<SEC-DOCUMENT>0001019687-13-000437.txt : 20130213
<SEC-HEADER>0001019687-13-000437.hdr.sgml : 20130213
<ACCEPTANCE-DATETIME>20130213080515
ACCESSION NUMBER:		0001019687-13-000437
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20130212
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20130213
DATE AS OF CHANGE:		20130213

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRECISION OPTICS Corp INC
		CENTRAL INDEX KEY:			0000867840
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				042795294
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-10647
		FILM NUMBER:		13599639

	BUSINESS ADDRESS:	
		STREET 1:		22 EAST BROADWAY
		CITY:			GARDNER
		STATE:			MA
		ZIP:			01440
		BUSINESS PHONE:		978-630-1800

	MAIL ADDRESS:	
		STREET 1:		22 EAST BROADWAY
		CITY:			GARDNER
		STATE:			MA
		ZIP:			01440

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRECISION OPTICS CORPORATION INC
		DATE OF NAME CHANGE:	19930328

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRECISION OPTICS CORP INC
		DATE OF NAME CHANGE:	19600201
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>precision_8k.htm
<DESCRIPTION>CURRENT REPORT ON FORM 8-K
<TEXT>
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 12pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM&nbsp;8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pursuant to Section&nbsp;13 or 15(d)&nbsp;of
the Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported)&nbsp;February
12, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRECISION OPTICS CORPORATION,&nbsp;INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="vertical-align: top; width: 32%; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Massachusetts</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 32%; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>001-10647</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 32%; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>04-2795294</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">(State or other jurisdiction</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">(Commission</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">(IRS Employer</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">of incorporation)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">File Number)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR>
    <TD STYLE="vertical-align: top; width: 49%; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>22 East Broadway, Gardner, Massachusetts</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 49%; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>01440</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">(Address of principal executive offices)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">(Zip Code)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(978) 630-1800</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Registrant&rsquo;s telephone number, including
area code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Not applicable.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form&nbsp;8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<U>see</U>
General Instruction A.2. below):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 15pt; text-align: left"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR
230.425)</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: left"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: left"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b)&nbsp;under the Exchange
Act (17 CFR 240.14d-2(b))</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: left"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c)&nbsp;under the Exchange
Act (17 CFR 240.13e-4(c))</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 1.01 Entry into a Material Definitive
Agreement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 3.02 Unregistered Sales of Equity
Securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Settlement Agreement with Special Situations
Fund III QP, L.P. and Special Situations Private Equity Fund, L.P.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As previously disclosed in
our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 24, 2013, we received a demand
letter from two of our stockholders, Special Situations Fund III QP, L.P. and Special Situations Private Equity Fund, L.P.
(along with Special Situations Fund III QP, L.P., &ldquo;<U>Special Situations</U>&rdquo;) on January 17, 2013. The letter
alleged that we failed to maintain a current registration statement for the sale of stock purchased by Special Situations
pursuant to registration rights agreements entered into with us in February 1, 2007 and June 25, 2008, and sought prompt
payment of $719,100 as liquidated damages and an amendment to the terms of certain warrants purchased in 2008. A registration
statement covering the shares in question is currently effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February
12, 2013, we entered into a settlement agreement with Special Situations (the &ldquo;<U>Settlement Agreement</U>&rdquo;).
Without agreeing to the alleged damages, we entered into this settlement in order to resolve the claim without requiring a cash
payment or extended distraction of our resources away from operational activities. Under the terms of the Settlement Agreement,
Special Situations agreed to forego their claims for cash damages. We agreed to: (a) issue an aggregate of (i) 350,000 shares of
our common stock, and (ii) warrants to purchase an aggregate of 350,000 shares of our common stock (the &ldquo;<U>Securities</U>&rdquo;),
and (b) amend the expiration date of the warrants issued to Special Situations in conjunction with our June 25, 2008 private placement
(the &ldquo;<U>2008 Warrants</U>&rdquo;), as payment in full of the alleged damages sought by Special Situations. The expiration
date of the 2008 Warrants shall be amended from June 25, 2015 to May 11, 2017. The new warrants to be issued in connection with
the Settlement Agreement will have an exercise price of $1.50 per share, subject to adjustment, will expire three years from February
12, 2013, and are exercisable in whole or in part, at any time prior to expiration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In conjunction with the Settlement Agreement,
we also entered into a registration rights agreement dated February 12, 2013 with
Special Situations, whereby we are obligated to register the resale by Special Situations of the Securities, consisting of 350,000
shares of our common stock and the 350,000 shares of our common stock underlying the new warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing description of the Settlement
Agreement is qualified in its entirety by reference to the full text of the Settlement Agreement, which is attached to this Current
Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference in its entirety. The foregoing description of the Registration
Rights Agreement is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is attached
to this Current Report on Form 8-K as Exhibit 4.2 and incorporated herein by reference in its entirety. The foregoing description
of the Form of Warrant is qualified in its entirety by reference to the full text of the Form of Warrant, which is attached to
this Current Report on Form 8-K as Exhibit 4.1 and incorporated herein by reference in its entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Settlement Agreement with Joel Pitlor</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February
12, 2013, we entered into a settlement agreement with one of our directors and stockholders, Joel Pitlor (the &ldquo;<U>Pitlor
Settlement Agreement</U>&rdquo;). Under the terms of the Pitlor Settlement Agreement, we agreed to issue 10,000 shares of our common
stock and warrants to purchase 10,000 shares of our common stock as payment in full of any amounts due to Mr. Pitlor under the
registration rights agreement we entered into with Mr. Pitlor, and other parties, on February 1, 2007. The warrants to
be issued in connection with the Pitlor Settlement Agreement will have an exercise price of $1.50 per share, subject to adjustment,
will expire three years from February 12, 2013, and are exercisable in whole or in
part, at any time prior to expiration. There are no registration rights associated with the securities being acquired pursuant
to the Pitlor Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">By virtue of Mr. Pitlor&rsquo;s directorship
with us, he is considered a related party of our Company under federal securities law. Our Board of Directors has acknowledged
that Mr. Pitlor&rsquo;s entry into the Pitlor Settlement Agreement is a related party transaction and has approved such transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing description of the Pitlor
Settlement Agreement is qualified in its entirety by reference to the full text of the Pitlor Settlement Agreement, which is attached
to this Current Report on Form 8-K as Exhibit 10.2 and incorporated herein by reference in its entirety. The foregoing description
of the Form of Warrant is qualified in its entirety by reference to the full text of the Form of Warrant, which is attached to
this Current Report on Form 8-K as Exhibit 4.3 and incorporated herein by reference in its entirety.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Settlement Agreement with Arnold Schumsky</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 12, 2013, we also entered
into a settlement agreement with one of our stockholders, Arnold Schumsky (the &ldquo;<U>Schumsky Settlement
Agreement</U>&rdquo;). The terms of the Schumsky Settlement Agreement and the accompanying Form of Warrant are
substantially similar to the terms of the Pitlor Settlement Agreement and the accompanying Form of Warrant. Under the terms
of the Schumsky Settlement Agreement, we have agreed to issue 10,000 shares of our common stock and warrants to purchase
10,000 shares of our common stock as payment in full of any amounts due to Mr. Schumsky under the registration rights
agreement we entered into with Mr. Schumsky, and other parties, on February 1, 2007 and under the registration rights
agreement we entered into with Mr. Schumsky, and other parties, on June 25, 2008. The warrants to be issued in
connection with the Schumsky Settlement Agreement will have an exercise price of $1.50 per share, subject to adjustment, will
expire three years from February 12, 2013, and are exercisable in whole or in part, at any time prior to expiration. There
are no registration rights associated with the securities being acquired pursuant to the Schumsky Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing description of the Schumsky
Settlement Agreement is qualified in its entirety by reference to the full text of the Schumsky Settlement Agreement, which is
attached to this Current Report on Form 8-K as Exhibit 10.3 and incorporated herein by reference in its entirety. The foregoing
description of the Form of Warrant is qualified in its entirety by reference to the full text of the Form of Warrant, which is
attached to this Current Report on Form 8-K as Exhibit 4.3 and incorporated herein by reference in its entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The securities discussed herein in this
Current Report on Form 8-K were offered and issued to a limited number of accredited investors without registration under the Securities
Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;), or state securities laws, in reliance on the exemptions provided
by Regulation D promulgated thereunder. Accordingly, the securities issued have not been registered under the Securities Act, and
until so registered, the securities may not be offered or sold in the United States absent registration or availability of an applicable
exemption from registration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This report does not constitute an offer
to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this
offer, solicitation, or sale would unlawful prior to registration or qualification under the securities laws of any state or jurisdiction. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 7.01&#9;Regulation FD Disclosure.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 8.01&#9;Other Events.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are excited about the continued development,
commercialization, and market acceptance of our new products and technical innovations based upon our unique proprietary technology.
As previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 18, 2012,
we accepted an order from a customer to purchase endoscopes for a total purchase amount of $1,032,000 (the &ldquo;<U>April 2012
Order</U>&rdquo;). We are continuing to complete pre-production activities to enable shipments against our previously announced
orders, including the April 2012 Order, for products incorporating Microprecision&trade; technology for very small endoscopes and
micro medical cameras with diameters on the order of 1 millimeter and smaller. Nearly all validation testing has been successfully
completed in connection with the pre-production requirements for the April 2012 Order for small endoscopes. We expect production
shipments of this product to begin within the upcoming months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have also focused recent operational
efforts on sales and marketing activities intended to broaden awareness of the benefits of our new technology platforms, which
we believe are ready for general application to medical device projects requiring surgery-grade visualization from sub-millimeter
sized devices and handheld 3D endoscopy. During the last two weeks of January, we visited two large medical device companies who
are existing customers of ours and conducted successful demonstrations of our latest technology and products. From February 5 through
February 7, 2013, we attended the SPIE Photonics West Conference in San Francisco, California, where we exhibited our latest technology,
and from February 12 through February 14, 2013, we are exhibiting our technology at the Medical Design &amp; Manufacturing (MD&amp;M)
West show located in Anaheim, California. Our new technology has been well received during these recent customer visits and trade
shows, which have already resulted in follow on discussions with a number of existing and new potential customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This report contains forward-looking statements.&nbsp;
Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies,
predictions or any other statements related to our future activities or future events or conditions.&nbsp; These statements are
based on current expectations, estimates and projections about our business based, in part, on assumptions made by our management.&nbsp;
These statements are not guarantees of future performances and involve risks, uncertainties and assumptions that are difficult
to predict.&nbsp; Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking
statements due to numerous factors, including those risks discussed in our Annual Report on Form&nbsp;10-K and in other documents
that we file from time to time with the SEC.&nbsp; Any forward-looking statements speak only as of the date on which they are made,
and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date
of this report, except as required by law.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and
Exhibits</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">4.1</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal">Form
    of Warrant to Purchase Shares of Common Stock (Special Situations Settlement), dated February 12, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">4.2</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Registration Rights Agreement by and among the Company, Special Situations Fund III QP, L.P. and Special Situations Private Equity Fund, L.P., dated February 12, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">4.3</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Form of Warrant to Purchase Shares of Common Stock (Pitlor and Schumsky Settlement), dated February 12, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">10.1</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Settlement Agreement by and among the Company, Special Situations Fund III QP, L.P. and Special Situations Private Equity Fund, L.P., dated February 12, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">10.2</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Settlement Agreement by and between the Company and Joel Pitlor, dated February 12, 2013</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">10.3</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Settlement Agreement by and between the Company and Arnold Schumsky, dated February 12, 2013</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-size: 10pt">Precision Optics Corporation,&nbsp;Inc.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">(Registrant)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Date</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-size: 10pt">February 13</FONT>, 2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-size: 10pt">/s/ Joseph N. Forkey</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Signature)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Name: Joseph N. Forkey</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Title: Chief Executive Officer</P></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
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<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>precision_ex0401.htm
<DESCRIPTION>FORM OF WARRANT
<TEXT>
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<P STYLE="margin: 0; text-align: right"><B>Exhibit 4.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS
(I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY
BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">THIS WARRANT SHALL BE VOID
AFTER 5:00 P.M. EASTERN TIME ON FEBRUARY 12, 2016 (THE &ldquo;EXPIRATION DATE&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No. __________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;WARRANT TO PURCHASE _______ SHARES OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;COMMON STOCK, PAR VALUE $0.01 PER SHARE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">FOR VALUE RECEIVED, ____________________
(&ldquo;Warrantholder&rdquo;), is entitled to purchase, subject to the provisions of this Warrant, from Precision Optics Corporation,
Inc., a Massachusetts corporation (&ldquo;Company&rdquo;), at any time not later than 5:00 P.M., Eastern time, on the Expiration
Date (as defined above), at an exercise price per share equal to $1.50 (the exercise price in effect being herein called the &ldquo;Warrant
Price&rdquo;), ______ shares (&ldquo;Warrant Shares&rdquo;) of the Company&rsquo;s Common Stock, par value $0.01 per share (&ldquo;Common
Stock&rdquo;). The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time as described herein. This Warrant is being issued pursuant to the Settlement Agreement, dated as
of February 12, 2013 (the &ldquo;Settlement Agreement&rdquo;), among the Company and the initial holders of the Company
Warrants (as defined in Section 19). Capitalized terms used herein have the respective meanings ascribed thereto in the Settlement
Agreement unless otherwise defined herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration</U>. The Company shall maintain books for the transfer
and registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in
the name of the Warrantholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfers</U>.
As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the &ldquo;Securities Act&rdquo;), or an exemption from such registration. Subject to such restrictions, the
Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender
hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may
be reasonably required by the Company, including, if required by the Company, an opinion of its counsel reasonably satisfactory
to the Company to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish
that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and
the surrendered Warrant shall be canceled by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercise
of Warrant</U>. Subject to the provisions hereof, the Warrantholder may exercise this Warrant, in whole or in part, at any time
prior to its expiration upon surrender of the Warrant, together with delivery of a duly executed Warrant Exercise Form, in the
form attached hereto as Appendix A (the &ldquo;Exercise Agreement&rdquo;) and payment by cash, certified check or wire transfer
of funds (or by cashless exercise as provided in Section 17) of the aggregate Warrant Price for that number of Warrant Shares
then being purchased, to the Company during normal business hours on any Business Day at the Company&rsquo;s principal executive
offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder). The Warrant Shares
so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder&rsquo;s designee, as the record owner of such
shares, as of the close of business on the date on which this Warrant shall have been surrendered (or the date evidence of loss,
theft or destruction thereof and security or indemnity satisfactory to the Company has been provided to the Company), the Warrant
Price shall have been paid and the completed Exercise Agreement shall have been delivered. Certificates for the Warrant Shares
so purchased shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) Business Days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the
Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder,
as specified in the Exercise Agreement. If this Warrant shall have been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with respect to which this Warrant shall not then have been exercised.
As used herein, &ldquo;Business Day&rdquo; means a day, other than a Saturday or Sunday, on which banks in New York City are open
for the general transaction of business. Each exercise hereof shall constitute the re-affirmation by the Warrantholder that the
representations and warranties contained in Article 3 of the Settlement Agreement are true and correct in all material respects
with respect to the Warrantholder as of the time of such exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If (1) a certificate representing
the Warrant Shares is not delivered to the Warrantholder within three (3) Business Days of the due exercise of this Warrant by
the Warrantholder and (2) prior to the time such certificate is received by the Warrantholder, the Warrantholder, or any third
party on behalf of the Warrantholder or for the Warrantholder&rsquo;s account, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Warrantholder of shares represented by such certificate (a &ldquo;Buy-In&rdquo;),
then the Company shall pay in cash to the Warrantholder (for costs incurred either directly by such Warrantholder or on behalf
of a third party) the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Warrantholder as a result of the sale to which such Buy-In relates.
The Warrantholder shall provide the Company written notice indicating the amounts payable to the Warrantholder in respect of the
Buy-In.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compliance
with the Securities Act of 1933</U>. Except as provided in the Settlement Agreement, the Company may cause the legend set forth
on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon
exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Payment of
Taxes</U>. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon
the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that
of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue
or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company&rsquo;s reasonable satisfaction that such tax has been paid. The Warrantholder
shall be responsible for income taxes due under federal, state or other law, if any such tax is due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mutilated
or Missing Warrants</U>. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange
and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect
to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reservation
of Common Stock</U>. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of
Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant. The Company
agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for
such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustments</U>.
Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant
shall be subject to adjustment from time to time as set forth hereinafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company shall, at any time
or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares
of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares
of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is
the continuing corporation), then (i) the Warrant Price in effect immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon exercise
of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately
prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Warrant Price
in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Warrant
Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above. Such adjustments
shall be made successively whenever any event listed above shall occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any capital reorganization, reclassification
of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not
the survivor, or sale, transfer or other disposition of all or substantially all of the Company&rsquo;s assets to another corporation
shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase
and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect
to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise
of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken
place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder
to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter
be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless
prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity
shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of
the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may
be entitled to purchase, and the other obligations under this Warrant. The provisions of this paragraph (b) shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case the Company shall fix a
payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions
referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall
be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price (as defined below) per share
of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company&rsquo;s Board
of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants,
and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock immediately prior to such payment date. &ldquo;Market Price&rdquo; as of a particular date (the &ldquo;Valuation
Date&rdquo;) shall mean the following: (a) if the Common Stock is then listed on the Nasdaq Global Market or the Nasdaq Capital
Market (&ldquo;Nasdaq&rdquo;) or any other national stock exchange, the closing sale price of one share of Common Stock on such
exchange on the last trading day prior to the Valuation Date; (b) if the Common Stock is then quoted on the OTC Bulletin Board
(the &ldquo;Bulletin Board&rdquo;) or such similar quotation system or association, the closing sale price of one share of Common
Stock on the Bulletin Board or such other quotation system or association on the last trading day prior to the Valuation Date or,
if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon on the last trading
day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on the Bulletin
Board or such other quotation system or association, the fair market value of one share of Common Stock as of the Valuation Date,
as determined in good faith by the Board of Directors of the Company and the Warrantholder. If the Common Stock is not then listed
on a national securities exchange, the Bulletin Board or such other quotation system or association, the Board of Directors of
the Company shall respond promptly, in writing, to an inquiry by the Warrantholder prior to the exercise hereunder as to the fair
market value of a share of Common Stock as determined by the Board of Directors of the Company. In the event that the Board of
Directors of the Company and the Warrantholder are unable to agree upon the fair market value in respect of subpart (c) of this
paragraph, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters. The decision
of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.
Such adjustment shall be made successively whenever such a payment date is fixed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An adjustment to the Warrant Price
shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the
effective date of each other event which requires an adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as a result of
an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of capital stock of
the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall
be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Warrant Shares contained in this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by applicable
law and the listing requirements of any stock market or exchange on which the Common Stock is then listed, the Company from time
to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty (20) days, the decrease
is irrevocable during the period and the Board shall have made a determination that such decrease would be in the best interests
of the Company, which determination shall be conclusive. Whenever the Warrant Price is decreased pursuant to the preceding sentence,
the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to the date the decreased Warrant
Price takes effect, and such notice shall state the decreased Warrant Price and the period during which it will be in effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fractional
Interest</U>. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon
such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in
cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 10.&nbsp;&nbsp;&nbsp;<U>Benefits</U>. Nothing
in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal
or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company
and the Warrantholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 11.&nbsp;&nbsp;&nbsp;<U>Notices to Warrantholder</U>.
Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof
to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect therein shall not affect the
legality or validity of the subject adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 12.&nbsp;&nbsp;&nbsp;<U>Identity
of Transfer Agent</U>. The Transfer Agent for the Common Stock is Computershare Investor Services. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company&rsquo;s capital stock issuable upon the exercise
of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the
name and address of such transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 13.&nbsp;&nbsp;&nbsp;<U>Notices</U>.
Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given
by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three (3)
Business Days after such notice is deposited in first class mail, postage prepaid, (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business Day after delivery to such carrier, and (v) if
given by electronic mail, upon receipt. All notices shall be addressed as follows: if to the Warrantholder, at its address as
set forth in the Company&rsquo;s books and records and, if to the Company, at the address as follows, or at such other address
as the Warrantholder or the Company may designate by ten (10) Business Days&rsquo; advance written notice to the other:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">If to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Precision Optics Corporation, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">22 East Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Gardner, Massachusetts 01440-3338</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Attention: Joseph N. Forkey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">President and Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Fax: (978) 630-1487</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">E-mail: [______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">With a copy to (which shall
not constitute notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Amy Trombly, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Trombly Business Law, PC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">1320 Centre Street, Suite 202</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Newton, MA 02459</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Fax: (617) 243-0066</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify"><FONT STYLE="color: black">E-mail:
</FONT>[______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 14.&nbsp;&nbsp;&nbsp;<U>Registration
Rights</U>. The initial Warrantholder is entitled to the benefit of certain registration rights with respect to the shares of
Common Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement entered into by the Company
and the initial Warranholder, and any subsequent Warrantholder may be entitled to such rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 15.&nbsp;&nbsp;&nbsp;<U>Successors</U>.
All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 16.&nbsp;&nbsp;&nbsp;<U>Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial</U>. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law provisions thereof (other than Section 5-1401 of
the New York General Obligation Law). The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits
to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Warrant and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding
may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under
this Warrant. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company and, by accepting
this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. <B> EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 17.&nbsp;&nbsp;&nbsp;<U>Cashless
Exercise</U>. The Warrantholder may elect to receive, without the payment by the Warrantholder of the aggregate Warrant Price
in respect of the shares of Common Stock to be acquired, shares of Common Stock of equal value to the value of this Warrant, or
any specified portion hereof, by the surrender of this Warrant (or such portion of this Warrant being so exercised) together with
a Net Issue Election Notice, in the form annexed hereto as Appendix B, duly executed, to the Company. Thereupon, the Company shall
issue to the Warrantholder such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed using
the following formula:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">X = <U>Y (A - B)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">where&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">X =&#9;the number of shares
of Common Stock to which the Warrantholder is entitled upon such cashless exercise;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">Y =&#9;the total number
of shares of Common Stock covered by this Warrant for which the Warrantholder has surrendered purchase rights at such time for
cashless exercise (including both shares to be issued to the Warrantholder and shares as to which the purchase rights are to be
canceled as payment therefor);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">A =&#9;the &ldquo;Market
Price&rdquo; of one share of Common Stock as at the date the net issue election is made; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">B =&#9;the Warrant Price
in effect under this Warrant at the time the net issue election is made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 18.&nbsp;&nbsp;&nbsp;<U>No Rights
as Stockholder</U>. Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder
of the Company by virtue of its ownership of this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 19.&nbsp;&nbsp;&nbsp;<U>Amendment;
Waiver</U>. This Warrant is one of a series of Warrants of like tenor issued by the Company pursuant to the Settlement Agreement
and initially covering an aggregate of 350,000 shares of Common Stock (collectively, the &ldquo;Company Warrants&rdquo;). Any
term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this Warrant) upon
the written consent of the Company and the holders of Company Warrants representing at least 50% of the number of shares of Common
Stock then subject to all outstanding Company Warrants; <U>provided</U>, that (x) any such amendment or waiver must apply to all
Company Warrants; and (y) the number of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date may
not be amended, and the right to exercise this Warrant may not be altered or waived, without the written consent of the Warrantholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 20.&nbsp;&nbsp;&nbsp;<U>Section
Headings</U>. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way
alter, modify, amend, limit or restrict the provisions hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed, as of the ___th day of February, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2"><B>PRECISION OPTICS CORPORATION, INC.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%"></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Joseph N. Forkey<BR>President and Chief Executive
Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPENDIX A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>WARRANT EXERCISE FORM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To Precision Optics Corporation, Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
irrevocably elects to exercise the right of purchase represented by the within Warrant (&ldquo;Warrant&rdquo;) for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (&ldquo;Warrant
Shares&rdquo;) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Name</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Address</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Federal Tax ID or Social
Security No.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">and delivered by (certified mail to the above
address, or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 135pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">(electronically (provide
DWAC Instructions:___________________), or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">(other (specify): __________________________________________).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">and, if the number of Warrant Shares shall
not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares
purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned&rsquo;s
Assignee as below indicated and delivered to the address stated below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Dated: ___________________, ____</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Note: The signature must correspond with the
name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or
any change whatever, unless the Warrant has been assigned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 45%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Signature:______________________________</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Name (please print)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Address</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><U>&nbsp;</U></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Federal Identification or</FONT> <FONT STYLE="font-size: 10pt">Social Security No.</font></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Assignee: </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPENDIX B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NET ISSUE ELECTION NOTICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To: Precision Optics Corporation, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Date: [_________________________]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
elects under <U>Section 17</U> of this Warrant to surrender the right to purchase [____________] shares of Common Stock pursuant
to this Warrant and hereby requests the issuance of [_____________] shares of Common Stock. The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Signature</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Name for Registration</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Mailing Address</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">12</P>

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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"></P>

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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>precision_ex0402.htm
<DESCRIPTION>REGISTRATION RIGHTS AGREEMENT
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0; text-align: right"><B>Exhibit 4.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>REGISTRATION RIGHTS AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">This Registration
Rights Agreement (the &ldquo;Agreement&rdquo;) is made and entered into as of this 12th day of February, 2013 by and among Precision
Optics Corporation, Inc., a Massachusetts corporation (the &ldquo;Company&rdquo;), and the &ldquo;Holders&rdquo; named in that
certain Settlement Agreement by and among the Company and the Holders (the &ldquo;Settlement Agreement&rdquo;). Capitalized terms
used herein have the respective meanings ascribed thereto in the Settlement Agreement unless otherwise defined herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">The parties hereby
agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">1.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
Definitions</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">As used in this Agreement,
the following terms shall have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Affiliate</U>&rdquo;
means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Business
Day</U>&rdquo; means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Common
Stock</U>&rdquo; means the Company&rsquo;s common stock, par value $0.01 per share, and any securities into which such shares may
hereinafter be reclassified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Control</U>&rdquo;
(including the terms &ldquo;controlling&rdquo;, &ldquo;controlled by&rdquo; or &ldquo;under common control with&rdquo;) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Investors</U>&rdquo;
means the Holders identified in the Settlement Agreement and any Affiliate or permitted transferee of any Holder who is a subsequent
holder of any Warrants or Registrable Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Person</U>&rdquo;
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Prospectus</U>&rdquo;
means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference
in such prospectus, and (ii) any &ldquo;free writing prospectus&rdquo; as defined in Rule 405 under the 1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Register</U>,&rdquo;
&ldquo;<U>registered</U>&rdquo; and &ldquo;<U>registration</U>&rdquo; refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the 1933 Act (as defined below) which is declared effective by the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Registrable
Securities</U>&rdquo; means (i) the Shares, (ii) the Warrant Shares, and (iii) any other securities issued or issuable with respect
to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided, that, a security shall
cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such
security becoming eligible for sale without restriction by the Investors pursuant to Rule 144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Registration
Statement</U>&rdquo; means any registration statement of the Company filed under the 1933 Act that covers the resale of any of
the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Required
Investors</U>&rdquo; means the Investors holding a majority of the Registrable Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>SEC</U>&rdquo;
means the U.S. Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Shares</U>&rdquo;
means the shares of Common Stock issued pursuant to the Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Warrants</U>&rdquo;
means, the warrants to purchase shares of Common Stock issued to the Investors pursuant to the Settlement Agreement, the form
of which is attached to the Settlement Agreement as <U>Exhibit A</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Warrant
Shares</U>&rdquo; means the shares of Common Stock issuable upon the exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>1933 Act</U>&rdquo;
means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>1934 Act</U>&rdquo;
means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">2.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&nbsp;<U>Registration
Statements</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(i)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
following the execution and delivery of this Agreement but no later than thirty (30) Business Days thereafter, the Company shall
prepare and file with the SEC a Registration Statement on Form S-1 (or, if Form S-1 is not then available to the Company, on such
form of registration statement as is then available to the Company to effect a registration for resale of the Registrable Securities),
covering the resale of the Registrable Securities in an amount at least equal to the Shares and the Warrant Shares. Subject to
any SEC comments, such Registration Statement shall include the Plan of Distribution substantially in the form attached hereto
as <U>Exhibit A</U>; provided, however, that no Investor shall be named as an &ldquo;underwriter&rdquo; in the Registration Statement
without the Investor&rsquo;s prior written consent. Such Registration Statement also shall cover, to the extent allowable under
the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common
Stock due to an increase in the number of Warrant Shares resulting from changes in the Warrant Price pursuant to the terms of the
Warrants. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other
holder without the prior written consent of the Required Investors. The Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investors
and their counsel prior to its filing or other submission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 1.4in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(ii)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>S-3 Qualification</U>.
Promptly following the date (the &ldquo;Qualification Date&rdquo;) upon which the Company becomes eligible to use a registration
statement on Form S-3 to register the Registrable Securities for resale, the Company shall file a registration statement on Form
S-3 covering the Registrable Securities (or a post-effective amendment on Form S-3 to the registration statement on Form S-1) (a
&ldquo;Shelf Registration Statement&rdquo;) and shall use commercially reasonable efforts to cause such Shelf Registration Statement
to be declared effective as promptly as practicable thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Expenses</U>.
The Company will pay all expenses associated with effecting the registration of the Registrable Securities, including filing and
printing fees, the Company&rsquo;s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities
for sale under applicable state securities laws, listing fees, but excluding fees and expenses of the Investors&rsquo; counsel,
discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with
respect to the Registrable Securities being sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Effectiveness</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(i)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company
shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after filing.
The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four
(24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of
any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(ii)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For not
more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the
Company may delay the disclosure of material non-public information concerning the Company, by suspending the use of any Prospectus
included in any Registration Statement contemplated by this Section containing such information, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of the Company (an &ldquo;Allowed Delay&rdquo;); provided,
that the Company shall promptly (a) notify the Investors in writing of the existence of (but in no event, without the prior written
consent of an Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, (b) advise the Investors in writing to cease all sales under the Registration Statement
until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(d)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Rule
415</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">If at any time the
SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible
to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any Investor to be
named as an &ldquo;underwriter&rdquo;, the Company shall use its best efforts to persuade the SEC that the offering contemplated
by the Registration Statement is a valid secondary offering and not an offering &ldquo;by or on behalf of the issuer&rdquo; as
defined in Rule 415 and that none of the Investors is an &ldquo;underwriter&rdquo;. The Investors shall have the right to participate
or have their counsel participate in any meetings or discussions with the SEC regarding the SEC&rsquo;s position and to comment
or have their counsel comment on any written submission made to the SEC with respect thereto. No such written submission shall
be made to the SEC to which the Investors&rsquo; counsel reasonably objects. In the event that, despite the Company&rsquo;s best
efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove
from the Registration Statement such portion of the Registrable Securities (the &ldquo;Cut Back Shares&rdquo;) and/or (ii) agree
to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure
the Company&rsquo;s compliance with the requirements of Rule 415 (collectively, the &ldquo;SEC Restrictions&rdquo;); provided,
however, that the Company shall not agree to name any Investor as an &ldquo;underwriter&rdquo; in such Registration Statement without
the prior written consent of such Investor. Any cut-back imposed on the Investors pursuant to this Section 2(d) shall be allocated
among the Investors on a pro rata basis and shall be applied first to any Warrant Shares, unless the SEC Restrictions otherwise
require or provide or the Investors otherwise agree.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(e)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Right
to Piggyback Registration</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(i)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If at any
time following the date of this Agreement that any Registrable Securities remain outstanding (A) there is not one or more effective
Registration Statements covering all of the Registrable Securities and (B) the Company proposes for any reason to register any
shares of Common Stock under the 1933 Act (other than pursuant to a registration statement on Form S-4 or Form S-8 (or a similar
or successor form)) with respect to an offering of Common Stock by the Company for its own account or for the account of any of
its stockholders, it shall at each such time promptly give written notice to the holders of the Registrable Securities of its
intention to do so (but in no event less than thirty (30) days before the anticipated filing date) and, to the extent permitted
under the provisions of Rule 415 under the 1933 Act, include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within fifteen (15) days after receipt of the Company&rsquo;s
notice (a &ldquo;Piggyback Registration&rdquo;). Such notice shall offer the holders of the Registrable Securities the opportunity
to register such number of shares of Registrable Securities as each such holder may request and shall indicate the intended method
of distribution of such Registrable Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">(ii)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, (A) if such registration involves an underwritten public offering, the Investors must sell their Registrable Securities
to, if applicable, the underwriter(s) at the same price and subject to the same underwriting discounts and commissions that apply
to the other securities sold in such offering (it being acknowledged that the Company shall be responsible for other expenses as
set forth in Section 2(b)) and subject to the Investors entering into customary underwriting documentation for selling stockholders
in an underwritten public offering, and (B) if, at any time after giving written notice of its intention to register any Registrable
Securities pursuant to Section 2(e)(i) and prior to the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to cause such registration statement to become effective under the
1933 Act, the Company shall deliver written notice to the Investors and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.4in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Company
Obligations</U>. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities
in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use
commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for
a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration
Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration
Statement may be sold without restriction pursuant to Rule 144 (the &ldquo;Effectiveness Period&rdquo;) and advise the Investors
in writing when the Effectiveness Period has expired;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prepare
and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be
necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933
Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provide
copies to and permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements
thereto no fewer than three (3) Business Days prior to their filing with the SEC and not file any document to which such counsel
reasonably objects;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(d)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;furnish
(which may be by email notice of a filing on EDGAR) to the Investors and their legal counsel (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing
date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each
preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the
Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company
has sought confidential treatment), and (ii) upon request, such number of copies of a Prospectus, including a preliminary prospectus,
and all amendments and supplements thereto and such other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor that are covered by the related Registration Statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(e)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use
commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest possible moment;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(f)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prior
to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with
the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such domestic jurisdictions requested by the Investors and do any and all other commercially
reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities
covered by the Registration Statement<B>;</B><FONT STYLE="font-weight: normal; color: black"> provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction
where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in
any such jurisdiction;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(g)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use
commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(h)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;immediately
notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing,
and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be
necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(i)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934
Act, including, without limitation, Rule 172 under the 1933 Act; file any final Prospectus, including any supplement or amendment
thereof, with the SEC pursuant to Rule 424 under the 1933 Act; promptly inform the Investors in writing if, at any time during
the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors
are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as
may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security
holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement
covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose
of this subsection 3(i), &ldquo;Availability Date&rdquo; means the 45th day following the end of the fourth fiscal quarter that
includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the
Company&rsquo;s fiscal year, &ldquo;Availability Date&rdquo; means the 90th day after the end of such fourth fiscal quarter); and</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(j)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a view to making
available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may
at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earliest of
(A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant
to Rule 144 or any other rule of similar effect; (B) such date as all of the Registrable Securities shall have been resold; or
(C) the seventh (7th) anniversary of the effective date of this Agreement (the &ldquo;Public Information Period&rdquo;); (ii) during
the Public Information Period, file with the SEC in a timely manner all reports and other documents required of the Company under
the 1934 Act; and (iii) during the Public Information Period, furnish to each Investor upon request, as long as such Investor owns
any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the
1934 Act, (B) a copy of the Company&rsquo;s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such
other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits
the selling of any such Registrable Securities without registration.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&#9;4.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Due
Diligence Review; Information</U>. The Company shall make available, through EDGAR if applicable, during normal business hours,
for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated
with the Investors and who are reasonably acceptable to the Company), all financial and other records, true and complete copies
of the Company&rsquo;s most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the &ldquo;10-K&rdquo;)
and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K (collectively, the &ldquo;SEC
Filings&rdquo;) and other filings with SEC, and all other corporate documents and properties of the Company as may be reasonably
necessary for the purpose of such review, and cause the Company&rsquo;s officers, directors and employees, within a reasonable
time period, to supply all such information reasonably requested by the Investors or any such representative, advisor or underwriter
in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration
Statement for the sole purpose of enabling the Investors and such representatives, advisors and underwriters and their respective
accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration
Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">The Company shall
not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior
to disclosure of such information the Company identifies such information as being material nonpublic information and provides
the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company
with respect thereto.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Obligations
of the Investors</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such Investor. An Investor shall provide such information
to the Company at least three (3) Business Days prior to the first anticipated filing date of such Registration Statement if such
Investor elects to have any of the Registrable Securities included in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from such Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to
Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Investor
is advised by the Company in writing that such dispositions may again be made.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">6.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification
by the Company</U>. To the extent permitted by law, the Company will indemnify and hold harmless each Investor and its officers,
directors, members, employees and agents, successors and assigns, and each other person, if any, who controls such Investor within
the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material
fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof;
(ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities
under the securities laws thereof (any such application, document or information herein called a &ldquo;Blue Sky Application&rdquo;);
(iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated
under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration
Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will
undertake such registration or qualification on an Investor&rsquo;s behalf pursuant to an Investor&rsquo;s affirmative request
under Section 3(f) hereof and will reimburse such Investor, and each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; <U>provided</U>, <U>however</U>, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or Prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification
by the Investors</U>. To the extent permitted by law, each Investor shall, severally but not jointly, indemnify and hold harmless
the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of
the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from
any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement
or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing
by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement
thereto. In no event shall the liability of an Investor be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Investor in connection with any claim relating to this Section 6 and the amount of any damages such Investor
has otherwise been required to pay by reason of such untrue statement or omission) received by such Investor upon the sale of
the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conduct
of Indemnification Proceedings</U>. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party; <U>provided</U> that any person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses,
or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory
to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest
exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of such person); and <U>provided</U>, <U>further</U>,
that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding
in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect of such claim or litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(d)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Contribution</U>.
If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution obligation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">7.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Miscellaneous</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendments
and Waivers</U>. This Agreement may be amended only by a writing signed by the Company and the Required Investors. The Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act, of the Required Investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.
All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 5.6 of the Settlement
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assignments
and Transfers by Investors</U>. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign, in whole or from time to time in part, to one
or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person,
provided that such Investor complies with all laws applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(d)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assignments
and Transfers by the Company</U>. This Agreement may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Investors, provided, however, that the Company may assign its rights and delegate
its duties hereunder to any surviving or successor corporation in connection with a merger or consolidation of the Company with
another corporation, or a sale, transfer or other disposition of all or substantially all of the Company&rsquo;s assets to another
corporation, without the prior written consent of the Required Investors, after notice duly given by the Company to each Investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(e)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Benefits
of the Agreement</U>. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(f)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts;
Faxes</U>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also be executed via facsimile or scanned PDF documents,
each of which shall be deemed an original.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(g)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Titles
and Subtitles</U>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(h)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable
in any respect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(i)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Further
Assurances</U>. The parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(j)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Entire
Agreement</U>. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in">(k)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial</U>. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law principles thereof (other than Section 5-1401 of
the New York General Obligation Law). Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States District Court for the Southern District of New York
for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of
venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. <B> TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.5pt; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first
above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">&nbsp;</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top">The Company:</TD>
    <TD COLSPAN="2">PRECISION OPTICS CORPORATION,
INC.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%">/s/ Joseph N. Forkey</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Joseph N. Forkey<BR>President and Chief Executive
Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[<I>Signature Page for Investors Follows</I>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">Special Situations Fund III QP, L.P.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2">Special Situations Private Equity Fund,
L.P.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%">/s/ David Greenhouse</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">David Greenhouse<BR>General Partner</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 0pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><U>Exhibit A</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Plan of Distribution</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The selling stockholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests
in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common
stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- block trades in which
the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to
facilitate the transaction;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- purchases by a broker-dealer
as principal and resale by the broker-dealer for its account;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- an exchange distribution
in accordance with the rules of the applicable exchange;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- privately negotiated
transactions;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- short sales effected
after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- through the writing or
settlement of options or other hedging transactions, whether through an options exchange or otherwise;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- broker-dealers may agree
with the selling stockholders to sell a specified number of such shares at a stipulated price per share;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- a combination of any such methods of sale; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">- any other method permitted
by applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares
of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;),
amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which
case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the
sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out
their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus
(as supplemented or amended to reflect such transaction).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.
We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will
receive the exercise price of the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
provided that they meet the criteria and conform to the requirements of that rule.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be &quot;underwriters&quot;
within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are &quot;underwriters&quot;
within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities
Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In order to comply with
the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make copies
of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose
of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under
the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating
to the registration of the shares offered by this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have agreed with the
selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier
of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration
statement or (2) the date on which the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">16</P>

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<TYPE>EX-4.3
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<FILENAME>precision_ex0403.htm
<DESCRIPTION>FORM OF WARRANT
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0; text-align: right"><B>Exhibit 4.3</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT
BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
(II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COMPANY COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">THIS WARRANT SHALL BE VOID
AFTER 5:00 P.M. EASTERN TIME ON FEBRUARY 12, 2016 (THE &ldquo;EXPIRATION DATE&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No. __________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;WARRANT TO PURCHASE _______ SHARES OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&#9;COMMON STOCK, PAR VALUE $0.01 PER SHARE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">FOR VALUE
RECEIVED, ____________________ (&ldquo;Warrantholder&rdquo;), is entitled to purchase, subject to the provisions of this
Warrant, from Precision Optics Corporation, Inc., a Massachusetts corporation (&ldquo;Company&rdquo;), at any time not later
than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an exercise price per share equal to $1.50 (the
exercise price in effect being herein called the &ldquo;Warrant Price&rdquo;), ______ shares (&ldquo;Warrant Shares&rdquo;)
of the Company&rsquo;s Common Stock, par value $0.01 per share (&ldquo;Common Stock&rdquo;). The number of Warrant
Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as
described herein. This Warrant is being issued pursuant to the Settlement Agreement, dated as of February 12, 2013
(the &ldquo;Settlement Agreement&rdquo;), by and between the Company and the initial Warrantholder. Capitalized terms used
herein have the respective meanings ascribed thereto in the Settlement Agreement unless otherwise defined herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration</U>. The Company shall maintain books for the transfer
and registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in
the name of the Warrantholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfers</U>.
As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the &ldquo;Securities Act&rdquo;), or an exemption from such registration. Subject to such restrictions, the
Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender
hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may
be reasonably required by the Company, including, if required by the Company, an opinion of its counsel reasonably satisfactory
to the Company to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish
that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and
the surrendered Warrant shall be canceled by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercise of Warrant</U>. Subject to the provisions hereof, the Warrantholder may
exercise this Warrant, in whole or in part, at any time prior to its expiration upon surrender of the Warrant, together with
delivery of a duly executed Warrant Exercise Form, in the form attached hereto as Appendix A (the &ldquo;Exercise
Agreement&rdquo;) and payment by cash, certified check or wire transfer of funds (or by cashless exercise as provided in
Section 17) of the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during
normal business hours on any Business Day at the Company&rsquo;s principal executive offices (or such other office or agency
of the Company as it may designate by notice to the Warrantholder). The Warrant Shares so purchased shall be deemed to be
issued to the Warrantholder or the Warrantholder&rsquo;s designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered (or the date evidence of loss, theft or destruction
thereof and security or indemnity satisfactory to the Company has been provided to the Company), the Warrant Price shall have
been paid and the completed Exercise Agreement shall have been delivered. Certificates for the Warrant Shares so purchased
shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) Business Days, after this Warrant
shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the
Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the
Warrantholder, as specified in the Exercise Agreement. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the
Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant shall
not then have been exercised. As used herein, &ldquo;Business Day&rdquo; means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business. Each exercise hereof shall constitute the
re-affirmation by the Warrantholder that the representations and warranties contained in Section 5 of the Settlement
Agreement are true and correct in all material respects with respect to the Warrantholder as of the time of such
exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If (1) a certificate representing
the Warrant Shares is not delivered to the Warrantholder within three (3) Business Days of the due exercise of this Warrant by
the Warrantholder and (2) prior to the time such certificate is received by the Warrantholder, the Warrantholder, or any third
party on behalf of the Warrantholder or for the Warrantholder&rsquo;s account, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Warrantholder of shares represented by such certificate (a &ldquo;Buy-In&rdquo;),
then the Company shall pay in cash to the Warrantholder (for costs incurred either directly by such Warrantholder or on behalf
of a third party) the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Warrantholder as a result of the sale to which such Buy-In relates.
The Warrantholder shall provide the Company written notice indicating the amounts payable to the Warrantholder in respect of the
Buy-In.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compliance
with the Securities Act of 1933</U>. Except as provided in the Settlement Agreement, the Company may cause the legend set forth
on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon
exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Payment of
Taxes</U>. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon
the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that
of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue
or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company&rsquo;s reasonable satisfaction that such tax has been paid. The Warrantholder
shall be responsible for income taxes due under federal, state or other law, if any such tax is due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mutilated
or Missing Warrants</U>. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange
and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect
to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reservation
of Common Stock</U>. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of
Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant. The Company
agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for
such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustments</U>.
Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant
shall be subject to adjustment from time to time as set forth hereinafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company shall, at any time
or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares
of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares
of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is
the continuing corporation), then (i) the Warrant Price in effect immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon exercise
of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately
prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Warrant Price
in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Warrant
Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above. Such adjustments
shall be made successively whenever any event listed above shall occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any capital reorganization, reclassification
of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not
the survivor, or sale, transfer or other disposition of all or substantially all of the Company&rsquo;s assets to another corporation
shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase
and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect
to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise
of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken
place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder
to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter
be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless
prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity
shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of
the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may
be entitled to purchase, and the other obligations under this Warrant. The provisions of this paragraph (b) shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case the Company shall fix a
payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions
referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall
be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price (as defined below) per share
of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company&rsquo;s Board
of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants,
and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock immediately prior to such payment date. &ldquo;Market Price&rdquo; as of a particular date (the &ldquo;Valuation
Date&rdquo;) shall mean the following: (a) if the Common Stock is then listed on the Nasdaq Global Market or the Nasdaq Capital
Market (&ldquo;Nasdaq&rdquo;) or any other national stock exchange, the closing sale price of one share of Common Stock on such
exchange on the last trading day prior to the Valuation Date; (b) if the Common Stock is then quoted on the OTC Bulletin Board
(the &ldquo;Bulletin Board&rdquo;) or such similar quotation system or association, the closing sale price of one share of Common
Stock on the Bulletin Board or such other quotation system or association on the last trading day prior to the Valuation Date or,
if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon on the last trading
day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on the Bulletin
Board or such other quotation system or association, the fair market value of one share of Common Stock as of the Valuation Date,
as determined in good faith by the Board of Directors of the Company and the Warrantholder. If the Common Stock is not then listed
on a national securities exchange, the Bulletin Board or such other quotation system or association, the Board of Directors of
the Company shall respond promptly, in writing, to an inquiry by the Warrantholder prior to the exercise hereunder as to the fair
market value of a share of Common Stock as determined by the Board of Directors of the Company. In the event that the Board of
Directors of the Company and the Warrantholder are unable to agree upon the fair market value in respect of subpart (c) of this
paragraph, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters. The decision
of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.
Such adjustment shall be made successively whenever such a payment date is fixed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An adjustment to the Warrant Price
shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the
effective date of each other event which requires an adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as a result of
an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of capital stock of
the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall
be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Warrant Shares contained in this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.9in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by applicable
law and the listing requirements of any stock market or exchange on which the Common Stock is then listed, the Company from time
to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty (20) days, the decrease
is irrevocable during the period and the Board shall have made a determination that such decrease would be in the best interests
of the Company, which determination shall be conclusive. Whenever the Warrant Price is decreased pursuant to the preceding sentence,
the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to the date the decreased Warrant
Price takes effect, and such notice shall state the decreased Warrant Price and the period during which it will be in effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fractional
Interest</U>. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon
such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in
cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 10.&nbsp;&nbsp;&nbsp;<U>Benefits</U>. Nothing
in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal
or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company
and the Warrantholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 11.&nbsp;&nbsp;&nbsp;<U>Notices to Warrantholder</U>.
Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof
to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect therein shall not affect the
legality or validity of the subject adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 12.&nbsp;&nbsp;&nbsp;<U>Identity
of Transfer Agent</U>. The Transfer Agent for the Common Stock is Computershare Investor Services. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company&rsquo;s capital stock issuable upon the exercise
of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the
name and address of such transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 13.&nbsp;&nbsp;&nbsp;<U>Notices</U>.
Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given
by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three (3)
Business Days after such notice is deposited in first class mail, postage prepaid, (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business Day after delivery to such carrier, and (v) if
given by electronic mail, upon receipt. All notices shall be addressed as follows: if to the Warrantholder, at its address as
set forth in the Company&rsquo;s books and records and, if to the Company, at the address as follows, or at such other address
as the Warrantholder or the Company may designate by ten (10) Business Days&rsquo; advance written notice to the other:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">If to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Precision Optics Corporation, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">22 East Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Gardner, Massachusetts 01440-3338</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Attention: Joseph N. Forkey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">President and Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Fax: (978) 630-1487</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">E-mail: [______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">With a copy to (which shall
not constitute notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Amy Trombly, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Trombly Business Law, PC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">1320 Centre Street, Suite 202</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Newton, MA 02459</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">Fax: (617) 243-0066</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify"><FONT STYLE="color: black">E-mail:
</FONT>[______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 14.&nbsp;&nbsp;&nbsp;<B>REMOVED
AND RESERVED.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 15.&nbsp;&nbsp;&nbsp;<U>Successors</U>.
All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 16.&nbsp;&nbsp;&nbsp;<U>Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial</U>. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law provisions thereof (other than Section 5-1401 of
the New York General Obligation Law). The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits
to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Warrant and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding
may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under
this Warrant. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company and, by accepting
this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. <B> EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 17.&nbsp;&nbsp;&nbsp;<U>Cashless
Exercise</U>. The Warrantholder may elect to receive, without the payment by the Warrantholder of the aggregate Warrant Price
in respect of the shares of Common Stock to be acquired, shares of Common Stock of equal value to the value of this Warrant, or
any specified portion hereof, by the surrender of this Warrant (or such portion of this Warrant being so exercised) together with
a Net Issue Election Notice, in the form annexed hereto as Appendix B, duly executed, to the Company. Thereupon, the Company shall
issue to the Warrantholder such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed using
the following formula:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">X = <U>Y (A - B)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">where&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">X =&#9;the number of shares
of Common Stock to which the Warrantholder is entitled upon such cashless exercise;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">Y =&#9;the total number
of shares of Common Stock covered by this Warrant for which the Warrantholder has surrendered purchase rights at such time for
cashless exercise (including both shares to be issued to the Warrantholder and shares as to which the purchase rights are to be
canceled as payment therefor);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">A =&#9;the &ldquo;Market
Price&rdquo; of one share of Common Stock as at the date the net issue election is made; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">B =&#9;the Warrant Price
in effect under this Warrant at the time the net issue election is made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 18.&nbsp;&nbsp;&nbsp;<U>No Rights
as Stockholder</U>. Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder
of the Company by virtue of its ownership of this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 19.&nbsp;&nbsp;&nbsp;<B>REMOVED
AND RESERVED.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Section 20.&nbsp;&nbsp;&nbsp;<U>Section
Headings</U>. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way
alter, modify, amend, limit or restrict the provisions hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed, as of the ___th day of February, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2"><B>PRECISION OPTICS CORPORATION, INC.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%"></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Joseph N. Forkey<BR>President and Chief Executive
Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPENDIX A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>WARRANT EXERCISE FORM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To Precision Optics Corporation, Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
irrevocably elects to exercise the right of purchase represented by the within Warrant (&ldquo;Warrant&rdquo;) for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (&ldquo;Warrant
Shares&rdquo;) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Name</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Address</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Federal Tax ID or Social
Security No.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">and delivered by (certified mail to the above
address, or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 135pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">(electronically (provide
DWAC Instructions:___________________), or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 135pt">(other (specify): __________________________________________).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">and, if the number of Warrant Shares shall
not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares
purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned&rsquo;s
Assignee as below indicated and delivered to the address stated below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Dated: ___________________, ____</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Note: The signature must correspond with the
name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or
any change whatever, unless the Warrant has been assigned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 45%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Signature:______________________________</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Name (please print)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Address</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Federal Identification or</FONT> <FONT STYLE="font-size: 10pt">Social Security No.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Assignee: </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">_______________________________</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPENDIX B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NET ISSUE ELECTION NOTICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To: Precision Optics Corporation, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Date: [_________________________]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
elects under <U>Section 17</U> of this Warrant to surrender the right to purchase [____________] shares of Common Stock pursuant
to this Warrant and hereby requests the issuance of [_____________] shares of Common Stock. The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Signature</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Name for Registration</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">_________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Mailing Address</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">12</P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>precision_ex1001.htm
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin-top: 0; text-align: right; margin-bottom: 0"><B>Exhibit 10.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>SETTLEMENT AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">This Settlement
Agreement (this &ldquo;<U>Agreement</U>&rdquo;), dated as of February 12, 2013, is made by and among Precision Optics Corporation,
Inc., a Massachusetts corporation (the &ldquo;<U>Company</U>&rdquo;), and Special Situations Fund III QP, L.P. and Special Situations
Private Equity Fund, L.P. (the &ldquo;<U>Holders</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
the Holders are party to (i) the Registration Rights Agreement, dated as of February 1, 2007, with the Company and (ii) the Registration
Rights Agreement, dated as of June 25, 2008 (collectively, the &ldquo;<U>Prior Registration Rights Agreements</U>&rdquo;), with
the Company;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
pursuant to the Prior Registration Rights Agreements, the Company is obligated to pay to the Holders liquidated damages in amounts
calculated pursuant to the terms of the respective Prior Registration Rights Agreements in certain circumstances;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
the Holders have agreed that, they will accept an aggregate of (i) 350,000 shares (the &ldquo;<U>Shares</U>&rdquo;) of the Company&rsquo;s
common stock, par value $0.01 per share (the &ldquo;<U>Common Stock</U>&rdquo;), and warrants in the form attached hereto as <U>Exhibit
A</U> (the &ldquo;<U>Warrants</U>&rdquo;) to purchase an aggregate of 350,000 shares of Common Stock (the &ldquo;<U>Warrant Shares</U>&rdquo;
and, together with the Shares, and the Warrants, the &ldquo;<U>Securities</U>&rdquo;) in payment in full of the amounts due under
the Prior Registration Rights Agreements (the &ldquo;<U>Settlement Consideration</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
the Shares and the Warrant Shares shall be subject to certain registration rights pursuant to that certain Registration Rights
Agreement, dated of even date herewith, by and among the Company and the Holders in the form attached hereto as <U>Exhibit B</U>
(the &ldquo;<U>Registration Rights Agreement</U>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
this Agreement, the Warrants and the Registration Rights Agreement are referred to herein as the &ldquo;<U>Transaction Documents</U>&rdquo;;
and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><B>NOW, THEREFORE</B>,
in consideration of the mutual promises, representations, warranties and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holders mutually agree as follows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ARTICLE
1</FONT><BR>
<BR>
ISSUANCE OF SHARES AND WARRANTS; EXTENSION of CERTAIN WARRANTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">1.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Issuance of Shares and Warrants</U>.&#9;Within three (3) Business Days of the execution and delivery of this Agreement,
the Company shall issue to each of the Holders, the Shares and the Warrants in the respective amounts set forth opposite each such
Holder&rsquo;s name on <U>Annex I</U> as payment in full of the Settlement Consideration owed to such Holder. Such Shares and Warrants
shall be registered in such name of names as each Holder may designate.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">1</FONT>.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Extension
of Certain Warrants</U>.&#9;The Company has agreed to extend the expiration date of the warrants issued to the Holders in conjunction
with the Company&rsquo;s June 25, 2008 private placement (the &ldquo;<U>2008 Warrants</U>&rdquo;). The expiration date of the
2008 Warrants shall be amended from June 25, 2015 to May 11, 2017. If the Holder wishes to receive new warrants indicating the
amended expiration date, then the Holder must provide the original 2008 Warrant to the Company for cancellation and replacement.
The Company agrees to mail the Holders a new 2008 Warrant with the amended expiration date within three (3) Business Days of the
Company&rsquo;s receipt of the original 2008 Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ARTICLE
2</FONT><BR>
<BR>
REPRESENTATIONS AND WARRANTIES OF THE COMPANY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">The Company hereby
represents and warrants to each of the Holders that:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">2.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Organization, Qualifications and Corporate Power</U>. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts. The Company has the corporate power and authority to
execute, deliver and perform the Transaction Documents to which it is a party and to issue, sell and deliver the Securities.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">2.2<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Authorization</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The execution and delivery by the Company of the Transaction Documents, the performance by the Company of its obligations
thereunder, the issuance, sale and delivery of the Securities have been duly authorized by all requisite corporate action.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors
and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization
of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation
for issuance) and delivery of the Securities. When delivered in accordance with the terms hereof, the Transaction Documents will
constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors&rsquo; rights generally and to general equitable principles.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of
the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official
other than filings that have been made pursuant to applicable state securities laws and post-sale filings pursuant to applicable
state and federal securities laws which the Company undertakes to file within the applicable time periods.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities
will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under
(i) the Company&rsquo;s Articles of Organization, as amended, or the Company&rsquo;s Bylaws, both as in effect on the date hereof
(true and complete copies of which have been filed on EDGAR), or (ii)(a) any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the Company, any subsidiary of the Company or any of
their respective assets or properties, or (b) any agreement or instrument to which the Company or any subsidiary of is a party
or by which the Company or a subsidiary is bound or to which any of their respective assets or properties is subject.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(e)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising, as
those terms are used in the provisions of Regulation D (&ldquo;<U>Regulation D</U>&rdquo;), promulgated by the Securities and Exchange
Commission (the &ldquo;<U>Commission</U>&rdquo;) under the Securities Act of 1933, as amended (the &ldquo;<U>Act</U>&rdquo;), in
connection with the offer or sale of any of the Securities.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(f)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Neither the Company nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely
affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or
would require registration of the Securities under the Act.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(g)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The offer and sale of the Securities to the Holders as contemplated hereby is exempt from the registration requirements
of the Act.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ARTICLE
3</FONT><BR>
<BR>
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">Each Holder, severally
and not jointly, represents and warrants to the Company that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Accredited
Investor</U></FONT>. Holder is an &ldquo;accredited investor&rdquo; as defined by Rule 501 of Regulation D, and Holder is capable of
evaluating the merits and risks of its investment in the Securities and has the ability and capacity to protect its interests.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.2<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Private Placement</U></FONT>. Holder understands that the Securities have not been registered under the Act on the ground that
the issuance thereof is exempt under Section 4(2) of the Act and/or Regulation D as a transaction by an issuer not involving any
public offering and that, in the view of the Commission, the statutory basis for the exception claimed would not be present if
any of the representations and warranties of Holder contained in this Agreement are untrue or, notwithstanding the Holder&rsquo;s
representations and warranties, the Holder currently has in mind acquiring any of the Securities for resale upon the occurrence
or non-occurrence of some predetermined event.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.3<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Investment Intent</U>. Holder is acquiring the Shares and Warrants as principal for its own account, and not for the
benefit of any other Person, for investment purposes and not with a view to distribution or resale in violation of the Act and
such Holder has no present intention of selling, granting any participation in, or otherwise distributing the same in violation
of the Act without prejudice, however, to such Holder&rsquo;s right at all times to sell or otherwise dispose of all or any part
of the Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation
or warranty by such Holder to hold any Securities for any period of time.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.4<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Opportunity to Inquire</U></FONT>. Holder confirms that Holder has had the opportunity to ask questions of, and receive answers
from, the Company or any authorized Person acting on its behalf concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could have been acquired by the Company without unreasonable
effort or expense). In connection therewith, Holder acknowledges that Holder has had the opportunity to discuss the Company&rsquo;s
business, management and financial affairs with the Company&rsquo;s management or any authorized Person acting on its behalf. Neither
such inquiries nor any other due diligence investigation conducted by such Holder shall modify, limit or otherwise affect such
Holder&rsquo;s right to rely on the Company&rsquo;s representations and warranties contained in this Agreement and the other Transaction
Documents.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.5<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Authorization</U></FONT>. Holder has all requisite legal and other power and authority to execute and deliver this Agreement
and to carry out and perform its obligations under the terms of this Agreement. This Agreement constitutes a valid and legally
binding obligation of Holder enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors&rsquo; rights and to general equity principles.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.6<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Residency</U></FONT>. Each Holder&rsquo;s principal place of business is the State of New York.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.7<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Restricted Securities</U></FONT>. Holder understands that the Securities are characterized as &ldquo;restricted securities&rdquo;
under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may be resold without registration under the Act only
in certain limited circumstances.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">3.8<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Legends</U></FONT>. It is understood that, except as provided below, certificates evidencing the Securities may bear the following
or any similar legend:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(a)<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;The
securities represented hereby have not been registered with the Securities and Exchange Commission or the securities commission
of any state in reliance upon an exemption from registration under the Securities Act of 1933, as amended, and, accordingly, may
not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended,
(ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory
to it that such transfer may lawfully be made without registration under the Securities Act of 1933 as amended.&rdquo;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 31.5pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in">(b)<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If
required by the authorities of any state in connection with the issuance or sale of the Securities, the legend required by such
state authority.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 1.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ARTICLE
4</FONT><BR>
<BR>
COVENANTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">4.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Removal
of Legends</U>. In connection with any sale or disposition of Securities by a Holder pursuant to Rule 144 or pursuant to any other
exemption under the  Act such that the purchaser acquires freely tradable Securities and upon compliance by the Holder with
the requirements of this Agreement, the Company shall or, in the case of Common Stock, shall cause the transfer agent for the
Common Stock (the &ldquo;<U>Transfer Agent</U>&rdquo;) to issue replacement certificates representing the Securities sold or disposed
of without restrictive legends. In furtherance of the foregoing, upon the earlier of (i) registration for resale pursuant to the
Registration Rights Agreement or (ii) any Shares or Warrant Shares becoming freely tradable by a non-affiliate pursuant to Rule
144 the Company shall (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall issue a certificate
representing shares of Common Stock without legends upon receipt by such Transfer Agent of (X) either (1) a customary representation
by the Holder that Rule 144 applies to the shares of Common Stock represented thereby or (2) a statement by the Holder that such
Holder has sold the shares of Common Stock represented thereby in accordance with the Plan of Distribution contained in the Registration
Statement, and (Y) if applicable, the legended certificates for such shares, and (B) cause its counsel to deliver to the Transfer
Agent one or more blanket opinions to the effect that the removal of such legends in such circumstances may be effected under
the Act. At any time when any Securities may be freely sold or is covered by an effective Registration Statement, the Company
shall, or shall cause the Transfer Agent to, promptly cause such Securities held by the Holder to be replaced with Securities
which do not bear restrictive legends, and, in the case of any Warrant Shares subsequently issued upon due exercise of the Warrants,
shall not bear such restrictive legends provided such Warrant Shares may be freely sold or are covered by an effective Registration
Statement. When the Company is required to cause an unlegended Security to be issued as provided herein, if: (1) the unlegended
Security is not delivered to a Holder within three (3) Business Days of submission by that Holder of a request for unlegended
Securities and, if applicable, the documentation specified above to the Transfer Agent or the Company, as applicable, and (2)
prior to the time such unlegended Security is received by the Holder, the Holder, or any third party on behalf of such Holder
or for the Holder&rsquo;s account, purchases (in an open market transaction or otherwise) another Security to deliver in satisfaction
of a sale by the Investor of such Security (a &ldquo;<U>Buy-In</U>&rdquo;), then the Company shall pay in cash to the Holder (for
costs incurred either directly by such Holder or on behalf of a third party) the amount by which the total purchase price paid
for the replacement Security as a result of the Buy-In (including brokerage commissions, if any) exceeds the proceeds received
by such Holder or as a result of the sale to which such Buy-In relates. The Holder shall provide the Company written notice indicating
the amounts payable to the Investor in respect of the Buy-In.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">4.2<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Reservation
of Common Stock</U>. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of providing for the exercise of the Warrants, such number of shares of Common Stock as shall from
time to time equal the number of shares sufficient to permit the exercise of the Warrants in accordance with their respective
terms.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ARTICLE
5</FONT><BR>
<BR>
MISCELLANEOUS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 31.5pt; text-transform: uppercase; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Expenses</U></FONT>.
The Company and the Holders shall each bear their own costs and expenses, including without limitation legal fees and expenses,
incurred in connection with the negotiation of this Agreement and the other Transaction Documents. In the event that legal proceedings
are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the
other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay
their pro rata share of the reasonable attorneys&rsquo; fees and other reasonable out-of-pocket costs and expenses incurred by
the prevailing party in such proceedings.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.2<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Further
Assurances</U></FONT>. The Company shall duly execute and deliver, or cause to be duly executed and delivered, at its own cost and expense,
such further instruments and documents and to take all such action, in each case as may be necessary or proper in the reasonable
judgment of the Holders to carry out the provisions and purposes of this Agreement and the other Transaction Documents.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.3<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Survival</U></FONT>.
The representations, warranties, covenants and agreements made herein shall survive any investigation made by any party hereto,
the execution and delivery of this Agreement and the closing of the transactions contemplated hereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.4<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Successors and Assigns</U></FONT>. This Agreement shall bind and inure to the benefit of the Company and the Holders and their
respective successors and permitted assigns. Subject to applicable federal and state securities laws and regulations, the Holders
may freely assign either this Agreement or any of their rights, interests, or obligations hereunder without the prior written approval
of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.5<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Entire
Agreement</U></FONT>. This Agreement and the other writings referred to herein or delivered pursuant hereto (including the other Transaction
Documents) which form a part hereof contain the entire agreement among the parties with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous arrangements or understandings with respect thereto.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.6<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Notices</U>.&#9;Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing
and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by facsimile, then such notice shall be deemed given upon receipt of confirmation of complete
transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three (3) Business Days after such notice is deposited in first class mail, postage prepaid, (iv) if given by
an internationally recognized overnight air courier, then such notice shall be deemed given one (1) Business Day after delivery
to such carrier, and (v) if given by electronic mail, upon receipt. All notices shall be addressed to the party to be notified
at the address as follows, or at such other address as such party may designate by ten (10) Business Days&rsquo; advance written
notice to the other party:</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.1in; text-indent: 0.5in">If to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Precision Optics Corporation, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">22 East Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Gardner, Massachusetts 01440-3338</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Attention: Joseph N. Forkey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">President and Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Fax: (978) 630-1487</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">E-mail: [______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.1in; text-indent: 0.5in">With a copy to (which shall not constitute notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Amy Trombly, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Trombly Business Law, PC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">1320 Centre Street, Suite 202</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Newton, MA 02459</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Fax: (617) 243-0066</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">E-mail: [______]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 1.1in; text-indent: 0.5in">If to the Holders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 2in">to the addresses set forth on <U>Annex I</U>
hereto;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">or to such other address as the party
to whom such notice or other communication is to be given may have furnished to each other party in writing in accordance herewith.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.7<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Amendments, Modifications, Terminations and Waivers</U>. Provisions of this Agreement and the Securities may be amended,
modified, terminated or waived only by the written consent of the Company and the Holders.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.8<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Governing Law; Waiver of Jury Trial</U>. This Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits
to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices
under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action
or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. <B>EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST
A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS
TO THIS WAIVER.</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.9<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>No Third Party Reliance</U>. Anything contained herein to the contrary notwithstanding, the representations and warranties
of the Company contained in this Agreement (a) are being given by the Company as an inducement to the Holders to enter into this
Agreement and the other Transaction Documents (and the Company acknowledges that the Holders have expressly relied thereon) and
(b) are solely for the benefit of the Holders. Accordingly, no third party (including, without limitation, any holder of capital
stock of the Company) or anyone acting on behalf of any holder thereof other than the Holders, and each of them, shall be a third-party
or other beneficiary of such representations and warranties and no such third party shall have any rights of contribution against
the Holders or the Company with respect to such representations or warranties or any matter subject to or resulting in indemnification
under this Agreement or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.10<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Publicity</U>. Neither the Holders nor the Company shall issue any press release or make any public disclosure regarding
the transactions contemplated hereby unless such press release or public disclosure is approved by the Company in advance. Notwithstanding
the foregoing, each of the parties hereto may, in documents required to be filed by it with the Commission or other regulatory
bodies, make such statements with respect to the transactions contemplated hereby as each may be advised by counsel is legally
necessary or advisable.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.11<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Severability</U>. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the
fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly,
in the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in any jurisdiction. Notwithstanding the foregoing,
if such provision could be more narrowly drawn so as to not be invalid, prohibited or unenforceable in such jurisdiction, it shall,
as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.12<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Independence of Agreements, Covenants, Representations and Warranties</U>. All agreements and covenants hereunder shall
be given independent effect so that if a certain action or condition constitutes a default under a certain agreement or covenant,
the fact that such action or condition is permitted by another agreement or covenant shall not affect the occurrence of such default,
unless expressly permitted under an exception to such covenant. In addition, all representations and warranties hereunder shall
be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact
that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect
the incorrectness of or a breach of a representation and warranty hereunder. The annexes and exhibits attached hereto are hereby
made part of this Agreement in all respects.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.13<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Counterparts; Facsimile and Electronic Signatures</U>. This Agreement may be executed in any number of counterparts,
and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute
but one agreement. Counterpart signatures to this Agreement delivered by facsimile or other electronic transmission shall be acceptable
and binding.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">5.14<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Headings</U>. The section and paragraph headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>ARTICLE 6</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>DEFINITIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">In addition to those
terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings
set forth below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Business
Day</U>&rdquo; means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Person</U>&rdquo;
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&ldquo;<U>Transaction
Documents</U>&rdquo; means this Agreement, the Warrants and the Registration Rights Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">*&#9;&nbsp;&nbsp;*&nbsp;&nbsp;&#9;*&nbsp;&nbsp;&#9;*&nbsp;&nbsp;&#9;*</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>, each of the
undersigned has duly executed this Settlement Agreement as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2"><B>PRECISION OPTICS CORPORATION, INC.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%">/s/ Joseph N. Forkey</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Joseph N. Forkey<BR>Chief Executive
Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>, each of the
undersigned has duly executed this Settlement Agreement as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt 3.5in"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2"><B>SPECIAL SITUATIONS FUND III QP, L.P.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%">/s/ David Greenhouse</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">David Greenhouse<BR>General Partner</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify"></P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD COLSPAN="2"><B>SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 8%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 42%">/s/ David Greenhouse</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Name:</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Title:</P></TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">David Greenhouse<BR>General Partner</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B><U>ANNEX I</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B><U>Schedule of Holders</U></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Holders</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Holder Name, Address and Contact Information)</B></P></TD>
    <TD STYLE="width: 20%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; font-size: 10pt; text-align: center">Number of Shares</TD>
    <TD STYLE="width: 20%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; font-size: 10pt; text-align: center">Number of Warrants</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">SPECIAL SITUATIONS FUND III QP, L.P.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">527 Madison Avenue Suite 2600</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">New York, NY 10022</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(212) 319-6670</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt">175,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt">175,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">527 Madison Avenue Suite 2600</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">New York, NY 10022</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(212) 319-6670</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt">175,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt">175,000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; font-size: 10pt">Total</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; font-size: 10pt; text-align: center">350,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; font-size: 10pt; text-align: center">350,000</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B><U>EXHIBIT A</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Form of Warrant to Purchase Shares
of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">(See attached)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center"><B><U>EXHIBIT B</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Form of Registration Rights Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">(See attached)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>



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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">14</P>

<P STYLE="margin: 0"></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>6
<FILENAME>precision_ex1002.htm
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 10.2</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SETTLEMENT AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>THIS SETTLEMENT
AGREEMENT</B> (this &ldquo;<U>Settlement Agreement</U>&rdquo;) is made and entered into as of February 12, 2013 by and between
Precision Optics Corporation, Inc., a Massachusetts corporation (the &ldquo;<U>Company</U>&rdquo;), on the one hand, and Joel Pitlor,
an individual (the &ldquo;<U>Investor</U>&rdquo;), on the other hand. The Company and the Investor may be referred to hereinafter
individually as a &ldquo;<U>Party</U>&rdquo; and collectively, as the &ldquo;<U>Parties</U>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RECITALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, on
February 1, 2007, the Company entered into a purchase agreement with the Investor and other parties thereto (the &ldquo;<U>2007
Purchase Agreement</U>&rdquo;), and contemporaneously with the execution of the 2007 Purchase Agreement, the Parties executed a
registration rights agreement (the &ldquo;<U>2007 Registration Rights Agreement</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, pursuant
to the terms of the 2007 Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to maintain the
effectiveness of a registration statement or registration statements to cover the resale of securities sold in the 2007 Purchase
Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, the
Parties acknowledge that the Investor may have a potential basis for claims of damages calculated pursuant to the terms of the
2007 Registration Rights Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, the
Investor has agreed that, he will accept an aggregate of (i) 10,000 shares (the &ldquo;<U>Shares</U>&rdquo;) of the Company&rsquo;s
common stock, par value $0.01 per share (the &ldquo;<U>Common Stock</U>&rdquo;), and warrants in the form attached hereto as <U>Exhibit
A</U> (the &ldquo;<U>Warrants</U>&rdquo;) to purchase an aggregate of 10,000 shares of Common Stock (the &ldquo;<U>Warrant Shares</U>&rdquo;
and, together with the Shares, and the Warrants, the &ldquo;<U>Securities</U>&rdquo;) in payment in full of the amounts due under
the 2007 Registration Rights Agreement (the &ldquo;<U>Settlement Consideration</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NOW THEREFORE</B>,
for good and valuable consideration, for the purpose of settling potential claims without litigation, and without admission of
any fault or liability on the part of any Party whatsoever, the Parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to those terms defined above
and elsewhere in this Settlement Agreement, for the purposes of this Settlement Agreement, the following terms shall have the meanings
set forth below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Business
Day</U>&rdquo; means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Person</U>&rdquo;
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Securities
Act</U>&rdquo; means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated
thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Transaction
Documents</U>&rdquo; means this Agreement and the Warrants.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance of Shares and
Warrants in Settlement</U>. Within three (3) Business Days of the execution and delivery of this Settlement Agreement, the Company
shall issue the Shares and Warrants to the Investor as payment in full of the Settlement Consideration owed to such Investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reliance on Independent
Legal Advice</U>. Each Party represents and warrants to the other Party that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">It has received advice from his or its own respective, independent legal counsel prior to its execution
of this Settlement Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">The legal nature and effect of this Settlement Agreement has been explained to it by its respective
counsel;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">It fully understands the terms and provisions of this Settlement Agreement and the nature and effect
thereof;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify">It is relying solely on the advice of its own legal counsel in executing this Settlement Agreement;
and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify">It has carefully read this Settlement Agreement, knows the contents thereof, and is executing the
same freely and voluntarily.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations and Warranties
of the Company</U>. The Company hereby represents and warrants to the Investor that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify"><U>Due Organization</U>. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. The Company has the corporate power and authority to execute,
deliver and perform this Settlement Agreement to which it is a party and to issue and deliver the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt"><U>Authorization, Validity and Enforceability</U>. </FONT>The
Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and
stockholders necessary for (i) the authorization, execution and delivery of this Settlement Agreement, (ii) the authorization of
the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance and delivery of
the Securities. When delivered in accordance with the terms hereof, this Settlement Agreement will constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors&rsquo;
rights generally and to general equitable principles.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify"><U>Issuance of the Securities</U>. The Shares and the Warrants to purchase shares of the Company&rsquo;s
Common Stock, when issued pursuant to the Settlement Agreement, have been duly authorized and validly issued and are fully paid
and nonassessable and free of preemptive or similar rights, and have been issued in compliance with applicable securities laws,
rules and regulations. The Warrant Shares have been duly and validly authorized and reserved for issuance, and, when issued upon
the exercise of the Warrants in accordance with the terms of the Warrants and as described in the Transaction Documents, will be
validly issued, fully paid and nonassessable, and free of any preemptive or similar rights.</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify"><U>No Consents</U>. The execution, delivery and performance by the Company of this Settlement Agreement
and the issuance of the Securities requires no consent of, action by or in respect of, or filing with, any governmental body, agency,
official or other third party, other than filings that have been made pursuant to applicable securities laws and post-sale filings
pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt"><U>No Conflict</U>. </FONT>The execution, delivery and performance
of this Settlement Agreement by the Company and the issuance of the Securities will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under (i) the Company&rsquo;s Articles of Organization,
as amended, or the Company&rsquo;s Bylaws, both as in effect on the date hereof (true and complete copies of which have been filed
on EDGAR), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, any subsidiary of the Company or any of their respective assets or properties, or (b) any
agreement or instrument to which the Company or any subsidiary of is a party or by which the Company or a subsidiary is bound or
to which any of their respective assets or properties is subject.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(f)</TD><TD STYLE="text-align: justify"><U>No General Solicitation</U>. Neither the Company nor any Person acting on its behalf has conducted
any general solicitation or general advertising (as those terms are used in the provisions of Regulation D, promulgated by the
Securities and Exchange Commission (the &ldquo;<U>Commission</U>&rdquo;) under the Securities Act) in connection with the issuance
of the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(g)</TD><TD STYLE="text-align: justify">Neither the Company nor any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances
that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated
hereby or would require registration of the Securities under the Securities Act.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(h)</TD><TD STYLE="text-align: justify">The issuance of the Securities to the Investor as contemplated hereby is exempt from the registration
requirements of the Securities Act.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations and Warranties
of the Investor</U>. The Investor represents and warrants to the Company that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify"><U>Purchase for Own Account</U>. Such Investor is acquiring the Securities for such Investor&rsquo;s
own account for investment purposes only and not with a present view towards the public sale or distribution thereof except for
sales duly registered under the Securities Act. Such Investor is not a registered broker/dealer, nor is an affiliate of a registered
broker/dealer and such Investor does not have any agreement or understanding, directly or indirectly, with any person regarding
the sale or distribution of the Securities or any of the Company&rsquo;s Common Stock, except this Settlement Agreement. Such Investor
understands that it must bear the economic risk of this investment indefinitely, unless the Securities are registered pursuant
to the Securities Act and any applicable state securities or blue sky laws or an exemption from such registration is available.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify"><U>Accredited Investor Status</U>. Such Investor is an &ldquo;accredited investor&quot; as that
term is defined in Rule 501(a) of Regulation D, promulgated by the Commission under the Securities Act, and such Investor is capable
of evaluating the merits and risks of its investment in the Securities and has the ability and capacity to protect its interests.</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify"><U>Information Availability</U>. Such Investor acknowledges that the Company has made available
to Investor all documents and information that Investor has requested relating to an investment in the Securities, and Investor
has had an opportunity to discuss this investment with representatives of the Company and ask questions of them.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify"><U>No General Solicitation</U>. Such Investor confirms that he did not learn of the issuance of
the Securities as a result of any general solicitation or general advertising.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify"><U>Reliance on Exemptions</U>. Such Investor understands that the Securities are being issued to
such Investor in reliance upon specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and such Investor&rsquo;s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability
of such exemptions and the eligibility of such Investor to acquire the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(f)</TD><TD STYLE="text-align: justify"><U>Governmental Review</U>. Such Investor understands that no United States federal or state agency
or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(g)</TD><TD STYLE="text-align: justify"><U>Transfer or Resale</U>. Such Investor understands that (i) the sale or resale of the Securities
has not been and is not being registered under the Securities Act or any state securities laws, and the Securities may not be transferred
unless (A) the Investor shall have delivered to the Company an opinion of Company counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration; or (B) sold under and in compliance with Rule 144 promulgated
under the Securities Act (or a successor rule) (&ldquo;<U>Rule 144</U>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(h)</TD><TD STYLE="text-align: justify"><U>Authority to Enter into Settlement Agreement.</U> Such Investor has all requisite legal and
other power and authority to execute and deliver this Settlement Agreement and to carry out and perform his obligations under the
terms of this Settlement Agreement. This Settlement Agreement constitutes a valid and legally binding obligation of such Investor
enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors&rsquo; rights and to general equity principles.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD STYLE="text-align: justify"><U>Residency</U>. Such Investor is a resident of the state set forth under the name of Investor
on his signature page to this Settlement Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(j)</TD><TD STYLE="text-align: justify"><U>Restricted Securities</U>. Such Investor understands that</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">the Securities are characterized as &ldquo;restricted securities&rdquo; under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">the Securities have not been registered under the Securities Act or any state securities laws and
are being offered in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities
laws, and the Company is relying upon the truth and accuracy of, and Investor&rsquo;s compliance with, the representations, warranties,
covenants, agreements, acknowledgments and understandings of Investor contained in this Settlement Agreement in order to determine
the availability of such exemptions and the eligibility of Investor to acquire the Securities;</TD></TR></TABLE>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD STYLE="text-align: justify">the Securities must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD STYLE="text-align: justify">the Securities will bear a legend substantially in the form set forth in Section 5(k) herein; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD STYLE="text-align: justify">the Company will make a notation on its transfer books to such effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(k)</TD><TD STYLE="text-align: justify"><U>Legend</U>. Such Investor understands that until such time as the Securities issued pursuant
to this Settlement Agreement may have been registered under the Securities Act or otherwise may be sold by the Investor under Rule
144, certificates for the Securities may bear a restrictive legend in substantially the following form:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">&ldquo;The securities represented hereby have not been registered with the Securities and Exchange
Commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of
1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for sale pursuant to
the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received
an opinion of Company counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under
the Securities Act of 1933 as amended.&rdquo;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">If required by the authorities of any state in connection with the issuance of sale of the Securities,
the legend required by such state authority.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(l)</TD><TD STYLE="text-align: justify"><U>No Registration Rights</U>. Such Investor further understands that there are no registration
rights associated with the Securities being acquired pursuant to this Settlement Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Related Party Transaction</U>.
The Parties acknowledge that the Investor is a member of the Company&rsquo;s board of directors and accordingly, by virtue of his
directorship with the Company, he is considered a related party of the Company under federal securities law. The Company&rsquo;s
Board of Directors acknowledges that the Investor&rsquo;s entry into this Settlement Agreement is a related party transaction and
has approved such transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fees and Expenses</U>.
Each Party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Entire Agreement</U>.
This Settlement Agreement contains the entire understanding and agreement between the Parties hereto with respect to the matters
referred to herein and supersedes any and all prior and contemporaneous commitments, undertakings and agreements, whether written
or oral. The Parties further acknowledge and agree that parol evidence shall not be required to interpret the intent of the Parties.
No other representations, covenants, undertakings, or other prior or contemporary agreements, whether oral or written, respecting
such matters, which are not specifically incorporated herein, shall be deemed in any way to exist or bind any of the Parties. The
Parties acknowledge that each party has not executed this Settlement Agreement in reliance on any other promise, representation,
or warranty.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>. Any notice
given by any Party under this Settlement Agreement shall in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by facsimile, then
such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three (3) Business Days after such
notice is deposited in first class mail, postage prepaid, (iv) if given by an internationally recognized overnight air courier,
then such notice shall be deemed given one (1) Business Day after delivery to such carrier, and (v) if given by electronic mail,
upon receipt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>. In
case any provision of this Settlement Agreement shall be declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Settlement Agreement shall not in any way be affected or impaired thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Waiver, Amendment, and
Modification of Settlement Agreement</U>. The Parties agree that no waiver, amendment, or modification of any of the terms and/or
conditions of this Settlement Agreement shall be effective unless in writing and signed by all Parties affected by the waiver,
amendment, or modification. No waiver of any term, condition or default of any term of this Settlement Agreement shall be construed
as a waiver of any other term, condition or default.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts; Facsimile
and Electronic Signatures</U>. This Settlement Agreement may be executed in any number of counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Counterpart
signatures to this Settlement Agreement delivered by facsimile or other electronic transmission shall be acceptable and binding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Section 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>.
The section and paragraph headings contained in this Settlement Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Settlement Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing Law</U>. This
Settlement Agreement and its terms shall be governed by and construed under Massachusetts law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No Admissions By Parties</U>.
Nothing contained in this Settlement Agreement is intended to, or shall be deemed or construed to, be an admission by any Party
hereto, for any liability whatsoever, to the other Party, except as may be otherwise expressly provided for in this Settlement
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Joint Participation in
Drafting</U>. Each Party to this Settlement Agreement has participated in the negotiation and drafting of this Settlement Agreement.
As such, the language used herein shall be deemed to be the language chosen by the Parties hereto to express their mutual intent,
and no rule of strict construction will be applied against any Party to this Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[Signature page to follow]</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>,
each of the undersigned has duly executed this Settlement Agreement as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">22 East Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gardner, Massachusetts 01440-3338</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fax: &#9;(978) 630-1487</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">By:&#9;<U>/s/ Joseph N. Forkey</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&#9;Joseph N. Forkey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Title:&#9;Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With a copy to (which shall not constitute
notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amy Trombly, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Trombly Business Law, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1320 Centre Street, Suite 202</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Newton, MA 02459</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fax: (617) 243-0066</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>JOEL PITLOR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>/s/ Joel Pitlor</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Joel Pitlor, an individual</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">[Address]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Form of Warrant to Purchase Shares of
Common Stock</B></P>

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<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>7
<FILENAME>precision_ex1003.htm
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>
<HTML>
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<P STYLE="margin: 0; text-align: right">&nbsp;<B>Exhibit 10.3</B></P>

<P STYLE="margin: 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SETTLEMENT AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>THIS SETTLEMENT
AGREEMENT</B> (this &ldquo;<U>Settlement Agreement</U>&rdquo;) is made and entered into as of February 12, 2013 by and between
Precision Optics Corporation, Inc., a Massachusetts corporation (the &ldquo;<U>Company</U>&rdquo;), on the one hand, and Arnold
Schumsky, an individual (the &ldquo;<U>Investor</U>&rdquo;), on the other hand. The Company and the Investor may be referred to
hereinafter individually as a &ldquo;<U>Party</U>&rdquo; and collectively, as the &ldquo;<U>Parties</U>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RECITALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, on
February 1, 2007, the Company entered into a purchase agreement with the Investor and other parties thereto (the &ldquo;<U>2007
Purchase Agreement</U>&rdquo;), and contemporaneously with the execution of the 2007 Purchase Agreement, the Parties executed a
registration rights agreement (the &ldquo;<U>2007 Registration Rights Agreement</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, on
June 25, 2008, the Company entered into a purchase agreement with the Investor and other parties thereto (the &ldquo;<U>2008 Purchase
Agreement</U>&rdquo;), and contemporaneously with the execution of the 2008 Purchase Agreement, the Parties executed
a registration rights agreement (the &ldquo;<U>2008 Registration Rights Agreement</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, pursuant
to the terms of the 2007 Registration Rights Agreement and the 2008 Registration Rights Agreement (the &ldquo;<U>Prior Registration
Rights Agreements</U>&rdquo;), the Company agreed to use commercially reasonable efforts to maintain the effectiveness of a registration
statement or registration statements to cover the resale of securities sold in the 2007 Purchase Agreement and the 2008 Purchase
Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, the
Parties acknowledge that the Investor may have a potential basis for claims of damages calculated pursuant to the terms of the
respective Prior Registration Rights Agreements;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, the
Investor has agreed that, he will accept an aggregate of (i) 10,000 shares (the &ldquo;<U>Shares</U>&rdquo;) of the Company&rsquo;s
common stock, par value $0.01 per share (the &ldquo;<U>Common Stock</U>&rdquo;), and warrants in the form attached hereto as <U>Exhibit
A</U> (the &ldquo;<U>Warrants</U>&rdquo;) to purchase an aggregate of 10,000 shares of Common Stock (the &ldquo;<U>Warrant Shares</U>&rdquo;
and, together with the Shares, and the Warrants, the &ldquo;<U>Securities</U>&rdquo;) in payment in full of the amounts due under
the Prior Registration Rights Agreements (the &ldquo;<U>Settlement Consideration</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NOW THEREFORE</B>,
for good and valuable consideration, for the purpose of settling potential claims without litigation, and without admission of
any fault or liability on the part of any Party whatsoever, the Parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to those terms defined above
and elsewhere in this Settlement Agreement, for the purposes of this Settlement Agreement, the following terms shall have the meanings
set forth below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Business
Day</U>&rdquo; means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Person</U>&rdquo;
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Securities
Act</U>&rdquo; means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated
thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;<U>Transaction
Documents</U>&rdquo; means this Agreement and the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance of Shares and
Warrants in Settlement</U>. Within three (3) Business Days of the execution and delivery of this Settlement Agreement, the Company
shall issue the Shares and Warrants to the Investor as payment in full of the Settlement Consideration owed to such Investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reliance on Independent
Legal Advice</U>. Each Party represents and warrants to the other Party that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">It has received advice from his or its own respective, independent legal counsel prior to its execution
of this Settlement Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">The legal nature and effect of this Settlement Agreement has been explained to it by its respective
counsel;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">It fully understands the terms and provisions of this Settlement Agreement and the nature and effect
thereof;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify">It is relying solely on the advice of its own legal counsel in executing this Settlement Agreement;
and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify">It has carefully read this Settlement Agreement, knows the contents thereof, and is executing the
same freely and voluntarily.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations and Warranties
of the Company</U>. The Company hereby represents and warrants to the Investor that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify"><U>Due Organization</U>. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. The Company has the corporate power and authority to execute,
deliver and perform this Settlement Agreement to which it is a party and to issue and deliver the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt"><U>Authorization, Validity and Enforceability</U>. </FONT>The
Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and
stockholders necessary for (i) the authorization, execution and delivery of this Settlement Agreement, (ii) the authorization of
the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance and delivery of
the Securities. When delivered in accordance with the terms hereof, this Settlement Agreement will constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors&rsquo;
rights generally and to general equitable principles.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify"><U>Issuance of the Securities</U>. The Shares and the Warrants to purchase shares of the Company&rsquo;s
Common Stock, when issued pursuant to the Settlement Agreement, have been duly authorized and validly issued and are fully paid
and nonassessable and free of preemptive or similar rights, and have been issued in compliance with applicable securities laws,
rules and regulations. The Warrant Shares have been duly and validly authorized and reserved for issuance, and, when issued upon
the exercise of the Warrants in accordance with the terms of the Warrants and as described in the Transaction Documents, will be
validly issued, fully paid and nonassessable, and free of any preemptive or similar rights.</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify"><U>No Consents</U>. The execution, delivery and performance by the Company of this Settlement Agreement
and the issuance of the Securities requires no consent of, action by or in respect of, or filing with, any governmental body, agency,
official or other third party, other than filings that have been made pursuant to applicable securities laws and post-sale filings
pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt"><U>No Conflict</U>. </FONT>The execution, delivery and performance
of this Settlement Agreement by the Company and the issuance of the Securities will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under (i) the Company&rsquo;s Articles of Organization,
as amended, or the Company&rsquo;s Bylaws, both as in effect on the date hereof (true and complete copies of which have been filed
on EDGAR), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, any subsidiary of the Company or any of their respective assets or properties, or (b) any
agreement or instrument to which the Company or any subsidiary of is a party or by which the Company or a subsidiary is bound or
to which any of their respective assets or properties is subject.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(f)</TD><TD STYLE="text-align: justify"><U>No General Solicitation</U>. Neither the Company nor any Person acting on its behalf has conducted
any general solicitation or general advertising (as those terms are used in the provisions of Regulation D, promulgated by the
Securities and Exchange Commission (the &ldquo;<U>Commission</U>&rdquo;) under the Securities Act) in connection with the issuance
of the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(g)</TD><TD STYLE="text-align: justify">Neither the Company nor any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances
that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated
hereby or would require registration of the Securities under the Securities Act.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(h)</TD><TD STYLE="text-align: justify">The issuance of the Securities to the Investor as contemplated hereby is exempt from the registration
requirements of the Securities Act.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations and Warranties
of the Investor</U>. The Investor represents and warrants to the Company that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify"><U>Purchase for Own Account</U>. Such Investor is acquiring the Securities for such Investor&rsquo;s
own account for investment purposes only and not with a present view towards the public sale or distribution thereof except for
sales duly registered under the Securities Act. Such Investor is not a registered broker/dealer, nor is an affiliate of a registered
broker/dealer and such Investor does not have any agreement or understanding, directly or indirectly, with any person regarding
the sale or distribution of the Securities or any of the Company&rsquo;s Common Stock, except this Settlement Agreement. Such Investor
understands that it must bear the economic risk of this investment indefinitely, unless the Securities are registered pursuant
to the Securities Act and any applicable state securities or blue sky laws or an exemption from such registration is available.</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify"><U>Accredited Investor Status</U>. Such Investor is an &ldquo;accredited investor&quot; as that
term is defined in Rule 501(a) of Regulation D, promulgated by the Commission under the Securities Act, and such Investor is capable
of evaluating the merits and risks of its investment in the Securities and has the ability and capacity to protect its interests.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify"><U>Information Availability</U>. Such Investor acknowledges that the Company has made available
to Investor all documents and information that Investor has requested relating to an investment in the Securities, and Investor
has had an opportunity to discuss this investment with representatives of the Company and ask questions of them.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify"><U>No General Solicitation</U>. Such Investor confirms that he did not learn of the issuance of
the Securities as a result of any general solicitation or general advertising.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify"><U>Reliance on Exemptions</U>. Such Investor understands that the Securities are being issued to
such Investor in reliance upon specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and such Investor&rsquo;s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability
of such exemptions and the eligibility of such Investor to acquire the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(f)</TD><TD STYLE="text-align: justify"><U>Governmental Review</U>. Such Investor understands that no United States federal or state agency
or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(g)</TD><TD STYLE="text-align: justify"><U>Transfer or Resale</U>. Such Investor understands that (i) the sale or resale of the Securities
has not been and is not being registered under the Securities Act or any state securities laws, and the Securities may not be transferred
unless (A) the Investor shall have delivered to the Company an opinion of Company counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration; or (B) sold under and in compliance with Rule 144 promulgated
under the Securities Act (or a successor rule) (&ldquo;<U>Rule 144</U>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(h)</TD><TD STYLE="text-align: justify"><U>Authority to Enter into Settlement Agreement.</U> Such Investor has all requisite legal and
other power and authority to execute and deliver this Settlement Agreement and to carry out and perform his obligations under the
terms of this Settlement Agreement. This Settlement Agreement constitutes a valid and legally binding obligation of such Investor
enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors&rsquo; rights and to general equity principles.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD STYLE="text-align: justify"><U>Residency</U>. Such Investor is a resident of the state set forth under the name of Investor
on his signature page to this Settlement Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(j)</TD><TD STYLE="text-align: justify"><U>Restricted Securities</U>. Such Investor understands that</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">the Securities are characterized as &ldquo;restricted securities&rdquo; under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances.</TD></TR></TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">the Securities have not been registered under the Securities Act or any state securities laws and
are being offered in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities
laws, and the Company is relying upon the truth and accuracy of, and Investor&rsquo;s compliance with, the representations, warranties,
covenants, agreements, acknowledgments and understandings of Investor contained in this Settlement Agreement in order to determine
the availability of such exemptions and the eligibility of Investor to acquire the Securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD STYLE="text-align: justify">the Securities must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD STYLE="text-align: justify">the Securities will bear a legend substantially in the form set forth in Section 5(k) herein; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD STYLE="text-align: justify">the Company will make a notation on its transfer books to such effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(k)</TD><TD STYLE="text-align: justify"><U>Legend</U>. Such Investor understands that until such time as the Securities issued pursuant
to this Settlement Agreement may have been registered under the Securities Act or otherwise may be sold by the Investor under Rule
144, certificates for the Securities may bear a restrictive legend in substantially the following form:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">&ldquo;The securities represented hereby have not been registered with the Securities and Exchange
Commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of
1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for sale pursuant to
the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received
an opinion of Company counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under
the Securities Act of 1933 as amended.&rdquo;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">If required by the authorities of any state in connection with the issuance of sale of the Securities,
the legend required by such state authority.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(l)</TD><TD STYLE="text-align: justify"><U>No Registration Rights</U>. Such Investor further understands that there are no registration
rights associated with the Securities being acquired pursuant to this Settlement Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fees and Expenses</U>.
Each Party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Entire Agreement</U>.
This Settlement Agreement contains the entire understanding and agreement between the Parties hereto with respect to the matters
referred to herein and supersedes any and all prior and contemporaneous commitments, undertakings and agreements, whether written
or oral. The Parties further acknowledge and agree that parol evidence shall not be required to interpret the intent of the Parties.
No other representations, covenants, undertakings, or other prior or contemporary agreements, whether oral or written, respecting
such matters, which are not specifically incorporated herein, shall be deemed in any way to exist or bind any of the Parties. The
Parties acknowledge that each party has not executed this Settlement Agreement in reliance on any other promise, representation,
or warranty.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>. Any notice
given by any Party under this Settlement Agreement shall in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by facsimile, then
such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three (3) Business Days after such
notice is deposited in first class mail, postage prepaid, (iv) if given by an internationally recognized overnight air courier,
then such notice shall be deemed given one (1) Business Day after delivery to such carrier, and (v) if given by electronic mail,
upon receipt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>. In case
any provision of this Settlement Agreement shall be declared invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Settlement Agreement shall not in any way be affected or impaired thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Waiver, Amendment, and
Modification of Settlement Agreement</U>. The Parties agree that no waiver, amendment, or modification of any of the terms and/or
conditions of this Settlement Agreement shall be effective unless in writing and signed by all Parties affected by the waiver,
amendment, or modification. No waiver of any term, condition or default of any term of this Settlement Agreement shall be construed
as a waiver of any other term, condition or default.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts; Facsimile
and Electronic Signatures</U>. This Settlement Agreement may be executed in any number of counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Counterpart
signatures to this Settlement Agreement delivered by facsimile or other electronic transmission shall be acceptable and binding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Section 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>.
The section and paragraph headings contained in this Settlement Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Settlement Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 13. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing Law</U>. This
Settlement Agreement and its terms shall be governed by and construed under Massachusetts law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No Admissions By Parties</U>.
Nothing contained in this Settlement Agreement is intended to, or shall be deemed or construed to, be an admission by any Party
hereto, for any liability whatsoever, to the other Party, except as may be otherwise expressly provided for in this Settlement
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Joint Participation in
Drafting</U>. Each Party to this Settlement Agreement has participated in the negotiation and drafting of this Settlement Agreement.
As such, the language used herein shall be deemed to be the language chosen by the Parties hereto to express their mutual intent,
and no rule of strict construction will be applied against any Party to this Settlement Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[Signature page to follow]</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>,
each of the undersigned has duly executed this Settlement Agreement as of the date first written above.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRECISION OPTICS CORPORATION, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">22 East Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gardner, Massachusetts 01440-3338</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fax: &nbsp;&nbsp;(978) 630-1487</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">By:<U>&nbsp;/s/ Joseph N. Forkey</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&nbsp;&nbsp;Joseph N. Forkey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Title:&nbsp;&nbsp;Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With a copy to (which shall not constitute
notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amy Trombly, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Trombly Business Law, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1320 Centre Street, Suite 202</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Newton, MA 02459</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fax: (617) 243-0066</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ARNOLD SCHUMSKY</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>/s/ Arnold Schumsky</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Arnold Schumsky, an individual</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">[Address]</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Form of Warrant to Purchase Shares of
Common Stock</B></P>

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