Document:

Form of Subscription Agreement

 
Exhibit
4.2 
 
SUBSCRIPTION AGREEMENT

Irvine Sensors Corporation 
Units to Purchase Common Stock and Warrants 
 
THIS SUBSCRIPTION AGREEMENT (the “Agreement”) by and between Irvine Sensors Corporation, a Delaware corporation (the “Company”) and the undersigned purchaser (the
“Purchaser”), is made as of the date of acceptance by the Company of the terms hereof 
 
NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
 

	 	1.	 	Subscription for Units. 

 
        (a) Subject to the terms and conditions herein contained, Purchaser subscribes to purchase
from the Company that number of units set forth on the signature page hereto (the “Units”) at the purchase price per Unit of $2.20, each such Unit consisting of (i) two (2) shares (the “Shares”) of the
Company’s Common Stock, par value $0.01 per share (the “Common Stock”) and (ii) a warrant, substantially in the form attached hereto at Exhibit A, to acquire one (1) share of the Company’s Common Stock at an
exercise price equal to $2.00 per share (the “Warrant”). 
 
        (b) The Units, including the Shares and the Common Stock issuable upon exercise of the Warrant (the “Warrant Shares”) are
sometimes herein collectively referred to as the “Securities.” This Agreement and the Warrant are sometimes herein collectively referred to as the “Transaction Documents.” 
 
        (c) The
Securities will be offered and sold to the Purchaser without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the
“Commission”) promulgated thereunder, the “Securities Act”), in reliance on exemptions therefrom. 
 
        (d) The Company may, in its sole discretion, accept or reject, in whole or in part,
Purchaser’s subscription pursuant to this Agreement. Subscriptions, once received by the Company are irrevocable by the Purchaser, and, therefore, may not be withdrawn. If the subscription is not accepted by the Company, then this Agreement
will be null and void and the purchase price will be returned without interest and without deduction. In the event the Company accepts the subscription of the Purchaser, and the Purchaser pays to the Company the purchase price for the Units, the
Company shall deliver the certificate representing the Shares and the Warrant to the Purchaser as set forth below. 
 

	 	2.	 	Purchase, Sale and Delivery of the Shares and the Warrant. 

 
        (a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Purchaser, and Purchaser agrees to purchase from the Company, that number of Units set forth on the
signature page hereto at the purchase price of $2.20 per Unit. In 

connection with the purchase and sale of Units hereunder, Purchaser will receive, for each Unit purchased
hereunder and for no additional consideration, two (2) Shares and a Warrant to purchase up to one (1) Warrant Share with an exercise price of $2.00 per share. 
 
        (b) As soon as reasonably practicable following the Closing (as defined below), the
Company shall have delivered to Purchaser one or more certificates in definitive form for the Shares that the Purchaser has agreed to purchase hereunder, as well as the Warrant, registered in the name of Purchaser or its nominee, against payment by
or on behalf of the Purchaser, of the purchase price therefor by wire transfer of immediately available funds to the account of the Company previously designated by it in writing. Such purchase and payment for the Units shall be made at the offices
of Dorsey & Whitney LLP, 38 Technology Drive, Irvine, California 92618, on March     , 2003, or at such date as the Purchaser and the Company may agree upon (the “Closing”), such time and date of the
issuance of the Units against payment being herein referred to as the “Closing Date.” 
 

	 	3.	 	Representations and Warranties of the Company. The Company represents and warrants to Purchaser as follows: 

 
        (a) In
connection with the sale of the Securities, the Company has made available to Purchaser its periodic and current reports filed with the Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
since October 1, 2001. These reports, filings and amendments, are collectively referred to as the “Disclosure Documents.” All references in this Agreement to financial statements and schedules and other information which is
“contained,” “included” or “stated” in the Disclosure Documents (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is
incorporated by reference in the Disclosure Documents. 
 
        (b) Each of the Company and its subsidiaries set forth on Schedule A attached hereto (the “Subsidiaries”) has been duly incorporated and each of the
Company and the Subsidiaries is validly existing in good standing as a corporation under the laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as now conducted
as described in the Disclosure Documents and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, financial condition, properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a “Material Adverse Effect”). The Company has the authorized, issued and outstanding capitalization set forth in the Disclosure Documents (subject to the issuance of shares
pursuant to options outstanding under the Company’s stock option plans, employee stock purchase plans or outstanding warrants or other rights to acquire shares described in the Disclosure Documents. Except as set forth in the Disclosure
Documents, the Company does not have any subsidiaries or own directly or indirectly any of the capital stock or other equity or long-term debt securities of or have any equity interest in any other person. All of the 
 

2 

outstanding shares of capital stock of the Company and the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights. Except as set forth in the Disclosure Documents, all of the outstanding shares of capital stock of the Subsidiaries are owned,
directly or indirectly, by the Company. Except as set forth in the Disclosure Documents or as issued in connection with this offering, no options, warrants or other rights to purchase from the Company or any Subsidiary, agreements or other
obligations of the Company or any Subsidiary to issue or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in the Company or any Subsidiary are outstanding. Except as set
forth in the Disclosure Documents, there is no agreement, understanding or arrangement among the Company or any Subsidiary and each of their respective stockholders or any other person relating to the election of directors of the Company or any
Subsidiary or the governance of the Company’s or any Subsidiary’s affairs, and, if any, such agreements, understandings and arrangements will not be breached or violated as a result of the execution and delivery of, or the consummation of
the transactions contemplated by, the Transaction Documents. 
 
        (c) The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Transaction Documents. Each of the Transaction Documents has
been duly and validly authorized by the Company and, when executed and delivered by the Company, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms except as the
enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally or (ii) general
principles of equity and the discretion of the court before which any proceeding therefore may be brought (regardless of whether such enforcement is considered in a proceeding at law or in equity) (collectively, the “Enforceability
Exceptions”). 
 
        (d) The Shares and the Warrant have been duly authorized and, when issued upon payment thereof in accordance with this Agreement, will have been validly issued, fully paid and
nonassessable. The Shares have been duly authorized and validly reserved for issuance, and when issued in accordance with the terms of the this Agreement, will be validly issued, fully paid and nonassessable. The Warrant Shares have been authorized
and validly reserved for issuance, and when issued upon exercise of the Warrant in accordance with the terms thereof (and upon payment of the exercise price therefor), will be validly issued, fully paid and nonassessable. The Common Stock of the
Company conforms to the description thereof contained in the Disclosure Documents. The stockholders of the Company have no preemptive or similar rights to purchase shares of Common Stock from the Company. 
 
        (e) No
consent, approval, authorization, license, qualification, exemption or order of any court or governmental agency or body or third party is required for the performance of the Transaction Documents by the Company or for the consummation by the
Company at the Closing of any of the transactions contemplated thereby, or the application of the proceeds of the issuance of the Securities as described in the this Agreement, except for such consents, approvals, authorizations, licenses,
qualifications, exemptions or orders (i) as have been obtained or (ii) the failure to obtain would not, individually or in the aggregate, have a Material Adverse 
 

3 

Effect. All such consents, approvals, authorizations, licenses, qualifications, exemptions and orders will
be in full force and effect as of the Closing Date and not the subject of any pending or, to the knowledge of the Company, threatened termination. 
 
        (f) None of the Company or the Subsidiaries is (i) in material violation of its
certificate of incorporation or bylaws (or similar organizational documents), (ii) in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to it or any of its properties or assets, which breach or violation
would, individually or in the aggregate, have a Material Adverse Effect, or (iii) in default (nor has any event occurred which with notice or passage of time, or both, would reasonably be expected to constitute a default) in the performance or
observance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or agreement or instrument
to which it is a party or to which it is subject, which default would, individually or in the aggregate, have a Material Adverse Effect. 
 
        (g) The execution, delivery and performance by the Company of the Transaction Documents
and the consummation by the Company of the transactions contemplated thereby and the fulfillment of the terms thereof will not (i) violate, conflict with or constitute or result in a breach of or a default under (or an event that, with notice or
lapse of time, or both, would constitute a breach of or a default under) any of (A) the terms or provisions of any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or
agreement or instrument to which any of the Company or the Subsidiaries is a party or to which any of their respective properties or assets are subject, (B) the certificate of incorporation or bylaws of any of the Company or the Subsidiaries (or
similar organizational document) or (C) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or other body applicable to the Company or the Subsidiaries or any of their respective properties or assets or (ii)
result in the imposition of any lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Company or any of the Subsidiaries, which violation, conflict, breach, default or lien would, individually or in the
aggregate, have a Material Adverse Effect. 
 
        (h) The audited consolidated financial statements included in the Disclosure Documents present fairly the consolidated financial position, results of operations, cash flows and changes
in stockholders’ equity of the entities, at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis; the interim unaudited consolidated financial statements included in the Disclosure Documents present fairly the consolidated financial position, results of operations and cash flows of the Company and its Subsidiaries, at the dates
and for the periods to which they relate subject to year-end audit adjustments and have been prepared in accordance with GAAP applied on a consistent basis with the audited consolidated financial statements included therein. Grant Thornton LLP,
which has examined certain of such financial statements as set forth in its report included in the Disclosure Documents, is an independent certified public accountant as required by the Securities Act for an offering registered thereunder.

 

4 

 
        (i) Except as described in the Disclosure Documents, there is not pending or, to the knowledge of the Company, threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, to which any of the Company or the Subsidiaries is a party, or to which their respective properties or assets are subject, before or brought by any court, arbitrator or governmental agency or body, that, if determined
adversely to the Company or any such Subsidiary, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to
be sold hereunder or the application of the proceeds therefrom or the other transactions described in the Disclosure Documents. 
 
        (j) The Company and the Subsidiaries own or possess adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights, know-how and other intellectual property rights that are necessary to conduct their businesses as described in the Disclosure Documents. None of the Company or the Subsidiaries has
received any written notice of infringement of (or knows of any such infringement of) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights, know-how or other intellectual property rights that, if
such assertion of infringement or conflict were sustained, would, individually or in the aggregate, have a Material Adverse Effect. 
 
        (k) Each of the Company and the Subsidiaries possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other
tribunals presently required or necessary to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as now conducted as set forth in the Disclosure Documents
(“Permits”), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect, and none of the Company or the Subsidiaries has received any notice of any proceeding
relating to revocation or modification of any such Permit, except as described in the Disclosure Documents and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. 
 
        (l) Subsequent
to the respective dates as of which information is given in the Disclosure Documents and except as described therein, (i) the Company and the Subsidiaries have not incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of business, (ii) the Company and the Subsidiaries have not declared, paid or otherwise made any dividend or distribution of any kind on any of their respective capital stock or
otherwise (other than, with respect to any of such Subsidiaries, the purchase of capital stock by the Company), (iii) there has not been any material increase in the long-term indebtedness of the Company or any of the Subsidiaries,
(iv) there has not occurred any event or condition, individually or in the aggregate, that has, or could reasonably be expected to have, a Material Adverse Effect, and (v) the Company and the Subsidiaries have not sustained any material
loss or interference with respect to their respective businesses or properties from fire, flood, hurricane, earthquake, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental
proceeding. 
 

5 

 
        (m) There are no material legal or governmental proceedings nor are there any material contracts or other documents that are required by the Securities Act to be described in a
prospectus that are not described in the Disclosure Documents. Except as described in the Disclosure Documents, none of the Company or the Subsidiaries is in default under any of the contracts described in the Disclosure Documents, has received a
notice or claim of any such default or has knowledge of any breach of such contracts by the other party or parties thereto, except for such defaults or breaches as would not, individually or in the aggregate, have a Material Adverse Effect.

 
        (n) Each of the Company and the Subsidiaries has good and marketable title to all personal property described in the Disclosure Documents as being owned by it and good and marketable
title to the leasehold estate in the real property described therein as being leased by it, free and clear of all liens, charges, encumbrances or restrictions, except, in each case, as described in the Disclosure Documents or such as would not,
individually or in the aggregate, have a Material Adverse Effect. All material leases, contracts and agreements to which the Company or any of the Subsidiaries is a party or by which any of them is bound are valid and enforceable against the Company
or any such Subsidiary, and are, to the knowledge of the Company, valid and enforceable against the other party or parties thereto and are in full force and effect. 
 
        (o) Each of the Company and the Subsidiaries has filed all
federal, state and foreign income and franchise tax returns that are required to have been filed, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect, and has paid all taxes
shown as due thereon. Other than tax deficiencies which the Company or any Subsidiary is contesting in good faith and for which adequate reserves have been provided in accordance with generally accepted accounting principles, there is no tax
deficiency that has been asserted against the Company or any Subsidiary that would, individually or in the aggregate, have a Material Adverse Effect. 
 
        (p) None of the Company or the Subsidiaries is, or immediately after the Closing Date will
be, required to register as an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company
Act”). 
 
        (q) None of the Company or the Subsidiaries or, to the knowledge of the Company, any of such entities’ directors, officers, employees, agents or controlling persons, has taken,
directly or indirectly, any action designed, or that might reasonably be expected, to cause or result, under the Securities Act or the Exchange Act, or otherwise, in, or that has constituted, stabilization or manipulation of the price of the Common
Stock. 
 
        (r) None of the Company, the Subsidiaries or any of their respective Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) directly, or through any agent,
engaged in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offering of the Units or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act. 
 

6 

Assuming the accuracy of the representations and warranties of the Purchaser in Section 4 hereof, it is
not necessary to register any of the Securities under the Securities Act in connection with the offer, sale and delivery of the Units to the Purchaser in the manner contemplated by this Agreement. 
 
        (s) Except as
set forth in the Disclosure Documents, there is no strike, labor dispute, slowdown or work stoppage with the employees of the Company or any of the Subsidiaries which is pending or, to the knowledge of the Company or any of the Subsidiaries,
threatened. 
 
        (t) Each of the Company and the Subsidiaries is insured by insurers of recognized financial responsibility against such losses and in such amounts that are reasonably prudent and
comparable to other companies of its size and similar business. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business. 
 
        (u) Except as set forth in the Disclosure Documents, none of the officers or directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of such services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments in excess of $50,000 to or from any officer director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
 
        (v) Except for the potential fees for selling agents discussed in Section 14 below, the
Company does not know of any claims for services, either in the nature of a finder’s fee or financial advisory fee, with respect to the offering of the Units and the transactions contemplated by the Transaction Documents. 
 
        (w) The Common
Stock is listed on the Nasdaq SmallCap Market. The Company currently is not in violation of, and the consummation of the transactions contemplated by the Transaction Documents will not violate, any rule of the National Association of Securities
Dealers. The Company will file a Listing of Additional Shares Notification Form with the Nasdaq Stock Market with respect to the Shares and the Warrant Shares, if required by Nasdaq’s Marketplace Rules. 
 
        (x) The
Company is eligible to use Form S-3 for the resale of the Shares and the Warrant Shares by Purchaser or its transferees. The Company has no reason to believe that it is not capable of satisfying the registration or qualification requirements (or an
exemption therefrom) necessary to permit the resale of the Shares and the Warrant Shares under the securities or “blue sky” laws of any jurisdiction within the United States that is the residence or domicile of any Purchaser. 
 

7 

 
        (y) Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 4, no registration under the Securities Act is required for the offer and sale of
the Units by the Company to the Purchaser as contemplated hereby. 
 

	 	4.	 	Representations and Warranties of the Purchaser. 

 
        (a) Purchaser represents and warrants to the Company that the Securities to be acquired by
it hereunder (including the Shares and the Warrant Shares that it may acquire upon exercise of the Warrant) are being acquired for its own account for investment (and/or on behalf of managed accounts who are purchasing solely for their own accounts
for investment) and with no intention of distributing or reselling such Securities (including the Warrant Shares that it may acquire upon exercise of the Warrant) or any part thereof or interest therein in any transaction which would be in violation
of the securities laws of the United States of America or any State, without prejudice, however, to a Purchaser’s right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Shares or
Warrant Shares under an effective registration statement under the Securities Act and in compliance with applicable state securities laws or under an exemption from such registration, and subject, nevertheless, to the disposition of a
Purchaser’s property being at all times within its control. By executing this Agreement, each Purchaser further represents that such Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer
or grant participation to any Person with respect to any of the Securities. 
 
        (b) Purchaser understands that the Securities (including the Warrant Shares that it may acquire upon exercise of the Warrant) have not been registered
under the Securities Act and may not be offered, resold, pledged or otherwise transferred except (i) pursuant to an exemption from registration under the Securities Act (and, if requested by the Company, based upon an opinion of counsel acceptable
to the Company) or pursuant to an effective registration statement under the Securities Act and (ii) in accordance with all applicable securities laws of the states of the United States and other jurisdictions. 
 
        (c) Purchaser
agrees to the imprinting, so long as appropriate, of the following legend on the Securities (including the Shares and the Warrant Shares that it may acquire upon exercise of the Warrant, as the case may be): 
 

	    	 	The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, offered for sale,
transferred or pledged in the absence of such registration or an exemption therefrom under such Act. 	 

 
The legend set
forth above may be removed if and when the Shares or the Warrant Shares, as the case may be, are disposed of pursuant to an effective registration statement under the Securities Act or in the opinion of counsel reasonably acceptable to the Company
experienced in the area of United States Federal securities laws that such legends are no longer required under applicable requirements of the Securities Act. The Shares and the Warrant Shares shall also bear any other legends required by applicable
Federal or state securities laws, which legends may be removed when in the opinion of counsel to the Company experienced in the applicable securities laws, the 
 

8 

same are no longer required under the applicable requirements of such securities laws. The Company agrees
that it will provide each Purchaser, upon request, with a substitute certificate, not bearing such legend at such time as such legend is no longer applicable. Each Purchaser agrees that, in connection with any transfer of the Shares or the Warrant
Shares by it pursuant to an effective registration statement under the Securities Act, such Purchaser will comply with all prospectus delivery requirements of the Securities Act. The Company makes no representation, warranty or agreement as to the
availability of any exemption from registration under the Securities Act with respect to any resale of the Shares or the Warrant Shares. 
 
        (d) Purchaser is an “accredited investor” within the meaning of Rule 501(a) of
Regulation D under the Securities Act. Purchaser has a preexisting personal or business relationship with the Company and has previously invested in the Company through a private placement of the Company’s securities. 
 
        (e) Purchaser
represents and warrants to the Company that it has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, having been
represented by counsel, and has so evaluated the merits and risks of such investment and is able to bear the economic risk of such investment and, at the present time, is able to afford a complete loss of such investment. 
 
        (f) Purchaser
represents and warrants to the Company that (i) the purchase of the Securities to be purchased by it has been duly and properly authorized and this Agreement has been duly executed and delivered by it or on its behalf and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors’ rights generally and to general principals of equity; (ii) the purchase of the Securities to be purchased by it does not conflict with or violate its charter, by-laws or any law, regulation or court order applicable to it;
and (iii) the purchase of the Securities to be purchased by it does not impose any penalty or other onerous condition on Purchaser under or pursuant to any applicable law or governmental regulation. 
 
        (g) Purchaser
represents and warrants to the Company that neither it nor any of its directors, officers, employees, agents, partners, members, or controlling persons has taken, directly or indirectly, any actions designed, or might reasonably be expected to cause
or result, under the Securities Act or Exchange Act or otherwise, in, or that has constituted, stabilization, or manipulation of the price of the Common Stock. 
 
        (h) Purchaser acknowledges it has reviewed the Disclosure Documents and further
acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the
merits and risks of investing in the Securities; (ii) access to information about the Company and the Company’s financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment in the Securities; and (iii) the opportunity to obtain such 
 

9 

additional information which the Company possesses or can acquire without unreasonable effort or expense
that is necessary to verify the accuracy and completeness of the information contained in the Disclosure Documents. 
 
        (i) Purchaser represents and warrants to the Company that it has based its investment
decision solely upon the information contained in the Disclosure Documents and such other information as may have been provided to it by the Company in response to its inquiries, and has not based its investment decision on any research or other
report regarding the Company prepared by any third party (“Third Party Reports”). Purchaser understands and acknowledges that (i) the Company does not endorse any Third Party Reports and (ii) its actual results may differ
materially from those projected in any Third Party Report. 
 
        (j) Purchaser understands and acknowledges that (i) any forward-looking information included in the Disclosure Documents supplied to Purchaser by the Company or its management is
subject to risks and uncertainties, including those risks and uncertainties set forth in the Disclosure Documents; and (ii) the Company’s actual results may differ materially from those projected by the Company or its management in such
forward-looking information. 
 
        (k) Purchaser understands and acknowledges that (i) the Securities are offered and sold without registration under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act and (ii) the availability of such exemption depends in part on, and that the Company and its counsel will rely upon, the accuracy and truthfulness of the foregoing representations and Purchaser hereby
consents to such reliance. 
 

	 	5.	 	Certain Covenants of the Company. The Company covenants and agrees with Purchaser as follows: 

 
        (a) None of
the Company or any of its Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities Act) which could be integrated with the sale of the Securities in a
manner which would require the registration of the Securities under the Securities Act. 
 
        (b) The Company will not become, at any time prior to the expiration of three years after the Closing Date, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under the Investment Company Act. 
 
        (c) The Company will perform its obligations under this Agreement and the other
Transaction Documents prior to or after the Closing Date and will satisfy all conditions precedent on its part to the obligations of the Purchaser to purchase and accept delivery of the Securities. 
 
6.      Conditions of the
Purchaser’s Obligations. The obligation of each Purchaser to purchase and pay for the Units is subject to the following conditions unless waived in writing by the Purchaser: 
 

10 

 
        (a) The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date. The Company shall
have complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date. 
 
        (b) None of the issuance and sale of the Securities pursuant
to this Agreement or any of the transactions contemplated by any of the other Transaction Documents shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued in respect thereof. There
shall not have been any legal action, order, decree or other administrative proceeding instituted or, to the Company’s knowledge, threatened against the Company or against any Purchaser relating to the issuance of the Securities or any
Purchaser’s activities in connection therewith or any other transactions contemplated by this Agreement, the other Transaction Documents or the Disclosure Documents. 
 
        (c) The Purchaser shall have received certificates, dated the
Closing Date and signed by the Chief Executive Officer and the Chief Financial Officer of the Company, to the effect of paragraphs 5(a) and (b). 
 
        (d) The Company shall have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the Transaction Documents. 
 
7.      Covenants of Purchaser Not to Short Stock. Purchaser and its affiliates and assigns agree not to make any short sale of, or grant any option for the
purchase of or enter into any hedging or similar transaction with the same economic effect as a short sale, the Shares or the Warrant Shares for a period of one-hundred eighty (180) days following the Closing Date. 
 
8.      Survival of
Representations. The respective representations, warranties, agreements and covenants of the Company and the Purchaser set forth in this Agreement shall survive until the first anniversary of the Closing Date. 
 

	 	9.	 	Termination. 

 
        (a) This Agreement may be terminated in the sole discretion of the Company by notice to
Purchaser if at the Closing Date: 
 
        (b) the representations and warranties made by Purchaser in Section 4 are not true and correct in all material respects; 
 
        (c) as to the Company, the sale of the Securities hereunder
(i) is prohibited or enjoined by any applicable law or governmental regulation or (ii) subjects the Company to any penalty, or in its reasonable judgment, other onerous condition under or pursuant to any applicable law or government regulation that
would materially reduce the benefits to the Company of the sale of the Securities to such Purchaser, so long as such regulation, law or onerous condition was not in effect in such form at the date of this Agreement; or 
 

11 

 
        (d) the Company otherwise determines to reject the Purchaser’s subscription. 
 
        (e) This Agreement may be terminated in the sole discretion of Purchaser by notice to the
Company given in the event that the Company shall have failed, refused or been unable to satisfy all conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date or if after the execution and delivery of this
Agreement and prior to the Closing Date trading in securities of the Company or in securities generally on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National or SmallCap Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange. 
 
        (f) This Agreement may be terminated by mutual written consent of both parties. 
 
10.      Registration. Within 45 days from the Closing Date, the Company shall prepare and file with
the Securities and Exchange Commission (the “SEC”) a Registration Statement covering the resale of the Shares and the Warrant Shares (collectively, the “Registrable Securities”) for an offering to be
made on a continuous basis for two (2) years following the Closing Date pursuant to Rule 415 (the “Registration Statement”). The Registration Statement required hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form). The Company shall use diligent efforts to cause such Registration Statement to become effective
within 120 days after initial filing of the Registration Statement with the SEC, but shall not be liable for any damages should such effectiveness be delayed solely by reason of the SEC review process. The Company shall use diligent efforts to keep
such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) as determined
by the counsel reasonably acceptable to the Company pursuant to a written opinion to such effect addressed and acceptable to the Company’s transfer agent. 
 
11.      Furnishing of Information. As long as Purchaser owns Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. Upon the request of any such Person, the Company
shall deliver to such Person a written certification of a duly authorized officer as to whether it has complied with the preceding sentence. As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will
take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144. 
 

12 

 
12.      Securities Laws Disclosure; Publicity; Non-Public Information. The Company may, following the Closing Date, issue a press release or file a Current Report on Form 8-K, in each case
reasonably acceptable to the Purchaser disclosing the transactions contemplated hereby and (ii) make such other filings and notices in the manner and time required by the Commission. The Company and the Purchaser shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby, and neither party shall issue any such press release or otherwise make any such public statement without the prior consent of the other, which consent shall not
unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of Purchaser, or include the name of Purchaser in any filing with the Commission or any regulatory agency or trading market, without the prior written consent of such Purchaser, except to the extent such
disclosure is required by law or trading market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure. The Company covenants and agrees that neither it nor any other person acting on its behalf will
provide Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use
of such information. The Company understands and confirms that Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
 
13.      Indemnification. 
 
        (a) The
Company will indemnify and hold the Purchaser and its directors, officers, shareholders, partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser
Party may incur as a result of or relating to (a) any misrepresentation, breach or inaccuracy of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the Transaction Documents; (b) any
cause of action, suit or claim brought or made against such Purchaser Party and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any of the other Transaction Documents as of the Closing Date
or (c) any material misstatement or omission in the Registration Statement. The Company will reimburse Purchaser for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith)
incurred in connection with this Section 13, as such expenses are incurred. 
 
        (b) The Purchaser will indemnify and hold the Company and its directors, officers, shareholders, partners, employees and agents (each, a
“Company Party”) harmless from any and all Losses that any such Company Party may incur as a result of or relating to (a) any misrepresentation, breach or inaccuracy of any of the representations, warranties, covenants or
agreements made by the Purchaser in this Agreement or in the Transaction Documents; (b) any cause of action, suit or claim brought or made against such Company Party and arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any of 
 

13 

the other Transaction Documents as of the Closing Date or (c) any material misstatement or omission in the
Registration Statement. The Purchaser will reimburse each Company Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection with this Section
13, as such expenses are incurred. 
 
14.      Fees. The Company may, in its sole discretion, use selling agents for subscriptions to purchase Units and the Company has the absolute right and discretion to accept or reject any
potential subscription referred to it by a selling agent. In the event that the Company does use one or more selling agents, it will pay a cash commission of five percent (5%) for any amounts received by the Company from a subscriber brought to the
Company by a selling agent. The Company will not reimburse any expenses incurred by a selling agent in connection with any accepted or rejected subscription. 
 
15.      Notices. All communications hereunder shall be in writing and shall be hand delivered,
mailed by first-class mail, delivered by next-day air courier or by facsimile and confirmed in writing (a) if to the Company, at the addresses set forth below, or (b) if to Purchaser, to the address(es) set forth on the signature page hereto.

 
If to the Company:

 
Irvine Sensors Corporation

3001 Redhill Avenue 
Costa Mesa, California 92650 
Attention: Chief Financial Officer 
Facsimile: (714) 444-8773 
 
with a copy to: 
 
Dorsey & Whitney LLP 
38 Technology Drive 
Irvine, California 92618 
Attention: Ellen S. Bancroft, Esq. 
Facsimile: (949) 790-6301 
 
All such notices and communications shall be deemed to have been duly given: (a) when delivered by hand, if personally delivered; (b) five business days
after being deposited in the mail, postage prepaid, if mailed certified mail, return receipt requested; (c) one business day after being timely delivered to a next-day air courier guaranteeing overnight delivery; (d) the date of transmission if sent
via facsimile to the facsimile number as set forth in this Section or the signature page hereof prior to 6:00 p.m. on a business day, or (e) the business day following the date of transmission if sent via facsimile at a facsimile number set forth in
this Section or on the signature page hereof after 6:00 p.m. or on a date that is not a business day. Change of a party’s address or facsimile number may be designated hereunder by giving notice to all of the other parties hereto in accordance
with this Section. 
 
16.      Successors. This Agreement shall inure to the benefit of and be binding upon Purchaser and the Company and their respective successors and legal representatives, and 
 

14 

nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit
of such persons and for the benefit of no other person. Neither the Company nor Purchaser may assign this Agreement or any rights or obligation hereunder without the prior written consent of the other party. 
 
17.  No Waiver; Modifications in Writing. No
failure or delay on the part of the Company or Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Company or Purchaser at law or in equity or otherwise. No waiver
of or consent to any departure by the Company or Purchaser from any provision of this Agreement shall be effective unless signed in writing by the party entitled to the benefit thereof, provided that notice of any such waiver shall be given to each
party hereto as set forth below. Except as otherwise provided herein, no amendment, modification or termination of any provision of this Agreement shall be effective unless signed in writing by or on behalf of each of the Company and the Purchaser.
Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or Purchaser from the terms of any provision of this Agreement shall
be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other
or further notice or demand in similar or other circumstances. 
 
18.      Entire Agreement. This Agreement, together with Transaction Documents constitutes the entire agreement among the parties hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, among the parties hereto with respect to the subject matter hereof and thereof. 
 
19.      Severability. If any provision of this Agreement is held to be invalid or unenforceable in
any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby. 
 
20.      APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND
CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY. 
 
21.      Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. 
 

15 

 
22.      Attorney’s Fees. If either party to this Agreement shall bring any action, suit, counterclaim, appeal, arbitration, or mediation for any relief against the other, declaratory or
otherwise, to enforce the terms hereof or to declare rights hereunder, the losing party shall pay to the prevailing party a reasonable sum for attorneys’ fees and costs incurred in bringing and prosecuting such action and/or enforcing any
judgment, order, ruling, or award. 
 

16 

 
IN WITNESS WHEREOF, the
Purchase hereby represents and warrants that the Purchaser has read this entire Agreement and has executed this Agreement as of the      day of March, 2003. 
 

	 PURCHASER:
	 	 	 	 
	
	 	 	 By:
	 	

	 	 	 Name:
	 	

	 	 	 Title:
	 	

	
	 Aggregate Subscription Amount:
	 	

	 Number of Units:
	 	

	 Number of Shares of Common Stock:
	 	

	 Number of Warrants:
	 	

	
	 	 	 Address for Notice:

	 	 	  

	 	 	

	 	 	

	 	 	 Attention:
	 	

	 	 	 Facsimile:
	 	

	
	 	 	 with a copy to

	
	 	 	

	 	 	

	 	 	

	 	 	 Attention:
	 	

	 	 	 Facsimile:
	 	

 
Accepted and agreed this

     day of March, 2003: 
 
IRVINE SENSORS CORPORATION 

	
	 By:
	 	

	 Name:
	 	 John J. Stuart, Jr.

	 Title:
	 	 Chief Financial OfficerForm of Warrant

 
Exhibit
4.3 
 
WARRANT TO PURCHASE COMMON STOCK

 
THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER 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 THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
 
WARRANT TO PURCHASE COMMON STOCK 
 

	 Number of Shares:
	  	 «NUMBER_OF_SHARES» shares

	 Warrant Price:
	  	 $2.00

	 Issuance Date:
	  	 «ISSUANCE_DATE»

	 Expiration Date:
	  	 No later than «EXPIRATION_DATE» (see below)

 
THIS WARRANT
CERTIFIES THAT for value received, «HOLDER» or its registered assigns (hereinafter called the “Holder”) is entitled to purchase from Irvine Sensors Corporation (hereinafter called the
“Company”), the above referenced number of fully paid and nonassessable shares (the “Shares”) of the Company’s common stock (the “Common Stock”), at the exercise price per
Share of $2.00, subject to adjustment as provided for herein (the “Warrant Price”). This Warrant is issued in connection with that certain Subscription Agreement dated as of «ISSUANCE_DATE», by and between the
Company and Holder (the “Subscription Agreement”) pursuant to which the Holder purchased units consisting of two (2) shares of Common Stock and a warrant to purchase one (1) share of Common Stock. The exercise of this Warrant
shall be subject to the provisions, limitations and restrictions contained herein. 
 
1. Term and Exercise. 
 
1.1 Term. This Warrant is exercisable in whole or in part (but not as to any fractional share of Common Stock), at any time and from time to time beginning on the date hereof and expiring on the
earlier of (a) three (3) years from the date of the closing of the Subscription Agreement or (b) 1:00 p.m. Eastern Time on the 30th trading day that (1) the Common Stock of the Company has consecutively traded over $3.00 per share as reported by the Nasdaq Stock Market (or comparable trading market) and (2) the shares issuable pursuant to this Warrant have been
registered with the Securities and Exchange Commission on an effective registration statement on Form S-3. 
 
1.2 Procedure for Exercise of Warrant. Holder may exercise this Warrant by delivering the following to the principal office of the Company in accordance with Section 5.1 hereof:
(a) a duly executed Notice of Exercise in substantially the form attached as Schedule A, (b) payment of the Warrant Price then in effect for each of the Shares being purchased, as designated in the Notice of Exercise, and (c) this Warrant. Payment
of the Warrant Price may be in cash, certified or official bank check payable to the order of the Company, or wire transfer of funds to the Company’s account (or any combination of any of the foregoing) in the amount of the Warrant Price for
each share being purchased. Notwithstanding any provisions herein to the contrary, if the Current Market Price (as defined below) is greater than the Warrant Price as of the day of exercise, the Holder may elect to receive, without the payment by
the Holder of any additional consideration, shares of Common Stock equal to the value of the “spread” on the Shares (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company in accordance
with Section 5.1, together with the Notice of Exercise, in which event the Company shall issue to the Holder hereof a number of shares of Common Stock computed using the following formula: 
 
X = Y x (CMP-WP) 
CMP 
 

	 Where:
	  	 X
	  	 =
	  	 the number of shares of Common Stock to be issued to the Holder pursuant to this net exercise

	
	 	  	 Y
	  	 =
	  	 the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being
exercised, that portion of the Warrant requested to be exercised

	
	 	  	 CMP
	  	 =
	  	 the Current Market Price (as of the date of such calculation) of one share of Common Stock

	
	 	  	 WP
	  	 =
	  	 the Warrant Price (as adjusted as of the date of such calculation)

 
For purposes of this
Warrant, the “Current Market Price” of one share of the Company’s Common Stock as of a particular date shall be determined as follows: (a) if traded on a national securities exchange or through the Nasdaq Stock Market,
the Current Market Price shall be deemed to be the volume weighted average trading price of the Common Stock on such exchange for the five (5) business days immediately prior to the date of exercise indicated in the Notice of Exercise (or if no
reported sales took place on such day, the last date on which any such sales took place prior to the date of exercise); (b) if traded over-the-counter but not on the Nasdaq Stock Market, the Current Market Price shall be deemed to be the average of
the closing bid and asked prices for the five (5) business days immediately prior to the date of exercise indicated in the Notice of Exercise; and (c) if there is no active public market, the Current Market Price shall be the fair market value of
the Common Stock as of the date of exercise, as determined in good faith by the Board of Directors of the Company. 
 
1.3 Delivery of Certificate and New Warrant. In the event of any exercise of the rights represented by this Warrant, a certificate or
certificates for the shares of Common Stock so purchased, registered in the name of the Holder or such other name or names as may be 
 

1 

designated by the Holder, together with any other securities or other property which the Holder is
entitled to receive upon exercise of this Warrant, shall be delivered to the Holder hereof, at the Company’s expense, within a reasonable time, not exceeding fifteen (15) calendar days, after the rights represented by this Warrant shall have
been so exercised; and, unless this Warrant has expired, a new Warrant representing the number of Shares (except a remaining fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the
Holder hereof within such time. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which the
Warrant was surrendered and payment of the Warrant Price was received by the Company, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is on a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of such Shares at the close of business on the next succeeding date on which the stock transfer books are open. 
 
1.4 Restrictive Legend. Each certificate for Shares shall bear a restrictive legend in substantially the
form as follows, together with any additional legend required by (a) any applicable state securities laws and (b) any securities exchange upon which such 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, and may not be sold, offered for sale, transferred or pledged in the absence of such registration or an exemption therefrom under such Act.” 
 
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the opinion of counsel for the Holder thereof (which counsel shall be reasonably satisfactory to counsel for the Company), the securities represented thereby are not, at such
time, required by law to bear such legend. 
 
1.5
Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon
any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying to Holder an amount computed by multiplying the fractional interest by the Current Market Price of a full Share. 
 
2. Representations, Warranties and Covenants.

 
2.1 Representations and
Warranties. 
 
(a) The Company is a
corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all necessary power and authority to perform its obligations under this Warrant; 
 
(b) The execution, delivery and performance of this Warrant
has been duly authorized by all necessary actions on the part of the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; and 
 
(c) This Warrant does not violate and is not in conflict with
any of the provisions of the Company’s Certificate of Incorporation, Bylaws and any resolutions of the Company’s Board of Directors or stockholders, or any agreement of the Company, and no event has occurred and no condition or
circumstance exists that might (with or without notice or lapse of time) constitute or result directly or indirectly in such a violation or conflict. 
 
2.2 Issuance of Shares. The Company covenants and agrees that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully paid and nonassessable, and free from all transfer taxes, liens and charges with respect to the issue thereof. The Company further covenants and agrees that the Company
will at all times have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise in full of the rights represented by this Warrant. If at any time the number of authorized but
unissued shares of Common Stock of the Company shall not be sufficient to effect the exercise of the Warrant in full, subject to the limitations set forth in Section 1.2 hereto, then the Company will take all such corporate action as may, in the
opinion of counsel to the Company, be necessary or advisable to increase the number of its authorized shares of Common Stock as shall be sufficient to permit the exercise of the Warrant in full, subject to the limitations set forth in Section 1.2
hereto, including without limitation, using its best efforts to obtain any necessary stockholder approval of such increase. The Company further covenants and agrees that if any shares of capital stock to be reserved for the purpose of the issuance
of shares upon the exercise of this Warrant require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued or delivered upon exercise, then the Company will in good faith
and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If and so long as the Common Stock issuable upon the exercise of this Warrant is listed on any national securities exchange or the Nasdaq Stock
Market, the Company will, if permitted by the rules of such exchange or market, list and keep listed on such exchange or market, upon official notice of issuance, all shares of such Common Stock issuable upon exercise of this Warrant. 
 
3. Other Adjustments. 
 
3.1 Subdivision or Combination of Shares. In case the
Company shall at any time subdivide its outstanding Common Stock into a greater number of shares, the Warrant Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Shares obtainable upon exercise of
this Warrant shall be proportionately increased. Conversely, in case the outstanding Common Stock of the Company shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall be
proportionately increased and the number of Shares obtainable upon exercise of this Warrant shall be proportionately decreased. 
 
3.2 Dividends in Common Stock, Other Stock or Property. If at any time or from time to time the holders of Common Stock (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor: 
 
(a) Common Stock, options or any shares or other securities which are at any time directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution; 
 
(b) any cash paid or payable other than as a regular cash dividend; or 
 
(c) Common Stock or additional shares or other securities or
property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of
Section 3.1 above) and additional shares, other securities or property issued in connection with a Change (as defined below) (which shall be covered by the terms of Section 3.3 below), then and in each such case, 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 stock and other securities and property
(including cash in the cases referred to in clause (b) above and this clause (c)) 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 or all other additional stock and other securities and property. 
 
3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or
reorganization of the share  
 

2 

capital of the Company, or any consolidation or merger of the Company with another corporation, or the
sale of all or substantially all of its shares and/or assets or other transaction (including, without limitation, a sale of substantially all of its assets followed by a liquidation) shall be effected in such a way that holders of Common Stock shall
be entitled to receive shares, securities or other assets or property (a “Change”), then, as a condition of such Change, lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby) such shares, securities or other assets or property as may be
issued or payable with respect to or in exchange for the number of outstanding Common Stock which such Holder would have been entitled to receive had such Holder exercised this Warrant immediately prior to the consummation of such Change. The
Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to give effect to the
adjustments provided for in this Section 3 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 3.3 shall similarly
apply to successive Changes.  

	

4. Ownership and Transfer. 
 
4.1 Ownership of This Warrant. The Company may deem and
treat the person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to
the contrary until presentation of this Warrant for registration of transfer as provided in this Section 4. 
 
4.2 Transfer and Replacement. This Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof in person or by duly
authorized attorney, and a new Warrant or Warrants, of the same tenor as this Warrant but registered in the name of the transferee or transferees (and in the name of the Holder, if a partial transfer is effected) shall be made and delivered by the
Company upon surrender of this Warrant duly endorsed, at the office of the Company in accordance with Section 5.1 hereof. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft or destruction, and, in such case, of
indemnity or security reasonably satisfactory to it, and upon surrender of this Warrant if mutilated, the Company will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This Warrant shall be promptly cancelled by the Company
upon the surrender hereof in connection with any transfer or replacement. Except as otherwise provided above, in the case of the loss, theft or destruction of a Warrant, the Company shall pay all expenses, transfer taxes and other charges payable in
connection with any transfer or replacement of this Warrant, other than stock transfer taxes (if any) payable in connection with a transfer of this Warrant, which shall be payable by the Holder. Holder will not transfer this Warrant and the rights
hereunder except in compliance with federal and state securities laws and except after providing evidence of such compliance reasonably satisfactory to the Company. 
 
5. Miscellaneous Provisions. 
 
5.1 Notices. Any notice or other document required or permitted to be given or delivered to the Holder
shall be delivered or forwarded to the Holder at the address for Holder provide in the Subscription Agreement or to such other address or number as shall have been furnished to the Company in writing by the Holder. Any notice or other document
required or permitted to be given or delivered to the Company shall be delivered or forwarded to the Company at 3001 Redhill Ave., Costa Mesa, California 92626, Attention: Chief Financial Officer (Facsimile No. 714/444-8773, with a copy to Dorsey
& Whitney LLP, 38 Technology Drive, Irvine, California 92618, Attention: Ellen S. Bancroft, Esq. (Facsimile No. 949/790-6301), or to such other address or number as shall have been furnished to Holder in writing by the Company. 
 
5.2 All notices, requests and approvals required by this Warrant shall
be in writing and shall be conclusively deemed to be given (a) when hand-delivered to the other party, (b) when received if sent by facsimile at the address and number set forth above; provided that notices given by facsimile shall not be effective,
unless either (i) a duplicate copy of such facsimile notice is promptly given by depositing the same in the mail, postage prepaid and addressed to the party as set forth below or (ii) the receiving party delivers a written confirmation of receipt
for such notice by any other method permitted under this paragraph; and further provided that any notice given by facsimile received after 5:00 p.m. (recipient’s time) or on a non-business day shall be deemed received on the next business day;
(c) five (5) business days after deposit in the United States mail, certified, return receipt requested, postage prepaid, and addressed to the party as set forth below; or (d) the next business day after deposit with an international overnight
delivery service, postage prepaid, addressed to the party as set forth below with next business day delivery guaranteed; provided that the sending party receives confirmation of delivery from the delivery service provider. 
 
5.3 No Rights as Stockholder; Limitation of Liability.
This Warrant shall not entitle the Holder to any of the rights of a stockholder of the Company except upon exercise in accordance with the terms hereof. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Warrant Price hereunder or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company. 
 
5.4
Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of
California, without giving effect to the conflict of law principles thereof. 
 
5.5 Waiver, Amendments and Headings. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by both parties (either generally or in a
particular instance and either retroactively or prospectively). The headings in this Warrant are for purposes of reference only and shall not affect the meaning or construction of any of the provisions hereof. 
 

3 

 
IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized officer this «SIGNING_DATE» day of March, 2003. 
 

	 COMPANY:
	 	 	 	 IRVINE SENSORS CORPORATION

	
	 	 	 	 	 	 	 By:
	 	

	 	 	 	 	 	 	 	 	 Robert G. Richards, Chief Executive Officer

 

4 

 
SCHEDULE A

 
FORM OF NOTICE OF EXERCISE

 
[To be signed only upon exercise of the
Warrant] 
 
TO BE EXECUTED BY THE
REGISTERED HOLDER 
TO EXERCISE THE WITHIN WARRANT 
 
The undersigned hereby elects to purchase              shares of
Common Stock (the “Shares”) under the Warrant to Purchase Common Stock dated             , which the undersigned is entitled to purchase pursuant to the terms of such Warrant, and
[check one]: 
 

	-	 	Cash Exercise. The undersigned has delivered $            , the aggregate Warrant Price for
             Shares purchased herewith, in full in cash or by certified or official bank check or wire transfer; 

 

	-	 	Net Exercise. In exchange for the issuance of              Shares, the undersigned hereby agrees
to surrender the right to purchase              shares of Common Stock pursuant to the net exercise provisions set forth in Section 1.2 of the Warrant. 

 
    Please issue a certificate or
certificates representing such shares of Common Stock in the name of the undersigned or in such other name as is specified below and in the denominations as is set forth below: 
 

	 	 	
	  	 
	 	 	 [Type Name of Holder as it should appear on the stock certificate]
	  	 
	
	 	 	
	  	 
	 	 	 [Requested Denominations – if no denomination is specified, a single certificate will be issued]
	  	 
	
	 	 	 The initial address of such Holder to be entered on the books of Company shall be:
	  	 
	
	 	 	
	  	 
	
	 	 	
	  	 

 
    The undersigned hereby represents and warrants that the undersigned is acquiring such shares for his own account for investment purposes only, and not for resale or with a view to distribution of such shares
or any part thereof. 
 
 

	 By:
	 	

	
	 Print Name:
	 	

	
	 Title:
	 	

	
	 Dated:
	 	

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}]]