exv10w10






Exhibit 10.10




FORM OF UNSECURED NON-CONVERTIBLE DEBENTURE




FORM OF NON-CONVERTIBLE DEBENTURE




 







THE TRANSFER OF THIS DEBENTURE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF IS SUBJECT
TO RESTRICTIONS CONTAINED HEREIN. THIS DEBENTURE AND THE COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF PAYEE THAT IT HAS
BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER
DISTRIBUTION THEREOF. THIS DEBENTURE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF
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 IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.



UNSECURED NON-CONVERTIBLE DEBENTURE




	 	 	 

	PN-

	 	_______, 2010
	$_______

	 	COSTA MESA, CALIFORNIA






     1. Principal. For value received, IRVINE SENSORS CORPORATION, a Delaware corporation
(“Company”), hereby promises to pay to the order of                                    , an individual (“Payee”),
whose address is as set forth below, or such other address as the holder of this Unsecured
Non-Convertible Debenture (this “Debenture”) may designate in writing, the principal sum of
$                    . This Debenture is part of an offering of Units consisting of Debentures and associated
warrants and unsecured convertible debentures being made by the Company (the “Offering”) and the
other purchasers of debentures in such Offering are referred to as the “Other Payees”.



     2. Interest.




          (i) Mechanics. This Debenture shall bear simple interest at a rate per annum
of 20% of the original principal value of this Debenture, which interest shall accrue and be
payable quarterly in arrears and shall be convertible at the election of the Company into shares of the Company’s $0.01 par value Common Stock (“Common Stock”) at a conversion price
(the “Conversion Price”) equal to the greater of (a) the fair market value of the Common
Stock (as determined in accordance with the rules of The NASDAQ Stock Market, LLC) (the
“Market Value”) as of the date of issuance of this Debenture and (b) $0.40 per share (as
adjusted for stock splits and recapitalizations). Upon conversion of any accrued interest
under this Debenture into Common Stock, the Company will be forever released from all its
obligations and liabilities with respect to such accrued interest, including without
limitation the obligation to pay the accrued interest that is so converted.




          (ii) Fractional Shares. No fractional shares of capital stock shall be issued
upon conversion of any accrued interest owing on this Debenture. In lieu of any fractional
share to which Payee would otherwise be entitled, the Company shall pay to Payee the amount
of the outstanding accrued interest due that is not so converted, such payment to be in cash
or by check.



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          (iii) No Rights as Stockholder. Payee understands that Payee shall not have
any of the rights of a stockholder with respect to the shares of Common Stock issuable upon
conversion of any accrued interest owing under this Debenture, until such accrued interest is converted
into capital stock of the Company as provided herein.




          (iv) Conversion Limitation. The Company may not convert the accrued interest
of this Debenture in amounts that would result in the sum of (i) the number of shares of
Common Stock beneficially owned by the Payee and its affiliates on such conversion date, and
(ii) the number of shares of Common Stock issuable upon the conversion of such accrued
interest with respect to which the determination of this Section 2(iv) is being made on such
conversion date resulting in beneficial ownership by the Payee and its affiliates of more
than 4.99% of the outstanding shares of Common Stock of the Company. For the purposes of
this Section 2(iv), 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 Payee shall not be limited to successive conversions which
would result in the aggregate issuance of more than 4.99%. The Payee may revoke the
conversion limitation described in this Section 2(iv), in whole or in part, upon 61 days
prior notice to the Company. The Payee may allocate which of the equity of the Company
deemed beneficially owned by the Payee shall be included in the 4.99% amount described above
and which shall be allocated to the excess above 4.99%. The Payee may waive the conversion
limitation described in this Section 2(iv) 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%. .



     3. Maturity. The principal of this Debenture shall be due and payable in full on the
anniversary of the date hereof (the “Maturity Date”).



     4. Prepayment. Subject to the provision set forth in Section 2 above, all payments
shall be made in lawful money of the United States of America at the principal office of the
Company, or at such other place as the Payee hereof may from time to time designate in writing to
the Company. The Company shall have the right to prepay in cash all or any portion of the
principal hereof at any time prior to maturity for an amount equal to 110% of the principal so
prepaid.



     5. Certain Adjustments. The Conversion Price is subject to adjustment from time to
time as set forth in this Section 5:




          (i) 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 fixed), the Conversion
Price shall be appropriately decreased.




          (ii) 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 Conversion Price shall be appropriately increased.




          (iii) Reclassification or Reorganization. If the shares of Common Stock
issuable upon the conversion of any outstanding accrued interest owing under this Debenture
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 5(i) above or a combination of shares provided for in
Section 5(ii) above), then and in each such event the Payee shall be entitled to receive
upon the conversion of any outstanding accrued interest owing under this Debenture 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 shares
of Common Stock issuable upon the conversion of the outstanding accrued interest to be
converted would have received if such outstanding accrued interest had been converted
immediately prior to such reorganization, reclassification or other change, all subject to
further adjustment as provided herein.



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     6. Default. The Payee shall have the right upon the occurrence of any of the following
events to declare an event of default and elect to accelerate the amount owing hereunder
(individually, an “Event of Default” and collectively, “Events of Default”):




          (v) the termination of existence of Company, whether by dissolution or otherwise, or
the appointment of a receiver or custodian for the Company or any part of its property if
such appointment is not terminated or dismissed within thirty (30) days;




          (vi) the institution against Company of any proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership or
other similar law affecting the rights of creditors generally, which proceeding is not
dismissed within sixty (60) days of filing;




          (vii) the commencement by Company of any voluntary proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership or
other similar law affecting the rights of creditors generally;




          (viii) the failure to pay interest on the Debenture in accordance with Section 2
hereunder; or




          (v) an assignment by Company for the benefit of its creditors or an admission in
writing by the Company of its inability to pay its debts as they become due.



     7. Cumulative Rights. No delay on the part of Payee in the exercise of any power or
right under this Debenture shall operate as a waiver thereof, nor shall a single or partial
exercise of any other power or right. Enforcement by the Payee of any right or remedy for the
payment hereof shall not constitute any election by the Payee of remedies so as to preclude the
exercise of any other remedy available to the Payee.



     8. Waivers. Except as otherwise set forth in this Debenture, the Company, for itself
and its legal representatives, successors and assigns, expressly waives presentment, protest,
demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, and diligence in collection.



     9. Modifications in Writing. No waiver or modification of any of the terms or
provisions of this Debenture shall be valid or binding unless set forth in a writing signed by the
Company and Payee, and then only to the extent therein specifically set forth.



     10. Notices. All notices required or permitted hereunder shall be in writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent
by confirmed facsimile if sent during the normal business hours of the recipient, if not, then on
the next business day; (iii) one (1) business day after deposit with a nationally recognized
overnight courier designating next business day delivery; or (iv) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid. All communications
shall be sent to the address or facsimile number as set forth on the signature page hereof or at
such other address as such party may designate by ten (10) days’ advance written notice to the
other parties.



     11. Entire Agreement; Severability. This Debenture constitutes the full and entire
understanding, promise and agreement between the Company and Payee with respect to the subject
matter hereof, and it supersedes, merges and renders void every other prior written and/or oral
understanding, promise or agreement between the Company and Payee. If one or more provisions of
this Debenture are held to be unenforceable under applicable law, such provision shall be excluded
from this Debenture, the balance of the Debenture shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms, and the parties shall use good
faith to negotiate a substitute, valid and enforceable provision that replaces the excluded
provision and that most nearly effects the parties’ intent in entering into this Debenture.



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THIS DEBENTURE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.




     12. Governing Law. This Debenture is being executed and delivered and is intended to
be performed, in the State of California, and the laws of such state shall govern the construction,
validity, enforcement and interpretation hereof, except to the extent federal laws otherwise govern the validity, construction,
enforcement and interpretation hereof.




     13. Headings. The headings of the paragraphs of this Debenture are inserted for
convenience only and shall not be deemed to constitute a part hereof.



     14. Successors and Assigns. All of the promises and agreements in this Debenture
contained by or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not; provided, however, that the Company may not, without the prior written consent of
Payee, assign any rights, duties, or obligations under this Debenture.



     15. Counterparts. This instrument may be executed in counterparts and delivered by
facsimile, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.



[Signatures appear on the following page.]




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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed as of the date
first set forth above.



	 	 	 	 	 
	 	COMPANY:

IRVINE SENSORS CORPORATION

 	 
	 	By:  	
 	 
	 	 	Name:  	John J. Stuart, Jr. 	 
	 	 	Title:  

Address: 
	Chief Financial Officer

           3001 Red Hill Ave.

           Costa Mesa, CA  92626 
	 
	 	 	Fax No.:	714-444-8773	 
	 



ACKNOWLEDGED AND AGREED:




PAYEE:




Acknowledgement contained in the Omnibus

Signature Page in the Subscription Agreement




Name:

Address:




[Signature Page — Unsecured Non-Convertible Debenture]





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