exv10w74



 





Exhibit 10.74





REGISTRATION RIGHTS PURCHASE AGREEMENT,

CONSENT AND WAIVER




     This Registration Rights Purchase Agreement, Consent and Waiver (the “Agreement”) is made and
entered into this 28th day of November, 2007 (the “Effective Date”) by and among, Irvine Sensors
Corporation (the “Company”), Alpha Capital Anstalt (“Alpha”), Longview Fund, L.P. (“Longview”),
Jolie G. Kahn (“Kahn”) and Barbara R. Mittman (“Mittman”). Longview, Alpha, Kahn and Mittman are
sometimes collectively referred to herein as the “Investors.”



     WHEREAS, in December 2006, pursuant to the Subscription Documents set forth on Exhibit
A attached hereto (the “Subscription Documents”), Alpha and Longview agreed to loan the Company
$8.25 million and in connection therewith were issued the Company’s Class A Warrants, and purchased
the Company’s Series 1 and Series 2 Senior Convertible Notes in the original aggregate principal
amount of $10.0 million payable to Pequot Private Equity Fund III, L.P. and Pequot Offshore Private
Equity Partners III, L.P.(collectively, “Pequot”)



     WHEREAS, in December 2006, the Company issued shares of the Company’s common stock to Kahn and
Mittman (collectively, the “Stockholders”) and entered into a Joinder Agreement with the
Stockholders, pursuant to which the Company agreed that the Stockholders would be deemed to be
Subscribers under the Subscription Agreement and Purchasers under the Registration Rights
Agreement.



     WHEREAS, in July 2007, the Company entered into the following documents with Longview,
pursuant to which the Company borrowed an additional $2.0 million from Longview (collectively,
“July Loan Documents”): (i) the Loan Agreement between the Company and Longview, (ii) the Secured
Promissory Note payable to Longview in the principal amount of $2.1 million (the “July Note”);
(iii) the Class B Common Stock Purchase Warrant issued to Longview dated August 15, 2007 (the
“Class B Warrant”); (iv) Letter Agreement to dated July 19, 2007 executed by Alpha; (v) Consent and
Waiver dated July 19, 2007 executed by Alpha; (vi) Consent and Waiver dated July 2007 executed by
Kahn and Mittman; and (v) Confirmation dated July 27, 2007 between Longview and Alpha.



     WHEREAS, in connection with the foregoing transactions, Alpha and Longview were granted
security interests in the assets of the Company and its wholly-owned subsidiary, Optex Systems,
Inc. (“Optex”), and received a guaranty (the “Guaranty”) of the Company’s obligations, pursuant to
the Subscription Documentation and assumption of the Subordinated Debt and were granted and
received other rights pursuant to the Subscription Documents and assumption of the Subordinated
Debt pursuant to the “Existing Security Agreements,” as defined on Exhibit B hereto. The
Existing Security Agreements, the Subscription Documents, the Joinder Agreement and the July Loan
Documents, the Contingent Notes (as defined herein) and the Restructuring Notes (as defined herein)
are sometimes collectively referred to herein as the “Financing Documents.”



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     WHEREAS, in connection with this Agreement, the Company is concurrently entering into a
Secured Promissory Note (Restructuring) of even date herewith with each of Longview and Alpha in
the original principal amounts of $1.0 million and $115,000, respectively (the “Restructuring
Notes”), pursuant to the terms attached hereto as Exhibit C.



     NOW THEREFORE, for good and valuable consideration paid by Longview and the Company, receipt
of which is acknowledged, the parties hereto agree as follows:



     1. Kahn and Mittman Agreement. Notwithstanding anything to the contrary contained in
the Joinder Agreement, the Securities Purchase Agreement, the Registration Rights Agreement or any
of the other Financing Documents that may be applicable to Kahn or Mittman, Kahn and Mittman hereby
agree that they shall be bound by any waiver, consent or modification under any of the Financing
Documents that has been or will be approved or adopted by Longview.



     2. Purchase of Registration Rights. In consideration for (i) the payment by the
Company of an aggregate of $1.0 million and $115,000 to Longview and Alpha, respectively, and (ii)
good and valuable consideration paid to Kahn and Mittman, receipt of which is acknowledged by them,
the Company hereby purchases from the Investors the Company’s requirement and obligation to
register with the U.S. Securities and Exchange Commission (the “SEC”) and any state regulatory body
or agencies, any shares of the Company’s securities owned by or issuable to any of the Investors
including Shares issuable upon exercise of Class A Warrants and Class B Warrants or upon the
conversion of the Series 1 Notes and the Series 2 Notes (collectively, the “Shares”) under any of
the Financing Documents. As a result of such purchase, the parties hereto agree that the Company
shall have no further obligation under any of the Financing Documents to register the Shares. The
purchase price payable to Longview and Alpha shall be payable pursuant to the terms and conditions
of the Contingent Secured Promissory Notes (Buyout), copies of which are attached hereto as
Exhibit C (the “Contingent Notes”).



     3. Amendment of Securities Purchase Agreement. Notwithstanding anything to the
contrary contained in the Securities Purchase Agreement, Longview and Alpha, as the holders of all
of the Series 1 Notes and the Series 2 Note, hereby agree that the Securities Purchase Agreement
shall be amended to clarify that the Company shall have no further obligation under the Securities
Purchase Agreement to register any Registrable Securities held by any party thereunder.



     4. No Liquidated Damages. The parties hereto agree that no liquidated damages or
other damages (and no default interest on such liquidated or other damages) have accrued in
connection with the Company’s failure to register the Shares except to the extent waived as of the
date hereof, and no such damages or default interest are outstanding and owing as a result of or
related to the Company’s failure to register the Shares. The Investors further waive any and all
events of default under any of the Financing Documents, whether or not declared, perfected or
asserted, that relate solely to the failure of the Company to so register such Shares.




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     5. Registration Rights Prohibition. Notwithstanding anything to the contrary
contained in the Financing Documents, without the prior written consent of Longview and Alpha, the
Company shall not file any registration statement with the SEC or state regulatory authorities
until the end of the Exclusion Period (other than a Registration Statement on Form S-8, or any
successor form to the Form S-8, which the Investors hereby consent to, but such consent is limited
to the registration of the annual evergreen increase in shares issuable under the Company’s 2006
Omnibus Incentive Plans). The “Exclusion Period” shall end on the later of (i) June 30, 2008, or
(ii) 180 days after the date when all of the Shares held by the Investors may be sold without
restriction under Rule 144(k) (or any successor rule) promulgated under the Securities Act of 1933,
as amended (the “Securities Act”), provided that for the purposes of determining 144(k)
eligibility, it is assumed that all of such Shares are currently outstanding or will be issued
using the net exercise or cashless exercise provisions contained in the Class A Warrants and the
Class B Warrants, even if such warrants are ultimately exercised for cash. The parties hereto
further agree that Section 6.1(f) of the Subscription Agreement shall be deleted in its entirety.
The Exclusion Period as defined above shall be deemed to be the Exclusion Period for the purposes
of the Subscription Agreement.



     6. Consent to Approved Financing, Specified Indebtedness and Waivers. The parties
hereto agree that this Agreement shall be in addition to, and not in lieu of any prior consents and
waivers previously entered into among the parties hereto. Notwithstanding anything to the contrary
contained in the Financing Documents, the Investors hereby (i) consent to the issuance of the
Restructuring Notes and the Contingent Notes in substantially the forms attached hereto as
Exhibit C; and (ii) consent to the issuance by the Company of common stock and/or warrants
or options to purchase common stock in an aggregate amount not to exceed $2.0 million on or before
May 31, 2008; provided that any such issuances must be at a purchase price of not less than $1.30
per share for common stock or at an exercise price of not less than $1.30 per share for any
warrants or options to purchase common stock (the “Approved Financing”). The Investors hereby
waive any notice period under the Financing Documents for the Approved Financing and further waive
the Investors’ right of first offer, right of first refusal or other rights to participate in such
Approved Financing under the Financing Documents, as well as any repurchase right solely as it
relates to the Approved Financing or the issuance of the Restructuring Notes or the Contingent
Notes. The Investors agree that (i) any Approved Financing shall be deemed to be “Excluded Stock”
and “Excepted Issuances” under the Financing Documents, and (ii) to the extent that any of the
officers or directors of the Company participate in the Approved Financing, any such shares
purchased by such persons shall be deemed to be Excluded Stock, but shall not be included in the
calculation of the 5% limit in subparagraph (A) of the definition of Excluded Stock contained in
Section 1.1 of the Securities Purchase Agreement. Without limiting the foregoing, the Investors
hereby (A) waive the rights set forth in Section 3(c) of the Series 1 Notes and the Series 2 Note
with respect to the Additional Financing, the Restructuring Notes and the Contingent Notes; and (C)
waive the right of first refusal (including any right to notice thereof) set forth in Section 10(a)
of the Subscription Agreement solely in connection with the Approved Financing, the Restructuring
Notes and the Contingent Notes.



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     7. Increase in Existing Indebtedness. The Company and Investors agree that the
references in the following documents to “$1,000,000” shall be amended and changed to “$2,000,000”
but only with respect to accounts payable: (i) Section 2.7 of the Company’s Secured Promissory Note
dated July 19, 2007 payable to Longview; and (ii) Section 8(a)(iii) in the Series 1 Notes and the
Series 2 Note. The other Investors hereby consent to the foregoing amendments.



     8. Looney Default and Other Defaults. In November 2007, the Company received written
notice from Timothy Looney and TWL Group, L.P. (collectively, “Looney”) that the Company was in
default regarding its obligations to register or qualify the shares of the Company’s common stock
held by Looney under that certain Registration Rights Agreement dated December 30, 2005 (the
“Looney Default”), and Looney demanded liquidated damages thereunder for such default. The Company
also acknowledges that Looney Default and the Company’s failure to obtain Longview’s and Alpha’s
consent to the Company’s issuance on May 16, 2007 of a warrant to purchase up to 200,000 shares of
common stock constitute a technical event of default under the Subscription Agreement and certain
of the other Financing Documents (the “Consent Default”). Notwithstanding the foregoing, the
Investors agree that (i) the Looney Default (but only to the extent that Looney does not take any
further action to accelerate or collect any obligations owed to Looney by the Company or forecloses
on any of Looney’s security interests in any of the assets of the Company or if Looney gives
further written notice to the Company in accordance with the terms of any of the loan documents
between Looney and either of the Company or Optex to so accelerate, collect or foreclose), (ii) the
Consent Default and (iii) any event identified in a writing designated as the “Other Written
Information,” which will be delivered on or prior to the execution of this Agreement, to (and
accepted by) a representative of Longview and Alpha, shall not be deemed to be a cross default for
the purposes of any of the Financing Documents, and the Investors waive their right to accelerate
or require repurchase of any of its obligations under the Financing Documents or triggering default
interest under the Financing Documents, exercising remedies with respect to any collateral under
the Existing Security Agreement solely with respect to the Looney Default, the Consent Default or
the event identified in the Other Written Information.



     9. September 2007 Note Amendments. In September 2007, the Company, Alpha and Longview
reached a preliminary agreement to amend the Series 1 Notes, the Series 2 Note, the Term Notes and
the July Note, which agreement is memorialized in the September 2007 Amendments, executed copies of
which are attached hereto as Exhibit D (collectively, the “September 2007 Note
Amendments”). The Company, Alpha and Longview agree and confirm that such September 2007 Note
Amendments have been duly executed and delivered and are in full force and effect.



     10. Company Representations and Warranties.




     (a) Power and Authority; Due Execution. The Company has (i) full corporate power,
authority and legal right to execute, deliver and perform its obligations under this Agreement,
(ii) taken all necessary actions to authorize the execution, delivery and



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performance by the Company of this Agreement, and (iii) caused the Agreement to be duly
executed and delivered on behalf of the Company.



     (b) Legal, Valid, Binding Obligation. This Agreement constitutes the legal, valid,
and binding obligation of the Company, enforceable against the Company in accordance with their
terms, subject to limitations as to enforceability which might result from bankruptcy, insolvency,
moratorium and other similar laws affecting creditors’ rights generally and subject to limitations
on the availability of equitable remedies.



     (c) Organization, Existence, Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of Delaware, (ii) has
the power and authority and the legal right to own, lease and operate its property and to conduct
the business in which it is currently engaged; and (iv) is duly qualified to do business and is in
good standing as a foreign entity in each other jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.



     (d) Consents. Except as have been obtained, no consent, permit, license, approval or
authorization of, or registration, declaration or filing with or notice to, any governmental
authority, bureau or agency or any other person or entity is required in connection with the
execution, delivery or performance by the Company of this Agreement.



     (e) No Material Inside Information. Upon the filing of the Company’s Annual Report on
Form 10-K with the SEC and the public dissemination of such Form 10-K, the Company confirms that
the Company shall not have provided the Investors with any material, inside information. For the
purposes of this Section 8(e), any information provided to the persons identified in the Other
Written Information shall not be deemed to have been provided to the Investors.



     (f) Net Exercise Tacking. The Series 1 Notes, the Series 2 Note, the Class A Warrants
and the Class B Warrants contain cashless or net exercise provisions, and provided that the Series
1 Notes and the Series 2 Note are converted into shares of the Company’s common stock in accordance
with such net exercise provisions, or the Class A Warrants and the Class B Warrants are exercised
in accordance with such cashless exercise provisions, the holding period under Rule 144 promulgated
under the Securities Act, as in effect as of the date hereof, for the shares of common stock issued
to Alpha and Longview upon such net exercise or cashless exercise, shall commence December 29, 2006
with respect to the Class A Warrants, and on August 15, 2007 with respect to the Class B Warrants.



     11. Investors Representations and Warranties. Each of the Investors hereby represents
and warrants to the Company as follows:



     (a) Power and Authority; Due Execution. Such Investor has (i) the full power,
authority and legal right to execute, deliver and perform such Investor’s obligations under



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this Agreement, (ii) taken all necessary actions to authorize the execution, delivery and
performance by the Investor of this Agreement, and (iii) caused the Agreement to be duly executed
and delivered on behalf of such Investor.



     (b) Legal, Valid, Binding Obligation. This Agreement constitutes the legal, valid,
and binding obligation of such Investor, enforceable against such Investor in accordance with its
terms, subject to limitations as to enforceability which might result from bankruptcy, insolvency,
moratorium and other similar laws affecting creditors’ rights generally and subject to limitations
on the availability of equitable remedies.



     (c) Organization, Existence, Good Standing. To the extent the Investor is a legal
entity and not an individual, such Investor is a duly formed, validly existing and in good standing
under the laws of its formation, and (ii) has the power and authority and the legal right to own,
lease and operate its property and to conduct the business in which it is currently engaged; and
(iii) is duly qualified to do business and is in good standing as a foreign entity in each other
jurisdiction where its ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified would not have a material
adverse effect on such Investor.



     (d) Consents. Except as have been obtained, no consent, permit, license, approval or
authorization of, or registration, declaration or filing with or notice to, any governmental
authority, bureau or agency or any other person or entity is required in connection with the
execution, delivery or performance by such Investor of this Agreement.



     12. Miscellaneous. The notice, venue, jurisdiction, governing law and other
miscellaneous provisions of Section 11 of the Subscription Agreement are incorporated herein and
shall be applicable to this Consent.



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     IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties hereto as of
the Effective Date.



	 	 	 	 	 	 	 	 	 	 	 
	IRVINE SENSORS CORPORATION

“Company”	 	 	 	LONGVIEW FUND, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/S/ JOHN C. CARSON
	 	 	 	By:
	 	/S/ S. MICHAEL RUDOLPH	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: John C. Carson
	 	 	 	 	 	Name: S. Michael Rudolph	 	 
	 

	 	Title: President and CEO
	 	 	 	 	 	Title: CFO — Investment Adviser	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ALPHA CAPITAL ANSTALT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/S/ KONRAD ACKERMAN	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Konrad Ackerman

Title: Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/S/ JOLIE G. Kahn	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Jolie G. Kahn	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/S/ BARBARA R. MITTMAN	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Barbara R. Mittman	 	 






[Signature Page to 

Registration Rights Purchase Agreement, Consent and Waiver]




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EXHIBIT A




Subscription Documents




     For purposes of this Agreement to which this Exhibit A is attached, the “Subscription
Documents” include the following agreements, all dated as of December 29, 2006, except as otherwise
stated below:




	 	1.	 	Subscription Agreement among the Company, Longview and Alpha (the “Subscription
Agreement”);
	 
	 	2.	 	Class A Common Stock Purchase Warrants issued to Alpha and Longview (the “Class A
Warrants”);
	 
	 	3.	 	The Irvine Sensors Corporation Series 1 Senior Subordinated Secured Convertible Notes
(the “Series 1 Notes”) dated as of December 30, 2005 issued by the Company in favor of
Pequot as assigned to Longview and Alpha;
	 
	 	4.	 	The Irvine Sensors Corporation Series 2 Senior Subordinated Secured Convertible Note
(the “Series 2 Note”) dated as of December 30, 2005 by the Company in favor of Pequot as
assigned to Longview\,
	 
	 	5.	 	The September 2007 Note Amendments effective as of September 2007;
	 
	 	6.	 	The Securities Purchase Agreement dated December 30, 2005 originally between the
Company and Pequot, as amended by that certain Amendment to Securities Purchase Agreement
dated March 31, 2006, and as assigned to Longview and Alpha (collectively, the “Securities
Purchase Agreement”);
	 
	 	7.	 	The Assignment of Series 1 and Series 2 Senior Subordinated Secured Convertible Notes
dated December 30, 2005, and related Addendum thereto;
	 
	 	8.	 	Registration Rights Agreement among the Company, Longview and Alpha; and
	 
	 	9.	 	The Term Loan and Security Agreement among the Company, Longview and Alpha (“Loan
Agreement”) and related Term Notes issued by the Company to Longview and Alpha (the “Term
Notes”), together with the documents evidencing the Subordinated Debt as defined in the
Loan Agreement.




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EXHIBIT B




     For purposes of this Agreement to which this Exhibit B is attached, the “Existing
Security Agreements” include the following agreements, all dated as of December 29, 2006, except as
otherwise stated below with respect to certain security agreements and a guaranty originally
executed and delivered by Irvine Sensors and Optex to and/or in favor of Pequot, which are all
dated as of December 30, 2005:




	 	1.	 	Irvine Sensors Intellectual Property Security Agreement, executed and delivered by
Irvine Sensors in favor of Longview and Alpha;
	 
	 	2.	 	Optex Intellectual Property Security Agreement, executed and delivered by Optex in
favor of Longview and Alpha;
	 
	 	3.	 	Optex Guaranty, executed and delivered by Optex in favor of Longview and Alpha;
	 
	 	4.	 	Optex Third Party Security Agreement, executed and delivered by Optex in favor of
Longview and Alpha;
	 
	 	5.	 	Term Loan and Security Agreement by and between Irvine Sensors, on the one hand, and
Longview and Alpha, on the other;
	 
	 	6.	 	Security Agreement dated December 30, 2005, by and among Irvine Sensors and various
Pequot entities;
	 
	 	7.	 	Subsidiary Security Agreements, all dated December 30, 2005, by and among various
subsidiaries of Irvine Sensors (including Optex) and various Pequot entities;
	 
	 	8.	 	Subsidiary Guaranty, dated December 30, 2005, by and among various subsidiaries of
Irvine Sensors and various Pequot entities (items 6 — 8, all as assigned to Longview and
Alpha pursuant to that certain Assignment Agreement by and among the various Pequot
entities, Longview and Alpha, dated December 29, 2006).
	 
	 	9.	 	Omnibus Security Interest Acknowledgement executed and delivered by Irvine and Optex
in favor of Longview and Alpha, dated July 19, 2007;
	 
	 	10.	 	Unconditional Guaranty executed and delivered by Borrower in favor of Lender, dated
July 19, 2007; and
	 
	 	11.	 	Collateral Agent Agreement, dated on or about July 19, 2007, by and among S. Michael
Rudolph, as collateral agent, Lender and Alpha Capital Anstalt, and acknowledged by
Borrower.
	 
	 	12.	 	Subordination Agreement among Timothy Looney, Longview and Alpha.
	 
	 	13.	 	Subordinated Security Agreement dated January 17, 2007 between Optex and TWL Group,
L.P.




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EXHIBIT C




Restructuring Notes and Contingent Notes

(attached hereto)




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Exhibit D




September 2007 Note Amendments

(attached hereto)





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