth of a share of
Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised.

 

(b)          Upon
receipt of a Rights Certificate representing exercisable Rights with the form of election to purchase and the certificate contained
therein properly completed and duly executed, accompanied by payment of the Purchase Price for each one one-thousandth of a share
of Preferred Stock (or other securities, cash or other assets, as the case may be) to be purchased and an amount equal to any applicable
tax or charge required to be paid under Section 9(d) hereof by certified check, cashier’s check, bank draft or money order
payable to the order of the Company, the Rights Agent shall, subject to Section 19(j) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates representing the total number of one one-thousandths of a share of Preferred Stock to be purchased (and the
Company hereby irrevocably authorizes and directs its transfer agent to comply with all such requests) or (B) if the Company shall
have elected to deposit any shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of one one-thousandths of a share of Preferred Stock as
are to be purchased (and the Company hereby irrevocably authorizes and directs such depositary agent to comply with all such requests),
(ii) after receipt of such certificates (or depositary receipts, as the case may be) cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder,
(iii) when appropriate, requisition from the Company or any transfer agent therefor of certificates representing the number of
equivalent shares to be issued in lieu of the issuance of shares of Common Stock in accordance with the provisions of Section 11(a)(iii)
hereof, (iv) when appropriate, after receipt of such certificates, 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, (v) when appropriate,
requisition from the Company of the amount of cash to be paid in lieu of the issuance of fractional shares in accordance with the
provisions of Section 13 hereof, and (vi) when appropriate, after receipt, deliver such cash to the registered holder of such Rights
Certificate.

 

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(c)          In
case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, the Rights Agent
shall prepare, execute and deliver a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised to
the registered holder of such Rights Certificate or to such holder’s duly authorized assigns, subject to the provisions of
Section 13 hereof.

 

(d)          Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action
with respect to any purported transfer, split-up, combination or exchange of any Rights Certificate pursuant to Section 6 hereof
or exercise or assignment of a Rights Certificate as set forth in this Section 7 unless the registered holder of such Rights Certificate
shall have (i) duly and properly completed and signed the certificate contained in the form of assignment or the form of election
to purchase, as applicable, set forth on the reverse side of the Rights Certificate surrendered for such transfer, split-up, combination,
exchange, exercise or assignment and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof and of the Rights evidenced thereby and Affiliates and Associates thereof as the Company or the Rights
Agent may reasonably request.

 

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

 

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Section 9.            Company
Covenants Concerning Securities and Rights.

 

(a)          The
Company covenants and agrees that it shall cause to be reserved, authorized for issuance and kept available out of its authorized
and unissued shares of Preferred Stock, a number of shares of Preferred Stock that shall be sufficient to permit the exercise in
full of all outstanding Rights in accordance with Section 7 hereof.

 

(b)          The
Company covenants and agrees so long as the shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event,
shares of Common Stock or other securities, as the case may be) issuable upon the exercise of the Rights may be listed on any national
securities exchange, or quoted on a quotation system, it shall endeavor to cause, from and after such time as the Rights become
exercisable, all securities reserved for issuance upon the exercise of Rights to be listed on such exchange, or quoted on such
quotation system, upon official notice of issuance upon such exercise.

 

(c)          The
Company covenants and agrees it will take all such actions as may be necessary to ensure that all shares of Preferred Stock (and,
following the occurrence of a Section 11(a)(ii) Event, shares of Common Stock or other securities, as the case may be) delivered
upon exercise of Rights, at the time of delivery of the certificates for such securities, shall be (subject to payment of the Purchase
Price) duly authorized, validly issued, fully paid and nonassessable securities.

 

(d)          The
Company covenants and agrees 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 representing securities issued upon the
exercise of Rights; provided, however, that the Company shall not be required to pay any tax or charge which may be payable in
respect of any transfer or delivery of Rights Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts representing securities issued upon the exercise of Rights in a name other than that of the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise, or to issue or deliver any certificates or depositary receipts
representing securities issued upon the exercise of any Rights until any such tax or charge has been paid (any such tax or charge
being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax or charge is due.

 

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(e)          If
the Company determines that registration under the Securities Act is required, then the Company shall use commercially reasonable
efforts (i) to file, as soon as practicable after the Distribution Date, on an appropriate form, a registration statement under
the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) to cause such registration statement
to become effective as soon as practicable after such filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities 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 shall 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 90 calendar days
after the date the Company determines that registration is required, the exercisability of the Rights in order to prepare and file
such registration statement and to permit it to become effective or to qualify the rights, the exercise thereof or the issuance
of shares of Preferred Stock, Common Stock, or other securities upon the exercise thereof under state securities or “blue
sky” laws. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.
The Company shall notify the Rights Agent in writing whenever it makes a public announcement pursuant to this Section 9(e) and
give the Rights Agent a copy of such announcement. In addition, if the Company determines that a registration statement or other
document should be filed under the Securities Act or any state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights, for a period of time not to exceed 90 calendar days after the date the Company
makes such determination, in each relevant jurisdiction, until such time as a registration statement has been declared effective
or any such other document filed and, if required, approved, and, upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding anything in this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite registration or qualification in such jurisdiction has not been effected or the exercise of
the Rights is not permitted under applicable law.

 

(f)          Notwithstanding
anything in this Agreement to the contrary, after the later of the Stock Acquisition Date and the Distribution Date, the Company
shall not, except as permitted by Section 22 or Section 26 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 shall eliminate or otherwise diminish the benefits intended
to be afforded by the Rights.

 

(g)          In
the event that the Company is obligated to issue other securities of the Company, pay cash or distribute other assets pursuant
to Section 7, Section 11, Section 13, Section 22 or Section 23 hereof, it shall make all arrangements necessary so that such other
securities, cash or other assets are available for distribution by the Rights Agent, if and when necessary to comply with this
Agreement.

 

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Section 10.          Record
Date. Each Person in whose name any certificate for a number of one one-thousandths of a share of Preferred Stock (or Common
Stock or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such shares of Preferred Stock (or Common Stock or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights Certificate representing 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 transfer books of the Company for shares of Preferred Stock (or Common Stock or
other securities, as the case may be) are closed, such Person shall be deemed to have become the record holder of such securities
on, and such certificate shall be dated, the next succeeding Business Day on which the transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of
a holder of any security of the Company with respect to shares for which the Rights are or may 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 Securities or Number of Rights. The Purchase Price, the number of shares of Preferred
Stock or other securities or property 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 Record Date (A) declare a dividend on the shares of Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred
Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of
the shares of Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, as
the case may be, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of capital stock 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 transfer books of the Company for the shares of Preferred
Stock (or other capital stock, as the case may be) were open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right.

 

(ii)         Subject
to Section 22 and Section 23 of this Agreement and except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii)
hereof, in the event that any Person becomes an Acquiring Person (a “Section 11(a)(ii) Event”), each holder
of a Right shall thereafter have the right to receive, upon exercise thereof at a price equal to the then-current Purchase Price,
in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock
(or at the option of the Company, such number of one one-thousandths of a share of Preferred Stock) as shall equal the result obtained
by (x) multiplying the then-current Purchase Price by the number of one one-thousandths of a share of Preferred Stock for which
a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and 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 (y) 50% of the Current Per Share Market Price of the Common Stock (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence; provided, however, that the Purchase Price (as so adjusted) and the
number of shares of Common Stock so receivable upon exercise of a Right shall thereafter be subject to further adjustment as appropriate
in accordance with Section 11(f) hereof.

 

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Notwithstanding anything
in this Agreement to the contrary, however, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights that are
beneficially owned by (A) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (B) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of such Person becoming an
Acquiring Person or (C) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior
to or concurrently with such Person becoming an Acquiring Person pursuant to either (1) a transfer from the Acquiring Person (or
any such Affiliate or Associate) to holders of its equity securities or to any Person with whom the Acquiring Person (or any such
Affiliate or Associate) has any continuing agreement, arrangement or understanding, written or otherwise, regarding the transferred
Rights or (2) a transfer that the Board has determined is part of a plan, arrangement or understanding, written or otherwise, which
has the purpose or effect of avoiding the provisions of this paragraph, shall be null and void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company will use commercially reasonable efforts to ensure that the provisions of this Section 11(a)(ii)
are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and
after the occurrence of any Person becoming an Acquiring Person, no Right Certificates shall be issued pursuant to Section 3 or
Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right
Certificates delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions of this
paragraph shall be cancelled.

 

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(iii)        The
Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing
Section 11(a)(ii) such number or fractions of shares of Preferred Stock having an aggregate current market value equal to the Current
Per Share Market Price of a share of Common Stock. In the event that there shall be an insufficient number of shares of Common
Stock authorized but unissued (and unreserved) to permit the exercise in full of the Rights in accordance with the foregoing Section
11(a)(ii), the Board shall, with respect to such deficiency, to the extent not prohibited by applicable law or any material agreements
then in effect to which the Company is a party (A) determine the excess of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with the foregoing Section 11(a)(ii) (the “Current Value”) over (2)
the then-current Purchase Price (such excess, the “Spread”), and (B) with respect to each Right (other than
Rights which have become void pursuant to Section 11(a)(ii)), make adequate provision to substitute for the shares of Common Stock
issuable in accordance with Section 11(a)(ii) upon exercise of the Right and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board to have substantially the
same value as the shares of Common Stock), (4) debt securities of the Company, (5) other assets or (6) any combination of the foregoing,
having a value which, when added to the value of the shares of Common Stock actually issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board (upon the advice
of a nationally recognized investment banking firm selected by the Board in good faith); provided, however, if the Company shall
not make adequate provision to deliver value pursuant to clause (B) above within 30 calendar days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s right of redemption pursuant to Section
22(a) expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the
Company shall be obligated to deliver, to the extent not prohibited by applicable law or any material agreements then in effect
to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock
(to the extent available) and then, if necessary, cash, which shares and cash have an aggregate value equal to the Spread. If within
the 30-day period referred to above the Board shall determine in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, such 30-day
period may be extended to the extent necessary, but not more than 90 calendar 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 hereinafter called the “Substitution Period”). To the extent that the Company determines that some
action need be taken pursuant to the second or third sentence of this Section 11(a)(iii), the Company (I) shall provide, subject
to Section 11(a)(ii), that such action shall apply uniformly to all outstanding Rights and (II) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares or to decide
the appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no longer in effect.

 

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(b)          If
the Company fixes a record date for the issuance of rights, options or warrants to all holders of shares of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase shares of Preferred Stock
(or securities having equivalent rights, privileges and preferences as the shares of Preferred Stock (for purposes of this Section
11(b), “Equivalent Preferred Stock”)) or securities convertible into shares of Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into shares of Preferred Stock or Equivalent Preferred Stock) less than the Current Per Share Market
Price of the shares of Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which is the number of shares of Preferred Stock outstanding on such record date plus the
number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and Equivalent
Preferred Stock so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would
purchase at such Current Per Share Market Price and the denominator of which is the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of Preferred Stock and Equivalent Preferred Shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which
is 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 written statement filed with the Rights Agent. Shares of Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such computation. Such 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 which would then be in effect if such record date had not been fixed.

 

(c)          If
the Company fixes a record date for the making of a distribution to all holders of shares of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation)
of evidences of indebtedness, cash (other than a regular periodic cash dividend), assets, stock (other than a dividend payable
in shares of Preferred Stock) or subscription rights, options 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 is the Current Per Share Market Price of the shares of Preferred
Stock (as determined pursuant to Section 11(d) hereof) on such record date or, if earlier, the date on which shares of Preferred
Stock begin to trade on an ex-dividend or when issued basis for such distribution, less the fair market value (as determined in
good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent) of the portion
of the evidences of indebtedness, cash, assets or stock so to be distributed or of such subscription rights, options or warrants
applicable to one share of Preferred Stock, and the denominator of which is such Current Per Share Market Price of the shares of
Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right but less
than the aggregate par value of the shares of capital stock issuable upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

 

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(d)          (i)          For
the purpose of any computation hereunder, the “Current Per Share Market Price” of a share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of a share of Common Stock for the 30 consecutive Trading
Days immediately prior to, but not including, such date; provided, however, that in the event that the Current Per Share Market
Price of Common Stock is determined during a period following the announcement by the Company of (A) a dividend or distribution
on such shares of Common Stock payable in shares of Common Stock or securities convertible into such shares (other than the Rights)
or (B) any subdivision, combination or reclassification of such shares of Common Stock, and prior to the expiration of 30 Trading
Days after, but not including, the ex-dividend date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted
to take into account ex-dividend trading or to reflect the current per share market price per share equivalent of such shares of
Common Stock. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the NASDAQ Stock Market or, if the Common
Stock is not listed or admitted to trading on the NASDAQ Stock Market, 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 quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If
the Common Stock is not publicly held or not so listed or traded, or is not the subject of available bid and asked quotes, the
Current Per Share Market Price of such Common Stock shall mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights Agent.

 

(ii)         For
the purpose of any computation hereunder, the “Current Per Share Market Price” of a share of Preferred Stock
shall be determined in accordance with the method set forth above in Section 11(d)(i) other than the last sentence thereof. If
the Current Per Share Market Price of Preferred Stock cannot be determined in the manner provided above, it shall be conclusively
deemed to be an amount equal to the current per share market price of the shares of Common Stock multiplied by ten thousand (as
such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar
transactions relating to the shares of Common Stock occurring after the date of this Agreement). If neither the Common Stock nor
the Preferred Stock are publicly held or so listed or traded, or the subject of available bid and asked quotes, “Current
Per Share Market Price” of the Preferred Stock shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent. For all purposes of this Agreement, the
current per share market price of one one-thousandth of a Preferred Share will be equal to the current per share market price of
one Preferred Share divided by ten thousand.

 

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(e)          Except
as set forth below, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease
of at least 1% in such Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a share of Preferred Stock or one one-thousandth
of a share of Common Stock or other security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment and (ii) the Expiration Date.

 

(f)          If
as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised becomes entitled
to receive any securities of the Company other than shares of Preferred Stock, thereafter the number or kind of such other securities
so receivable upon exercise of any Right (or the Purchase Price in respect 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 shares of Preferred Stock
(and the Purchase Price in respect thereof) contained in this Section 11, and the provisions of Section 7, Section 9, Section 10
and Section 13 hereof with respect to the shares of Preferred Stock (and the Purchase Price in respect thereof) shall apply on
like terms to any such other securities (and the Purchase Price in respect thereof).

 

(g)          All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock issuable from time
to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

(h)          Unless
the Company has exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price pursuant
to Section 11(b) or 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 share of Preferred Stock
(calculated to the nearest one one-millionth of a share of Preferred Stock) obtained by (i) multiplying (x) the number of one one-thousandths
of a share of Preferred Stock issuable upon exercise of a Right immediately prior to such adjustment of the Purchase Price 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.

 

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(i)          The
Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution
for any adjustment in the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one hundred-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to
be made. The Company shall also, as promptly as practicable, notify the Rights Agent in writing of same pursuant to Section 9(e)
hereof and give the Rights Agent a copy of such announcement. Such 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, such record date shall be at least ten calendar 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 the provision of Section 13 hereof, the additional
Rights to which such holders are 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 are entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed, and countersigned
in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.

 

(j)          Without
respect to any adjustment or change in the Purchase Price or the number or kind of securities issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number and
kind of securities which were expressed in the initial Rights Certificate issued hereunder.

 

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

 

     22

     

    

 

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

 

(m)          Notwithstanding
anything in this Agreement to the contrary, the Company shall be entitled to make such reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 11, as and to the extent that in its good faith judgment the Board determines
to be necessary or advisable in order that any (i) consolidation or subdivision of the shares of Preferred Stock, (ii) issuance
wholly for cash of shares of Preferred Stock at less than the Current Per Share Market Price therefor, (iii) issuance wholly for
cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its shares of Preferred Stock is not taxable to such stockholders.

 

(n)          Notwithstanding
anything in this Agreement to the contrary, in the event that the Company at any time after the Record Date and prior to the Distribution
Date (i) pays a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivides the outstanding
shares of Common Stock, (iii) combines the outstanding shares of Common Stock into a smaller number of shares or (iv) issues any
shares of its capital stock in a reclassification of the outstanding shares of Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the 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 21 hereof), shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock following any such event equals the result obtained
by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the
numerator of which is the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which is the total number of shares of Common Stock outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.

 

     23

     

    

 

Section 12.           Certificate
of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made or any event affecting the Rights or their exercisability
(including, without limitation, an event which causes Rights to become null and void) occurs as provided in Section 11 thereof,
the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts and calculations
accounting for such adjustment or describing such event, (b) file with the Rights Agent, and with each transfer agent for the shares
of Preferred Stock and the shares of Common Stock, a copy of such certificate, and (c) if a Distribution Date has occurred, give
a brief summary thereof to each holder of a Rights Certificate in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received such certificate, provided, however, that the Rights Agent will
not be entitled to such protection in cases of bad faith or willful misconduct.

 

Section 13.           Fractional
Rights and Fractional Shares.

 

(a)          The
Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(n)
hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, 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 value of one Right. For purposes of this Section 13(a), the
current market value of one Right is 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 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 the NASDAQ Stock Market or, if the Rights are not listed or admitted to trading on the NASDAQ Stock Market, as reported
in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported on a quotation system then in use or, if on any such date the Rights are not quoted, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the Rights, such market maker to be selected
by the Board. If the Rights are not publicly held or are not so listed or traded, or are not the subject of available bid and asked
quotes, the current market value of one Right shall mean the fair value thereof as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent.

 

     24

     

    

 

(b)          The
Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock).
Fractions of Preferred Stock in integral multiples of one one-thousandth of such Preferred Stock may, in the sole discretion of
the Company, be evidenced by depositary receipts pursuant to an appropriate agreement between the Company and a depositary selected
by it, provided that such agreement provides that the holders of such depositary receipts have all the rights, privileges and preferences
to which they are entitled as Beneficial Owners of the Preferred Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company may
pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one one-thousandth of a share of Preferred Stock. For purposes of this
Section 13(b), the current market value of one one-thousandth of a share of Preferred Stock shall be one one-thousandth of the
closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise; provided, however, that if the closing price of the shares of the Preferred Stock cannot be
so determined, the closing price of the shares of the Preferred Stock for such Trading Day shall be conclusively deemed to be an
amount equal to the closing price of the shares of Common Stock for such Trading Day multiplied by ten thousand (as such number
may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions
relating to the Common Stock shares occurring after the date of this Agreement).

 

(c)          Following
the occurrence of a Section 11(a)(ii) Event, the Company shall not be required to issue fractions of shares of Common Stock upon
exercise or exchange of the Rights or to distribute certificates or Ownership Statements which evidence fractional shares of Common
Stock. In lieu of issuing any such fractional shares of Common Stock, the Company may pay to any Person to whom or which such fractional
shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of
one such share of Common Stock. For purposes of this Section 13(c), the current market value of one share of Common Stock shall
be the closing price thereof (as determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately prior to the date
of such exercise or exchange.

 

(d)          The
holder of a Right by the acceptance of the Rights 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 13.

 

Section 14.           Rights
of Action.

 

(a)          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 (or, prior to the Distribution Date, the registered holders of shares
of Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the shares of Common Stock), may, on such first holder’s behalf and for such first 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
first 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 holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder
of any Person subject to this Agreement.

 

     25

     

    

 

(b)          Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental regulatory, self-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 shall use commercially reasonable efforts to have any such injunction, order, judgment,
decree or ruling lifted or otherwise overturned as soon as possible.

 

Section 15.          Agreement
of Rights Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

 

(a)          prior
to the Distribution Date, the Rights shall 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 principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a properly executed
instrument of transfer with the appropriate forms and certificates contained therein fully executed;

 

(c)          subject
to Section 6(a) and Section 7(d) hereof, the Company and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock share 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 associated Common Stock share 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 penultimate sentence
of Section 11(a)(ii) hereof, shall be affected by any notice to the contrary; and

 

(d)          such
holder expressly waives any right to receive any fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 13 hereof.

 

     26

     

    

 

Section 16.         Rights
Certificate Holder Not Deemed a Stockholder. No holder, of any Rights Certificate, by means of such possession, shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the number of one one-thousandths of a share of Preferred
Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate,
by means of such possession, any of the rights of a stockholder of the Company including any right to vote on any matter submitted
to stockholders at any meeting thereof, including the election of directors, 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 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate have been exercised
in accordance with the provisions of this Agreement.

 

Section 17.           Concerning
the Rights Agent.

 

(a)          The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation,
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, cost or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement and the performance
of its duties and responsibilities and the exercise of its rights hereunder, including the costs and expenses of defending against
any claim of liability arising therefrom, directly or indirectly. The costs and expenses of enforcing this right of indemnification
will also be paid by the Company. The provisions of this Section 17 shall survive the exercise, exchange, redemption or expiration
of the Rights, the resignation, replacement or removal of the Rights Agent and the termination of this Agreement.

 

(b)          The
Rights Agent may conclusively rely on, and will be protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with, its acceptance or administration of this Agreement and the exercise and performance
of its duties and responsibilities and the exercise of its rights hereunder, in reliance upon any Rights Certificate or certificate
evidencing shares of Preferred Stock, Common Stock or other securities of the Company or an Ownership Statement, or any instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement,
or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged,
by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 19 hereof.

 

     27

     

    

 

(c)          Notwithstanding
anything in this Agreement to the contrary, in no event will the Rights Agent be liable for special, indirect 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.

 

Section 18.           Merger,
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 is a party, or any Person succeeding
to the corporate trust, stock transfer or other shareholder services business of the Rights Agent or any successor Rights Agent
will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent
under the provisions of Section 20 hereof If at the time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and if at that time any
of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates
either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this Agreement.

 

(b)          If
at any time the name of the Rights Agent changes and at such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned;
and if at that time any of the Rights Certificates have not been countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.

 

Section 19.          Duties
of the Rights Agent. The Rights Agent undertakes to perform the duties and obligations expressly imposed by this Agreement
(and no implied duties) upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

 

(a)          The
Rights Agent may consult with competent legal counsel (who may be legal counsel for the Company), 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 by it in good faith and in accordance with the content of such advice
or opinion.

 

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(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 the Current Per Share Market Price)
be proved or established by the Company prior to taking, 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 any Authorized Officer and delivered to the Rights Agent; and such certificate, pursuant to its terms,
shall be full and complete authorization and protection to the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such certificate.

 

(c)          The
Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct.

 

(d)          The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereof) and it shall not be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company only.

 

(e)          The
Rights Agent will have no liability 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
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11, Section
22 or Section 23 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock shall, when so issued, be validly authorized
and issued, fully paid and nonassessable.

 

(f)          The
Company agrees that it shall 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.

 

     29

     

    

 

(g)          The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties and the exercise
of the rights hereunder from any Authorized Officer, and to apply to any such Authorized Officer for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with
instructions of any such Authorized Officer or for any delay in acting while waiting for those instructions. Any application by
the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement and the date on or after which such action shall be taken
or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any Authorized Officer of the Company actually receives such application, unless
any such Authorized Officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application
specifying the action to be taken or omitted.

 

(h)          The
Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other
Person.

 

(i)          The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
(through its directors, officers or employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, omission, 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, provided reasonable care was exercised in the
selection and continued employment thereof.

 

(j)          If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed
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.

 

(k)          No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(l)          The
Rights Agent will not be required to take notice or be deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of any Person as an Acquiring Person, Affiliate or
Associate) under this Agreement unless and until the Rights Agent is specifically notified in writing by the Company of such fact,
event or determination.

 

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(m)          The
provisions of this Section 19 shall survive the exercise, exchange, redemption or expiration of the Rights, the resignation, replacement
or removal of the Rights Agent and the termination of this Agreement.

 

Section 20.           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 30 calendar days’ written notice given to the Company in accordance with Section 25 hereof, and to each transfer
agent, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company, of the shares
of Common Stock and Preferred Stock known to the Rights Agent, respectively, 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 30 calendar days’ written notice, given to the Rights Agent or successor Rights Agent, as the case may
be, in accordance with Section 25 hereof, and to each transfer agent of the shares of Common Stock and the Preferred Stock, by
registered or certified mail, and, if such removal occurs after the Distribution Date, to the holders of the Rights Certificates
in accordance with Section 25 hereof If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall, in its sole discretion, appoint a successor to the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 calendar days after giving notice of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice,
submit such holder’s Rights Certificate for inspection by the Company), then 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 the State of New York or f any other state of the United States, in good standing, which is authorized
under such laws to exercise corporate trust, stock transfer or shareholder services powers and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a 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 the purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the shares of Common
Stock and the Preferred Stock, and, if such appointment occurs after the Distribution Date, give a notice thereof in writing to
the registered holders of the Rights Certificates in accordance with Section 25 hereof. Failure to give any notice provided for
in this Section 20, 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.

 

     31

     

    

 

Section 21.           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 by the Company of shares of Common Stock following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, exchange or conversion 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 representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i)
no such Rights Certificate shall be issued if, and to the extent that, in its good faith judgment the Board determines that the
issuance of such Rights Certificate could have a material adverse tax consequence to the Company or to the Person to whom or which
such Rights Certificate otherwise would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

 

Section 22.           Redemption.

 

(a)          The
Board may, at its option, at any time prior to the earlier of (1) the Close of Business on the tenth calendar day following the
Stock Acquisition Date, or (ii) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at 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 Company’s right of redemption has expired. The redemption
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. The Company may, at its option, pay the Redemption Price in cash, securities or any other form of consideration deemed
appropriate by the Board.

 

(b)          Immediately
upon the effectiveness of the action of the Board ordering the redemption of the Rights, and without any further action and without
any notice, the right to exercise the Rights shall terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held without interest thereon. Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding
Rights in accordance with Section 25 hereof; provided, however, that the failure to give, or any defect in, any such notice will
not affect the validity of the redemption of the Rights. Any notice given in accordance with Section 25 hereof shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment
of the Redemption Price shall be made.

 

     32

     

    

 

Section 23.           Exchange.

 

(a)          The
Board may, at its option, at any time after a Section 11(a)(ii) Event, exchange all or part of the then-outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such amount per Right 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.

 

(b)          Immediately
upon the effectiveness of the action of the Board ordering the exchange of any Rights and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly give a notice of
any such exchange to all of the holders of the Rights so exchanged in accordance with Section 25 hereof Any notice given in accordance
with Section 25 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 shares of Common Stock, for Rights shall be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.

 

(c)          The
Company may at its option substitute and, in the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued (and unreserved) to permit an exchange of Rights as contemplated in accordance with this
Section 23, the Company shall substitute to the extent of such insufficiency, for each share of Common Stock that would otherwise
be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof (or Equivalent Preferred Stock)
such that the Current Per Share Market Price of one share of Preferred Stock (or Equivalent Preferred Stock) multiplied by such
number or fraction is equal to the Current Per Share Market Price of the Common Stock that would otherwise be issuable as of the
date of such exchange.

 

(d)          Prior
to effecting an exchange pursuant to this Section 23, the Board may direct the Company to enter into a trust agreement in such
form and with such terms as the Board shall then approve (the “Trust Agreement”). If the Board so directs, the
Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”)
all of the shares of Common Stock, Preferred Stock or other securities, if any, issuable pursuant to the exchange, and all Persons
entitled to receive such shares or other securities (and any dividends or distributions made thereon after the date on which such
shares or other securities are deposited in the Trust) shall be entitled to receive such only from the Trust and solely upon compliance
with the relevant terms and provisions of the Trust Agreement.

 

     33

     

    

 

Section 24.           Notice
of Certain Events.

 

(a)          If
the Company, at any time after the Distribution Date, proposes to (i) pay any dividend payable in stock of any class to the holders
of shares of Preferred Stock or to make any other distribution to the holders of shares of Preferred Stock (other than a regular
periodic cash dividend), (ii) offer to the holders of shares of Preferred Stock rights, options, warrants or any similar instrument
to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), (iv) effect any consolidation, merger or statutory share exchange into or with any other
Person, or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall
give to the Rights Agent and, to the extent possible, to each holder of a Rights Certificate, in accordance with Section 25 hereof,
a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution or
offering of rights, warrants, options or any similar instrument or the date on which such reclassification, consolidation, merger,
share exchange, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein
by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least ten calendar days prior to the record date for determining holders of
the shares of Common Stock or Preferred Stock for purposes of such action, and in the case of any such other action at least ten
calendar days prior to the date of such proposed action or the date of participation therein by the holders of the shares of Preferred
Stock, whichever is the earlier.

 

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

 

Section 25.           Notices.

 

(a)          Notices
or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or
on the Company shall be sufficiently given or made (a) immediately, if made by personal delivery, (b) on the fifth calendar day
if sent by first-class mail, postage prepaid, (c) the next Business Day if by nationally recognized overnight courier or (d) upon
confirmation, if transmission by facsimile is combined with a phone call to the Company notifying it of such transmission, all
addressed (until another address is filed in writing by the Company with the Rights Agent) as follows:

 

     34

     

    

 

Special Diversified
Opportunities Inc.

1521 Concord
Pike, Suite 301

Wilmington,
Delaware 19803

Attention:
President

 

with a copy
(which will not constitute notice) to:

 

Morgan, Lewis
& Bockius LLP

1701 Market
Street

Philadelphia,
PA 19103-2921

Attention:
Justin W. Chairman, Esq.

Fax: (215)
963-5001

 

(b)          Subject
to the provisions of Section 20 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or
by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made (a) immediately, if made
by personal delivery, (b) on the fifth calendar day if sent by first-class mail, postage prepaid, (c) the next Business Day if
by nationally recognized overnight courier or (d) upon confirmation, if transmission by facsimile is combined with a phone call
to the Rights Agent notifying it of such transmission, all 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:
Corporate Trust Department

 

with a copy
(which will not constitute notice) to:

 

American Stock
Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY
11219

Attention:
Corporate Trust Department

 

(c)          Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock or an Ownership Statement)
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
shares of Common Stock).

 

     35

     

    

 

Section 26.          Supplements
and Amendments. Except as otherwise provided in this Section 26, for so long as the Rights are redeemable pursuant to Section
22 hereof, the Company may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement in any respect without the approval of any holders of Rights. From and after the time
at which the Rights cease to be redeemable pursuant to Section 22 hereof, the Company may and the Rights Agent shall, if the Company
so directs, supplement or amend this Agreement without the approval of any holders of Rights in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to amend 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 Rights (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person or certain
of their transferees), and no such amendment may cause the Rights again to become redeemable or cause this Agreement again to become
amendable other than in accordance with this sentence. 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 26, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything herein to the contrary, the Rights Agent shall not be obligated
to enter into any supplement or amendment that affects the Rights Agent’s own right, duties, obligations or immunities under
this Agreement.

 

Section 27.          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 28.           Determinations
and Actions by the Board.

 

(a)          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 shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with, as the Board of Directors deems to be applicable,
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act or the provisions of Section
382 of the Code, or any successor provision or replacement provision.

 

(b)          The
Board shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations and
calculations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or amend this Agreement).

 

(c)          All
such actions, calculations, interpretations and determinations which are done or made by the Board in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties. Unless otherwise notified,
the Rights Agent shall always be entitled to assume that the Board acted in good faith and the Rights Agent shall be fully protected
and shall incur no liability in reliance thereon.

 

     36

     

    

 

Section 29.          Benefits
of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Common Stock).

 

Section 30.          Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority
to be invalid, void, or unenforceable and the Board determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 22
hereof shall be reinstated and shall not expire until the Close of Business on the tenth Business Day following the date of such
determination by the Board.

 

Section 31.          Governing
Law. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.

 

Section 32.          Counterparts;
Facsimiles and PDFs. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A facsimile
or pdf signature delivered electronically shall constitute an original signature for all purposes.

 

Section 33.           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 34.           Force
Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or
failures in performance resulting from acts beyond its reasonable control including, 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.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

     37

     

    

 

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

 

	 	SPECIAL DIVERSIFIED OPPORTUNITIES INC.
	 	 	 
	 	By:	/s/ Kevin J Batton
	 	 	Name: Kevin J. Bratton
	 	 	Title: CFO
	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	 	 	 
	 	By:	/s/ Michael A. Nespoli
	 	Name:	Michael A. Nespoli
	 	
        Title: 
	Executive Director

 

     38

     

    

 

Exhibit
A

 

FORM OF

 

CERTIFICATE

 

OF

 

DESIGNATION,
PREFERENCES, AND

 

RIGHTS OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

 

of

 

SPECIAL
DIVERSIFIED OPPORTUNITIES INC.

 

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

 

Special Diversified
Opportunities Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”),
in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

 

That pursuant to the
authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the Corporation, as
amended (the “Certificate of Incorporation”), the said Board of Directors on April 27, 2016, adopted the following
resolution creating a series of Preferred Stock designated as Series B Junior Participating Preferred Stock (as hereinafter defined):

 

RESOLVED, that pursuant
to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of its Certificate of Incorporation,
a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof are as follows:

 

Section 1.          Designation
and Amount. The shares of such series shall be designated as “Series B Junior Participating Preferred Stock” and
the number of shares constituting such series shall be 300,000.

 

    A-1

     

    

 

Section 2.             Dividends
and Distributions.

 

(A)         Subject
to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series B Junior Participating
Preferred Stock, in preference to the holders of shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common
Stock”), and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September,
and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B
Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) 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 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 B Junior Participating Preferred
Stock. In the event the Corporation shall at any time after April 27, 2016 (the “Rights Dividend Declaration Date”)
(i) pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification
of the outstanding shares of Common Stock (including any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation), then in each such case the amount to which holders of shares
of Series B Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.

 

(B)         The
Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in Paragraph
(A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares
of Common Stock); 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 B Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.

 

(C)         Dividends
shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Participating Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders
of shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

 

    A-2

     

    

 

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

 

(A)         Subject
to the provision for adjustment hereinafter set forth, each share of Series B Junior Participating Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Dividend Declaration Date (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares of Series B Junior Participating Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

 

(B)         Except
as otherwise provided herein or by law, the holders of shares of Series B Junior Participating Preferred Stock and the holders
of shares of Common Stock 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 B Junior Participating Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”)
that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series B Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all holders of Preferred Stock (including holders of the
Series B Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two directors.

 

    A-3

     

    

 

(ii)         During
any default period, such voting right of the holders of Series B Junior Participating Preferred Stock may be exercised initially
at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter
at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of 10% in
number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right,
voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two directors
or, if such right is exercised at an annual meeting, to elect two directors. If the number that may be so elected at any special
meeting does not amount to the required number, the holders of Preferred Stock shall have the right to make such increase in the
number of directors as shall be necessary to permit the election by them of the required number. After the holders of Preferred
Stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the
number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Junior Participating Preferred
Stock.

 

(iii)        Unless
the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors,
the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than 10% of the total number
of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders
of Preferred Stock, which meeting shall thereupon be called by the Board of Directors. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder
of record of Preferred Stock by mailing a copy of such notice to such holder at such holder’s last address as the same appears
on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after
such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may
be called on similar notice by any stockholder or stockholders owning in the aggregate not less than 10% of the total number of
shares of Preferred Stock outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no such special meeting shall
be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

 

(iv)        In
any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect
two directors voting as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be filled
by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director
whose office shall have become vacant. References in this Paragraph (C) to directors elected by the holders of a particular class
of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.

 

    A-4

     

    

 

(v)         Immediately
upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect directors shall cease,
(y) the term of any directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of directors
shall be such number as may be provided for in the Certificate of Incorporation or Bylaws irrespective of any increase made pursuant
to the provisions of Paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner
provided by law or in the Certificate of Incorporation or Bylaws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

 

(D)         Except
as set forth herein, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.

 

Section 4.             Certain
Restrictions.

 

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

 

(i) declare or pay dividends
on, 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 B Junior Participating Preferred Stock;

 

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

 

(iii)        
redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution, or winding up) to the Series B Junior Participating 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 B Junior Participating Preferred
Stock; or

 

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

 

    A-5

     

    

 

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

 

Section 5.            Reacquired
Shares. Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein,
in the Certificate of Incorporation, or in any other Certificate of Designation creating a series of Preferred Stock or any similar
stock, or as otherwise required by law.

 

Section 6.             Liquidation,
Dissolution, or Winding Up.

 

(A)         Upon
any liquidation (voluntary or otherwise), dissolution, or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution, or winding up) to the Series B Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Participating Preferred Stock shall
have received an amount equal to $1,000 per share of Series B Participating Preferred Stock, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series B Liquidation
Preference”). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares
of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained
by dividing (i) the Series B Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C) below
to reflect such events as stock splits, stock dividends, and recapitalizations with respect to the Common Stock) (such number in
clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series B Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of Series B Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series B Junior Participating Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to
one with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.

 

    A-6

     

    

 

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

 

(C)         In
the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted
by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

 

Section 7.            Consolidation,
Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination, or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock, a member’s interest, a partnership interest, a
beneficial interest in a trust or other owner’s interest, or securities, cash, or any other property, then in any such case
the shares of Series B Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, a
member’s interest, a partnership interest, a beneficial interest in a trust or other owner’s interest, securities,
cash, and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series B Junior Participating Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

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

 

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

 

    A-7

     

    

 

Section 10.          Amendment.
At any time when any shares of Series B Junior Participating Preferred Stock are outstanding, neither the Certificate of Incorporation
of the Corporation nor this Certificate of Designation shall be amended in any manner that would materially alter or change the
powers, preferences, or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of two-thirds or more of the outstanding shares of Series B Junior Participating Preferred
Stock, voting separately as a class.

 

Section 11.           Fractional
Shares. The Series B Junior Participating 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 B Junior Participating Preferred Stock.

 

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INTENTIONALLY BLANK]

 

    A-8

     

    

 

IN WITNESS WHEREOF,
Special Diversified Opportunities Inc. has caused this Certificate of Designation to be signed by the undersigned this 28th day
of April, 2016.

 

	 	
        SPECIAL DIVERSIFIED OPPORTUNITIES
INC. 

	 	 
	 	By:	 
	 	 	Name: Kevin J. Bratton
	 	 	Title: Chief Financial Officer

 

    A-9

     

    

 

Exhibit
B

 

FORM OF
RIGHTS CERTIFICATE

 

	Certificate No. R-	______ Rights

 

NOT EXERCISABLE AFTER
__________, 2017 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AND EXCHANGE AT THE OPTION
OF THE COMPANY, ON THE TERMS SET FORTH IN THE SECTION 382 RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS SET FORTH IN THE SECTION
382 RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE SECTION 382 RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.

 

RIGHTS CERTIFICATE

 

SPECIAL
DIVERSIFIED OPPORTUNITIES 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 Section 382 Rights Agreement, dated as of April 28, 2016
(the “Rights Agreement”), between Special Diversified Opportunities Inc., a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agent”), to purchase from
the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m. (New
York City time) on the Expiration Date (as such term is defined in the Rights Agreement) at the office or offices of the Rights
Agent designated for such purpose, or its successor as Rights Agent, one one-thousandth of a fully paid nonassessable share of
Series B Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the Company,
at a purchase price of $5.00 per one one-thousandth of a share of Preferred Stock (the “Purchase Price”), upon
presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed.
If this Rights Certificate is exercised in part, the holder will be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised. The number of Rights evidenced by this Rights Certificate
(and the number of one one-thousandths of a share of Preferred Stock which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of the date of the Rights Agreement, based on the
shares of Preferred Stock as constituted at such date. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the Rights Agreement.

 

As provided in the
Rights Agreement, the Purchase Price, the number or kind of shares of Preferred Stock (or other securities, as the case may be)
which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate and the number of Rights outstanding
are subject to adjustment upon the occurrence of certain events.

 

    B-1

     

    

 

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 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 the Rights under the
circumstances specified in the Rights Agreement. Copies of the Rights Agreement are on file at the principal executive offices
of the Company and can be obtained from the Company without charge upon written request therefor.

 

Pursuant to the Rights
Agreement, from and after the occurrence of any Person becoming an Acquiring Person, any Rights that are beneficially owned by
(i) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after the occurrence of such Person becoming an Acquiring Person or (iii)
a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with
such Person becoming an Acquiring Person pursuant to either (a) a transfer from the Acquiring Person (or any such Affiliate or
Associate)to holders of its equity securities or to any Person with whom the Acquiring Person has any continuing agreement, arrangement
or understanding, written or otherwise, regarding the transferred Rights or (b) a transfer that the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding certain provisions of
the Rights Agreement, will be null and void without any further action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights, whether under any provision of the Rights Agreement or otherwise. From and after the occurrence
of any Person becoming an Acquiring Person, no Rights Certificate will be issued that represents Rights that are or have become
void pursuant to the provisions of the Rights Agreement, and any Rights Certificate delivered to the Rights Agent that represents
Rights that are or have become void pursuant to the provisions of the Rights Agreement will be cancelled.

 

This Rights Certificate,
with or without other Rights Certificates, may be exchanged for another Rights Certificate or Rights Certificates entitling the
holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or other securities, as the case may be)
as the Rights Certificate or Rights Certificates surrendered entitled such holder (or former holder in the case of a transfer)
to purchase, upon presentation and surrender hereof at the office or offices of the Rights Agent designated for such purpose, with
the Form of Assignment (if appropriate) and the related Certificate duly executed.

 

    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 $0.001 per Right at any time prior to ten days after the Stock Acquisition Date. In addition, following the time any person
becomes an Acquiring Person, the Company may at its option exchange the Rights, in whole or in part, for shares of common stock,
Preferred Stock or other preferred stock having equivalent rights, privileges and preferences as the Preferred Stock. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.

 

The Company is not
required to issue fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the option of the Company, be evidenced by depositary receipts) or other securities
issuable, as the case may be, upon the exercise of any Right or Rights evidenced hereby. In lieu of issuing fractional shares of
Preferred Stock or other securities, the Company may make a cash payment, as provided in the Rights Agreement.

 

No holder of this Rights
Certificate, as such, will be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of the Preferred
Stock or of any other securities of the Company which may at any time be issuable upon the exercise of the Right or Rights represented
hereby, nor will anything contained herein or in the Rights Agreement be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by this Rights Certificate have been exercised in accordance with the provisions
of the Rights Agreement.

 

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

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

    B-3

     

    

 

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

 

	Dated as of:	 	 	 	 
	 	 	 	 	 
	 	 	 	SPECIAL DIVERSIFIED OPPORTUNITIES INC.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	 
	 	 	 	Name:	 
	 	 	 	 	 
	 	 	 	Title:	 

 

Countersigned:

 

AMERICAN STOCK TRANSFER
& TRUST COMPANY, LLC

 

	By:	 	 
	 	Authorized Signature	 
	 	 	 
	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 Assignment)

 

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 above on the books of the within named Company, with
full power of substitution.

 

Dated:______________________,
20____

 

	 	 
	 	Signature

 

Medallion Signature Guaranteed:

 

    B-5

     

    

 

Certificate

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1)         to
the best knowledge of the undersigned, 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 an Affiliate or Associate 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 subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.

 

Dated:______________________,
20____

 

	 	 
	 	Signature

 

Medallion Signature Guaranteed:

 

NOTICE

 

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

 

    B-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: Special Diversified Opportunities 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 that 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 social security or other identifying
number)

 

 

(Please print name and address)

 

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

 

 

(Please print social security or other identifying
number)

 

 

(Please print name and address)

 

Dated:______________________,
20____

 

	 	 
	 	Signature

 

Medallion Signature Guaranteed:

 

 

    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
an Affiliate or Associate 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 an Affiliate or Associate of an Acquiring Person.

 

Dated:______________________,
______

 

	 	 
	 	Signature

 

Medallion Signature Guaranteed:

 

NOTICE

 

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

 

    B-8

     

    

 

Exhibit
C

 

UNDER CERTAIN CIRCUMSTANCES AS SET FORTH
IN THE SECTION 382 RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE SECTION 382 RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.

 

SUMMARY
OF RIGHTS

 

On April 27, 2016,
the Board of Directors (the “Board”) of Special Diversified Opportunities Inc., a Delaware corporation (the
“Company”), declared a dividend of one preferred share purchase right (each, a “Right”) for
each outstanding share of common stock, par value $0.01, of the Company (the “Common Stock”). The dividend is
payable to our stockholders of record as of the close of business on May 16, 2016.

 

This summary of rights
provides only a general description and should be read together with the Section 382 Rights Agreement, dated as of April 28, 2016,
between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agreement”).
All capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Rights Agreement.
Upon written request, the Company will provide a copy of the Rights Agreement free of charge to any of its stockholders.

 

Our Board adopted the
Rights Agreement in an effort to protect stockholder value by attempting to diminish the risk that our ability to use our net operating
losses (collectively, the “NOLs”) to reduce potential future federal income tax obligations may become substantially
limited. Under the Internal Revenue Code and regulations promulgated by the U.S. Treasury Department, we may “carry forward”
these NOLs in certain circumstances to offset any current and future taxable income and thus reduce our federal income tax liability,
subject to certain requirements and restrictions. To the extent that the NOLs do not otherwise become limited, we believe that
we will be able to carry forward a significant amount of NOLs, and therefore these NOLs could be a substantial asset to us. However,
if we experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code, our ability to use
the NOLs may be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore
significantly impair the value of that asset. A company experiences an “ownership change” for tax purposes if the percentage
of stock owned by its 5% stockholders (as defined for tax purposes) increases by more than 50 percentage points over a rolling
three-year period.

 

    C-1

     

    

 

The Rights Agreement
is intended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of our outstanding Common Stock
without the approval of our Board. Stockholders who beneficially own 4.9% or more of our outstanding Common Stock as of the close
of business on April 27, 2016 will not trigger the Rights Agreement so long as they do not acquire beneficial ownership of additional
shares of our Common Stock representing 1.0% or more of our outstanding Common Stock (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding shares of Common Stock or pursuant to a split or subdivision of the outstanding
shares of Common Stock) at a time when they still beneficially own 4.9% or more of our outstanding Common Stock. In addition, the
Board retains the sole discretion to exempt any person or group from the penalties imposed by the Rights Agreement.

 

The Board remains open
to all alternatives to maximize stockholder value, and may in its sole discretion exempt a proposed acquisition of our Common Stock
from the Rights Agreement, including if it determines that the acquisition is in the Company’s best interests, or if it will
not jeopardize our tax benefits. The Rights Agreement is not expected to interfere with any merger or other business combination
approved by our Board.

 

The Rights.
Our Board authorized the issuance of one Right per each outstanding share of our Common Stock payable to our stockholders of record
as of the close of business on May 16, 2016. One Right will also be issued together with each share of our Common Stock issued
after May 16, 2016 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date.
Subject to the terms, provisions and conditions of the Rights Agreement, if the Rights become exercisable, each Right would initially
represent the right to purchase from us one one-thousandth of a share of our Series B Junior Participating Preferred Stock, par
value $0.01 per share (the “Series B Preferred Stock”) for a purchase price of $5.00 (the “Purchase
Price”). If issued, each fractional share of Series B Preferred Stock would give the stockholder approximately the same
dividend, voting and liquidation rights as does one share of our Common Stock. However, prior to exercise, a Right does not give
its holder any rights as a stockholder of the Company, including, without limitation, any dividend, voting or liquidation rights.

 

Initial Exercisability.
The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become
an “Acquiring Person” by acquiring beneficial ownership of 4.9% or more of our outstanding Common Stock (or, in the
case of a person that had beneficial ownership of 4.9% or more of our outstanding Common Stock as of the close of business on April
27, 2016, by obtaining beneficial ownership of any additional shares of our Common Stock representing 1% or more of the shares
of our Common Stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding
shares of Common Stock or pursuant to a split or subdivision of the outstanding shares of Common Stock) at a time such person still
beneficially owns 4.9% or more of our outstanding Common Stock), and (ii) ten business days (or such later date as may be specified
by the Board prior to such time as any person becomes an Acquiring Person) after the commencement of a tender or exchange offer
by or on behalf of a person that, if completed, would result in such person becoming an Acquiring Person.

 

    C-2

     

    

 

We refer to the date
that the Rights become exercisable as the “Distribution Date.” Until the Distribution Date, our Common Stock
certificates or the ownership statements issued with respect to uncertificated shares of Common Stock will evidence the Rights.
Any transfer of shares of Common Stock prior to the Distribution Date will also constitute a transfer of the associated Rights.
After the Distribution Date, separate rights certificates will be issued and the Rights may be transferred other than in connection
with the transfer of the underlying shares of Common Stock unless and until our Board has determined to effect an exchange pursuant
to the Rights Agreement (as described below).

 

Flip-In Event.
In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances,
were beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon
exercise of a Right and payment of the Purchase Price, a number of shares of our Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a market value equal to two times the Purchase Price. 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 described below).

 

Redemption.
At any time until the earlier of the April 27, 2017 and ten calendar days following the first date of public announcement that
a person has become an Acquiring Person or that discloses information which reveals the existence of an Acquiring Person or such
earlier date as a majority of the Board becomes aware of the existence of an Acquiring Person (any such date, the “Stock
Acquisition Date”), the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption
Price”). The redemption 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. Immediately upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the Redemption Price.

 

Exchange. At
any time after a person becomes an Acquiring Person, the Board may, at its option, exchange the Rights (other than Rights that
have become void), in whole or in part, at an exchange ratio of one share of Common Stock, or a fractional share of Series B Preferred
Stock (or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and
privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange of any Rights, the right to exercise
such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of Common Stock
(or fractional share of Series B Preferred Stock or of a share of a similar class or series of the Company’s preferred stock
having similar rights, preferences and privileges) equal to the number of such Rights held by such holder multiplied by the exchange
ratio.

 

    C-3

     

    

 

Preferred Stock
Provisions. Each one one-thousandth of a share of Series B Preferred Stock, if issued: (i) will be nonredeemable and junior
to any other series of preferred stock the Company may issue (unless otherwise provided in the terms of such other series), (ii)
will entitle holders to preferential cumulative quarterly dividends in an amount per share of Series B Preferred Stock equal to
the greater of (a) $1 or (b) 1,000 times the aggregate the dividends, if any, declared on one share of Common Stock, (iii) will
entitle holders upon liquidation (voluntary or otherwise) to receive $1,000 per share of Series B Preferred Stock plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not declared, (iv) will have the same voting power
as one share of Common Stock, and (v) will entitle holders to a per share payment equal to the payment made on one share of Common
Stock, if shares of the Common Stock are exchanged via merger, consolidation, or a similar transaction. Because of the nature of
the Series B Preferred Stock’s dividend, liquidation and voting rights, the value of a Unit of Series B Preferred Stock purchasable
upon exercise of each Right should approximate the value of one share of Common Stock.

 

Expiration.
The Rights and the Rights Agreement will expire on the earliest of (i) April 27, 2017, (ii) the time at which the Rights are redeemed
pursuant to the Rights Agreement, (iii) the time at which the Rights are exchanged in full pursuant to the Rights Agreement, (iv)
the date that the Board determines that the Rights Agreement is no longer necessary for the preservation of material valuable Tax
Benefits, (v) the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried
forward, and (vi) a determination by the Board, prior to the time any Person becomes an Acquiring Person, that the Rights Agreement
and the Rights are no longer in the best interests of the Company and its stockholders.

 

Anti-Dilution Provisions.
Our Board may adjust the Purchase Price, the number of shares of Series B Preferred Stock or other securities or assets issuable
and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including among others,
a stock dividend, a stock split or a reclassification of the Series B Preferred Stock or our Common Stock. With certain exceptions,
no adjustments to the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price.

 

Amendments.
For so long as the Rights are redeemable, our Board may supplement or amend any provision of the Rights Agreement in any respect
without the approval of the holders of the Rights. From and after the time the Rights are no longer redeemable, our Board may supplement
or amend the Rights Agreement only to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions, or
to make any additional changes to the Rights Agreement which the Company may deem necessary or desirable, but only to the extent
that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the Rights
Agreement again becoming amendable other than in accordance with this sentence.

 

The Company has
filed a copy of the Rights Agreement with the Securities and Exchange Commission as an exhibit to a Form 8-A filed on or about
April 28, 2016. 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 Rights Agreement.

 

    C-4Exhibit

Exhibit 10.1

COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC. 
Up to $2,975,000,000 of Shares of Class A Common Stock and Class T Common Stock 
AMENDED AND RESTATED DEALER MANAGER AGREEMENT 
April 29, 2016 
Cole Capital Corporation 
2325 East Camelback Road 
Suite 1100 
Phoenix, Arizona 85016 
Ladies and Gentlemen: 
This Amended and Restated Dealer Manager Agreement (the “Agreement”) amends, restates and replaces in full that certain Dealer Manager Agreement dated September 17, 2013 by and between Cole Office & Industrial REIT (CCIT II), Inc., a Maryland corporation (the “Company”), and Cole Capital Corporation (the “Dealer Manager”). 
The Company has registered for a public sale a maximum of $2,975,000,000 in shares of Class A common stock, $0.01 par value per share (“Class A Shares”), and Class T common stock, $0.01 par value per share (“Class T Shares”) (the Class A Shares and the Class T Shares, collectively, the “Shares” or the “Stock”), consisting of (a) up to $1,500,000,000 in Class A Shares in the primary offering at a price of $10.99 per share (subject in certain circumstances to discounts based upon the volume of shares purchased and for certain categories of purchasers), (b) up to $1,000,000,000 in Class T Shares in the primary offering at a price of $10.53 per share (subject in certain circumstances to discounts based upon the volume of shares purchased and for certain categories of purchasers), (c) up to $290,000,000 in Class A Shares pursuant to the Company’s distribution reinvestment plan at a purchase price of $10.00 per share and (d) up to $185,000,000 in Class T Shares pursuant to the Company’s distribution reinvestment plan at a purchase price of $10.00 per share, all upon the other terms and subject to the conditions set forth in the Prospectus (as defined in Section 1.1, below) (the “Offering”). The aforementioned per share prices at which the Shares are being offered pursuant to the Offering are based on the estimated per share net asset value (“NAV”) of the Company as determined by the Company’s board of directors on April 8, 2016, plus, in the case of the primary offering, applicable commissions and fees. Subsequent estimates of the Company’s NAV will be made by the Company’s board of directors at least annually. Upon any subsequent estimate of the Company’s NAV, the per share price for Shares in the Company’s primary offering and the Company’s distribution reinvestment plan will be equal to the most recent NAV as determined by the Company’s board of directors divided by the number of Shares outstanding as of the date of the most recent NAV determination, plus, in the case of the primary offering, applicable commissions and fees. The Company reserves the right to reallocate the Shares included in the Offering among the classes of Shares and between those offered pursuant to the primary offering and those offered pursuant to the distribution reinvestment plan. There shall be a minimum purchase by any one person of $2,500 (except as otherwise indicated in the Prospectus or in any letter or memorandum from the Company to the Dealer Manager). Terms not defined in this Agreement shall have the same meaning as in the Prospectus. In connection therewith, the Company hereby agrees with you, the Dealer Manager, as follows: 
1.     Representations and Warranties of the Company 
As an inducement to the Dealer Manager to enter into this Agreement, the Company represents and warrants to the Dealer Manager that: 
1.1. A registration statement (Registration No. 333-187470) on Form S-11 with respect to the Company has been prepared by the Company in accordance with applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the applicable rules and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “SEC”) promulgated thereunder, covering the Shares. Such registration statement, including any amendment thereto filed prior to the date hereof, has become effective. Copies of such registration statement and each amendment thereto have been or will be delivered to the Dealer Manager. The registration statement and prospectus contained therein, as finally amended at the effective date of the registration statement, are respectively hereinafter referred to as the “Registration Statement” and the “Prospectus,” except that if the Company files a Prospectus or a prospectus supplement pursuant to Rule 424(b) under the Securities Act, or if the Company files a post-effective amendment to the Registration Statement, the term “Prospectus” includes the prospectus filed pursuant to Rule 424(b) or the prospectus included in such post-effective amendment. “Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective. 
1.2. On the Effective Date, the Registration Statement did, and when the Prospectus was first filed in accordance with Rule 424(b), the Prospectus (and any supplement thereto) did (and will), comply in all material respects with the applicable requirements of the Securities Act; on the Effective Date and on the date hereof, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in 

order to make the statements therein not misleading; and on the date of any filing pursuant to Rule 424(b), the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
1.3. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification. 
1.4. The Company’s authorized equity capitalization is as set forth in the Prospectus. 
1.5. All issued and outstanding securities of the Company have been duly and validly authorized and issued and are fully paid and nonassessable; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The offers and sales of the outstanding securities of the Company were at all relevant times either registered under the Securities Act, the applicable state securities or “blue sky” laws, or, based in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements. The holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Shares; and, except as set forth in the Prospectus and for the Company’s distribution reinvestment plan, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding. 
1.6. At the time of the issuance of the Shares, the Shares will have been duly authorized and validly issued, and upon payment therefor, will be fully paid and nonassessable and will conform to the description thereof contained in the Prospectus. 
1.7. The Company has full legal right, power and authority to enter into this Agreement and to perform the transactions contemplated hereby, except to the extent that the enforceability of the indemnity and/or contribution provisions contained in Section 4 of this Agreement may be limited under applicable securities laws. 
1.8. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability. 
1.9. The Company intends to use the funds received from the sale of the Shares as set forth in the “Estimated Use of Proceeds” section of the Prospectus. 
1.10. No consent, approval, authorization or other order of any governmental authority is required in connection with the execution or delivery by the Company of this Agreement or the issuance and sale by the Company of the Shares, except such as may be required under the Securities Act or applicable state securities laws. 
1.11. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or its property is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement by the Company or (ii) could reasonably be expected to have a material adverse effect on the financial condition, prospects, earnings, business or properties of the Company, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus. 
1.12. Neither the execution and delivery of this Agreement, the issue and sale of the Shares nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to (i) the charter or by-laws of the Company, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company is a party or bound or to which its property is subject, or (iii) any statute, law, rule, or regulation, judgment, order or decree applicable to the Company of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its properties, except to the extent that the enforceability of the indemnity and/or contribution provisions contained in Section 4 of this Agreement may be limited under applicable securities laws. 
1.13. The SEC has not issued any order or, to the Company’s knowledge, threatened to issue any order preventing or suspending the effectiveness of the Registration Statement or the use of the Prospectus or any part thereof, and has not instituted or, to the Company’s knowledge, threatened to institute any proceedings with respect to such an order. 
1.14. The Company qualified as a real estate investment trust pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, for the taxable year ended December 31, 2014, and no transaction or other event has occurred or is contemplated which would prevent the Company from continuing to so qualify. 

2

1.15. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended. 
1.16. To the best of the Company’s knowledge, Deloitte & Touche LLP, who have certified certain of the financial statements filed with the SEC as part of the Registration Statement and the Prospectus, is an independent registered public accounting firm with respect to the Company as required by the Securities Act and the Rules and Regulations thereof and the Public Company Accounting Oversight Board. 
2.    Covenants of the Company 
The Company covenants and agrees with the Dealer Manager that: 
2.1. Prior to the termination of the offering of the Shares, the Company will file every amendment or supplement to the Registration Statement or the Prospectus that may be required by the SEC. The Company will cause the Prospectus, properly completed, and any supplement thereto to be filed with the SEC pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed. The Company will promptly advise the Dealer Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the SEC pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Shares, any amendment to the Registration Statement shall have been filed or become effective, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable. 
2.2. If, at any time when a prospectus relating to the Shares is required to be delivered under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Securities Act or the rules thereunder, the Company promptly will (i) prepare and file with the SEC, an amendment or supplement which will correct such statement or omission or effect such compliance; and (ii) supply any supplemented Prospectus to the Dealer Manager in such quantities as it may reasonably request. 
2.3. The Company will, at no expense to the Dealer Manager, furnish the Dealer Manager with such number of printed copies of the Registration Statement, including all supplements, amendments and exhibits thereto, as the Dealer Manager may reasonably request. It will similarly furnish to the Dealer Manager, and others designated by the Dealer Manager, as many copies as the Dealer Manager may reasonably request in connection with the offering of the Shares of: (a) the Prospectus in preliminary and final form and every form of supplemental or amended prospectus; (b) this Agreement; and (c) any other printed sales literature or other materials (provided that the use of said sales literature and other materials has been first approved for use by the Company and all appropriate regulatory agencies). 
2.4. The Company will endeavor in good faith, in cooperation with the Dealer Manager, to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Dealer Manager may reasonably designate and use all reasonable efforts to file and make such statements or reports at such times as are or may be required to continue the qualification of the Shares for offering and sale under the securities laws of such jurisdiction. The Company will furnish to the Dealer Manager a copy of such papers filed by the Company in connection with any such qualification. 
3.     Obligations and Compensation of Dealer Manager 
3.1. The Company hereby appoints the Dealer Manager as its agent and principal distributor for the purpose of selling for cash up to a maximum of $2,975,000,000 in Shares (or such other amount as the Company allocates to the primary Offering of Shares as described in the first paragraph of this Agreement) through the dealers selected to participate in the distribution of Shares in the Offering who have executed Selected Dealer Agreements with the Dealer Manager (each, a “Dealer” and, collectively, the “Dealers”), all of whom shall be members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Dealer Manager may also sell Shares for cash directly to its own clients and customers at the public offering price and subject to the terms and conditions stated in the Prospectus. The Dealer Manager hereby accepts such agency and distributorship and agrees to use its best efforts to sell the Shares on said terms and conditions. The Dealer Manager represents to the Company that (i) it is a member of FINRA; (ii) it and its employees and representatives have all required licenses and registrations to act under this Agreement; and (iii) it has established and implemented anti-money laundering compliance programs in accordance 

3

with applicable law, including applicable FINRA rules, SEC rules, and the USA PATRIOT Act of 2001, reasonably designed to detect and cause the reporting of suspicious transactions in connection with the sale of Shares of the Company. 
3.2. The Dealer Manager and the Dealers shall commence the offering of the Shares for cash to the public only in jurisdictions in which the Shares are registered or qualified for sale or in which such offering is otherwise permitted. The Dealer Manager and the Dealers will suspend or terminate offering of the Shares upon request of the Company at any time and will resume offering the Shares upon subsequent request of the Company. 
3.3. Except as provided in the “Plan of Distribution” section of the Prospectus, as compensation for the services rendered by the Dealer Manager, the Company agrees that it will pay to the Dealer Manager selling commissions in the amount of 7.0% of the gross proceeds of the Class A Shares sold and 3.0% of the gross proceeds of the Class T Shares sold, plus a dealer manager fee in the amount of 2.0% of the gross proceeds of the Shares sold to the public; provided, however, that there shall be no selling commissions and no dealer manager fees paid for sales of Shares under the Company’s distribution reinvestment plan. In addition, the Company agrees that it will pay to the Dealer Manager a monthly distribution and stockholder servicing fee that will accrue daily in an amount equal to 1/365th of 0.8% of the Company’s per share NAV of Class T Shares sold, excluding Class T Shares sold pursuant to the distribution reinvestment plan. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares sold in the Offering at the earliest of (i) the end of the month in which the transfer agent, on behalf of the Company, determines that total selling commissions and distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 7.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T shares held in such account; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross proceeds from the sale of Shares, excluding Shares sold pursuant to the distribution reinvestment plan; (iii) the fifth anniversary of the last day of the month in which the Offering (excluding the offering of shares pursuant to the Company’s distribution reinvestment plan offering) terminates; (iv) the date such Class T share is no longer outstanding; and (v) the date the Company effects a liquidity event. The distribution and stockholder servicing fee relates to the share or shares sold. Payments to the Dealer Manager shall be made by the end of the week following the week in which Shares are sold by wire transfer of immediately available funds to an account designated by the Dealer Manager. Notwithstanding the foregoing, the Dealer Manager will reallow all of the selling commissions to Dealers. The Dealer Manager also may reallow all or a portion of the dealer manager fee and the distribution and stockholder servicing fee to Dealers; provided, however, that with respect to any individual investment, the Dealer Manager will not re-allow the related distribution and stockholder servicing fee to a Dealer if such Dealer ceases to hold the account related to such investment. In addition, the Dealer Manager will not reallow the distribution and stockholder servicing fee to any Dealer if such Dealer has not executed a Participating Dealer Agreement with the Dealer Manager or if the Dealer’s previously executed Selected Dealer Agreement with the Dealer Manager is terminated. In any instance in which the Dealer Manager does not re-allow the distribution and stockholder servicing fee to a Dealer, the Dealer Manager will return such fee to the Company. If, for any reason, a sale is cancelled or rescinded, the Dealer Manager shall return to the Company the selling commission, the dealer manager fee and the distribution and stockholder servicing fee paid to it with respect to such sale. The Company will not be liable or responsible to any Dealer for direct payment of commissions to such Dealer, it being the sole and exclusive responsibility of the Dealer Manager to make payment of commissions to Dealers. Notwithstanding the above, at its discretion, the Company may act as agent of the Dealer Manager by making direct payment of commissions to such Dealers without incurring any liability therefore. 
3.4. The Dealer Manager shall use and distribute, in conjunction with the offer and sale of any Shares, only the Prospectus and such sales literature and advertising as shall have been previously approved in writing by the Company. 
3.5. The Dealer Manager acknowledges that the Company may reimburse its advisor for underwriting expenses not covered by the selling commissions, dealer manager fee and distribution and stockholder servicing fee set forth in Section 3.3, but only to the extent that the total of such reimbursements for underwriting expenses and the selling commissions, dealer manager fee and distribution and stockholder servicing fee set forth in Section 3.3 is no more than 10.0% of the gross offering proceeds of the Shares sold in the Offering, excluding proceeds from the distribution reinvestment plan. In no event will total underwriting compensation exceed 10.0% of the gross proceeds of the Shares sold in the Offering, excluding proceeds from the distribution reinvestment plan. 
4.     Indemnification 
4.1. The Company agrees to indemnify and hold harmless the Dealer Manager and the directors, officers, employees and agents of the Dealer Manager, each person who controls the Dealer Manager within the meaning of either the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each affiliate of the Dealer Manager (such directors, officers, employees, agents, controlling persons and affiliates being referred to collectively as “Dealer Manager Affiliates” and, individually, as a “Dealer Manager Affiliate”) against any and all losses, claims, damages or liabilities (“Losses”), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the 

4

Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Prospectus or in any amendment thereof or supplement thereto, or in any blue sky application or other document executed by the Company or on its behalf specifically for the purpose of qualifying any or all of the Shares for sale under the securities laws of any jurisdiction (a “Blue Sky Application”), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such Losses or action; provided, however, that the Company shall not indemnify or hold harmless the Dealer Manager or any Dealer Manager Affiliates in any such case to the extent that any such Loss arises out of, or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the information relating to the Dealer Manager that appears in the following sections of the Prospectus or any amendment thereof: Prospectus Summary – Our Dealer Manager; Management – Dealer Manager; and Plan of Distribution – Cole Capital Corporation (collectively, the “Dealer Manager Sections”). Notwithstanding the foregoing, the Company shall not indemnify or hold harmless the Dealer Manager or any Dealer Manager Affiliates in any manner that would be inconsistent with the provisions of Section II.G. of the Statement of Policy Regarding Real Estate Investment Trusts of the North American Securities Administrators Association, Inc., effective May 7, 2007, as may be amended (the “NASAA Guidelines”). In particular, but without limitation, the Company shall not be required to provide indemnity or hold harmless any person under this Section 4.1 for any Loss or expense unless: (i) the person seeking indemnification has determined, in good faith, that its course of conduct was in the best interests of the Company; (ii) the person seeking indemnification was acting on behalf of or performing services on behalf of the Company; (iii) the Loss or expense was not the result of negligence or misconduct on the part of the person seeking indemnification; and (iv) any Loss or expense is recoverable only out of the net assets of the Company and not from the personal assets of the Company’s stockholders. This indemnity agreement will be in addition to any liability which the Company may otherwise have. 
In addition, the Company shall not indemnify or hold harmless the Dealer Manager or any Dealer Manager Affiliates for liabilities arising from or out of a violation of state or federal securities laws, unless one or more of the following conditions are met: 
(a) there has been a successful adjudication on the merits of each count involving alleged securities law violations; 
(b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or 
(c) a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which the securities were offered as to indemnification for violations of securities laws. 
The advancement of Company funds to the Dealer Manager or any Dealer Manager Affiliate for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought shall be permissible only if all of the following conditions are satisfied: 
(a) the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; 
(b) the legal action is initiated by a third party who is not a stockholder of the Company or the legal action is initiated by a stockholder of the Company acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; and 
(c) the Dealer Manager or the Dealer Manager Affiliate undertakes to repay the advanced funds to the Company, together with the applicable legal rate of interest thereon, in cases in which the Dealer Manager or the Dealer Manager Affiliate is found not to be entitled to indemnification. 
4.2. The Company agrees to indemnify and hold harmless each Dealer, the directors, officers, employees and agents of each Dealer, each person who controls any Dealer within the meaning of either the Securities Act or the Exchange Act and each affiliate of each Dealer (such directors, officers, employees, agents, controlling persons and affiliates being referred to collectively as “Dealer Affiliates” and, individually, as a “Dealer Affiliate”) against any and all Losses, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Prospectus or in any amendment thereof or supplement thereto, or in any Blue Sky Application, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such Losses or action; provided, however, that the Company shall not indemnify or hold harmless a Dealer or any of its Dealer Affiliates in any such case if it is 

5

determined that such Dealer was at fault in connection with the Loss. Notwithstanding the foregoing, the Company shall not indemnify or hold harmless the Dealer or any Dealer Affiliates in any manner that would be inconsistent with the provisions of Section II.G. of the NASAA Guidelines. In particular, but without limitation, the Company shall not indemnify or hold harmless a Dealer or any of its Dealer Affiliates for liabilities arising from or out of a violation of state or federal securities laws, unless one or more of the following conditions are met: 
(a) there has been a successful adjudication on the merits of each count involving alleged securities law violations; 
(b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or 
(c) a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which the securities were offered as to indemnification for violations of securities laws. 
This indemnity agreement will be in addition to any liability which the Company may otherwise have. 
4.3. The Dealer Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act (such directors, officers and controlling persons being referred to collectively as “Company Affiliates” and, individually, as a “Company Affiliate”) against any and all Losses, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon: (a) any untrue statement or alleged untrue statement of a material fact contained in the information relating to the Dealer Manager that appears in the Dealer Manager Sections of the Prospectus or any amendment thereof, or arise out of or are based upon the omission or alleged omission to state in the Dealer Manager Sections a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (b) any unauthorized use of sales materials or use of unauthorized verbal representations concerning the Shares by the Dealer Manager; or (c) the Dealer Manager’s failure to comply with applicable laws governing money laundry abatement and anti-terrorist financing efforts, including applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001; and, in each case, agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such Losses or action. This indemnity agreement will be in addition to any liability which the Dealer Manager may otherwise have. 
4.4. Each Dealer, severally, agrees to indemnify and hold harmless the Company, the Dealer Manager and their respective Company Affiliates and Dealer Manager Affiliates against any and all Losses, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon: (a) any unauthorized use of sales materials or use of unauthorized verbal representations concerning the Shares by such Dealer or Dealer’s representatives or agents in violation of Section VII of the Selected Dealer Agreement, in substantially the form attached hereto as Exhibit A, or otherwise, or any other violation of Section VII of the Selected Dealer Agreement by Dealer; (b) the Dealer’s failure to comply with applicable laws governing money laundry abatement and anti-terrorist financing efforts, including applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001; or (c) the Dealer’s failure to determine the suitability of any purchase as provided for in Section 11 of this Agreement; and, in each case, will reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such Losses or action. This indemnity agreement will be in addition to any liability which any Dealer may otherwise have. 
4.5. Promptly after receipt by an indemnified party under Sections 4.1, 4.2, 4.3 or 4.4 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under Section 4.1, 4.2, 4.3 or 4.4, as the case may be, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under such Section of this Agreement unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in such Section of this Agreement. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be subject to approval by the indemnified party, not to be unreasonably withheld or delayed. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel) selected by the indemnifying party, subject to approval by the indemnified party not to be unreasonably withheld or delayed, and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen 

6

by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel for the indemnified party (subject to approval by the indemnified party not to be unreasonably withheld or delayed) to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party may settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder but may not do so without the prior written consent of the indemnified parties, unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. 
4.6. If the right to indemnification provided for in Sections 4.1, 4.2, 4.3 and 4.4 herein would by its terms be available to a person hereunder, but is held to be unavailable by a court of competent jurisdiction for any reason, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party as a result of such Losses and expenses in respect thereof, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company, the Dealer Manager and the Dealer, as applicable, in connection with the statements, omissions or other circumstances which resulted in such Losses or expenses, as well as any other relevant equitable considerations. 
The relative fault of the Company, the Dealer Manager and the Dealer, as applicable, shall be determined by reference to, among other things, the parties’ relative intent, knowledge, and access to information. It is understood that it would not be just and equitable if contribution pursuant to this Section 4.6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4.6. 
Notwithstanding the provisions of this Section 4, the Dealer Manager or Dealer shall not be required to contribute any amount in excess of the total price of the Shares sold by it. 
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 
For purposes of this Section 4, each Company Affiliate shall have the same rights to contribution as the Company, each Dealer Manager Affiliate shall have the same rights to contribution as the Dealer Manager and each Dealer Affiliate of a particular Dealer shall have the same rights to contribution as that Dealer. 
5.     Survival of Provisions 
The respective agreements, representations and warranties of the Company and the Dealer Manager set forth in this Agreement shall remain operative and in full force and effect regardless of (a) any investigation made by or on behalf of the Dealer Manager or any Dealer or any person controlling the Dealer Manager or any Dealer or by or on behalf of the Company or any person controlling the Company, and (b) the acceptance of any payment for the Shares. 
6.     Applicable Law; Venue 
This Agreement was executed and delivered in, and its validity, interpretation and construction shall be governed by the laws of, the State of Arizona; provided however, that causes of action for violations of federal or state securities laws shall not be governed by this Section. Venue for any action brought hereunder shall lie exclusively in Phoenix, Arizona. 
7.     Counterparts 
This Agreement may be executed in any number of counterparts. Each counterpart, when executed and delivered, shall be an original contract, but all counterparts, when taken together, shall constitute one and the same Agreement. 
8.     Successors and Amendment 
8.1. This Agreement shall inure to the benefit of and be binding upon the Dealer Manager and the Company and their respective successors. Nothing in this Agreement is intended or shall be construed to give to any other person any right, remedy or claim, except as otherwise specifically provided herein. This Agreement shall inure to the benefit of the Dealers to the extent set forth in Sections 1 and 4 hereof. 
8.2. This Agreement may be amended only by the written agreement of the Dealer Manager and the Company. 
9.     Term 
This Agreement may be terminated by either party (i) immediately upon notice to the other party in the event that the other party shall have materially failed to comply with any of the material provisions of this Agreement on its part to be performed during the term of this Agreement or if any of the representations, warranties, covenants or agreements of such party 

7

contained herein shall not have been materially complied with or satisfied within the times specified or (ii) by either party on 60 days written notice. 
In any case, this Agreement shall expire at the close of business on the effective date that the Offering is terminated. The provisions of Section 4 hereof shall survive such termination. In addition, the Dealer Manager, upon the expiration or termination of this Agreement, shall (i) promptly deposit any and all funds in its possession which were received from investors for the sale of Shares into such account as the Company may designate; and (ii) promptly deliver to the Company all records and documents in its possession which relate to the Offering and are not designated as dealer copies. The Dealer Manager, at its sole expense, may make and retain copies of all such records and documents, but shall keep all such information confidential, except as otherwise required by applicable law. The Dealer Manager shall use its commercially reasonable efforts to cooperate with the Company to accomplish an orderly transfer of management of the Offering to a party designated by the Company. Upon expiration or termination of this Agreement, the Company shall pay to the Dealer Manager all commissions and fees to which the Dealer Manager is or becomes entitled under Section 3 at such time as such commissions become payable. In such event, participating Dealers shall only be entitled to receive the actual earned commissions to which they are entitled as a reallowance of the commissions received by the Dealer Manager. 
10.     Confirmation 
The Company hereby agrees and assumes the duty to confirm on its behalf and on behalf of dealers or brokers who sell the Shares, including the Dealer Manager, all orders for purchase of Shares accepted by the Company. Such confirmations will comply with applicable rules of the SEC and FINRA, and will comply with applicable laws of such other jurisdictions to the extent the Company is advised of such laws in writing by the Dealer Manager. 
11.     Suitability of Investors 
The Dealer Manager will offer Shares, and in its agreements with Dealers will require that the Dealers offer Shares, only to persons who meet the financial qualifications set forth in the Prospectus and will only make offers to persons in the states in which it is advised in writing by the Company that the Shares are qualified for sale or that such qualification is not required. In offering Shares, the Dealer Manager will, and in its agreements with Dealers, the Dealer Manager will require that the Dealers will, comply with the provisions of all applicable rules and regulations relating to suitability of investors, including without limitation, the provisions of Article III of the NASAA Guidelines. The Dealer Manager shall determine if a purchaser meets the minimum initial suitability standards: a net worth of at least $250,000 (exclusive of the value of the purchaser’s home, furnishings and automobiles) or an annual gross income of at least $70,000 and a net worth of at least $70,000 (exclusive of the value of the purchaser’s home, furnishings and automobiles), and any applicable state specific suitability standards. In making the determinations as to suitability, the Dealer Manager shall be entitled to rely on the Dealers and/or information provided by the purchasers. In addition, the Dealer Manager shall make every reasonable effort to determine that the purchase of the Shares is a suitable and appropriate investment for each purchaser. The Dealer Manager shall be entitled to rely on representations as to suitability provided by the Dealer based on information provided by such purchaser to the Dealer. In making its suitability determination, the Dealer will consider, based on the information provided by the purchaser, such purchaser’s age, investment objectives, investment experience, income, net worth, financial situation, and other investments held by such purchaser, and whether the purchaser: meets the state specific minimum income and net worth standards set forth in the Suitability Standards section of the Prospectus for purchasers resident in those states; can reasonably benefit from an investment in the Shares based on his overall investment objectives and portfolio structure; is able to bear the economic risk of the investment based on his overall financial situation; and has an apparent understanding of the fundamental risks of an investment in the Shares, the risk that he may lose his entire investment, the lack of liquidity of the Shares, the restrictions on transferability of the Shares, the background and qualifications of the Company’s advisor, and the tax, including ERISA, consequences of an investment in the Shares. With respect to the maintenance of records required by the NASAA Guidelines, the Company agrees that the Dealer Manager can satisfy its obligations by contractually requiring such information to be maintained by the Dealers for at least six (6) years. 
12.     Submission of Subscriptions 
12.1. Those persons who purchase Shares will be instructed by the Dealer Manager or the Dealer to make their checks payable to “Cole Office & Industrial REIT (CCIT II), Inc.” or, alternatively, “CCIT II” or, in the event that the purchase is made using a subscription agreement covering the Shares and the shares of one or more other Cole REITs (a “Joint Subscription Agreement”), “Cole REIT.” Checks received by the Dealer Manager or Dealer that conform to the foregoing instructions shall be transmitted for deposit as set forth below. The Dealer Manager may authorize certain Dealers that are “$250,000 broker-dealers” to instruct their customers to make their checks for Shares subscribed for payable directly to the Dealer. In such case, the Dealer will collect the proceeds of the subscribers’ checks and issue a check for the aggregate amount of the subscription proceeds, without any reductions or offset, made payable in the manner described above. Transmittal of received investor funds will be made in accordance with the following procedures: 

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(a) If a Dealer conducts its internal supervisory procedures at the location where subscription documents and checks are initially received, the Dealer shall conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward the subscription documents to the Dealer Manager and the checks to the Company by the end of the next business day following receipt of the subscription documents and the checks. 
(b) If a Dealer’s internal supervisory procedures are to be performed at a different location (the “Final Review Office”), the subscription documents and check must be transmitted to the Final Review Office by the end of the next business day following receipt by the Dealer of the subscription documents and check. The Final Review Office will, by the end of the next business day following receipt by the Final Review Office of the subscription documents and check, conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward the subscription documents and the checks to the Company. 
13.     Notices 
Any notice, approval, request, authorization, direction or other communication under this Agreement shall be given in writing and shall be deemed to be delivered when delivered in person or deposited in the United States mail, properly addressed and stamped with the required postage, registered or certified mail, return receipt requested, to the intended recipient as set forth below: 
	
			
	If to the Company:
	 
	Cole Office & Industrial REIT (CCIT II), Inc.

	 
	 
	2325 East Camelback Road, Suite 1100

	 
	 
	Phoenix, Arizona 85016

	 
	 
	Attention: President

	 
	 
	 

	If to the Dealer Manager:
	 
	Cole Capital Corporation

	 
	 
	2325 East Camelback Road, Suite 1100

	 
	 
	Phoenix, Arizona 85016

	 
	 
	Attention: President

Any party may change its address specified above by giving the other party notice of such change in accordance with this Section 13. 
14.     Independent Contractor 
The Company hereby acknowledges that the Company’s engagement of the Dealer Manager in connection with the Offering and the process leading up to the Offering is as an independent contractor and not in any other capacity. 
15.     Integration 
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Dealer Manager with respect to the subject matter hereof. 
16.     Waiver of Jury Trial 
The Company and the Dealer Manager hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 
    

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If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter and your acceptance shall constitute a binding agreement between us as of the date first above written. 
	
			
	 
	 
	 

	 
	Very truly yours,

	 
	 
	 

	 
	COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC.

	 
	 
	 

	 
	By:
	/s/ Simon J. Misselbrook

	 
	Name:
	Simon J. Misselbrook

	 
	Title:
	Chief Financial Officer and Treasurer

	
				
	 
	 
	 
	 

	Accepted and agreed as of the date first above written.
	 
	 

	 
	 
	 
	 

	COLE CAPITAL CORPORATION
	 
	 

	 
	 
	 
	 

	By:
	/s/ William C. Miller
	 
	 

	Name:
	William C. Miller
	 
	 

	Title:
	President and Treasurer
	 
	 

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Exhibit A 
COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC. 
Up to $2,975,000,000 in Shares of Class A Common Stock and Class T Common Stock 
FORM OF 
SELECTED DEALER AGREEMENT 
Ladies and Gentlemen: 
Cole Capital Corporation, as the dealer manager (“Dealer Manager”) for Cole Office & Industrial REIT (CCIT II), Inc. (the “Company”), a Maryland corporation, invites you (the “Dealer”) to participate in the distribution of shares of Class A common stock, $0.01 par value per share (“Class A Shares”), and Class T common stock, $0.01 par value per share (“Class T Shares”) (the Class A Shares and Class T Shares, collectively, the “Shares”), subject to the following terms: 
I. Dealer Manager Agreement 
The Dealer Manager has entered into that certain Amended and Restated Dealer Manager Agreement with the Company dated April 29, 2016, in the form attached hereto as Exhibit A (the “Dealer Manager Agreement”). The terms of the Dealer Manager Agreement relating to the Dealer are incorporated herein by reference as if set forth verbatim and except as otherwise specifically stated herein, all terms used in this Agreement have the meanings provided in the Dealer Manager Agreement. By your acceptance of this Agreement, you will become one of the Dealers referred to in the Dealer Manager Agreement and will be entitled and subject to the terms and conditions of the Dealer Manager Agreement, including but not limited to the indemnification provisions contained in Sections 4.2 and 4.4 of the Dealer Manager Agreement. The Shares are offered solely through broker-dealers who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). 
The Dealer hereby agrees to use its best efforts to sell the Shares for cash on the terms and conditions stated in the Prospectus. Nothing in this Agreement shall be deemed or construed to make the Dealer an employee, agent, representative or partner of the Dealer Manager or of the Company, and the Dealer is not authorized to act for the Dealer Manager or the Company or to make any representations on their behalf except as set forth in the Prospectus and such other printed information furnished to the Dealer by the Dealer Manager or the Company to supplement the Prospectus (“supplemental information”). 
II. Submission of Orders 
Those persons who purchase Shares shall make their checks payable to “Cole Office & Industrial REIT (CCIT II), Inc.” or, alternatively, “CCIT II” or, in the event that the purchase is made using a Joint Subscription Agreement, “Cole REIT.” Checks received by the Dealer that conform to the foregoing instructions shall be transmitted for deposit as set forth below. The Dealer Manager may authorize the Dealer, if the Dealer is a “$250,000 broker-dealer”, to instruct its customers to make its checks for Shares subscribed for payable directly to the Dealer, in which case the Dealer will collect the proceeds of the subscriber’s checks and issue a check made payable in the manner described above for the aggregate amount of the subscription proceeds. Transmittal of received investor funds will be made in accordance with the following procedures: 
(a) If the Dealer conducts its internal supervisory procedures at the location where subscription documents and checks are initially received, the Dealer shall conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward the subscription documents and the checks to the Company by the end of the next business day following receipt of the subscription documents and the checks. 
(b) If the internal supervisory procedures are to be performed at a different location (the “Final Review Office”), the subscription documents and checks must be transmitted to the Final Review Office by the end of the next business day following receipt by the Dealer of the subscription documents and checks. The Final Review Office will, by the end of the next business day following receipt by the Final Review Office of the subscription documents and checks, conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward the subscription documents and the checks to the Company. 
III. Pricing 
Except for discounts described in or as otherwise provided in the “Plan of Distribution” section of the Prospectus, up to $2,975,000,000 in Shares shall be offered to the public, consisting of (a) up to $1,500,000,000 in Class A Shares in the primary offering at a price of $10.99 per share (subject in certain circumstances to discounts based upon the volume of shares purchased and for certain categories of purchasers), (b) up to $1,000,000,000 in Class T Shares in the primary offering at a price of $10.53 per share (subject in certain circumstances to discounts based upon the volume of shares purchased and for certain categories of purchasers), (c) up to $290,000,000 in Class A Shares pursuant to the Company’s distribution reinvestment plan at a purchase price of $10.00 per share and (d) up to $185,000,000 in Class T Shares pursuant to the Company’s distribution reinvestment plan at a purchase price of $10.00 per share, all upon the other terms and subject to the conditions set 

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forth in the Prospectus. The aforementioned per share prices at which the Shares are being offered pursuant to the Offering are based on the estimated per share net asset value (“NAV”) of the Company as determined by the Company’s board of directors on April 8, 2016, plus, in the case of the primary offering, applicable commissions and fees. Subsequent estimates of the Company’s NAV will be made by the Company’s board of directors at least annually. Upon any subsequent estimate of the Company’s NAV, the per share price for Shares in the Company’s primary offering and the Company’s distribution reinvestment plan will be equal to the most recent NAV as determined by the Company’s board of directors divided by the number of Shares outstanding as of the date of the most recent NAV determination, plus, in the case of the primary offering, applicable commissions and fees. The Company reserves the right to reallocate the Shares included in the Offering among the classes of Shares and between those offered to the public and those offered pursuant to the distribution reinvestment plan. Except as otherwise indicated in the Prospectus or in any letter or memorandum sent to the Dealer by the Company or Dealer Manager, a minimum initial purchase of $2,500 is required. Except as otherwise indicated in the Prospectus, additional investments may be made in cash in minimal increments of at least $1,000. The Shares are nonassessable. The Dealer hereby agrees to place any order for the full purchase price. 
IV. Dealers’ Commissions 
Except for discounts described in or as otherwise provided in the “Plan of Distribution” section of the Prospectus, the Dealer’s selling commission applicable to the total public offering price of Shares sold by the Dealer which it is authorized to sell hereunder is 7.0% of the gross proceeds of the Class A Shares sold by it and accepted and confirmed by the Company and 3.0% of the gross proceeds of the Class T Shares sold by it and accepted and confirmed by the Company, which commission will be paid by the Dealer Manager; provided, however, that there shall be no selling commissions paid with respect to sales of Shares under the Company’s distribution reinvestment plan. In addition, the Dealer shall provide ongoing services to holders of Class T Shares in accordance with the Dealer’s internal policies and procedures, which ongoing services may include, but are not limited to, (a) offering to meet with the holder of the Class T Share no less than annually to provide overall guidance on the stockholder’s investment in the Company, including discussing the mechanics of the Company’s distribution reinvestment plan, the Company’s share redemption program or a tender offer, or to answer questions about their customer account statement or valuations, and (b) discussing with the holder of the Class T Share, upon such stockholder’s request, any questions related to the stockholder’s investment in the Company. As compensation for such ongoing services to holders of Class T Shares, the Dealer will be paid a monthly distribution and stockholder servicing fee that will accrue daily in an amount equal to 1/365th of 0.8% of the amount of the Company’s per share NAV of Class T Shares sold, excluding Class T Shares sold pursuant to the distribution reinvestment plan. The Dealer shall not receive any distribution and stockholder servicing fee with respect to Class A Shares, although the Dealer may, in its sole discretion, provide ongoing services to holders of Class A Shares similar to those services provided to holders of Class T Shares. The Dealer will no longer be entitled to the distribution and stockholder servicing fee with respect to Class T Shares sold in the Offering at the earliest of (i) the end of the month in which the transfer agent, on behalf of the Company, determines that total selling commissions and distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 7.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross proceeds from the sale of Shares, excluding Shares sold pursuant to the distribution reinvestment plan; (iii) the fifth anniversary of the last day of the month in which the Offering (excluding the offering of shares pursuant to the Company’s distribution reinvestment plan offering) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event. The distribution and stockholder servicing fee relates to the share or shares sold. The Dealer will not receive a distribution and stockholder servicing fee if such Dealer has not executed a Participating Dealer Agreement with the Dealer Manager or if such Dealer’s previously executed Participating Dealer Agreement with the Dealer Manager is terminated pursuant to the provisions of Article XI of this Selected Dealer Agreement; and provided further, that with respect to any individual investment, the Dealer will not receive a distribution and stockholder servicing fee if such Dealer ceases to hold the account related to such investment. For these purposes, a “sale of Shares” shall occur if, and only if, a transaction has closed with a securities purchaser pursuant to all applicable offering and subscription documents, and the Company has thereafter distributed the commission to the Dealer Manager in connection with such transaction. The Dealer hereby waives any and all rights to receive payment of commissions due until such time as the Dealer Manager is in receipt of the commission from the Company. In addition, as set forth in the Prospectus, the Dealer Manager may, in its sole discretion, reallow out of its dealer manager fee a marketing fee and its due diligence expense reimbursement portion of the dealer manager fee, based on such factors as the number of Shares sold by such participating Dealer, the assistance of such Dealer in marketing the offering of Shares, and bona fide conference fees incurred. 
The parties hereby agree that the foregoing commission is not in excess of the usual and customary distributors’ or sellers’ commission received in the sale of securities similar to the Shares, that the Company is not liable or responsible for the direct payment of such commission to the Dealer, and that Dealer’s interest in the offering is limited to such commission from the Dealer Manager and to the Dealer’s indemnity rights referred to in Section 4 of the Dealer Manager Agreement. 
The Dealer acknowledges that the Company may reimburse its advisor for underwriting expenses not covered by the selling commissions, dealer manager fee and distribution and stockholder servicing fee set forth in Section 3.3 of the Dealer 

A-2

Manager Agreement, but only to the extent that the total of such reimbursements for underwriting expenses and the selling commissions, dealer manager fee and distribution and stockholder servicing fee set forth in Section 3.3 of the Dealer Manager Agreement is no more than 10.0% of the gross offering proceeds of the Shares sold in the Offering, excluding proceeds from the distribution reinvestment plan. In no event will total underwriting compensation exceed 10.0% of the gross proceeds of the Shares sold in the Offering, excluding proceeds from the distribution reinvestment plan. 
The Dealer acknowledges that the Dealer Manager intends to pay transaction-based compensation to the Dealer Manager’s wholesalers in connection with sales of Shares, and that such transaction-based compensation may, and likely will, be different from the amount of transaction-based compensation the Dealer Manager will pay its wholesalers in connection with sales of securities offered by other real estate investment programs sponsored by Cole Capital. Such compensation may provide a disproportionate incentive for the Dealer Manager’s wholesalers to recommend that the Dealer distribute the Shares in addition to or in lieu of securities offered by other real estate investment programs sponsored by Cole Capital, or to recommend that the Dealer distribute securities offered by other real estate investment programs sponsored by Cole Capital in addition to or in lieu of the Shares. 
V. Payment 
Payments of selling commissions will be made by the Dealer Manager (or by the Company as agent of the Dealer Manager as provided in the Dealer Manager Agreement) to the Dealer within 30 days of the receipt by the Dealer Manager of the gross commission payments from the Company. The Dealer acknowledges that if the Company pays selling commissions to the Dealer Manager, the Company has satisfied its obligation for paying selling commissions. The Company may rely on and use the preceding acknowledgement as a defense against any claim by the Dealer for selling commissions that the Company pays to Dealer Manager but that Dealer Manager fails to remit to the Dealer. If, for any reason, a purchase is cancelled, the Dealer shall promptly return to the Company any selling commission and distribution and stockholder servicing fees it has received with respect to such purchase. 
VI. Right to Reject Orders or Cancel Sales 
All orders, whether initial or additional, are subject to acceptance by and shall only become effective upon confirmation by the Company, which reserves the right to reject any order for any or no reason. Orders not accompanied by a Subscription Agreement/Signature Page and the required check in payment for the Shares may be rejected. If any check is not paid upon presentment, or if the Company is not in actual receipt of clearinghouse funds or cash, certified or cashier’s check or the equivalent in payment for the Shares within 15 days of sale, the Company reserves the right to cancel the sale without notice. In the event an order is rejected or cancelled for any reason, the Dealer agrees to return to the Dealer Manager any commission theretofore paid with respect to such order. 
VII. Prospectus and Supplemental Information 
The Dealer is not authorized or permitted to give and will not give, any information or make any representation concerning the Shares except as set forth in the Prospectus and any supplemental information provided by the Company or Dealer Manager. The Dealer Manager will supply the Dealer with reasonable quantities of the Prospectus, any amendments or supplements thereto, as well as any supplemental information, for delivery to investors, and the Dealer will deliver a copy of the Prospectus and all supplements and amendments thereto to each investor to whom an offer is made prior to or simultaneously with the first solicitation of an offer to sell the Shares to an investor. The Dealer agrees that it will not send or give any supplemental information to an investor unless it has previously sent or given a Prospectus to that investor or has simultaneously sent or given a Prospectus with such supplemental information. The Dealer agrees that it will not show or give to any investor or prospective investor or reproduce any material or writing which is supplied to it by the Dealer Manager and marked “broker-dealer only,” or otherwise bearing a legend denoting that it is not to be used in connection with the sale of Shares to any prospective investor. The Dealer agrees that it will not use in connection with the offer or sale of Shares any material or writing which relates to another company supplied to it by the Company or the Dealer Manager bearing a legend which states that such material may not be used in connection with the offer or sale of any securities other than the company to which it relates. The Dealer further agrees that it will not use in connection with the offer or sale of Shares any materials or writings which have not been previously approved by the Dealer Manager. Each Dealer agrees, if the Dealer Manager so requests, to furnish a copy of any revised preliminary Prospectus to each person to whom it has furnished a copy of any previous preliminary Prospectus, and further agrees that it will itself mail or otherwise deliver all preliminary and final Prospectuses required for compliance with the provisions of Rule 15c2-8 under the Exchange Act. Regardless of the termination of this Agreement, the Dealer will deliver a Prospectus in transactions in the Shares for a period of 90 days from the effective date of the Registration Statement or such longer period as may be required by the Exchange Act or the rules and regulations thereunder. On becoming a Dealer, and in offering and selling Shares, the Dealer agrees to comply with all the applicable requirements under the Securities Act and the Exchange Act. 
    

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VIII. License and Association Membership 
The Dealer’s acceptance of this Agreement constitutes a representation to the Company and the Dealer Manager that the Dealer is (1) a properly registered broker-dealer under the Exchange Act and any applicable state securities laws, or a broker-dealer exempt from such registration, and (2) is a member in good standing of FINRA and each other securities self-regulatory organization of which it is a member. This Agreement shall automatically terminate if the Dealer ceases to be a member in good standing of FINRA or such other self-regulatory organization. The Dealer agrees to notify the Dealer Manager immediately if the Dealer ceases to be a member in good standing of FINRA or any other such self-regulatory organization. The Dealer Manager also hereby agrees to comply with the Conduct Rules of FINRA, including but not limited to Rules 2730, 2740, 2420 and 2750. 
IX. Anti-Money Laundering Compliance Programs 
The Dealer represents to the Company and the Dealer Manager that the Dealer has established and implemented anti-money laundering compliance programs in accordance with applicable law, including applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001, reasonably designed to detect and cause the reporting of suspicious transactions in connection with the sale of Shares. 
X. Limitation of Offer 
The Dealer will offer Shares only to persons who meet the financial qualifications set forth in the Prospectus and will only make offers to persons in the states in which it is advised in writing by the Company or the Dealer Manager that the Shares are qualified for sale or that such qualification is not required. In offering Shares, the Dealer will comply with all applicable provisions of the FINRA Rules including those rules relating to suitability of recommendations, as well as all other applicable rules and regulations relating to suitability of investors, including without limitation, the provisions of Article III.C. of the Statement of Policy Regarding Real Estate Investment Trusts of the North American Securities Administrators Association, Inc. 
In accordance with Section 11 of the Dealer Manager Agreement, the Dealer Manager shall be responsible for determining if a purchaser meets the following initial suitability standards: a net worth of at least $250,000 (exclusive of the value of the purchaser’s home, furnishings and automobiles) or an annual gross income of at least $70,000 and a net worth of at least $70,000 (exclusive of the value of the purchaser’s home, furnishings and automobiles), and any applicable state specific suitability standards set forth in the Prospectus. In making this determination, the Dealer Manager shall be entitled to rely on the Dealer and/or information provided by the purchasers. The Dealer shall make every reasonable effort to determine that the purchase of the Shares is a suitable and appropriate investment for each purchaser based on information provided by such purchaser to the Dealer including such purchaser’s age, investment objectives, investment experience, income, net worth, financial situation, and other investments held by such purchaser. In making its determination, the Dealer will consider, based on the information provided by the purchaser whether the purchaser: meets the state specific minimum income and net worth standards set forth in the Suitability Standards section of the Prospectus for purchasers resident in those states; can reasonably benefit from an investment in the Shares based on his overall investment objectives and portfolio structure; is able to bear the economic risk of the investment based on his overall financial situation; and has an apparent understanding of the fundamental risks of an investment in the Shares, the risk that he may lose his entire investment, the lack of liquidity of the Shares, the restrictions on transferability of the Shares, the background and qualifications of the Company’s advisor, and the tax, including ERISA, consequences of an investment in the Shares. The Dealer agrees to maintain records for at least six (6) years of the information used to determine that an investment in the Shares is suitable and appropriate for each such purchaser. 
XI. Termination 
The Dealer will suspend or terminate its offer and sale of Shares upon the request of the Company or the Dealer Manager at any time and will resume its offer and sale of Shares hereunder upon subsequent request of the Company or the Dealer Manager. Any party may terminate this Agreement by written notice. Such termination shall be effective 48 hours after the mailing of such notice. This Agreement, including the terms of the Dealer Manager Agreement relating to the Dealer incorporated by reference in this Agreement, is the entire agreement of the parties and supersedes all prior agreements, if any, between the parties hereto relating to the subject matter hereof. 
This Agreement may be amended at any time by the Dealer Manager by written notice to the Dealer, and any such amendment shall be deemed accepted by the Dealer upon placing an order for sale of Shares after such Dealer has received such notice. 
XII. Privacy Laws 
The Dealer Manager and the Dealer (each referred to individually in this section as “party”) agree as follows: 
(a) Each party agrees to abide by and comply with (i) the privacy standards and requirements of the Gramm-Leach-Bliley Act of 1999 (“GLB Act”), (ii) the privacy standards and requirements of any other applicable Federal or state law, and (iii) its own internal privacy policies and procedures, each as may be amended from time to time; 

A-4

(b) Each party agrees to refrain from the use or disclosure of nonpublic personal information (as defined under the GLB Act) of all customers who have opted out of such disclosures except as necessary to service the customers or as otherwise necessary or required by applicable law; and
(c) Each party shall be responsible for determining which customers have opted out of the disclosure of nonpublic personal information by periodically reviewing and, if necessary, retrieving a list of such customers (the “List”) as provided by each to identify customers that have exercised their opt-out rights. In the event either party uses or discloses nonpublic personal information of any customer for purposes other than servicing the customer, or as otherwise required by applicable law, that party will consult the List to determine whether the affected customer has exercised his or her opt-out rights. Each party understands that each is prohibited from using or disclosing any nonpublic personal information of any customer that is identified on the List as having opted out of such disclosures. 
XIII. Notice 
All notices will be in writing and will be duly given to the Dealer Manager when sent via overnight express delivery service to 2325 East Camelback Road, Suite 1100, Phoenix, Arizona 85016, and to the Dealer when sent via overnight express delivery service to the address specified by the Dealer herein. 
XIV. Arbitration, Attorneys’ Fees, Applicable Law and Venue 
In the event of a dispute between the Parties arising out of or related to this Agreement, such dispute shall be submitted to arbitration before FINRA in Phoenix, Arizona, in accordance with FINRA industry arbitration rules. Any award shall be final and binding between the Parties and judgment thereon may be entered in any court of competent jurisdiction. 
In any action to enforce the provisions of this Agreement or to secure damages for its breach, the prevailing party shall recover its costs and reasonable attorney’s fees. This Agreement shall be construed under the laws of the State of Arizona and shall take effect when signed by the Dealer and countersigned by the Dealer Manager. Venue for any action (including arbitration) brought hereunder shall lie exclusively in Phoenix, Arizona. 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on its behalf by its duly authorized agent. 
	
			
	 
	 
	 

	 
	THE DEALER MANAGER:

	 
	 
	 

	 
	COLE CAPITAL CORPORATION

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

A-5

EXHIBIT A

Dealer Manager Agreement 
Attached on CD-Rom in Due Diligence package. 

We have read the foregoing Agreement and we hereby accept and agree to the terms and conditions therein set forth. We hereby represent that the list below of jurisdictions in which we are registered or licensed as a broker or dealer and are fully authorized to sell securities is true and correct, and we agree to advise you of any change in such list during the term of this Agreement. 
	
		
	1.
	Identity of Dealer: 

	
			
	Company Name: 
	 
	 

	 
	 
	 

	Type of entity:
	 
	 

	 
	 
	(Corporation, Partnership, Proprietorship, Etc.)

	
			
	Organized in the State of: 
	 
	 

Licensed as broker-dealer in the following jurisdictions: 
	
										
	o
	All
	o
	Georgia
	o
	Massachusetts
	o
	New York
	o
	Tennessee

	o
	Alabama
	o
	Hawaii
	o
	Michigan
	o
	North Carolina
	o
	Texas

	o
	Alaska
	o
	Idaho
	o
	Minnesota
	o
	North Dakota
	o
	US Virgin Islands

	o
	Arizona
	o
	Illinois
	o
	Mississippi
	o
	Ohio
	o
	Utah

	o
	Arkansas
	o
	Indiana
	o
	Missouri
	o
	Oklahoma
	o
	Vermont

	o
	California
	o
	Iowa
	o
	Montana
	o
	Oregon
	o
	Virginia

	o
	Colorado
	o
	Kansas
	o
	Nebraska
	o
	Puerto Rico
	o
	Washington

	o
	Connecticut
	o
	Kentucky
	o
	Nevada
	o
	Pennsylvania
	o
	West Virginia

	o
	Delaware
	o
	Louisiana
	o
	New Hampshire
	o
	Rhode Island
	o
	Wisconsin

	o
	District of Columbia
	o
	Maine
	o
	New Jersey
	o
	South Carolina
	o
	Wyoming

	o
	Florida
	o
	Maryland
	o
	New Mexico
	o
	South Dakota
	 
	 

	
			
	Tax I.D. #:
	 
	 

	
		
	2.
	Person to receive notice pursuant to Section XIII: 

	
			
	Name:
	 
	 

	 
	 
	 

	Company:
	 
	 

	 
	 
	 

	Address:
	 
	 

	 
	 
	 

	Telephone No.:
	 
	 

	 
	 
	 

	Facsimile No.:
	 
	 

	 
	 
	 

	Email Address:
	 
	 

AGREED TO AND ACCEPTED BY THE DEALER: 
	
			
	Company Name:
	 
	 

	 
	 
	 

	Signature:
	 
	 

	 
	 
	 

	Print Name:
	 
	 

	 
	 
	 

	Title:
	 
	 

	 
	 
	 

	Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00257-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00257-of-00352.parquet"}]]