FORM OF SUBSCRIPTION AGREEMENT FOR DEBENTURE FINANCING FORM OF SUBSCRIPTION AGREEMENT
Exhibit 10.8
FORM OF SUBSCRIPTION AGREEMENT FOR DEBENTURE FINANCING
FORM OF SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of , 2010, by and between
Irvine Sensors Corporation, a Delaware corporation (the “Company”), and the subscriber identified
on the signature page hereto (the “Subscriber”).
WHEREAS, the Company is offering (the “Offering”) Units (the “Units”), each of which is
comprised of (i) one one-year, unsecured Convertible Debenture substantially in the form delivered
herewith (the “Convertible Debenture”), with a principal repayment obligation of $5,000, with the
original principal value of each Convertible Debenture convertible at the election of the holder on
or prior to the maturity date into shares of Irvine Sensors’ $0.01 par value Common Stock (the
“Common Stock”) at a conversion price equal to the greater of (a) the fair market value of the
Common Stock (as determined in accordance with the rules of The NASDAQ Stock Market, LLC) (the
“Market Value”) as of the date of issuance of the Units and (b) $0.40 per share (the “Conversion
Price”) (the “Initial Conversion Shares”), (ii) one one-year, unsecured Non-Convertible Debenture
substantially in the form delivered herewith (the “Non-Convertible Debenture” and, collectively
with the Convertible Debenture, the “Debentures”), with a principal repayment obligation of $5,000,
and (iii) a five-year warrant, substantially in the form attached as Annex C to the Memorandum, to
purchase the number of shares of Irvine Sensors’ Common Stock equal to twenty-five percent (25%) of
the Initial Conversion Shares of one Convertible Debenture at the initial Conversion Price and the
exercise price of such warrant shall be the greater of (a) 120% of the Market Value of one share of
Common Stock as of the closing with respect to the applicable Unit and (b) $0.40 per share (the
“Investor Warrants” or the “Warrants”). Each of the Convertible Debentures and Non-Convertible
Debentures shall bear simple interest at a rate per annum of 20% of the original principal value of
each Debenture, which interest shall accrue and be payable quarterly in arrears and shall be
convertible at the election of the Company into shares of Common Stock at the Conversion Price.
The purchase price for each Unit will be $6,000, with $3,000 of such Unit purchase price being paid
for each Convertible Debenture and $3,000 of such Unit purchase price being paid for each
Non-Convertible Debenture. Any shares of Common Stock issued or issuable upon conversion of
principal and/or accrued interest of the Debentures or exercise of the Investor Warrants shall be
referred to herein collectively as the “Shares.” The Units will only be offered and sold to a
limited number of subscribers who are “Accredited Investors,” as such term is defined hereinafter,
in accordance with the terms and conditions set forth in the confidential private placement
memorandum dated February 16, 2010 and the supplement thereto dated March 3, 2010 (together with
and as amended by such supplement, the “Confidential Placement Memorandum” or the “Memorandum”)
that was furnished by the Company to the Subscriber. Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings ascribed to such terms in the Memorandum.
WHEREAS, the Company and the Subscriber are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the provisions of Section 4(2)
and/or Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”),
and similar exemptions under applicable state securities laws.
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Subscriber, as provided herein, and the Subscriber,
shall purchase the Units. The Subscriber desires to acquire the number of Units set forth on the
signature page hereto pursuant to the Confidential Placement Memorandum and the terms and
conditions of this Agreement. The Units, the Debentures, the Warrants and the Shares are sometimes
collectively referred to herein as the “Securities.”
NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in
this Agreement the Company and the Subscriber hereby agree as follows:
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1. (a) Subscription. In accordance with the terms and conditions of the Confidential
Placement Memorandum, the Subscriber, intending to be legally bound, hereby irrevocably subscribes
for and agrees to purchase the number of Units set forth on the signature page hereto and to pay the purchase
price for said Units in immediately available funds contemporaneously with the execution and
delivery of this Agreement. The execution and delivery of this Agreement by the Subscriber will
not constitute an agreement between the Subscriber and the Company until this Agreement has been
accepted by the Company evidenced by receipt by the Subscriber of an acceptance page of this
Agreement signed by the Company, and then subject to the terms and conditions of this Agreement.
The Subscriber understands that acceptance or rejection, in whole or in part, by the Company and/or
the Placement Agent (as defined herein) of the subscription and agreement of the Subscriber to
purchase the Units is within the sole and absolute discretion of the Company and/or the Placement
Agent, and the Company may reject any subscription in whole or in part, for any reason or without
reason. Likewise, the Subscriber understands, acknowledges and agrees that acceptance by the
Company and/or the Placement Agent of any subscription of a Subscriber, in whole or in part, is
predicated upon the representations and warranties of the Subscriber as set forth hereinafter and
that SUBSCRIPTIONS, ONCE RECEIVED BY THE COMPANY AND/OR THE PLACEMENT AGENT, ARE IRREVOCABLE BY THE
SUBSCRIBER, AND, THEREFORE, MAY NOT BE WITHDRAWN.
(b) Closing Date. The closing of the purchase and sale of the Units hereunder (the
“Closing”) shall be held at the offices of Xxxxxx & Xxxxxxx LLP, 00 Xxxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000 after subscriptions for the Units have been accepted by the Company (the
date of the Closing being hereinafter referred to as the “Closing Date”). Subscriptions will not
be refunded unless the Company rejects the Subscriber’s subscription, in whole or in part, in which
case, the refund shall be without interest.
(c) Deliveries. The Subscriber shall deliver at the Closing the Omnibus Signature Page
to this Agreement, which the Company shall be authorized, upon satisfaction of the conditions set
forth in Sections 6 and 7 hereof, to attach to an execution version of the Investor Warrant,
Convertible Debenture and Non-Convertible Debenture, all in substantially the form included in the
Memorandum or delivered herewith with such minor modifications thereto, if any, as the Company
deems are necessary and appropriate and are approved by the Placement Agent.
2. Subscriber’s Representations and Warranties. The Subscriber hereby represents and
warrants to and agrees with the Company that:
(a) Information on Company. The Subscriber acknowledges receipt of the Confidential
Placement Memorandum. The Subscriber has had access at the XXXXX Website of the Commission to the
Company’s Annual Report on Form 10-K for the year ended September 27, 2009, and all periodic and
current reports filed with the Commission thereafter (hereinafter referred to as the “Reports”).
The Subscriber has had the opportunity to review information regarding the Company, its business,
operations, financial condition and the terms and conditions of the Securities, and considered all
factors Subscriber deems material in deciding on the advisability of investing in the Securities.
The offer to sell the Securities to the Subscriber was communicated to the Subscriber by the
Company in such manner that the Subscriber was able to ask questions of and received answers from
the Company or a person acting on the Company’s behalf concerning the terms and conditions of this
transaction as well as to obtain any information requested by the Subscriber. Any questions raised
by the Subscriber or its representatives concerning the transactions contemplated by this Agreement
have been answered to the satisfaction of the Subscriber and its representatives. The Subscriber
can fend for itself, can bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating the merits and risks
of the investment in the Securities. Except as set forth in the Confidential Placement Memorandum
or this Agreement, no representations or warranties have been made to the Subscriber by the Company
or any agent, employee or affiliate of the Company and in entering into this Agreement, the
Subscriber is not relying on any information, other than that which is contained in the
Confidential Placement Memorandum and the results of any independent investigation by the
Subscriber.
(b) Information on Subscriber. The Subscriber is, and will be at the time of issuance
of the Securities, an “accredited investor”, as such term is defined in Regulation D promulgated by
the Commission under the Securities Act, is experienced in investments and business matters, has
made investments of
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a speculative nature and has purchased securities of United States publicly-owned companies in private placements in the past and
has such knowledge and experience in financial, tax and other business matters as to enable
the Subscriber to utilize the information made available by the Company to evaluate the merits and
risks of and to make an informed investment decision with respect to the proposed purchase, which
represents a speculative investment. The Subscriber is not a broker-dealer under Section 15 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) or an officer, director or
affiliate of the Company; provided, however, that for purposes of this Section 2(b) an “affiliate”
shall not include a stockholder of the Company owning less than 5% of the outstanding Common Stock
of the Company. The Subscriber has the authority and is duly and legally qualified to purchase and
own the Securities. The Subscriber is able to bear the risk of such investment for an indefinite
period and to afford a complete loss thereof. The information set forth on the signature page
hereto regarding the Subscriber is accurate. The information set forth in Schedule 1 hereto is
correct in all respects.
(c) Purchase of Securities. The Subscriber is acquiring the Securities in the
ordinary course of its business as principal for its own account, and not as nominee, for
investment only and not with a view toward, or for resale in connection with, the public sale or
any distribution thereof. The Subscriber does not have any contract, undertaking, agreement,
understanding or arrangement, directly or indirectly, with any Person to distribute, sell, transfer
or pledge to such Person, or anyone else, all or any part of the Securities, and the Subscriber has
no present plan to enter into any such contract, undertaking, agreement, understanding or
arrangement. The Subscriber further agrees to execute and deliver any further investment
certificates as counsel to the Company deems necessary or advisable to comply with state or federal
securities laws. The Subscriber understands that it shall not have any of the rights of a
stockholder with respect to the Debentures or the Investor Warrant or any shares of Common Stock
issuable upon conversion of principal and/or accrued interest under the Debentures or exercise of
the Investor Warrants until such Securities are issued pursuant to the terms thereof. The
Subscriber will notify the Company at least five days prior to an interest conversion date under
the Debentures if such Subscriber has reason to believe that it and its affiliates beneficially
owns a number of shares of the Company’s Common Stock on such interest conversion date such that
the conversion of accrued interest on that date would exceed the conversion limitation set forth in
the Debentures.
(d) Compliance with Securities Act. The Subscriber understands and agrees that the
Securities have not been registered under the Securities Act or any applicable state securities
laws, by reason of their issuance in a transaction that does not require registration under the
Securities Act (based on the accuracy of the representations and warranties of the Subscriber
contained herein), and that such Securities may not be sold, assigned or transferred and must be
held indefinitely in the absence of (i) an effective registration statement under the Act and
applicable state securities laws with respect thereto or (ii) an opinion of counsel satisfactory to
the Company that such registration is not required. The Subscriber understands that the Company is
under no obligation to register the Securities.
(e) Securities Legend. The Securities shall bear the following or similar legend (in
addition to such other restrictive legends as are required or deemed advisable under any applicable
law or any other agreement to which the Company is a party):
“THE TRANSFER OF THIS SECURITY IS SUBJECT TO RESTRICTIONS
CONTAINED HEREIN. THIS SECURITY HAS BEEN ISSUED IN RELIANCE UPON
THE REPRESENTATION OF THE SECURITYHOLDER THAT IT HAS BEEN ACQUIRED
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR
OTHER DISTRIBUTION THEREOF. THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. ”
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(f) Tax Advisors. The Subscriber has had the opportunity to review with such
Subscriber’s own tax advisors the federal, state and local tax consequences of this investment,
where applicable, and the transactions contemplated by this Agreement. The Subscriber is relying
solely on the Subcriber’s own determination as to tax consequences or the advice of such tax
advisors and not on any statements or representations of the Company or any of its agents and
understands that such Subscriber (and not the Company) shall be responsible for such Subscriber’s
own tax liability that may arise as a result of this investment or the transactions contemplated by
this Agreement.
(g) Communication of Offer. The offer to sell the Securities was directly
communicated to the Subscriber by the Company. At no time was the Subscriber presented with or
solicited by any leaflet, advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or any other form of
general advertising, or solicited or invited to attend a promotional meeting or any seminar or
meeting by any general solicitation or general advertising.
(h) Authority; Enforceability. If the Subscriber is an entity, it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization with
the requisite corporate, limited liability company or partnership power and authority to enter into
and to consummate the transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder. This Agreement has been duly authorized, executed and delivered by the
Subscriber and is a valid and binding agreement enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and to general
principles of equity; and Subscriber has full corporate power and authority necessary to enter into
this Agreement, the Debentures, the Investor Warrants and such other agreements and to perform its
obligations hereunder, thereunder and under all other agreements entered into by the Subscriber
relating hereto and thereto.
(i) No Governmental Review. The Subscriber understands that no United States federal
or state agency or any other governmental or state agency has passed on or made recommendations or
endorsement of the Securities or the fairness or suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
The Subscriber understands that neither legal counsel to the Company, the Placement Agent, nor its
counsel has independently verified the information concerning the Company included in the
Memorandum or herein, all of which has been provided by the Company, nor has such legal counsel
passed upon the adequacy or accuracy of the Memorandum. No independent third party, such as an
investment banking firm, the Placement Agent, or other expert in evaluating businesses or
securities, has made an evaluation of the economic potential of the Company.
(j) Certain Trading Activities. The Subscriber has not directly or indirectly, nor
has any Person acting at the direction of the Subscriber, engaged in any transactions in the
securities of the Company (including, without limitation, any short sales involving the Company’s
securities) since the earlier to occur of (i) the time the Subscriber was first contacted by the
Company or any other Person regarding the investment in the Company and (ii) the 30th
day prior to the date of this Agreement. The Subscriber covenants that neither it nor any Person
acting at the direction of the Subscriber will engage in any transactions in the securities of the
Company (including short sales) after the date hereof and prior to the date that the transactions
contemplated by this Agreement are publicly disclosed.
(k) Correctness of Representations. The Subscriber represents as to the Subscriber
that the foregoing representations and warranties are true and correct as of the date hereof and,
unless the Subscriber otherwise notifies the Company prior to the Closing Date shall be true and
correct as of the Closing Date and as of the issuance date of each of the Securities.
3. Company Representations and Warranties. The Company represents and warrants to and
agrees with the Subscriber that:
(a) Due Incorporation. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has the requisite
corporate power to own its properties and to carry on its business as disclosed in the Reports.
The Company is duly qualified as a foreign corporation to do business and is in good standing in
the State of California.
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(b) Outstanding Stock. All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and nonassessable.
(c) Authority; Enforceability. This Agreement, and any other agreements delivered
together with this Agreement or in connection herewith, including the Debentures, (collectively
“Transaction Documents”) have been duly authorized, executed and delivered by the Company and are
valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights generally and to general principles of
equity. The Company has full corporate power and authority necessary to enter into and deliver the
Transaction Documents and to perform its obligations thereunder.
(d) Consents. No consent, approval, authorization or order of any court, governmental
agency or body or arbitrator having jurisdiction over the Company is required for the execution by
the Company of the Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the issuance and sale
of the Securities, other than the filing by the Company of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, any applicable Blue Sky filings, or
otherwise as may be required by The Nasdaq Stock Market. The Transaction Documents and the
Company’s performance of its obligations thereunder have been approved by the Company’s board of
directors.
(e) No Violation or Conflict. Neither the issuance and sale of the Securities nor the
performance of the Company’s obligations under this Agreement and all other agreements entered into
by the Company relating thereto will violate, conflict with, result in a breach of, or constitute a
default under (A) the certificate of incorporation or bylaws of the Company, (B) to the Company’s
knowledge, any decree, judgment, order, law, treaty or regulation applicable to the Company of any
court, governmental agency or body, or arbitrator having jurisdiction over the Company, or (C) the
terms of any material bond, debenture, note or other evidence of indebtedness, agreement, stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to
which the Company is a party or by which it is bound, except the violation, conflict, breach, or
default of which would not have a Material Adverse Effect. For purposes of this Agreement, a
"Material Adverse Effect” shall mean a material adverse effect on the financial condition, results
of operations, properties or business of the Company and its Subsidiaries taken as a whole. For
purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any
corporation, limited or general partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which more than 50% of (i) the outstanding capital stock
having (in the absence of contingencies) ordinary voting power to elect a majority of the board of
directors or other managing body of such entity, (ii) in the case of a partnership or limited
liability company, the interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or other entity, the
beneficial interest in such trust, estate, association or other entity business is, at the time of
determination, owned or controlled directly or indirectly through one or more intermediaries, by
such entity.
(f) The Securities. The Securities upon issuance in accordance with
their respective terms:
(i) will be free and clear of any security interests, liens, claims or other encumbrances,
subject to restrictions upon transfer set forth herein, under the Securities Act and any applicable
state securities laws;
(ii) have been, or will be, duly and validly authorized, duly and validly issued, and, in the
case of the Common Stock issuable upon conversion of the principal and/or accrued interest under
the Debentures and the exercise of the Investor Warrants, fully paid and nonassessable;
(iii) will not have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Company;
(iv) will not subject the holders thereof to personal liability by reason of being such
holders; and
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(v) will have been issued in reliance upon an exemption from the registration requirements of
and will not result in a violation of Section 5 under the Securities Act.
(g) Reporting Company. The Company is a publicly-held company subject to reporting
obligations pursuant to Section 13 of the Exchange Act and has a class of common shares registered
pursuant to Section 12(g) of the Exchange Act. Pursuant to the provisions of the Exchange Act, the
Company has timely filed all reports and other materials required to be filed thereunder with the
Commission during the preceding twelve months.
(h) No General Solicitation. Neither the Company, nor any of its affiliates, nor to
its knowledge, any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under the 0000 Xxx) in
connection with the offer or sale of the Securities.
(i) Correctness of Representations. The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all material respects,
and, unless the Company otherwise notifies the Subscribers prior to the Closing Date, shall be true
and correct in all material respects as of the Closing Date.
4. Escrow and Use of Purchase Price. The subscription payments made pursuant hereto
prior to the Closing of the Offering will be deposited in an escrow account at a commercial bank or
trust company of the Placement Agent’s choosing and agreeable to the Company. No interest will be
earned by the Subscriber on subscription payments held in any escrow account. If for any reason
the Closing of the purchase and sale of the Units does not take place, the subscription payment
will be returned to the Subscriber without interest and without deduction. Upon receipt of the
Agreement and the subscription payment, and upon acceptance of the subscription by the Company, the
subscription payments shall belong to the Company. If the subscription is not accepted by the
Company, then this Agreement will be null and void and the subscription payment will be returned to
the Subscriber without interest.
5. Securities Law Disclosures. The Company may in its sole discretion, following the
Closing Date, (i) issue a press release and/or file a Current Report on Form 8-K disclosing the
transactions contemplated hereby and (ii) make such other disclosures, filings and notices in the
manner and time required by the Commission, any state securities commission, any national
securities exchange or Nasdaq.
6. Conditions to Subscriber’s Obligations. The obligations of the Subscriber under
Section 1 of this Agreement are subject to the fulfillment at or before the Closing of each of the
following conditions, any of which may be waived in writing by the Subscriber:
(a) Representations and Warranties. The representations and warranties of the Company
contained in Section 3 shall be true and correct in all material respects on and as of the Closing
Date with the same effect as if made on and as of the Closing Date.
(b) Performance. The Company shall have performed or fulfilled in all material
respects all agreements, obligations and conditions contained herein required to be performed or
fulfilled by the Company at or prior to the Closing.
(c) Regulatory Matters. None of the issuance and sale of the Securities pursuant to
this Agreement or any of the transactions contemplated by any of the other Transaction Documents
shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order
shall have been issued in respect thereof. There shall not have been any legal action, order,
decree or other administrative proceeding instituted against the Company or against the Subscriber
relating to the issuance of the Securities or the Subscriber’s activities in connection therewith
or any other transactions contemplated by this Agreement or the other Transaction Documents.
(d) Consents. The Company shall have obtained any and all consents, permits and
waivers necessary or appropriate for consummation of the transactions contemplated by the
Transaction Documents.
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7. Conditions to the Company’s Obligations. The obligations of the Company under
Section 1 of this Agreement are subject to the fulfillment at or before the Closing of each of the
following conditions, any of which may be waived in writing by the Company:
(a) Representations and Warranties. The representations and warranties of the
Subscriber contained in Section 2 shall be true and correct in all material respects on and as of
the Closing Date with the same effect as if made on and as of the Closing Date.
(b) Performance. The Subscriber shall have performed or fulfilled in all material
respects all agreements, obligations and conditions contained herein required to be performed or
fulfilled by the Subscriber at or prior to the Closing.
(c) Subscription Payments. The Subscriber shall have delivered the aggregate
subscription payment for the Units in the amount specified for the Subscriber on the signature page
hereto.
(d) Regulatory Matters. None of the issuance and sale of the Securities pursuant to
this Agreement or any of the transactions contemplated by any of the other Transaction Documents
shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order
shall have been issued in respect thereof. There shall not have been any legal action, order,
decree or other administrative proceeding instituted against the Company or against the Subscriber
relating to the issuance of the Securities or the Subscriber’s activities in connection therewith
or any other transactions contemplated by this Agreement or the other Transaction Documents.
(e) Consents. The Company shall have obtained any and all consents, permits and
waivers necessary or appropriate for consummation of the transactions contemplated by the
Transaction Documents.
9. Covenants of Subscriber Not to Short Stock. The Subscriber and its affiliates and
assigns agree not to make any short sale of, or grant any option for the purchase of or enter into
any hedging or similar transaction with the same economic effect as a short sale, the Securities
until one-hundred eighty (180) days following the issuance of the Securities.
10. Miscellaneous.
(a) Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable overnight courier service with
charges prepaid, or (iv) transmitted by hand delivery, electronic mail, or facsimile, addressed as
set forth below or to such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by electronic mail or facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is
to be received), (b) the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received) or (c) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be: (i) if to the Company, to: Irvine Sensors Corporation, 0000 Xxx
Xxxx Xxxxxx, Xxxxx Xxxx, XX 00000, Attn: Chief Financial Officer, facsimile: (000) 000-0000, with a
copy to: Xxxxxx & Xxxxxxx LLP, 00 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attn: Xxxxx X.
Xxxxxxxx, Esq., facsimile: (000) 000-0000, and (ii) if to the Subscriber, to: the address and
facsimile number indicated on the signature pages hereto.
(b) Entire Agreement; Assignment. This Agreement and other documents delivered in
connection herewith represent the entire agreement between the parties hereto with respect to the
subject matter hereof and may be amended only by a writing executed by both parties. Neither the
Company nor the Subscriber have relied on any representations not contained or referred to in this Agreement and the documents delivered
herewith. No right or obligation of the Company shall be assigned without prior notice to and the
written consent of the Subscriber.
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(c) Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts, each of which, when
so executed, shall be deemed an original, but all such counterparts shall constitute but one and
the same instrument. This Agreement may be executed by facsimile signature and delivered by
facsimile transmission.
(d) Law Governing this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without regard to principles of conflicts of
laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of California or in the
federal courts located in the state of California. The parties and the individuals executing this
Agreement and other agreements referred to herein or delivered in connection herewith on behalf of
the Company agree to submit to the jurisdiction of such courts. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and costs. In the event
that any provision of this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of any other provision
of any agreement.
(e) Specific Enforcement, Consent to Jurisdiction. The Company and the Subscriber
acknowledge and agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity. Subject to Section 10(d) hereof, each of the
Company, the Subscriber and any signatory hereto in his personal capacity hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction in California of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in
this Section shall affect or limit any right to serve process in any other manner permitted by law.
(f) Independent Nature of Subscribers. The Company acknowledges that the obligations
of the Subscriber under the Transaction Documents are several and not joint with the obligations of
any other Subscriber who is also purchasing Securities in the transaction (collectively, with the
Subscriber, referred to as the “Subscribers”), and none of the Subscribers shall be responsible in
any way for the performance of the obligations of any of the other Subscribers under the
Transaction Documents. The Company acknowledges that the decision of each of the Subscribers to
purchase Securities has been made by each of such Subscribers independently of any of the other
Subscribers and independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or given by any of
the other Subscribers or by any agent or employee of any of the other Subscribers, and none of the
Subscribers or any of its agents or employees shall have any liability to any of the Subscribers
(or any other person) relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained in any Transaction Document, and no
action taken by any of the Subscribers pursuant hereto or thereto shall be deemed to constitute the
Subscribers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Subscribers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents. The
Company acknowledges that each of the Subscribers shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of the Transaction
Documents, and it shall not be necessary for any of the other Subscribers to be joined as an
additional party in any proceeding for such purpose. The Company acknowledges that it has elected
to provide all of the Subscribers with the same terms and Transaction Documents for the convenience
of the Company and not because Company was required or requested to do so by the Subscribers. The
Company acknowledges that such procedure with respect to the Transaction Documents in no way
creates a presumption that the Subscribers are in any way acting in concert or as a group with
respect to the Transaction Documents or the transactions contemplated thereby.
(g) Omnibus Signature Page. This Agreement is intended to be read and construed in
conjunction with the Forms of Convertible Debenture and Non-Convertible Debenture and the Form of
Investor Warrant pertaining to the issuance by the Company of the Securities pursuant to the
Memorandum. Accordingly, pursuant to the terms and conditions of this Agreement, it is hereby
agreed that the execution by the Subscriber of this Agreement, in the place set forth herein, shall constitute agreement to be bound by the
terms and conditions of the Convertible Debenture, Non-Convertible Debenture and the Investor
Warrant, with the same effect as if each such separate, but related agreement, was separately
signed to the extent required to be executed by the Subscriber.
Page 8
11. Payment
(a) For payment by check, please make checks payable to “US National Bank as Escrow Agent for
Irvine Sensors Corp.” and mail such checks to X.X. Xxxxxx & Company, L.L.C., attn: Investment
Banking — Xxx Xxxxxx, 0000 Xxxxxxxxx Xx., XX, 00xx Xxxxx, Xxxxxxx, XX 00000.
(b) For wiring the funds directly to the Escrow Account please use the following instructions:
| Account Name: | ||||
| ABA Number: | ||||
| A/C Number: | ||||
| Reference: | ||||
| FBO: | [Investor Name] | |||
| [Investor’s Social Security Number] | ||||
| [Investor’s Address] |
[THIS SPACE INTENTIONALLY LEFT BLANK]
Page 9
OMNIBUS SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT, INVESTOR WARRANT,
UNSECURED CONVERTIBLE DEBENTURE AND UNSECURED NON-CONVERTIBLE DEBENTURE
UNSECURED CONVERTIBLE DEBENTURE AND UNSECURED NON-CONVERTIBLE DEBENTURE
IN WITNESS WHEREOF, the Subscriber hereby represents and warrants that the Subscriber has read
this entire Agreement and the Confidential Placement Memorandum and all documents annexed thereto,
incorporated by reference therein and/or delivered herewith, including the Forms of Convertible
Debenture, Non-Convertible Debenture and Investor Warrant, and hereby executes and delivers this
Agreement as of the ___day of , 2010.
| AGGREGATE | ||||||||
| SUBSCRIBER | NUMBER OF UNITS | PURCHASE PRICE | ||||||
Print Name:
|
$ | |||||||
Address: |
||||||||
Fax: |
||||||||
Title: |
||||||||
ACCEPTANCE
IN WITNESS WHEREOF, the Company has duly executed and delivered this Agreement as of the ___
day of , 2010.
| IRVINE SENSORS CORPORATION a Delaware corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Page 10
Schedule 1 to Subscription Agreement
Name:
INVESTOR QUESTIONNAIRE
Purpose of this Questionnaire
The Units, the Debentures, the Investor Warrants and the Shares (collectively, the
"Securities”) of Irvine Sensors Corporation, a Delaware corporation (the “Company”), will be
offered without registration under the Securities Act of 1933, as amended (the “Act”), or the
securities laws of any state, in reliance on the exemptions contained in Section 4(2) of the Act
and Regulation D promulgated thereunder and on similar exemptions under applicable state laws.
Under Section 4(2) of the Act and/or certain state securities laws, the Company may be required to
determine that a prospective investor meets certain suitability requirements before offering to
sell the Securities to such individual or entity. THE COMPANY MAY, IN ITS SOLE DISCRETION, EXCLUDE
ANY POTENTIAL INVESTOR FROM THE OFFERING TO THE EXTENT NECESSARY TO COMPLY WITH APPLICABLE FEDERAL
AND STATE SECURITIES LAWS, or for any other reason or without reason. This Investor Questionnaire
does not constitute an offer to sell or a solicitation of an offer to buy the Securities or any
other security.
INSTRUCTIONS.PLEASE COMPLETE THIS QUESTIONNAIRE BY FILLING IN THE INFORMATION CALLED FOR,
CHECKING THE APPROPRIATE BOXES, AND SIGNING BELOW. PLEASE FAX AND MAIL THE COMPLETED QUESTIONNAIRE
TO X. X. XXXXXX & COMPANY, L.L.C.
REPRESENTATIONS
The undersigned hereby represents to the Company as follows:
1. Accredited Investor Status. The undersigned has read the definition of “accredited
investor” as defined in Rule 501 of Regulation D attached hereto as Attachment 1, and
certifies that either (check one):
o The undersigned is an “accredited investor;” or
o The undersigned is not an “accredited investor.”
o The undersigned is not an “accredited investor.”
2. Domicile/State of Organization. The undersigned’s state of domicile/organization is:
.
The foregoing representations are true and accurate as of the date hereof. The undersigned
undertakes to notify the Company regarding any material change in the information set forth above
prior to the purchase by the undersigned of any Securities of the Company.
| Dated: | ||||||||||
| Address: | ||||||||||
| Signature | of Investor(s) | |||||||||
| Telephone: | ||||||||||
| Facsimile: | ||||||||||
| Email: | ||||||||||
| Print Name of Investor(s) | ||||||||||
| Print Title (if applicable) | ||||||||||
Page 11
ATTACHMENT 1
Rule 501. Definitions and Terms Used in Regulation D under the Act.
As used in Regulation D, the term “accredited investor” shall mean any person who comes within
any of the following categories, or who the issuer reasonably believes comes within any of the
following categories, at the time of the sale of the securities to that person:
(1) Any bank as defined in Section 3(a)(2) of the Act or any savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; insurance company as defined in Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;
any plan established and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the employee benefit plan
has total assets in excess of $5,000,000; or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors;
(2) Any private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation,
Massachusetts or similar business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer of the securities being
offered or sold, or any director, executive officer, or general partner of a general partner of
that issuer;
(5) Any natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his purchase exceeds $1,000,000;
(6) Any natural person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person’s spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income level in the current year;
(7) Any trust with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the securities offered, whose purchase is directed by a sophisticated person as
described in Rule 506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited investors.
Page 12
