Document:

Loan and Security Agreement

 Exhibit 10.1 
 Execution Copy 
 Partners for Growth 

Loan and Security Agreement 
  

			
	Borrower:	  	Irvine Sensors Corporation, a Delaware corporation
	Address:	  	3001 Red Hill Ave., Bldg. 4/108, Costa Mesa, Orange County, CA 92926
		
	Date:	  	December 14, 2011

 THIS LOAN AND SECURITY AGREEMENT (“Agreement”) is entered into on the above date (the “Effective
Date”) between PARTNERS FOR GROWTH III, L.P. (“PFG”), whose address is 150 Pacific Avenue, San Francisco, CA 94111 and the borrower(s) named above (jointly and severally, “Borrower”), whose chief executive office is located
at the above address (“Borrower’s Address”). The Schedule to this Agreement (the “Schedule”) being signed by the parties concurrently, is an integral part of this Agreement. (Definitions of certain terms used in this
Agreement are set forth in Section 8 below.) 
 1. LOANS. 

1.1 Loans. PFG will make loans to Borrower (the “Loans”) up to the amounts (the “Credit Limit”) shown on
the Schedule, provided no Default or Event of Default has occurred and is continuing. 
 1.2 Interest. All Loans
and all other monetary Obligations shall bear interest at the rates shown on the Schedule, except where expressly set forth to the contrary in this Agreement. Interest shall be payable monthly, on the first Business Day of each month for interest
accrued during the prior month. Overdue interest and other overdue monetary Obligations may, in PFG’s discretion, be charged to Borrower’s loan account, and the same shall thereafter bear interest at the same rate as the other Loans.

 1.3 Overadvances. If, at any time or for any reason, the total of all outstanding Loans and all other monetary
Obligations exceeds the Credit Limit (such excess amount, an “Overadvance”), Borrower shall pay the amount of such Overadvance to PFG within one (1) Business Day from PFG notice or Knowledge thereof (the “Overadvance Due
Date”). Without limiting Borrower’s obligation to repay to PFG the amount of any Overadvance, Borrower agrees to pay PFG interest on the outstanding amount of any Overadvance not repaid prior to the expiry of such Overadvance Due Date at
the Default Rate. 
 1.4 Fees. Borrower shall pay PFG the fees shown on the Schedule, which are in addition to all
interest and other sums payable to PFG and are not refundable. 
 1.5 Loan Requests. To obtain a Loan, Borrower
shall make a Qualifying Request to PFG by facsimile or telephone. Loan requests may also be made by Borrower by email, but the same shall not be deemed made until PFG acknowledges receipt of the same by email or otherwise in writing. Loan requests
received after 12:00 Noon Pacific time will not be considered to have been received by PFG until the next Business Day and PFG shall use reasonable commercial efforts to fund a Qualifying Request within one Business Day after such deemed receipt and
shall, in any event, fund a Qualifying Request within five Business Days after such deemed receipt. 
 1.6 Late
Fee. If any payment of accrued interest for any month is not made within three business days after the later of the date a bill therefor is sent by PFG or three business days after the due date therefor, or if any payment of principal or any
other payment is not made within three Business Days after the date due, then Borrower shall pay PFG a late payment fee equal to 5% of the amount of any and all such delinquent monetary Obligations then outstanding (excluding for the avoidance of
doubt, Non-Overdue Monetary Obligations) in the first three instances of such late payment and in the fourth such instance of late payment and thereafter, 10% of the amount of such overdue monetary Obligations; provided, however, that the relevant
percentage of late payment charge shall not be applied in such as fashion as to result in additional interest being due on the interest component of late fees previously charged. The provisions of this paragraph shall not be construed as PFG’s
consent to Borrower’s failure to pay any amounts when due, and PFG’s acceptance of any such late payments shall not restrict PFG’s exercise of any remedies arising out of any such failure. 

 2. SECURITY INTEREST. 
 2.1 Grant of Security Interest. To secure the payment and performance of all of the Obligations when due, Borrower hereby grants to PFG a continuing security interest in, and pledges to PFG,
all of the following (collectively, the “Collateral”): all right, title and interest of Borrower in and to all of the following, whether now owned or hereafter arising or acquired and wherever located: all Accounts; all Inventory; all
Equipment; all Deposit Accounts; all General Intangibles (including without limitation all Intellectual Property); all Investment Property; all Other Property; and any and all claims, rights and interests in any of the above, and all guaranties and
security for any of the above, and all substitutions and replacements for, additions, accessions, attachments, accessories, and improvements to, and proceeds (including proceeds of any insurance policies, proceeds of proceeds and claims against
third parties) of, any and all of the above, and all Borrower’s books relating to any and all of the above; provided that (i) with respect to any Trademarks, applications in the United States Patent and Trademark Office to register
Trademarks or service marks on the basis of the Company’s “intent to use” such Trademarks or service marks will not be deemed to be Collateral unless and until a “Statement of Use” or “Amendment to Allege Use” has
been filed and accepted in the United States Patent and Trademark Office, whereupon such application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral and (ii) for the sake of
clarity, the PFG acknowledges and agrees that Collateral does not include the interests owned by Optics 1, Inc. in certain Intellectual Property that is co-owned by Optics 1, Inc. and Borrower. Borrower hereby authorizes PFG to file financing
statements, without notice to Borrower, with all appropriate jurisdictions in order to perfect or protect PFG’s interests or rights hereunder, which financing statements may show the Collateral as “all assets of Debtor” or words of
similar effect, or as being of equal or lesser scope, or with greater detail, all in PFG’s discretion. 

2.2. Release. Upon any sale or other transfer by Borrower of any Collateral pursuant to a Permitted
Disposition, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 9.11 hereof, the security interest in such Collateral shall be automatically released. In
connection with any release of Collateral, PFG shall execute and deliver to Borrower, at Borrower’s expense, all documents that Borrower shall reasonably request to evidence such release. 

3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER. 
 In order to induce PFG to enter into this Agreement and to make Loans, Borrower represents and warrants to PFG as follows, and Borrower covenants that the following representations will continue to be
true, and that Borrower will at all times comply with all of the following covenants, throughout the term of this Agreement and thereafter until all Obligations have been paid and performed in full: 

3.1 Corporate Existence and Authority. Borrower is and will continue to be, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Borrower is and will continue to be qualified and will have all Governmental Authorizations required to do business in all jurisdictions in which any failure to do so would result in
a Material Adverse Change. The execution, delivery and performance by Borrower of this Agreement, and all other documents contemplated hereby (i) have been duly and validly authorized, (ii) are enforceable against Borrower in accordance
with their terms (except as enforcement may be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors’ rights generally), (iii) do not violate Borrower’s
Constitutional Documents, (iv) do not violate in any material respect any Legal Requirement or any material agreement or instrument of Borrower or relating to its property, and (v) do not constitute grounds for acceleration of any material
indebtedness or obligation under any agreement or instrument to which Borrower or its property is subject. 
 3.2 Name;
Trade Names and Styles. As of the date hereof, the name of Borrower set forth in the heading to this Agreement is its correct name, as set forth in its Constitutional Documents. Listed in the Representations are all prior names of Borrower
and all of Borrower’s present and prior trade names as of the date hereof. Borrower shall give PFG 30 days’ prior written notice before changing its name or doing business under any other name. 

3.3 Place of Business; Location of Collateral. As of the date hereof, the address set forth in the heading to this
Agreement is Borrower’s chief executive office. In addition, as of the date hereof, Borrower has places of business and Collateral is located only at the locations set forth in the Representations. Borrower will give PFG at least 30 days prior
written notice before opening any additional place of business, changing its chief executive office, or moving any of the Collateral (other than delivery of inventory in the ordinary course of business to third party contractors for processing and
sales of inventory in the ordinary course of business or as otherwise expressly permitted hereunder) to a location other than Borrower’s Address or one of the locations set forth in the Representations, except that Borrower may maintain sales
offices in the ordinary course of business at which not more than a total of $10,000 fair market value of Equipment is located. 

  
 -2-

 3.4 Title to Collateral; Perfection; Permitted Liens. 

(a) Borrower is now, and will at all times in the future be, the sole owner of all the Collateral, except for items of Equipment which are
leased to Borrower. The Collateral now is and will remain free and clear of any and all Liens, except for Permitted Liens. For Collateral in which a security interest may be perfected by the filing of a UCC financing statement, upon the filing a UCC
financing statement in Borrower’s jurisdiction of organization and, in the case of Intellectual Property with respect to which a security interest may be perfected by filing, recording or registration in the United States, upon recording of
Intellectual Property security documents, and in other Collateral in which a security interest is otherwise perfected, PFG now has, and will continue to have, a First-Priority perfected and enforceable security interest in all of the Collateral,
subject only to the Permitted Liens, and Borrower will at all times defend PFG and the Collateral against all claims of others. 

(b) Borrower has set forth in the Representations all of Borrower’s Deposit Accounts as of the date hereof, and Borrower will give
PFG five Business Days advance written notice before establishing any new Deposit Accounts and will cause the institution where any such new Deposit Account is maintained to execute and deliver to PFG a Control Agreement in form reasonably
satisfactory to PFG and legally sufficient to perfect PFG’s security interest in such Deposit Account. 
 (c) In the event
that Borrower shall at any time after the date hereof have any commercial tort claims against others, which it is asserting, and in which the potential recovery exceeds $100,000, Borrower shall promptly notify PFG thereof in writing and provide PFG
with such information regarding the same as PFG shall request (unless providing such information would waive the Borrower’s attorney-client privilege). Such notification to PFG shall constitute a grant of a security interest in the commercial
tort claim and all proceeds thereof to PFG, and Borrower shall execute and deliver all such documents and take all such actions as PFG shall request to perfect PFG’s security interest therein. 

(d) None of the Collateral now is or will be affixed to any real property in such a manner, or with such intent, as to become a fixture,
unless specified in Exhibit A. Except as specified in Exhibit A, Borrower is not and, without a Landlord Consent in favor of PFG, will not (without PFG’s consent), become a lessee under any real property lease pursuant to which
the lessor may obtain any rights in any Collateral senior to the rights of PFG in such Collateral (other than immovable fixtures and tenant improvements financed by the lessor and Collateral with an aggregate value not in excess of $50,000) and,
except as specified in Exhibit A, no such lease now prohibits, restrains, impairs or will prohibit, restrain or impair Borrower’s right to remove any such Collateral from the leased premises. Whenever any Collateral is located upon
premises in which any third party has an interest, Borrower shall, whenever requested by PFG, use commercially reasonable efforts to cause such third party to execute and deliver to PFG, in form reasonably acceptable to PFG, a Landlord Consent or
such other waivers and subordinations as PFG shall specify in its good faith business judgment. Borrower will keep in full force and effect, and will comply with all material terms of, any lease of real property where any of the Collateral now or in
the future may be located, except to the extent that such failure to do so would not result in a Material Adverse Change. 

3.5 Maintenance of Collateral. Borrower will maintain the Collateral in good working condition (ordinary wear and tear and
casualty excepted), and Borrower will not use the Collateral for any unlawful purpose. Borrower will promptly advise PFG in writing of any material loss or damage to the Collateral. 

3.6 Books and Records. Borrower has maintained and will maintain at Borrower’s Address complete and accurate books and
records, comprising an accounting system in accordance with GAAP. 
 3.7 Financial Condition, Statements and
Reports. All Financial Statements now or in the future delivered to PFG have been, and will be, prepared in conformity with GAAP and now and in the future will fairly present the results of operations and financial condition of Borrower in
all material respects, in accordance with GAAP, at the times and for the periods therein stated. Between the last date covered by any such statement provided to PFG and the date hereof, there has been no Material Adverse Change. 

3.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed, and will timely file, all required
Non-trivial Tax Returns, and Borrower has timely paid, and will timely pay, all Non-trivial Taxes now or in the future owed by Borrower. Borrower may, however, defer payment of any of the foregoing which are contested by Borrower in good faith,
provided that Borrower (i) contests the same by appropriate proceedings promptly and diligently instituted and conducted, (ii) notifies PFG in writing of the commencement of, and any material development in, the proceedings, and
(iii) posts bonds or takes all other steps required to stay the enforcement of any such Lien upon any of the Collateral. As of the Effective Date, Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior Tax
years which could result in additional Taxes becoming due and payable by Borrower. Borrower has paid, and shall continue to pay all amounts necessary to fund all present and future pension, profit sharing and deferred compensation plans in
accordance with their terms, and Borrower has not and will not withdraw from participation in, permit partial or complete termination of, or permit 

  
 -3-

 
the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other governmental agency. 
 3.9 Compliance with Law. Borrower has, to the
best of its knowledge, complied, and will comply, in all material respects, with all material Legal Requirements, including, but not limited to, those relating to Borrower’s ownership of real or personal property, the conduct and licensing of
Borrower’s business, and all environmental matters. 
 3.10 Litigation. There is no claim, suit, litigation,
proceeding or investigation pending or (to best of Borrower’s knowledge) threatened against or affecting Borrower in any court or before any governmental agency (or any basis therefor known to Borrower) which could reasonably be expected to
result, either separately or in the aggregate, in any Material Adverse Change. Borrower will promptly inform PFG in writing of any claim, proceeding, litigation or investigation in the future threatened in writing or instituted against Borrower
involving aggregate claims of $100,000 or more. 
 3.11 Use of Proceeds. Proceeds of all Loans shall be used as
set forth in the Schedule. No part of the proceeds of any Loan will be used to purchase or carry any “margin stock” or to extend credit to others for the purpose of purchasing or carrying any “margin stock” (as defined in
Regulation U of the Board of Governors of the Federal Reserve System. 
 3.12 No Default. At the date hereof, no
Default or Event of Default has occurred, and no Default or Event of Default will have occurred after giving effect to any Loans being made concurrently herewith. 
 3.13 Protection and Registration of Intellectual Property Rights. Borrower owns or otherwise hold the right to use all intellectual property rights, including, without
limitation, all patents, copyrights, trademarks, Domain Rights (as defined below), trade secrets and computer software, necessary for the conduct of its business as conducted on the date hereof. Borrower shall: (a) protect, defend and maintain
the validity and enforceability of its intellectual property, other than intellectual property that is not material to Borrower’s business and that Borrower has determined not to maintain or to abandon; (b) promptly advise PFG in writing
of material infringements of its intellectual property; and (c) not allow any intellectual property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without PFG’s written consent. If, before the
Obligations have been paid and/or performed in full, Borrower shall (i) adopt, use, acquire or apply for registration of any trademark, service mark or trade name, (ii) apply for registration of any patent or obtain any patent or patent
application; (iii) create or acquire any published or material unpublished works of authorship material to the business that is or is to be registered with the U.S. Copyright Office or any non-U.S. equivalent; or (iv) register or acquire
any domain name or domain name rights, then the provisions of Section 2.1 shall automatically apply thereto, and within 20 days after the end of each calendar month, Borrower shall give PFG written notice of any such acquisition, creation,
application or registration occurring during the prior calendar month. Borrower shall further provide PFG with all information and details relating to the foregoing and take such further actions as PFG may reasonably request from time to time to
enable PFG to perfect or continue the perfection of PFG’s interest in such Collateral. 
 3.14 Domain Rights and
Related Matters. Borrower (a) is the sole record, legal and beneficial owner of all domain names and domain name rights that are material to the conduct of Borrower’s business (and that of its Subsidiaries), free and clear of any
rights or claims of any third party; (b) the information provided in the Representations with respect to domain names and ownership thereof, domain registry, domain servers, location and administrative contact information, web hosting and
related services and facilities (collectively, “Domain Rights”) is true, accurate and complete as of the date hereof and Borrower shall promptly notify PFG of any changes to such information; (c) shall maintain all Domain Rights,
other than Domain Rights that Borrower has affirmatively determined to not maintain, in full force and effect so long as any Obligations remain outstanding; (d) shall, upon request of PFG, notify such third parties (including domain registrars,
hosting companies and internet service providers) of PFG’s security interest in Borrower’s Domain Rights; and (e) promptly advise PFG in writing of any Non-trivial disputes or infringements of its Domain Rights. 

4. ACCOUNTS. 

4.1 Documents Relating to Accounts. If requested by PFG, Borrower shall furnish PFG with copies (or, at PFG’s
reasonable request, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave
rise to such Accounts, and Borrower warrants the genuineness of all of the foregoing. Borrower shall also furnish to PFG an aged accounts receivable trial balance as provided in the Schedule. In addition, Borrower shall deliver to PFG, on its
request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary endorsements, and copies of all credit
memos. 

  
 -4-

 4.2 Collection of Accounts. Borrower shall have the right to collect all
Accounts, unless and until an Event of Default has occurred and is continuing. At any time thereafter, PFG may, in its sole business judgment, require that all proceeds of Collateral be deposited by Borrower into a lockbox account, or such other
“blocked account” as PFG may specify, pursuant to a blocked account agreement in form reasonably acceptable to PFG. 

4.3. Remittance of Proceeds. All proceeds arising from the disposition of any Collateral shall be delivered, in kind, by
Borrower to PFG in the original form in which received by Borrower not later than the following three (3) Business Days after receipt by Borrower, to be applied to the Obligations in such order as PFG shall determine; provided, however, if no
Default or Event of Default has occurred and is then continuing: 
 (a) Borrower shall not be obligated to remit to PFG:

 (i) the proceeds of Accounts arising in the ordinary course of business; 

(ii) the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction
for an aggregate purchase price of $25,000 or less (for all such transactions in any fiscal year); 
 (iii) the proceeds of sales
of Inventory in the ordinary course of business; 
 (iv) the proceeds of the sale of Permitted Investments, so long as such
proceeds are promptly reinvested in other Permitted Investments; or 
 (v) the proceeds of the sale of the Thermal Business;

 Any of the proceeds set forth in clauses (a)(i) through (v) that are remitted to PG during a Default or
Event of Default, if not used to repay Obligations, shall be returned to Borrower if such Default or Event of Default is cured or waived by PFG. 
 (b) as to the proceeds of the sale(s) of Non-Core Intellectual Property, Borrower may (A) use all such proceeds to repay Obligations (or, if such proceeds exceed all monetary Obligations, such excess
may be applied in accordance with the following clauses (B), (C) or (D)), (B) direct such proceeds into a blocked Deposit Account in respect of which there is a Control Agreement in favor of PFG, (C) pay such proceeds to PFG to be
held by PFG as a non-interest-bearing deposit securing Obligations, or (D) retain such proceeds, but with the effect that the Credit Limit specified in Section 1 of the Schedule is permanently reduced by the amount of the proceeds
retained; 
 Borrower agrees that it will not commingle proceeds of Collateral (other than those described in subclauses (a)(i)
through (v), above) with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for PFG, except as set forth above. PFG may, in its good faith
business judgment, require that all proceeds of Collateral be deposited by Borrower into a lockbox account, or such other “blocked account” as PFG may specify, pursuant to a blocked account agreement in such form as PFG may specify in its
good faith business judgment. Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement. 
 5. ADDITIONAL DUTIES AND COVENANTS OF BORROWER. 
 Borrower will at
all times comply with all of the following covenants throughout the term of this Agreement: 
 5.1 Financial and Other
Covenants. Borrower shall at all times comply with the financial and other covenants set forth in the Schedule. 

5.2 Insurance. Borrower shall, at all times insure all of the tangible personal property Collateral and carry such other
business insurance in such form and amounts as are customary and in accordance with standard practices for Borrower’s industry and locations, and Borrower shall provide evidence of such insurance to PFG. All such insurance policies shall name
or include an endorsement showing PFG as an additional loss payee, and shall contain a lenders loss payee endorsement in form reasonably acceptable to PFG. Upon receipt of the proceeds of any such insurance, PFG shall apply such proceeds in
reduction of the Obligations as PFG shall determine in its good faith business judgment, except that, provided no Default or Event of Default has occurred and is continuing, PFG shall release to Borrower insurance proceeds with respect to Equipment
totaling less than $250,000, which may be used for any lawful purpose. PFG may require reasonable assurance that the insurance proceeds so released will be so used. If Borrower fails to provide or pay for any insurance, PFG may, but is not obligated
to, obtain the same at Borrower’s expense. Borrower shall promptly deliver to PFG copies of all material reports made to insurance companies. 
 5.3 Reports. Borrower, at its expense, shall provide PFG with the written reports set forth in the Schedule, and such other written reports with respect to Borrower (including budgets,
projections, operating plans and other financial documentation), as PFG shall reasonably request. 

  
 -5-

 5.4 Access to Collateral, Books and Records. At reasonable times, and on three
(3) Business Days’ notice, PFG, or its agents, shall have the right to inspect the Collateral, and the right to audit and copy Borrower’s books and records. The foregoing inspections and audits shall be at Borrower’s expense and
the charge therefor shall be $850 per person per day (or such higher amount as shall represent PFG’s then current standard charge for the same), plus reasonable expenses; provided however, unless a Default or Event of Default has occurred and
is continuing, Borrower shall be only be required to pay for one such inspection and one such audit during each year. Notwithstanding the foregoing, Borrower shall not be required to disclose to PFG any document or information (i) where
disclosure is prohibited by applicable law or any agreement binding on Borrower, or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product. If Borrower is withholding any information under the preceding
sentence, it shall so advise PFG in writing, giving PFG a general description of the nature of the information withheld. 

5.5 Negative Covenants. Except as may be permitted in the Schedule, Borrower shall not, without PFG’s prior written
consent (which shall be a matter of its good faith business judgment and shall be conditioned on Borrower then being in compliance with the terms of this Agreement), do any of the following: 

(i) permit or suffer any Change in Control; 
 (ii) acquire any assets, except in the ordinary course of business, or make any Investments other than Permitted Investments; 
 (iii) enter into any other transaction outside the ordinary course of business other than a transaction (which might otherwise be out of the ordinary course of business) expressly authorized under this
Agreement; 
 (iv) sell or transfer any Collateral (including without limitation the sale or transfer of Collateral which is
then leased back by Borrower), except for (A) the sale of finished Inventory in the ordinary course of Borrower’s business, and except for the sale of obsolete or unneeded Equipment in the ordinary course of business, (B) the making
or sale of Permitted Investments (subject to permitted use of proceeds or re-investment in Permitted Investments), (C) the granting of Permitted Liens, (D) the non-exclusive licensing of Intellectual Property in the ordinary course of
business, (E) the sale of the Thermal Business on an arm’s length basis; and (F) subject to section 4.3(b), the sale of Non-Core Intellectual Property (each, a “Permitted Disposition”); 

(v) store any Inventory or other Collateral with any warehouseman or other third party, unless (A) there is in place a bailee
agreement that complies with the provisions of Section 3.4(d) above, or (B) Borrower has used commercially reasonable efforts to comply with the provisions of Section 3.4(d), has so notified PFG and the value of such Collateral is no
greater than $50,000; 
 (vi) sell any Inventory on a sale-or-return, guaranteed sale, consignment, or other contingent basis;

 (vii) make any loans of any money or other assets, other than Permitted Investments; 

(viii) incur any Indebtedness, other than Permitted Indebtedness; 

(ix) guarantee or otherwise become liable with respect to the obligations of another party or entity; 

(x) pay or declare any dividends on Borrower’s stock (except for dividends payable solely in stock of Borrower); 

(xi) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of Borrower’s stock, except (A) in connection
with redeeming or purchasing stock or departing officers, directors or employees, up to a maximum aggregate of $50,000 in any fiscal year and (B) repurchases of stock deemed to occur upon exercise of stock options or warrants if such stock
represents a portion of the exercise price of such options or warrants; 
 (xii) engage, directly or indirectly, in any business
other than the businesses currently engaged in by Borrower or reasonably related thereto; 
 (xiii) without at least thirty
(30) days prior written notice to PFG: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than $10,000 in Borrower’s assets or property, (2) change its
jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization; 

(xiv) cause or permit any Dormant Subsidiary to own any Non-trivial property (of any kind) or to actively conduct business, without
providing at least thirty (30) days’ advance notice to PFG and subject to such Dormant Subsidiary’s joinder to this Agreement as a Borrower and cross-corporate guarantor; 

(xv) liquidate or dissolve or elect to liquidate or dissolve; or 

  
 -6-

 (xvi) the Board of directors shall resolve to or approve, or Borrower shall otherwise take
any steps to effect, any of the foregoing actions in clauses (i) through (xv), inclusive, without providing prompt written notice to PFG, provided that such notice shall not be deemed to constitute PFG’s consent to any of the foregoing.

 Transactions permitted by the foregoing provisions of this Section are only permitted if no Default or Event of Default would occur as a
result of such transaction. 
 5.6 Litigation Cooperation. Should any third-party suit or proceeding be instituted
by or against PFG with respect to any Collateral or relating to Borrower, Borrower shall, without expense to PFG, make available Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that PFG may deem
them reasonably necessary in order to prosecute or defend any such suit or proceeding. 
 5.7 Changes. Borrower
agrees to promptly notify PFG in writing of any Non-trivial changes in the information set forth in the Representations, not less than monthly in connection with delivery of the required Compliance Certificate and, if material, promptly; provided,
that, Borrower shall be deemed to have satisfied the foregoing requirements (other than with respect to the information required in Sections 11(a) and (b) of Part C of the Representations) if such changes are reported in (a) a filing with
the Securities and Exchange Commission or (b) a report delivered pursuant to Section 5.3, in each case, within the required filing or reporting periods, as applicable. 

5.8 Further Assurances. Borrower agrees, at its expense, on request by PFG, to execute all documents and take all actions,
as PFG, may, in its good faith business judgment, deem necessary or useful in order to perfect and maintain PFG’s perfected First-Priority security interest in the Collateral (subject to Permitted Liens). 

6. TERM. 

6.1 Maturity Date. This Agreement shall continue in effect until the maturity date set forth on the Schedule (the
“Maturity Date”), subject to Sections 6.2, 6.3 and 6.4, below. 
 6.2 Early Termination.
This Agreement may be terminated prior to the Maturity Date as follows: (i) if expressly permitted in the Schedule, by Borrower, effective three Business Days after written notice of termination is given to PFG; or (ii) by PFG at any time
after the occurrence and during the continuance of an Event of Default, without notice, effective immediately. If this Agreement is terminated by Borrower (to the extent permitted in the Schedule) or by PFG under this Section 6.2, Borrower
shall pay to PFG a prepayment fee in the amount set forth in the Schedule. Any prepayment fee shall be due and payable on the effective date of termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of
the Obligations. 
 6.3 Payment of Obligations. On the Maturity Date or on any earlier effective date of
termination, Borrower shall pay and perform in full all Obligations, whether evidenced by installment notes or otherwise, and whether or not all or any part of such Obligations are otherwise then due and payable. Notwithstanding any termination of
this Agreement, all of PFG’s security interests in all of the Collateral and all of the terms and provisions of this Agreement shall continue in full force and effect until all Obligations have been paid and performed in full; provided that PFG
may, in its sole discretion, refuse to make any further Loans after termination. No termination shall in any way affect or impair any right or remedy of PFG, nor shall any such termination relieve Borrower of any Obligation to PFG, until all of the
Obligations have been paid and performed in full. Upon payment and performance in full of all the Obligations and termination of this Agreement, PFG shall promptly terminate its financing statements with respect to the Borrower and deliver to
Borrower such other documents as may be required to fully terminate PFG’s security interests. 
 6.4 Survival of
Certain Obligations. Without limiting the survival of obligations addressed otherwise in this Agreement and notwithstanding any other provision of this Agreement, the obligations of Borrower under Section 5.6 and Section 9 shall
survive the termination of this Agreement. 
 7. EVENTS OF DEFAULT AND REMEDIES. 

7.1 Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” under
this Agreement, and Borrower shall give PFG prompt written notice thereof: 
 (a) Any warranty, representation, covenant,
statement, report or certificate made or delivered to PFG by Borrower or any of Borrower’s officers, employees or agents, now or in the future, shall be untrue or misleading in a material respect when made or deemed to be made; or 

(b) Borrower shall fail to pay any Loan or any interest thereon or any other monetary Obligation within three Business Days after the
date due; or 

  
 -7-

 (c) the total Loans and other Obligations outstanding, other than Non-Overdue Monetary
Obligations, at any time shall exceed the Credit Limit, unless such excess shall have been repaid to PFG within one (1) Business Day of the earliest of the occurrence thereof, notice thereof or Borrower Knowledge thereof; or 

(d) Borrower (i) shall fail to comply with any of the financial covenants set forth in the Schedule, or (ii) shall breach any
of the provisions of Section 5.5 hereof, or (iii) shall fail to perform any other non-monetary Obligation which by its nature cannot be cured, or (iv) shall fail to permit PFG to conduct an inspection or audit as provided in
Section 5.4 hereof or (v) shall fail to provide PFG with a Report under Section 6 of the Schedule within three (3) Business Days after the date due; or 
 (e) Borrower shall fail to perform any other non-monetary Obligation, which failure is not cured within five (5) Business Days after the date due; or 

(f) any levy, assessment, attachment or seizure is made on all or any Non-trivial part of the Collateral which is not cured within three
(3) Business Days after the occurrence of the same, or any lien or encumbrance (other than a Permitted Lien) is made on all or any part of the Collateral which is not cured within ten (10) calendar days after the occurrence of the same;
provided that no Event of Default shall be deemed to have occurred if (1) a bond is posted and maintained covering an amount equal to the amount in controversy giving rise to such levy, assessment, attachment or seizure and (2) Borrower
diligently contests such levy, assessment, attachment or seizure; or 
 (g) any default or event of default occurs under any
Non-trivial obligation secured by a Permitted Lien, which is not cured within any applicable cure period or waived in writing by the holder of the Permitted Lien; or 
 (h) Borrower breaches any material contract or obligation, which has resulted or may reasonably be expected to result in a Material Adverse Change; or 

(i) Dissolution, termination of existence or insolvency of Borrower; or appointment of a receiver, trustee or custodian, for all or any
part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by Borrower under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, or Borrower shall generally not pay its debts as they become due, or Borrower shall conceal, remove or transfer any part of its property, with intent to hinder, delay or defraud its creditors, or
make or suffer any transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or 
 (j) the commencement of any proceeding against Borrower or any guarantor of any of the Obligations under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect, which is not cured by the dismissal or stay thereof within 45 days after the date commenced; or 
 (k) (i) revocation or termination of, or limitation or denial of liability upon, the Guaranty or any other any guaranty of the Obligations or any attempt to do any of the foregoing, or (ii) the
commencement of proceedings by any Guarantor of any of the Obligations under any bankruptcy or insolvency law; or 
 (l)
revocation or termination of, or limitation or denial of liability upon, any pledge of any certificate of deposit, securities or other property or asset of any kind pledged by any third party to secure any or all of the Obligations, or any attempt
to do any of the foregoing, or commencement of proceedings by or against any such third party under any bankruptcy or insolvency law; or 
 (m) Borrower makes any payment on account of any indebtedness or obligation which has been subordinated to the Obligations (other than as permitted in the applicable subordination agreement), or if any
Person who has subordinated such indebtedness or obligations terminates or in any way limits his subordination agreement; or 

(n) a default or breach shall occur under any other Loan Document, which default or breach shall be continuing after the later of any
applicable expressly specified cure period of five (5) Business Days; or 
 (o) a Material Adverse Change shall occur.

 PFG may cease making any Loans hereunder during any of the cure periods provided above, and thereafter if an Event of Default has occurred
and is continuing. 
 7.2 Remedies. Upon the occurrence and during the continuance of any Event of Default, PFG,
at its option, and without notice or demand of any kind (all of which are hereby expressly waived by Borrower), may do any one or more of the following: (a) Cease making Loans or otherwise extending credit to Borrower under this Agreement or
any other Loan 

  
 -8-

 
Document; (b) Accelerate and declare all or any part of the Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any
instrument evidencing or relating to any Obligation; (c) Take possession of any or all of the Collateral wherever it may be found, and for that purpose Borrower hereby authorizes PFG without judicial process to enter onto any of Borrower’s
premises without interference to search for, take possession of, keep, store, or remove any of the Collateral, and remain on the premises or cause a custodian to remain on the premises in exclusive control thereof, without charge for so long as PFG
deems it necessary, in its good faith business judgment, in order to complete the enforcement of its rights under this Agreement or any other agreement; provided, however, that should PFG seek to take possession of any of the Collateral by court
process, Borrower hereby irrevocably waives: (i) any bond and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession; (ii) any demand for possession prior to the
commencement of any suit or action to recover possession thereof; and (iii) any requirement that PFG retain possession of, and not dispose of, any such Collateral until after trial or final judgment; (d) Require Borrower to assemble any or
all of the Collateral and make it available to PFG at places designated by PFG which are reasonably convenient to PFG and Borrower, and to remove the Collateral to such locations as PFG may deem advisable; (e) Complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and, for such purpose and for the purpose of removal, PFG shall have the right to use Borrower’s premises, vehicles, hoists, lifts, cranes, and other Equipment and all
other property without charge; (f) Sell, lease or otherwise dispose of any of the Collateral, in its condition at the time PFG obtains possession of it or after further manufacturing, processing or repair, at one or more public and/or private
sales, in lots or in bulk, for cash, exchange or other property, or on credit, and to adjourn any such sale from time to time without notice other than oral announcement at the time scheduled for sale. PFG shall have the right to conduct such
disposition on Borrower’s premises without charge, for such time or times as PFG deems reasonable, or on PFG’s premises, or elsewhere and the Collateral need not be located at the place of disposition. PFG may directly or through any
affiliated company purchase or lease any Collateral at any such public disposition, and if permissible under applicable law, at any private disposition. Any sale or other disposition of Collateral shall not relieve Borrower of any liability Borrower
may have if any Collateral is defective as to title or physical condition or otherwise at the time of sale; (g) Demand payment of, and collect any Accounts and General Intangibles comprising Collateral and, in connection therewith, Borrower
irrevocably authorizes PFG to endorse or sign Borrower’s name on all collections, receipts, instruments and other documents, to take possession of and open mail addressed to Borrower and remove therefrom payments made with respect to any item
of the Collateral or proceeds thereof, and, in PFG’s good faith business judgment, to grant extensions of time to pay, compromise claims and settle Accounts and the like for less than face value; (h) Exercise any and all rights under any
present or future Control Agreements relating to Deposit Accounts or Investment Property; and (i) Demand and receive possession of any of Borrower’s federal and state income tax returns and the books and records utilized in the preparation
thereof or referring thereto. All reasonable attorneys’ fees, expenses, costs, liabilities and obligations incurred by PFG with respect to the foregoing shall be added to and become part of the Obligations, shall be due upon written demand
(together with reasonably detailed backup documentation). Without limiting any of PFG’s rights and remedies, from and after the occurrence and during the continuance of any Event of Default, the interest rate applicable to the Obligations shall
be the Default Rate. 
 7.3 Standards for Determining Commercial Reasonableness. Borrower and PFG agree that a
sale or other disposition (collectively, “sale”) of any Collateral which complies with the following standards will conclusively be deemed to be commercially reasonable: (i) Notice of the sale is given to Borrower at least ten days
prior to the sale, and, in the case of a public sale, notice of the sale is published at least five days before the sale in a newspaper of general circulation in the county where the sale is to be conducted; (ii) Notice of the sale describes
the collateral in general, non-specific terms; (iii) The sale is conducted at a place designated by PFG, with or without the Collateral being present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m.; (v) Payment of
the purchase price in cash or by cashier’s check or wire transfer is required; (vi) With respect to any sale of any of the Collateral, PFG may (but is not obligated to) direct any prospective purchaser to ascertain directly from Borrower
any and all information concerning the same. PFG shall be free to employ other methods of noticing and selling the Collateral, in its discretion, if they are commercially reasonable. 

7.4 Power of Attorney. Upon the occurrence and during the continuance of any Event of Default, without limiting PFG’s
other rights and remedies, Borrower grants to PFG an irrevocable power of attorney coupled with an interest, authorizing and permitting PFG (acting through any of its employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower’s expense, to do any or all of the following, in Borrower’s name or otherwise, but PFG agrees that if it exercises any right hereunder, it will do so in good faith and in a
commercially reasonable manner: (a) Execute on behalf of Borrower any documents that PFG may, in its good faith business judgment, deem advisable in order to perfect and maintain PFG’s security interest in the Collateral, or in order to
exercise a right of Borrower or PFG, or in order to fully consummate all the transactions contemplated under this Agreement, and all other Loan Documents; (b) Execute on behalf of Borrower, any invoices relating to any Account, any draft against any
Account Debtor and any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of mechanic’s, materialman’s or 

  
 -9-

 
other lien, or assignment or satisfaction of mechanic’s, materialman’s or other lien; (c) Take control in any manner of any cash or non-cash items of payment or proceeds of
Collateral; endorse the name of Borrower upon any instruments, or documents, evidence of payment or Collateral that may come into PFG’s possession; (d) Endorse all checks and other forms of remittances received by PFG; (e) Pay,
contest or settle any lien, charge, encumbrance, security interest and adverse claim in or to any of the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (f) Grant extensions of time to
pay, compromise claims and settle Accounts and General Intangibles for less than face value and execute all releases and other documents in connection therewith; (g) Pay any sums required on account of Borrower’s taxes or to secure the
release of any liens therefor, or both; (h) Settle and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefor; (i) Instruct any third party having custody or control of any books
or records belonging to, or relating to, Borrower to give PFG the same rights of access and other rights with respect thereto as PFG has under this Agreement; (j) Execute on behalf of Borrower and file in Borrower’s name such documents and
instruments as may be necessary or appropriate to effect the transfer of Domain Rights, domain names, domain registry administrative contacts and domain and website hosting services into the name of PFG or its designees, and (k) Take any action
or pay any sum required of Borrower pursuant to this Agreement and any other Loan Documents. Any and all reasonable sums paid and any and all reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by PFG with respect
to the foregoing shall be payable upon written demand (together with reasonably-detailed back documentation). In no event shall PFG’s rights under the foregoing power of attorney or any of PFG’s other rights under this Agreement be deemed
to indicate that PFG is in control of the business, management or properties of Borrower. 
 7.5 Application of
Proceeds. All proceeds realized as the result of any sale of the Collateral shall be applied by PFG first to the reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by PFG in the exercise of its rights
under this Agreement, second to the interest due upon any of the Obligations, and third to the principal of the Obligations, in such order as PFG shall determine in its sole discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to PFG for any deficiency. If, PFG, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral,
PFG shall have the option, exercisable at any time, in its good faith business judgment, of either reducing the Obligations by the principal amount of purchase price or deferring the reduction of the Obligations until the actual receipt by PFG of
the cash therefor. 
 7.6 Remedies Cumulative. In addition to the rights and remedies set forth in this Agreement,
PFG shall have all the other rights and remedies accorded a secured party under the Code and under all other applicable laws, and under any other instrument or agreement now or in the future entered into between PFG and Borrower, and all of such
rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by PFG of one or more of its rights or remedies shall not be deemed an election, nor bar PFG from subsequent exercise or partial exercise of any other rights or
remedies. The failure or delay of PFG to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed.

 8. DEFINITIONS. As used in this Agreement, the following terms have the following meanings: 

“Account Debtor” means the obligor on an Account. 

“Accounts” means all present and future “accounts” as defined in the California Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes without limitation all accounts receivable and other sums owing to Borrower. 
 “Affiliate” means, with respect to any Person, a relative, partner, shareholder, director, officer, or employee of such Person, or any parent or Subsidiary of such Person, or any Person
directly or indirectly through any other Person controlling, controlled by or under common control with such Person. 

“Bridge Period” means the period from the Effective Date to the earlier to occur of (i) February 15, 2012, and
(ii) the closing of the sale of the Thermal Business. 
 “Business Day” means a day on which PFG is open
for business. 
 “Cash” means unrestricted cash or Cash Equivalents in deposit accounts or investment accounts
for which there is in effect a Control Agreement among Borrower, PFG and the depositary institution in respect of such accounts, unless the requirement for a Control Agreement has been waived by PFG. 

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or
any agency or any State thereof having maturities of not more than two (2) years from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard &
Poor’s 

  
 -10-

 
Ratings Group of Moody’s Investors Service, Inc.; (c) certificates of deposit with such financial institutions in respect of which PFG has in effect a Control Agreement) issued maturing
no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

 “Change in Control” means any event, transaction, or occurrence as a result of which (a) any
“person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as an amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit
plan of Borrower, is or becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Borrower, representing thirty-five percent (35%) or more of the combined voting
power of Borrower’s then outstanding securities; or (b) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the Board of Directors of Borrower (together with any new
directors whose election by the Board of Directors of Borrower was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office. 
 “Code” means the Uniform Commercial Code as adopted and in effect in the State of California from time to time. 
 “Collateral” has the meaning set forth in Section 2 above. 

“Compliance Certificate” means Borrower’s certification of its compliance with the terms and conditions of this
Agreement and such other matters as PFG may reasonably require to be addressed in such certificate, in the form as initially set forth as Exhibit B hereto, as such form may be amended from time to time upon advance notice from PFG.

 “Constitutional Document” means in relation to any Borrower, such Borrower’s articles of incorporation,
formation or association, certificate of incorporation or formation, by-laws or other or other document or instrument required or customary in such Borrower’s jurisdiction of formation, principal place of business or operation, including such
Borrower’s agreements with shareholders and joint venture partners. 
 “continuing” and “during
the continuance of” when used with reference to a Default or Event of Default means that the Default or Event of Default has occurred and has not been either waived in writing by PFG or cured within any applicable cure period. 

“Default” means any event which with notice or passage of time or both, would constitute an Event of Default.

 “Default Rate” means the lesser of four percent (4%) per annum over the rate stated in the Schedule and
the maximum rate of interest that may lawfully be charged to a commercial borrower under applicable usury laws. 

“Deposit Accounts” means all present and future “deposit accounts” as defined in the California Code in effect
on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all general and special bank accounts, demand accounts, checking accounts, savings accounts and certificates of deposit and, for the
avoidance of doubt, whether such accounts would be deemed within the term “Deposit Account” as intended in the California Code, any escrow accounts holding funds that may be due to Borrower, but excluding deposit and similar accounts with
Governmental Bodies for payment of pension and tax liabilities and the like, shall be deemed within the term “Deposit Account” for purposes of this Agreement. 
 “Dormant Subsidiary(ies)” means each and all of Novalog, Inc., a California corporation, Microsensors, Inc., a Delaware corporation, RedHawk Vision, Inc., a Delaware corporation, and
iNetWorks Corporation, a Nevada corporation, each with its address for purposes of this Agreement at 3001 Red Hill Ave., Bldg. 4/108, Costa Mesa, Orange County, CA 92926. 
 “Equipment” means all present and future “equipment” as defined in the California Code in effect on the date hereof with such additions to such term as may hereafter be made,
and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 
 “Escrow” means the Escrow Agreement entered into with J.P. Morgan Chase Bank, N.A. (as Escrow Agent) in connection with that certain Asset Purchase Agreement dated as of October 17,
2011 between Borrower and Vectronix, Inc. for the purchase of the Thermal Business by Vectronix, and “Escrow Account” means the corresponding escrow deposit account for a portion of the purchase price of the Thermal Business to be
paid by Vectronix Inc. to Borrower. 
 “Event of Default” means any of the events set forth in Section 7.1
of this Agreement. 
 “Fees” or “fees” or “costs” or
“expenses” that are specified to be “incurred” hereunder mean fees, costs or expenses, as the case may be, that are incurred and payable to the relevant third party(ies) invoicing such fees, costs and expenses for goods
and/or services and shall not include (except to the extent specified in this Agreement, such as in Section 5.4) any PFG-allocated internal costs or cost estimates of providing the same or similar products and/or services internally.

  
 -11-

 “First-Priority” means, in relation to PFG’s security interest in
Collateral, a security interest that is prior to any other security interest, with the exception of security interests corresponding to Permitted Liens that are expressly stated to be senior in priority and payment to the security interests
of PFG. 
 “Financial Statements” means consolidated financial statements of Borrower, including a balance
sheet, income statement and cash flow and, in the case of monthly-required financial statements, showing data for the month being reported and a history showing each month from the beginning of the relevant fiscal year. 

“GAAP” means generally accepted accounting principles consistently applied. 

“General Intangibles” means all present and future “general intangibles” as defined in the California Code in
effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all Intellectual Property, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders,
customer lists, route lists, telephone numbers, domain names, claims, income tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in
contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 

“good faith business judgment” means honesty in fact and good faith (as defined in Section 1201 of the Code) in the
exercise of PFG’s business judgment. 
 “Governmental Authorization” means any: (a) permit, license,
certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization that is, has been issued, granted, given
or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body. 

“Governmental Body” means any: (a) nation, principality, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national organization or body; or (e) individual, entity or body
exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature. 
 “Guarantor” means each of Griffin Fund LP, a Delaware limited partnership and Costa Brava Partnership III, L.P., individually and collectively, jointly and severally, and the
“Guaranty” means the unconditional guarantee of $2,000,000 of Borrower’s monetary Obligations by Guarantor. 
 “including” means including (but not limited to). 

“Indebtedness” means (a) indebtedness for borrowed money or the deferred purchase price of property or services
(other than trade payables arising in the ordinary course of business), (b) obligations evidenced by bonds, notes, debentures or other similar instruments, (c) reimbursement obligations in connection with letters of credit, and
(d) capital lease obligations. 
 “Intellectual Property” means all present and future:
(a) copyrights, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, (b) trade secret rights, including all rights
to unpatented inventions and know-how, and confidential information; (c) mask work or similar rights available for the protection of semiconductor chips; (d) patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same; (e) trademarks, servicemarks, trade styles, and trade names, whether or not any of the foregoing are registered, and all applications
to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by any such trademarks; (f) computer software and computer software products; (g) designs and
design rights; (h) technology; (i) all claims for damages by way of past, present and future infringement of any of the rights included above; and (j) all licenses or other rights to use any property or rights of a type described
above. 
 “Inventory” means all present and future “inventory” as defined in the California Code in
effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including
without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

  
 -12-

 “Investment” means any beneficial ownership interest in any Person
(including any stock, partnership interest or other equity or debt securities issued by any Person), and any loan, advance or capital contribution to any Person. 
 “Investment Property” means all present and future investment property, securities, stocks, bonds, debentures, debt securities, partnership interests, limited liability company interests,
options, security entitlements, securities accounts, commodity contracts, commodity accounts, and all financial assets held in any securities account or otherwise, and all options and warrants to purchase any of the foregoing, wherever located, and
all other securities of every kind, whether certificated or uncertificated. 
 “Knowledge” or “best of
knowledge” and words of similar import mean either (i) the actual knowledge of any of Borrower’s officers, including Chief Executive Officer, President, Chief Information Officer (if any), Chief Technology Officer (or equivalent),
Chief Financial Officer and Corporate Controller, or Borrower’s Vice Presidents or General Managers supervising a business unit or division, or any persons succeeding or performing the responsibilities of such identified positions, or
(ii) such knowledge as the persons in such identified positions would have assuming (A) Borrower policies in accordance with generally-accepted norms of corporate governance and (B) the actual exercise of reasonable diligence and
prudence by such persons in accordance with such policies. 
 “Legal Requirement” means any written local,
municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation that is, has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Body.

 “Lien” or “lien” is a security interest, claim, mortgage, deed of trust, levy, charge,
pledge, adverse claim or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property. 
 “Loan Documents” means, collectively, this Agreement, the Representations, and all other present and future documents, instruments and agreements between PFG and Borrower, including, but
not limited to those relating to this Agreement, and all amendments and modifications thereto and replacements therefor. 

“Loan Request” means any request that may be made by a Borrower in connection with this Agreement, including a borrowing
request, consent request, waiver request or the like. 
 “Looney Note” means that certain secured promissory
note issued to Timothy Looney in April 2010 by Borrower in the original principal amount of $2,500,000, of which a principal balance of $1,897.476.35 remains outstanding (the “Looney Note”).

“Material Adverse Change” means any of the following: (i) a material adverse change in the business, operations, or
financial or other condition of the Borrower, or (ii) a material impairment of the prospect of repayment of any portion of the Obligations; or (iii) a material impairment of the value or priority of PFG’s security interests in the
Collateral. 
 “Non-Core Intellectual Property” means Intellectual Property which is not used or intended to be
used by Borrower in the development or sale of products in the ordinary course of business. 
 “Non-Overdue Monetary
Obligations” means, at any time, the amount of monetary Obligations other than principal Indebtedness owed by Borrower to PFG but not then due, such as accrued and unpaid interest not yet due, and “Overdue Monetary
Obligations” means, at any time, the amount of monetary Obligations that are due, owing and unpaid, and in the case where the existence and quantum of such Obligations would not be reasonably Known by Borrower absent a PFG notice of the
same, such Obligations shall not be deemed “Overdue” unless and until unpaid in accordance with the terms of such notice. For the avoidance of doubt, The amount of Default interest payable in respect of one Overdue Monetary Obligation
shall not be compounded with Default interest that may be due as a result of late payment of another distinct Overdue Monetary Obligation (i.e., no default interest on interet about which Borrower would be unaware absent PFG notice of the same shall
not be deemed “overdue” unless such obligations remain unpaid under the terms of the PFG notice specifying the same. 

“Obligations” means all present and future Loans, advances, debts, liabilities, obligations, guaranties, covenants,
duties and indebtedness at any time owing by Borrower to PFG, including obligations and covenants intended to survive the termination of this Agreement, whether evidenced by this Agreement or any note or other instrument or document, or otherwise,
including indebtedness under any obligation to purchase equity derivatives purchased or otherwise issued to PFG from time 

  
 -13-

 
to time, whether arising from an extension of credit, opening of a letter of credit, banker’s acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including,
without limitation, those acquired by assignment and any participation by PFG in Borrower’s debts owing to others), absolute or contingent, due or to become due, including, without limitation, all interest, charges, expenses, fees,
attorney’s fees, expert witness fees, audit fees, collateral monitoring fees, closing fees, facility fees, termination fees, minimum interest charges and any other sums chargeable to Borrower under this Agreement or under any other Loan
Documents. 
 “Ordinary (or “ordinary”) course of business” and derivatives shall apply to an action
taken or an action required to be taken and not taken by or on behalf of a Borrower. An action will not be deemed to have been taken in the “ordinary course of business” unless: (a) such action is consistent with its past practices
(if such type of action has been taken in the past and, if not, such action shall be deemed not in the ordinary course of business) and is similar in nature and magnitude to actions customarily taken by it; (b) such action is taken in
accordance with sound and prudent business practices in its jurisdiction of organization; and (c) such action is not required to be authorized by its shareholders and does not require any other separate or special authorization of any nature.

 “Other Property” means the following as defined in the California Code in effect on the date hereof with
such additions to such term as may hereafter be made, and all rights relating thereto: all present and future “commercial tort claims” (including without limitation any commercial tort claims identified in the Representations),
“documents”, “instruments”, “promissory notes”, “chattel paper”, “letters of credit”, “letter-of-credit rights”, “fixtures”, “farm products” and “money”; and
all other goods and personal property of every kind, tangible and intangible, whether or not governed by the California Code. 

“Payment” means all checks, wire transfers and other items of payment received by PFG for credit to Borrower’s
outstanding Obligations. 
 “Permitted Indebtedness” means 

(i) the Loans and other Obligations; and 
 (ii) Indebtedness existing on the date hereof and shown on Exhibit A hereto and any extension, renewal or refinancing thereof, provided that the principal amount of the indebtedness being extended,
renewed or refinanced does not increase except by an amount equal to accrued and unpaid interest and other amounts paid in connection with such extension, renewal or refinancing; 

(iii) Subordinated Debt; 
 (iv) unsecured Indebtedness to trade creditors in the ordinary course of business; 

(v) other Indebtedness secured by Permitted Liens; 
 (vi) reimbursement obligations in respect of letters of credit in an aggregate face amount outstanding not to exceed $300,000 at any time outstanding, which has been reported to PFG in writing.

 “Permitted Investments” are: 
 (i) Investments (if any) shown on Exhibit A and existing on the date hereof; 

(ii) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition; 
 (iii) commercial paper maturing no more than 1 year after its creation and having the highest
rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc; 
 (iv) investments in
Dormant Subsidiaries existing on the date hereof; 
 (v) Cash Equivalents and bank certificates of deposit issued maturing
no more than 1 year after issue; and 
 (vi) loans or advances to officers, directors and employees of Borrower in an aggregate
principal amount not to exceed $25,000 at any one time. 
 “Permitted Liens” means the following: 

(i) purchase money security interests in specific items of Equipment; 

(ii) leases of specific items of Equipment; 
 (iii) Liens for Taxes not yet payable; 

  
 -14-

 (iv) additional security interests and liens consented to in writing by PFG, which consent
may be withheld in its good faith business judgment. PFG will have the right to require, as a condition to its consent under this subparagraph (iv), that the holder of the additional security interest or lien sign an intercreditor agreement on
PFG’s then standard form, acknowledge that the security interest is subordinate to the security interest in favor of PFG, and agree not to take any action to enforce its subordinate security interest so long as any Obligations remain
outstanding, and that Borrower agrees that any uncured default in any obligation secured by the subordinate security interest shall also constitute an Event of Default under this Agreement; 

(v) security interests being terminated substantially concurrently with this Agreement; 

(vi) Liens of materialmen, mechanics, warehousemen, carriers, or other similar liens arising in the ordinary course of business and
securing obligations which are not delinquent; 
 (vii) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described above in clauses (i) or (ii) above and (xiv) below, provided that any extension, renewal or replacement lien is limited to the property encumbered by the existing
lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase except by an amount equal to accrued and unpaid interest and other amounts paid in connection with such extension, renewal or refinancing and,
if such indebtedness is subordinated to the Obligations, pursuant to the same terms of subordination; 
 (viii) Liens in favor
of customs and revenue authorities which secure payment of customs duties in connection with the importation of goods; 
 (ix)
statutory, common law or contractual liens of depository institutions or institutions holding securities account (including rights of set-off) securing only customary charges and fees in connection with such accounts; 

(x) security deposits for the benefit of landlords in the ordinary course of business; 

(xi) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like
obligations incurred in the ordinary course of business; 
 (xii) leases or subleases of real property granted in the ordinary
course of business, and leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and
sublicenses do not prohibit granting PFG a security interest; 
 (xiii) non-exclusive licenses of Intellectual Property granted
to third parties in the ordinary course of business; and 
 (xiv) Liens existing on the date hereof and shown on Exhibit
A hereto. 
 “Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity. 
 “Plan” means Borrower’s Board-approved financial plan for each fiscal year, including budgets and forecasts. 
 “Qualifying Request” means a request made by an authorized officer of Borrower under Section 1.5 for a Loan within the requisite notice periods required under this Agreement that is
within the Dollar Credit Limit (as set forth in Section 1 of the Schedule) and is accompanied by such certificates, documents and instruments as may be required under this Agreement or otherwise reasonably required by PFG to confirm
Borrower’s compliance with the Loan Documents at the time of such request. 
 “Representations” means the
written Representations and Warranties provided by Borrower to PFG referred to in the Schedule. 
 “Security
Instruments” means financing statements filed under the Code in any jurisdiction in which such financing statements may be filed, fixed and floating charges, share charges, mortgage debentures, and any other notices, instruments and filings
that reflect the “all assets” security granted to PFG by Borrower in this Agreement and the other Loan Documents. 

“Subordinated Debt” means debt incurred by Borrower and subordinated to Borrower’s debt to PFG (pursuant to a
subordination agreement entered into between PFG, Borrower and the subordinated creditor), legally effective to subordinate such the Lien and repayment of the holder of such subordinated debt, as PFG may determine in its business discretion with
respect to any particular debt to be subordinated. 
 “Subsidiary” means, with respect to any Person, any
Person of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person. 

  
 -15-

 “Tax” means any tax (including any income tax, franchise tax, capital gains
tax, estimated tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll tax),
levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), that is, has been or may in the future be (a) imposed,
assessed or collected by or under the authority of any Governmental Body, or (b) payable pursuant to any tax-sharing agreement or similar contract. 
 “Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document
or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax. 
 “Thermal Business” means Borrower’s thermal business imaging division and all Collateral required to operate said business on a stand-alone basis, as described in Borrower’s
public announcement of the pending sale of such business division, including trademarks, patents and patent applications identified in Exhibit A. 
 “Transfer” or “transfer” shall include any sale, assignment with or without consideration, encumbrance, hypothecation, pledge, or other transfer or disposition of any
kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly.

 “Trivial” and “Non-trivial” mean trivial and non-trivial, respectively, from the
perspective of a reasonable lender in PFG’s position, as determined by PFG in its good faith business discretion, and “Non-trivial” includes a lesser level of significance that does the term “material.” 

Other Terms. All accounting terms used in this Agreement, unless otherwise indicated, shall have the meanings given to such terms
in accordance with GAAP, consistently applied. All other terms contained in this Agreement, unless otherwise indicated, shall have the meanings provided by the Code, to the extent such terms are defined therein. 

9. GENERAL PROVISIONS. 
 9.1 Confidentiality. PFG agrees to use the same degree of care that it exercises with respect to its own proprietary information, to maintain the confidentiality of any
and all proprietary, trade secret or confidential information provided to or received by PFG from the Borrower, which indicates that it is confidential, including business plans and forecasts, non-public financial information, confidential or secret
processes, formulae, devices and contractual information, customer lists, and employee relation matters, provided that PFG may disclose such information (i) to its officers, directors, employees, attorneys, accountants, affiliates,
participants, prospective participants, assignees and prospective assignees, and such other Persons to whom PFG shall at any time be required to make such disclosure in accordance with applicable law or legal process, provided such persons are
informed of the confidential nature of the information and PFG’s obligations hereunder, and (ii) in its good faith business judgment in connection with the enforcement of its rights or remedies after an Event of Default, or in connection
with any dispute with Borrower or any other Person relating to Borrower. The confidentiality agreement in this Section supersedes any prior confidentiality agreement of PFG relating to Borrower. 

9.2 Interest Computation. In computing interest on the Obligations, all Payments received after 12:00 Noon, Pacific Time,
on any day shall be deemed received on the next Business Day. 
 9.3 Payments. If no Default or Event of
Default has occurred and is continuing, all payments shall be applied (i) first, to accrued and unpaid interest and fees (ii) second, to the principal amount of Loans then due and payable and (iii) third, as a prepayment of principal
Obligations not then due. If a Default or Event of Default has occurred and is continuing, payments may be applied, and in PFG’s good faith business judgment reversed and re-applied, to the Obligations, in such order and manner as PFG shall
determine in its good faith business judgment. 
 9.4 Charges to Accounts. PFG may, in its discretion, require
that Borrower pay monetary Obligations in cash to PFG, or if not paid when due, charge them to Borrower’s Loan account, in which event they will bear interest at the same rate applicable to the Loans. 

9.5 Monthly Accountings. PFG shall provide Borrower monthly with an account of advances, charges, expenses and payments
made pursuant to this Agreement. Such account shall be deemed correct, accurate and binding on Borrower and an account stated (except for reverses and reapplications of payments made and corrections of errors discovered by PFG), unless Borrower
notifies PFG in writing to the contrary within 60 days after such account is rendered, describing the nature of any alleged errors or omissions. 

  
 -16-

 9.6 Notices. All notices to be given under this Agreement shall be in writing
and shall be given either personally, or by reputable private delivery service, or by regular first-class mail, or certified mail return receipt requested, or by fax to the most recent fax number a party has for the other party (and if by fax, sent
concurrently by one of the other methods provided herein), or by electronic mail to the most recent electronic mail address for Borrower provided for the chief financial officer or financial controller executing the Representations (and if by
electronic mail, with an electronic delivery and/or read receipt), addressed to PFG or Borrower at the addresses shown in the heading to this Agreement, in the Representations or at any other address designated in writing by one party to the other
party. All notices shall be deemed to have been given upon delivery in the case of notices personally delivered, or at the expiration of one Business Day following delivery to the private delivery service, or two Business Days following the deposit
thereof in the United States mail, with postage prepaid, or on the first business day of receipt during business hours in the case of notices sent by fax or electronic mail, as provided herein. All notices to be given to Borrower shall be addressed
to the attention of the Chief Executive Officer or Senior Vice President, Corporate Development, or as otherwise noticed by an authorized officer of Borrower to PFG. 
 9.7 Severability. Should any provision of this Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this
Agreement, which shall continue in full force and effect. 
 9.8 Integration. This Agreement and such other
written agreements, documents and instruments as may be executed in connection herewith are the final, entire and complete agreement between Borrower and PFG and supersede all prior and contemporaneous negotiations and oral representations and
agreements, all of which are merged and integrated in this Agreement. There are no oral understandings, representations or agreements between the parties which are not set forth in this Agreement or in other written agreements signed by the parties
in connection herewith. 
 9.9 Waivers; Indemnity. The failure of PFG at any time or times to require Borrower to
strictly comply with any of the provisions of this Agreement or any other Loan Document shall not waive or diminish any right of PFG later to demand and receive strict compliance therewith. Any waiver of any default shall not waive or affect any
other default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other Loan Document shall be deemed to have been waived by any act or knowledge of PFG or its agents or employees, but only by a
specific written waiver signed by an authorized officer of PFG and delivered to Borrower. Borrower waives the benefit of all statutes of limitations relating to any of the Obligations or this Agreement or any other Loan Document, and Borrower waives
demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, General Intangible, document or guaranty at
any time held by PFG on which Borrower is or may in any way be liable, and notice of any action taken by PFG, unless expressly required by this Agreement. Borrower hereby agrees to indemnify PFG and its affiliates, subsidiaries, parent, directors,
officers, employees, agents, and attorneys, and to hold them harmless from and against any and all claims, debts, liabilities, demands, obligations, actions, causes of action, penalties, costs and expenses (including reasonable attorneys’
fees), of every kind, which they may sustain or incur based upon or arising out of any of the Obligations, or the Loan Documents; provided that this indemnity shall not extend to damages proximately caused by the indemnitee’s own gross
negligence or willful misconduct. Notwithstanding any provision in this Agreement to the contrary, the indemnity agreement set forth in this Section shall survive any termination of this Agreement and shall for all purposes continue in full force
and effect. 
 9.10 No Liability for Ordinary Negligence. Neither PFG, nor any of its directors, officers,
employees, agents, attorneys or any other Person affiliated with or representing PFG shall be liable for any claims, demands, losses or damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower or any other party through the
ordinary negligence of PFG, or any of its directors, officers, employees, agents, attorneys or any other Person affiliated with or representing PFG, but nothing herein shall relieve PFG from liability for its own gross negligence or willful
misconduct. 
 9.11 Amendment. The terms and provisions of this Agreement may not be waived or amended, except in
a writing executed by Borrower and a duly authorized officer of PFG. 
 9.12 Time of Essence. Time is of the
essence in the performance by Borrower of each and every obligation under this Agreement. 
 9.13 Attorneys Fees and
Costs. Subject to the limitations on expense reimbursements set forth in Section 5.4 in respect of inspections and audits and in Section 9.17 in respect of loan monitoring, Borrower shall reimburse PFG for all reasonable
attorneys’ fees and all filing, recording, search, title insurance, appraisal, audit, and other reasonable costs incurred by PFG, pursuant to, or in connection with, or relating to this Agreement (whether or not a lawsuit is filed), including,
but not limited 

  
 -17-

 
to, any reasonable attorneys’ fees and costs PFG incurs in order to do the following: prepare and negotiate this Agreement and all present and future documents relating to this Agreement;
obtain legal advice in connection with this Agreement or Borrower; enforce, or seek to enforce, any of its rights; prosecute actions against, or defend actions by, Account Debtors; commence, intervene in, or defend any action or proceeding; initiate
any complaint to be relieved of the automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party claim, or other claim; examine, audit, copy, and inspect any of the Collateral or any of Borrower’s books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce PFG’s security interest in, the Collateral; and otherwise represent PFG in any litigation relating to Borrower. If either PFG or Borrower files any lawsuit against
the other predicated on a breach of this Agreement, the prevailing party in such action shall be entitled to recover its reasonable costs and attorneys’ fees, including (but not limited to) reasonable attorneys’ fees and costs incurred in
the enforcement of, execution upon or defense of any order, decree, award or judgment. All attorneys’ fees and costs to which PFG may be entitled pursuant to this Paragraph shall be due upon written invoice or demand (together with customary
backup documentation) and thereupon become part of Borrower’s Obligations and, if not paid within five (5) Business Days, shall (without prejudice to PFG’s rights arising under Section 7.1 (b)) bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations. 
 9.14 Benefit of Agreement. The provisions of
this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of Borrower and PFG; provided, however, that Borrower may not assign or transfer any of its rights under
this Agreement without the prior written consent of PFG, and any prohibited assignment shall be void. No consent by PFG to any assignment shall release Borrower from its liability for the Obligations. 

9.15 Joint and Several Liability. If Borrower consists of more than one Person, their liability shall be joint and several,
and the compromise of any claim with, or the release of, any Borrower shall not constitute a compromise with, or a release of, any other Borrower. 
 9.16 Limitation of Actions. Any claim or cause of action by Borrower against PFG, its directors, officers, employees, agents, accountants or attorneys, based upon, arising from, or
relating to this Loan Agreement, or any other Loan Document, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, incurred, done, omitted or suffered to be done by
PFG, its directors, officers, employees, agents, accountants or attorneys, shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by (a) the filing of a complaint within
one year after the earlier to occur of (i) the first act, occurrence or omission upon which such claim or cause of action, or any part thereof, is based, or (ii) the date this Agreement is terminated, and (b) the service of a summons
and complaint on an officer of PFG, or on any other person authorized to accept service on behalf of PFG, within thirty (30) days thereafter. Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower to
investigate and act upon any such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or extended except by the written consent of PFG in its sole discretion. This provision shall survive any termination of
this Loan Agreement or any other Loan Document. 
 9.17 Loan Monitoring. At reasonable times and upon reasonable
advance notice to Borrower, PFG shall have the right to visit personally with Borrower up to four times per calendar year at its principal place of business or such other location as the parties may mutually agree, for the purpose of meeting with
Borrower’s management in order to remain as up-to-date with Borrower’s business as is practicable and to maintain best practices in terms of lender loan monitoring and diligence. Reasonable costs, including travel and lodging for up to two
PFG staff for two of the four visits (which shall be inclusive of the costs of any inspection or audit under Section 5.4) shall be at Borrower’s expense and reimbursed in the same manner as other PFG expenses under this Agreement.

 9.18 Correction of Loan Documents. PFG may correct patent errors and fill in any blanks in the Loan Documents
consistent with the agreement of the parties so long as PFG provides Borrowers with written notice of such correction and allows Borrower at least ten (10) days to object to such correction. In the event of such objection, such correction shall
not be made except by an amendment signed by both PFG and Borrower. 
 9.19 Paragraph Headings; Construction.
Paragraph headings are only used in this Agreement for convenience. Borrower and PFG acknowledge that the headings may not describe completely the subject matter of the applicable paragraph, and the headings shall not be used in any manner to
construe, limit, define or interpret any term or provision of this Agreement. This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Agreement shall be construed
strictly against PFG or Borrower under any rule of construction or otherwise. 

  
 -18-

 9.20 Governing Law; Jurisdiction; Venue. This Agreement and all acts and
transactions hereunder and all rights and obligations of PFG and Borrower shall be governed by the laws of the State of California. As a material part of the consideration to PFG to enter into this Agreement, Borrower (i) agrees that all
actions and proceedings relating directly or indirectly to this Agreement shall, at PFG’s option, be litigated in courts located within California, and that the exclusive venue therefor shall be San Francisco County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Borrower may have to object to the
jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding. 
 9.20 Mutual Waiver
of Jury Trial. BORROWER AND PFG EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
PFG AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF PFG OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH PFG OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree
that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the San Francisco
County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts),
sitting without a jury, in San Francisco County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil
Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent
injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief,
but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the San Francisco County, California Superior Court for such relief. The proceeding before the private judge shall be
conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the
rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and order applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the
selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a).
Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph. 
 [SIGNATURE PAGE FOLLOWS]

  
 -19-

									
	 Borrower:
  
	  		  	PFG:  

	IRVINE SENSORS CORPORATION	  		  	PARTNERS FOR GROWTH III, L.P.
					
	    By	 	 /s/ Bill Joll
	  		  		 	
		 	President or Vice President	  		  	By	 	 /s/ Lorraine Nield

		 		  		  		 	
	    By	 	 /s/ Marcus A. Williams
	  		  	Name:	 	 Lorraine Nield

		 	Secretary or Ass’t Secretary	  		  		 	
		 		  		  	Title:	 	 Manager, Partners for Growth III, LLC
 Its General Partner

 Signature Page to Loan and Security Agreement 

					
		  		  	

  

 Partners For Growth 

Schedule to 
 Loan and Security Agreement 
  

			
	Borrower:	  	Irvine Sensors Corporation, a Delaware corporation
	 Address:
  
	  	 3001 Red Hill Ave., Bldg. 4/108, Costa Mesa, Orange County, CA 92926

 

	Date:	  	December 14, 2011

 This Schedule forms an integral part of the Loan and Security Agreement between PARTNERS FOR GROWTH III, L.P. and the
Borrower above of even date. 
  

			
	 1.      CREDIT LIMIT
	  	
	 (Section 1.1):
	  	An amount not to exceed $5,000,000 (the “Credit Limit”) at any one time outstanding.
		
	 Repayment:
	  	Borrower shall pay interest only on outstanding Loans until the Maturity Date, on which date all Loans and other monetary Obligations shall be paid.
		
	 Prepayment:
	  	Borrower may prepay the Loans in whole or in part, without premium or penalty, and, within the Credit Limit and subject to the other terms and conditions hereof, amounts prepaid
may be reborrowed. If the aggregate principal amount of the Loans at any time shall exceed the Credit Limit, Borrower shall prepay the Loans in an amount equal to such excess. Borrower may terminate this Agreement prior to the Maturity Date in
accordance with Section 6.2 of the Agreement, so long as contemporaneous with the repayment of all monetary Obligations it pays PFG an early termination fee equal to $50,000.
		
	 2.      INTEREST.
	  	
		
	 Interest Rate (Section 1.2):
	  	  
  
 A rate equal to 12% per annum. Interest shall be calculated on the basis of a 360-day year and a year of twelve months of 30 days each for the actual number of days elapsed. Accrued interest for each
month shall be payable monthly, on the first Business Day of each month for interest accrued during the prior month.

  
 -21-

					
		  	Partners for Growth	  	Schedule to Loan and Security Agreement      

 

			
	 3.      FEES (Section 1.3):
	  	
		
	 Commitment Fee:
	  	$100,000, payable concurrently herewith, less any due diligence fees paid to PFG on or about execution of the term sheet in respect of the Loans.
		
	 4.      MATURITY DATE
	  	
	 (Section 6.1):
	  	December 14, 2013.
		
	 5.      FINANCIAL COVENANTS
	  	
	 (Section 5.1):
	  	Measured as from January 1, 2012, as at the end of each month, but with compliance not required until the first full calendar month occurring after the expiry of the Bridge
Period, Borrower shall meet or exceed the minimum covenant thresholds set forth below as of each required date of measurement:
		
	 Minimum Liquidity:
	  	Measured monthly, (a) minus (b), below, must be greater than $0, where (a) equals (i) Cash, plus (ii) Accounts Receivable, plus (iii) 80% of the balance from time to time in the
Escrow Account, plus (iv) 50% of Inventory, and (b) equals 150% of all monetary Obligations owing (whether or not then due) to PFG in excess of $2,000,000. Mathematically, {sum ((i)+(ii)+(iii)+(iv)} > {150% * (all PFG monetary Obligations -
$2,000,000)}. If Borrower achieves or exceeds Revenues of not less than $20,000,000 during the 2012 calendar year, then the above-referenced percentage shall thereafter increase from 150% to 175%.
		
		  	For purposes hereof, the term “Accounts Receivable” and “Inventory” mean Borrower’s accounts receivables and inventory under GAAP as reflected and
reported from time to time in its Financial Statements.
		
	 Minimum EBITDA:
	  	Borrower shall maintain cumulative EBITDA measured monthly on a cumulative basis of not less than ($4,500,000) (with parentheses denoting a negative number); provided, however,
if Borrower achieves or exceeds Revenues of not less than $20,000,000 during the 2012 calendar year, then Borrower shall not be required to comply with the afore-specified Minimum EBITDA Financial Covenant. For example only, after having had not
more than $4,500,000 in cumulative EBITDA losses as at each of the February, March and April reporting periods, if Borrower reports cumulative EBITDA of ($5,000,000) (i.e., a $5,000,000 EBITDA loss) as of the monthly period ending May 31, 2012,
Borrower would not be in compliance with the Minimum EBITDA Financial Covenant.

  
 -22-

					
		  	Partners for Growth	  	Schedule to Loan and Security Agreement      

 

			
		  	“EBITDA” means (a) net income, minus (b) any non-cash income, plus (c) interest expense, plus (d) to the extent deducted in the calculation of net
income, depreciation expense and amortization expense, plus (e) income tax expense excluding (f) any non-cash change in fair value of derivative instruments, and (g) non-cash stock-based compensation, including employee retirement plan
contributions, in each case as reported in Borrower’s public filings (or calculated on a consistent basis with Borrower’s current public filings.
		
		  	“Revenues” means revenues as reported as such by Borrower in its public filings (or calculated on a consistent basis with Borrower’s current public
filings).
		
	 6.      REPORTING.
	  	
	 (Section 5.3):
	  	  
  
 Borrower shall provide PFG with the following:

		
		  	 (a)    Monthly deferred revenue schedules, accounts receivable and accounts payable agings, aged by
invoice date, within 20 days after the end of each calendar month.

		
		  	 (b)    Monthly unaudited financial statements (balance sheet, income statement, statement of cash flows),
as soon as available, and in any event within 20 days after the end of each calendar month.

		
		  	 (c)    Monthly Compliance Certificates, within 20 days after the end of each month, signed by the Chief
Financial Officer of Borrower, certifying that as of the end of such month Borrower was in full compliance with all of the terms and conditions of this Agreement, and, to the extent then relevant, setting forth calculations showing compliance with
the financial covenants set forth in this Agreement and such other information as PFG shall reasonably request.

		
		  	 (d)    If requested by PFG, annual operating budgets (including income statements, balance sheets and cash
flow statements, by month) for each next succeeding fiscal year of Borrower, within 30 days after the end of each fiscal year of Borrower.

		
		  	 (e)    Annual financial statements, as soon as available, and in any event within 120 days following the
end of Borrower’s fiscal year, certified by, and with an unqualified opinion of,

  
 -23-

					
		  	Partners for Growth	  	Schedule to Loan and Security Agreement      

 

			
		  	 independent certified public accountants acceptable to PFG. If Borrower files a form 10-K with the Securities and Exchange Commission and the same
is available within said period through EDGAR, this requirement will be deemed satisfied.

		
		  	 (f)     Such other information and reports as PFG may reasonably request from time to
time.

		
	 7.      BORROWER INFORMATION:
	  	  
  
 Borrower represents and warrants that the information set forth in the Representations and Warranties of the Borrower delivered contemporaneously with this Loan Agreement (the “Representations”)
is true and correct as of the Effective Date.

		
	 8.      ADDITIONAL PROVISIONS
	  	  
  
 (a)      Deposit Accounts. Concurrently, Borrower shall cause the banks and other institutions where its Deposit Accounts are maintained to enter into Control
Agreements with PFG, in form and substance reasonably satisfactory to PFG and sufficient to perfect PFG’ security interest in said Deposit Accounts. Said Control Agreements shall permit PFG, upon a Default, to exercise exclusive control over
said Deposit Accounts and in the case of escrow accounts that are Deposit Accounts, as defined herein, exclusive control of the disposition of the proceeds thereof.
  

(b)      Subordination of Inside Debt. All present and future Indebtedness
of Borrower to its officers, directors and shareholders (“Inside Debt”) shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on PFG’s standard form. Borrower represents and warrants that there
is no Inside Debt presently outstanding, except as specified in Exhibit A. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to PFG a subordination
agreement on PFG’s standard form.
  
 (c)      Use of Proceeds. The proceeds of the initial Loan shall be used to discharge the Looney Note and, thereafter, for general working capital
purposes.

  
 -24-

					
		  	Partners for Growth	  	Schedule to Loan and Security Agreement      

 

			
	 9.      CONDITIONS

 
	  	
		  	In addition to any other conditions to Loans set out in this Agreement, PFG will not make the initial Loan hereunder until PFG shall have received, in form and substance
reasonably satisfactory to PFG, such documents, and completion of such other matters, as PFG may reasonably deem necessary or appropriate, including that there shall be no discovery of any facts or circumstances which would, as determined by PFG in
its sole discretion, negatively affect or be reasonably expected to negatively affect the collectability of the Obligations, PFG’s security interest in Borrower’s Collateral or the value thereof, including, without
limitation:
		
		  	 (a)      duly executed original signatures of Borrower to the Loan Documents to which Borrower
is a party;

		
		  	 (b)      Borrower’s respective constitutional documents and a good standing certificate of
Borrower certified by the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days prior to the date hereof, together with a foreign qualification certificate from the States of California and
Texas;

		
		  	 (c)      a Secretary’s Certificate certifying the incumbency and signatures of the relevant
executive officers of Borrower, the appended Certificate of Incorporation of Borrower, the appended Bylaws of Borrower, the appended resolutions of the Board of Directors of Borrower authorizing the transactions contemplated by this Agreement, the
Warrant (as defined below) and the Representations;

		
		  	 (d)      account Control Agreements as required by Section 8(b) of this Schedule, duly executed
by Borrower and each relevant depositary and other institution in favor of PFG;

		
		  	 (e)      Security Instrument searches, as PFG shall request, accompanied by written evidence
(including any UCC termination statements) that the Liens indicated in any such Security Instruments either constitute Permitted Liens or have been or, in connection with the Loans, will be terminated or released;

		
		  	 (f)       the Representations, duly executed by Borrower,

		
		  	 (g)      a landlord consent executed in favor of PFG by the Borrower’s principal office
lessor in respect of Borrower’s principal business premises;

  
 -25-

					
		  	Partners for Growth	  	Schedule to Loan and Security Agreement      

 

			
		  	 (h)      if Borrower’s constitutional documents or stockholders agreements include a
redemption right at the option of stockholders, which right would become exercisable while any Loan is outstanding, the written waiver of such right by the requisite stockholders until such time as all Obligations are indefeasibly paid and
discharged.

		
		  	 (i)       a duly executed warrant in favor of PFG and its designees to purchase shares of
Borrower’s common stock, in agreed form (the “PFG Warrant”);

		
		  	 (j)     the insurance policies and/or endorsements required pursuant to
Section 5.2;

		
		  	 (k)      payment of the Fee specified in Section 3 of this Schedule and PFG’s expenses
incurred in connection with the Loan;

		
		  	 (l)     a duly executed Compliance Certificate dated the date hereof;

		
		  	 (m)     a pay-off agreement duly executed by Timothy Looney and Borrower in favor of PFG and evidence of
the substantially concurrent, full and indefeasible pay-off of the Looney Note, together with the discharge any and all associated liens; and

		
		  	 (n)    the Guaranty, duly executed and delivered by each Guarantor.

		
		  	In addition to any other conditions to Loans set out in this Agreement (including that no Default or Event of Default has occurred), PFG will not make the any Loan subsequent to the
initial loan hereunder until PFG shall have received, in form and substance reasonably satisfactory to PFG:
		
		  	 (o)    a proper and timely Loan Request for a borrowing;

		
		  	 (p)      evidence of the satisfaction of any of the above conditions to the initial Loan the
satisfaction of which (by their respective terms, above, or which by any terms of any post-closing obligations letter agreement between PFG and Borrower) PFG has permitted to be deferred to a date after the Effective Date (except for post-closing
obligations not yet required to be delivered; and

		
		  	 (q)    a Compliance Certificate.

 [SIGNATURE PAGE FOLLOWS] 

  
 -26-

					
		  	 	  	 

  

  

									
	 Borrower:
  

    IRVINE SENSORS CORPORATION
	  		  	PARTNERS FOR GROWTH III, L.P.
					
		 	  
	  		  	By	 	 /s/ Lorraine Nield

					
	     By
	 	 /s/ Bill Joll
	  		  	Name:	 	 Lorraine Nield

		 	President or Vice President	  		  	Title:	 	Manager, Partners for Growth III, LLC
		 		  		  		 	Its General Partner
	    By	 	 /s/ Marcus A. Williams
	  		  		 	
		 	Secretary or Ass’t Secretary	  		  		 	

 - Signature Page of Schedule to Loan and Security Agreement - 

  

 Exhibit A to Loan and Security Agreement 

Section 8 - “Permitted Indebtedness”—Other Existing Permitted Indebtedness: 

12% Subordinated Secured Convertible Notes due December 23, 2015 issued December 23, 2010 

12% Subordinated Secured Convertible Notes due December 23, 2015 issued March 31, 2010 
 12% Subordinated Secured Convertible Notes due December 23, 2015 issued July 1, 2010 

12% Subordinated Secured Convertible Notes due December 23, 2015 issued July 19, 2010 
 12% Senior Subordinated Promissory Notes due March 16, 2013 issued March 16, 2011 
 12%
Senior Subordinated Promissory Notes due March 16, 2013 issued March 31, 2011 
 Capital Lease dated 5/17/11 for Equipment between the
Company and Univest Capital 
 Capital Lease dated 5.17.11 for Equipment between the Company and Western Finance & Lease 

Section 8 - “Permitted Investments”—Other Existing Permitted Investments: None 

Section 8 - “Permitted Liens” (Existing on the Date Hereof) 
 Liens granted in favor of the holders of 12% Senior Subordinated Secured Promissory Notes due March 16, 2013 
 Liens granted in favor of the holders of 12% Subordinated Secured Convertible Notes due December 23, 2015 
 Section 8 - “Thermal Business” 
 Trademarks Subject to Pending Sale

  

							
	 Serial Number - Registration Number
	  	 Date
	  	Mark	  	 Owner

	 78544618
	  	May 2, 2006	  	PMTV	  	Irvine Sensors Corporation

 Patents Subject to Pending Sale 
  

					
	 Serial #
	  	 Title
	  	 Owner

	12/456,345	  	Second Imaging Device Adaptable for Use With First Imaging Device and Method for Using Same	  	Irvine Sensors Corporation
			
	12/800,888	  	Repositionable Lens Cover	  	Irvine Sensors Corporation
			
	61/444,970	  	On-Board Non-Uniformity Correction Calibration Method for Microbolometer Focal Plane Array	  	Irvine Sensors Corporation
			
	61/404,123	  	Alignment and Lead Insertion Device for an Electronic Component	  	Irvine Sensors Corporation
			
	13/245,345	  	Alignment and Lead Insertion Device for an Electronic Component	  	Irvine Sensors Corporation

 Compliance Certificate 

 

					
	Borrower: Irvine Sensors Corp. dba ISC8	  	Lender:	  	Partners for Growth III, L.P. (“PFG”)
	3001 Red Hill Ave., Bldg. 4/108	  		  	150 Pacific Avenue
	Costa Mesa, CA 92926	  		  	San Francisco, CA 94111

 The undersigned authorized officer of Borrower hereby certifies that in accordance with the terms and conditions of the
Loan and Security Agreement between Borrower and PFG dated as of December 14, 2011 (the “Agreement”), as of the date hereof (i) Borrower is in compliance with all required covenants except as detailed below, (ii) all
representations and warranties of Borrower stated in the Agreement, including the Representation Letter, as defined in the Agreement, are true, complete, correct and accurate in all material respects on this date except those representations and
warranties expressly referring to a specific date shall be true, complete, correct and accurate in all material respects as of such date, and except as noted below or on any disclosure letter attached to this Certificate, (iii) Borrower has
timely filed all required Non-Trivial Tax Returns, and Borrower has timely paid all Non-Trivial Taxes owed by Borrower(s) except as otherwise permitted pursuant to the Loan Agreement and, and (iv) no Defaults or Events of Default have occurred
and are continuing. Capitalized terms used but not defined herein shall have the meanings given thereto in the Agreement. 

[Signature page follows] 

	
	 /s/ Dan Regalado

	  
 SIGNATURE

 

	 Treasurer
  

	 TITLE
  

	 December 14, 2011

 

	DATE

 [Signature Page to Compliance Certificate]Form of Warrant

 Exhibit 10.2 
 WARRANT 
 THIS WARRANT (“WARRANT”) WAS SOLD IN A PRIVATE TRANSACTION, WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT AND SUCH LAWS OR IF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH LAWS IS AVAILABLE. 
  

			
	Company:	  	 Irvine Sensors Corporation, a Delaware corporation (OTCBB:
 IRSN)

	Number of Shares:	  	                    
	Class of Shares:	  	Common Stock, $0.01 par value per share
	Exchange Price:	  	$0.11 per share
	Issue Date:	  	December 14, 2011
	Expiration Date:	  	December 14, 2018

 The term “Holder” shall initially refer to
                        , which is the initial holder of this Warrant and shall further refer to any subsequent permitted
holder of this Warrant from time to time. 
 Irvine Sensors Corporation (the “Company”) does hereby certify and agree
that, for the sum of $                     paid to Holder on the date hereof, which the parties agree is fair consideration for this Warrant,
Holder, or its permitted successors and assigns, hereby is entitled to Exercise or Exchange this Warrant (each as defined below) in the Company for up to
                        
(                    ) duly authorized, validly issued, fully paid and non-assessable shares of its Common Stock, $0.01 par value per
share, upon the terms and subject to the provisions of this Warrant, including the possible reduction of shares issuable upon Exercise or Exchange of this Warrant pursuant to Section 1.7 hereof. The shares of common stock of the Company (the
“Common Stock”) issuable upon Exercise or Exchange of this Warrant are referred to herein as the “Warrant Stock”, and this Warrant and the Warrant Stock are collectively referred to herein as the “Securities”.
Capitalized terms used but not defined in this Warrant have their meanings as set forth in that certain Loan and Security Agreement of even date herewith between the Company and Holder (the “Loan Agreement”). 

Section 1 Term, Price, Exercise and Exchange of Warrant. 
 1.1 Term of Warrant. This Warrant shall be exercisable or exchangeable from the Issue Date until the Expiration Date. 
 1.2 Exchange Price. The price per share at which the Warrant Stock is issuable upon Exercise or Exchange of this Warrant shall be $0.11, subject to Section 1.3 (a) hereof and subject to
adjustment from time to time as set forth herein (the “Exchange Price”). 

 1.3 Exercise of Warrant; Exchange of Warrant. 

(a) This Warrant may be Exercised (as defined below) in whole or in part, upon surrender to the Company at its then principal offices in
the United States of this Warrant, together with the form of election to Exchange or Exercise attached hereto as Exhibit A (the “Election”) duly completed and executed, and upon payment to the Company of the Exercise Price for the number
of shares of Warrant Stock in respect of which this Warrant is then being exercised (an “Exercise”). In whole or in part in lieu of an Exercise, Holder may exchange this Warrant by indicating so in the Election and proceeding in accordance
with the remainder of this Section 1.3 (an “Exchange”). 
 (b) Upon an Exchange, the Holder shall receive Warrant
Stock such that, without the payment of any funds, the Holder shall surrender this Warrant in exchange for the number of shares of Warrant Stock equal to “X” (as defined below), computed using the following formula: 

 

											
		 	 X
	  	 	=	  	  	 Y * (A-B)
	  	
		 	  	  	A	  	

 Where 
  

							
	 X
	  	 	=	  	  	the number of shares of Warrant Stock to be issued to Holder
	 Y
	  	 	=	  	  	the number of shares of Warrant Stock to be exchanged under this Warrant
	 A
	  	 	=	  	  	the Fair Market Value of one share of Warrant Stock
	 B
	  	 	=	  	  	the Exchange Price (as adjusted to the date of such calculations)
	 *
	  	 	=	  	  	multiplied by

 (c) For purposes of this Warrant, the “Fair Market Value” of one share of Warrant Stock shall
be (i) if the Common Stock is or becomes listed on a national stock exchange or is quoted on the Nasdaq Global Select Market or Nasdaq Global Market, the average closing sale price reported on such exchange or market during the five consecutive
trading days prior to the date on which Holder delivers its Election to the Company, or (ii) if the Common Stock is traded over-the-counter, the highest closing bid price reported for the Common Stock during the trading day on which Holder
delivers its Election to the Company, and if there has been no such reported bid price for such day, the next prior day(s) until the first such reported bid price. If the Common Stock is not traded as contemplated in clauses (i) or (ii), above,
the Fair Market Value of the Warrant Stock shall be the price per share which the Company could obtain from a willing buyer for shares of Common Stock sold by the Company from its authorized but unissued shares, as the Board of Directors of the
Company (“Board”) shall determine in its reasonable good faith judgment, but in no event less than the price at which qualified employee stock options issued at such time are exercisable. In the event that Holder elects to convert the
Warrant Stock through Exchange in connection with a transaction in which the Warrant Stock is converted into or exchanged for another security, Holder may effect a Exchange directly into such other security. 

  
 2 

 (d) Upon surrender of this Warrant, and the duly completed and executed Election, and
payment of the Exchange Price or conversion of this Warrant through Exchange, the Company shall issue and deliver within 3 business days to the Holder or such other person as the Holder may designate in writing a certificate or certificates for the
number of shares of Warrant Stock issuable pursuant to the terms of this Warrant upon Exercise or Exchange. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such Warrant Stock as of the date of the surrender of this Warrant, and the duly completed and executed Election, and payment of the Exchange Price in the case of an Exercise or conversion of this Warrant through
Exchange; provided, that if the date of surrender of this Warrant and payment of the Exchange Price is not a business day, the certificates for the Warrant Stock shall be deemed to have been issued as of the next business day (whether before or
after the Expiration Date). If this Warrant is exchanged or exercised in part, a new warrant of the same tenor and for the number of shares of Warrant Stock not exchanged or exercised shall be executed by the Company and delivered to Holder.

 1.4 Fractional Interests. The Company shall not be required to issue fractions of shares of Warrant Stock upon the
Exercise or Exchange of this Warrant. If any fraction of a share of Warrant Stock would be issuable upon the exchange of this Warrant (or any portion thereof), the Company shall purchase such fraction for an amount in cash equal to the Fair Market
Value of the Warrant Stock. 
 1.5 Automatic Conversion on Expiration Date. In the event that, on the Expiration Date,
the Fair Market Value of one share of Common Stock (or other security issuable upon the Exercise or Exchange hereof) as determined in accordance with Section 1.3(c) is greater than the Exchange Price in effect on such date, then this Warrant
shall automatically be deemed on and as of such date to be converted pursuant to Section 1.3 as to all Warrant Stock (or such other securities) for which it shall not previously have been Exercised or Exchanged, and the Company shall promptly
deliver a certificate representing the Warrant Stock (or such other securities) issued upon such conversion to the Holder. 

1.6 Treatment of Warrant Upon Acquisition of Company. 

(a) “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale or other disposition of all or
substantially all of the assets of the Company in whatever form, or any reorganization, consolidation, or merger of the Company (whether in a single transaction or multiple related transactions) where the holders of the Company’s securities
before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction(s). 

  
 3 

 (b) Treatment of Warrant at Acquisition. Upon the closing of any Acquisition, the
successor entity (if applicable in such Acquisition) shall, as condition to such Acquisition, either: (i) assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities as would be payable for the Warrant
Stock issuable upon exchange of the unexchanged portion of this Warrant as if such Warrant Stock were outstanding on the record date for the Acquisition (and the Warrant Price and/or number of shares of Warrant Stock shall be adjusted accordingly)
or (ii) purchase this Warrant at its “Fair Value” (as described in clause (c) below, the “Purchase Price”). 
 (c) Purchase at Fair Value. 
 For purposes of this Warrant, “Fair
Value” shall mean that value determined by the parties using a European Black-Scholes Option-Pricing Model (the “Black-Scholes Calculation”) with the following assumptions: (A) a risk-free interest rate equal to the risk-free
interest rate at the time of the closing of the Acquisition (or as close thereto as practicable), (B) a contractual life of the Warrant equal to the remaining term of this Warrant as of the date of the announcement of the Acquisition,
(C) an annual dividend yield equal to dividends declared on the underlying Warrant Stock (including securities into which the Warrant Stock may be convertible) during the term of this Warrant (calculated on an annual basis), and (D) a
volatility factor of the expected market price of the Company’s Common Stock comprised of: (1) if the Company is publicly traded on a national securities exchange or is quoted on the Nasdaq Global Select Market or Nasdaq Global Market, its
volatility over the one year period ending on the day prior to the announcement of the Acquisition, (2) if the Common Stock is traded over-the-counter, its volatility over the one year period ending on the day prior to the announcement of the
Acquisition, or (3) if the Company is a non-public company, the volatility, over the one year period prior to the Acquisition, of an average of publicly-traded companies in the same or similar industry to the Company with such companies having
similar revenues. The Purchase Price determined in accordance with the above shall be paid upon the initial closing of the Acquisition and shall not be subject to any post-Acquisition closing contingencies or adjustments; provided, however, the
parties may take such post-Acquisition closing contingencies or adjustments into account in determining the Purchase Price, and if the parties take any post-Acquisition closing contingencies or adjustments into account, then upon the partial or
complete removal of those post-Acquisition closing contingencies or adjustments, a new Black-Scholes Calculation would be made using all of the same inputs except for the value of the Company’s Common Stock (as determined under subclause (D)),
and any increase in Fair Value (and, correspondingly, Purchase Price), including, without limitation, as a result of any earn-out or escrowed consideration, would be paid in full to Holder immediately after those post-Acquisition closing
contingencies or adjustments can be determined or achieved. 
 1.7 Reduction in Number of Shares. If the Company (i) earns at least
$20,000,000 in Revenues during the calendar year 2012, and (ii) has EBITDA of not less than ($4,000,000) for the calendar year 2012 (parentheses denoting a negative number), then the Number of Shares issuable on Exercise or Exchange of
this Warrant shall be reduced to 4,500,000. The term “EBITDA” means (a) net income, minus (b) any non-cash 

  
 4 

 
income, plus (c) interest expense, plus (d) to the extent deducted in the calculation of net income, depreciation expense and amortization expense, plus
(e) income tax expense excluding (f) any non-cash change in fair value of derivative instruments, and (g) non-cash stock-based compensation, including employee retirement plan contributions, in each case as reported in the Company’s
public filings (or calculated on a consistent basis with Borrower’s current public filings). The term “Revenues” means revenues as reported as such by Borrower in its public filings (or calculated on a consistent basis with
Borrower’s current public filings). 
 Section 2. Exchange and Transfer of Warrant. 

(a) This Warrant may be transferred, in whole or in part, without restriction, subject to (i) Holder’s compliance with
applicable securities laws and delivery of an opinion of competent counsel as to the same, if so requested by the Company, and (ii) the transferee holder of the new Warrant assuming in writing the obligations of the Holder set forth in this
Warrant. Notwithstanding and without the necessity of delivering an opinion of counsel, Holder may at any time transfer this Warrant in whole or in part to any affiliate. By its acceptance of this Warrant, each such affiliate transferee will be
deemed to have made to the Company each of the representations and warranties set forth in Section 7 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof. A transfer may be registered
with the Company by submission to it of this Warrant, together with the Assignment Form attached hereto as Exhibit B duly completed and executed. After the Company’s receipt of this Warrant and the Assignment Form so completed and executed, the
Company will issue and deliver to the transferee a new warrant (representing the portion of this Warrant so transferred) at the same Exchange Price per share and otherwise having the same terms and provisions as this Warrant, which the Company will
register in the new holder’s name. In the event of a partial transfer of this Warrant, the Company shall concurrently issue and deliver to the transferring holder a new warrant that entitles the transferring holder to purchase the balance of
this Warrant not so transferred and that otherwise is upon the same terms and conditions as this Warrant. Upon the due delivery of this Warrant for transfer, the transferee holder shall be deemed for all purposes to have become the holder of the new
warrant issued for the portion of this Warrant so transferred, effective immediately prior to the close of business on the date of such delivery, irrespective of the date of actual delivery of the new warrant representing the portion of this Warrant
so transferred. 
 (b) In the event of the loss, theft or destruction of this Warrant, the Company shall execute and deliver an
identical new warrant to the Holder in substitution therefor upon the Company’s receipt of (i) evidence reasonably satisfactory to the Company of such event and (ii) if requested by the Company, an indemnity agreement reasonably
satisfactory in form and substance to the Company. In the event of the mutilation of or other damage to the Warrant, the Company shall execute and deliver an identical new warrant to the Holder in substitution therefor upon the Company’s
receipt of the mutilated or damaged warrant. 
 (c) The Company shall pay all reasonable costs and expenses incurred in
connection with the Exchange, Exercise, transfer or replacement of this Warrant, including, without limitation, the costs of preparation, execution and delivery of a new warrant and of share certificates representing all Warrant Stock. 

  
 5 

 Section 3. Certain Covenants. 

(a) The Company shall at all times reserve for issuance and keep available out of its authorized and unissued Common Stock, solely for the
purpose of providing for the exchange of this Warrant, such number of shares of Common Stock as shall from time to time be sufficient therefor. 
 (b) The Company will not, by amendment or restatement of its Certificate of Incorporation or Bylaws or through reorganization, consolidation, merger, amalgamation, sale of assets or otherwise, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant. Without limiting the foregoing, the Company will not increase the par value of any Warrant Stock receivable upon the exchange of this Warrant above the amount payable
therefor upon such exchange. 
 (c) So long as Holder holds this Warrant, the Company shall deliver to Holder such reports as it
provides to its stockholders generally, as and when delivered to such stockholders. Notwithstanding the foregoing, the Company shall provide Holder quarterly and annual financial statements upon request, if such statements are not publicly
available. The parties shall not treat the Warrant or the Warrant Stock as being granted or issued as property transferred in connection with the performance of services or otherwise as compensation for services rendered. 

Section 4. Adjustments to Exchange Price and Number of Shares of Warrant Stock. 

4.1 Adjustments. The Exchange Price shall be subject to adjustment from time to time in accordance with this Section 4. Upon
each adjustment of the Exchange Price pursuant to this Section 4, the Holder shall thereafter be entitled to acquire upon exchange, at the Exchange Price resulting from such adjustment, the number of shares of Warrant Stock obtainable by
multiplying the Exchange Price in effect immediately prior to such adjustment by the number of shares of Warrant Stock acquirable immediately prior to such adjustment and dividing the product thereof by the new Exchange Price resulting from such
adjustment. 
 4.2 Subdivisions, Combinations and Stock Dividends. If the Company shall at any time subdivide by split-up
or otherwise, its outstanding Common Stock into a greater number of shares, or issue additional Common Stock as a dividend or otherwise with respect to any Common Stock, the Exchange Price in effect immediately prior to such subdivision or share
dividend shall be proportionately reduced and the number of shares acquirable upon Exercise or Exchange hereunder shall be proportionately increased. Conversely, in case the outstanding Common Stock of the Company shall be combined into a smaller
number of shares, the Exchange Price in effect immediately prior to such combination shall be proportionately increased. 

  
 6 

 4.3 Reclassification, Exchange, Substitutions, Etc. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exchange or exercise of this Warrant, Holder shall be entitled to receive and the Company shall promptly issue an amended
warrant for the number and kind of securities and property that Holder would have received for the Warrant Stock if this Warrant had been Exercised or Exchanged immediately before such reclassification, exchange, substitution, or other event. The
amendment to this Warrant shall provide for adjustments (as determined in good faith by the Board) which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4.3, without limitation, adjustments to
the Warrant Price and to the number of securities or property issuable upon Exercise or Exchange of the new Warrant. The provisions of this Section 4.3 shall similarly apply to successive reclassifications, exchanges, substitutions, or other
similar events. 
 4.4. Notices of Record Date, Etc. In the event that the Company shall: 

(1) declare or propose to declare any dividend upon its Common Stock, whether payable in cash, property, stock or other securities and
whether or not a regular cash dividend, or 
 (2) offer for sale any additional shares of any class or series of the
Company’s stock or securities exchangeable for or convertible into such stock in any transaction that would give rise (regardless of waivers thereof) to pre-emptive rights of any class or series of stockholders, or 

(3) effect or approve (by stockholder vote or otherwise) any reclassification, exchange, substitution or recapitalization of the capital
stock of the Company, including any subdivision or combination of its outstanding capital stock, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation, or to liquidate, dissolve or
wind up (including an assignment for the benefit of creditors), or 
 (4) offer holders of registration rights the opportunity
to participate in any public offering of the Company’s securities, 
 then, in connection with such event, the Company shall give to
Holder: 
 (i) at least ten (10) days prior written notice of the date on which the books of the Company shall close or a
record shall be taken for such a dividend or offer in respect of the matters referred to in (1) or (2) above; 
 (ii)
in the case of the matters referred to in (3) above, at least ten (10) days prior written notice of the date when the same shall take place; and 

  
 7 

 (iii) in the case of the matter referred to in (4) above, the same notice as is given
or required to be given to the holders of such registration rights. 
 Such notice in accordance with the foregoing clause (1) shall also
specify, in the case of any such dividend, the date on which the holders of capital stock shall be entitled thereto and the terms of such dividend, and such notice in accordance with clause (2) shall also specify the date on which the holders
of capital stock shall be entitled to exchange their capital stock for securities or other property deliverable upon such reorganization, reclassification, exchange, substitution, consolidation, merger or sale, as the case may be, and the terms of
such exchange. Each such written notice shall be given by first class mail, postage prepaid, addressed to the holder of this Warrant at the address of Holder. 
 4.5 Adjustment by Board. If any event occurs as to which, in the opinion of the Board, the provisions of this Section 4 are not strictly applicable or if strictly applicable would not fairly
protect the rights of the Holder in accordance with the essential intent and principles of such provisions, then the Board shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as
to protect such rights, but in no event shall any adjustment have the effect of increasing the Exchange Price as otherwise determined pursuant to any of the provisions of this Section 4, except in the case of a combination of shares of a type
contemplated in Section 4.2 and then in no event to an amount larger than the Exchange Price as adjusted pursuant to Section 4.2. 
 4.6 Officers’ Statement as to Adjustments. Whenever the Exchange Price and/or number of shares of Warrant Stock subject to the Warrant is required to be adjusted as provided in this
Section 4, the Company shall forthwith file at its principal office with a copy to the Holder notice parties set forth in Section 9 hereof a statement, signed by the Chief Executive Officer or Chief Financial Officer of the Company,
showing in reasonable detail the facts requiring such adjustment, the Exchange Price and number of issuable shares that will be effective after such adjustment; provided, however, such statement shall not be required to the extent the information
otherwise required by this Section 4.6 is available through the Company’s current reports filed with the Securities and Exchange Commission. 
 4.7 Issue of Securities other than Common Stock. In the event that at any time, as a result of any adjustment made pursuant to this Section 4, Holder thereafter shall become entitled to
receive any securities of the Company, other than Common Stock, the number of such other shares so receivable upon Exercise or Exchange of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in this Section 4. 

  
 8 

 Section 5. Rights and Obligations of the Warrant Holder. 

Except as otherwise specified in this Warrant, this Warrant shall not entitle the Holder to any rights of a holder of Common Stock in the
Company until such time as this Warrant is exchanged or exercised. 
 Section 6. Representations, Warranties and Covenants of the
Company. The Company represents and warrants to, and covenants with, Holder that: 
 6.1 Corporate Power;
Authorization. The Company has all requisite corporate power and has taken all requisite corporate action to execute and deliver this Warrant, to sell and issue the Warrant and Warrant Stock and to carry out and perform all of its obligations
hereunder. This Warrant has been duly authorized, executed and delivered on behalf of the Company by the person executing this Warrant and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally and (ii) as limited by equitable principles generally. 

6.2 Validity of Securities. The issuance and delivery of the Warrant is not subject to preemptive or any similar rights of the
stockholders of the Company (which have not been duly waived) or any liens or encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws; and when the Warrant Stock is issued upon
Exercise or Exchange in accordance with the terms hereof, and this Warrant is converted into Warrant Stock, such securities will be, at each such issuance, validly issued, fully paid and nonassessable, in compliance with all applicable securities
laws and free of any liens or encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. 
 6.3 Capitalization. The authorized capital stock of the Company consists of 500,000,000 shares of common stock, of which 113,695,834 were issued and outstanding on October 2, 2011. All such
issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable. As of the date hereof, the Company has reserved a total of 68,895,556 shares of its common stock for issuance under its employee stock
plans, of which 58,457,215 shares are reserved for issuance upon exercise of outstanding options granted under such stock plans. In addition, as of the date hereof, the Company has reserved a total of 10,115,826 shares of its common stock for
issuance pursuant to exercise of issued and outstanding warrants. Exhibit C hereto sets forth a capitalization table of the Company which is true, correct accurate and complete in all material respects as of October 2, 2011. 

6.4 No Conflict. The execution and delivery of this Warrant do not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit, under,
any provision of the Certificate of Incorporation or Bylaws of the Company or any mortgage, indenture, lease or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, its properties or assets, in each case, the effect of which would have a material adverse effect on the Company or materially impair or restrict its power to perform its obligations as contemplated hereby.

  
 9 

 6.5 Governmental and other Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any governmental authority or other person or entity is required on the part of the Company in connection with the issuance, sale and delivery of the Warrant and the Warrant
Stock, except such filings as shall have been made prior to and shall be effective on and as of the date hereof. All stockholder consents required in connection with issuance of the Warrant and Warrant Stock have either been obtained by Borrower or
no such consents are required. 
 6.6 Exempt from Registration. Assuming the accuracy of the representations and
warranties of Holder in Section 7 hereof, the offer, sale and issuance of the Warrant and the Warrant Stock will be exempt from the registration requirements of the Securities Act pursuant to 506 of Regulation D under the Securities Act and
from the registration and qualification requirements of applicable state securities laws. Neither the Company nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell or will offer to sell all or any part
of Securities to any person or persons so as to bring the sale of such Shares by the Company within the registration provisions of the Securities Act. 
 6.7 Reporting Obligations. Borrower is and will remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and (i) has filed and will file all required
reports under Section 13 or 15(d) of the Exchange Act, as applicable, other than Form 8-K reports. Without limiting the foregoing, if the Company ceases to timely file periodic reports under the Exchange Act, the Company shall from time to time
promptly provide a copy of its most recent annual, quarterly and other interim reports to Holder. 
 6.9 Non-Public
Information. To the extent the Company provides any material nonpublic information to Holder, the Company shall cease doing so during any period requested by Holder. To the extent required, the Company will publicly disclose the terms of this
Agreement on Form 8-K under the Exchange Act (including it as an exhibit thereto if it deems it required under applicable law) promptly following the date hereof. 
 6.10 Delivery of Information; Accuracy. The Company acknowledges its delivery of certain Representations and Warranties of even date with the Loan Agreement (the “Representation Letter”),
to Holder, which Representations and Warranties form the basis for Holder purchasing the Warrant. The information contained in Part B of the Representation Letter and all documents, instruments and other information delivered to Holder in connection
therewith are true, correct, accurate and complete in all material respects. 
 6.11 Legends. The Company shall remove
any restrictive securities legends on Warrant Stock resulting from Exercise or Exchange of the Warrant as soon as permitted by applicable law. 

  
 10 

 Section 7. Representations and Warranties of Holder. Holder hereby represents
and warrants to the Company as of the Closing Date as follows: 
 7.1 Investment Experience. Holder is an
“accredited investor” within the meaning of Rule 501 under the Securities Act, and was not organized for the specific purpose of acquiring the Securities. Holder is aware of the Company’s business affairs and financial condition and
has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Holder has such business and financial experience as is required to give it the capacity to protect its own interests in
connection with the purchase of the Securities. 
 7.2 Investment Intent. Holder is purchasing the Warrant for investment
for its own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act. Holder understands that the Warrant has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein. 

7.3 Authorization. Holder has all requisite power and has taken all requisite action required of it to carry out and perform all
of its obligations hereunder. The execution and delivery of this Warrant has been duly authorized, executed and delivered on behalf of Holder and constitutes the valid and binding agreement of Holder, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally and (ii) as limited by equitable principles generally. The consummation of the
transactions contemplated herein and the fulfillment of the terms herein will not result in a breach of any of the terms or provisions of Holder’s constitutional documents or instruments. 

Section 8. Restricted Stock Legend. 
 This Warrant and the Warrant Stock have not been registered under any securities laws. Accordingly, any share certificates issued pursuant to the Exercise or Exchange of this Warrant shall (until receipt
of an opinion of counsel in customary form that such legend is no longer necessary) bear the following legend: 
 THIS WARRANT
AND THE WARRANT STOCK ISSUABLE UPON EXERCISE OR EXCHANGE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN CUSTOMARY FORM THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT. 

  
 11 

 Section 9. Notices. 
 Any notice or other communication required or permitted to be given here shall be in writing and shall be effective (a) upon hand delivery or delivery by e-mail or facsimile at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received) or the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received), or (b) on the third business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communication shall be: 
 if to Holder, at 
 Partners for Growth III, L.P. 
 150 Pacific Avenue 

San Francisco, California 94111 
 Attention: Chief Financial Officer 
 Fax: (415) 781-0510 

Email: notices@pfgrowth.com 
 with a copy (not constituting notice) to 
 Greenspan Law Office 

Attn: Benjamin Greenspan, Esq. 
 620 Laguna Road Mill Valley, CA 94941 
 Fax: (415) 738-5371 

Email: ben@greenspan-law.com 

or 
 if to the Company, at

 Irvine Sensors Corporation 
 3001 Red Hill Ave., Bldg. 4/108 
 Costa Mesa 

Orange County, CA 92926 
 Attn: Marcus Williams 
 Email: mwilliams@isc8.com 

  
 12 

 with a copy (not constituting notice) to: 

Ropes & Gray LLP 
 Prudential Tower 
 800 Boylston Street 

Boston, MA 02199-3600 
 Attn: Jeffrey R. Katz 
 Fax: (617) 951-7000 

Email: jeffrey.katz@ropesgray.com 
 Each party hereto may from time to time change its address for notices under this Section 9 by giving at least 10 calendar days’ notice of such changes address to the other party hereto.

 Section 10. Amendments and Waivers. 
 This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant may only be amended by an instrument in writing signed by both parties. 
 Section 11. Applicable
Law; Severability. 
 This Warrant shall be governed by and construed and enforced in accordance with the laws of the State
of California. If any one or more of the provisions contained in this Warrant, or any application of any provision thereof, shall be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and all other applications of any provision thereof shall not in any way be affected or impaired thereby. 

Section 12. Construction; Headings. 
 The terms “Exercise” and “Exchange” may be used interchangeably from time to time in this Warrant, the only substantive difference being that the exercise of rights under this Warrant
by Exercise will require payment of cash consideration per share equal to the Exchange Price. The headings used in this Warrant are for the convenience of the parties only and shall not be used in construing the provisions hereof. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 13 

 IN WITNESS WHEREOF, the company has caused this warrant to be duly executed on the day and year first about
written. 
  

									
	COMPANY:	 		 	ACKNOWLEDGED AND AGREED:
			
	IRVINE SENSORS CORPORATION	 		 	HOLDER:
			
		 		 	                           
             
					
	By:	 	  
	 		 		 	
	Name:	 	  
	 		 	By:	 	  

	Title:	 	  
	 		 		 	                             
   , Manager of
		 		 		 		 	Partners for Growth III, LLC,
		 		 		 		 	Its General Partner

 Warrant Signature Page 

 Exhibit A 
 To: 
 ELECTION TO EXCHANGE OR EXERCISE 

1. The undersigned hereby exercises its right to Exchange its Warrant for
                     fully paid, validly issued and nonassessable shares of Warrant Stock in accordance with the terms thereof. 

1. The undersigned hereby elects to Exercise the attached Warrant for fully paid, validly issued and nonassessable shares of Warrant Stock by payment of
$         as specified in the attached Warrant. This right is exercised with respect to                  of shares. 

[Strike the paragraph above that does not apply.] 
 The undersigned requests that certificates for such shares be issued in the name of, and delivered to: 
  

					
		  	  
	  	
		  	  
	  	
		  	  
	  	

 2. By its execution below and for the benefit of the Company, the undersigned hereby restates each of the representations
and warranties in Section 7 of the Warrant as of the date hereof. 
  

									
	Date:                     	 		 	[Holder]	 		 	
					
		 		 	By	 	  
	 	
		 		 	Name:	 		 	
		 		 	Title:	 		 	

 Exhibit B 
 ASSIGNMENT FORM 
 To: 
 The undersigned hereby assigns and transfers this Warrant to 
  

					
	  
	  		  	
	(Insert assignee’s social security or tax identification number)	  		  	
		
	  
	  	
	(Print or type assignee’s name, address and postal code)	  		  	
	  
	  	
		
	  
	  	

 and irrevocably appoints
                                         
                to transfer this Warrant on the books of the Company. 
 Date:                      Partners for Growth III, L.P. 

 

			
	By	 	  

	Name:	 	                    , Manager of Partners for Growth III, LLC, Its
General Partner

 Exhibit C – Summary Capitalization Table 

 

													
	 ~10% or greater Stockholders
	   
	  				  	 	% of issued	  
	 Costa Brava
	  	 	41,400,260	  	  				  	 	36.41	% 
	 Griffin
	  	 	14,141,561	  	  				  	 	12.44	% 
	 ISC ESBP (ERISA-qualified Pension Plan)
	  	 	11,158,806	  	  				  	 	9.81	% 
		  	  
	  
	 	  				  	  
	  
	 
		  	 	66,700,627	  	  				  	 	58.67	% 
				
	 All Others (~5,000 in number, primarily retail)
	  	 	46,995,207	  	  				  			
				
	 Common Stock issued and outstanding @ 10-2-11
	  				  	 	113,695,834	  	  			
				
	 Common Shares Issuable Pursuant to Long-term Convertible Notes
	  				  				  	 
 	% of Note
potential	  
  
	 Costa Brava
	  	 	139,148,358	  	  				  	 	60.42	% 
	 Griffin
	  	 	65,950,457	  	  				  	 	28.63	% 
	 All Others
	  	 	25,218,845	  	  				  	 	10.95	% 
		  	  
	  
	 	  				  			
	 Total Dilutive Potential of Long-term
	  				  				  			
	 Convertible Notes
	  				  	 	230,317,661	  	  			
				
	 Common Shares Issuable Pursuant to Other Outstanding Convertible Instruments
	  				  				  			
	 Series B Convertible Preferred (~50 individual retail investors)
	  	 	3,571,139	  	  				  			
	 Warrants (largely J.P. Turner partners, brokers & retail investors)
	  	 	10,115,826	  	  				  			
	 Options (Officers, Directors &
	  				  				  			
	 Employees)
	  	 	57,983,465	  	  				  			
		  	  
	  
	 	  				  			
		  				  	 	71,670,430	  	  			
		  				  	  
	  
	 	  			
	 Total Fully Diluted @ 10-2-11
	  				  	 	415,683,925	  	  			
		  				  	  
	  
	 	  			
				
	 Institutional Ownership, Fully Diluted
	  				  				  			
	 Costa Brava
	  	 	180,548,618	  	  				  	 	43.43	% 
	 Griffin
	  	 	80,092,018	  	  				  	 	19.27	%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]