Document:

Non-Competition Agreement

 Exhibit 10.4 
  
 NON-COMPETITION AGREEMENT 
  
 This Non-Competition Agreement (the “Agreement”) is entered into, as of December 30, 2005, by and among Irvine Sensors
Corporation, a Delaware corporation (“Parent”), Optex Systems, Inc., a Texas corporation (the “Company”), and the undersigned, Timothy Looney, an individual (“Executive”).

  
 RECITALS 
  
 A. The Company is engaged in the business of developing, manufacturing and
distributing telescopes, periscopes, lenses, collimators, vision blocks and other optical systems and instruments, including related components and test equipment. Parent designs, develops, manufactures and sells miniaturized electronic products for
defense, security and commercial applications. The foregoing businesses, together with any other business of the Company, Parent or their respective subsidiaries or affiliates existing or reasonably contemplated prior to the Closing (as that term is
defined in the Purchase Agreement), are collectively referred to herein as the “Business”). For purposes of this Agreement, a business of the Company, Parent or their respective subsidiaries or affiliates (each a
“Group Company” and collectively, the “Group Companies”) will be deemed “reasonably contemplated” if it is included in the fiscal year 2006 budget or included in any business plan or product
plans of such Group Companies as of the date hereof. 
  
 B. The
Company’s key customers include the U.S. government and other governmental agencies that work with manufacturers located throughout the world. The parties acknowledge that the relevant market for the Business is worldwide in scope (the
“Restricted Area”) and that there exists intense worldwide competition for the products and services of the Business. 
  
 C. Pursuant to the Stock Purchase Agreement, dated as of December 30, 2005 (the “Purchase Agreement”), among the Parent,
Company and Executive, Parent will acquire 70% of all of the issued and outstanding shares of capital stock of the Company from Executive, and the Company will become a subsidiary of the Parent (the “Acquisition”). In
connection with the Acquisition, Executive has also granted Parent the right to acquire the remaining 30% of the Company’s capital stock. 
  
 D. The Group Companies possess certain information (whether or not recorded in documentary form or on computer disk or tape) to which they attach a level
of confidentiality or in respect of which any of them owe an obligation of confidentiality to any third-party, relating to, without limitation, business methods, corporate plans, management systems, finances, maturing new business opportunities,
research and development projects, marketing or sales of any past, present or future product or service of any Group Company including, without limitation, sales targets and statistics, market share and pricing statistics, marketing surveys and
plans, market research reports, sales techniques, price lists, discount structures, advertising and promotional material, the names, addresses, telephone numbers, contact names and identities of customers and potential customers of, and suppliers
and potential suppliers to, any Group Company, the nature of their business operations, their requirements for any product or service sold to or purchased by any Group Company and all confidential aspects of their business relationship with any
Group Company, any and all trade secrets, secret formulae, manufacturing 

  

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techniques, processes, technology, inventions, designs, know-how, discoveries, technical specifications and other technical information relating to the
creation, production or supply of any past, present or future product or service of any Group Company, and all other Intellectual Property Rights and confidential and proprietary information of any Group Company (“Confidential Business
Information”). 
  
 E. Executive is the sole
shareholder, President and Chief Executive Officer of the Company and has, or will learn or otherwise acquire during his service to any Group Company, detailed knowledge of the Confidential Business Information. 
  
 F. Executive holds 100% of the total shares of capital stock of the Company
outstanding at the date hereof, and therefore has a material economic interest in the consummation of the Acquisition and, in order to induce Parent to consummate the Acquisition and the transactions contemplated by the Purchase Agreement, Executive
has agreed to enter into this Agreement. 
  
 G. In order to
protect the goodwill, trade secrets and other Confidential Business Information related to the Company being acquired by Parent in the Acquisition, the Parent, Company and Executive have agreed that Parent’s obligation to consummate the
Acquisition and the transactions contemplated by the Purchase Agreement is subject to the condition, among others, that Executive shall have entered into this Agreement. 
  
 H. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Purchase Agreement.

  
 NOW, THEREFORE, in consideration of the promises and
mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Executive, Company and Parent, intending to be legally bound, hereby agree as follows:

  
 ARTICLE 1 
  
 NON-COMPETITION 
  
 1.1 Non-Competition. As an inducement for Parent to enter into the Purchase Agreement and consummate the Acquisition,
and in connection with the sale of Executive’s shares of Company capital stock in connection with the Acquisition, and the acquisition of the goodwill of the Company by Parent, Executive agrees that, without the express prior written consent of
Parent, from and after the consummation of the Acquisition and until the date that is two (2) years after the date that Executive ceases to be employed by a Group Company (as defined below) (the “Non-Competition
Period”), Executive shall not, anywhere in the Restricted Area, directly or indirectly, whether individually or as an employee, consultant, partner, advisor, independent contractor, officer, director, member, equity holder, debt holder,
joint venture participant, lender, guarantor, principal, agent, representative or in any other similar capacity, for any Person, firm, partnership, company, corporation or other entity (other than a Group Company) (without limitation by specific
enumeration of the foregoing): (1) in any way own, manage, operate, sell, control or participate in the ownership, management, operation, sale or control of any business, activity, entity or Person, or engage in any business or activity, that
is competitive (wholly or partly) with or similar to the Business, or (2) render any services or 

  

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provide any advice with respect to or involving the Business to any business, activity, entity or Person (other than a Group Company), or (3) allow his
name or the name of the Company to be used in connection with any business, activity, entity or Person (other than a Group Company) that is competitive (wholly or partly) with or similar to the Business. Notwithstanding the foregoing, Executive may
own, directly or indirectly, solely as an investment, up to one percent (1%) of any class of Publicly Traded Securities (as defined below) of any Person that owns or operates a business that is competitive (wholly or partly) with or similar to
the Business; provided however, that Executive may not devote any managerial efforts for, or provide any services to, such Person. For the purposes of this Section 1.1, the term “Publicly Traded Securities” shall mean
securities that are traded on a national securities exchange or listed on the Nasdaq National Market. 
  
 1.2 No Interference with the Business; Non-Solicitation. As an inducement for Parent to enter into the Purchase Agreement and consummate the
Acquisition, Executive agrees that during the Non-Competition Period, at any time or for any reason, Executive shall not, directly or indirectly, (a) solicit or divert away from a Group Company any business or customers, vendors, clients,
licensors, licensees, suppliers, agents or other Persons made known to Executive during his employment with a Group Company, (b) induce customers, vendors, clients, licensors, licensees, suppliers, agents or other Persons under contract or
otherwise associated or doing business with a Group Company to reduce or alter any such association or business with the Group Company or otherwise interfere in the business relationship of any such Persons and the Group Company, and/or
(c) solicit any employee, independent contractor, consultant or other Person in the employment or service of a Group Company, at the time of such solicitation, in any case to (i) terminate such employment or service, and/or
(ii) accept employment, or enter into any consulting or other service arrangement, with any Person other than a Group Company. 
  
 ARTICLE 2 
  
 REMEDIES AND CONFLICT RESOLUTION 
  
 2.1 Remedies. The parties to this Agreement agree that: (i) Executive’s services are unique, because of the particular skill, knowledge, experience and reputation of Executive; (ii) if Executive
breaches Article 1 of this Agreement, the damage to Parent will be substantial, and difficult to ascertain, and, further, that money damages will not afford Parent an adequate remedy, and consequently, (iii) if Executive is in breach of any
provision of this Agreement, or threatens a breach of Article 1 of this Agreement, Parent shall be entitled, in addition to all other rights and remedies as may be provided by law, to seek specific performance and injunctive and other equitable
relief to prevent or restrain a breach of any provision of this Agreement notwithstanding Section 2.2 hereof. All claims for damages for a breach of this Agreement shall be submitted to mediation and arbitration in accordance with
Section 2.2 of this Agreement. 
  
 2.2 Dispute
Resolution. Except for the right of Parent to seek specific performance and injunctive and other equitable relief in court as set forth in Section 2.1 hereof, any controversy, claim or dispute of any type arising out of, in connection with,
or in relation to the interpretation, performance or breach of this Agreement shall be resolved in accordance with this Section 2.2 of this Agreement, regarding resolution of disputes. This Agreement shall be enforced in accordance with the
Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference. 
  

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 (a) Mediation. Parent and Executive will make a good faith attempt to resolve any
and all claims and disputes under this Agreement through good faith negotiations. If such claims and disputes cannot be settled through negotiation, Parent and Executive agree to submit them to mediation in Orange County, California before resorting
to arbitration or any other dispute resolution procedure. The mediation of any such claim or dispute must be conducted in accordance with the then-current JAMS procedures for the resolution of disputes by mediation, by a mediator
(“Mediator”) who has had both training and experience as a mediator of general non-competition and commercial matters. If the parties to this Agreement cannot agree on a Mediator, then the Mediator will be selected by JAMS in
accordance with JAMS’ strike list method. Within thirty (30) days after the selection of the Mediator, Parent and Executive and their respective attorneys will meet with the Mediator for one mediation session of at least four
(4) hours. If the claim or dispute cannot be settled during such mediation session or mutually agreed continuation of the session, either Parent or Executive may give the Mediator and the other party to the claim or dispute written notice
declaring the end of the mediation process. All discussions connected with this mediation provision will be confidential and treated as compromise and settlement discussions. Nothing disclosed in such discussions, which is not independently
discoverable, may be used for any purpose in any later proceeding. In the event that the mediation process is ended without resolution, the Mediator’s fees will be paid in equal portions by Parent and Executive. 
  
 (b) Arbitration. If a claim or dispute under this
Agreement has not been resolved in accordance with Section 2.2(a) above, then the claim or dispute will be determined by arbitration in accordance with the then-current JAMS comprehensive arbitration rules and procedures, except as modified
herein. The arbitration will be conducted in Orange County, California by a sole neutral arbitrator (“Arbitrator”) who has had both training and experience as an arbitrator of general non-competition and commercial matters
and who is, and for at least ten (10) years has been, a partner, a shareholder, or a member in a law firm. If Parent and Executive cannot agree on an Arbitrator, then the Arbitrator will be selected by JAMS in accordance with Rule 15 of the
JAMS comprehensive arbitration rules and procedures. No person who has served as a Mediator under the mediation provision, however, may be selected as the Arbitrator for the same claim or dispute. Reasonable discovery will be permitted and the
Arbitrator may decide any issue as to discovery. The Arbitrator may decide any issue as to whether or as to the extent to which a dispute is subject to the dispute resolution provisions in this Section 2.2 and the Arbitrator may award any
relief permitted by law. The Arbitrator must base the arbitration award on the provisions of this Section 2.2 and applicable law and must render the award in writing, including an explanation of the reasons for the award. Judgment upon the
award may be entered by any court having jurisdiction of the matter. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under this Section 2.2(b). At the request of any party,
the Arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the arbitration proceedings. The
arbitrator’s fee will be paid in full by the Company, unless Executive agrees in writing to pay some or all of the fee. 
  
 (c) Interim Actions. Notwithstanding the foregoing, a party may apply to a court of competent jurisdiction within the State of
California for relief in the form of a temporary restraining order or preliminary injunction, pending appointment of an Arbitrator or pending determination of a claim through arbitration in accordance with this Section 2.2. In the event a
dispute is submitted to arbitration hereunder during the term of this Agreement, the parties shall 

  

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continue to perform their respective obligations hereunder, subject to any interim relief that may be ordered by the Arbitrator or by a court of competent
jurisdiction pursuant to the previous sentence. 
  
 (d) Fees. Unless otherwise agreed, the prevailing party (if a prevailing party is determined to exist by the arbitrator or judge) will be entitled to its costs and attorneys’ fees incurred in any arbitration or other proceeding
under this Section 2.2 relating to the interpretation or enforcement of this Agreement. 
  
 2.3 Acknowledgement. EXECUTIVE HAS READ AND UNDERSTANDS THIS ARTICLE 2, WHICH DISCUSSES MEDIATION AND ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS NON-COMPETITION AGREEMENT, EXECUTIVE AGREES
TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS NON-COMPETITION AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO MEDIATION AND ARBITRATION, AND THAT THE DISPUTE
RESOLUTION PROVISIONS SET FORTH IN THIS ARTICLE 2 CONSTITUTE A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL. 
  
 ARTICLE 3 
  
 MISCELLANEOUS 
  
 3.1 Entire Agreement; Amendments and
Waivers. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto, including any other non-competition or non-solicitation
agreement in effect as of the closing of the Acquisition. This Agreement may be amended or modified and the terms and conditions hereof may be waived, only by a written instrument signed by each of the parties or, in the case of waiver, by the party
waiving compliance. No delay on the part of either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. The rights and remedies provided herein are cumulative and are
not exclusive of any rights or remedies that either party may otherwise have at law or in equity. 
  
 3.2 Representations and Warranties. Executive represents and warrants that this Agreement is a legal, valid and binding obligation, enforceable
against Executive in accordance with its terms. 
  

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 3.3 Notices. All notices, demands and other communications to be given or delivered under or by
reason of the provisions of this Agreement will be in writing and will be deemed to have been given (i) when delivered if personally delivered by hand; (ii) one (1) business day after deposit with a nationally recognized overnight
courier service, prepaid and specifying next business day delivery; or (iii) five (5) business days after being mailed, if sent by U.S. certified or registered mail, prepaid, and return receipt requested. Notices, demands and
communications to Parent, the Company and Executive will, unless another address is specified in writing, be sent to the address indicated below: 
  
 If to Parent or the Company: 
  
 Irvine Sensors Corporation 
 3001 Red Hill
Avenue 
 Building #4 
 Costa
Mesa, CA 92626 
 Attn: Chief Executive Officer 
  
 With a copy to: 
  
 Dorsey & Whitney LLP 
 38 Technology
Drive 
 Irvine, CA 92618 
 Attn:
Ellen S. Bancroft, Esq. 
  
 If to Executive: 
  
 Timothy Looney 
 4306 Savannah Circle 
 Parker, TX 75002

  
 With a copy to: 
  
 Haynes Boone LLP 
 201 Main Street, Suite 2200 
 Fort Worth, TX
76102 
 Attn: Stephen M. Pezanosky, Esq. 
  
 3.4 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of California, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. 

 
 3.5 Acquisition. In the event the Acquisition is not consummated
and the Purchase Agreement is terminated for any reason in accordance with its terms, this Agreement shall be null and void. 
  
 3.6 Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted from this
Agreement and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect. Executive acknowledges that the agreements contained in this Agreement are reasonable (including with respect to
duration, geographical area and scope) and necessary to protect the legitimate interests of the Group Companies, including the preservation of the business of the Company. In furtherance and not in limitation of the foregoing, should the duration or

  

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geographical extent of, or business activities covered by any provision of this Agreement be in excess of that which is valid and enforceable under
applicable law, then such provision shall be construed to cover only that duration, extent or activities which may validly and enforceably be covered. In particular, should a court of competent jurisdiction hold the territorial restriction of the
Restricted Area to be overly broad, void or unenforceable, then such Restricted Area shall extend no further than those cities, counties and states in the United States impacted by the market area of all phases of the Company’s Business or
where the goodwill of the Company has been established. To the extent any provision of this Agreement shall be declared invalid or unenforceable for any reason by any Governmental Entity in any jurisdiction, this Agreement (or provision thereof)
shall remain valid and enforceable in each other jurisdiction where it applies. Executive acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be given the construction which renders its
provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. 
  
 3.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto, the heirs and legal
representatives of Executive and the successors and assigns of Parent and Company. Executive shall not be entitled to assign his obligations hereunder without the written consent of the Company. Parent and Company may assign any of their respective
rights under this Agreement to any Group Company (including, without limitation, the successors and assigns of any Group Company) and to any Person that shall succeed to all or substantially all of the assets relating to the Business. Executive
agrees that, upon request therefor, he will, in writing, acknowledge and consent to any such assignment of this Agreement. 
  
 3.8 Signatures; Counterparts. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and the same instrument. A facsimile signature will be considered an original signature. 
  
 3.9 Independent Review and Advice. Executive represents and warrants that Executive has carefully read this
Agreement; that Executive executes this Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which each party may have with respect to one another; that Executive has had the
opportunity to receive independent legal advice with respect to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters, and that Executive is entering into this Agreement of
Executive’s own free will. Executive expressly agrees that there are no expectations contrary to the Agreement and no usage of trade or regular practice in the industry shall be used to modify the Agreement. The parties agree that this
Agreement shall not be construed for or against either party in any interpretation thereof. 
  
 [signature page follows] 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first
written above. 
  

					
	 IRVINE SENSORS CORPORATION
	 	 	 	 EXECUTIVE

			
	 /s/ JOHN C. CARSON
	 	 	 	 /s/ TIMOTHY LOONEY

	 Signature
	 	 	 	 TIMOTHY LOONEY

			
	 John C. Carson, President/CEO
	 	 	 	 Address: 4306 Savannah Circle

	 Print Name and Title
	 	 	 	                 Parker, TX 75002

			
	 Address
	 	 	 	 
	 3001 Red Hill Ave B4-108
	 	 	 	 
	 Costa Mesa, CA 92626
	 	 	 	 
			
	 OPTEX SYSTEMS, INC.
	 	 	 	 
			
	 /s/ TIMOTHY LOONEY
	 	 	 	  
	 Signature
	 	 	 	 
			
	 Timothy Looney, President
	 	 	 	  
	 Print Name and Title
	 	 	 	 
			
	 Address
	 	 	 	 
	 1420 Presidential Dr.
	 	 	 	 
	 Richardson, TX 75081
	 	 	 	 

  
 [Signature Page to
Non-Competition Agreement] 
  

 8Registration Rights Agreement

 Exhibit 10.5 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 30, 2005, by
and among Irvine Sensors Corporation, a Delaware corporation (the “Company”), and Timothy Looney, an individual (the “Investor”). 
  
 WHEREAS, this Agreement is made pursuant to the Stock Purchase Agreement,
dated as of the date hereof, among the Company, Optex Systems, Inc., a Texas corporation, and the Investor (the “Purchase Agreement”) and the Buyer Option Agreement, dated as of the date hereof, among the
Company and the Investor (the “Option Agreement”). 
  
 The Company and the Investor hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement will have the meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms have the respective meanings set forth in this Section 1: 
  
 “Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday or
a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 
  
 “Commission” means the United States Securities and Exchange Commission. 
  
 “Effective Date” means
the date that the Registration Statement filed pursuant to Section 2(a) or 2(b) is first declared effective by the Commission. 
  
 “Effectiveness Date” means (a) with respect to the initial Registration Statement required to
be filed under Section 2(a), the 60th day following the Option Closing Date; provided, that, if the
Commission reviews and has written comments to the filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (a)(i) shall be the 120th day following the Option Closing Date, and (ii) the date on which the Commission notifies the Company that the initial
Registration Statement has been declared effective, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2(b), the earlier of (i) the 60th day following (x) if such Registration Statement is required because the Commission shall have notified the Company in writing that certain Registrable
Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which the Commission shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the date on which the Company first knows that such additional Registration Statement(s) is required; provided, that, if
the Commission reviews and has written comments to such filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (b)(i) shall be the
120th day following the date that the Company first knows that such additional Registration Statement is required
under such Section and (ii) the date on which the Commission notifies the Company that such Registration Statement has been declared effective. 
  
 “Effectiveness Period” has the meaning set forth in Section 2(a). 
  
 “Exchange Act” means
the Securities Exchange Act of 1934, as amended. 
  

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 “Filing Date” means (a) with respect to the
initial Registration Statement required to be filed under Section 2(a), the 45th day following the Option
Closing Date, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2(b), the 60th day following (x) if such Registration Statement is required because the Commission shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed
Registration Statement, the date or time on which the Commission shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required
for a reason other than as described in (x) above, the date on which the Company first knows that such additional Registration Statement(s) is required. 
  

“Holder” or “Holders” means the holder or holders, as the
case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning set forth in Section 5(c). 
  
 “Losses” shall have
the meaning set forth in Section 5(a). 
  
 “Orange County Courts” means the state and federal courts sitting in Orange County, California. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means the Shares and any securities issued or issuable upon any stock
split, dividend or other distribution, or recapitalization or similar event with respect to the Shares. Notwithstanding the foregoing, the term “Registrable Securities” shall not include any shares that the Holder may then sell without
restriction under Rule 144(k) promulgated under the Securities Act. 
  
 “Registration Statement” means the initial registration statement required to be filed in accordance with Section 2(a) and any additional registration statement(s) required
to be filed under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference therein. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 
  

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 “Rule 415” means Rule 415 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means
the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Buyer Common Stock issued or issuable to the Investor by the Company pursuant to the Option Agreement. 
  
 “Trading Day” means (i) a day on which the Buyer Common Stock is
traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if the Buyer Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Buyer Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Buyer Common Stock is not quoted on any Trading Market, a day on which the Buyer Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Buyer Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading
Day shall mean a Business Day. 
  
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Buyer Common Stock
is listed or quoted for trading on the date in question. 
  
 2.
Registration. 
  
 (a) On or prior to each
Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another
appropriate form for such purpose). The Company shall use its commercially reasonable best efforts to cause such Registration Statement to be declared effective under the Securities Act as soon as reasonably practicable but, in any event, no later
than its Effectiveness Date, and shall use its commercially reasonable best efforts to keep each Registration Statement continuously effective under the Securities Act until the date which is the earlier of (i) three years after its Effective
Date, (ii) such time as all of the Registrable Securities covered by such Registration Statement have been sold by the Holders pursuant to the Registration Statement or otherwise publicly sold by the Holders, or (iii) such time as all of
the Registrable Securities covered by such Registration Statement may be sold by the Holders pursuant to Rule 144(k) as determined by the counsel to the Company (the “Effectiveness Period”). 
  
 (b) If for any reason the Commission does not permit all of
the Registrable Securities to be included in the Registration Statement filed pursuant to Section 2(a), or for any other reason any outstanding Registrable Securities are not then covered by an effective Registration Statement, then the Company
shall prepare and file by the Filing Date for such Registration Statement, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering
to be made on a continuous basis pursuant to Rule 415, on Form S-3 (except if the Company is not then eligible to register for resale the Registrable 

  

 -3- 

 
Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose). The Company shall cause each such
Registration Statement to be declared effective under the Securities Act as soon as reasonably practicable but, in any event, by its Effectiveness Date, and shall use its commercially reasonable best efforts to keep such Registration Statement
continuously effective under the Securities Act during the entire Effectiveness Period. 
  
 (c) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement, the
Company shall not be deemed to have satisfied this clause (i); or (ii) a Registration Statement is not declared effective by the Commission on or prior to its required Effectiveness Date, or (iii) after its Effective Date, without regard
for the reason thereunder or efforts therefore, such Registration Statement ceases for any reason to be effective and available to the Holders as to all Registrable Securities to which it is required to cover at any time prior to the expiration of
its Effectiveness Period for more than an aggregate of 20 Trading Days (any such failure or breach being referred to as an “Event,” and for purposes of clauses (i) or (ii) the date on which such Event
occurs, or for purposes of clause (iii) the date which such 20 Trading Day-period is exceeded, being referred to as “Event Date”), then in addition to any other rights the Holders may have hereunder or
under applicable law: (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to $10,000; and (y) on each monthly anniversary of each such Event Date (if
the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to $10,000. The partial liquidated
damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. 
  
 (d) The Company shall not be required to include the Registrable Securities of a Holder in a Registration
Statement and shall not be required to pay any liquidated or other damages under Section 2(c) to any Holder who fails to furnish to the Company a fully completed Selling Holder Questionnaire in the form provided to all other Investors
participating in such registration at least three Trading Days prior to the Filing Date (subject to the requirements set forth in Section 3(a)). 
  
 3. Registration Procedures. 
  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall, at the written request of a Holder, furnish to each Holder copies of the “Selling Stockholders” section of such document, the “Plan of Distribution”
and any risk factor contained in such document that addresses specifically this transaction or the Selling Stockholders, as proposed to be filed, which documents will be subject to the review of such Holder. 
  
 (b) (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably practicable to any comments received from the Commission
with respect to each Registration Statement or any amendment thereto and, at the request of a Holder, as promptly as reasonably practicable, provide such Holder with true and complete copies of all correspondence from and to the Commission relating
to such Registration Statement that would not result in the disclosure to 

  

 -4- 

 
such Holder of material and non-public information concerning the Company; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement. 
  
 (c) Notify the Holders as promptly as reasonably practicable (and, in the case of (i)(A) below, prior to
such filing): (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such
Registration Statement and at the written request of the Investor, whenever the Commission comments in writing on such Registration Statement (if requested by such Holder, the Company shall provide true and complete copies of any such comments and
all written responses thereto to such Holder that pertain to such Holder as a Selling Stockholder or to the Plan of Distribution, but not information which the Company believes would constitute material and non-public information); and (C) with
respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such purpose. and (v) of the occurrence of any event or passage of time known by the Company that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (d) Use its commercially reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

  
 (e) At the request of a Holder, furnish to
such Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Holder (including those previously furnished) promptly after the filing of such
documents with the Commission. 
  
 (f) Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Holder may reasonably request. The Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (g) Prior to any public offering of Registrable Securities,
to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue
Sky laws of all jurisdictions within the United States, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things 

  

 -5- 

 
necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements. 
  
 (h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, and to enable such Registrable Securities to be in such denominations and registered in such names
as any such Holders may request. 
  
 (i) Upon the
occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an 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, in light of the circumstances under which they were made, not misleading. 
  
 4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Buyer Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated
by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required
hereunder. 
  
 5. Indemnification. 
  
 (a) Indemnification by the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, investment advisors, partners, members, stockholders and employees of each of them, each Person who controls any such
Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding 

  

 -6- 

 
such Holder furnished by such Holder in writing to the Company expressly for use therein or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of an
Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The
Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an
amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus, the misstatement or omission giving rise to such Loss would have been corrected. In no event shall
the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

  
 An Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the defense thereof, provided that such counsel is reasonably acceptable to the Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party which would make it inadvisable for such counsel to represent
both the 

  

 -7- 

 
Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent
it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason
of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
  
 The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous. 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being 

  

 -8- 

 
entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as then applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (c) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph. 
  
 (d)
Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to
each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable
Securities such holder requests to be registered, subject to cutbacks if an underwriter in any such offering reasonably determines that the inclusion of all or part of the Holder’s Registrable Securities would jeopardize the success of that
offering. 
  
 (e) Amendments and Waivers.
The provisions of this Agreement, including the provisions of this Section 6(e), may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holders of no less than a majority in interest of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent
relates. 
  

 -9- 

 (g) Notices. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given (i) when delivered if personally delivered by hand (with written confirmation of receipt), (ii) one business day
after deposit with a nationally recognized overnight courier service (which is prepaid and provides for next day package delivery), or (iii) five business days after being mailed, if sent by first class mail, certified mail, return receipt
requested and postage prepaid. Notices, demands and communications to Buyer and Seller will, unless another address is specified in writing in accordance with this Section, be sent to the address indicated below: 
  
 If to the Company: 
  
 Irvine Sensors Corporation 
 3001 Red Hill Avenue 
 Costa Mesa, CA 92626

 Attn: Chief Executive Officer 
  
 With a copy to: 
  
 Dorsey & Whitney LLP 
 38 Technology
Drive 
 Irvine, CA 92618 
 Attn:
Ellen S. Bancroft, Esq. 
  
 If to Investor: 
  
 Timothy Looney 
 4306 Savannah Circle 
 Parker, TX 75002

  
 With a copy to: 
  
 Haynes Boone LLP 
 201 Main Street, Suite 2200 
 Fort Worth, TX
76102 
 Attn: Stephen M. Pezanosky, Esq. 
  
 If to any other Person who is then a registered Holder hereunder: 
  
 To the address of such Holder as it appears in the stock transfer books of the Company 
  
 (h) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent
of each 

  

 -10- 

 
Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 
  
 (i) Execution and Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 

 
 (j) Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof.
Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) will be
commenced in the Orange County Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Orange County Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any Orange County Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law. 
  
 (l)
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  
 (m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the
meaning hereof. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 SIGNATURE PAGES TO FOLLOW] 
  

 -11- 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 IRVINE SENSORS CORPORATION,
 a Delaware corporation

		
	By:	 	 /s/ JOHN CARSON

	 	 	 John Carson,

	 	 	 Chief Executive Officer

	
	/s/ TIMOTHY LOONEY
	 Timothy Looney, an individual

  
 [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] 
  

 -12-

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