Document:

Third Party Security Agreement Dtd. December 29, 2006

 Exhibit 10.8 
 THIRD PARTY 
 SECURITY AGREEMENT 
 This Third Party Security Agreement (this “Agreement”) is made and entered into as of December 29, 2006 by and between the undersigned
(“Grantor”), and the lenders listed on the signature page hereto (collectively, the “Lender”). 
 RECITALS 
 Lender proposes to enter into a transaction with IRVINE SENSORS CORPORATION (“Borrower”), which
is the parent company of Grantor, pursuant to a Loan and Security Agreement dated as of even date herewith, as amended from time to time (the “Loan Agreement”). Grantor expects to derive economic benefit from Lender’s doing so
and dealing with Borrower in accordance with the Loan Agreement, and has entered into an Unconditional Guaranty of even date herewith with respect to the present and future obligations of Borrower to Lender (as amended from time to time, the
“Guaranty”). Grantor wishes to secure performance and payment of all obligations to Lender under the Guaranty (the “Guarantor Obligations”) with substantially all of its assets. All terms used without definition in
this Agreement shall have the meaning assigned to them in the Loan Agreement. All terms used without definition in this Agreement or in the Loan Agreement shall have the meaning assigned to them in the Uniform Commercial Code. 
 NOW, THEREFORE, Grantor and the Lender agree as follows: 
 1. Grant of Security Interest. To secure all of the Guarantor Obligations, Grantor grants to the Lender a security interest in the property described in Exhibit A (the “Collateral”).

 2. Grantor’s Representations and Warranties. Grantor represents and warrants as follows: 
 (a) Authorization. Grantor has authority and has obtained all approvals and consents necessary to enter into this Agreement, and Grantor’s
execution, delivery and performance of this Agreement will not violate or conflict with the terms of Grantor’s Articles or Certificate of Incorporation, Bylaws or other charter document, or any law, agreement, or other instrument or writing to
which Grantor is party or by which is it bound. 
 (b) Title. The Collateral is owned by Grantor and is free of all liens,
encumbrances and other security interests other than Permitted Liens (giving effect to such definition as if Grantor were the Borrower under the Loan Agreement). 
 (c) Solvency, Payment of Debts. Grantor and each Subsidiary is solvent and able to pay its debts (including trade debts) as they mature. 
 (d) Further Representations. Grantor further represents, warrants, and covenants that (i) neither Grantor nor any Subsidiary is in default
under any agreement under which Grantor or such Subsidiary owes any money, or any agreement, the violation or termination of which could have a material adverse effect on Grantor on a consolidated or consolidating basis; (ii) the information
provided to Lender on or prior to the date of this Agreement is true and correct in all material respects; (iii) all financial statements and other information provided to Lender fairly present Grantor’s financial condition, and there has
not been a material adverse change in the financial condition of Grantor since the date of the most recent of the financial statements submitted to Lender; (iv) Grantor and each Subsidiary is in compliance with all laws and orders applicable to
it the failure to comply with which could have a material adverse effect on Grantor on a consolidated or consolidating basis; (v) neither Grantor nor any Subsidiary is a party to any litigation or is the subject of any government investigation,
and neither Grantor nor any Subsidiary has any knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or investigation, in each case where such
litigation or investigation could have a material adverse effect on Grantor on a consolidated or consolidating basis; (vi) Grantor’s principal place of business is located at the address specified in Section 11; and (vii) no
representation or other statement made by Grantor to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Lender not misleading. 
  

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 3. Covenants. 
 (a) Encumbrances. Grantor shall not grant a security interest in any of the Collateral other than (a) to Lender, or (b) Permitted Liens (giving effect to such definition as if Grantor were the
Borrower under the Loan Agreement) or execute any financing statements covering any of the Collateral in favor of any person other than Lender or a holder of a Permitted Lien. 
 (b) Use of Collateral. The Collateral will not be used for any unlawful purpose or in any way that will void any insurance required to be carried
in connection therewith. Grantor will keep the Collateral free and clear of liens and adverse claims other than Permitted Liens and, as appropriate and applicable, will keep it in good condition and repair, and will clean, shelter, and otherwise
care for the Collateral in all such ways as are considered good practice by owners of like property. 
 (c) Indemnification. Grantor
shall indemnify Lender against all losses, claims, demands and liabilities of any kind caused by the Collateral except claims, losses or liabilities resulting from the Lender’s gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. 
 (d) Perfection of Security Interest. Grantor shall execute and deliver such
documents as Lender reasonably deems necessary to create, perfect and continue the security interest in the Collateral contemplated hereby. 
 (e) Insurance of Collateral. 
 (i) Grantor, at its expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Grantor’s business is conducted on the date hereof.
Grantor shall also maintain insurance relating to Grantor’s ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Grantor’s. 
 (ii) All such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Lender. All such
policies of property insurance shall contain a Lender’s loss payable endorsement, in a form satisfactory to Lender, showing Lender as an additional loss payee thereof and all liability insurance policies shall show Lender as an additional
insured, and shall specify that the insurer must give at least twenty (20) days notice to Lender before canceling its policy for any reason. Upon Lender’s request, Grantor shall deliver to Lender certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. At any time after the occurrence and during the continuance of any Event of Default, all proceeds payable under any such policy shall, at the option of Lender, be payable to Lender to
be applied on account of the Guarantor Obligations. 
 (f) Inventory and Equipment. 
 (i) Grantor shall not store its Inventory or the Equipment with a bailee, warehouseman, or other third party unless the third party has been notified of
Lender’s security interest and Lender (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Lender’s benefit or (b) is in pledge possession of the warehouse
receipt, where negotiable, covering such Inventory or Equipment. Grantor shall not store or maintain any Equipment or Inventory at a location other than the location set forth in Section 11 of this Agreement. 
 (ii) Grantor shall maintain the Collateral in good and saleable condition, repair it if necessary and otherwise deal with the Collateral in all such
ways as are considered good practice by owners of like property, use it lawfully and only as permitted by insurance policies, and permit Lender to inspect the Collateral at any reasonable time. 
  

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 (iii) Not sell, contract to sell, lease, encumber (other than Permitted Liens) (giving effect to such
definition as if Grantor were the Borrower under the Loan Agreement) or transfer the Collateral (other than Permitted Transfers) (giving effect to such definition as if Grantor were the Borrower under the Loan Agreement) until the Obligations and
the Guarantor Obligations have been paid or performed in full, even though Lender has a security interest in the proceeds of such Collateral. 
 (g) Accounts, Chattel Paper and General Intangibles. As to Collateral which are Accounts, Chattel Paper, General Intangibles and Proceeds, Grantor warrants, represents and agrees: 
 (i) All such Collateral is genuine, enforceable in accordance with its terms and conditions precedent (except as disclosed to and accepted by Lender in
writing). Grantor will supply Lender with duplicate invoices or other evidence of Grantor’s rights on Lender’s request. 
 (ii)
All persons appearing to be obligated on such Collateral have authority and capacity to contract. 
 (iii) All Chattel Paper is in
compliance with applicable law as to form, content and manner of preparation and execution and has been properly registered, recorded, and/or filed to protect Grantor’s interest thereunder. Grantor will mark conspicuously all Chattel Paper with
a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper is subject to the security interests of Lender and will, upon Lender’s request upon the occurrence of an Event of Default, deliver possession thereof to
Lender. 
 (iv) Grantor agrees that following the occurrence and during the continuance of an Event of Default, Grantor shall not
compromise, settle or adjust any Account or renew or extend the time of payment thereof without Lender’s prior written consent. 
 (v)
Until Lender exercises its rights to collect the Accounts pursuant hereto, Grantor will collect with diligence all Grantor’s Accounts. Any collection of Accounts by Grantor, whether in the form of cash, checks, notes, or other instruments for
the payment of money (properly endorsed or assigned where required to enable Lender to collect same), shall be in trust for Lender. If an Event of Default has occurred and is continuing, Grantor shall keep all such collections separate and apart
from all other funds and property so as to be capable of identification as the property of Lender and deliver said collections daily to Lender in the identical form received. The proceeds of such collections when received by Lender may be applied by
Lender directly to the payment of the Guarantor Obligations. Any credit given by Lender upon receipt of said proceeds shall be conditional credit subject to collection. Returned items at Lender’s option may be charged to the Grantor. All
collections of the Accounts shall be set forth on an itemized schedule, showing the name of the account debtor, the amount of each payment and such other information as Lender may request. 
 (vi) Until Lender exercises its rights to collect the Accounts pursuant hereto, Grantor may continue its present policies with respect to returned
merchandise and adjustments. However, Grantor shall immediately notify Lender of all cases involving repossessions, and material loss or damage of or to merchandise represented by the Accounts. 
 (h) Binding Agreement. Anything herein to the contrary notwithstanding, (a) Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed; (b) the exercise by Lender of any of the rights granted hereunder
shall not release Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral; and (c) Lender shall not have any obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 
 (i) Instruments. Grantor will deliver and pledge to Lender all Instruments that are part of the Collateral duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. 
  

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 (j) Records. Grantor shall prepare and keep, in accordance with generally accepted accounting
principles consistently applied, complete and accurate records regarding the Collateral and, if and when requested by Lender, shall prepare and deliver a complete and accurate schedule of all the Collateral in such detail as Lender may reasonably
require. 
 (k) Inspection of Grantor’s Books. Grantor shall permit Lender or its designee at reasonable times, without
interrupting Grantor’s business and from time to time, but no more than twice a year (unless an Event of Default has occurred and is continuing) to inspect Grantor’s books, records and properties and to audit and to make copies of extracts
from such books and records. 
 (l) Fees and Costs. Grantor shall pay all reasonable expenses, including reasonable attorneys’
fees, incurred by Lender in the preservation, realization, enforcement or exercise of any Lender’s rights under this Agreement. 
 (m)
Accounts. Grantor shall maintain and shall cause each of its Subsidiaries to maintain its primary depository, operating, and investment accounts with Lender and/or Comerica Securities, Inc. 
 (n) Corporate Existence. Grantor will maintain its corporate existence and good standing and will maintain in force all licenses and agreements,
the loss of which could have a material adverse effect on Grantor’s business. Grantor will pay all taxes on or before the date such taxes are due, and will comply with all laws and orders applicable to it.; provided that Grantor need not make
any payment on account of taxes if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Grantor. 
 (o) Negative Covenants. Grantor will not and will cause each Subsidiary to not (i) make any investments in, or loans or advances to, any
person other than as permitted in Section 8.6, (ii) acquire any assets other than permitted in Section 8.10, (iii) make any distributions or pay any dividends to any person on account of Grantor’s shares other than as
permitted in Section 8.5, (iv) create, incur, assume or be or remain liable with respect to any Indebtedness other than Permitted Indebtedness, (v) move, dispose of or encumber any portion of its assets, except for Permitted Transfers
and Permitted Liens, (vi) merge or consolidate with or into any person or entity other than as permitted in Section 8.10, (vii) create, incur, assume or suffer to exist any lien with respect to any of its property other than Permitted
Liens, or assign or otherwise convey any right to receive income, including the sale of any of Grantor’s accounts, (viii) keep Inventory or Equipment at a location other than the address specified in Section 11 hereof;
(ix) relocate its chief executive office or state of incorporation, (x) or maintain or invest any of its property with a Person other than Lender or permit any of its Subsidiaries to do so unless such Person has entered into an account
control agreement with Lender in form and substance satisfactory to Lender, or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to
Borrower, or (xi) permit the inclusion in any contract to which it becomes a party of any provisions that could restrict or invalidate the creation of a security interest in any of Grantor’s or a Subsidiary’s property. 
 (p) Further Assurances. At any time and from time to time, upon the written request of Lender, and at the sole expense of Grantor, Grantor shall
promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Lender may reasonably deem desirable to obtain the full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (a) to secure all consents and approvals necessary or appropriate for the grant of a security interest to Lender in any Collateral held by Grantor or in which Grantor has any rights not heretofore assigned,
(b) filing any financing or continuation statements under the UCC with respect to the security interests granted hereby, (c) transferring Collateral to Lender’s possession (if a security interest in such Collateral can be perfected by
possession), (d) placing the interest of Lender as lienholder on the certificate of title (or other evidence of ownership) of any vehicle owned by Grantor or in or with respect to which Grantor holds a beneficial interest and (e) using its
best efforts to obtain waivers of liens from landlords and mortgagees. Grantor also hereby authorizes Lender to file any such financing or continuation statement without the signature of Grantor. If any amount payable under or in connection with any
of the Collateral is or shall become evidenced by any Instrument, such Instrument, other than checks and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to Lender and delivered to Lender promptly
upon Grantor’s receipt thereof. 
  

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 4. Events of Default. The occurrence of any Event of Default under the Loan Agreement, or the
failure by Grantor to perform any obligations under the Guaranty, or the breach of any representation under this Agreement, or the failure to perform any obligation under Section 3 of this Agreement, shall constitute an “Event of
Default” under this Agreement. 
 5. Remedies on Default. Upon the occurrence of an Event of Default, Lender shall have all
rights, privileges, powers and remedies provided by law, including, but not limited to, exercise of any or all of the following remedies. 
 (a) Lender may declare all amounts outstanding under the Loan Agreement and the Guaranty to be immediately due and payable, and thereupon all such amounts shall be and become immediately due and payable to the Lender. 
 (b) Lender may dispose of the Collateral in accordance with applicable law. 
 (c) Lender may use, operate, consume and sell the Collateral in its possession as appropriate for the purpose of performing Grantor’s obligations
with respect thereto to the extent necessary to satisfy the obligations of Grantor. 
 (d) All payments received and amounts realized by
Lender shall be promptly applied and distributed by the Lender in the following order of priority: 
 (i) first, to the payment of all costs
and expenses, including reasonable legal expenses and attorneys fees, incurred or made hereunder by Lender, including any such costs and expenses of foreclosure or suit, if any, and of any sale or the exercise of any other remedy under this
Section 5, and of all taxes, assessments or liens superior to the lien granted under this Agreement; and 
 (ii) second, to the payment
to Lender of the amount then owing under the Loan Agreement. 
 6. Power of Attorney. Grantor hereby appoints Lender, its
attorney-in-fact to prepare, sign and file or record, for Grantor in Grantor’s name, any financing statements, applications for registration and like papers and to take any other action deemed by Lender necessary or desirable in order to
perfect the security interest of the Lender hereunder, to dispose of any Collateral, and, upon the occurrence and during the continuance of an Event of Default, to perform any obligations of Grantor hereunder, at Grantor’s expense, but without
obligation to do so. 
 7. Remedies Cumulative. Lender’s rights and remedies under this Agreement, the Loan Documents, and all
other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the New York Uniform Commercial Code (the “UCC”), by law, or in equity. No exercise by Lender of one right or
remedy shall be deemed an election, and no waiver by Lender of any Event of Default on Borrower’s or Grantor’s part shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it. No
waiver by Lender shall be effective unless made in a written document signed on behalf of Lender and then shall be effective only in the specific instance and for the specific purpose for which it was given. 
 8. Amendment of Loan Documents. Grantor authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to
time to (a) renew, extend, or otherwise change the terms of any Loan Document, or any part thereof; (b) take and hold security for the payment of any Loan Document, and exchange, enforce, waive and release any such security; and
(c) apply such security and direct the order or manner of sale thereof as Lender in its sole discretion may determine. 
 9. Grantor
Waivers. Grantor waives any right to require Lender to (a) proceed against Borrower, any other guarantor or any other person; (b) proceed against or exhaust any security held from Borrower; (c) marshal any assets of Borrower; or
(d) pursue any other remedy in Lender’s power whatsoever. Lender may, at its election, exercise or decline or fail to exercise any right or remedy it may have against Borrower or any security held by 
  

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 Lender, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale,
without affecting or impairing in any way the liability of Grantor hereunder. Grantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of
Borrower. Grantor waives any setoff, defense or counterclaim that Borrower may have against Lender. Grantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against
Borrower. Until all obligations under the Guaranty have been satisfied, Grantor shall have no right of subrogation or reimbursement, contribution or other rights against Borrower, and Grantor waives any right to enforce any remedy that Lender now
has or may hereafter have against Borrower. Grantor waives all rights to participate in any security now or hereafter held by Lender. Grantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, and notices of acceptance of this Agreement and of the existence, creation, or incurring of new or additional indebtedness. Grantor assumes the responsibility for being and keeping itself informed of the financial condition of
Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Lender that it will keep so informed, and agrees that absent a request for particular
information by Grantor, Lender shall have no duty to advise Grantor of information known to Lender regarding such condition or any such circumstances. 
 10. Borrower Insolvency. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the
United States Bankruptcy Code, or if such a petition is filed against Borrower, and in any such proceeding some or all of any indebtedness or obligations under the Loan Documents are terminated or rejected or any obligation of Borrower is modified
or abrogated, or if Borrower’s obligations are otherwise avoided for insolvency, bankruptcy or any similar reason, Grantor agrees that Grantor’s liability hereunder shall not thereby be affected or modified and such liability shall
continue in full force and effect as if no such action or proceeding had occurred. This Agreement shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by Lender upon the insolvency, bankruptcy or
reorganization of Borrower, Grantor, any other person, or otherwise, as though such payment had not been made. 
 11. Notices. Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Grantor or to
Lender, as the case may be, at its addresses set forth below: 
  

			
	If to Grantor:	  	OPTEX SYSTEMS, INC.
		  	c/o 3001 Red Hill Ave., Bldg. 4-108
		  	Costa Mesa, CA 92626
		  	Attn: Chief Financial Officer
		  	FAX: (714) 444-8773
		
	If to Lender:	  	LONGVIEW FUND, LP
		  	600 Montgomery Street, 44th Floor
		  	San Francisco, CA 94111
		  	Fax: (415) 981-5301
		
		  	ALPHA CAPITAL ANSTALT
		  	Pradafant 7
		  	9490 Furstentums
		  	 Vaduz, Lichtenstein
 Fax:
011-42-32323196

  

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	with a copy to:	  	Grushko & Mittman, P.C.
		  	551 Fifth Avenue, Suite 1601
		  	New York, New York 10176
		  	FAX: (212) 697-3575

 The parties hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other. 
 12. Choice of Law and Venue; Jury Trial Waiver. 
 This Guaranty shall be governed by the laws of the State of New York, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASES. Guarantor submits to the
exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York. If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this
Guaranty or any of the transactions contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator
appointed in accordance with said rules. The arbitrator shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.
The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and
when billed by the arbitrator. 
 13. General Provisions. 
 13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Grantor without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Lender shall have the
right without the consent of or notice to Grantor to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Lender’s obligations, rights and benefits hereunder. 
 13.2 Indemnification. Grantor shall defend, indemnify and hold harmless Lender and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Lender Expenses in any way suffered, incurred, or paid by Lender as a
result of or in any way arising out of, following, or consequential to transactions between Lender and Grantor whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses
caused by Lender’s gross negligence or willful misconduct. 
 13.3 Time of Essence. Time is of the essence for the performance of
all obligations set forth in this Agreement. 
 13.4 Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
 13.5
Amendments in Writing, Integration. This Agreement cannot be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of
this Agreement, if any, are merged into this Agreement and the Loan Documents. 
  

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 13.6 Counterparts. This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 
 13.7 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding, any Guarantor Obligations remain outstanding, or Lender has any obligation to make Credit Extensions to Borrower. The obligations of Grantor to indemnify Lender with respect to the expenses, damages, losses, costs and
liabilities described in Section shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Lender have run. 
 IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above. 
  

							
	GRANTOR:	 	LENDER:
		
	OPTEX SYSTEMS, INC.	 	LONGVIEW FUND, L.P.
				
	By:	 	 /s/ JOHN J. STUART
	 	By:	 	 /s/ S. MICHAEL RUDOLPH

	Name:	 	John J. Stuart	 	Name:	 	S. Michael Rudolph
	Title:	 	Chief Financial Officer	 	Title:	 	CFO – Investment Adviser

  

			
	LENDER:
	
	ALPHA CAPITAL ANSTALT
		
	By:	 	 /s/ KONRAD ACKERMAN

	Name:	 	Konrad Ackerman
	Title:	 	Director

  

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 EXHIBIT A 
 COLLATERAL DESCRIPTION ATTACHMENT 
 TO THIRD PARTY SECURITY AGREEMENT 
 All personal property of Debtor (herein referred to as “Debtor”) whether presently existing or hereafter created or acquired, and wherever
located, including, but not limited to: 
 (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), financial assets, general intangibles (including patents, trademarks, copyrights,
goodwill, payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and
repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said
books and records; 
 (b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance
proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the New York Uniform Commercial Code, as amended or supplemented from time to time, including revised
Division 9 of the Uniform Commercial Code-Secured Transactions. 

 COMPANY RESOLUTIONS 
 I, the undersigned Secretary or Assistant Secretary of OPTEX SYSTEMS, INC. (the “Company”), HEREBY CERTIFY that the Company is organized and existing under and by virtue of the laws of the state of Texas.

 I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and complete copies of the Articles of Incorporation and Bylaws of
the Company, each of which is in full force and effect on the date hereof. 
 I FURTHER CERTIFY that a meeting of the Directors of the
Company (or by other duly authorized corporate action in lieu of a meeting), duly called and held, at which a quorum was present and voting, the following resolutions were adopted. 
 BE IT RESOLVED, that any one (1) of the following named officers, employees, or agents of this Company, whose actual signatures are shown
below: 
  

					
	NAMES	 	POSITIONS	 	ACTUAL SIGNATURES
	_________________________________	 	_________________________________	 	_________________________________
	_________________________________	 	_________________________________	 	_________________________________
	_________________________________	 	_________________________________	 	_________________________________

 acting for and on behalf of this Company and as its act and deed be, and they hereby are, authorized and
empowered: 
 Guaranty Indebtedness; Grant Security. To guaranty amounts borrowed from LONGVIEW FUND, LP AND ALPHA CAPITAL ANSTALT
(“Lender”) by IRVINE SENSORS CORPORATION (“Borrower”) including without limitation pursuant to that certain Loan and Security Agreement between Borrower and Lender dated as of December 29, 2006, as amended from time to time.
To grant a security interest to Lender in the Collateral described in the Third Party Security Agreement by and between the Company and Lender (the “Security Agreement”), which security interest shall secure all of the Company’s
obligations, as described in that certain Unconditional Guaranty by the Company dated as of December 29, 2006 (the “Guaranty”). 
 Execute Guaranty and Security Agreement. To execute the Security Agreement, the Guaranty, and any other agreement entered into between Company and Lender in connection therewith, all as amended or extended from time to time
(collectively, the “Secured Guaranty Documents”), and also to execute and deliver to Lender one or more affirmations, renewals, extensions, modifications, refinancings, consolidations, or substitutions for the Secured Guaranty Documents,
or any portion thereof. 
 Further Acts. In the case of lines of credit, to designate additional or alternate individuals as being
authorized to request advances thereunder, and in all cases, to do and perform such other acts and things, to pay any and all fees and costs, and to execute and deliver such other documents and agreements as they may in their discretion deem
reasonably necessary or proper in order to carry into effect the provisions of these Resolutions. 
 BE IT FURTHER RESOLVED, that any and all
acts authorized pursuant to these resolutions and performed prior to the passage of these resolutions are hereby ratified and approved, that these Resolutions shall remain in full force and effect and Lender may rely on these Resolutions until
written notice of their revocation shall have been delivered to and received by Lender. Any such notice shall not affect any of the Company’s agreements or commitments in effect at the time notice is given. 
 I FURTHER CERTIFY that the officers, employees, and agents named above are duly elected, appointed, or employed by or for the Company, as the case may
be, and occupy the positions set opposite their respective names; that the foregoing Resolutions now stand of record on the books of the Company; and that the Resolutions are in full force and effect and have not been modified or revoked in any
manner whatsoever. 

 In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said
Corporation to be affixed on December 30, 2005. 
  

	
	  

	Secretary

  

			
	The Above Statements are Correct.	 	  

		 	SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.

 Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by
the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation. 
 Attachment 1 - Articles of Incorporation 
 Attachment 2 - Bylaws 

 AGREEMENT TO PROVIDE INSURANCE 
  

			
	        LONGVIEW FUND, LP	  	Date:
	        ALPHA CAPITAL ANSTALT	  	
	        OPTEX SYSTEMS, INC.	  	

 In consideration of a loan in the amount of $8,250,000 to IRVINE SENSORS CORPORATION, secured by
all Grantor’s tangible and intangible personal property including inventory and equipment. 
 I/We agree to obtain adequate insurance
coverage to remain in force during the term of the loan. 
 I/We also agree to advise the below named agent to add LONGVIEW FUND, LP AND
ALPHA CAPITAL ANSTALT as lender’s loss payable on the new or existing insurance policy, and to furnish Lender at above address with a copy of said policy/endorsements and any subsequent renewal policies. 
 I/We understand that the policy must contain: 
 1. Fire and extended coverage in an amount sufficient to cover: 
 (a) The amount of the loan, OR 
 (b) All existing encumbrances, whichever is greater, 
 But not in excess of the replacement value of the improvements on the real property. 
 2. Lender’s
“Loss Payable” Endorsement Form 438 BFU in favor of LONGVIEW FUND, LP AND ALPHA CAPITAL ANSTALT, or any other form acceptable to Lender. 
 INSURANCE INFORMATION 
 Insurance Co./Agent
                                        
                                        
        Telephone No.: 
 Agent’s Address: 
  

			
	Signature of Grantor:	 	  

		
	Signature of Grantor:	 	  

  

			
	 FOR BANK USE ONLY
  
 INSURANCE VERIFICATION: Date:
                                       
 
 Person Spoken to:
                                        
                                 
 Policy Number:
                                        
                                      
 Effective From:
                                 To:
                                      
 Verified by:
                                        
                                        
    
	 	

	
	DEBTOR: OPTEX SYSTEMS, INC.
	SECURED PARTY:

 EXHIBIT A 
 COLLATERAL DESCRIPTION ATTACHMENT 
 TO UCC NATIONAL FORM FINANCING STATEMENT 
 All personal property of Debtor (herein referred to as “Debtor”) whether presently existing or hereafter created or acquired, and wherever
located, including, but not limited to: 
 (a) all accounts (including health-care-insurance receivables), chattel paper (including tangible
and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), financial assets, general intangibles (including patents, trademarks, copyrights, goodwill,
payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions),
investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and
records; 
 (b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds,
and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the New York Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions.Subscription Agreement Dtd. December 29, 2006

 Exhibit 10.9 
 SUBSCRIPTION AGREEMENT 
 THIS SUBSCRIPTION AGREEMENT (this
“Agreement”), dated as of December 29, 2006, by and among Irvine Sensors Corporation, a Delaware corporation (the “Company”), and the subscribers identified on the signature page hereto (each a
“Subscriber” and collectively “Subscribers”). 
 WHEREAS, the Company and the Subscribers are
executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”). 
 WHEREAS, in connection herewith, the Subscribers will take by assignment certain debt of the Company (the “Obligations”) owed by the Company to Pequot Private Equity Fund III, L.P., and Pequot Offshore Private Equity
Partners III, L.P. (collectively “Pequot”) as more fully described in a certain Assignment Agreement (the “Assignment Agreement”) among the Subscribers and Pequot, and the Subscribers will become the beneficiaries
of Pequot’s rights, as more fully described in the Assignment Agreement (the “Assignment”); the Subscribers will advance additional funds to the Company (the “Advance”), subject to which the Subscribers will be
granted a senior security interest in assets of the Company, and the aggregate amount of all Advances to be made by the Subscribers together with the Obligations shall not exceed the amount set forth on Schedule 1 hereto. 
 WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and the Subscribers, in the aggregate, shall purchase share purchase warrants (collectively the “Class A Warrants”), in the form attached hereto as Exhibit A, to purchase shares of the
Company’s $0.01 par value common stock (“Common Stock”) (the “Class A Warrant Shares”). The Class A Warrants and the Class A Warrant Shares are collectively referred to herein as the
“Securities.” 
 NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscribers hereby agree as follows: 
 1. (a). Closing Date. The “Closing Date” shall
be the date that the Advance is transmitted by wire transfer or otherwise credited to or for the benefit of the Company and the Assignment is completed. The consummation of the transactions contemplated herein shall take place at the offices of
Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, upon the satisfaction or waiver of all conditions to closing set forth in this Agreement. 
 (b) Closing. Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date each Subscriber shall
advance its Pro Rata Portion of the Advance (as set forth on the signature pages hereto) and pay its Pro Rata Portion of the Assignment consideration and the Company shall sell to each Subscriber Class A Warrants as described in Section 2
of this Agreement. The aggregate amount of the Advance and Assignment consideration for all Subscribers is set forth on Schedule 1 hereto. 
 (c) Conditions to Closing. In addition to the satisfaction of all conditions and requirements to Closing set forth herein, the Closing shall be subject to: (i) the satisfaction of all obligations owed by the Company to Square 1
Bank; (ii) the receipt by the Company of a loan payoff letter from Square 1 Bank in form and substance satisfactory to Subscribers; and (iii) the delivery of all documents and agreements reasonably requested by Subscribers to effect the
transactions contemplated hereby. 
  

 1 

 2. Warrants. 
 (a) Class A Warrants. On the Closing Date, the Company will issue and deliver 3,000,000 Class A Warrants, in the form annexed hereto as Exhibit A, to the Subscribers in proportion to each
Subscriber’s Pro Rata Portion. The per Warrant Share exercise price to acquire a Warrant Share upon exercise of a Class A Warrant shall be $1.30. The Class A Warrants shall be exercisable until five (5) years after the issue date
of the Class A Warrants. The Warrant exercise price and amount of Warrant Shares issuable upon exercise of the Class A Warrants shall be equitably adjusted to offset the effect of stock splits, stock dividends, pro rata distributions of
property or equity interests to the Company’s shareholders, similar event and as otherwise described in the Class A Warrant. 
 (b) Registration Rights. The Subscribers are granted the registration rights set forth in the Registration Rights Agreement in connection with the Common Stock issuable upon exercise of the Class A Warrants. 
 (c) Cross Reference. All references herein to Warrants and Warrant Shares shall be deemed to include, respectively, the Class A Warrants and
Common Stock issuable upon exercise of the Class A Warrants. 
 3. Subscriber’s Representations and Warranties. Each
Subscriber hereby represents and warrants to and agrees with the Company only as to such Subscriber that: 
 (a) Information on
Company. The Subscriber has been furnished with or has had access at the EDGAR Website of the Commission to the Company’s Form 10-K for the year ended October 2, 2005, and all periodic reports filed with the Commission thereafter, but
not later than five days before the Closing Date (hereinafter referred to as the “Reports”). In addition, the Subscriber has received in writing from the Company such other information concerning its operations, financial condition
and other matters as the Subscriber has requested in writing (such other information is collectively, the “Other Written Information”), and considered all factors the Subscriber deems material in deciding on the advisability of
investing in the Securities. 
 (b) Information on Subscriber. The Subscriber is, and will be at the time of issuance and/or exercise
of any of the Warrants, an “accredited investor”, as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative
nature and has purchased securities of United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Subscriber
to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Subscriber is not a
broker-dealer under Section 15 of the Exchange Act. The Subscriber has the authority and is duly and legally qualified to purchase and own the Securities. The Subscriber is able to bear the risk of such investment for an indefinite period and
to afford a complete loss thereof. The information set forth on the signature page hereto regarding the Subscriber is accurate. 
 (c)
Purchase of Securities. The Subscriber is acquiring the Securities in the ordinary course of its business as principal for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or
any distribution thereof. Such Subscriber does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  

 2 

 (d) Compliance with Securities Act. The Subscriber understands and agrees that the Securities
have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and
warranties of Subscriber contained herein), and that such Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration.
Notwithstanding anything to the contrary contained in this Agreement, such Subscriber may transfer (without restriction and without the need for an opinion of counsel) the Securities to its Affiliates (as defined below) provided that each such
Affiliate is an “accredited investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or entity means
any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such person or entity. Affiliate when employed in connection with the Company includes each Subsidiary (as defined in
Section 5(a)) of the Company. For purposes of this definition, “control” means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise. 
 (e) Warrant Shares Legend. The Warrant Shares shall bear the following or similar legend: 
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR
BLUE SKY LAWS. SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS, OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IRVINE SENSORS CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.” 
 (f) Warrants
Legend. The Warrants shall bear the following or similar legend: 
 “THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR BLUE SKY LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IRVINE SENSORS CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.” 
  

 3 

 (g) Communication of Offer. The offer to sell the Securities was directly communicated to the
Subscriber by the Company. At no time was the Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a
promotional meeting otherwise than in connection and concurrently with such communicated offer. 
 (h) Authority; Enforceability. If
the Subscriber is an entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate, limited liability company or partnership power and authority to enter into
and to consummate the transactions contemplated by the Transaction Agreements and otherwise to carry out its obligations hereunder and thereunder. This Agreement and other agreements delivered together with this Agreement or in connection herewith
have been duly authorized, executed and delivered by the Subscriber and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights generally and to general principles of equity; and Subscriber has full corporate power and authority necessary to enter into this Agreement and such other agreements and to
perform its obligations hereunder and under all other agreements entered into by the Subscriber relating hereto. 
 (i) No Governmental
Review. Each Subscriber understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 
 (j) Certain Trading
Activities. Such Subscriber has not directly or indirectly, nor has any Person acting at the direction of such Subscriber, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales involving the
Company’s securities) since the earlier to occur of (i) the time such Subscriber was first contacted by the Company or any other Person regarding the investment in the Company described herein and (ii) the 30th day prior to the date
of this Agreement. Such Subscriber covenants that neither it nor any Person acting at the direction of such Subscriber will engage in any transactions in the securities of the Company (including Short Sales) after the date hereof and prior to the
date that the transactions contemplated by this Agreement are publicly disclosed. Each Subscriber represents that as of the date of this Agreement and without giving effect to the purchase of Securities hereunder, it holds no Common Stock or other
securities of the Company. 
 (k) Correctness of Representations. Each Subscriber represents as to such Subscriber that the foregoing
representations and warranties are true and correct as of the date hereof and, unless a Subscriber otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date and as of the issuance of the Class B
Warrants. 
 (l) Survival. The foregoing representations and warranties shall survive the Closing Date for a period of three years.

  

 4 

 4. Company Representations and Warranties. Except as set forth in a disclosure schedule delivered
to the Subscribers on the date hereof (the “Schedules”), the Company represents and warrants to and agrees with each Subscriber that: 
 (a) Due Incorporation. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power to own its
properties and to carry on its business as disclosed in the Reports. The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by
it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect. For purpose of this Agreement, a “Material Adverse Effect” shall mean a material
adverse effect on the financial condition, results of operations, properties or business of the Company taken individually, or in the aggregate, as a whole. For purposes of this Agreement, “Subsidiary” means, with respect to any
entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity) of which more than 50% of (i) the outstanding capital stock having (in the
absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such
partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries, by such entity. All the Company’s Subsidiaries as of the Closing Date are set forth on Schedule 4(a) hereto. 
 (b) Outstanding Stock. All issued and outstanding shares of capital stock of the Company and each Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable. 
 (c) Authority; Enforceability. This Agreement, the Warrants, Registration
Rights Agreement, and any other agreements delivered together with this Agreement or in connection herewith, or in connection with the Assignment Agreement and Advance, to which the Company is a party (collectively “Transaction
Documents”) have been duly authorized, executed and delivered by the Company and are valid and binding agreements enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity. The Company and Subsidiaries have full corporate power and authority necessary to
enter into and deliver the Transaction Documents and to perform their obligations thereunder. 
 (d) Additional Issuances. There are
no outstanding agreements or preemptive or similar rights affecting the Company’s common stock or equity and no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of common stock or equity of the Company or Subsidiaries or other equity interest in any of the Subsidiaries of the Company except as described on Schedule 4(d). The Common
Stock of the Company on a fully diluted basis outstanding as of the last Business Day preceding the Closing Date is set forth on Schedule 4(d). “Business Day” and “trading day” shall mean any day that the New
York Stock Exchange is open for trading for three or more hours. 
 (e) Consents. Subject to Section 6(j), no consent, approval,
authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company or any of its Affiliates, the Nasdaq Capital Market (“NCM”), nor the Company’s shareholders is required for the
execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities, the filing by the Company
with the Commission of the Registration Statement, the filing by the Company of a Notice of Sale of Securities on Form D with the Commission under 
  

 5 

 Regulation D of the Securities Act, the notice by the Company to NCM regarding listing of additional shares, and
applicable Blue Sky filings. The Transaction Documents and the Company’s performance of its obligations thereunder have been approved unanimously by the Company’s directors. 
 (f) No Violation or Conflict. Except as set forth on Schedule 4(f), neither the issuance and sale of the Securities nor the performance of
the Company’s obligations under this Agreement and all other agreements entered into by the Company relating thereto by the Company will: 
 (i) violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles or
certificate of incorporation, charter or bylaws of the Company, (B) to the Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or any of its Subsidiaries or over the properties or assets of the Company or any of its Subsidiaries, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or
any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its Subsidiaries is a party, by which the Company or any of its Subsidiaries is bound, or to which any of
the properties of the Company or any of its Subsidiaries is subject, or (D) the terms of any “lock-up” or similar provision of any underwriting or similar agreement to which the Company, or any of its Subsidiaries is a party except
the violation, conflict, breach, or default of which would not have a Material Adverse Effect on the Company; or 
 (ii) result in the
creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of its Subsidiaries; or 
 (iii) result in the activation of any anti-dilution rights or a reset or repricing of any debt or security instrument of any other creditor or equity holder of the Company, nor result in the acceleration of the due date of any obligation of
the Company; or 
 (iv) result in the activation of any piggy-back registration rights of any person or entity holding securities of the
Company or having the right to receive securities of the Company. 
 (g) The Securities. The Securities upon issuance: 
 (i) are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the 1933
Act and any applicable state securities laws; 
 (ii) have been, or will be, duly and validly authorized and on the date of exercise of the
Warrants and issuance of the Warrant Shares against payment therefor will be duly and validly issued, fully paid and nonassessable and the Warrant Shares, if registered for resale pursuant to the 1933 Act and resold pursuant to an effective
registration statement under the 1933 Act, will be free trading and unrestricted; 
 (iii) will not have been issued or sold in violation of
any preemptive or other similar rights of the holders of any securities of the Company; 
 (iv) will not subject the holders thereof to
personal liability by reason of being such holders; and 
  

 6 

 (v) will have been issued in reliance upon an exemption from the registration requirements of and will
not result in a violation of Section 5 under the 1933 Act. 
 (h) Reporting Company. The Company is a publicly-held company
subject to reporting obligations pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and has a class of common shares registered pursuant to Section 12(g) of the 1934 Act. Pursuant to
the provisions of the 1934 Act, the Company has timely filed all reports and other materials required to be filed thereunder with the Commission during the preceding twelve months. 
 (i) Information Concerning Company. The Reports contain all material information relating to the Company and its operations and financial
condition as of their respective dates which information is required to be disclosed therein. Since the date of the latest financial statements included in the Reports, and except as modified in the Other Written Information or in the Schedules
hereto, there has been no material adverse change in the Company’s business, financial condition or affairs not disclosed in the Reports (it being understood that by signing this Agreement, the Subscribers shall be deemed to have agreed in
writing to receiving such Other Written Information and Schedules). The Reports do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances when made. 
 (j) No Market Manipulation. The Company will not take, directly or indirectly,
any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Common Stock of the Company to facilitate the sale or resale of the Securities or affect the price at which the
Securities may be issued or resold. 
 (k) Listing. The Company’s common stock is listed on the NCM under the symbol IRSN. The
Company has not received any oral or written notice that the Common Stock is not eligible nor will become ineligible for listing on the NCM nor that the Common Stock does not meet all requirements for the continuation of such listing. As of the date
of this Agreement and the Closing Date, the Company satisfies all the requirements for the continued listing and trading of the Common Stock on the NCM. 
 (l) Stop Transfer. The Securities, when issued, will be restricted securities. The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Securities,
except as may be required in order to facilitate compliance with applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the Subscriber. 
 (m) Not an Integrated Offering. Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf,
has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offer of the Securities pursuant to this Agreement to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the NCM which would impair the exemptions relied upon in this Offering or the Company’s
ability to timely comply with its obligations hereunder. Nor will the Company or any of its Affiliates take any action or steps that would cause the offer or issuance of the Securities to be integrated with other offerings which would impair the
exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder. The Company will not conduct any offering other than the transactions contemplated hereby that will be integrated with the offer
or issuance of the Securities, which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder. 
  

 7 

 (n) No General Solicitation. Neither the Company, nor any of its Affiliates, nor to its
knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer or sale of the Securities. 

(o) Dilution. The Company’s executive officers and directors understand the nature of the Securities being sold hereby and recognize that
the issuance of the Securities will have a potential dilutive effect on the equity holdings of other holders of the Company’s equity or rights to receive equity of the Company. The board of directors of the Company has unanimously concluded, in
its good faith business judgment, that the issuance of the Securities is in the best interests of the Company. The Company specifically acknowledges that its obligation to issue the Warrant Shares upon exercise of the Warrants is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company or parties entitled to receive equity of the Company. 
 (p) No Disputes with Accountants and Lawyers. There are no disputes of any kind presently existing, or reasonably anticipated by the Company to
arise, between the Company and the accountants and lawyers formerly or presently employed by the Company, including but not limited to disputes or conflicts over payment owed to such accountants and lawyers. 
 (q) S-3 Eligible. The Company represents that it is eligible to register the Warrant Shares for public resale on Form S-3. 
 (r) Subsidiary Representations. The Company makes each of the representations contained in Sections 4(a), (b), (c), (d), (e), (f) and
(p) of this Agreement, as same may relate to each Subsidiary of the Company, with the same qualifications to each such representation. 
 (s) DTC Status/Transfer Agent. The Company’s transfer agent is eligible to participate in and the Common Stock is eligible for transfer through DWAC pursuant to the Depository Trust Company Automated Securities Transfer
Programs, subject to any restrictions imposed by securities laws. The name, address, telephone number, fax number, contact person and email address of the Company transfer agent are set forth on Schedule 4(s) hereto. 
 (t) Correctness of Representations. The Company represents that the foregoing representations and warranties are true and correct as of the date
hereof in all material respects, and, unless the Company otherwise notifies the Subscribers prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date. 
 (u) Survival. The foregoing representations and warranties shall survive the Closing Date for a period of three years. 
 5. Regulation D Offering. The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from the
registration provisions of the 1933 Act afforded by Section 4(2) of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder. On the Closing Date, the Company will provide an opinion to Subscriber from the Company’s legal
counsel opining on the availability of an exemption from registration under the 1933 Act as it relates to the offer and issuance of the Securities and the other matters set forth in the form of legal opinion annexed hereto as Exhibit B. The
Company will provide its transfer agent, at the Company’s expense, such other legal opinions in the future as are reasonably necessary for the issuance and resale of the Common Stock issuable upon exercise of the Warrants. 
  

 8 

 6.1. Covenants of the Company. The Company covenants and agrees with the Subscribers as follows:

 (a) Stop Orders. The Company will advise the Subscribers, within two hours after the Company receives notice of issuance by the
Commission, the Principal Market or any other trading or listing market, any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any Securities, or of the
suspension of the qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose. 
 (b) Listing. The Company will maintain the listing or quotation of its Common Stock on the American Stock Exchange, NCM, Nasdaq Global Market, Nasdaq Global Select Market, or New York Stock Exchange (whichever
of the foregoing is at the time the principal trading exchange or market for the Common Stock (the “Principal Market”)), and will comply in all respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Principal Market, as applicable. The Company will provide the Subscribers copies of all notices it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market. As of the
date of this Agreement, the NCM is the Principal Market. 
 (c) Market Regulations. The Company shall notify the Commission,
Principal Market and applicable state authorities, in accordance with their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities to the Subscribers and promptly provide copies thereof to Subscriber. 
 (d) Filing Requirements. From the date of this Agreement and until the sooner of (i) three (3) years after the Closing Date, or (ii) until all the Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume limitations, the Company will (A) cause its Common Stock to continue to be registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in
all respects with its reporting and filing obligations under the 1934 Act, (C) voluntarily comply with all reporting requirements that are applicable to an issuer with a class of shares registered pursuant to Section 12(g) of the 1934 Act,
if Company is not subject to such reporting requirements, and (D) comply with all requirements related to any registration statement filed pursuant to this Agreement. The Company will use its best efforts not to take any action or file any
document (whether or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said acts until three (3) years after
the Closing Date. Until the earlier of the resale of the Warrant Shares by each Subscriber or three (3) years after the Closing Date, the Company will use its best efforts to continue the listing or quotation of the Common Stock on a Principal
Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market. The Company agrees to timely file a Form D with respect to the Securities if required under
Regulation D and to provide a copy thereof to each Subscriber promptly after such filing. 
 (e) Reservation. Prior to the Closing
Date, the Company undertakes to reserve, pro rata, on behalf of each holder of Warrant, from its authorized but unissued Common Stock, a number of common shares equal to 115% of the amount of Warrant Shares issuable upon exercise of
the Class A Warrants. Failure to have sufficient shares reserved pursuant to this Section 6.1(e) for three (3) consecutive business days or ten (10) days in the aggregate shall be a material default of the Company’s
obligations under this Agreement. 
  

 9 

 (f) Further Registration Statements. Except for a registration statement filed on behalf of the
Subscribers pursuant to the Registration Rights Agreement, and except as described on Schedule 4(f), the Company will not file any registration statements, including but not limited to Forms S-8, with the Commission or with state regulatory
authorities without the consent of the Subscriber until the expiration of the “Exclusion Period”, which shall be until the Registration Statement shall have been declared effective, current and available for use in connection with
the resale of the Registrable Securities (as defined in the Registration Rights Agreement) for a period of 180 days. The Exclusion Period will be tolled during the pendency of an Event of Default (as defined in Article 10 of the Term Loan and
Security Agreement among the Company and Subscribers. 
 (g) Confidentiality/Public Announcement. From the date of this Agreement and
until the sooner of (i) three (3) years after the Closing Date, or (ii) until all the Warrant Shares have been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard
to volume limitations, the Company agrees that except in connection with a Form 8-K, Form 10-K, Form 10-Q, Form D, Principal Market notices, Proxy or the Registration Statement, it will not disclose publicly or privately the identity of the
Subscribers unless expressly agreed to in writing by a Subscriber (which approval will not be unreasonably withheld or delayed) or only to the extent required by law and then only upon five days prior notice to Subscriber. In any event and subject
to the foregoing, the Company undertakes to file a Form 8-K or make a public announcement describing the Offering not later than the fourth business day after the Closing Date. In the Form 8-K or public announcement, the Company will specifically
disclose the amount of Common Stock outstanding immediately after the Closing. 
 (h) Non-Public Information. The Company covenants
and agrees that neither it nor any other person acting on its behalf will provide any Subscriber or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such
Subscriber shall have agreed in writing to receive such information. The Company understands and confirms that each Subscriber shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
 (i) Offering Restrictions. Until the expiration of the Exclusion Period, except for the Excepted Issuances, the Company will not enter into an
agreement to nor issue any equity, convertible debt or other securities convertible into Common Stock or equity of the Company nor modify any of the foregoing which may be outstanding at anytime, without the prior written consent of the Subscribers,
which consent may be withheld for any reason. For so long as Warrants remain outstanding, except for the Excepted Issuances, the Company will not enter into any equity line of credit or similar bank financing agreement, nor issue nor agree to issue
any floating or variable priced equity linked instruments nor any of the foregoing or equity with price reset rights. The restriction described in the previous sentence shall not apply after the Registration Statement has been effective for 365
calendar days. 
 7. Broker. The Company on the one hand, and each Subscriber (for himself only) on the other hand, agrees to
indemnify the other against and hold the other harmless from any and all liabilities to any persons claiming brokerage commissions or finder’s fees on account of services purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby and arising out of such party’s actions. The Company represents that there are no parties entitled to receive fees, commissions, or similar payments in connection with the
Offering except that a due diligence fee of $75,000 (“Due Diligence Fee”) will be paid to The Lieberman Financial Group, Inc. upon the Closing Date and an investment banking fee of $425,000 will be paid to Dominick &
Dominick upon the Closing Date. 
  

 10 

 8. Legal Fees. On the Closing Date, the Company shall pay to Grushko & Mittman, P.C., a
fee of $95,000 (“Legal Fees”) (of which $20,000 has been paid) and 50,000 shares of restricted Common Stock (“Fee Shares”) as reimbursement for services rendered to the Subscribers in connection with this Agreement
and the purchase and sale of the Warrants (the “Offering”). The Fee Shares will be issued in such names and amounts as Grushko & Mittman, P.C. shall designate. The recipients of the Fee Shares shall be “accredited
investors,” as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, and shall sign Subscription Agreements in form hereof. The holders of the Fee Shares are granted the same registration rights as are granted
to the Subscribers. The Fee Shares are included in the definition of Registrable Securities. The Legal Fees and reimbursement for estimated UCC search and filing fees and credit reports, if any, will be payable on the Closing Date. 
 9. Covenants of the Company and Subscriber Regarding Indemnification. 
 (a) The Company agrees to indemnify, hold harmless, reimburse and defend the Subscribers, the Subscribers’ officers, directors, agents, Affiliates,
control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Subscriber or any such person which results, arises
out of or is based upon (i) any material misrepresentation by Company or breach of any warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any
applicable notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered into by the Company and Subscriber relating hereto.

 (b) Each Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s officers,
directors, agents, Affiliates, control persons against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company or any such person which results, arises
out of or is based upon (i) any material misrepresentation by such Subscriber in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure
periods, any breach or default in performance by such Subscriber of any covenant or undertaking to be performed by such Subscriber hereunder, or any other agreement entered into by the Company and Subscribers, relating hereto. 
 (c) In no event shall the liability of any Subscriber or permitted successor hereunder or under any other agreement delivered in connection herewith be
greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of Registrable Securities (as defined herein). 
 (d) The procedures set forth in Section 5 of the Registration Rights Agreement shall apply to the indemnification set forth in Sections 9(a) and 9(b) above. 
 10. (a) Right of First Refusal. Subject to the rights described on Schedule 4(f) hereto, until the Registration Statement has been
effective for 365 days or until the Obligations and Advance are no longer outstanding, whichever is later, the Subscribers shall be given not less than seven (7) business days prior written notice of any proposed sale by the Company of its
common stock or other securities or debt obligations, except in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets of
corporation or other entity provided such issuances are not for the purpose of raising capital, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such
issuances are not for the purpose of raising capital, (iii) the Company’s 
  

 11 

 issuance of Common Stock or the issuances or grants of options or other awards to purchase Common Stock, restricted
stock, or stock appreciation rights, pursuant to stock option plans, stock incentive plans and employee stock purchase plans described on Schedule 4(f) hereto at prices equal to or higher than the fair market value of the Common Stock on the
issue or grant date of any of the foregoing, (iv) the Company’s issuance of Common Stock or similar rights pursuant to the Company’s Non-Qualified Deferred Compensation Plan or the Company’s Cash or Deferred & Stock
Bonus Plan; (v) the Company’s issuance of Common Stock to Timothy Looney in connection with the acquisition of Optex Systems, Inc.; (vi) the Company’s issuance of the warrant listed in Schedule 10(a); (vii) the
Company’s issuance of Common Stock upon exercise of the warrants or conversion of the notes listed on Schedule 10(a); (viii) the Company’s issuance of Common Stock to Chris Toffales or CTC Aero LLC pursuant to their consulting
agreement with the Company; (ix) offerings, the proceeds of which will fully retire the Advance; (x) the Company’s issuance of Common Stock to Pequot in connection with the settlement agreement to be entered into with Pequot, subject
to the reasonable approval of the Subscribers; and (xi) underwritten public offerings (collectively the foregoing are “Excepted Issuances”). The Subscribers who exercise their rights pursuant to this Section 10(a) shall
have the right during the seven (7) business days following receipt of the notice to purchase their Pro Rata Portion of such offered common stock, debt or other securities in accordance with the terms and conditions set forth in the notice of
sale and pay for same by crediting the Company for amounts outstanding on the Obligations. In the event the principal terms and conditions are materially modified during the notice period, the Subscribers shall be given prompt notice of such
modification and shall have the right during the seven (7) business days following the notice of modification to exercise such right. 
 (b) Maximum Exercise of Rights. In the event the exercise of the rights described in Section 10(a) would or could result in the issuance of an amount of Common Stock that would exceed the maximum amount that may be issued to a
Subscriber calculated in the manner described in Section 10 of the Warrant, then the issuance of such additional shares of Common Stock to such Subscriber will be deferred in whole or in part until such time as such Subscriber is able to
beneficially own such Common Stock without exceeding the applicable maximum amount set forth calculated in the manner described in Section 10 of the Warrant. The determination of when such Common Stock may be issued shall be made by each
Subscriber as to only such Subscriber. 
 11. Miscellaneous. 
 (a) Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable overnight courier service with
charges prepaid, or (iv) transmitted by hand delivery, electronic mail, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by electronic mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be: (i) if to the Company, to: Irvine Sensors Corporation, 3001 Red Hill Avenue, Costa Mesa, CA 92650, Attn: Chief Financial Officer, telecopier: (714) 444-8773, with a copy by telecopier only to:
Dorsey & Whitney LLP, 38 Technology Drive, Irvine, CA 92618, Attn: Ellen S. Bancroft, Esq., telecopier: (949) 932-3601, and (ii) if to the Subscribers, to: the one or more addresses 
  

 12 

 and telecopier numbers indicated on the signature pages hereto, with an additional copy by telecopier only to:
Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier: (212) 697-3575. 
 (b) Entire
Agreement; Assignment. This Agreement and other documents delivered in connection herewith represent the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both
parties. Neither the Company nor the Subscribers have relied on any representations not contained or referred to in this Agreement and the documents delivered herewith. No right or obligation of the Company shall be assigned without prior notice to
and the written consent of the Subscribers. 
 (c) Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. This Agreement may be executed
by facsimile signature and delivered by facsimile transmission. 
 (d) Law Governing this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought
only in the state courts of New York or in the federal courts located in the State of New York. The parties and the individuals executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the
Company agree to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. 
 (e) Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. Subject to Section 11(d) hereof, each of
the Company, Subscriber and any signator hereto in his personal capacity hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction in New York of such court, that
the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law.

 (f) Independent Nature of Subscribers. The Company acknowledges that the obligations of each Subscriber under the Transaction
Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction Documents. The Company
acknowledges that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently of any other Subscriber and independently of any information, materials, statements or 
  

 13 

 opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or given by any other Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability to any
Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions. The Company acknowledges that nothing contained in any Transaction Document, and no action taken by any Subscriber pursuant
hereto or thereto (including, but not limited to, the (i) inclusion of a Subscriber in the Registration Statement and (ii) review by, and consent to, such Registration Statement by a Subscriber) shall be deemed to constitute the
Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. The Company acknowledges that each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of the Transaction Documents, and it
shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that it has elected to provide all Subscribers with the same terms and Transaction Documents for
the convenience of the Company and not because Company was required or requested to do so by the Subscribers. The Company acknowledges that such procedure with respect to the Transaction Documents in no way creates a presumption that the
Subscribers are in any way acting in concert or as a group with respect to the Transaction Documents or the transactions contemplated thereby. 
 (h) Consent. As used in the Agreement, “consent of the Subscribers” or similar language means the consent of holders of not less than 70% of the outstanding Warrants owned by Subscribers on the date
consent is requested. 
 (i) Equal Treatment. No consideration shall be offered or paid to any person to amend or consent to a waiver
or modification of any provision of the Transaction Documents unless the same consideration is also offered and paid to all the parties to the Transaction Documents. 
 [THIS SPACE INTENTIONALLY LEFT BLANK] 
  

 14 

 SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A) 
 Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us. 
  

			
	IRVINE SENSORS CORPORATION
	a Delaware corporation
		
	By:	 	 /s/ JOHN C. CARSON

	Name:	 	John C. Carson
	Title:	 	President & CEO
	
	Dated: December 29, 2006

  

						
	 SUBSCRIBER
	  	CLASS A
WARRANTS	  	PRO RATA
PORTION	 
	 LONGVIEW FUND, LP
 600 Montgomery Street, 44th Floor
 San Francisco, CA 94111
 Fax: (415) 981-5301
	  	2,589,000	  	86.30	%

  

	
	 /s/ S. MICHAEL RUDOLPH

	(Signature)

 SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (B) 
 Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us. 
  

			
	IRVINE SENSORS CORPORATION
	a Delaware corporation
		
	By:	 	 /s/ JOHN C. CARSON

	Name:	 	John C. Carson
	Title:	 	President & CEO
	
	Dated: December 29, 2006

  

						
	 SUBSCRIBER
	  	CLASS A
WARRANTS	  	PRO
RATA
PORTION	 
	 ALPHA CAPITAL ANSTALT
 Pradafant 7
 9490 Furstentums
 Vaduz, Lichtenstein
 Fax: 011-42-32323196
	  	411,000	  	13.70	%

  

	
	 /s/ KONRAD ACKERMAN

	(Signature)

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