Document:

Consulting Agreement

 Exhibit 10.2 
  
 IRVINE SENSORS CORP. 
  
 AMENDED AND RESTATED CONSULTING AGREEMENT 
  
 This Amended and Restated Consulting Agreement (this “Agreement”) is entered into as of December 30, 2005 by and between Irvine Sensors
Corporation (the “Company”), and CTC Aero, LLC, a limited liability company (“CTC”) and Chris Toffales, the manager of CTC (“Toffales”). CTC and Toffales are sometimes collectively referred to herein as the
“Consultant.” 
  
 RECITALS 
  
 1. Consultant has expertise in the area of the Company’s business and is
willing to provide consulting services to the Company. 
  
 2. The
Company is willing to engage Consultant as an independent contractor, and not as an employee, on the terms and conditions set forth herein. 
  
 3. This Agreement is intended to amend and restate in its entirety that certain Consulting Agreement dated August 10, 2005 between the Company and
Consultant. 
  
 AGREEMENT 
  
 In consideration of the foregoing and of the mutual promises set forth
herein, and intending to be legally bound, the parties hereto agree as follows: 
  
 1. Engagement. 
  
 (a) The Company hereby engages Consultant to render, as an independent contractor, the consulting services described in Exhibit A hereto and such other services as may be agreed to in writing by the Company and Consultant from time to time.

  
 (b) Consultant hereby accepts the engagement
to provide consulting services to the Company on the terms and conditions set forth herein. 
  
 2. Term. This Agreement will be effective from December 30, 2005 and unless modified by the mutual written agreement of the parties, shall continue until December 30, 2008. Company may terminate this
Agreement upon 730 days prior written notice to Consultant. Consultant may terminate this Agreement upon 365 days written notice to Company. 
  
 3. Compensation. 
  
 (a) In consideration of the services to be performed by Consultant, the Company agrees to pay Consultant in the manner and at the rates
set forth in Exhibit A. 
  
 (b) The Company shall
reimburse all out-of-pocket, reasonable and itemized business expenses directly incurred by Consultant and directly related to services conducted pursuant to this Agreement, provided however, that any expense greater than $5,000 must be approved by
the CEO or CFO of the Company in writing or by email in advance of being incurred. 

 4. Consultant’s Business Activities. 
  
 (a) During the term of this Agreement, Consultant will
engage in no business or other activities, which are or may be directly competitive with the business activities of the Company, other than in connection with activities relating to Isonics Corporation with respect to Uncooled Mems imaging business
efforts, (the “Isonics Business”). The Company acknowledges that Toffales, consistent with his duties to the Company, has provided the Company with an opportunity to participate in the Isonics Business which the Company is in the process
of considering. The Company has no claim against Toffales relating to this corporate opportunity.(b) It is anticipated that the Consultant shall devote seven (7) days per month to the business and the activities set forth in Section 1(a)
of Exhibit A and shall be compensated as set forth in Exhibit A. 
  
 (c) Consultant shall keep and periodically provide to the Company a log describing the work activities performed by and hours of Consultant. 
  
 5. Confidential Information and Assignments. Consultant is simultaneously executing a Confidential Information and
Invention Assignment Agreement for Consultants in the form of Exhibit B (the “Confidential Information and Invention Assignment Agreement”). The obligations under the Confidential Information and Invention Assignment Agreement shall
survive termination of this Agreement for any reason. 
  
 6.
Interference with the Company’s Business. 
  
 (a) Notwithstanding any other provision of this Agreement, for a period of one year after termination of this Agreement, Consultant shall not, directly or indirectly, employ, solicit for employment, or advise or recommend to any other
person that such other person employ or solicit for employment, any person employed or under contract (whether as a consultant, employee or otherwise) by or to the Company during the period of such person’s association with the Company and one
year thereafter. 
  
 (b) Notwithstanding any
other provision of this Agreement, and to the fullest extent permitted by law, for a period of one year after termination of this Agreement, Consultant shall not, directly or indirectly, solicit any clients or customers of the Company. Consultant
agrees that such solicitation would necessarily involve disclosure or use of confidential information in breach of the Confidential Information and Invention Assignment Agreement. 
  
 7. Representations and Warranties. Consultant represents and warrants (i) that Consultant has no obligations,
legal or otherwise, inconsistent with the terms of this Agreement or with Consultant’s undertaking this relationship with the Company, (ii) that the performance of the services called for by this Agreement do not and will not violate any
applicable law, rule or regulation or any proprietary or other right of any third party, (iii) that Consultant will not use in the performance of his responsibilities under this Agreement any confidential information or trade secrets of any
other person or entity and (iv) that Consultant has not entered into or will enter into any agreement (whether oral or written) in conflict with this Agreement. 
  
 8. Indemnification. Consultant hereby indemnifies and agrees to defend and hold harmless the Company from and against
any and all claims, demands and actions, and any liabilities, damages or expenses resulting therefrom, including court costs and reasonable attorneys’ fees, arising out of or relating to the services performed by Consultant under this Agreement
or the representations and warranties made by Consultant pursuant to paragraph 7 hereof. Consultant’s obligations under this paragraph 8 hereof shall survive the termination, for any reason, of this Agreement. 
  
 9. Attorney’s Fees. Should either party hereto, or any heir,
personal representative, successor or assign of either party hereto, resort to litigation to enforce this Agreement, the party or parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to recover
its or their reasonable attorneys’ fees and costs in such litigation from the party or parties against whom enforcement was sought. 

 10. Entire Agreement. This Agreement contains the entire understanding and agreement between the
parties hereto with respect to its subject matter and supersedes in its entirety the Original Agreement and any other prior or contemporaneous written or oral agreements, representations or warranties between them respecting the subject matter
hereof. 
  
 11. Amendment. This Agreement may be amended
only by a writing signed by Consultant and by an executive officer of the Company or by a representative of the Company duly authorized by the Company’s Board of Directors. 
  
 12. Severability. If any term, provision, covenant or condition of this Agreement, or the application thereof to any
person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and
circumstances shall remain in full force and effect. 
  
 13.
Rights Cumulative. The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either party hereto (or by its successors), whether pursuant to this Agreement, to any other agreement, or to
law, shall not preclude or waive its right to exercise any or all other rights and remedies. 
  
 14. Nonwaiver. No failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or
of the same right, power or privilege in any other instance. All waivers by either party hereto must be contained in a written instrument signed by the party to be charged and, in the case of the Company, by an executive officer of the Company or
other person duly authorized by the Board of Directors of the Company. 
  
 15. Remedy for Breach. The parties hereto agree that, in the event of breach or threatened breach of this Agreement, the damage or imminent damage to the value and the goodwill of the Company’s business will be inestimable, and
that therefore any remedy at law or in damages shall be inadequate. Accordingly, the parties hereto agree that the Company shall be entitled to injunctive relief against Consultant in the event of any breach or threatened breach by Consultant, in
addition to any other relief (including damages and the right of the Company to stop payments hereunder which is hereby granted) available to the Company under this Agreement or under law. 
  
 16. Agreement to Perform Necessary Acts. Consultant agrees to perform
any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement. 
  
 17. Assignment. This Agreement may not be assigned by Consultant without the Company’s prior written consent. This Agreement may be assigned
by the Company in connection with a merger of the Company, the sale of all or substantially all of the Company’s assets, and in other instances approved by the Consultant, which approval shall not be unreasonably withheld or delayed.

  
 18. Compliance with Law. In connection with his
services rendered hereunder, Consultant agrees to abide by all applicable federal, state, and local laws, ordinances and regulations. 
  
 19. Independent Contractor. The relationship between Consultant and the Company is that of independent contractor under a “work for hire”
arrangement. All work product developed by Consultant shall be deemed owned and assigned to Company. This Agreement is not authority for Consultant to act for the Company as its agent or make commitments for the Company. Consultant will not be
eligible for any employee benefits, nor will the company make deductions from fees to the consultant for taxes, insurance, bonds or the like. Consultant retains the discretion in performing the tasks assigned, within the scope of work specified.

  
 20. Taxes. Consultant agrees to pay all appropriate
local, state and federal taxes as a result fees paid under this Agreement. The Company shall supply the 1099 misc documents with fee’s paid. 

 
Expenses will be excluded from the 1099 misc. form. The Company agrees to deduct these expenses as business expenses. 
  
 21. Governing Law. This Agreement shall be construed in accordance
with, and all actions arising hereunder shall be governed by, the laws of the State of California. 
  
 22. Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed
effectively given and received by the party to be notified (i) upon personal delivery to the party to be notified; (ii) three (3) business days after having been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iii) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All such notices shall be sent to the parties hereto at the addresses below or
at such other address as such party may provide in writing to the other parties hereto in accordance with this Section 22: 
  
 If to the Company: 
 Irvine Sensors
Corporation 
 3001 Redhill Avenue, Building 4-108 
 Costa Mesa, CA 92626 
 Attention: Chief Executive Officer 
  
 If to Consultant: 
 Chris Toffales 
 Irvine Sensors Corporation

 3001 Redhill Avenue, Building -#4-108 
 Costa Mesa, CA 92626 
  
 IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written. 
  

									
	 Company
	 	 	 	 Consultant

			
	 IRVINE SENSORS CORPORATION
	 	 	 	 CTC AERO, LLC

					
	 By:
	 	 /s/ JOHN J. STUART, JR.
	 	 	 	 By:
	 	 /s/ CHRIS TOFFALES

	 	 	 John J. Stuart, Jr., CFO
	 	 	 	 	 	 Chris Toffales, Manager

				
	 	 	 	 	 	 	 /s/ CHRIS TOFFALES

	 	 	 	 	 	 	 Chris Toffales

 Exhibit A 
  

	1.	Description of Services to be Rendered 

  
 (a) Consultant will provide strategic planning and business development support. Statement of work for such consulting services will be provided by John
Carson. 
  
 (b) Consultant will also provide leadership,
negotiation, financing and analytical services for potential acquisition activities of the Company as agreed upon with the Company’s CEO and CFO. 
  

	2.	Compensation 

  
 (a) It is anticipated that Toffales will work with Irvine Sensors approximately 7 days per month in the provisions of services identified in 1(a) above.
In consideration of the services contemplated herein, CTC shall bill at the rate of $21,000.00 per month. If Toffales provides more than or less than 7 days of service per month, CTC shall roll forward to the days to the next month. 
  
 (b) CTC will be compensated for services as contemplated by 1(b) above only
in the event of a successful acquisition by the Company or any of its subsidiaries of all or substantially all of the assets or stock of another entity or upon the merger of the Company or its subsidiary with another entity (an
“Acquisition”) as a result of an introduction of such Acquisition by Consultant. At the close of such an Acquisition, CTC will earn a success fee as a percentage of the total purchase price paid by the Company for the Acquisition, not
including the success fee itself. The percentage of the total price that comprises the success fee will be as follows, unless a written exception to such success fee schedule is agreed to by both parties prior to initiation of formal due diligence
with respect to a given acquisition target, subject to the limitation that the minimum success fee shall be $150,000.00 . 
  

			
	 Success Fee Percentage

	  	 Increment of total Price
 (millions of dollars)

		
	 5
	  	 0-20

		
	 4
	  	 20-40

		
	 3
	  	 40-80

		
	 2
	  	 80-160

		
	 1
	  	 Greater than 160

  
 The success fee will be paid in the
Company’s stock, valued on the agreed upon conversion rate within the terms of the acquisition. An additional amount equal to 35% of the success fee will be paid to Consultant in cash. 

 Exhibit B 
  
 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT FOR CONSULTANT 
  
 This CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT (the “Agreement”)
is made between Irvine Sensors Corporation, a Delaware corporation (the “Company”) and the CTC Aero, LLC, a limited liability company (“CTC”) and Chris Toffales, the manager of CTC (“Toffales”). CTC and Toffales are
sometimes collectively referred to herein as the “Consultant.” 
  
 In consideration of my relationship with the Company (which for purposes of this Agreement shall be deemed to include any subsidiaries or Affiliates* of the Company), the receipt of confidential information while associated with the Company, and other good and valuable consideration, I, the undersigned
individual, agree that: 
  
 1. Term of Agreement. This
Agreement shall continue in full force and effect for the duration of my relationship with the Company and shall continue thereafter until terminated through a written instrument signed by both parties. 
  
 2. Confidentiality. 
  
 (a) Definitions. “Proprietary Information”
is all information and any idea whatever form, tangible or intangible, pertaining in any manner to the business of the Company, or any of its Affiliates, or its employees, clients, consultants, or business associates, which was produced by any
employee or consultant of the Company in the course of his or her employment or consulting relationship or otherwise produced or acquired by or on behalf of the Company. All Proprietary Information not generally known outside of the Company’s
organization, and all Proprietary Information so known only through improper means, shall be deemed “Confidential Information.” By example and without limiting the foregoing definition, Proprietary and Confidential Information shall
include, but not be limited to: 
  
 (1) formulas, research and
development techniques, processes, trade secrets, computer programs, software, electronic codes, mask works, inventions, innovations, patents, patent applications, discoveries, improvements, data, know-how, formats, test results, and research
projects; 
  
 (2) information about costs, profits, markets,
sales, contracts and lists of customers, and distributors; 
  
 (3) business, marketing, and strategic plans; 
  
 (4)
forecasts, unpublished financial information, budgets, projections, and customer identities, characteristics and agreements; and 
  
 (5) employee personnel files and compensation information. 
  
 Confidential Information is to be broadly defined, and includes all information that has or could have commercial value or other utility in the business
in which the Company is engaged or contemplates engaging, and all information of which the unauthorized disclosure could be detrimental to the interests of the Company, whether or not such information is identified as Confidential Information by the
Company. 
  

	*	For purposes of this Agreement, “Affiliate” shall mean any person or entity that shall directly or indirectly controls, is controlled by, or is under common control with
the Company. 

 Confidential Information does not include information which (i) is in the possession of the
recipient at the time of disclosure,or (ii) becomes publicly available not as a direct or indirect result of any improper inaction or action of recipient, or (iii) was acquired by recipient before receiving such information from Company by
a party having the legal right to make such disclosure. Information shall be deemed “publicly available” if it becomes a matter of public knowledge or is contained in materials available to the public or is obtained from any source other
than the Company (or its directors, officers, employees, agents, representatives oradvisors), provided that such source has not to recipient’s knowledge entered into a confidentiality agreement with the Company with respect to such information
or obtained the information from an entity or person party to a confidentiality agreement with the Company. 
  
 b) Existence of Confidential Information. The Company owns and has developed and compiled, and will develop and compile, certain
trade secrets, proprietary techniques and other Confidential Information which have great value to its business. This Confidential Information includes not only information disclosed by the Company to me, but also information developed or learned by
me during the course of my relationship with the Company. 
  
 (c) Protection of Confidential Information. I will not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any third party, other than in my assigned duties and for the
benefit of the Company, any of the Company’s Confidential Information, either during or after my relationship with the Company. In the event I desire to publish the results of my work for the Company through literature or speeches, I will
submit such literature or speeches to the President of the Company at least 10 days before dissemination of such information for a determination of whether such disclosure may alter trade secret status, may be prejudicial to the interests of the
Company, or may constitute an invasion of its privacy. I agree not to publish, disclose or otherwise disseminate such information without prior written approval of the President of the Company. I acknowledge that I am aware that the unauthorized
disclosure of Confidential Information of the Company may be highly prejudicial to its interests, an invasion of privacy, and an improper disclosure of trade secrets. 
  
 (d) Delivery of Confidential Information. Upon request or when my relationship with the Company
terminates, I will immediately deliver to the Company all copies of any and all materials and writings received from, created for, or belonging to the Company including, but not limited to, those which relate to or contain Confidential
Information. 
  
 (e) Location and
Reproduction. I shall maintain at my workplace only such Confidential Information as I have a current “need to know.” I shall return to the appropriate person or location or otherwise properly dispose of Confidential Information once
that need to know no longer exists. I shall not make copies of or otherwise reproduce Confidential Information unless there is a legitimate business need of the Company for reproduction. 
  
 (f) Prior Actions and Knowledge. I represent and warrant that from the time of my first contact with
the Company I held in strict confidence all Confidential Information and have not disclosed any Confidential Information, directly or indirectly, to anyone outside the Company, or used, copied, published, or summarized any Confidential information,
except to the extent otherwise permitted in this Agreement. 
  
 (g) Third-Party Information. I acknowledge that the Company has received and in the future will receive from third parties their confidential information subject to a duty on the Company’s part to maintain
the confidentiality of such information and to use it only for certain limited purposes. I agree that I will at all times hold all such confidential information in the strictest confidence and not to disclose or use it, except as necessary to
perform my obligations hereunder and as is consistent with the Company’s agreement with such third parties. 
  
 (h) Third Parties. I represent that my relationship with the Company does not and will not breach any agreements with or duties to
a former employer or any other third party. I will not 

 
disclose to the Company or use on its behalf any confidential information belonging to others and I will not bring onto the premises of the Company any
confidential information belonging to any such party unless consented to in writing by such party. 
  
 3. Proprietary Rights, Inventions and New Ideas. 
  
 (a) Definition. The term “Subject Ideas or Inventions” includes any and all ideas, processes, trademarks, service marks,
inventions, designs, technologies, computer hardware or software, original works of authorship, formulas, discoveries, patents, copyrights, copyrightable works products, marketing and business ideas, and all improvements, know-how, data, rights, and
claims related to the foregoing that, whether or not patentable, which are conceived, developed or created which: (1) relate to the Company’s current or contemplated business; (2) relate to the Company’s actual or demonstrably
anticipated research or development; (3) result from any work performed by me for the Company; (4) involve the use of the Company’s equipment, supplies, facilities or trade secrets; (5) result from or are suggested by any work
done by the Company or at the Company’s request, or any projects specifically assigned to me; or (6) result from my access to any of the Company’s memoranda, notes, records, drawings, sketches, models, maps, customer lists, research
results, data, formulae, specifications, inventions, processes, equipment or other materials (collectively, “Company Materials”). 
  
 (b) Company Ownership. All right, title and interest in and to all Subject Ideas and Inventions, including but not limited to all
registrable and patent rights which may subsist therein, shall be held and owned solely by the Company, and where applicable, all Subject Ideas and Inventions shall be considered works made for hire. I shall mark all Subject Ideas and Inventions
with the Company’s copyright or other proprietary notice as directed by the Company and shall take all actions deemed necessary by the Company to protect the Company’s rights therein. In the event that the Subject Ideas and Inventions
shall be deemed not to constitute works made for hire, or in the event that I should otherwise, by operation of law, be deemed to retain any rights (whether moral rights or otherwise) to any Subject Ideas and Inventions, I agree to assign to the
Company, without further consideration, my entire right, title and interest in and to each and every such Subject Idea and Invention. 
  
 (c) Disclosure. I agree to disclose promptly to the Company full details of any and all Subject Ideas and Inventions. 

 
 (d) Maintenance of Records. I agree to keep and
maintain adequate and current written records of all Subject Ideas and Inventions and their development made by me (solely or jointly with others) during the term of my relationship with the Company. These records will be in the form of notes,
sketches, drawings, and any other format that may be specified by the Company. These records will be available to and remain the sole property of the Company at all times. 
  
 (e) Determination of Subject Ideas and Inventions. I further agree that all information and records
pertaining to any idea, process, trademark, service mark, invention, technology, computer hardware or software, original work of authorship, design, formula, discovery, patent, copyright, product, and all improvements, know-how, rights, and claims
related to the foregoing (“Intellectual Property”), that I do not believe to be a Subject Idea or Invention, but that is conceived, developed, or reduced to practice by the Company (alone by me or with others) during my relationship with
the Company and for one (1) year thereafter, shall be disclosed promptly by me to the Company. The Company shall examine such information to determine if in fact the Intellectual Property is a Subject Idea or Invention subject to this
Agreement. 
  
 (f) Access. Because of the
difficulty of establishing when any Subject Ideas or Inventions are first conceived by me, or whether it results from my access to Confidential Information or Company Materials, I agree that any Subject Idea and Invention shall, among other
circumstances, be deemed to have resulted from my access to Company Materials if: (1) it grew 

 
out of or resulted from my work with the Company or is related to the business of the Company, and (2) it is made, used, sold, exploited or reduced to
practice, or an application for patent, trademark, copyright or other proprietary protection is filed thereon, by me or with my significant aid, within one year after termination of my relationship with the Company. 
  
 (g) Assistance. I further agree to assist the Company
in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights or registrations on said Subject Ideas and Inventions in any and all countries, and to that end will execute all
documents necessary: 
  
 (1) to apply for, obtain and vest in the
name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and 
  
 (2) to defend any opposition proceedings in respect of such applications and
any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection; and 
  
 (3) to cooperate with the Company (but at the Company’s expense) in any enforcement or infringement proceeding on such letters patent, copyright or
other analogous protection. 
  
 (h)
Authorization to Company. In the event the Company is unable, after reasonable effort, to secure my signature on any patent, copyright or other analogous protection relating to a Subject Idea and Invention, whether because of my physical or
mental incapacity or for any other reason whatsoever, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney-in-fact, to act for and on my behalf and stead to execute and file any
such application, applications or other documents and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of letters patent, copyright or other analogous rights or protections thereon with the same legal
force and effect as if executed by me. My obligation to assist the Company in obtaining and enforcing patents and copyrights for Subject Ideas and Inventions in any and all countries shall continue beyond the termination of my relationship with the
Company, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance. 
  
 (i) Acknowledgement. I acknowledge that there are no currently existing ideas, processes, inventions,
discoveries, marketing or business ideas or improvements which I desire to exclude from the operation of this Agreement. To the best of my knowledge, there is no other contract to assign inventions, trademarks, copyrights, ideas, processes,
discoveries or other intellectual property that is now in existence between me and any other person (including any business or governmental entity). 
  
 (j) No Use of Name. I shall not at any time use the Company’s name or any the Company trademark(s) or trade name(s) in any
advertising or publicity without the prior written consent of the Company. 
  
 4. Competitive Activity. 
  
 (a) Acknowledgment. I acknowledge that the pursuit of the activities forbidden by Section 4(b) below would necessarily involve the use, disclosure or misappropriation of Confidential Information.

  
 (b) Prohibited Activity. To prevent
the above-described disclosure, misappropriation and breach, I agree that during my relationship and for a period of one (1) year thereafter, without the Company’s express written consent, I shall not, directly or indirectly,
(i) employ, solicit for 

 
employment, or recommend for employment any person employed by the Company (or any Affiliate); and (ii) engage in any present or contemplated business
activity that is or may be competitive with the Company (or any Affiliate) in any state where the Company conducts its business, unless I can prove that any action taken in contravention of this subsection (ii) was done without the use in any
way of Confidential Information. 
  
 5. Representations and
Warranties. I represent and warrant (i) that I have no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with my undertaking a relationship with the Company; (ii) that the performance of the services
called for by this Agreement do not and will not violate any applicable law, rule or regulation or any proprietary or other right of any third party; (iii) that I will not use in the performance of my responsibilities for the Company any
confidential information or trade secrets of any other person or entity; and (iv) that I have not entered into or will enter into any agreement (whether oral or written) in conflict with this Agreement. 
  
 6. Termination Obligations. 
  
 (a) Upon the termination of my relationship with the
Company or promptly upon the Company’s request, I shall surrender to the Company all equipment, tangible Proprietary Information, documents, books, notebooks, records, reports, notes, memoranda, drawings, sketches, models, maps, contracts,
lists, computer disks (and other computer-generated files and data), any other data and records of any kind, and copies thereof (collectively, “Company Records”), created on any medium and furnished to, obtained by, or prepared by myself
in the course of or incident to my relationship with the Company, that are in my possession or under my control. 
  
 (b) My representations, warranties, and obligations contained in this Agreement shall survive the termination of my relationship with
the Company. 
  
 (c) Following any
termination of my relationship with the Company, I will fully cooperate with the Company in all matters relating to my continuing obligations under this Agreement. 
  
 (d) I hereby grant consent to notification by the Company to any of my future employers or companies I
consult with about my rights and obligations under this Agreement. 
  
 (e) Upon termination of my relationship with the Company, I will execute a Certificate acknowledging compliance with this Agreement in the form reasonably requested by the Company. 
  
 7. Injunctive Relief. I acknowledge that my failure to carry out any
obligation under this Agreement, or a breach by me of any provision herein, will constitute immediate and irreparable damage to the Company, which cannot be fully and adequately compensated in money damages and which will warrant preliminary and
other injunctive relief, an order for specific performance, and other equitable relief. I further agree that no bond or other security shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and
to the ordering of specific performance. I also understand that other action may be taken and remedies enforced against me. 
  
 8. Modification. No modification of this Agreement shall be valid unless made in writing and signed by both parties. 

 9. Binding Effect. This Agreement shall be binding upon me, my heirs, executors, assigns and
administrators and is for the benefit of the Company and its successors and assigns. 
  
 10. Governing Law. This Agreement shall be construed in accordance with, and all actions arising under or in connection therewith shall be governed by, the internal laws of the State of California (without
reference to conflict of law principles). 
  
 11.
Integration. This Agreement sets forth the parties’ mutual rights and obligations with respect to proprietary information, prohibited competition, and intellectual property. It is intended to be the final, complete, and exclusive
statement of the terms of the parties’ agreements regarding these subjects. This Agreement supersedes all other prior and contemporaneous agreements and statements on these subjects, and it may not be contradicted by evidence of any prior or
contemporaneous statements or agreements. To the extent that the practices, policies, or procedures of the Company, now or in the future, apply to myself and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall
control unless changed in writing by the Company. 
  
 12. Not
Employment. This Agreement is not an employment agreement as I am an independent consultant. I understand that the Company may terminate my association with it at any time, with or without cause, subject to the terms of any separate written
consulting agreement executed by a duly authorized officer of the Company. 
  
 13. Construction. This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. By way of example and not limitation, this Agreement shall not be
construed against the party responsible for any language in this Agreement. The headings of the paragraphs hereof are inserted for convenience only, and do not constitute part of and shall not be used to interpret this Agreement. 
  
 14. Attorneys’ Fees. Should either I or the Company, or any heir,
personal representative, successor or permitted assign of either party, resort to legal proceedings to enforce this Agreement, the prevailing party (as defined in California statutory law) in such legal proceeding shall be awarded, in addition to
such other relief as may be granted, attorneys’ fees and costs incurred in connection with such proceeding. 
  
 15. Severability. If any term, provision, covenant or condition of this Agreement, or the application thereof to any person, place or circumstance,
shall be held to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and circumstances shall remain in full force and effect. 
  
 16. Rights Cumulative. The rights and remedies provided by this
Agreement are cumulative, and the exercise of any right or remedy by either the Company or me (or by that party’s successor), whether pursuant hereto, to any other agreement, or to law, shall not preclude or waive that party’s right to
exercise any or all other rights and remedies. This Agreement will inure to the benefit of the Company and its successors and assigns. 
  
 17. Nonwaiver. The failure of either the Company or me, whether purposeful or otherwise, to exercise in any instance any right, power or privilege
under this Agreement or under law shall not constitute a waiver of any other right, power or privilege, nor of the same right, power or privilege in any other instance. Any waiver by the Company or by me must be in writing and signed by either
myself, if I am seeking to waive any of my rights under this Agreement, or by an officer of the Company (other than me) or some other person duly authorized by the Company. 
  
 18. Notices. Any notice, request, consent or approval required or permitted to be given under this Agreement or
pursuant to law shall be sufficient if it is in writing, and if and when it is hand delivered or sent by regular mail, with postage prepaid, to my residence (as noted in the Company’s records), or to the Company’s principal office, as the
case may be. 

 19. Agreement to Perform Necessary Acts. I agree to perform any further acts and execute and
deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement. 
  
 20. Assignment. This Agreement may not be assigned without the Company’s prior written consent. 
  
 21. Compliance with Law. I agree to abide by all federal, state, and
local laws, ordinances and regulations. 
  
 22.
Acknowledgment. I acknowledge that I have had the opportunity to consult legal counsel in regard to this Agreement, that I have read and understand this Agreement, that I am fully aware of its legal effect, and that I have entered into it
freely and voluntarily and based on my own judgment and not on any representations or promises other than those contained in this Agreement. 
  
 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the dates set forth below. 
  
 CAUTION: THIS AGREEMENT CREATES IMPORTANT OBLIGATIONS OF TRUST AND AFFECTS THE
CONSULTANT’S RIGHTS TO INVENTIONS AND OTHER INTELLECTUAL PROPERTY THE CONSULTANT MAY DEVELOP. 
  

			
	 Consultant

	
	 CTC AERO, LLC

		
	 By:
	 	 /s/ CHRIS TOFFALES

	 	 	 Chris Toffales, ManagerEmployment Agreement

 Exhibit 10.3 
  
 EMPLOYMENT AGREEMENT 
  

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of December 30, 2005 by and between Timothy Looney, an
individual (“Executive”) and Irvine Sensors Corporation, a Delaware corporation (“ISC”) and its subsidiaries. For the purposes of this Agreement, ISC and its subsidiaries shall be collectively referred
to herein as the “Company.” 
  
 1.
Duties and Responsibilities. 
  
 A.
Executive shall serve as a Vice President of ISC and the President of Optex Systems, Inc. (“Optex”) or such other title or position as may be mutually agreed to by the Company and Executive. Executive shall report to and
perform the duties and responsibilities assigned to him by the Board of Directors of ISC (the “Board”) and ISC’s Chief Executive Officer, or such other person as may be designated by the Board. Executive shall have
primary responsibility for the formulation, implementation and execution of strategic policies relating to the Optex’s business operations, financial objectives, market growth and compliance with applicable laws and regulations, and shall have
overall responsibility for the formulation of the business plan for Optex for each fiscal year to be submitted for Board approval. 
  
 B. Executive agrees to devote his full time and attention to the Company, to use his best efforts to advance the business and welfare of
the Company, to render his services under this Agreement fully, faithfully, diligently, competently and to the best of his ability. 
  
 C. Executive shall be based at the Company’s office located in Richardson, Texas, but Executive shall be required to travel to other
geographic locations in connection with the performance of his executive duties. 
  
 2. Commencement Date. Executive’s employment shall commence on January 3, 2006 (the “Commencement Date”). 
  
 3. Employment Term. Executive’s employment shall commence as of the Commencement Date and shall end upon
the second year anniversary of the Commencement Date (the “Employment Term”). 
  
 4. Cash Compensation. 
  
 A. Executive’s initial base salary shall be $180,000 per year payable in accordance with the Company’s standard payroll
schedule. Executive’s compensation shall be subject to periodic review by the Company, but the base salary shall not be reduced below the amount stated in this Agreement during the Employment Term. 
  
 B. The Company shall deduct and withhold from the
compensation payable to Executive any and all applicable Federal, State and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statutes, regulations, ordinances or
orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages to employees. 
  

					
	 	  	 	  	Employment Agreement

 C. Executive shall be eligible to participate in all incentive stock option Programs that
are made available to the Company’s executive officers and for which Executive qualifies, except for the Company’s deferred compensation plan and employee stock bonus plan. 
  
 5. Expense Reimbursement. In addition to the compensation specified in Section 3, Executive shall be
entitled, in accordance with the reimbursement policies in effect from time to time, to receive reimbursement from the Company for reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder, provided
Executive furnishes the Company with vouchers, receipts and other details of such expenses in the form required by the Company, sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal
and state taxing authorities. 
  
 6. Fringe
Benefits. 
  
 A. Executive shall,
throughout the Employment Period, be eligible to participate in all group term life insurance plans, group health plans, accidental death and dismemberment plans and other executive perquisites that are made available to the Company’s executive
officers and for which Executive qualifies pursuant to the requisite plan requirements. 
  
 B. Executive shall earn vacation time during the Employment Period as the Company makes available to its management level employees
generally. Vacation shall accrue and be taken pursuant to the Company’s vacation benefit policy and subject to an accrual cap at any give time equal to eight weeks. 
  
 7. Employment Termination. Upon termination, the Executive will have no rights to any unvested benefits or any
other compensation or payments except as stated in this Section 7. 
  
 A. Termination for Cause. In the event the Company terminates Executive’s employment prior to the expiration of the Employment Term for Cause (as defined below), Executive shall receive his wages through
the termination date, his accrued but unused vacation, reimbursement of his outstanding expenses incurred in compliance with Section 5 above, and any portion of his other compensation earned through the termination date. 
  
 B. Termination Upon Death or Disability. In the event
the Company terminates Executive’s employment prior to the expiration of the Employment Term as a result of a Long-Term Disability (as defined below) or upon Executive’s death, the Company shall pay Executive or his estate, his wages
earned through the termination date, reimbursement of his outstanding expenses incurred in compliance with Section 5 above, his accrued but unused vacation, any portion of his other compensation earned through the termination date, and the
Company shall continue Executive’s base salary for a period of at least three months following the termination date. For the purposes of this Agreement, a “Long-Term Disability” shall mean a long-term disability that
after consideration and implementation of reasonable accommodations (provided that no accommodation that imposes undue hardship on the Company will be required), renders or will render Executive unable to perform his essential job functions
for a period longer than four months. The determination of Executive’s Long-Term Disability shall be made by Executive’s attending physician unless the Board disagrees with such determination, in 

  

					
	 	  	2	  	Employment Agreement

 
which case Executive’s Long-Term Disability shall be determined by a majority of three physicians qualified to practice medicine in the State of the
Executive’s residence, one to be selected by each of the Executive (or his authorized representative) and the Board and the third to be selected by such two designated physicians. 
  
 C. Termination Without Cause. Should the Company terminate Executive’s employment prior to the
expiration of the Employment Term other than (i) for Cause; (ii) as a result of Executive’s death, or (iii) as a result of a Long-Term Disability, the Company shall have no further obligation under this Agreement, except as
follows: On his last day of employment., the Company shall pay to Executive his wages earned through the termination date, his accrued but unused vacation, reimbursement of his outstanding expenses incurred in compliance with Section 5 above,
and any portion of his other compensation earned through the termination date. Furthermore, the Company shall continue to pay Executive’s base salary through the end of the Employment Term. Such payments will be made at the Company’s usual
and customary pay intervals and will be subject to all appropriate deductions and withholdings. 
  
 D. For Cause. For purposes of this Section 7, “Cause” shall mean that Executive has engaged in any one
of the following: (i) financial dishonesty, including, without limitation, misappropriation of funds or property, or any attempt by Executive to secure any personal profit related to the business or business opportunities of the Company without
the informed, written approval of the Company’s Board of Directors; (ii) Executive’s refusal for at least ten (10) days to comply with reasonable directives of the Company’s Chief Executive Officer or Board of Directors
after receipt by Executive of prior written notice from the Board specifying such noncompliance; (iii) gross negligence or reckless or willful misconduct in the performance of Executive’s duties; (iv) the failure to perform, or
continuing neglect in the performance of, duties assigned to Executive for at least ten (10) days after receipt by Executive from the Board of prior written notice of such failure or neglect; (v) misconduct which has a materially adverse
effect upon the Company’s business or reputation; (vi) the conviction of, or plea of nolo contendre to, any felony or a misdemeanor involving moral turpitude or fraud; (vii) continuing the material breach of any provision of this
Agreement for at least ten (10) days after receipt by Executive from the Board of prior written notice of such breach; of (viii) the violation of Company policies including, without limitation, the Company’s policies on equal
employment opportunity and prohibition of unlawful harassment. A termination as a result of a Change in Control shall not constitute Cause. 
  
 E. Good Reason. The Executive may terminate his employment under this Agreement for Good Reason if (i) the Executive gives
notice to the Company setting forth in reasonable detail his grounds for termination for Good Reason (“Notice of Good Reason”) and (ii) thereafter, the Company fails to cure within ten (10) days the action or
inaction described in the Notice of Good Reason. In the event the Executive terminates this Agreement for Good Reason, the Executive shall be entitled to the payments and benefits specified by Section 7(C). For purposes of this Agreement,
“Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following events: 
  
 (i) a material breach of the Agreement by the Company;

  

					
	 	  	3	  	Employment Agreement

 (ii) a change by the Company in the Executive’s primary work location of more than
fifty (50) miles from Optex’s current offices as of the date hereof in Richardson, Texas; 
  
 (iii) a material diminution of the Executive’s principal duties as described in Section 1 above; or 
  
 (iv) a reduction by the Company in the Executive’s Base
Salary or other compensation without his written consent. 
  
 (v) a change in Executive’s primary reporting responsibilities such that Executive no longer reports directly to the Chief Executive Officer of ISC. 
  
 F. Change in Control. For purposes of this Section 7, “Change In
Control” shall mean any of the following transactions effecting a change in ownership or control of the Company: 
  
 (i) a merger, consolidation or reorganization approved by the Company’s stockholders, unless securities representing more than
fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company’s outstanding voting securities immediately prior to such transaction, or 
  
 (ii) any stockholder-approved transfer or other disposition of all or substantially all of the Company’s assets, or 
  
 (iii) the acquisition, directly or indirectly by any person
or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders. 
  
 In no event, however, shall a Change in Control be deemed to occur in connection with any
public offering of the Common Stock. 
  
 G.
Effect. In the event there is a Change in Control, and Executive is terminated without Cause within six months in conjunction with or within six months immediately following the closing of such a Change in Control, on his last day of
employment with the Company, the Company shall pay to Executive, his accrued but unused vacation, reimbursement of his outstanding expenses incurred in compliance with Section 5 above, and any portion of his other compensation earned through
the termination date. Furthermore, the Company shall continue to pay Executive’s base salary through the end of the Employment Term at the Company’s usual and customary pay intervals. Any payments to Executive shall be subject to all
appropriate deductions and withholdings. 
  

					
	 	  	4	  	Employment Agreement

 8. Restrictive Covenants. During the Employment Period: 
  
 (i) Executive shall devote Executive’s full time solely
and exclusively to the performance of Executive’s duties described herein, except during periods of illness or vacation periods. 
  
 (ii) Executive shall not directly or indirectly provide services to or through any person, firm or other entity except the Company, unless
otherwise authorized by the Board in writing. 
  
 (iii) Executive shall not render any services of any kind or character for Executive’s own account or for any other person, firm or entity without first obtaining the Company’s written consent. 
  
 Executive, however, shall have the right to perform such incidental services as are necessary
in connection with Executive’s charitable or community activities, or participation in trade or professional organizations, but only if such incidental services do not interfere with the performance of Executive’s services to the Company.

  
 9. Non-Competition During The Employment Period.
Executive acknowledges and agrees that given the extent and nature of the confidential and proprietary information he will obtain during the course of his employment with the Company, it would be inevitable that such confidential information would
be disclosed or utilized by the Executive should he obtain employment from, or otherwise become associated with, an entity or person that is engaged in a business or enterprise that directly competes with the Company. Consequently, during any period
for which Executive is receiving payments from the Company, either as wages or as a severance benefit, Executive shall not, without prior written consent of the Company’s Board of Directors, directly or indirectly own, manage, operate, join,
control or participate in the ownership, management, operation or control of, or be employed by or connected in any manner with, any enterprise which is engaged in any business competitive with or similar to that of the Company; provided, however,
that such restriction shall not apply to any passive investment representing an interest of less than one percent (1%) of an outstanding class of Publicly-Traded Securities (as defined below) of any company or other enterprise; provided
however, that Executive may not devote any managerial efforts for, or provide any services to, such company or enterprise. For the purposes of this Agreement, the term “Publicly Traded Securities” shall mean securities that
are traded on a national securities exchange or listed on the Nasdaq National Market. Notwithstanding the foregoing, Executive shall have the right to perform such incidental services as are necessary in connection with Executive’s charitable
or community activities, or participation in trade or professional organizations, but only if (i) such incidental services do not interfere with the performance of Executive’s services to the Company and (ii) any such services do not
violate Executive’s obligations under Executive’s Non-Competition Agreement with the Company as of the date hereof. 
  
 10. Non-Solicitation. During the Employment Period, and for two (2) years following termination of Executive’s employment,
Executive shall not encourage or solicit any of the Company’s employees, independent contractors, consultants or other persons in the employment or service of the Company to leave the Company’s employ or service for any reason 

  

					
	 	  	5	  	Employment Agreement

 
or interfere in any other manner with employment or service relationships at the time existing between the Company and any of such persons. In addition,
Executive shall not, directly or indirectly, solicit or divert away from the Company any business, clients or customers, induce any of the Company’s customers, vendors, clients, licensors, licensees, suppliers, agents or other persons under
contract or otherwise associated or doing business with the Company to reduce, alter or terminate any such association or business with the Company, or otherwise interfere in any other manner with any existing business relationship between the
Company and any such persons or other third party. 
  
 Executive acknowledges that
monetary damages may not be sufficient to compensate the Company for any economic loss which may be incurred by reason of his breach of the foregoing restrictive covenants. Accordingly, in the event of any such breach, the Company shall, in addition
to the termination of this Agreement and any remedies available to the Company at law, be entitled to obtain equitable relief in the form of an injunction precluding Executive from continuing such breach. 
  
 11. Proprietary Information. As a condition precedent to
Executive’s employment with the Company, Executive will execute the Company’s standard form of Proprietary Information and Assignment of Inventions Agreement. Executive’s obligations pursuant to the Proprietary Information and
Assignment of Inventions Agreement will survive termination of Executive’s employment with the Company. 
  
 12. Dispute Resolution. Except for the right of the Company and Executive to seek injunctive relief in court, any controversy, claim or
dispute of any type arising out of or relating to Executive’s employment or the provisions of this Agreement shall be resolved in accordance with this Section 12 of the Agreement (and Article 2 of Executive’s Non-Competition
Agreement), regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any such disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of
which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination,
discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, the California labor code, and the California Fair Employment and Housing Act. Nothing in this provision is intended to restrict Executive from submitting any matter to an administrative agency with jurisdiction
over such matter. 
  
 A. Mediation.
The Company and Executive will make a good faith attempt to resolve any and all claims and disputes relating to the subject matter of this Agreement through good faith negotiations. If such claims and disputes cannot be settled through
negotiation, the Company and Executive agree to submit them to mediation in Orange County, California before resorting to arbitration or any other dispute resolution procedure. The mediation of any such claim or dispute must be conducted in
accordance with the then-current JAMS procedures for the resolution of employment disputes by mediation, by a mediator who has had both training and experience as a mediator of general employment and commercial matters. If the parties to this
Agreement cannot agree on a mediator, then the mediator will be 

  

					
	 	  	6	  	Employment Agreement

 
selected by JAMS in accordance with JAMS’ strike list method. Within thirty (30) days after the selection of the mediator, the Company and
Executive and their respective attorneys will meet with the mediator for one mediation session of at least four (4) hours. If the claim or dispute cannot be settled during such mediation session or mutually agreed continuation of the session,
either the Company or Executive may give the mediator and the other party to the claim or dispute written notice declaring the end of the mediation process. All discussions connected with this mediation provision will be confidential and treated as
compromise and settlement discussions. Nothing disclosed in such discussions, which is not independently discoverable, may be used for any purpose in any later proceeding. The mediator’s fees will be paid in equal portions by the Company and
Executive, unless the Company agrees to pay all such fees. 
  
 B. Arbitration. If a claim or dispute relating to the subject matter of this Agreement has not been resolved in accordance with Section 12(A) above, then the claim or dispute will be determined by
arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein. The arbitration will be conducted in Orange County, California by a sole neutral arbitrator who has had both training and
experience as an arbitrator of general employment and commercial matters and who is, and for at least ten (10) years has been, a partner, a shareholder, or a member in a law firm. If the Company and Executive cannot agree on an arbitrator, then
the arbitrator will be selected by JAMS in accordance with Rule 12 of the JAMS employment arbitration rules and procedures. No person who has served as a mediator under the mediation provision, however, may be selected as the arbitrator for the same
claim or dispute. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to the dispute resolution
provisions in Section 12 and the arbitrator may award any relief permitted by law. The arbitrator must base the arbitration award on the provisions of Section 12 of the Agreement and applicable law and must render the award in writing,
including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The parties hereto hereby waive to the
fullest extent permitted by law any rights to appeal or to review of such award by any court. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under Section 12(B) of the
Agreement. At the request of any party, the Arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the
arbitration proceedings. The arbitrator’s fees will be paid in full by the Company, unless Executive agrees in writing to pay some or all of such fees. 
  
 C. Interim Actions. Notwithstanding the foregoing, a party may apply to a court of competent jurisdiction within the State
of California for relief in the form of a temporary restraining order or preliminary injunction, pending appointment of an arbitrator or pending final determination of a claim through arbitration in accordance with this Section 12. In the event
a dispute is submitted to arbitration hereunder during the term of this Agreement, the parties shall continue to perform their respective obligations hereunder, subject to any interim relief that may be ordered by the arbitrator or by a court of
competent jurisdiction pursuant to the previous sentence. 
  

					
	 	  	7	  	Employment Agreement

 D. Fees. Unless otherwise agreed, the prevailing party (if a prevailing
party is determined to exist by the arbitrator or judge) will be entitled to its costs and attorneys’ fees incurred in any arbitration or other proceeding relating to the interpretation or enforcement of this Agreement. 
  
 E. Acknowledgement. EXECUTIVE HAS READ AND
UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES MEDIATION AND ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO MEDIATION AND ARBITRATION, AND THAT THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN THIS SECTION 12 CONSTITUTE A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL.

  
 13. Successors and Assigns. This Agreement
is personal in its nature and the Executive shall not assign or transfer his rights under this Agreement. The provisions of this Agreement shall inure to the benefit of, and shall be binding on, each successor of the Company whether by merger,
consolidation, transfer of all or substantially all assets, or otherwise, and the heirs and legal representatives of Executive. 
  
 14. Notices. Unless otherwise provided, all notices required or permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five
(5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) business day after deposit with a nationally recognized overnight courier, prepaid and specifying next
day delivery, with written verification of receipt. All communications shall be sent to the address as hereinafter set forth: 
  

			
	To the Company:	  	Irvine Sensors Corporation
	 	  	3001 Red Hill Avenue
	 	  	Building #4
	 	  	Costa Mesa, CA 92626-4532
	 	  	Attention: Chief Executive Officer
		
	To Executive:	  	Timothy Looney
	 	  	4306 Savannah Circle
	 	  	Parker, TX 75002

  
 Any party may change its address for
the purpose of receiving notices, demands and other communications by providing written notice to the other party in the manner described in this section. 
  
 15. Governing Documents. This Agreement, along with the documents expressly referenced in this Agreement, constitute the entire agreement
and understanding of the Company and Executive with respect to the terms and conditions of Executive’s employment with the 

  

					
	 	  	8	  	Employment Agreement

 
Company and the payment of severance benefits, and supersedes all prior and contemporaneous written or verbal agreements and understandings between Executive
and the Company relating to such subject matter. This Agreement may only be amended by written instrument signed by Executive and an authorized officer of the Company. Any and all prior agreements, understandings or representations relating to the
Executive’s employment with the Company are terminated and cancelled in their entirety and are of no further force or effect. 
  
 16. Governing Law. The provisions of this letter agreement will be construed and interpreted under the laws of the State of California. If
any provision of this Agreement as applied to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the
maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement
as a whole. 
  
 17. Remedies. All rights and
remedies provided pursuant to this Agreement or by law shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may pursue any one or more rights or remedies hereunder, or may seek damages or specific performance in
the event of another party’s breach hereunder, or may pursue any other remedy by law or equity, whether or not stated in this Agreement. 
  
 18. Severability. If one or more provisions of this Agreement are held to be unenforceable, invalid, or illegal in any jurisdiction by
reason of the scope, extent or duration of its coverage, then such a provision shall be deemed amended to the extent necessary to confirm to applicable law so as to be valid and enforceable or, if such a provision cannot be so amended without
materially altering the intentions of the parties, then such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its
terms. 
  
 19. No Waiver. The waiver by either party
of a breach of any provision of this Agreement shall not operate as, or be construed as, a waiver of any later breach of that provision. 
  
 20. Entire Agreement. This Agreement (including the exhibits hereto, if any) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and supersedes any prior agreements or understandings with respect thereto. 
  
 21. Disclosure. Executive agrees fully and completely to reveal the terms of this Agreement to any future employer or potential employer of
Executive and authorizes the Company, at its election, to make such a disclosure. 
  
 22. Representation of Executive. Executive represents and warrants to the Company that Executive is free to enter into this Agreement and has no contract, commitment, arrangements or understanding to or
with any party that restrains or is in conflict with Executive’s performance of the covenants, services and duties provided in this Agreement. Executive has had opportunity to consult with independent counsel of his choice prior to agreeing to
the terms of this Agreement and enters into the agreement, knowingly, willingly and 

  

					
	 	  	9	  	Employment Agreement

 
voluntarily. Executive agrees to indemnify the Company and hold it harmless against any and all liabilities or claims arising out of any unauthorized act or
acts by Executive that, the foregoing representation and warranty to the contrary notwithstanding, are in violation, or constitute a breach, of any such contract, commitment, arrangement or understanding. 
  
 23. Counterparts. This Agreement may be executed in more than
one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 
  
 IN WITNESS WHEREOF, this Agreement is made and entered into as of the date first above written. 
  

									
	COMPANY:	 	 	 	IRVINE SENSORS CORPORATION
					
	 	 	 	 	 	 	By:	 	 /s/ JOHN CARSON

	 	 	 	 	 	 	 	 	 John Carson,

	 	 	 	 	 	 	 	 	 President and Chief Executive Officer

				
	EXECUTIVE:	 	 	 	 	 	 /s/ TIMOTHY LOONEY

	 	 	 	 	 	 	 	 	 Timothy Looney, an individual

  

					
	 	  	10	  	Employment Agreement

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