Document:

EXHIBIT 10.2 

 

FIRST AMENDMENT
TO LETTER OF INTENT

 

THIS FIRST AMENDMENT
TO LETTER OF INTENT (the "First Amendment") is made and entered into effective as of the 31st day of May 2013
by and between Discovery Energy Corp. (“Discovery”)
and Global Energy International Inc. (“Global”). 

 

Recitals

 

WHEREAS, the Discovery
and Global entered into a Letter of Intent dated May 28,
2013 (the "Letter of Intent"); and

 

WHEREAS, the Discovery
and Global both desire to amend the Letter of Intent upon the terms, provisions and conditions set forth hereinafter;

 

Agreement

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements of the Discovery and Global to amend the Letter of Intent, the Discovery and
Global agree as follows (all undefined, capitalized terms used herein shall have the meanings assigned to such terms in the Letter
of Intent):

 

1.Amendment to the Letter of
Intent. Section 7(a) of the Letter of Intent is hereby amended so that the May
31, 2013 date is changed to “June 6, 2013,” and Global shall have until June 6, 2013 to remit to Discovery the initial
standstill payment required by Section 7(a). 

 

2.Miscellaneous. Except
as otherwise expressly provided herein, the Letter of Intent is not amended, modified or affected by this First Amendment. Except
as expressly set forth herein, all of the terms, conditions, covenants, representations, warranties and all other provisions of
the Letter of Intent are herein ratified and confirmed and shall remain in full force and effect. On and after the date on which
this First Amendment becomes effective, the terms, "Letter of Intent," "hereof," "herein," "hereunder"
and terms of like import, when used herein or in the Letter of Intent shall, except where the context otherwise requires, refer
to the Letter of Intent, as amended by the First Amendment and this First Amendment. This First Amendment may be executed into
one or more counterparts, and it shall not be necessary that the signatures of all parties hereto be contained on any one counterpart
hereof; each counterpart shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF,
the undersigned have set their hands hereunto as of the first day written above.

 

	DISCOVERY ENERGY CORP.	 	Global Energy International Inc.
	 	 	 
	 	 	 
	By:	 	 	By:	 
	 	Keith D. Spickelmier, Chairman	 	 	John S. Ippolito Jr., Chief
Executive OfficerEXHIBIT 10.3

 

SECOND AMENDMENT TO LETTER OF INTENT

 

THIS SECOND AMENDMENT
TO LETTER OF INTENT (the "Second Amendment") is made and entered into as of the 10th day of July 2013, but
effective as of the 1st day of July 2013 by and between Discovery Energy Corp. (“Discovery”)
and Global Energy International Inc. (“Global”). 

 

Recitals

 

WHEREAS, the Discovery
and Global entered into a Letter of Intent dated May 28, 2013 (the "Letter of Intent");
and

 

WHEREAS,
the Letter of Intent was first amended effective on June 12, 2013 by an instrument entitled “FIRST
AMENDMENT TO LETTER OF INTENT” (for purposes of the remainder of this Second Amendment, the term “Letter of
Intent” shall mean the Letter of Intent as heretofore amended
by said First Amendment); and

 

WHEREAS, the Discovery
and Global both desire to amend the Letter of Intent again upon the terms, provisions and conditions set forth hereinafter;

 

Agreement

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements of the Discovery and Global to amend the Letter of Intent, the Discovery and
Global agree as follows (all undefined, capitalized terms used herein shall have the meanings assigned to such terms in the Letter
of Intent):

 

		1.	Amendments to the Letter of Intent.

 

(a)The
Letter of Intent is hereby amended in all respect so that the US$60.0 million purchase price for the Common
Stock is increased to US$62.0 million, with no corresponding increase in the number of shares of Common
Stock to be issued as a result. The use of proceeds table in the Letter of Intent will not be changed, but the additional
US$2.0 million in the purchase price shall be used for such purposes as Discovery’s current management
shall see fit, including the use of the entire additional US$2.0 million for the payment of bonuses to management.

 

(b)The
Letter of Intent is hereby amended in all respect so that the amount of the non-refundable Standstill Payment is increased to
US$7.0 million. Global hereby acknowledges that the US$500,000 initial portion of the Standstill Payment is now due and payable,
and that the increased remaining portion of the Standstill Payment shall be due and payable in accordance the terms of Paragraph
7(b) of the Letter of Intent as amended below.

 

    	 

    	 

    

 

(c)Paragraph
7(b) of the Letter of Intent is hereby amended to read in its entirety as follows:

 

“(b)On
or before the earliest to occur of (i) the Closing, (ii) July 19, 2013, or (iii) Global's giving of notice pursuant to paragraph
12 of this Letter of Intent, Global shall remit to Discovery six million, five hundred thousand dollars (US$6,500,000) for the
remainder of the Standstill Payment.

 

(d)The
Letter of Intent is hereby amended so that Paragraph 7(c) is deleted in its entirety, such that the Company shall not be obligated
to issue any shares for any portion of the Standstill Payment if the Common
Stock sale and purchase fails to occur as contemplated by the Letter of Intent.

 

(e)Global
hereby acknowledges that, in accordance with the terms of Paragraph 7(d), the Standstill Period is
not in effect due to Global’s failure to make the initial Standstill Payment, and that the Standstill Period shall not commence
until the full Standstill Payment is made, and Paragraph 7(d) is hereby amended accordingly.

 

(f)The
Letter of Intent is hereby amended in all respect so that, in each instance in which the date “July 1, 2013” is used
(i.e the outside date for the Closing, and the date on which the Standstill Period ends), the
date “July 31, 2013” shall be substituted in place thereof.

 

(g)Paragraph
12 is hereby amended so as to delete the language that reads “, and Discovery’s obligation
to issue shares pursuant to Paragraph 7(c) in consideration of the Standstill Payment.”

 

2.Miscellaneous.
Except as otherwise expressly provided herein, the Letter of Intent is not amended, modified or affected by this Second Amendment.
Except as expressly set forth herein, all of the terms, conditions, covenants, representations, warranties and all other provisions
of the Letter of Intent are herein ratified and confirmed and shall remain in full force and effect. On and after the date on
which this Second Amendment becomes effective, the terms, "Letter of Intent," "hereof," "herein,"
"hereunder" and terms of like import, when used herein or in the Letter of Intent shall, except where the context otherwise
requires, refer to the Letter of Intent, as amended by the Second Amendment and this Second Amendment. This Second Amendment may
be executed into one or more counterparts, and it shall not be necessary that the signatures of all parties hereto be contained
on any one counterpart hereof; each counterpart shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

IN WITNESS WHEREOF,
the undersigned have set their hands hereunto as of the second day written above.

 

	DISCOVERY ENERGY CORP.	Global Energy International Inc.
	
         

         

        By:____________________________________
	
         

         

        By:____________________________________

	Keith D. Spickelmier, Chairman	
        John S. Ippolito Jr.,

        Chief Executive OfficerCHANGE
IN TERMS AGREEMENT

 

	Principal

$10,000,000.00	Loan Date

03-01-2013	Maturity

03-01-2015	Loan No 

155354101	Call / Coll 

CLS 07 / 240	Account

600714	Officer

765	Initials
	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing “***” has been omitted due to text length limitations.

 

	Borrower:	BISCO INDUSTRIES, INC.	Lender:	COMMUNITY BANK
	 	1500 NORTH LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	1750 S. STATE COLLEGE BLVD.
	 	 	 	ANAHEIM, CA 92806
	 	 	 	(800) 788-9999

  

	Principal
    Amount: $10,000,000.00	Date
    of Agreement: March 26, 2013

 

DESCRIPTION
OF EXISTING INDEBTEDNESS. A loan to Borrower evidenced by a Promissory Note dated November 15, 2000, as modified by Change
in Terms Agreements dated May 1, 2001; July 1, 2001; September 1, 2001; October 19, 2001; April 30, 2002; June 17, 2002; August
28, 2002; September 16, 2002; October 28, 2002; January 24, 2003; March 27, 2003; June 1, 2003; October 1, 2003; December 1, 2003;
February 1, 2004; May 1, 2004; June 23, 2004; August 1, 2004; February 1, 2005; April 1, 2005; April 1, 2006; March 28, 2007; June
1, 2007; July 13, 2007; March 27, 2008, May 15, 2008; March 3, 2009; March 23, 2010; April 16, 2010; October 1, 2010; January 3,
2011; March 1, 2011; May 10, 2012 and September 18, 2012 (“Note”).

 

DESCRIPTION
OF COLLATERAL. A security interest in personal property assets as described in two (2) Commercial Security Agreements each
dated March 23, 2010 and a security interest in personal property assets as described in a Commercial Security Agreement dated
August 1, 2004 (“Security Agreement”).

 

DESCRIPTION
OF CHANGE IN TERMS.

 

EFFECTIVE
AS OF MARCH 20, 2013:

 

MODIFICATION
OF BUSINESS LOAN AGREEMENT. The Business Loan Agreement dated June 1, 2007 (“Loan Agreement”) is hereby modified and
amended as follows:

 

1)The
paragraph entitled “Effective Tangible Net Worth” is hereby deleted in its entirety and replaced with the following:

 

Effective
Tangible Net Worth. Maintain an Effective Tangible Net Worth of not less than $9,000,000.00 to be measured at the end
of each fiscal quarter. The term "Effective Tangible Net Worth" means Borrower's total assets, less intangibles [i.e.,
goodwill, trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and
leasehold improvements], less amounts due from officers, partners, stockholders, directors, affiliates, and subsidiaries, less
total liabilities, plus amounts subordinated to Lender, as evidenced by a subordination agreement, if any. The first measurement
will be as of May 31, 2013.

 

2)The
paragraph entitled “Debt to Effective Tangible Net Worth” is hereby deleted in its entirety and replaced with
the following:

 

Debt to
Effective Tangible Net Worth. Maintain a maximum Debt to Effective Tangible Net Worth Ratio of 2.25 to 1.00 to be measured
at the end of each fiscal quarter. The term "Debt to Effective Tangible Net Worth" means Borrower's total liabilities,
less amounts subordinated to Lender, as evidenced by a subordination agreement, if any divided by Borrower's Effective Tangible
Net Worth. The term "Effective Tangible Net Worth" means Borrower’s total assets, less intangibles [i.e. goodwill,
trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold
improvements], less amounts due from officers, partners, stockholders, directors, affiliates, and subsidiaries, less total liabilities,
plus amounts subordinated to Lender, as evidenced by a subordination agreement, if any. The first measurement will be as of May
31, 2013.

 

3)The
paragraph entitled “Current Ratio” is hereby deleted in its entirety and replaced with the following:

 

Current
Ratio. Maintain a Current Ratio of not less than 1.25 to 1.00 to be measured at the end of each fiscal quarter. The
term “Current Ratio” means Borrower's total Current Assets divided by Borrower’s total Current Liabilities. The
first measurement will be as of May 31, 2013.

 

4)The
paragraph entitled “Quick Ratio” is hereby deleted in its entirety and replaced with the following:

 

Quick Ratio.
Maintain a Quick Ratio of not less than 0.75 to 1.00 to be measured at the end of each fiscal quarter. The term “Quick
Ratio” means Borrower's Cash & Equivalent plus Borrower's net Trade Receivables divided by Borrower's total Current Liabilities.
The first measurement will be as of May 31, 2013.

 

5)The
paragraph entitled “Current Assets” is hereby deleted in its entirety and replaced with the following:

 

Current
Assets. Borrower shall maintain a minimum current assets of $17,000,000.00 on a consolidated basis measured quarterly,
per GAAP, Investments in Data I/O are to continue to be shown as non-current assets. The first measurement will be as of May 31,
2013.

 

6)The
paragraph entitled “Additional Provision” is hereby deleted in its entirety and replaced with the following:

 

Additional
Provision. Bisco industries. Inc. has advanced funds to EACO Corporation for which it expects repayment in the future. Bisco
Industries, Inc. will require EACO Corporation to pay down advances from any proceeds received from the sale of real estate in
Florida. Bisco Industries, inc. agrees to pay the line of credit at Community Bank from any proceeds received from EACO Corporation
from the sale of the real estate in Florida.

 

7)The
paragraph entitled “Additional Information” is hereby deleted in its entirety.

 

MODIFICATION
OF NOTE. The Note is hereby modified and amended as follows:

 

The maturity
date of the Note is hereby extended from March 1, 2014 to March 1, 2015.

 

PAYMENT.
Borrower will pay this loan in full immediately upon Lender's demand. If no demand is made, Borrower will pay this loan in one
payment of all outstanding principal plus all accrued unpaid interest on March 1, 2015. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date, beginning May 1, 2013, with all subsequent interest
payments to be due on the same day of each month after that.

 

    	 

    	 

    

 

	 	CHANGE IN TERMS AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 2

 

CONTINUING
VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all
agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement
does not waive Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future
change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to
retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party
is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue
of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing
below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party
consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only
to any initial extension, modification or release, but also to all such subsequent actions.

 

PRIOR TO
SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, BORROWER AGREES TO THE TERMS OF THE
AGREEMENT.

 

BORROWER:

 

BISCO INDUSTRIES,
INC.

 

	By:	/s/
    GLEN F. CEILEY
	 	GLEN
    F. CEILEY, CHAIRMAN and CEO of BISCO 
	 	INDUSTRIES,
    INC.

  

	LASER
PRO Lending, Ver. 5.60.00.005 Copr. Harland Financial Solutions, Inc. 1997, 2013.    All Rights Reserved.   - CA
G:\CFI50\CFI\LPL\120.FC  TR - 18064 PR-38

 

    	 

    	 

    

 

NOTICE
TO GUARANTOR(S)

 

	Principal

$10,000,000.00	Loan Date 

03-01-2013	Maturity

03-01-2015	Loan No 

155354101	Call / Coll 

CLS 07 / 240	Account

600714	Officer

765	Initials
	References
    in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan
    or item. Any item above containing “***” has been omitted due to text length limitations.

  

	Borrower:	BISCO INDUSTRIES, INC.	Lender:	COMMUNITY BANK
	 	1500 NORTH LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	1750 S. STATE COLLEGE BLVD.
	 	 	 	ANAHEIM, CA 92806
	 	 	 	(800) 788-9999

  

This NOTICE
TO GUARANTOR(S) is attached to and by this reference is made a part of the Disbursement Request and Authorization, dated March
26, 2013, and executed in connection with a loan or other financial accommodations between COMMUNITY BANK and BISCO INDUSTRIES,
INC.

 

The above referenced
loan represents a renewal debt under the conditions of your Commercial Guaranty.

 

Guarantor(s):

 

	/s/
    GLEN F. CEILEY	 
	GLEN
    F. CEILEY	 

 

GLEN F.
CEILEY AND BARBARA A. CEILEY REVOCABLE TRUST

 

	BY:	/s/
    GLEN F. CEILEY	 
	 	GLEN F. CEILEY, TRUSTEE of the GLEN F.
    CEILEY AND BARBARA A. CEILEY REVOCABLE TRUST	 

 

	BY:	/s/
    BARBARA A. CEILEY	 
	 	BARBARA A. CEILEY, TRUSTEE of the GLEN
    F. CEILEY AND BARBARA A. CEILEY REVOCABLE TRUST	 

 

EACO CORPORATION

 

	BY:	/s/
    GLEN F. CEILEY	 
	 	GLEN F. CEILEY, AUTHORIZED OFFICER	 

 

THIS NOTICE
TO GUARANTOR(S) IS EXECUTED ON MARCH 26, 2013. 

 

BORROWER:

 

BISCO INDUSTRIES,
INC.

 

	By:	/s/
    GLEN F. CEILEY	 
	 	
        GLEN F.
        CEILEY, CHAIRMAN and CEO of BISCO

        INDUSTRIES,
        INC.
	 

 

	LASER
PRO Lending, Ver. 5.60.00.005 Copr. Harland Financial Solutions, Inc. 1997, 2013.    All Rights Reserved.   - CA
G:\CFI50\CFI\LPL\120.FC  TR - 18064 PR-38

 

    	 

    	 

    

 

 

DISBURSEMENT
REQUEST AND AUTHORIZATION

 

	Principal

$10,000,000.00	Loan Date 

03-01-2013	Maturity

03-01-2015	Loan No 

155354101	Call / Coll 

CLS 07 / 240	Account

600714	Officer

765	Initials
	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

 

	Borrower:	BISCO INDUSTRIES, INC.	Lender:	COMMUNITY BANK
	 	1500 NORTH LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	1750 S. STATE COLLEGE BLVD.
	 	 	 	ANAHEIM, CA 92806
	 	 	 	(800) 788-9999

 

LOAN TYPE.
This is a Variable Rate Nondisclosable Revolving Line of Credit Loan to a Corporation for $10,000,000.00 due on March 1, 2015.
This is an unsecured renewal loan.

 

PRIMARY
PURPOSE OF LOAN. The primary purpose of this loan is for:

 

 ̈
Personal, Family, or Household Purposes or Personal Investment.

 

x
Business (Including Real Estate Investment).

 

SPECIFIC
PURPOSE. The specific purpose of this loan is: RENEWAL.

 

DISBURSEMENT
INSTRUCTIONS. Borrower understands that no loan proceeds will be disbursed until all of Lender's conditions for making the
loan have been satisfied. Please disburse the loan proceeds of $10,000,000.00 as follows:

 

	Undisbursed Funds:	 	$	3,308,469.61	 
	 	 	 	 	 
	Other Disbursements:	 	$	6,691,530.39	 
	$6,691,530.39 BALANCE AS OF 3/26/13	 			 
	 	 	 	 	 
	Note Principal:	 	$	10,000,000.00	 

 

CHARGES
PAID IN CASH. Borrower has paid or will pay in cash as agreed the following charges:

 

	Prepaid Finance Charges Paid in Cash:	 	$	18,698.00	 
	$ 18,698.00 Interest Payment due 4/1/13	 			 
	 	 	 	 	 
	Total Charges Paid in Cash:	 	$	18,698.00	 

 

AUTOMATIC
PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower's Demand Deposit - Checking account, numbered
704000652, the amount of any loan payment. If the funds in the account are insufficient to cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate
Automatic Payments.

 

FINANCIAL
CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE
AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S
MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED MARCH 26, 2013.

 

BORROWER:

 

BISCO INDUSTRIES,
INC.

 

	By:	/s/
    GLEN F. CEILEY	 
	 	GLEN
        F. CEILEY, CHAIRMAN and CEO of BISCO

        INDUSTRIES,
        INC.
	 

  

	LASER
PRO Lending, Ver. 5.60.00.005 Copr. Harland Financial Solutions, Inc. 1997, 2013.    All Rights Reserved.   - CA
G:\CFI50\CFI\LPL\120.FC  TR - 18064 PR-38

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