EXHIBIT 10.71
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER HEREOF FOR
ITS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR CAUSING TO BE MADE
A PUBLIC DISTRIBUTION OF ALL OR ANY PORTION THEREOF. SUCH SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IRVINE SENSORS CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
October 14, 2009
IRVINE SENSORS CORPORATION
WARRANT TO PURCHASE COMMON STOCK
Void after October 13, 2014
     IRVINE SENSORS CORPORATION, a Delaware corporation (the “Company”), hereby
certifies that, for value received,                                         
(including any permitted successors and assigns, the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time during the Exercise Period, defined below, and prior to
5:00 PM Central time, on October 13, 2014 (the “Expiration Date”), fully paid
and nonassessable shares of Common Stock (the “Warrant Shares”) under the terms
set forth herein.
     1. Number of Warrant Shares; Exercise Price. This Warrant shall evidence
the right of the Holder to purchase up to 350,000 Warrant Shares at an exercise
price per Warrant Share of $0.44 per share, subject to adjustment as provided in
Section 6 below (the “Exercise Price”).
     2. Definitions. As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:
          (a) The term “Common Stock” shall mean the common stock, $0.01 par
value per share, of the Company.
          (b) The term “Company” shall include any company which shall succeed
to or assume the obligations of the Company hereunder.
          (c) The term “Corporate Transaction” shall mean (i) a sale, transfer
or conveyance of all or substantially all of the assets of the Company; (ii) a
consolidation of the Company with, or merger of the Company with or into,
another corporation or other business entity in which the stockholders of the
Company immediately prior to such consolidation or merger own less than 50% of
the voting power of the surviving entity immediately after such consolidation or
merger; or (iii) any transaction or series of related transactions to which the
Company is a party in which in excess of 50% of the Company’s voting power is
transferred, excluding any consolidation or merger effected exclusively to
change the domicile of the Company and excluding any transaction for the primary
purpose of raising capital or acquiring another corporation or business entity.
          (d) The term “Stock” shall mean (i) Common Stock or (ii) any other
class of stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.

 

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     3. Exercise Date; Expiration. Subject to the terms hereof, this Warrant may
be exercised by the Holder at any time or from time to time before the
Expiration Date (the “Exercise Period”).
     4. Exercise of Warrant; Partial Exercise.
          (a) Subject to Section 4(b) below, this Warrant may be exercised in
full by the Holder by surrender of this Warrant, together with the Holder’s duly
executed form of subscription attached hereto as Exhibit A, to the Company at
its principal office, accompanied by payment, in cash or by certified or
official bank check payable to the order of the Company, of the aggregate
exercise price (as determined above) of the number of Warrant Shares to be
purchased hereunder. The exercise of this Warrant pursuant to this Section 4
shall be deemed to have been effected immediately prior to the close of business
on the business day on which this Warrant is surrendered to the Company as
provided in this Section 4, and at such time the person in whose name any
certificate for Warrant Shares shall be issuable upon such exercise shall be
deemed to be the record holder of such Warrant Shares for all purposes. No later
than seven (7) business days after the exercise of this Warrant, the Company at
its expense will cause to be issued in the name of and delivered to the Holder,
or as the Holder may direct, a certificate or certificates for the number of
fully paid and nonassessable full shares of Warrant Shares to which the Holder
shall be entitled on such exercise, together with cash, in lieu of any fraction
of a share, equal to such fraction of the fair market value (as defined in
Section 5(c) below) of one full Warrant Share as of the close of business on the
business day on which this Warrant is surrendered, and, if applicable, a new
warrant evidencing the balance of the shares remaining subject to the Warrant.
          (b) The Holder may not exercise that portion of the Warrant on the
deemed exercise date (the “Exercise Amount”) in amounts that would result in the
Holder having a beneficial ownership of Common Stock which would be in excess of
the sum of (i) the number of shares of Common Stock beneficially owned by the
Holder and its affiliates on such deemed exercise date, and (ii) the number of
shares of Common Stock issuable upon the exercise of the Exercise Amount with
respect to which the determination of this Section 4(b) is being made on such
deemed exercise date, which would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock
of the Company. For the purposes of this Section 4(b), beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the
foregoing, the Holder shall not be limited to successive exercises which would
result in the aggregate issuance of more than 4.99%. The Holder may revoke the
exercise limitation described in this Section 4(b), in whole or in part, upon
61 days prior notice to the Company. The Holder may allocate which of the equity
of the Company deemed beneficially owned by the Holder shall be included in the
4.99% amount described above and which shall be allocated to the excess above
4.99%. The Holder may waive the exercise limitation described in this Section
4(b) in whole or in part, upon and effective after 61 days prior written notice
to the Company to increase such percentage to up to 9.99%.
     5. Net Issuance.
          (a) Cashless Exercise. In the event that the Company has not
registered the Warrant Shares issued or issuable upon the exercise of this
Warrant for resale under the Securities Act of 1933, as amended, on or prior to
the six-month anniversary (the “Net Issuance Date”) of the issuance date of this
Warrant, the Holder shall have the right to convert this Warrant (the
“Conversion Right”) into Warrant Shares as provided in this Section 5 from time
to time after the Net Issuance Date until the Expiration Date. Subject to
Section 4(b), upon exercise of the Conversion Right with respect to shares
subject to the Warrant (the “Converted Warrant Shares”), the Company shall
deliver to the Holder (without payment by the Holder of any exercise price or
any cash or other consideration) that number of fully paid and nonassessable
Warrant Shares computed using the following formula:

 

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     X = Y (A – B)
                    A
Where:    X =    the number of Warrant Shares to be delivered to the Holder;
               Y =    the number of Converted Warrant Shares;
               A =    the fair market value of one Warrant Share on the
Conversion Date (as defined below); and
               B =    the Exercise Price (as adjusted on the Conversion Date).
     No fractional shares shall be issuable upon exercise of the Conversion
Right, and if the number of shares to be issued (determined in accordance with
the foregoing formula) is other than a whole number, the Company shall pay to
the Holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as defined below). Shares issued
pursuant to the Conversion Right shall be treated as if they were issued upon
the exercise of the Warrant.
          (b) Method of Exercise. The Conversion Right may be exercised by the
Holder by the surrender of the Warrant at the principal office of the Company
together with a written statement specifying that the Holder thereby intends to
exercise the Conversion Right and indicating the total number of shares under
the Warrant that the Holder is exercising through the Conversion Right. Such
conversion shall be effective upon receipt by the Company of the Warrant
together with the aforesaid written statement, or on such later date as is
specified therein (the “Conversion Date”). Certificates for the shares issuable
upon exercise of the Conversion Right shall be delivered to the Holder within
seven (7) business days following the Conversion Date and, if applicable, a new
warrant evidencing the balance of the shares remaining subject to the Warrant
shall also be delivered to the Holder.
          (c) Determination of Fair Market Value. For purposes of this
Section 5, fair market value of a Warrant Share on the Conversion Date shall be
determined as follows:
               (i) If the Common Stock is traded on a national securities
exchange or the Nasdaq Capital Market, the fair market value of a Warrant Share
shall be deemed to be the closing sales price of the Common Stock on the stock
exchange or market determined by the Board to be the primary market for the
Common Stock as of the trading day immediately prior to the Conversion Date, as
such prices are officially quoted in the composite tape of transactions on such
exchange or market;
               (ii) If the Common Stock is traded over-the-counter or in the
“pink sheets”, the fair market value of a Warrant Share shall be deemed to be
the closing bid price (or, if such information is available, the closing selling
price, or, in the case of the “pink sheets,” the most recent bid price) of the
Common Stock as of the trading day immediately prior to the Conversion Date; and
               (iii) If there is no public market for the Common Stock, then the
fair market value of a Warrant Share shall be determined by the Board of
Directors of the Company in good faith and, upon request of the Holder, the
Board (or a representative thereof) shall, as promptly as reasonably
practicable, but in any event not later than 15 days after such request, notify
the Holder of the Fair Market Value per share of Common Stock.
     6. Adjustments to Exercise Price and Number of Warrant Shares. The number
and kind of Warrant Shares (or any shares of stock or other securities which may
be) issuable upon the exercise of this Warrant and the Exercise Price hereunder
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:
          (a) Splits and Subdivisions. In the event the Company should at any
time or from time to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock into a greater number of
shares, then, as of such record date (or the date of such split or subdivision
if no record date is

 

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fixed), the Exercise Price shall be appropriately decreased and the number of
Warrant Shares for which this Warrant is exercisable shall be appropriately
increased in accordance with Section 6(f) hereof.
          (b) Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the Exercise Price shall be
appropriately increased and the number of Warrant Shares for which this Warrant
is exercisable shall be appropriately decreased in accordance with Section 6(f)
hereof.
          (c) Dividends in Common Stock or Common Stock Equivalents. In the
event the Company should at any time or from time to time fix a record date for
the determination of the holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as the “Common Stock Equivalents”) without payment of any
consideration by such holder for the additional shares of Common Stock or Common
Stock Equivalents, then, as of such record date (or the date of such
distribution if no record date is fixed), the Holder hereof shall, upon the
exercise of this Warrant, be entitled to receive, in addition to the number of
shares of Common Stock receivable thereupon, and without payment of any
additional consideration therefor, the amount of Common Stock and Common Stock
Equivalents which such Holder would hold on the date of such exercise had such
Holder been the holder of record of such Common Stock as of the date on which
holders of Common Stock received or became entitled to receive such shares of
Common Stock or Common Stock Equivalents.
          (d) Reclassification or Reorganization. If the Warrant Shares issuable
upon the exercise of this Warrant shall be changed into the same or different
number of shares of any class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a split or subdivision
provided for in Section 6(a) above or stock dividend provided for in Section
6(c) above or a combination of shares provided for in Section 6(b) above, or a
reorganization, merger or consolidation provided for in Section 6(e) below),
then and in each such event the Holder shall be entitled to receive upon the
exercise of this Warrant the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification or
other change, to which a holder of the number of Warrant Shares issuable upon
the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, reclassification or other
change, all subject to further adjustment as provided herein.
          (e) Merger or Consolidation. If at any time there shall be a capital
reclassification or reorganization of the Warrant Shares or a Corporate
Transaction (other than a subdivision, combination, reclassification or exchange
of shares provided for elsewhere in this Section 6) of the Company, then as a
part of such reorganization or Corporate Transaction, lawful and adequate
provision shall be made so that the Holder shall thereafter be entitled to
receive upon the exercise of this Warrant, the number of shares of stock or
other securities or property of the Company, resulting from such reorganization,
recapitalization or Corporate Transaction to which a holder of the number of
Warrant Shares issuable upon the exercise of this Warrant would have received if
this Warrant had been exercised immediately prior to such reorganization or
Corporate Transaction. In any such case, the Company will make lawful and
appropriate provision to insure that the provisions of this Section 6(e) hereof
will thereafter be applicable as nearly as may be in relation to any shares of
stock or securities thereafter deliverable upon the exercise of this Warrant.
The Company shall not effect any such Corporate Transaction unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Corporate Transaction or the corporation
purchasing or acquiring such assets or other appropriate corporation or entity
shall assume the obligation to deliver to the Holder, at the last address of the
Holder appearing on the books of the Company, such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, and the other obligations under this Warrant. The
provisions of this Section 6(e) shall similarly apply to successive
reorganizations, reclassifications, or Corporate Transactions.
          (f) Adjustment in Number of Warrant Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 6, the number of
Warrant Shares issuable upon the exercise of this Warrant shall be adjusted to
the nearest full amount by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
issuable upon exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.

 

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          (g) Notice of Record Dates; Adjustments. In the event of a Corporate
Transaction, the Company shall provide to the Holder ten (10) days advance
written notice of such Corporate Transaction. The Company shall promptly notify
the Holder in writing of each adjustment or readjustment of the Exercise Price
and the number of Warrant Shares issuable upon the exercise of this Warrant.
Such notice shall state the adjustment or readjustment and show in reasonable
detail the facts on which that adjustment or readjustment is based.
     7. Replacement of Warrants. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver to the Holder, in lieu thereof, a new Warrant
of like tenor.
     8. No Rights or Liability as a Stockholder. This Warrant does not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.
No provisions, in the absence of affirmative action by the Holder to purchase
Warrant Shares, and no enumeration of the rights or privileges of the Holder
contained herein, shall give rise to any liability of the Holder as a
stockholder of the Company.
     9. Miscellaneous.
          (a) Transfer of Warrant; Permitted Designees. The Holder agrees not to
make any disposition of this Warrant, the Warrant Shares or any rights hereunder
without the prior written consent of the Company. Any such permitted transfer
must be made by the Holder in person or by duly authorized attorney, upon
delivery of this Warrant and the form of assignment attached hereto as Exhibit B
to any such permitted transferee. As a condition precedent to such transfer, the
transferee shall sign an investment letter in form and substance satisfactory to
the Company. Subject to the foregoing, the provisions of this Warrant shall
inure to the benefit of and be binding upon any successor to the Company and
shall extend to any holder hereof. Notwithstanding anything contained herein,
the Company shall, upon written instructions to be delivered to the Company
within fifteen (15) business days following the date hereof, transfer all or a
portion of this Warrant to officers, directors, employees and other registered
agents or associated persons of the Holder (collectively, “Permitted Designees”)
in accordance with this Section 9; provided, however, the Company shall not be
required to issue such Warrants to any person who is not an “accredited
investor” within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended, and provided, further, that Holder provides an opinion
of counsel reasonably satisfactory to the Company that such transfer complies
with applicable Federal and state securities laws. Each Permitted Designee shall
be required to execute fully and completely the Investor Representation Letter
in the form attached hereto as Exhibit C prior to the issuance of the Warrant to
such person.
          (b) Restrictive Legend. Each certificate for Warrant Shares shall bear
a restrictive legend in substantially the form as follows, together with any
additional legend required by (i) any applicable state securities laws and
(ii) any securities exchange upon which such Warrant Shares may, at the time of
such exercise, be listed:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IRVINE
SENSORS CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
          (c) Titles and Subtitles. The titles and subtitles used in this
Warrant are for convenience only and are not to be considered in construing or
interpreting this Warrant.
          (d) Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Warrant shall be in writing and shall be
effective and deemed given to such party under this Warrant on the earliest of
the following: (i) the date of personal delivery; (ii) the date of transmission
by facsimile,

 

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addressed to the other party at its facsimile number, with confirmation of
transmission; (iii) the next business day after deposit with an overnight
courier for United States deliveries; or (iv) five (5) business days after
deposit in the United States mail by registered or certified mail (return
receipt requested) for United States deliveries. All notices not delivered
personally or by facsimile will be sent with postage and/or other charges
prepaid and properly addressed to such party at the address set forth on the
signature page hereto, or at such other address as such party may designate by
ten (10) days advance written notice to the other party hereto. Notices to the
Company will be marked “Attention: Chief Financial Officer.”
          (e) Attorneys’ Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to reasonable attorneys’ fees, costs and disbursements in addition to
any other relief to which such party may be entitled.
          (f) Amendments and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively) with the
written consent of the Holder and the Company. Any amendment or waiver effected
in accordance with this Section 9(f) shall be binding upon the Holder of this
Warrant (and of any securities into which this Warrant is convertible), each
future holder of all such securities, and the Company.
          (g) Severability. If one or more provisions of this Warrant are held
to be unenforceable under applicable law, such provision shall be excluded from
this Warrant and the balance of the Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
          (h) Governing Law. This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without giving
effect to its conflicts of laws principles.
          (i) Counterparts. This Warrant may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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     In Witness Whereof, the Company has caused this Warrant to be executed by
its duly authorized officer as of the date first written above.

            IRVINE SENSORS CORPORATION
a Delaware corporation
      By:         Name:    John J. Stuart, Jr.      Title:    Sr. VP & Chief
Financial Officer     

Address:   3001 Red Hill Avenue
Building 4, Suite 108
Costa Mesa, CA 92626

ACKNOWLEDGED AND AGREED:

              Holder:        
 
           
 
  By:        
 
     
 
   
 
           
 
Name:        
 
  Title:  
 
   
 
     
 
   

 

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EXHIBIT A TO INVESTOR WARRANT
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
To:      IRVINE SENSORS CORPORATION
     The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to (a) purchase ___ shares of the Common
Stock covered by such Warrant and herewith makes payment of $___, representing
the full purchase price for such shares at the price per share provided for in
such Warrant, or (b) exercise such Warrant for the issuance of ___ shares of
Common Stock in exchange for the surrender of the right to purchase ___ shares
of Common Stock under the Warrant pursuant to the Net Issue Exercise provisions
of Section 5 of such Warrant.
     Please issue a certificate or certificates representing ___ shares of
Common Stock in the name of the undersigned or in such other name or names as
are specified below:
 
(Name)
 
 
(Address)
     The undersigned represents that the undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended, and that the aforesaid shares are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares, all except as in compliance with
applicable securities laws.

         
 
 
 
   
 
  (Signature must conform in all respects to name of the Holder as specified on
the face of the Warrant)    
 
       
 
 
 
(Print Name)    
 
       
 
 
 
   
 
 
 
(Address)    

Dated:                                         

 

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EXHIBIT B TO INVESTOR WARRANT
FORM OF ASSIGNMENT
(To assign the foregoing Warrant, execute this form
and supply required information. Do not use this
form to purchase shares.)
     For Value Received, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to:

         
Name:
       
 
 
 
(Please Print)    
 
       
Address:
       
 
 
 
(Please Print)    

Dated:                     , 20__

         
Holder’s
Signature:
       
 
 
 
   
 
       
Holder’s
Address:
       
 
 
 
   

NOTE: The signature to this Assignment must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

 

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EXHIBIT C TO INVESTOR WARRANT
FORM OF INVESTOR REPRESENTATION LETTER
DATE:                     
Irvine Sensors Corporation
3001 Red Hill Avenue
Building 4, Suite 108
Costa Mesa, CA 92626
Gentlemen:
          In connection with my receipt of warrants (“Warrants”) to purchase the
number of shares of common stock referred to below, I hereby represent, warrant
and covenant as follows:
1. Check each one which is applicable:
                     I am an “accredited investor” within the meaning of
Regulation D promulgated under the Securities Act of 1933, as amended (the
“Act”);
                     I am able to fend for myself, can bear the economic risk of
my investment and have such knowledge and experience in financial, tax, and
business matters so as to utilize information made available to me in order to
evaluate the merits and risks of an investment decision with respect thereto, or
I have a preexisting personal or business relationship with the Company or one
or more of the officers or directors of the Company;
2.                      I have had the opportunity to ask questions and receive
and review such answers and information concerning Irvine Sensors Corporation
(the “Issuer”) as I have deemed pertinent;
3.                      I am not relying on the Issuer or
                                         respecting the tax and other economic
considerations of an investment in the Issuer;
4.                      I am acquiring the Warrants and the underlying
securities related thereto solely for my own account for investment and not with
a view to resale or distribution. I acknowledge that neither the Warrants nor
the underlying securities have been registered under the Act or any state
securities laws and may not be resold except pursuant to an effective
registration statement thereunder or an exemption therefrom;

         
 
 
 
Name:    

Holder of Warrants to purchase                      shares of common stock of
Irvine Sensors Corporation pursuant to the terms of the Common Stock Purchase
Warrant of even date herewith.