Document:

Form of New Note

 Exhibit 4.5 
 FORM OF NEW NOTE 
 THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12
OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

CUSIP 76116A AB4 
  

			
	 No.1
	  	$250,000,000

 RESOLUTE ENERGY CORPORATION 

8.50% Senior Notes due 2020 
 Resolute Energy Corporation, a Delaware corporation (the “Company”), which term includes any successor under the Indenture hereinafter referred to, for value received, promises to pay to
Cede & Co., or its registered assigns, the principal sum of TWO HUNDRED FIFTY MILLION ($250,000,000) UNITED STATES DOLLARS (or such greater or lesser amount as should be reflected on the Schedule attached hereto) on May 1, 2020.

 Interest Payment Dates: May 1 and November 1 of each year, commencing November 1, 2012. 

Regular Record Dates: April 15 and October 15 of each year. 
 Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 Date of Issuance:
                     
 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually, by facsimile or by electronic image scan by its duly authorized officers. 

 

			
	 RESOLUTE ENERGY CORPORATION,
 a Delaware corporation

		
	 By:
	 	
                        
                                         
                              

	 Name:

	 Title:

 (Form of Trustee’s Certificate of Authentication) 

 This is one of the 8.50% Senior Notes due 2020 described in the within-mentioned Indenture. 

 

			
	 U.S. BANK NATIONAL ASSOCIATION,
 as Trustee

		
	 By:
	 	                             
                                         
                       
		 	Authorized Signatory
		
	 Date:
	 	                             
                                         
                       

 [Reverse Side of Note] 

RESOLUTE ENERGY CORPORATION 
 8.50% Senior Notes due 2020 
 Capitalized terms used herein shall have the
meanings assigned to them in the Indenture referred to below unless otherwise indicated. 
 1. Interest.
The Company promises to pay interest on the principal amount of this Note at 8.50% per annum from the date hereof until maturity. The Company shall pay interest semi-annually in arrears on May 1 and November 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid on the Notes (or one or more
Predecessor Notes) or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be November 1, 2012. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months. If a payment date is not a Business Day, payment may be made on the next succeeding day that is a Business Day, and no interest shall accrue on such payment for the intervening period.

 This Exchange Note was issued in connection with the Exchange Offer pursuant to which the 8.50% Senior Notes due 2020 in like
principal amount were exchanged for Exchange Notes. The Exchange Notes rank pari passu in right of payment with the Initial Notes. For any period in which the Initial Note exchanged for this Exchange Note was outstanding, Additional Interest may be
due and owing on the Initial Note in connection with the Registration Rights Agreement. 
 2. Method of
Payment. The Company shall pay interest on the Notes (except defaulted interest, if any) to the Persons in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the April 15 or October 15
immediately preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium, if any, on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and
private debts. 
 3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee
under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 

4. Indenture. The Company issued the Notes under an Indenture dated as of April 25, 2012 (the
“Indenture”) among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes
are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the

 
Indenture, the provisions of the Indenture shall govern and be controlling. The Indenture pursuant to which this Note is issued provides that an unlimited amount of Additional Notes may be issued
thereunder, subject to compliance with the covenants therein. 
 5. Optional Redemption. 

(a) On or after May 1, 2016, the Company may redeem all or a portion of the Notes, on not less than 30 nor more than
60 days’ prior notice, in amounts of $2,000 or whole multiples of $1,000 in excess thereof at the following redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, thereon, to the
applicable redemption date (subject to the rights of holders of record on relevant record dates to receive interest due on an interest payment date), if redeemed during the twelve-month period beginning on May 1 of the years indicated below:

  

					
	 Year
	  	Redemption
Price	 
	 2016
	  	 	104.250	%
	 2017
	  	 	102.125	%
	 2018 and thereafter
	  	 	100.000	%

 (b) In addition, at any time and from time to time prior to May 1, 2015, the Company
may use (i) the net proceeds of one or more Equity Offerings or (ii) the Net Cash Warrant Exercise Proceeds to redeem up to an aggregate of 35% of the aggregate principal amount of Notes issued under the Indenture (including the principal
amount of any Additional Notes issued under the Indenture) at a redemption price equal to 108.50% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date (subject to the rights of
holders of record on relevant record dates to receive interest due on an interest payment date). At least 65% of the aggregate principal amount of Notes (including the principal amount of any Additional Notes issued under the Indenture) must remain
outstanding immediately after the occurrence of such redemption. In order to effect this redemption, the Company must complete such redemption no later than 180 days after the closing of the related Equity Offering. 

(c) The Notes may also be redeemed, in whole or in part, at any time or from time to time prior to May 1, 2016 at the
option of the Company at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject
to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). 
 (d) The Notes may also be redeemed as set forth in Section 4.19 of the Indenture. 
 6. Mandatory Redemption. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 

7. Repurchase at Option of Holders. 

(a) Unless the Company has previously or concurrently mailed a redemption notice with respect to all outstanding notes,
upon the occurrence of a Change of Control, each Holder may require the Company to purchase such Holder’s Notes in whole or in part in amounts of $2,000 or whole multiples of $1,000 in excess thereof, at a purchase price in cash in an amount
equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase, pursuant to a Change of Control Offer in accordance with the procedures set forth in the Indenture. 

(b) Under certain circumstances described in the Indenture, the Company will be required to apply the proceeds of Asset
Sales to the repayment of the Notes and/or Pari Passu Indebtedness. 
 8. Selection and Notice of
Redemption. If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes not more than 60 days prior to the
redemption date in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and reasonable (except that any Notes represented by a Global Note shall be selected by such method as the 

 
Depositary or its nominee or successor may require or, where such nominee or successor is the trustee, a method that most nearly approximates pro rata selection as the trustee considers fair and
appropriate). Redemptions pursuant to Section 3.07(b) of the Indenture shall be made on a pro rata basis or on as nearly a pro rata basis as practicable (except that any Notes represented by a Global Note will be selected by such method as the
Depositary or its nominee or successor may require or, where such nominee or successor is the trustee, a method that most nearly approximates pro rata selection as the trustee deems fair and appropriate). In the event of partial redemption by lot,
the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. Notices of
redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest, if
any, shall cease to accrue on Notes or portions of them called for redemption. 
 9. Denominations, Transfer,
Exchange. The Notes are in registered form without coupons in denominations of $2,000 and whole multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar
and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not
required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. 

10. Persons Deemed Owners. The registered Holder of a Note will be treated as its owner for all purposes.

 11. Amendment, Supplement and Waiver. The Indenture or the Notes may be amended or supplemented only as
provided in the Indenture. 
 12. Defaults. In the case of an Event of Default arising from certain events
of bankruptcy, insolvency or reorganization specified in the Indenture, with respect to the Company or any Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all unpaid principal of, premium, if any, and accrued interest on all Notes to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by the Holders of the Notes) and upon any such declaration, such principal, premium, if any, and interest shall become due and payable immediately. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of not less
than a majority in aggregate principal amount of the Notes outstanding by notice to the Trustee may on behalf of the Holders of all outstanding Notes waive any past Default and its consequences under the Indenture except a Default (1) in the
payment of the principal of, premium, if any, or interest on any Note (which may only be waived with the consent of each Holder of Notes affected) or (2) in respect of a covenant or provision which under the Indenture cannot be modified or
amended without the consent of the Holder of each Note affected by such modification or amendment. 
 13.
Trustee Dealings with the Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee. 
 14. No Recourse Against Others. No director, officer,
employee, member, limited partner or stockholder of the Company or any Restricted Subsidiary, as such, will have any liability for any obligations of the Company or the Restricted Subsidiaries under the Notes, the Indenture or the Guarantees to
which they are a party, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 

 15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent. 
 16. CUSIP Numbers. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 

17. Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New
York. 
 The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may
be made to: 
 RESOLUTE ENERGY CORPORATION 
 1675 Broadway 
 Suite 1950 

Denver, Colorado 80202 
 Facsimile: 303-623-3626 
 Attention: General Counsel 

 ASSIGNMENT FORM 

To assign this Note, fill in the form below: 
  

			
	 (I) or (we) assign and transfer this
	 	  

                        

  

			
	Note to:	 	  

	
                    (Insert assignee’s
legal name)

	  

	
                    (Insert assignee’s
soc. sec. or tax I.D. no.)

	  

	  

	  

	
                    (Print or type
assignee’s name, address and zip code)

  

			
	and irrevocably appoint 	 	  

                         
                
 to transfer this Note on the books of the
Company. The agent may substitute another to act for him. 

Date:                  
                                         
                                         
                                         
                                         
                                  

 

	
	 Your Signature:
  

	 (Sign exactly as your name appears on the
 face of this Note)

 Signature Guarantee*: 
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

 OPTION OF HOLDER TO ELECT PURCHASE 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.11 or 4.19 of the Indenture, check the
appropriate box below: 
  ̈ Section 4.11
             ̈ Section 4.19 
 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.11 or Section 4.19 of the Indenture, state the amount you elect to have purchased: 

$         
 Date:
                                        
 
  

			
	Your Signature:	 	                             
                                         
   
	
(Sign exactly as your name appears on the face of this Note)

Tax Identification No.:

  

					
	 Signature Guarantee*:
	 	
                        
                                         
      
	 	

  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a
part of another Global Note or Definitive Note for an interest in this Global Note, have been made: 
  

							
	 Date of Exchange
	  	Amount of Decrease in
Principal
Amount at
Maturity of this Global
Note	  	Amount of Increase
in Principal 
Amount
at Maturity of this
Global Note	  	Principal Amount
Maturity of 
this Global
Following such Decrease
(or Increase)

 NOTATION OF GUARANTEE 

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, fully and
unconditionally and irrevocably guaranteed, to the extent set forth in the Indenture, dated as of April 25, 2012 (the “Indenture”), among Resolute Energy Corporation, a Delaware corporation (the “Company”), the
Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), and subject to the provisions in the Indenture, (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as
defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York. 
  

			
	 RESOLUTE NATURAL RESOURCES COMPANY,
 LLC., a Delaware limited liability company

		
	By: 	 	 
		 	 Name:

Title:

	
	WYNR, LLC, a Delaware limited liability company
		
	By: 	 	 
		 	 Name:

Title:

	
	BWNR, LLC, a Delaware limited liability company
		
	By: 	 	 
		 	 Name:

Title:

	
	RESOLUTE WYOMING, INC., a Delaware corporation
		
	By: 	 	 
		 	 Name:

Title:

	
	HICKS ACQUISITION COMPANY I, INC., a Delaware corporation
		
	By: 	 	 
		 	 Name:

Title:

 
			
	RESOLUTE ANETH, LLC, a Delaware limited liability company
		
	By:	 	 
		 	 Name:

Title:

	
	RESOLUTE NORTHERN ROCKIES, LLC, a Delaware limited liability company
		
	By:	 	 
		 	 Name:

Title:

	
	RESOLUTE NATURAL RESOURCES SOUTHWEST, LLC, a Delaware limited liability company
		
	By:	 	 
		 	 Name:

Title:Form of Forbearance, Limited Waiver and Consent under Loan and Security

 Exhibit 10.1 
 FORBEARANCE, LIMITED WAIVER AND CONSENT 
 UNDER 

LOAN AND SECURITY AGREEMENT 
 THIS FORBEARANCE, LIMITED WAIVER AND CONSENT UNDER LOAN AND
SECURITY AGREEMENT (“Forbearance”) is entered into this 21st day of August, 2012 (the “Forbearance Effective Date”), by and between ISC8, Inc., formerly
known as Irvine Sensors Corporation, a Delaware corporation with its principal place of business at 3001 Red Hill Ave., Bldg. 4/108, Costa Mesa, Orange County, CA 92926 (“Borrower”) and PARTNERS FOR
GROWTH III, L.P. (“PFG”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below). 

RECITALS 
 A. Borrower and PFG have entered into that certain Loan and Security Agreement dated as of December 14, 2011 (the “Loan Agreement Effective Date”), as may be amended
from time to time (the “Loan Agreement,” and together with such documents, instruments and security agreements as were executed reasonably contemporaneously with or in connection with the Loan Agreement, the
“Loan Documents”), pursuant to which PFG extended loans to Borrower, of which $5,000,000 in principal Obligations are outstanding and unpaid on the date hereof. 

B. Borrower is in default under the Loan Agreement for failing to comply with Section 5.1 of the Loan Agreement and the
Minimum Liquidity Financial Covenant set forth in Section 5 of the Schedule for the reporting period ending July 31, 2012 (the “Existing Default”). 

C. Borrower has further notified PFG that it will not be able to comply with the Financial Covenant referred to in Recital B for
the reporting period ending August 30, 2012 (the “Prospective Default” and, together with the Existing Default, the “Specified Defaults”). 

D. Borrower has further requested PFG’s consent to: (a) the acquisition of certain assets of Bivio Networks, Inc. (the
“Bivio Acquisition”); (b) the issuance, as part of the Bivio Acquisition, of shares of common stock of the Company (the “Bivio Issuance”); (c) the conversion and/or redemption of up to Four
Million Dollars ($4,000,000) of the 12% Senior Subordinated Promissory Notes of the Company (the 12% Senior Subordinated Promissory Notes, the “Subordinated Notes” and such transaction, the “Note
Redemption”); and (d) the issuance, in one or more capital raising transactions, of up to Two Hundred Fifty Million (250,000,000) shares of common stock of the Company (the “Raise Issuance”) ((a) though
(d), the “Consent Transactions”). 
 E. The parties wish to state the conditions under which PFG
will (i) waive the Specified Defaults, (ii) not declare an Event of Default due to the Specified Defaults, (iii) not commence the exercise of remedies under the Loan Documents with respect to the Specified Defaults (clauses
(ii) and (iii), collectively, to “Forbear”). 

 F. Borrower (a) acknowledges that the Specified Defaults have occurred and are
continuing, (b) desires that PFG waive the Specified Defaults, (c) desires that PFG Forbear for the duration of the Forbearance Period, (d) desires that PFG provide its consent to the matters described in Recital D. 

G. Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this
Forbearance, including without limitation, Borrower’s compliance with the conditions set forth in Section 6, PFG is willing to waive the Specified Defaults, to Forbear as set forth herein and to give its consent on the basis set forth
herein to the Consent Transactions. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the foregoing Recitals, incorporated by reference herein, and intending to be legally bound, the parties hereto agree as follows: 

1. EVENT OF DEFAULT. Borrower acknowledges the Existing Default
and Prospective Default. 
 2. FORBEARANCE, CONDITIONAL WAIVER
AND CONSENTS. 
 (a) Forbearance by PFG. 

(i) Forbearance by PFG. In consideration of, among other things, Borrower’s compliance with each and every term of this
Forbearance, PFG hereby agrees to forbear from exercising its rights and remedies as a result of the Specified Defaults until the earliest to occur of (i) a Default or an Event of Default under the Loan Agreement (with the sole exception of the
Specified Defaults), (ii) the failure of Borrower to promptly, punctually, or faithfully perform or comply with any term or condition of this Forbearance as and when required, it being expressly acknowledged and agreed that TIME IS OF THE
ESSENCE, and (iii) 5:00 p.m. (San Francisco, California time) on September 30, 2012 (the period commencing as of the date of the effectiveness of this Forbearance and ending on the earliest of (i), (ii) and (iii) above shall be
referred to as the “Forbearance Period”) 
 (ii) Conduct During Forbearance Period. At all times
during the Forbearance Period, Borrower shall comply with all terms and conditions of the Loan Agreement and the other Loan Documents including, without limitation, all representations, warranties, affirmative and negative covenants contained in the
Loan Agreement and other Loan Documents. During the Forbearance Period, Borrower shall continue to remit all regularly scheduled payments (whether due on account of any Loan or otherwise, including all principal, interest, fees, costs and other
amounts) which may become due under the Loan Agreement, as and when such payments are due. 
 (b) Conditional Limited
Waiver. PFG hereby gives the conditional limited waivers of the Specified Defaults as set forth in Section 5 hereof. 

(c) Consents. PFG hereby gives its consent to the Consent Transactions subject to the terms and conditions specified below.

 (i) Bivio Acquisition. PFG consents to the Bivio Acquisition in all material respects
as represented to PFG by Borrower, as described in Exhibit A hereto, Slide No. 4. 
 (ii) Bivio Issuance. PFG
consents to the Bivio Issuance in all material respects as represented to PFG by Borrower, as described in Exhibit A hereto, Slide No. 4. 
 (iii) Note Redemption. PFG consents to the conversion into Borrower equity (without dollar limit) of the Subordinated Notes in accordance with the terms thereof. PFG consents to the redemption of
up to $2,000,000 in Subordinated Notes so long as: (A) no Default or Event of Default has occurred and is continuing at the time of such redemption (other than the Specified Defaults), (B) no Default or Event of Default would result from
the redemption (e.g., due to Borrower non-compliance with financial covenants on a post-redemption basis), and (C) Borrower shall have received not less than $10,000,000 in proceeds of the Raise Issuance (as defined in clause (iv), below.

 (iv) Raise Issuance. PFG consents to the sale in one or more capital raising transactions of up to 250,000,000 shares
of Borrower common stock, in all material respects as represented to PFG by Borrower, as described in Exhibit A hereto, Slide No. 21. 

The foregoing consents shall be limited precisely as written and shall not be deemed to be a consent to any transaction other than the transaction(s)
specified herein and only to the extent given, or to any future amendment or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions
thereof; provided, however, PFG further gives its consent to any and all other actions reasonably necessary and commercially appropriate to effect the Consent Transactions, as specified, so long as in each instance, such further actions are in
spirit, substance, scope and intent, consistent with the Consent Transactions as disclosed to PFG. 
 3.
BORROWER’ REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that as of the Forbearance Effective Date: 

(a) immediately upon giving effect to this Forbearance (i) the representations and warranties contained in the Loan Documents are
true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Default or
Event of Default has occurred and is continuing, other than the Specified Defaults; 
 (b) Borrower has the corporate power and
authority to execute and deliver this Forbearance and to perform its obligations under the Loan Agreement, as amended by this Forbearance; 
 (c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to PFG on the effective date of the Loan Agreement remain true, accurate and complete and have not
been amended, supplemented or restated and are and continue to be in full force and effect; 

 (d) the execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement has been duly authorized by all necessary corporate action on the part of Borrower; 
 (e) this Forbearance has been duly executed and delivered by Borrower and constitutes the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; 

(f) as of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations and it has no claims of
any kind against PFG. Borrower acknowledges that PFG has acted in good faith and has conducted in a commercially reasonable manner its relationship with Borrower in connection with this Forbearance and in connection with the Loan Documents; and

 (g) the information set forth in the Representations, as may updated by Borrower (as it deems required) and delivered to PFG
on or prior to the date hereof, continues to be true, correct, accurate and complete. 
 Borrower understands and acknowledges
that PFG is entering into this Forbearance in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate. 

4. RELEASE. Borrower hereby forever relieves, releases, and discharges PFG and its present or former
employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type,
kind, nature, description or character, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner connected with or related to facts, circumstances, issues, controversies or claims existing or
arising from the beginning of time through and including the date of execution of this Forbearance (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall include any and all liabilities or
claims (except for those arising from gross negligence or intentional misconduct in relation to any confidentiality obligations PFG may have in respect of Borrower) arising out of or in any manner connected with or related to the Loan Documents, the
Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing. In furtherance of this release,
Borrower expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code, which provides as follows: “A general release does not extend to claims which the creditor does not know or expect to exist in
his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” By entering into this release, Borrower recognizes that no facts or representations are
ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of Borrower hereby to fully, finally and forever settle and release all
matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower should 

 
subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled to set aside
this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances. Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by PFG with respect to the
facts underlying this release or with regard to any of such party’s rights or asserted rights. This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that the release contained herein constitutes a material inducement to PFG to enter into this Forbearance, and that PFG would not have done so but for
PFG’s expectation that such release is valid and enforceable in all events. Borrower hereby represents and warrants to PFG, and PFG is relying thereon, as follows: (i) except as expressly stated in this Forbearance, neither PFG nor any
agent, employee or representative of PFG has made any statement or representation to any Borrower regarding any fact relied upon by any Borrower in entering into this Forbearance; (ii) Borrower has made such investigation of the facts
pertaining to this Forbearance and all of the matters appertaining thereto, as it deems necessary; (iii) the terms of this Forbearance are contractual and not a mere recital; (iv) this Forbearance has been carefully read by Borrower, the
contents hereof are known and understood by Borrower, and this Forbearance is signed freely, and without duress, by Borrower; (v) Borrower represents and warrants that it is the sole and lawful owner of all right, title and interest in and to
every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Borrower shall
indemnify PFG, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein. 

5. LIMITED WAIVER OF SPECIFIED
DEFAULTS. The limited waivers given in this Forbearance shall be limited precisely as written and shall not be deemed (a) to be a forbearance, waiver or modification of any other term or condition of the Loan
Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which PFG may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to
therein; (b) to be a consent to any future amendment or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof; or
(c) to limit or impair PFG’s right to demand strict performance of all terms and covenants as of any date, subject to this Forbearance. Notwithstanding the foregoing, PFG shall not be entitled to charge interest at the Default Rate with
respect to any Specified Defaults from the occurrence of such Specified Default through the last day of the Forbearance Period, unless due to the failure of any condition set forth in Section 6 and in such event, only prospectively from
the date of such failure (unless a Default other than the Specified Defaults has occurred as of the Forbearance Effective Date and in such case, the Default Rate may be charged as of the date of such Default). The Loan Agreement, as amended, shall
continue in full force and effect, and all waivers and accommodations granted herein and specified to apply for the duration of the Forbearance Period shall expire upon the expiry of the Forbearance Period; provided, however, if after the date
hereof no Default or Event of Default has occurred and is continuing under the Loan Agreement, other than the Specified Defaults, and Borrower timely satisfies the conditions set forth in Section 6, PFG shall be deemed to have irrevocably
waived the Specified Default and, for all purposes and at all times thereafter, such Specified Defaults shall be deemed to never have occurred. 

 6. EFFECTIVENESS. Subject to the satisfaction of
the conditions set forth below (whether performance is required on or after the date hereof), this Forbearance shall become effective on the date hereof, but shall continue to be subject to the satisfaction of all the following conditions:

 6.1 No Default Other than the Specified Defaults. The Specified Defaults shall be the only Defaults that have occurred
and are continuing during the Forbearance Period. 
 6.2 Execution and Delivery. Borrower shall have duly executed and
delivered this Forbearance to PFG on or before August 30, 2012. 
 6.3 Payment of PFG Expenses. Borrower shall pay
upon demand all PFG Expenses (including all reasonable attorneys’ fees and reasonable expenses) incurred in connection with this Forbearance. 
 6.4 Forbearance Fee. Borrower shall have paid PFG on or before the date referred to in Section 6.2 a non-refundable Forbearance Fee equal to $30,000 which Forbearance Fee shall be exclusive of
PFG Expenses. 
 6.5 Adjustment to Outstanding Warrants. To the extent that Borrower, in connection with any of the
Consent Transactions or otherwise, issues securities (by sale, conversion or otherwise) at an “effective” price per share less than the Exchange Price of Warrant Stock under the Warrants issued to PFG and its designees on the Loan
Agreement Effective Date (the “Original Warrants”), the Exchange Price under the Warrants shall be adjusted to such lesser price per share. For purposes hereof, the “effective” price shall, in the case of securities
issued with attached rights or other securities, including derivative securities, be the price reflecting the true value of the underlying security without accounting for any value associated with such other attached rights or other securities.

 6.6 New Warrant. In consideration of the forbearance, waivers and consents granted by PFG herein, Borrower shall issue
PFG (and its designees, as directed by PFG) a warrant to purchase $225,000 of the securities issued in (i) the transaction described in Section 2(c)(iv) hereof at the effective (as defined above) issue price in such transaction, in all
material respects in similar form to the Original Warrants, or (ii) if the foregoing transaction is not consummated, in such other equity financing as is consummated by Borrower (the securities issued in the transactions described in clauses
(i) and (ii), “Next Equity Financing Securities”). If no Next Equity Financing Securities are issued by December 31, 2012, PFG, at its option, may require a Warrant to be issued for Borrower’s common stock at
the same strike price as the then-current strike price of the Original Warrants. 
 For the avoidance of doubt, the failure of any of the
foregoing conditions shall result in the termination of PFG’s conditional agreement to Forbear and to waive the Specified Defaults. 
 7. COUNTERPARTS. This Forbearance may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as
if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Forbearance. 

 8. INTEGRATION; CONSTRUCTION.
This Forbearance, the Loan Agreement, the other Loan Documents and any documents executed in connection herewith or therewith or pursuant hereto or thereto contain the entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Forbearance;
except that any financing statements or other agreements or instruments filed by PFG with respect to Borrower shall remain in full force and effect. The title of this Agreement and section headings are for the readers’ convenience only and
shall be ignored for purposes of integration into the Loan Agreement. The term “Schedule” means the Schedule to the Loan Agreement. Quotation marks, if any, around modifications to the Loan Agreement are for the convenience of reading only
and are not to be construed substantively. The General Provisions set forth in Section 9 of the Loan Agreement are incorporated herein by reference. 
 9. GOVERNING LAW; VENUE. THIS FORBEARANCE SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA. Borrower and PFG each submit to the exclusive jurisdiction of the State and Federal courts in San Francisco County, California. 
 [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, the parties hereto have caused this Forbearance to be executed as of the
date first written above. 
  

							
	    BORROWER:	 		 	ISC8, INC.
		 		 	a Delaware corporation
				
		 		 	By:	 	 /s/ Bill Joll

		 		 	Printed Name:	 	 Bill Joll

		 		 	Title:	 	 President & CEO

			
	    PFG:	 		 	PARTNERS FOR GROWTH III, L.P.
				
		 		 	By:	 	 /s/ Andrew Kahn

		 		 	Printed Name:	 	 Andrew Kahn

		 		 	Title:	 	Manager, Partners for Growth III, LLC,
		 		 		 	its General Partner

 Exhibit A 
 Consent Transactions Presentation

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00207-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00207-of-00352.parquet"}]]