Document:

Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (the “Agreement”) is made and entered into as of this 28th day of September, 2012 by and among Precision
Optics Corporation, Inc., a Massachusetts corporation (the “Company”), and the “Investors” named in that
certain Purchase Agreement by and among the Company and the Investors (the “Purchase Agreement”). Capitalized terms
used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

 

The parties hereby
agree as follows:

 

1.Certain
Definitions.

 

As used in this Agreement,
the following terms shall have the following meanings:

 

“Common Stock”
means the Company’s common stock, par value $0.01 per share, and any securities into which such shares may hereinafter be
reclassified.

 

“Investors”
means the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent
holder of any Warrants or Registrable Securities.

 

“Prospectus”
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 “free writing prospectus” as defined in Rule 405 under the 1933 Act.

 

“Register,”
“registered” and “registration” 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.

 

“Registrable
Securities” 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.

 

“Registration
Statement” shall mean 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.

 

“Required
Investors” means the Investors holding a majority of the Registrable Securities.

 

“SEC”
means the U.S. Securities and Exchange Commission.

 

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“Shares”
means the shares of Common Stock issued pursuant to the Purchase Agreement.

 

“Warrants”
means, the warrants to purchase shares of Common Stock issued to the Investors pursuant to the Purchase Agreement, the form of
which is attached to the Purchase Agreement as Exhibit A.

 

“Warrant Shares”
means the shares of Common Stock issuable upon the exercise of the Warrants.

 

2.Registration.

 

(a)Registration
Statements.

 

(i)Promptly
following the closing of the purchase and sale of securities contemplated by the Purchase Agreement (the “Closing
Date”), but no later than thirty (30) days after the Closing Date (the “Filing Deadline”), 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 Exhibit A; provided, however, that no Investor shall be named as an
“underwriter” in the Registration Statement without the Investor’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.
If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline,
the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to
1.0% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following
the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities. Such payments
shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the
Investors to seek injunctive relief. Such payments shall be made to each Investor in cash no later than three (3) Business
Days after the end of each 30-day period.

 

(ii)S-3 Qualification.
Promptly following the date (the “Qualification Date”) upon which the Company becomes eligible to use a registration
statement on Form S-3 to register the Registrable Securities for resale, but in no event more than thirty (30) days after the Qualification
Date (the “Qualification Deadline”), 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 “Shelf Registration Statement”)
and shall use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as promptly as
practicable thereafter. If a Shelf Registration Statement covering the Registrable Securities is not filed with the SEC on or prior
to the Qualification Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty,
in an amount equal to 1.0% of the aggregate purchase price paid by such Investor pursuant to the Purchase Agreement attributable
to those Registrable Securities that remain unsold at that time for each 30-day period or pro rata for any portion thereof following
the date by which such Shelf Registration Statement should have been filed for which no such Shelf Registration Statement is filed
with respect to the Registrable Securities. Such payments shall constitute the Investors’ exclusive monetary remedy for such
events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each Investor
in cash no later than three (3) Business Days after the end of each 30-day period.

 

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(b)Expenses.
The Company will pay all expenses associated with effecting the registration of the Registrable Securities, including filing and
printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities
for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investors and the Investors’
reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold. The Company’s
reimbursement to Investors for their expenses, including counsel, shall be capped at $10,000.

 

(c)Effectiveness.

 

(i)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. If (A)(x)
a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five
(5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that
the SEC has no further comments on the Registration Statement or (ii) the 60th day after the Filing Deadline (the 90th
day if the SEC comments on the Registration Statement), or (y) a Shelf Registration Statement is not declared effective by the
SEC within 120 days after the Qualification Deadline, or (B) after a Registration
Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding
any Allowed Delay (as defined below) or the inability of any Investor to sell the Registrable Securities covered thereby due to
market conditions or its receipt of material nonpublic information at its
request in accordance with Section 4 hereof, then the Company will make pro rata payments to each Investor, as liquidated
damages and not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by such Investor for each 30- day period
or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout
Period”). Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect
the right of the Investors to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall
be paid monthly within three (3) Business Days of the last day of each month following the commencement of the Blackout Period
until the termination of the Blackout Period. Such payments shall be made to each Investor in cash.

 

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(ii)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 “Allowed Delay”); 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.

 

(d)Rule
415.

 

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 “underwriter”, 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 “by or on behalf of the issuer” as
defined in Rule 415 and that none of the Investors is an “underwriter”. The Investors shall have the right to participate
or have their counsel participate in any meetings or discussions with the SEC regarding the SEC’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’ counsel reasonably objects. In the event that, despite the Company’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 “Cut Back Shares”) 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’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided,
however, that the Company shall not agree to name any Investor as an “underwriter” 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. No liquidated damages shall accrue as to any Cut Back Shares until such date
as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the
“Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable
to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable
to such Cut Back Shares; provided, however, that (i) the Filing Deadline and the Qualification Deadline for the Registration Statement
including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which
the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 90th day immediately
after the Restriction Termination Date.

 

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(e)Right
to Piggyback Registration.

 

(i)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’s notice (a “Piggyback
Registration”). 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.

 

(ii)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; provided, however, that nothing contained in this Section 2(e)(ii)
shall limit the Company’s liabilities and/or obligations under this Agreement, including, without limitation, the obligation
to pay liquidated damages under this Section 2.

 

3.Company
Obligations. 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:

 

(a)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 “Effectiveness Period”) and advise the Investors
in writing when the Effectiveness Period has expired;

 

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(b)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;

 

(c)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;

 

(d)furnish
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;

 

(e)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;

 

(f)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; 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;

 

(g)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;

 

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(h)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;

 

(i)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), “Availability Date” 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’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter); and

 

(j)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
earlier 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 or (B) such date as all of the Registrable Securities shall have been
resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and
(iii) 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’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.

 

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4.Due
Diligence Review; Information. The Company shall make available, 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, all SEC Filings (as defined in the Purchase Agreement)
and other filings with the 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’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.

 

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.

 

5.Obligations
of the Investors.

 

(a)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.

 

(b)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.

 

(c)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.

 

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(d)The
Company shall have no obligation to make liquidated damages payments under this Agreement to any Investor that is in breach of
these obligations.

 

6.Indemnification.

 

(a)Indemnification
by the Company. 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 “Blue Sky Application”);
(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’s behalf pursuant to an Investor’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; provided, however, 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.

 

(b)Indemnification
by the Investors. 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.

 

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(c)Conduct
of Indemnification Proceedings. 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; provided 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 provided, further,
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.

 

(d)Contribution.
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.

 

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7.Miscellaneous.

 

(a)Amendments
and Waivers. 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.

 

(b)Notices.
All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.

 

(c)Assignments
and Transfers by Investors. 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.

 

(d)Assignments
and Transfers by the Company. 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’s assets to another
corporation, without the prior written consent of the Required Investors, after notice duly given by the Company to each Investor.

 

(e)Benefits
of the Agreement. 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.

 

(f)Counterparts;
Faxes. 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, which shall be deemed
an original.

 

(g)Titles
and Subtitles. 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.

 

(h)Severability.
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.

 

    	11

    	 	

    
 

(i)Further
Assurances. 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.

 

(j)Entire
Agreement. 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.

 

(k)Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. 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.  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.

    	12

    	 	

    
 

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.

 

	The Company:	 	 	 	PRECISION OPTICS CORPORATION, INC.
	 	 	 	 	 
	 	 	 	By:	                                                 
	 	 	 	Name:	Joseph N. Forkey
	 	 	 	Title:	President and Chief Executive Officer

 

 

[Signature Page for Investor Follows]

 

    	13

    	 	

    
 

[                                   ]

 

By:                                    

Name: 

Title:

 

    	14

    	 	

    
 

Exhibit A

 

Plan of Distribution

 

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.

 

The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:

 

- ordinary brokerage
transactions and transactions in which the broker-dealer solicits purchasers;

 

- 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;

 

- purchases by a broker-dealer
as principal and resale by the broker-dealer for its account;

 

- an exchange distribution
in accordance with the rules of the applicable exchange;

 

- privately negotiated
transactions;

 

- short sales effected
after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;

 

- through the writing
or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

- broker-dealers may
agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

- a combination of
any such methods of sale; and

 

- any other method permitted by applicable law.

 

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 “Securities Act”), 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.

 

    	15

    	 	

    
 

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).

 

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.

 

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.

 

The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be "underwriters"
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 "underwriters"
within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities
Act.

 

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.

 

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.

 

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.

 

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.

 

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.

 

    	16Exhibit 4.3

 

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OF 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.

 

SUBJECT TO THE PROVISIONS
OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON SEPTEMBER 28, 2017 (THE “EXPIRATION DATE”).

 

No. 2012-37

 

 

PRECISION OPTICS CORPORATION, INC.

 

WARRANT TO
PURCHASE 194,446  SHARES OF

COMMON STOCK, PAR VALUE $0.01 PER SHARE

 

For VALUE RECEIVED,
Loewen, Ondaatje, McCutcheon USA LTD (“Warrantholder”), is entitled to purchase, subject to the provisions of
this Warrant, from Precision Optics Corporation, Inc., a Massachusetts corporation (“Company”), 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 $0.95
(the exercise price in effect being herein called the “Warrant Price”), 194,446 shares (“Warrant
Shares”) of the Company’s Common Stock, par value $0.01 per share (“Common Stock”). 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 Engagement Letter entered into by and between the
Warrantholder and the Company and upon the closing of the Purchase Agreement, dated as of September 28, 2012 (the
“Purchase Agreement”), among the Company and the investors therein. Capitalized terms used herein have the
respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

 

Section 1.     Registration.
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.

 

    	1

    	 	

    
 

Section 2.     Transfers.
As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the “Securities Act”), 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.

 

Section 3.     Exercise
of Warrant. 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 “Exercise Agreement”) and payment by cash, certified check or wire transfer
of funds (or by cashless exercise as provided below) 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’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’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, “business day” means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business. 

 

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’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 “Buy-In”),
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.

  

    	2

    	 	

    
 

Section 4.     Compliance
with the Securities Act of 1933. Except as provided in the Purchase 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.

 

Section 5.     Payment
of Taxes. 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’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.

 

Section 6.     Mutilated
or Missing Warrants. 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.

 

Section 7.     Reservation
of Common Stock. 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.

 

Section 8.     Adjustments.
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.

 

    	3

    	 	

    

 

(a)     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.

 

(b)     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’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.

 

    	4

    	 	

    
 

(c)     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’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. “Market Price” as of a particular date (the “Valuation
Date”) shall mean the following: (a) if the Common Stock is then listed on the Nasdaq Global Market or the Nasdaq Capital
Market (“Nasdaq”) 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 National Association
of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) 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.

 

(d)     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.

 

(e)     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.

 

    	5

    	 	

    
 

(f)     Except as provided in subsection
(g) hereof, if and whenever the Company shall issue or sell, or is, in accordance with any of subsections (f)(l) through (f)(7)
hereof, deemed to have issued or sold, any Additional Shares of Common Stock for no consideration or for a consideration per share
less than the Warrant Price in effect immediately prior to the time of such issue or sale, then and in each such case (a “Trigger
Issuance”) the then-existing Warrant Price, shall be reduced, as of the close of business on the effective date of the Trigger
Issuance, to a price determined as follows:

 

Adjusted Warrant Price =
(A x B) + D

                           A+C

 

where

 

“A” equals
the number of shares of Common Stock outstanding, including Additional Shares of Common Stock (as defined below) deemed to be issued
hereunder, immediately preceding such Trigger Issuance (but excluding the Additional Shares included in “C” below);

 

“B” equals
the Warrant Price in effect immediately preceding such Trigger Issuance;

 

“C” equals
the number of Additional Shares of Common Stock issued or deemed issued hereunder as a result of the Trigger Issuance; and

 

“D” equals
the aggregate consideration, if any, received or deemed to be received by the Company upon such Trigger Issuance;

 

provided, however, that in no event shall the
Warrant Price after giving effect to such Trigger Issuance be greater than the Warrant Price in effect prior to such Trigger Issuance.

 

For purposes of this subsection
(f), “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company or deemed to be
issued pursuant to this subsection (f), other than Excluded Issuances (as defined in subsection (g) hereof).

 

    	6

    	 	

    
 

For purposes of this subsection
(f), the following subsections (f)(l) to (f)(7) shall also be applicable:

 

(f)(1)     Issuance of Rights or Options. In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants,
rights or options being called “Options” and such convertible or exchangeable stock or securities being called “Convertible
Securities”) whether or not such Options or the right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion
or exchange of such Convertible Securities (determined by dividing (i) the sum (which sum shall constitute the applicable consideration)
of (x) the total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus
(y) the aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in
the case of such Options which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than the Warrant Price in effect immediately prior to the
time of the granting of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options
or upon conversion or exchange of the total amount of such Convertible Securities issuable upon the exercise of such Options shall
be deemed to have been issued for such price per share as of the date of granting of such Options or the issuance of such Convertible
Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Warrant Price. Except as otherwise provided
in subsection 8(f)(3), no adjustment of the Warrant Price shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible
Securities. 

 

(f)(2)     Issuance of Convertible Securities. In case the Company shall in any manner issue (directly
and not by assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert
any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon such
conversion or exchange (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the
total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus
(y) the aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by
(ii) the total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall
be less than the Warrant Price in effect immediately prior to the time of such issue or sale, then the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Warrant Price, provided that (a) except as otherwise provided in subsection 8(f)(3),
no adjustment of the Warrant Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities and (b) no further adjustment of the Warrant Price shall be made by reason of the issue or sale of Convertible
Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Warrant Price
have been made pursuant to the other provisions of subsection 8(f). 

 

    	7

    	 	

    
 

(f)(3)     Change in Option Price or Conversion Rate. Upon the happening of any of the following events,
namely, if the purchase price provided for in any Option referred to in subsection 8(f)(l) hereof, the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2), or
the rate at which Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2) are convertible into or exchangeable for
Common Stock shall change at any time (including, but not limited to, changes under or by reason of provisions designed to protect
against dilution), the Warrant Price in effect at the time of such event shall forthwith be readjusted to the Warrant Price which
would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. On the termination
of any Option for which any adjustment was made pursuant to this subsection 8(f) or any right to convert or exchange Convertible
Securities for which any adjustment was made pursuant to this subsection 8(f) (including without limitation upon the redemption
or purchase for consideration of such Convertible Securities by the Company), the Warrant Price then in effect hereunder shall
forthwith be changed to the Warrant Price which would have been in effect at the time of such termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such termination, never been issued. 

 

(f)(4)     Stock Dividends. Subject to the provisions of this Section 8(f), in case the Company shall declare or pay a dividend or make any
other distribution upon any stock of the Company (other than the Common Stock) payable in Common Stock, Options or Convertible
Securities, then any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without consideration. 

 

(f)(5)     Consideration for Stock. In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor shall be deemed to be the net amount received by the Company
therefor, after deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by
the Company in connection therewith. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to
be the fair value of such consideration as determined in good faith by the Board of Directors of the Company, after deduction of
any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In
case any Options shall be issued in connection with the issue and sale of other securities of the Company, together comprising
one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall
be deemed to have been issued for such consideration as determined in good faith by the Board of Directors of the Company. If Common
Stock, Options or Convertible Securities shall be issued or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the “Additional Rights”) are issued, then the consideration received or deemed to be received
by the Company shall be reduced by the fair market value of the Additional Rights (as determined using the Black-Scholes option
pricing model or another method mutually agreed to by the Company and the Warrantholder). The Board of Directors of the Company
shall respond promptly, in writing, to an inquiry by the Warrantholder as to the fair market value of the Additional Rights. In
the event that the Board of Directors of the Company and the Warrantholder are unable to agree upon the fair market value of the
Additional Rights, 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 evenly by the Company and
the Warrantholder. 

 

    	8

    	 	

    
 

(f)(6)     Record Date. In case the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase,
as the case may be. 

 

(f)(7)     Treasury
Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation
or retirement thereof) shall be considered an issue or sale of Common Stock for the purpose of this subsection (f). 

 

(g)     Anything
herein to the contrary notwithstanding, the Company shall not be required to make any adjustment of the Warrant Price in the case
of the issuance of (A) capital stock, Options or Convertible Securities issued to directors,
officers, employees or consultants of the Company in connection with their service as directors of the Company, their employment
by the Company or their retention as consultants by the Company pursuant to an equity compensation program approved by the Board
of Directors of the Company or the compensation committee of the Board of Directors of the Company, (B) shares of Common Stock
issued upon the conversion or exercise of Options or Convertible Securities issued prior to the date hereof, provided such securities
are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise
or conversion price thereof, (C) securities issued pursuant to the Purchase Agreement and securities issued upon the exercise
or conversion of those securities, and (D) shares of Common Stock issued or issuable by reason of a dividend, stock split or other
distribution on shares of Common Stock (but only to the extent that such a dividend, split or distribution results in an adjustment
in the Warrant Price pursuant to the other provisions of this Warrant) (collectively, “Excluded Issuances”).

 

(h)    Upon
any adjustment to the Warrant Price pursuant to Section 8(f) above, the number of Warrant Shares purchasable hereunder shall be
adjusted by multiplying such number by a fraction, the numerator of which shall be the Warrant Price in effect immediately prior
to such adjustment and the denominator of which shall be the Warrant Price in effect immediately thereafter.

 

(i)     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.

 

Section 9.     Fractional
Interest. 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.

 

    	9

    	 	

    
 

Section 10.     Extension
of Expiration Date. If the Company fails to cause any Registration Statement covering Registrable Securities (as defined in
the Registration Rights Agreement) to be declared effective prior to the applicable dates set forth therein, or if any of the
events specified in Section 2(c)(ii) of the Registration Rights Agreement occurs, and the Blackout Period (as defined in the Registration
Rights Agreement) (whether alone, or in combination with any other Blackout Period) continues for more than 60 days in any 12
month period, or for more than a total of 90 days, then the Expiration Date of this Warrant shall be extended one day for each
day beyond the 60-day or 90-day limits, as the case may be, that the Blackout Period continues.

 

Section 11.     Benefits.
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.

 

Section 12.     Notices
to Warrantholder. 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.

 

Section 13.     Identity
of Transfer Agent. 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’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.

 

Section 14.     Notices.
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 telex or 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 days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall
be addressed as follows: if to the Warrantholder, at its address as set forth in the Company’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 days’
advance written notice to the other:

 

    	10

    	 	

    
 

If to the Company:

 

Precision Optics Corporation, Inc.

22 East Broadway

Gardner, Massachusetts 01440-3338

Attention: Joseph N. Forkey,

President and Chief Executive Officer

Fax: (978) 630-1487

 

With a copy to (which shall
not constitute notice):

 

Amy Trombly, Esq.

Trombly Business Law, PC

1320 Centre Street, Suite 202

Newton, MA 02459

Fax: (617) 663-6164

 

Section 15.     Registration
Rights. 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, and any subsequent Warrantholder
may be entitled to such rights.

 

Section 16.     Successors.
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.

 

Section 17.     Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. 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.  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.

 

    	11

    	 	

    
 

Section 18.     Call
Provision. Notwithstanding any other provision contained in this Warrant to the contrary, from and after the second anniversary
of the Closing Date (as defined in the Purchase Agreement) in the event that (a) the closing bid price per share of Common Stock
as traded on the Bulletin Board (or such other exchange or stock market on which the Common Stock may then be listed or quoted)
equals or exceeds $2.50 (appropriately adjusted for any stock split, reverse stock split, stock dividend or other reclassification
or combination of the Common Stock occurring after the date hereof) for twenty (20) consecutive trading days commencing after
the Registration Statement (as defined in the Registration Rights Agreement) has been declared effective (the "Measurement
Period") and (b) the average daily reported trading volume of the Common Stock is at least 5,000 shares during the Measurement
Period (appropriately adjusted for any stock split, reverse stock split, stock dividend or other reclassification or combination
of the Common Stock occurring after the date hereof); then the Company, upon thirty (30) days prior written notice (the “Notice
Period”) given to the Warrantholder within one business day immediately following the end of such twenty (20) trading
day period, may call this Warrant, in whole but not in part, at a redemption price equal to $0.01 per share of Common Stock then
purchasable pursuant to this Warrant; provided that (i) the Company simultaneously calls all Company Warrants (as defined in Section
22) on the same terms, (ii) all of the shares of Common Stock issuable hereunder either (A) are registered pursuant to an effective
Registration Statement (as defined in the Registration Rights Agreement) which is not suspended and for which no stop order is
in effect, and pursuant to which the Warrantholder is able to sell such shares of Common Stock at all times during the Notice
Period or (B) no longer constitute Registrable Securities (as defined in the Registration Rights Agreement) and (iii) this Warrant
is fully exercisable for the full amount of Warrant Shares covered hereby. Notwithstanding any such notice by the Company, the
Warrantholder shall have the right to exercise this Warrant prior to the end of the Notice Period.

 

Section 19.     Cashless
Exercise. 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:

 

X = Y (A - B)

     A

 

where

 

X =the number of shares
of Common Stock to which the Warrantholder is entitled upon such cashless exercise;

 

Y =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);

 

A =the “Market
Price” of one share of Common Stock as at the date the net issue election is made; and

 

B =the Warrant Price
in effect under this Warrant at the time the net issue election is made.

 

    	12

    	 	

    
 

Section 20.     Limitations
on Exercise.

 

(a)     Notwithstanding anything to the
contrary contained herein, the number of Warrant Shares that may be acquired by the Warrantholder upon any exercise of this Warrant
(or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by such Warrantholder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the Warrantholder's for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 4.999% of the total number of issued and outstanding
shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. This provision shall not restrict the number of shares of Common Stock which a Warrantholder may receive or beneficially
own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a transaction
contemplated by Section 8 of this Warrant. By written notice to the Company, the Warrantholder may waive the provisions of this
Section 20(a), but any such waiver will not be effective until the 61st day after delivery of such notice, nor will any such waiver
effect any other Warrantholder.

 

(b)     Notwithstanding anything to the
contrary contained herein, the number of Warrant Shares that may be acquired by the Warrantholder upon any exercise of this Warrant
(or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by such Warrantholder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the Warrantholder's for purposes of Section 13(d) of the Exchange
Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict
the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a transaction contemplated by Section 8 of this Warrant. This
restriction may not be waived.

 

Section 21.     No Rights
as Stockholder. 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.

 

Section 22.     RESERVED.

 

Section 22.     Section
Headings. 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.

 

    	13

    	 	

    
 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed, as of the 28th day of September, 2012.

 

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

 

 

 

 

    	14

    	 	

    
 

APPENDIX A

PRECISION OPTICS CORPORATION, INC.

WARRANT EXERCISE FORM

 

To Precision Optics Corporation, Inc.:

 

The undersigned hereby
irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant
Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:

 

________________________________

Name

________________________________

Address

________________________________

________________________________

Federal Tax ID or Social
Security No.

 

and delivered by(certified mail to
the above address, or

(electronically (provide
DWAC Instructions:___________________), or

(other (specify): __________________________________________).

 

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’s
Assignee as below indicated and delivered to the address stated below.

 

 

Dated: ___________________, ____

 

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.

		 
	Signature:______________________________	_______________________________
		Name (please print)
		 
		_______________________________
	 	_______________________________
	 	Address
	 	_______________________________
	 	Federal Identification or
	 	Social Security No.
	 	 
	 	Assignee: 
	 	_______________________________
	 	_______________________________
	 	_______________________________

 

    	15

    	 	

    
 

APPENDIX B

PRECISION OPTICS CORPORATION, INC.

NET ISSUE ELECTION NOTICE

 

 

To: Precision Optics Corporation, Inc.

 

Date:[_________________________]

 

 

The undersigned hereby
elects under Section 19 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.

 

 

_________________________________________

Signature

 

_________________________________________

Name for Registration

 

_________________________________________

Mailing Address

 

 

 

 

 

16

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