Document:

Securities Purchase Agreement

 Exhibit 4.2 
  
 SECURITIES PURCHASE AGREEMENT 
  

This Securities Purchase Agreement (this “Agreement”) is dated as of September 23, 2003, among Irvine Sensors Corporation, a Delaware
corporation (the “Company”), and the purchasers identified on the signature pages hereto (each a “Purchaser” and collectively the “Purchasers”); and 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and each Purchaser, severally and not jointly, desires to purchase from the Company in
the aggregate, up to 1,211,570 shares of Common Stock and Warrants to purchase shares of Common Stock. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement,
the following terms have the meanings indicated in this Section 1.1: 
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person as such terms are used in and construed under Rule 144. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such
Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by
law or other governmental action to close. 
  
 “Closing” means the closing of the purchase and sale of the Common Stock and Warrants pursuant to Section 2.1(a). 
  
 “Closing Date” means the date of the Closing, which shall be the date hereof. 
  
 “Closing Price” means on any particular
date (a) the last reported closing bid price per share of Common Stock on such date on the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the last reported closing bid price for regular session trading on such day), or
(b) if there is no such price on such date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the closing bid price for regular session trading on
such day), or (c) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “pink sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent 
  

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bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of
Common Stock as determined by an appraiser selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Common Stock” means the common stock of the Company, $0.01 par value per share, and any
securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 
  
 “Company Counsel” means Dorsey &
Whitney LLP, counsel to the Company, with offices at 38 Technology Drive, Irvine, California 92618. 
  
 “Disclosure Schedules” means the Disclosure Schedules concurrently delivered herewith. 
  
 “Effective Date” means the date that the
Registration Statement is first declared effective by the Commission. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “FW” means Feldman Weinstein LLP, counsel to the Purchasers, with offices located at 420 Lexington Avenue, New York, New
York 10170-0002. 
  
 “Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o). 
  
 “Liens” means a lien, charge, security interest, encumbrance, right of first refusal or other restriction. 
  
 “Material Adverse Effect” shall have the
meaning ascribed to such term in Section 3.1(b). 
  
 “Material Permits” shall have the meaning ascribed to such term in Section 3.1(m). 
  
 “Per Share Purchase Price” equals $1.30, subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and prior to the Closing. 
  
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Purchasers of some or all of the Shares and the Warrant Shares. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of this Agreement, among
the Company and each Purchaser, in substantially the form of Exhibit B hereto. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 
  

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 “Securities” means the Shares, the Warrants and the Warrant Shares.

  
 “Securities Act” means the
Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement. 
  
 “Subscription Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on
the signature page hereto, in United States dollars and in immediately available funds. 
  
 “Subsidiary” shall have the meaning ascribed to such term in Section 3.1(a). 
  
 “Trading Day” means (i) a day on which the
Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded on the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Trading Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market. 
  
 “Transaction Documents” means this Agreement, the Registration Rights Agreement, the
Warrant and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Warrants” means the Common Stock Purchase Warrants, in substantially the form of Exhibit C, issuable to the
Purchasers at the Closing, which Warrants shall be exercisable immediately and have an exercise price equal to $1.97, subject to adjustment therein, and a term of exercise of 5 years commencing immediately upon issuance. 
  
 “Warrant Shares” means the shares of Common
Stock issuable upon exercise of the Warrants. 
  
 ARTICLE II.

 PURCHASE AND SALE 
  
 2.1 Closing. At the Closing, the Purchasers identified on Annex A shall purchase, severally and not jointly, and the Company shall issue and
sell, in the aggregate, up to 1,211,570 shares of Common Stock and Warrants on the Closing Date. Each Purchaser shall purchase from the Company, and the Company shall issue and sell to each Purchaser, a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price (rounded down to the nearest whole Share), together with the Warrants, on the Closing Date. Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall
occur at the offices of Company Counsel, or such other location as the parties shall mutually agree. 
  
 2.2 Closing Conditions. 
  
 (a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser (unless otherwise indicated below): 

 
 (i) this Agreement duly executed by the Company; 
  

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 (ii) within 3 Trading Days of the Closing Date, a certificate evidencing a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price (rounded down to the nearest whole Share), registered in the name of such Purchaser; 
  
 (iii) within 3 Trading Days of the Closing Date, a Warrant, registered in the name of such Purchaser, pursuant to which such
Purchaser shall have the right to acquire up to the number of shares of Common Stock equal to 50% of the Shares to be issued to such Purchaser at such Closing; 
  

(iv) the Registration Rights Agreement duly executed by the Company; and 
  
 (v) a legal opinion of Company Counsel, in the form of Exhibit A attached hereto. 
  
 (b) At the Closing each Purchaser shall deliver or cause to
be delivered to the Company the following: 
  
 (i) this Agreement
duly executed by such Purchaser; 
  
 (ii) such Purchaser’s
Subscription Amount as to such Closing by wire transfer to the account of the Company; and 
  
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 
  
 (c) All representations and warranties of the other party contained herein shall remain true and correct in all material respects as of
the Closing Date. 
  
 (d) As of the Closing Date,
there shall have been no Material Adverse Effect with respect to the Company since the date hereof. 
  
 (e) From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any
suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets
shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United
States or New York State authorities. 
  
 ARTICLE III. 

REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. Except as set forth under the corresponding section of the Disclosure Schedules herewith and
except as otherwise would not have a Material Adverse Effect, the Company hereby makes the following representations and warranties as of the date hereof to each Purchaser: 
  
 (a) Subsidiaries. The subsidiaries of the Company are set forth on Schedule 3.1(a) (the
“Subsidiaries”). The Company owns, directly or indirectly, all of the capital stock of its Subsidiaries free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights. If the Company has no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be disregarded. 
  
 (b) Organization and Qualification. Each of the
Company and the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as 
  

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applicable), with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”). 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or
other equitable remedies, and (iii) with respect to the indemnification provisions set forth in the Registration Rights Agreement, as limited by public policy or otherwise. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party
or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii),
such as would not have or reasonably be expected to result in a Material Adverse Effect. 
  

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 (e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of the Registration Statement, (ii) the application(s) to the Nasdaq SmallCap Market for the listing of the Shares and Warrant Shares for trading
thereon in the time and manner required thereby, and applicable Blue Sky filings, and (iii) such as have already been obtained or such exemptive filings as are required to be made under applicable securities laws. 
  
 (f) Issuance of the Securities. The Securities are
duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. 
  
 (g) Capitalization. The capitalization of the Company is as described in the Company’s most recent periodic report filed with
the Commission. The Company has not issued any capital stock since such filing other than pursuant to the exercise of employee stock options under the Company’s stock option plans or pursuant to the conversion or exercise of Common Stock
Equivalents outstanding on the date hereof. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to purchase Common Stock and Warrants pursuant to the Transaction Documents. Except as a result of
the purchase and sale of the Securities and except for employee stock options under the Company’s stock option plans, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The issue and sale of the Shares and Warrants will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.

  
 (h) SEC Reports; Financial Statements.
The Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing materials being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light 
  

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of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  
 (i) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as
disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting in any material respect, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  
 (j) Litigation. Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could,
if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act
or the Securities Act. 
  
 (k) Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect. 
  

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 (l) Compliance. Except as disclosed in the SEC Reports, neither the Company nor
any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws applicable to its business, except in the case of clauses (i), (ii) and (iii) as would not have or reasonably be expected to result in a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the
failure to possess such permits would not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit. 
  
 (n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries, taken as a whole, and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, taken as a whole, in each case free and clear of all Liens, except for Liens (i) as do not materially affect the value
of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or (ii) Liens for the payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in material
compliance. 
  
 (o) Patents and
Trademarks. To the knowledge of the Company and each Subsidiary, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses
and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have or reasonably be expected to result in a Material Adverse
Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon
the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable. 
  
 (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. 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 without a significant increase in cost. 
  

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 (q) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, 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 services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments 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, in each case in excess of $60,000 other than
(a) for payment of salary consulting fees for services rendered, or Board fees (b) reimbursement for expenses incurred on behalf of the Company and (c) for other employee benefits, including stock option agreements under any stock option plan of the
Company. 
  
 (r) Internal Accounting
Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Company’s Form 10-K or 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and
procedures as of a date within 90 days prior to the filing date of the most recently filed Form 10-Q (such date, the “Evaluation Date”). The Company presented in its most recently filed Form 10-Q the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term
is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls. 
  
 (s) Certain Fees. No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due under any agreement or arrangement entered into by the Company in
connection with the transactions contemplated by this Agreement. 
  

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 (t) Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the Trading Market. 
  
 (u) Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. 
  
 (v) Registration Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company. 
  
 (w) Form S-3 Eligibility. Subject to the Company’s continued listing on The Nasdaq Stock Market,
the Company is eligible to register the resale of its Common Stock by the Purchasers under Form S-3 promulgated under the Securities Act. 
  
 (x) Listing and Maintenance Requirements. The Company has not, in the 12 months preceding the date hereof, received notice from any
Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has not received any notice
otherwise from the Trading Market that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
  

(y) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (z) Disclosure. The Company confirms that, neither the Company nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that currently constitutes material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of the
Company are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not
misleading. 
  
 (aa) No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any
applicable 
  

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shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated. 
  
 (bb) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the
Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and including the anticipated proceeds of the sale of the Securities; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
  
 3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or similar action on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its
terms. 
  
 (b) Investment Intent. Such
Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, has no present intention of distributing any of such Securities and has no arrangement or understanding with any other persons
regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

  

 11 

 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it
was, and at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
  
 (d) Experience of Such Purchaser. Such Purchaser,
either alone or together with its representatives, 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, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) General Solicitation. Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or
any other general solicitation or general advertisement. 
  
 (f) Access to Information. Such Purchaser acknowledges that it has reviewed the SEC Reports and Disclosure Schedules and 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
Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the
Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the SEC Reports and Disclosure Schedules and the Company’s representations and warranties
contained in the Transaction Documents. 
  
 The Company
acknowledges and agrees that each Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions. 
  
 (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement, to the
Company, to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement. 
  

 12 

 (b) The Purchasers agree to the imprinting, so long as is required by this Section
4.1(b), of a legend on any of the Securities in the following form: 
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT. 
  
 The Company acknowledges and
agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties and provided that such transfer is
exempt from the registration requirements of the Securities Act, then in effect. Such a pledge or transfer would not be subject to approval of the Company. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or (ii) following
any sale of such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s
transfer agent to effect the removal of the legend hereunder. 
  

 13 

 
If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, such
Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than five Trading Days following the delivery
by a Purchaser to the Company’s transfer agent (with a copy concurrently delivered to the Company and Company Counsel) of a certificate representing Shares or Warrant Shares (“Required Certificate Delivery Date”), as the case
may be, issued with a restrictive legend, deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. 
  
 (d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the Closing Price of the Common Stock on the date such Securities are deemed given to the Company’s transfer agent, the Company and Company Counsel) subject to Section
4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Required Certificate Delivery Date. Nothing herein shall limit such Purchaser’s right
to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief. 
  
 (e) Each Purchaser severally and not jointly agrees that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom. 
  
 4.2 Furnishing of
Information. As long as any 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 holder of Securities, the Company shall deliver to such holder 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 the Exchange Act, 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. 
  
 4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be
integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
  

 14 

 4.4 [RESERVED]. 
  

4.5 Securities Laws Disclosure; Publicity. The Company shall, by the Business Day following the date of this Agreement, issue a press release or
file a Current Report on Form 8-K, in each case reasonably acceptable to each Purchaser disclosing the transactions contemplated hereby and make such other filings and notices in the manner and time required by the Commission. The Company and each
Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, 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 any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in
connection with the registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii). 
  
 4.6 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any 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 each Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the Company. 
  
 4.7 Use of Proceeds. Except as set forth on Schedule 4.8 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Company equity or equity-equivalent securities or to settle any
outstanding litigation. 
  
 4.8 Indemnification of
Purchasers. The Company will indemnify and hold the Purchasers and their 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 that any such Purchaser Party may suffer or 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 other Transaction Documents; or (b) any cause of action, suit or claim
brought or made against such Purchaser Party and arising solely out of or solely resulting from the execution, delivery, performance or enforcement of this Agreement or any of the other Transaction Documents and without causation by any other
activity, obligation, condition or liability pertaining to such Purchaser. The Company will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. 
  

 15 

 4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to the
Warrants. 
  
 4.10 Listing of Common Stock. The Company
hereby agrees to use best efforts to maintain the listing of the Common Stock on the Trading Market, and as soon as reasonably practicable following the Closing (but not later than the earlier of the Effective Date and the first anniversary of the
Closing Date) to list the applicable Shares and Warrant Shares on the Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application the Shares and
Warrant Shares, and will take such other action as is reasonably necessary in the opinion of the Purchasers to cause the Shares and the Warrant Shares to be listed on such other Trading Market as promptly as possible. The Company will take all
action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

  
 4.11 Subsequent Equity Sales. From the date hereof
until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue additional shares of Common Stock or Common Stock Equivalents. Notwithstanding anything to the contrary herein, this Section 4.11 shall not apply to the
following (a) the granting and subsequent exercise of options to employees, officers and directors of the Company pursuant to any stock option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a
majority of the members of a committee of non-employee directors established for such purpose, or (b) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this
Agreement, or (c) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (d) acquisitions or strategic
investments, the primary purpose of which is not to raise capital, or (e) bank financings or similar debt transactions, or (f) the settlement of any trade or other payables, the primary purpose of which is not to raise capital. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Fees and Expenses. The Company agrees to pay $20,000 to Bonanza Master Fund Ltd. (“Bonanza”) for its legal and due diligence fees and expenses incurred in connection with the investigation and negotiation of the
transaction and the preparation and negotiation of the Transaction Documents. Accordingly, in lieu of the foregoing payments, the Company, on the Closing Date, will direct that the aggregate amount that Bonanza is to pay for the Shares and Warrants
at the Closing, be reduced by $20,000 (less the $10,000 previously paid to Bonanza Prior to the Closing Date in partial satisfaction of the aforementioned fee). Except as otherwise 
  

 16 

 set forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all stamp and other taxes and duties levied in connection with the
sale of the Securities. 
  
 5.2 Entire Agreement. The
Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
  
 5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature pages attached hereto prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. A copy of any notices given hereunder shall be concurrently provided to FW and Company Counsel in accordance with this Section. The address for such notices and communications shall be as set forth on the signature pages
attached hereto unless such party gives notice to the other parties to any Agreement of a new address or facsimile number in accordance with this Section. 
  
 5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and Purchasers holding at least 75% of the Shares then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either
party to exercise any right hereunder in any manner impair the exercise of any such right. 
  
 5.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”. 
  

 17 

 5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8. 
  
 5.8 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Each party hereto (including its affiliates, agents, officers, directors and employees) hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
  
 5.9 Survival. The representations and warranties contained herein
shall survive for two years following the Closing. 
  
 5.10
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 
  

 18 

 5.11 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 and the parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 5.12 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. 
  
 5.13 Remedies. In addition to
being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a
remedy at law would be adequate. 
  
 5.14 Payment Set
Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any
other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be
satisfied shall, to the extent permissible under applicable law, be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 5.15 Independent Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser
under any Transaction Document. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the rights arising out of this 
  

 19 

 Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. For reasons of administrative convenience only, Purchasers
and their respective counsel have chosen to communicate with the Company through FW. FW does not represent all of the Purchasers in this transaction but only Bonanza. The Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers. 
  
 (Signature Page Follows) 
  

 20 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

	 IRVINE SENSORS CORPORATION
	  	 Address for Notice:

	 	 	 	  	 3001 Redhill Avenue, Bldg. 4

	 	 	 	  	 Costa Mesa, California 92626

	 	 	 	  	 Attn: Chief Financial Officer

	 By:
	 	 /s/ John J. Stuart, Jr.

	  	 Tel: (714) 444-5728
 Fax: (714) 444-8773

	 	 	 John J. Stuart, Jr., Chief Financial Officer
	  

  
 With copy concurrently sent to (which
shall not constitute notice): 
  
 Dorsey &
Whitney LLP 
 38 Technology Drive 
 Irvine, Califonia 92618 
 Attn: Ellen S. Bancroft, Esq. 
 Fax No.: (949) 932-3654 
  
 [SIGNATURE PAGE CONTINUES] 
  

 21 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 BONANZA MASTER FUND LTD.
	  	 Address for Notice:

	 	  	 	  	 8235 Douglas, Suite 423

	 	  	 	  	 Dallas, TX 75205

	 	  	 	  	 P: 214.615.7090

	 By:
	  	 /s/ Brian Ladin

	  	 F: 214.987.4342
 Attn: Brian Ladin

	 	  	 Name:  Brian Ladin
	  
	 	  	 Title:    Managing Director
	  	 

  
 Subscription Amount: $350,000

  
 With a copy to: 
 Feldman Weinstein LLP 
 420 Lexington Avenue 
 New York, New York 10170-0002 
 Tel: (212) 931-8704 
 Fax: (212) 410-4741 
 Attn: Robert F. Charron 
  
 [SIGNATURE PAGE CONTINUES] 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 CRESCENT INTERNATIONAL LTD.
	  	 Address for Notice:

	 	  	 	  	 c/o GreenLight (Switzerland) SA

	 	  	 	  	 84, Avenue Louis-Casai

	 	  	 	  	 CH 1216 Cointrin, Geneva

	 By:
	  	 /s/ Mel Craw    /s/ Maxi Brezzi

 Name:  Mel Craw      Maxi Brezzi
 Title:    Authorized Signatories
	  	 Switzerland
 Attention: Mel Craw / Maxi Brezzi
 Tel.: + 41 22 791 7170 / +41 22 791 7256
 Fax : +41 22 929 5394

  
 Subscription Amount: $300,040

  
 [SIGNATURE PAGE CONTINUES] 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 GRYPHON MASTER FUND, LP

		
	 By:
	 	 /s/ E.B. Lyon IV

	 	 	     Name: E.B. Lyon IV

	 	 	     Title: Authorized Agent

  
 Subscription Amount: $250,000 
  
 Address for Notice: 
 500 Crescent Court, Suite #270 
 Dallas, Texas 75201 
 Tel: (214) 871-6783 
 Fax: (214) 871-6909 
 Attn: Ryan Wolters 
  
 [SIGNATURE PAGE CONTINUES] 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 VERTICAL VENTURES LLC

		
	 By:
	 	 /s/ Joshua Silverman

	 	 	     Name: Joshua Silverman

	 	 	     Title: Manager

  
 Subscription Amount: $325,00

  

	 Address for Notice and Delivery of Securities:
	  	 641 Lexington Avenue, 26th Floor
 New York, NY 10022

  
 [SIGNATURE PAGE
CONTINUES] 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 ENABLE GROWTH PARTNERS

		
	 By:
	 	 /s/ Mitch Levine

	 	 	     Name: Mitch Levine

	 	 	     Title: Managing Partner

  
 Subscription Amount: $50,000

  

	 Address for Notice and Delivery of Securities: One Sansome St., Suite 2900, San Francisco, CA
94104

  
 [SIGNATURE PAGE
CONTINUES] 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 OTAPE INVESTMENTS LLC

		
	 By:
	 	 /s/ Richard M. Cayne

	 	 	     Name: Richard M. Cayne

	 	 	     Title: General Counsel

  
 Subscription Amount: $200,000

  
 Address for Notice and Delivery of Securities: 
 c/o OTA Financial Group 
 One Manhattanville Road 
 Purchase, NY 10577 
 Attn: Frederick Berdon 
 (Tel) 914-694-5857 
 (Fax) 914-694-6335 

 [IRSN PURCHASER’S SIGNATURE PAGE] 
  

	 J.M. Hull Associates, L.P.

		
	 By:
	 	 /s/ J. M. Hull

	 	 	     Name: James Mitchell Hull

	 	 	     Title: General Partner

  
 Subscription Amount: $100,000 
  
 Address for Notice and Delivery of Securities: 
  
 78 Forest Avenue 
 Locust Valley, NY 11560 
 Main (516) 609-2500 
 Fax: (516) 977-3058 
 Email: mhull@hullcap.com 

 ANNEX A 
  

	 Name of Investor

	  	Investment
Amount

	  	Number of
Shares

	  	Number of
Warrants

	 Bonaza Master Fund Ltd.
	  	$	350,000	  	269,231	  	134,615
				
	 Crescent International Ltd.
	  	$	300,040	  	230,800	  	115,400
				
	 Gryphon Master Fund, L.P.
	  	$	250,000	  	192,308	  	96,154
				
	 Vertical Ventures Investments, LLC
	  	$	325,000	  	250,000	  	125,000
				
	 Enable Growth Partners
	  	$	50,000	  	38,462	  	19,231
				
	 OTAPE Investments LLC
	  	$	200,000	  	153,846	  	76,923
				
	 J.M. Hull Associates, L.P.
	  	$	100,000	  	76,923	  	38,462
				
	 TOTAL
	  	$	1,575,040	  	1,211,570	  	605,785Registration Rights Agreement

 Exhibit 4.3 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of September 23, 2003, by and among Irvine Sensors
Corporation, a Delaware corporation (the “Company”), and the investors signatory hereto (each a “Purchaser” and collectively, the “Purchasers”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof among the Company and the Purchasers (the “Purchase Agreement”). 
  
 The Company and the Purchasers hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Advice” shall have the meaning set forth in Section 6(d). 
  
 “Common Stock” means the common stock of the Company, $0.01 par value per share.

  
 “Effectiveness Date” means,
with respect to the initial Registration Statement required to be filed hereunder, the earlier of (a) the 60th
calendar day following the Closing Date (120th calendar day in the event of a full review by the Commission) and (b)
the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments. 
  
 “Effectiveness Period” shall have the
meaning set forth in Section 2(a). 
  
 “Event” shall have the meaning set forth in Section 2(b). 
  
 “Event Date” shall have the meaning set forth in Section 2(b). 
  
 “Filing Date” means, with respect to the
Registration Statement required to be filed hereunder, the 30th calendar day following the Closing Date. 

 
 “Holder” or “Holders”
means the holder or holders, as the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning
set forth in Section 5(c). 
  
 “Losses” shall have the meaning set forth in Section 5(a). 
  

 1 

 “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included in the Registration Statement (including, without limitation, a prospectus
that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means the Shares and the Warrant Shares, together with any Common Stock issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing. 
  
 “Registration Statement” means the registration statements required to be filed hereunder, including (in each case) the Prospectus, amendments and supplements to the registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in the registration statement. 
  
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock
issued pursuant to the Purchase Agreement. 
  
 “Warrant” shall mean the warrant issued pursuant to the Purchase Agreement. 
  
 “Warrant Shares” means the shares of Common Stock issued upon exercise of the Warrants. 
  
 2. Registration. 
  
 (a) On or prior to the Filing Date, the Company shall
prepare and file with the Commission the Registration Statement covering the resale of all of the Registrable 

  

 2 

 
Securities for an offering to be made on a continuous basis pursuant to Rule 415. 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 the Registration shall be on another appropriate form in accordance herewith). The Registration Statement required hereunder shall
contain (except if otherwise directed by the Holders or the Commission) the “Plan of Distribution” in substantially the form attached hereto as Annex A. The Company shall cause the Registration Statement to become effective
and remain effective as provided herein. The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any
event not later than the Effectiveness Date, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of when all Registrable Securities covered by the
Registration Statement (i) have been sold pursuant to the Registration Statement or an exemption from the registration requirements of the Securities Act or (ii) may be sold without volume restrictions pursuant to Rule 144(k) as determined by the
counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent (the “Effectiveness Period”). 
  
 (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a
Registration Statement without affording the Holder the opportunity to review and comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be “reviewed,” or is not subject to further review, or (iii) prior to the date when such Registration Statement is first declared effective by the Commission, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within fifteen Trading Days after the receipt of comments by or notice from the Commission that such amendment is required in
order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission on or before the Effectiveness Date, or (v) after a Registration
Statement is first declared effective by the Commission, it ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or the Holders are not permitted to utilize the Prospectus
therein to resell such Registrable Securities, for in any such cases ten Trading Days (which need not be consecutive days) in the aggregate during any 12-month period (any such failure or breach being referred to as an “Event,” and
for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause (ii) the date on which such five Trading Day period is exceeded, or for purposes of clause (iii) the date which such fifteen Trading Day period is
exceeded, or for purposes of clause (v) the date on which such ten Trading Day period is exceeded being referred to as “Event Date”), then in addition to any other rights the Holders may have hereunder or under applicable law: (x)
on each 

  

 3 

 
such Event Date the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2% (1.5% if such Event is caused
by the Commission’s review of the Registration Statement) of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable Securities then held by such Holder; and (y) on each monthly anniversary of
each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2% (1.5% if such
Event is caused by the Commission’s review of the Registration Statement) of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable Securities then held by such Holder; provided,
however, that each of the periods specified above shall be extended for any period of time for which the Company is unable to act with respect to the above items solely due to the failure of the Holder or counsel for such Holder to provide
the information regarding the Registration Statement reasonably requested by the Company. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are
paid in full. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder,
the Company shall: 
  
 (a) Not less than three
Trading Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall, (i) furnish to the Holders copies of all such documents proposed to be filed (including documents
incorporated or deemed incorporated by reference to the extent requested by such Person) which documents will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within 20 Trading Days, to 

  

 4 

 
any comments received from the Commission with respect to the Registration Statement or any amendment thereto and, as promptly as reasonably possible, upon
request, provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented. 
  
 (c) Notify the Holders of Registrable Securities to be sold as promptly as reasonably possible (and, in the case of (i)(A) below, not less than two Trading Days prior to such filing) and (if requested by any such Person) confirm such notice
in writing promptly following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a
“review” of the Registration Statement and whenever the Commission comments in writing on the Registration Statement (the Company shall upon request provide true and complete copies thereof and all written responses thereto to each of the
Holders); and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage
of time that makes the financial statements included in the Registration Statement ineligible for inclusion therein or any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (d) Use its commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of the Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction, at the earliest practicable moment. 
  

 5 

 (e) Furnish to each Holder upon the Holder’s request, without charge, at least one
conformed copy of the Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all
exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  
 (f) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the Holder of Registrable Securities. The Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (g) Prior to any resale of Registrable Securities by a
Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each the Registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process
in any such jurisdiction. 
  
 (h) If requested by
the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
  
 (i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (ii) 

  

 6 

 
through (v) of Section 3(c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall
suspend use of such Prospectus. The Company will use commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(i)
to suspend the availability of a Registration Statement and Prospectus, subject to the payment of liquidated damages pursuant to Section 2(b), for a period not to exceed 60 days (which need not be consecutive days) in any 12 month period.

  
 (j) Comply with all applicable rules and
regulations of the Commission. 
  
 (k) The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the person thereof that has voting and
dispositive control over the Shares. 
  
 4. Registration
Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Trading Market on which
the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. 
  
 5.
Indemnification 
  
 (a) Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents and employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred (collectively, “Losses”), to the extent arising 

  

 7 

 
out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities
Act; provided, each Holder, jointly and not severally with the other Holders, acknowledges and agrees that any of such Holder’s Affiliates that receive any Registrable Securities upon transfer or sale from the Holder must also comply with the
prospectus delivery requirements of the Securities Act upon resale of the Registrable Securities and accordingly, such Holder agrees that the indemnification provided for hereunder shall cover resales of the Registrable Securities by its Affiliates,
or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities 

  

 8 

 
and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood that the Holder has
approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar amount of the gross proceeds, less related commissions or underwriting discounts received by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. 
  
 (c) Conduct of
Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity
is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of
all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  

 9 

 All reasonable fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the parties. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder. The
indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this 

  

 10 

 
Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right to any of its security holders. Except as set forth in the SEC Reports, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company. The Company
shall not file any other registration statement until after the Effective Date. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

  
 (e) Piggy-Back Registrations. If at
any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to each Holder a written notice of such
determination and, if within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be
registered, subject to underwriter cutbacks applicable to all holders of registration rights. 
  

 11 

 (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and Holder’s of at least
75% of the then outstanding Registrable Securities. 
  
 (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number provided for below prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number provided for below later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Trading Day following the date of mailing, if
sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. A copy of any notices given hereunder shall be provided to FW and Company Counsel in accordance with this
Section The address and facsimile numbers for such notices and communications shall be delivered, addressed and changed as set forth in the Purchase Agreement. 
  

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of Holders of at least 75% of the then outstanding Registrable Securities.
Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 
  
 (i) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party
executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  
 (j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of New York, New York. Each party 

  

 12 

 
hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of this Agreement), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under the Purchase Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an
action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 
  

(l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto
shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  
 (m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (n) Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser hereunder is several and not
joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to 

  

 13 

 
such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 
  
 ************************* 
  

 14 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

	IRVINE SENSORS CORPORATION
		
	 By:
	 	 /s/ John J. Stuart, Jr.

	 	 	 John J. Stuart, Jr., Chief Financial Officer

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	BONANZA MASTER FUND LTD.
		
	 By:
	 	 /s/ Brian Ladin

	 Name:
	 	 Brian Ladin

	 Title:
	 	 Managing Director

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	CRESCENT INTERNATIONAL LTD.
		
	 By:
	 	 /s/ Mel Craw        /s/ Maxi
Brezzi

	 Name:
	 	 Mel Craw              Maxi
Brezzi

	 Title:
	 	 Authorized Signatories

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	GRYPHON MASTER FUND, LP
		
	 By:
	 	 /s/ E.B. Lyon IV

	 Name:
	 	 E.B. Lyon IV

	 Title:
	 	 Authorized Agent

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	VERTICAL VENTURES LLC
		
	 By:
	 	 /s/ Joshua Silverman

	 Name:
	 	 Joshua Silverman

	 Title:
	 	 Manager

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	ENABLE GROWTH PARTNERS
		
	 By:
	 	 /s/ Mitch Levine

	 Name:
	 	 Mitch Levine

	 Title:
	 	 Managing Partner

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	OTAPE INVESTMENTS LLC
		
	 By:
	 	 /s/ Richard M. Cayne

	 Name:
	 	 Richard M. Cayne

	 Title:
	 	 General Counsel

 [PURCHASER’S IRSN RRA SIGNATURE PAGE] 
  

	J. M. Hull Associates, L.P.
		
	 By:
	 	 /s/ James Mitchell Hull

	 Name:
	 	 James Mitchell Hull

	 Title:
	 	 General Partner

 ANNEX A 
  

Plan of Distribution 
  
 The Selling Stockholders and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common
Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when
selling shares: 
  

	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	•	privately negotiated transactions; 

  

	•	settlement of short sales; 

  

	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	•	a combination of any such methods of sale; and 

  

	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. 
  
 Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus. 

 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be
deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Stockholders have informed the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common
Stock. 
  
 The Company is required to pay all fees and expenses
incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

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