Private Equity Right of First Refusal Agreement

This Agreement is entered into on May 09, 2012 between the Shareholders of RL Electronics Corporation more specifically: Dorian M. Rothschild, 60 Arthur St., San Rafael, California 94901 Ryan H. Jagger, 35 Palm Circle Dr., Corte Madera, California 95422 Maria Pedula, 123 Main St., Mill Valley, California 94941 Peter R. Olsen, 32 Smith Ranch Rd., Terra Linda, California 94355 Rob G. Mackabee, 300 Oakhurst Way, Redwood City, California 94756 (individually "Shareholder" and collectively "Shareholders"), hereinafter "Seller" and RL Electronics Corporation, located at 440 Montgomery St., San Francisco, California 94103. Purpose of Agreement The Shareholders and the Corporation have concluded that it is in their best interest to establish a mechanism to govern sales or other transfers of the Corporation's capital stock. Transfer Only in Accordance With Agreement No Shareholder may sell, transfer, or encumber any shares of the Corporation's capital stock ("Shares") except as provided by this Agreement. Offer to Corporation No Shareholder may sell or transfer shares to anyone unless the Shareholder first offers, in writing, to sell those shares to the Corporation at the same price and on the same terms as the Shareholder ("Seller") was offered pursuant to an acceptable, bona fide, written offer. Response by Corporation The Corporation shall accept or reject Seller's offer within 10 calendar days after receipt. Failure of the Corporation to accept the offer within 10 calendar days after receipt constitutes rejection of the offer. An offer is received by the Corporation when a copy of a bona fide offer, identified as such and identifying the prospective purchaser, is physically received by any Director of the Corporation who is not Seller. Offer to Other Shareholders If the Corporation rejects Seller's offer, that offer is automatically extended to and deemed received by the entire Corporation's other Shareholders on the date of rejection by the Corporation without further notice or writing. The Other Shareholders shall accept or reject the offer within 30 after the Corporation rejects it. Failure of the Other Shareholders to accept the Seller's offer within 30 after the Corporation rejects it constitutes rejection of that offer by the other shareholders. Purchase by Other Shareholders If the Corporation has more than one Other Shareholder at the time it rejects the offer, the Other Shareholders may purchase all of the offered shares in any proportion among themselves as they may agree. If the Other Shareholders cannot agree on a division of the offered shares, then each
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Other Shareholder who wishes to purchase shares shall purchase a proportionate part of the offered shares determined as follows: the total number of shares offered for sale shall be multiplied by a fraction whose numerator is the number of shares then owned by the other Shareholders and whose denominator is the total number of shares owned by all of the other Shareholders who wish to purchase shares. Sale to Bona Fide Purchaser If neither the Corporation nor the Other Shareholders accept Seller's offer, Seller may sell the offered shares in the same quantity, at the same price, and under the same conditions offered to the Corporation to, and only to, the bona fide purchaser. If sale of the offered shares to the bona fide purchaser is not consummated within 60 after the Other Shareholders reject Seller's offer, Seller's right to sell his/her shares terminates and all of the restrictions imposed by this Agreement shall apply to all of Seller's stock. Legend on Stock Certificates Each certificate for shares in the Corporation shall bear the following legend: "The shares of stock represented by this certificate and the transfer of the shares are subject to an Agreement between RL Electronics Corporation and all of its Shareholders, further providing that no Shareholder may sell or dispose of any stock in the Corporation unless it is first offered to the Corporation, then to the other Stockholders, in the manner provided in the Agreement. The Corporation will mail to the holder of this certificate, without charge, a copy of that Agreement within five days after receiving a written request for a copy." Delivery of Existing Certificates to Corporation Each Shareholder shall deliver his or her share certificates to the Corporation to be so endorsed within 30 days of executing this Agreement. Termination This Agreement shall terminate only upon the written agreement of all Shareholders, bankruptcy, receivership or dissolution of the Corporation. Deletion of Legend on Stock Certificates On termination of this Agreement, the Corporation's Secretary shall, on tender of each Shareholder's stock certificates, delete the legend required by this Agreement. GENERAL PROVISIONS Scope This Agreement binds each of the parties identified in the preamble, their heirs, successors, assigns, and agents. Notices All notices required by this Agreement shall be written and signed by the person required to give the notice. Notice has not been given within the contemplation of this Agreement until it is physically delivered to the person entitled to receive it, or a person authorized, in writing, by the recipient to receive notice, or a Decedent's agent.
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Severability Legislative, judicial, or quasi-judicial invalidation of any provision of this Agreement shall not affect any other provision. The remainder of this Agreement shall remain in full force and effect. The Shareholders and the Corporation shall meet promptly after learning of the invalidation of any provision of this Agreement to adopt any new or replacement provisions that are necessary to carry out the purpose described in this Agreement. Governing Law This Agreement will be governed by the laws of the State of California without giving effect to any conflicts of law provisions. Entire Agreement This writing memorializes the entire Agreement between the Corporation and its Shareholders regarding the matters described above. All other agreements, whether written or oral, prior or contemporaneous, are void. This Agreement may not be amended except by a writing executed by the Corporation and each of its Shareholders at the time the amendment is adopted. IN WITNESS WHEREOF the parties have executed this Agreement as of the date shown above with the intent of being legally bound. SHAREHOLDERS: _______________________________________ Dorian M. Rothschild _______________________________________ Ryan H. Jagger _______________________________________ Maria Pedula _______________________________________ Peter R. Olsen _______________________________________ Rob G. Mackabee CORPORATION: _______________________________________ RL Electronics Corporation By David S. Atherton, Its CEO _______________________________ Date _______________________________ Date _______________________________ Date _______________________________ Date _______________________________ Date _______________________________ Date

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