Exhibit 10.13

December 30, 2005

Pequot Private Equity Fund III, L.P.

c/o Pequot Capital Management, Inc.

500 Nyala Farm Road

Westport, CT 06880

Attention: Aryeh Davis

                 Carlos Rodrigues

Ladies and Gentlemen:

Reference is made to that certain Securities Purchase Agreement dated as of the
date hereof among Irvine Sensors Corporation (the “Company”) and the purchasers
party thereto (the “Purchase Agreement”). Capitalized terms used but not defined
herein shall have the meanings given to them in the Purchase Agreement.

In order to induce the Purchasers to enter into the Purchase Agreement and
purchase the Notes and Warrants, the Company agrees to: (i) cause an individual
designated in writing from time to time by Pequot Private Equity Fund III, L.P.,
and reasonably acceptable to the Company’s Nominating and Corporate Governance
Committee, who shall initially be Martin Hale (the “Pequot Director”) to serve
on the Company’s Board of Directors; (ii) nominate the Pequot Director for
reelection at each annual meeting of the Company’s stockholders; (iii) provided
that the Pequot Director meets the applicable membership requirements of the
Securities and Exchange Commission and the Eligible Market on which the
Company’s Common Stock is then listed, appoint the Pequot Director to all
committees of the Company’s Board of Directors; and (iv) execute and deliver to
the Pequot Director the Company’s standard Director Indemnification Agreement in
the form of Exhibit A attached hereto. The covenants and obligations of the
Company under this letter agreement shall terminate upon the Purchasers and
their respective Affiliates owning (legally or beneficially), or having the
right to acquire, in the aggregate less than 500,000 shares of Common Stock (as
adjusted for any stock dividends, combinations, stock splits and the like)
issued or issuable upon conversion of the Notes. For the avoidance of doubt, the
Company acknowledges that Martin Hale is deemed reasonably acceptable to the
Company’s Nominating and Corporate Governance Committee.

This letter shall be governed by and construed in accordance with the laws of
the State of New York (except for matters governed by corporate law in the State
of Delaware) and each of the parties hereto irrevocably consents to the
exclusive jurisdiction of all courts, federal and state, located in the City of
New York for the adjudication of any dispute arising hereunder. This letter may
not be amended or waived except in writing, by a document executed by the
Company and Pequot Private Equity Fund III, L.P. This letter may be executed in
two or more counterparts, together constituting one agreement, and may be
executed by facsimile, having the same force as if originally executed.

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Very truly yours,

 

IRVINE SENSORS CORPORATION

By:  

/s/ John J. Stuart, Jr.

Name:

 

John J. Stuart, Jr.

Title:

 

SVP/CFO

Accepted:

 

PEQUOT PRIVATE EQUITY FUND III, L.P.

By:  

Pequot Capital Management, Inc.,

  its Investment Manager By:  

/s/ Carlos Rodrigues

Name:

 

Carlos Rodrigues

Title:

 

Chief Financial Officer

 

Pequot Ventures