Document:

Exhibit 10.2

 

AMENDMENT

TO

PLEDGE AND SECURITY AGREEMENT

 

Reference is made to the Pledge and Security Agreement, dated as of June 25, 2008 (as amended to date, the “Security Agreement”), by and among Precision Optics Corporation, Inc., a Massachusetts corporation (the “Borrower”), such other parties as may become Grantors thereunder (together with the Borrower, the “Grantors” and, individually, a “Grantor”) and the Investors named as such in the Purchase Agreement, dated June 25, 2008 (as amended to date and as the same may hereafter be amended from time to time, the “Purchase Agreement”), among the Borrower and such Investors (collectively, the “Purchasers”).

 

WHEREAS, the Borrower has advised the Purchasers that it wishes to sell certain Collateral for fair market value, sale is currently prohibited by the terms of the Security Agreement;

 

WHEREAS, the Purchasers wish to consent to such, on the terms and conditions set forth herein

 

NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.     Section 1 of the Security Agreement is hereby modified by adding at the end of such Section the following new sentence:

 

In addition, the term “Patent Rights” as used herein, means all right, title and interest of the Grantors in and to the following: (i) all patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and (ii) to the extent related to the items described in clause (i) all (a) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (b) copyrights and copyrightable works; (c) registrations, applications and renewals for any of the foregoing; and (d) proprietary computer software (including but not limited to data, data bases and documentation).

 

2.     Section 2 of the Security Agreement is hereby modified by restating the final paragraph thereof to read in its entirety as follows:

 

Notwithstanding the foregoing, Collateral shall not include any of the following (collectively, the “Excluded Collateral”) (1) vehicles subject to a certificate of title statute, (2) rights under licenses, permits and contracts in which a security interest may not be granted except to the extent that such prohibition is not enforceable under the applicable Uniform Commercial Code, provided, that the Grantors shall not permit any such prohibitions in any contracts, licenses and

 

 

permits entered into after the date hereof except in the ordinary course consistent with past practice (3) the property listed on Schedule 2 attached hereto and (4) immediately upon their sale by a Grantor for fair market value in accordance with  the Asset Purchase Agreement dated on or about July 21, 2011, all Patent Rights, provided that the security interest intended to be granted by this Agreement shall attach to the proceeds of such sale

 

3.     Section 6 of the Security Agreement is hereby modified by adding at the end of such Section the following new sentence:

 

Notwithstanding the foregoing, to the extent any Collateral subject to a Copyright Security Agreement, Trademark Security Agreement or Patent Security Agreement becomes Excluded Collateral, the Purchasers agree to execute and deliver to the Grantors, upon the request and at the expense of the Grantors, all documents and instruments necessary to terminate of record the security interest of the Purchasers in such Excluded Collateral.

 

4.     The Grantors hereby (a) reaffirm and admit the validity and enforceability of the Notes and all of the obligations of the Borrower thereunder, (b) agree and admit that the Borrower has no defenses to or offsets against any such obligation and (c) certify that, immediately after giving effect to this Amendment, (i) no Event of Default (or event which, with the giving of notice or passage of time would constitute an Event of Default) exists and (ii) each of the representations and warranties contained in the Security Agreement is true and correct with the same effect as though such representation and warranty had been made on the date hereof, except to the extent such representation and warranty specifically relates to an earlier date, in which case such representation and warranty shall continue to be true and correct on and as of such earlier date.

 

5.     The Grantors hereby confirms that (i) the Security Agreement, as amended hereby, remains in full force and effect and is hereby ratified and confirmed.

 

6.     This Amendment may be executed in any number of counterparts all of which, taken together, shall constitute one agreement.  In making proof of this Amendment, it shall only be necessary to produce the counterpart executed and delivered by the party to be charged.

 

7.     THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED TO BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date set forth below.

 

 

Dated: July 27, 2011

 

 

	
 
    	
GRANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PRECISION   OPTICS CORPORATION, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Joseph N. Forkey
    
	
 
    	
 
    	
Name:   Joseph N. Forkey
    
	
 
    	
 
    	
Title:   President, Chief Executive Officer and Treasurer
    

 

PURCHASERS:

 

SPECIAL SITUATIONS FUND III QP, L.P.

SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

 

 

	
By:
    	
/s/   David Greenhouse
    	
 
    
	
 
    	
Name:   David Greenhouse
    	
 
    
	
 
    	
Title:   General Partner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Arnold Schumsky
    	
 
    
	
Arnold   SchumskyExhibit 10.3

 

ENDORSEMENT

TO

10% SENIOR SECURED CONVERTIBLE NOTE

 

PRECISION OPTICS CORPORATION, INC.

 

New York, New York

July 27, 2011

 

The 10% Secured Convertible Note dated June 25, 2008 and amended December 11, 2008, June 25, 2010, July 26, 2010, September 15, 2010, October 15, 2010, November 15, 2010, November 30, 2010, December 1, 2010, December 3, 2010, December 17, 2010, January 10, 2011, January 24, 2011, February 7, 2011, February 25, 2011, March 11, 2011, March 31, 2011, April 14, 2011, April 29, 2011, May 13, 2011, June 3, 2011, June 28, 2011, July 20, 2011 and July 25, 2011 (as so amended, the “Note”) of PRECISION OPTICS CORPORATION, INC., a Massachusetts corporation  (the “Company”) payable to the order of ARNOLD SCHUMSKY (the “Purchaser”) in an aggregate principal amount of $50,000 and to which this Endorsement is affixed is hereby amended in the following respects:

 

1.             The second sentence of the first paragraph of the Note is hereby restated to read in its entirety as follows:

 

Subject to the other provisions of this Note, the principal of this Note and all accrued and unpaid interest hereon shall mature and become due and payable on August 31, 2011 (the “Stated Maturity Date”)

 

2.             The penultimate sentence of the first paragraph of the Note is hereby restated to read in its entirety as follows:

 

All payments of principal and interest by the Company under this Note shall be made in United States dollars in immediately available funds to an account specified by the Holder.

 

3.             The last sentence of the first paragraph of the Note is deleted in its entirety.

 

4.             Section 1 is hereby amended by adding the following new definition in appropriate alphabetical position:

 

“Patent Rights” means all right, title and interest of the Grantors in and to the following: (i) all patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and (ii) to the extent related to the items described in clause (i) all (a) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (b) copyrights and copyrightable works;

 

 

(c) registrations, applications and renewals for any of the foregoing; and (d) proprietary computer software (including but not limited to data, data bases and documentation).

 

5.             Section 5(a)(xii) is hereby amended by restating the final sentence thereof read in its entirety as follows:

 

Except for (i) non-exclusive licenses granted in the ordinary course of business and (ii) the sale of Patent Rights (as defined in the Security Agreement) for fair market value pursuant to and in accordance with  the Asset Purchase Agreement Dated on or about July 21, 2011, the Company shall not and shall cause each Subsidiary not to transfer, assign or otherwise convey the Intellectual Property, any registrations or applications thereof and all goodwill associated therewith, to any person or entity.

 

Except as expressly amended by this Endorsement, the Note remains in full force and effect and the Company hereby reconfirms its obligations thereunder.

 

IN WITNESS WHEREOF, the Company has caused this Endorsement to be duly executed, and the Purchaser has caused this Endorsement to be duly accepted, by their respective duly authorized representatives as of the day and year first above written.

 

	
 
    	
PRECISION   OPTICS  CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Joseph N. Forkey
    
	
 
    	
 
    	
Name:   Joseph N. Forkey
    
	
 
    	
 
    	
Title:   President, Chief Executive Officer and Treasurer
    
	
 
    	
 
    
	
Accepted:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Arnold Schumsky
    	
 
    
	
 
    	
Name:   Arnold Schumsky

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