Document:

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                                                                     EXHIBIT 4.5

                        WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

                        WARRANT TO PURCHASE COMMON STOCK

        Number of Shares:      Up to 250,000 shares (subject to adjustment)
                               --------------------------------------------

        Warrant Price:         Minimum of $1.50
                               ----------------

        Issuance Date:         December 20, 2002
                               -----------------

        Expiration Date:       December 19, 2005
                               -----------------

THIS WARRANT CERTIFIES THAT for value received, Mercator Momentum Fund, LP or
its registered assigns (hereinafter called the "Holder") is entitled to purchase
from Irvine Sensors Corporation (hereinafter called the "Company"), the above
referenced number of fully paid and nonassessable shares (the "Shares") of
common stock (the "Common Stock"), of Company, at the Warrant Price per Share
referenced above; the number of shares purchasable upon exercise of this Warrant
referenced above being subject to adjustment from time to time as described
herein. This Warrant is issued in connection with that certain Subscription
Agreement dated as of December ___, 2002, by and between the Company and Holder
(the "Subscription Agreement") whereby the Holder was issued 10,000 shares of
the Company's Series E Convertible Preferred Stock (the "Convertible Stock").
The exercise of this Warrant shall be subject to the provisions, limitations and
restrictions contained herein.

1.   Term and Exercise.

1.1  Term. This Warrant is exercisable in whole or in part (but not as to any
fractional share of Common Stock), at any time and from time to time beginning
60 days after the date all of the Company's Convertible Stock has been converted
into shares of Common Stock but prior to 6:00 p.m. on the Expiration Date set
forth above.

1.2  Warrant Price.

The Warrant shall be exercisable at the Current Market Price (as defined below)
of the Company's Common Stock calculated as of the day of the Closing of the
Subscription Agreement (the "Warrant Price"); provided, however that, the
Warrant Price shall not be less than $1.50 per share.

1.3  Maximum Number of Shares

The maximum number of Shares of Common Stock exercisable pursuant to this
Warrant is 250,000 Shares. However, notwithstanding anything herein to the
contrary, in no event shall the Holder be permitted to exercise this Warrant for
a number of whole Shares that, when aggregated with the number of shares issued
upon conversion of the Convertible Stock pursuant to the terms of the
Subscription Agreement and the Company's Series E Preferred Stock Certificate of
Designation (the "Certificate of Designation"), would equal over 19.99% of the
Company's Common Stock then outstanding. For illustration purposes only,
assuming the Company has 7,463,489 shares of Common Stock then outstanding, (a)
if the Convertible Stock is converted into 1,411,675 shares of Common Stock,
this Warrant shall only be exercisable for 80,276 Shares or (b) if the
Convertible Stock is convertible at the time into 800,000 shares of Common
Stock, then this Warrant shall be exercisable for the full 250,000 Shares.

1.4  Procedure for Exercise of Warrant. Holder may exercise this Warrant by
delivering the following to the principal office of the Company in accordance
with Section 5.1 hereof: (i) a duly executed Notice of Exercise in substantially
the form attached as Schedule A, (ii) payment of the Warrant Price then in
effect for each of the Shares being purchased, as designated in the Notice of
Exercise, and (iii) this Warrant. Payment of the Warrant Price may be in cash,
certified or official bank check payable to the order of the Company, or wire
transfer of funds to the Company's account (or any combination of any of the
foregoing) in the amount of the Warrant Price for each share being purchased.
Notwithstanding any provisions herein to the contrary, if the Current Market
Price (as defined below) is greater than the Warrant Price as of the day of
exercise, the Holder may elect to receive, without the payment by the Holder of
any additional consideration, shares of Common Stock equal to the value of the
"spread" on the Shares (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company in accordance with Section
5.1, together with the Notice of Exercise, in which event the Company shall
issue to the Holder hereof a number of shares of Common Stock computed using the
following formula:

                                X = Y x (CMP-WP)
                                    ------------
                                       CMP

Where: X   =   the number of shares of Common Stock to be issued to the Holder
               pursuant to this net exercise

       Y   =   the number of shares of Common Stock purchasable under the
               Warrant or, if only a portion of the Warrant is being exercised,
               that portion of the Warrant requested to be exercised

       CMP =   the Current Market Price (as of the date of such calculation) of
               one share of Common Stock

       WP  =   the Warrant Price (as adjusted as of the date of such
               calculation)

For purposes of this Warrant, the "Current Market Price" of one share of the
Company's Common Stock as of a particular date shall be determined as follows:
(i) if traded on a national securities exchange or through the Nasdaq SmallCap
Market, the Current Market Price shall be deemed to be the volume weighted
average trading price of the Common Stock on

                                                                          Page 1

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such exchange as of five business days immediately prior to the date of exercise
indicated in the Notice of Exercise (or if no reported sales took place on such
day, the last date on which any such sales took place prior to the date of
exercise); (ii) if traded over-the-counter but not on the Nasdaq SmallCap
Market, the Current Market Price shall be deemed to be the average of the
closing bid and asked prices as of five business days immediately prior to the
date of exercise indicated in the Notice of Exercise; and (iii) if there is no
active public market, the Current Market Price shall be the fair market value of
the Common Stock as of the date of exercise, as determined in good faith by the
Board of Directors of the Company; provided that such five trading day period
shall be extended by the number of trading days during such period on which
trading in the Company's Common Stock is suspended, by, or not traded on the
Nasdaq SmallCap Stock Market or a subsequent market on which the Common Stock is
then listed.

1.5  Delivery of Certificate and New Warrant. In the event of any exercise of
the rights represented by this Warrant, a certificate or certificates for the
shares of Common Stock so purchased, registered in the name of the Holder or
such other name or names as may be designated by the Holder, together with any
other securities or other property which the Holder is entitled to receive upon
exercise of this Warrant, shall be delivered to the Holder hereof, at the
Company's expense, within a reasonable time, not exceeding fifteen (15) calendar
days, after the rights represented by this Warrant shall have been so exercised;
and, unless this Warrant has expired, a new Warrant representing the number of
Shares (except a remaining fractional share), if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
hereof within such time. The person in whose name any certificate for shares of
Common Stock is issued upon exercise of this Warrant shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant was surrendered and payment of the Warrant Price was received by the
Company, irrespective of the date of delivery of such certificate, except that,
if the date of such surrender and payment is on a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become the
holder of such Shares at the close of business on the next succeeding date on
which the stock transfer books are open.

1.6  Restrictive Legend. Each certificate for Shares shall bear a restrictive
legend in substantially the form as follows, together with any additional legend
required by (i) any applicable state securities laws and (ii) any securities
exchange upon which such Shares may, at the time of such exercise, be listed):

     "The shares represented by this certificate have not been registered under
     the Securities Act of 1933, as amended and may not be sold, offered for
     sale, transferred or pledged in the absence of such registration or an
     exemption therefrom under such Act."

Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Holder thereof (which counsel shall be reasonably
satisfactory to counsel for the Company), the securities represented thereby are
not, at such time, required by law to bear such legend.

1.7  Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the number of Shares to be issued shall be rounded
down to the nearest whole Share. If a fractional share interest arises upon any
exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying to Holder an amount computed by multiplying
the fractional interest by the Current Market Price of a full Share.

2.   Representations, Warranties and Covenants.

2.1  Representations and Warranties.

     (a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and has all necessary
power and authority to perform its obligations under this Warrant;

     (b) The execution, delivery and performance of this Warrant has been duly
authorized by all necessary actions on the part of the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms; and

     (c) This Warrant does not violate and is not in conflict with any of the
provisions of the Company's Certificate of Incorporation or Certificates of
Designation, Bylaws and any resolutions of the Company's Board of Directors or
stockholders, or any agreement of the Company, and no event has occurred and no
condition or circumstance exists that might (with or without notice or lapse of
time) constitute or result directly or indirectly in such a violation or
conflict.

     2.2 Issuance of Shares. The Company covenants and agrees that all shares of
Common Stock that may be issued upon the exercise of the rights represented by
this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that it will pay when
due and payable any and all federal and state taxes which may be payable in
respect of the issue of this Warrant or any Common Stock or certificates
therefor issuable upon the exercise of this Warrant. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise in full of the rights represented by this
Warrant. If at any time the number of authorized but unissued shares of Common
Stock of the Company shall not be sufficient to effect the exercise of the
Warrant in full, subject to the limitations set forth in Section 1.3 hereto,
then the Company will take all such corporate action as may, in the opinion of
counsel to the Company, be necessary or advisable to increase the number of its
authorized shares of Common Stock as shall be sufficient to permit the exercise
of the Warrant in full, subject to the limitations set forth in Section 1.3
hereto, including without limitation, using its best efforts to obtain any
necessary stockholder approval of such increase. The Company further covenants
and agrees that if any shares of capital stock to be reserved for the purpose of
the issuance of shares upon the exercise of this Warrant require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued or delivered upon exercise, then the
Company will in good faith and as expeditiously as possible endeavor to secure
such registration or approval, as the case may be. If and so long as the Common
Stock issuable upon the exercise of this Warrant is listed on any national
securities exchange or the Nasdaq Stock Market, the Company will, if permitted
by the rules of such exchange or market, list and keep listed on such exchange
or market, upon official notice of issuance, all shares of such Common Stock
issuable upon exercise of this Warrant.

3.   Other Adjustments.

3.1  Subdivision or Combination of Shares. In case the Company shall at any
time subdivide its outstanding Common Stock into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding Common Stock of
the Company shall be combined into a smaller number of shares, the Warrant Price
in effect immediately prior to such combination shall be proportionately
increased.

3.2  Dividends in Common Stock, Other Stock or Property. If at any time or from
time to time the holders of Common Stock (or any shares of stock or other
securities at the time receivable upon the exercise of this Warrant) shall have
received or become entitled to receive, without payment therefor:

     (a) Common Stock, Options or any shares or other securities which are at
any time directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution;

     (b) any cash paid or payable otherwise than as a regular cash dividend; or

     (c) Common Stock or additional shares or other securities or property
(including cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement (other than

                                                                          Page 2

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Common Stock issued as a stock split or adjustments in respect of which shall be
covered by the terms of Section 3.1 above) and additional shares, other
securities or property issued in connection with a Change (as defined below)
(which shall be covered by the terms of Section 3.4 below), then and in each
such case, the Holder hereof shall, upon the exercise of this Warrant, be
entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clause (b) above and this clause (c)) which such
Holder would hold on the date of such exercise had such Holder been the holder
of record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other additional stock
and other securities and property.

3.3  Reorganization, Reclassification, Consolidation, Merger or Sale. If any
recapitalization, reclassification or reorganization of the share capital of the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its shares and/or assets or other
transaction (including, without limitation, a sale of substantially all of its
assets followed by a liquidation) shall be effected in such a way that holders
of Common Stock shall be entitled to receive shares, securities or other assets
or property (a "Change"), then, as a condition of such Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby) such shares, securities or other
assets or property as may be issued or payable with respect to or in exchange
for the number of outstanding Common Stock which such Holder would have been
entitled to receive had such Holder exercised this Warrant immediately prior to
the consummation of such Change. The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property. The new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to give effect to the adjustments provided for in this Section 3
including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 3.3 shall similarly apply to successive Changes.

4.   Ownership and Transfer.

4.1  Ownership of This Warrant. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration of transfer
as provided in this Section 4.

4.2  Transfer and Replacement. This Warrant and all rights hereunder are
transferable in whole or in part upon the books of the Company by the Holder
hereof in person or by duly authorized attorney, and a new Warrant or Warrants,
of the same tenor as this Warrant but registered in the name of the transferee
or transferees (and in the name of the Holder, if a partial transfer is
effected) shall be made and delivered by the Company upon surrender of this
Warrant duly endorsed, at the office of the Company in accordance with Section
5.1 hereof. Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft or destruction, and, in such case, of indemnity or
security reasonably satisfactory to it, and upon surrender of this Warrant if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant; provided that if the Holder hereof is an instrumentality
of a state or local government or an institutional holder or a nominee for such
an instrumentality or institutional holder an irrevocable agreement of indemnity
by such Holder shall be sufficient for all purposes of this Warrant, and no
evidence of loss or theft or destruction shall be necessary. This Warrant shall
be promptly cancelled by the Company upon the surrender hereof in connection
with any transfer or replacement. Except as otherwise provided above, in the
case of the loss, theft or destruction of a Warrant, the Company shall pay all
expenses, taxes and other charges payable in connection with any transfer or
replacement of this Warrant, other than stock transfer taxes (if any) payable in
connection with a transfer of this Warrant, which shall be payable by the
Holder. Holder will not transfer this Warrant and the rights hereunder except in
compliance with federal and state securities laws and except after providing
evidence of such compliance reasonably satisfactory to the Company.

5.   Miscellaneous Provisions.

5.1  Notices. Any notice or other document required or permitted to be given or
delivered to the Holder shall be delivered or forwarded to the Holder at c/o
Mercator Group, LLC, 555 South Flower Street, Suite 4500, Los Angeles,
California 90071, Attention: President (Facsimile No. 213/_____________, with a
copy to Sheppard, Mullin, Richter & Hampton, LLC, 333 South Hope Street, 48th
Floor, Los Angeles, California 90071, Attention: David Ulich (Facsimile No.
213/620-1398), or to such other address or number as shall have been furnished
to the Company in writing by the Holder. Any notice or other document required
or permitted to be given or delivered to the Company shall be delivered or
forwarded to the Company at 3001 Redhill Ave., Costa Mesa, California 92626,
Attention: Chief Financial Officer (Facsimile No. 714/ 444-8773, with a copy to
Brobeck, Phleger & Harrison LLP, 38 Technology Drive, Irvine, California 92618,
Attention: Ellen S. Bancroft, Esq. (Facsimile No. 949/790-6301), or to such
other address or number as shall have been furnished to Holder in writing by the
Company.

5.2  All notices, requests and approvals required by this Warrant shall be in
writing and shall be conclusively deemed to be given (i) when hand-delivered to
the other party, (ii) when received if sent by facsimile at the address and
number set forth above; provided that notices given by facsimile shall not be
effective, unless either (a) a duplicate copy of such facsimile notice is
promptly given by depositing the same in the mail, postage prepaid and addressed
to the party as set forth below or (b) the receiving party delivers a written
confirmation of receipt for such notice by any other method permitted under this
paragraph; and further provided that any notice given by facsimile received
after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed
received on the next business day; (iii) five (5) business days after deposit in
the United States mail, certified, return receipt requested, postage prepaid,
and addressed to the party as set forth below; or (iv) the next business day
after deposit with an international overnight delivery service, postage prepaid,
addressed to the party as set forth below with next business day delivery
guaranteed; provided that the sending party receives confirmation of delivery
from the delivery service provider.

5.3  No Rights as Shareholder; Limitation of Liability. This Warrant shall not
entitle the Holder to any of the rights of a shareholder of the Company except
upon exercise in accordance with the terms hereof. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Common Stock,
and no mere enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the Warrant Price hereunder or as a
shareholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

5.4  Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements
among California residents made and to be performed entirely within the State of
California, without giving effect to the conflict of law principles thereof.

5.5  Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets and/or securities. All of the
obligations of the Company relating to the Shares issuable upon the exercise of
this Warrant shall survive the exercise and termination of this Warrant. All of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the

5.6  Waiver, Amendments and Headings. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by both parties (either generally or in a particular instance and either
retroactively or prospectively). The headings in this Warrant are for purposes
of reference only and shall not affect the meaning or construction of any of the
provisions hereof.

                                                                          Page 3

<PAGE>

                        WARRANT TO PURCHASE COMMON STOCK

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer this 23rd day of December, 2002.

COMPANY:

                                               IRVINE SENSORS CORPORATION

                                               By /s/ John J. Stuart, Jr.
                                                 _______________________________

                                               Print Name: John J. Stuart, Jr.
                                                           ---------------------

                                               Title: Chief Financial Officer
                                                     ---------------------------

                                                                          Page 4

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                                   SCHEDULE A

                           FORM OF NOTICE OF EXERCISE

                [To be signed only upon exercise of the Warrant]

                     TO BE EXECUTED BY THE REGISTERED HOLDER
                         TO EXERCISE THE WITHIN WARRANT

The undersigned hereby elects to purchase _______ shares of Common Stock (the
"Shares") under the Warrant to Purchase Common Stock dated _________, which the
undersigned is entitled to purchase pursuant to the terms of such Warrant, and
[check one]:

..    Cash Exercise. The undersigned has delivered $_______, the aggregate
     Warrant Price for _____ Shares purchased herewith, in full in cash or by
     certified or official bank check or wire transfer;

..    Net Exercise. In exchange for the issuance of _______ Shares, the
     undersigned hereby agrees to surrender the right to purchase _______ shares
     of Common Stock pursuant to the net exercise provisions set forth in
     Section 1.2 of the Warrant.

     Please issue a certificate or certificates representing such shares of
Common Stock in the name of the undersigned or in such other name as is
specified below and in the denominations as is set forth below:

     ___________________________________________________________________________
     [Type Name of Holder as it should appear on the stock certificate]

     __________________________________________________________________________
     [Requested Denominations - if no denomination is specified, a single
     certificate will be issued]

     The initial address of such Holder to be entered on the books of Company
     shall be:

     __________________________________________________________________________

     __________________________________________________________________________

     __________________________________________________________________________

     The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for his own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.

                                        By:_____________________________________

                                        Print Name:_____________________________

                                        Title:__________________________________

                                        Dated:__________________________________

<PAGE>

                               FORM OF ASSIGNMENT
                                    (ENTIRE)

               [To be signed only upon transfer of entire Warrant]

                     TO BE EXECUTED BY THE REGISTERED HOLDER
                         TO TRANSFER THE WITHIN WARRANT

FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto _______________________________ all rights of the undersigned
under and pursuant to the within Warrant, and the undersigned does hereby
irrevocably constitute and appoint _____________________ Attorney to transfer
the said Warrant on the books of Company, with full power of substitution.

_____________________________________
[Type Name of Holder]

By:__________________________________
Title:_______________________________

Dated:_______________________________

NOTICE

The signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.

<PAGE>

                               FORM OF ASSIGNMENT
                                    (PARTIAL)

              [To be signed only upon partial transfer of Warrant]

                     TO BE EXECUTED BY THE REGISTERED HOLDER
                         TO TRANSFER THE WITHIN WARRANT

FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto ____________________________ (i) the rights of the undersigned to
purchase ____________________ shares of Common Stock under and pursuant to the
within Warrant, and (ii) on a non-exclusive basis, all other rights of the
undersigned under and pursuant to the within Warrant, it being understood that
the undersigned shall retain, severally (and not jointly) with the transferee(s)
named herein, all rights assigned on such non-exclusive basis. The undersigned
does hereby irrevocably constitute and appoint __________________________
Attorney to transfer the said Warrant on the books of Company, with full power
of substitution.

__________________________________________
[Type Name of Holder]

By:_______________________________________
Title:____________________________________

Dated:____________________________________

NOTICE

The signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.<PAGE>

                                                                     EXHIBIT 4.6

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                                       OF
                            SERIES E PREFERRED STOCK
                                       OF
                           IRVINE SENSORS CORPORATION,
                             a Delaware corporation

               The undersigned, Robert G. Richards and John J. Stuart, Jr., the
duly elected and acting Chief Executive Officer and Secretary, respectively, of
Irvine Sensors Corporation, a Delaware corporation (the "Corporation"), hereby
certify that pursuant to the authority contained in Article IV of the
Corporation's Certificate of Incorporation, as amended, and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Corporation's Board of Directors has adopted the following
resolutions creating a series of its Preferred Stock designated as Series E
Convertible Preferred Stock:

               WHEREAS, the Corporation's Certificate of Incorporation provides
for a class of shares known as Preferred Stock, issuable from time to time in
one or more series; and

               WHEREAS, the Board of Directors of the Corporation is authorized
to determine or alter the rights, preferences, privileges and restrictions
granted to or imposed upon any wholly unissued shares of Preferred Stock, to fix
the number of shares constituting any such series, and to determine the
designation thereof, or any of any of them.

               NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
hereby fixes and determines the designations of, the number of shares
constituting, and the rights, preferences, privileges and restrictions relating
to, a new series of Preferred Stock as follows:

               (a) Designation. The series of Preferred Stock is hereby
designated Series E Convertible Preferred Stock (the "Series E Preferred
Stock").

               (b) Authorized Shares. The number of authorized shares
constituting the Series E Preferred Stock shall be 10,000 shares of such series.

               (c) Dividends. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holder of the Series E Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors, out of any assets of the
Corporation legally available therefor, such dividends as may be declared from
time to time by the Board of Directors.

               (d) Liquidation Preference.

                   (i) Preference upon Liquidation, Dissolution or Winding Up.
In the event of any dissolution or winding up of the Corporation, whether
voluntary or involuntary, holders of each outstanding share of Series E
Preferred Stock shall be entitled to be paid first out of the assets of the
Corporation available for distribution to stockholders, whether such assets are
capital, surplus or earnings, an amount equal to $120 (the "Series E Purchase
Price") per share of Series E Preferred Stock held (as adjusted for any stock
splits, stock dividends or recapitalizations of the Series E Preferred Stock)
and any declared but unpaid dividends on such

<PAGE>

share, before any payment shall be made to the holders of the Common Stock, or
any other stock of the Corporation ranking as to assets upon liquidation,
dissolution or winding up of the Corporation junior to the Series E Preferred
Stock; provided, however, that the holders of Series E Preferred Stock shall not
be entitled to receive the liquidation preference of such shares until the
liquidation preference of any other series of or class of the Corporation's
stock then outstanding that ranks senior as to liquidation rights to the Series
E Preferred Stock (including already issued series of Preferred Stock) has been
paid in full. The holders of the Series E Preferred Stock shall be entitled to
share ratably, in accordance with the respective preferential amounts payable on
such stock, in any distribution (after payment of the liquidation preference of
the senior liquidation stock) which is not sufficient to pay in full the
aggregate of the amounts payable thereon. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets to be distributed to the holders of
the Series E Preferred Stock shall be insufficient to permit payment to such
stockholders of the full preferential amounts aforesaid, then all of the assets
of the Corporation available for distribution to stockholders shall be
distributed to the holders of Series E Preferred Stock. Each holder of the
Series E Preferred Stock shall be entitled to receive that portion of the assets
available for distribution as the number of shares of Series E Preferred Stock
held by such holder bears to the total number of shares of Series E Preferred
Stock. Such payment shall constitute payment in full to the holders of the
Series E Preferred Stock upon the liquidation, dissolution or winding up of the
Corporation. After such payment shall have been made in full, or funds necessary
for such payment shall have been set aside by the Corporation in trust for the
account of the holders of Series E Preferred Stock, so as to be available for
such payment, such holders of Series E Preferred Stock shall be entitled to no
further participation in the distribution of the assets of the Corporation.

                   (ii)  Consolidation, Merger and Other Corporate Events. A
consolidation or merger of the Corporation (except into or with a subsidiary
corporation) or a sale, lease, mortgage, pledge, exchange, transfer or other
disposition of all or substantially all of the assets of the Corporation or any
reclassification of the stock of the Corporation (other than a change in par
value or from no par to par, or from par to no par or as the result of an event
described in subsections (v) through (viii) of paragraph (g)), shall be regarded
as a liquidation, dissolution or winding up of the affairs of the Corporation
within the meaning of this paragraph (d). In no event shall the issuance of new
classes of stock, whether senior, junior or on a parity with the Series E
Preferred Stock, be deemed a "reclassification" under or otherwise limited by
the terms hereof.

                   (iii) Distribution of Cash and Other Assets. In the event of
a liquidation, dissolution or winding up of the Corporation resulting in the
availability of assets other than cash for distribution to the holders of the
Series E Preferred Stock, the holders of the Series E Preferred Stock shall be
entitled to a distribution of cash and/or assets equal to the value of the
liquidation preference stated in subsection (i) of this paragraph (d), which
valuation shall be made solely by the Board of Directors, and provided that such
Board of Directors was acting in good faith, shall be conclusive.

                   (iv)  Distribution to Junior Security Holders. After the
payment or distribution to the holders of the Series E Preferred Stock of the
full preferential amounts aforesaid, the holders of the Common Stock then
outstanding (excluding Common Stock held by the Corporation as treasury stock)
shall be entitled to receive ratably all of the remaining assets of the
Corporation.

                                       2

<PAGE>

                    (v)   Preference; Priority. References to a stock that is
"senior" to, on a "parity" with or "junior" to other stock as to liquidation
shall refer, respectively, to rights of priority of one series or class of stock
over another in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation. The Series E Preferred Stock shall be senior to
the Common Stock of the Corporation and junior to the Corporation's outstanding
Series B Cumulative Convertible Preferred Stock, the Series C Cumulative
Convertible Preferred Stock and the Series D Convertible Preferred Stock as to
liquidation.

               (e)  Redemption. The Series E Preferred Stock shall not be
redeemable.

               (f)  Voting Rights. Except as otherwise required by law, the
holder of shares of Series E Preferred Stock shall not have the right to vote on
matters that come before the stockholders.

               (g)  Conversion Rights. The holders of Series E Preferred Stock
will have the following conversion rights:

                    (i)   Right to Convert. Subject to and in compliance with
the provisions of this paragraph (g), any issued and outstanding shares of
Series E Preferred Stock may, at the option of the holder, be converted at any
time or from time to time into fully paid and nonassessable shares of Common
Stock at the conversion rate in effect at the time of conversion, determined as
provided herein; provided, that a holder of Series E Preferred Stock may at any
given time convert only up to that number of shares of Series E Preferred Stock
so that, upon conversion, such holder's beneficial ownership (as calculated
pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
the Company's Common Stock is not more than 9.99% of the Company's Common Stock
then outstanding.

                    (ii)  Mechanics of Conversion. Before any holder of Series E
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Common Stock, and shall give written notice to the Corporation at such office
that he elects to convert the same and shall state therein the number of shares
of Series E Preferred Stock being converted. Thereupon, the Corporation shall
promptly issue and deliver at such office to such holder of Series E Preferred
Stock a certificate or certificates for the number of shares of Common Stock to
which he shall be entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series E Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.

                    (iii) Conversion Price. The number of shares into which one
share of Series E Preferred Stock shall be convertible shall be determined by
dividing $120 (the "Series E Purchase Price") by the then existing Conversion
Price (as set forth below), which shall be subject to adjustment from time to
time in certain instances, as provided below in this paragraph (g)(iii) (the
"Conversion Ratio"). The initial "Conversion Price" per share for the Series E
Preferred Stock shall be $1.20 per share, so that the each share of Series E
Preferred Stock shall initially be convertible into Common Stock at a Conversion
Ratio equal to 100 shares of Common Stock for each share of Series E Preferred
Stock. The Conversion Price shall be

                                       3

<PAGE>

adjusted from time to time to either (A) 85% of the Market Price (as defined
below), or (B) the then existing Floor Price, based on whichever formula would
result in a lower number of conversion shares being issued, in each instance,
rounded to the nearest penny. The "Floor Price" shall initially be $0.85, but
shall be subsequently adjusted at the end of each calendar month to be 75% of
the volume weighted average trading price of the Corporation's Common Stock for
the calendar month then just ended as obtained from the NASDAQ Stock Market,
Bloomberg Financial Services or another similar service. Notwithstanding the
foregoing, in no event shall (A) the Floor Price be less than $0.85 nor more
than $1.50 or (B) the total number of shares issuable upon conversion of all of
the Series E Preferred Stock be less than 800,000 shares or in excess of
1,411,765 shares (as adjusted for subsequent stock splits, stock dividends or
recapitalizations of the Corporation's capital stock). Until the shares of
Common Stock issuable from conversion of the Series E Preferred Stock (the
"Conversion Shares") are registered pursuant to a registration statement on Form
S-3 or another available form (the "Registration Statement") pursuant to the
Securities Act of 1933, as amended, this monthly adjustment in Floor Price shall
be upward or downward, within the $0.85 and $1.50 limitations set forth above.
After such a Registration Statement covering the Conversion Shares is declared
effective, all subsequent monthly adjustments in the Floor Price shall be upward
only.

               For purposes of illustration only, if the Market Price is $1.00
or less at time of conversion and the Floor Price is $0.85, the Conversion Ratio
will be $120/$0.85 = 141.1765 to 1, allowing the 10,000 shares of Series E
Preferred Stock to be converted into 1,411,765 shares of Common Stock, the
maximum number of shares of Common Stock into which the Preferred Stock may be
converted. On the other hand, if the Market Price is $1.00 or less at time of
conversion and the Floor Price has been subsequently adjusted upward to $1.00,
the Conversion Ratio will be $120/$1.00 = 120 to 1, allowing the 10,000 shares
of Preferred Stock to be converted into 1,200,000 shares of Common Stock.
Similarly, if the Market Price is $1.7647 or higher at time of conversion, the
Conversion Ratio will be $120/$1.50 = 80 to 1, allowing the 10,000 shares of
Preferred Stock to be converted into 800,000 shares of Common Stock. Since the
Floor Price cannot exceed $1.50, conversion at higher Market Prices will not
change the Conversion Ratio further.

               For purposes of determining the Conversion Price, the "Market
Price" shall equal the volume weighted average trading price of the
Corporation's Common Stock, as obtained from the NASDAQ Stock Market, Bloomberg
Financial Services or another similar service, for the five consecutive trading
days immediately preceding the conversion date (which may include trading days
prior to the date the Series E Preferred Stock is first issued (the "Original
Issue Date"), provided, that such five trading day period shall be extended by
the number of trading days during such period on which (A) trading in the
Corporation's Common Stock is suspended by, or not traded on, the Nasdaq
SmallCap Market, the Nasdaq National Market or successor market on which the
Corporation's Common Stock is then listed, or (B) after the date the
Registration Statement for the Conversion Shares is declared effective by the
Securities and Exchange Commission, the prospectus included in the Registration
Statement for the Conversion Shares may not be used by the holders of Series E
Preferred Stock for the resale of the Conversion Shares.

                    (iv)  Adjustment to Conversion Ratio upon Event of Default.
If an Event of Default (as defined below) occurs and remains uncured for a
period of 30 days following receipt of notice of such Event of Default in
accordance with this paragraph (g)(iv), the

                                       4

<PAGE>

Conversion Ratio then in effect in accordance with the terms hereof shall be
increased by 10% (rounded to the nearest penny, as more fully described herein);
provided, however, that in no event shall the Series E Preferred Stock convert
into more than 1,411,765 shares of Common Stock (as adjusted for subsequent
stock splits, stock dividends or recapitalizations of the Corporation's capital
stock). An "Event of Default" shall include the commencement by the Corporation
of a voluntary case or proceeding under the bankruptcy laws or the Corporation's
failure to: (A) file the Registration Statement with the Securities and Exchange
Commission within 30 days after the Original Issue Date; (B) maintain the
listing of the Corporation's Common Stock on the Nasdaq SmallCap Market, the
Nasdaq National Market or successor market; or (C) discharge or stay a
bankruptcy proceeding within 60 days of such action being taken against the
Corporation. Following an Event of Default, a holder of Series E Preferred Stock
may, at its option, exercise any of all of its remedies under the Series E
Preferred Stock or convert the shares into shares of Common Stock pursuant to
this paragraph (g). Notwithstanding any change in the Conversion Ratio as a
result of such Event of Default or subsequent conversion by a holder of Series E
Preferred Stock, a holder may still pursue all remedies available to such holder
under applicable law if an Event of Default has occurred.

                    (v)   Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issuance
Date effect a subdivision of the outstanding Common Stock, the Conversion Price
in effect immediately prior thereto shall be proportionately decreased, and
conversely, if the Corporation shall at any time or from time to time after the
Original Issuance Date combine the outstanding shares of Common Stock, the
Conversion Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph (g)(v) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

                    (vi)  Adjustment for Certain Dividends and Distributions. In
the event the Corporation at any time, or from time to time after the Original
Issuance Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
Conversion Price for the Series E Preferred Stock then in effect shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the Conversion Price for such Series E Preferred Stock then in
effect by a fraction:

                          (A) the numerator of which shall be the total number
     of shares of Common Stock issued and outstanding immediately prior to the
     time of such issuance or the close of business on such record date, and

                          (B) the denominator of which shall be the total number
     of shares of Common Stock issued and outstanding immediately prior to the
     time of such issuance or the close of business on such record date plus the
     number of shares of Common Stock issuable in payment of such dividend or
     distribution;

provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price for the Series E Preferred Stock shall be
recomputed accordingly as of the close of business on such record date and
thereafter, the Conversion Price for the Series E Preferred Stock shall be
adjusted

                                       5

<PAGE>

pursuant to this paragraph (g)(vi) as of the time of actual payment of such
dividends or distributions.

                    (vii)  Adjustments for Other Dividends and Distributions. In
the event the Corporation at any time or from time to time after the Original
Issuance Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of such
Series E Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation that they would have received had their Series E
Preferred Stock been converted into Common Stock on the date of such event and
had thereafter, during the period from the date of such event to and including
the conversion date, retained such securities receivable by them as aforesaid
during such period giving application to all adjustments called for during such
period under this paragraph (g) with respect to the rights of the holders of the
Series E Preferred Stock.

                    (viii) Adjustment for Reclassification Exchange or
Substitution. If the Common Stock issuable upon the conversion of the Series E
Preferred Stock shall be changed into the same or a different number of shares
of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for above, or a reorganization, merger, consolidation
or sale of assets provided for elsewhere in this paragraph (g)), then and in
each such event the holder of each share of Series E Preferred Stock shall have
the right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such reorganization,
reclassification or other change, by holders of the number of shares of Common
Stock into which such shares of Series E Preferred Stock might have been
converted immediately prior to such reorganization, reclassification, or change,
all subject to further adjustment as provided herein.

                    (ix)   Reorganization, Mergers, Consolidations or Sales of
Assets. If at any time or from time to time there shall be a capital
reorganization of the Common Stock (other than a subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this paragraph
(g)) or a merger or consolidation of the Corporation with or into another
corporation, or the sale of all or substantially all of the Corporation's
properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
the holders of the Series E Preferred Stock shall thereafter be entitled to
receive upon conversion of such Series E Preferred Stock, the number of shares
of stock or other securities or property of the Corporation or of the successor
corporation resulting from such merger or consolidation or sale, to which a
holder of Common Stock deliverable upon conversion would have been entitled on
such capital reorganization, merger, consolidation or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this paragraph (g) with respect to the rights of the holders of the Series E
Preferred Stock after the reorganization, merger, consolidation or sale to the
end that the provisions of this paragraph (g) (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series E Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable.

                    (x)    Certificate of Adjustment. In each case of an
adjustment or readjustment of the Conversion Price for the number of shares of
Common Stock or other

                                       6

<PAGE>

securities issuable upon conversion of the Series E Preferred Stock, the
Corporation shall compute such adjustment or readjustment in accordance herewith
and the Corporation's Chief Financial Officer shall prepare and sign a
certificate showing such adjustment or readjustment, and shall mail such
certificate by first class mail, postage prepaid. to each registered holder of
the Series E Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based.

                    (xi)   Notices of Record Date. In the event of (A) any
taking by the Corporation of a record of the holders of any class or series of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution or (B) any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation or any transfer of all or substantially all of
the assets of the Corporation to any other corporation, entity or person, or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Series E Preferred
Stock at least 20 days prior to the record date specified therein, a notice
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (2) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up is
expected to become effective and (3) the time, if any is to be fixed, as to when
the holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares, of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.

                    (xii)  Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the Series E Preferred Stock. In lieu
of any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the fair market value of one share of the Corporation's Common Stock on the date
of conversion, as determined in good faith by the Board of Directors.

                    (xiii) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series E Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series E Preferred Stock, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Series E
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.

                    (xiv)  Notices. Any notice required by the provisions of
this paragraph (g) to be given to the holders of shares of Series E Preferred
Stock shall be deemed given (i) if deposited in the United States mail, postage
prepaid, or (ii) if given by any other reliable or generally accepted means
(including by facsimile or by a nationally recognized overnight courier
service), in each case addressed to each holder of record at his address (or
facsimile number) appearing on the books of the Corporation.

                                       7

<PAGE>

                    (xv)   Payment of Taxes. The Corporation will pay all
transfer taxes and other governmental charges that may be imposed in respect of
the issue or delivery of shares of Common Stock upon conversion of shares of
Series E Preferred Stock.

                    (xvi)  No Dilution or Impairment. The Corporation shall not
amend its Certificate of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, without the approval of a majority of
the then outstanding Series E Preferred Stock.

               (h)  No Reissuance of Preferred Stock. No share or shares of
Series E Preferred Stock acquired by the Corporation by reason of purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares of Series E Preferred Stock
that the Corporation shall be authorized to issue.

               (i)  Severability. If any right, preference or limitation of the
Series E Preferred Stock set forth herein is invalid, unlawful or incapable of
being enforced by reason of any rule, law or public policy, all other rights,
preferences and limitations set forth herein that can be given effect without
the invalid, unlawful or unenforceable right, preference or limitation shall
nevertheless remain in full force and effect, and no right, preference or
limitation herein shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.

                                       8

<PAGE>

     IN WITNESS WHEREOF, IRVINE SENSORS CORPORATION has caused this Certificate
of Designations, Preferences and Rights of Series E Preferred Stock to be
executed by Robert G. Richards, its Chief Executive Officer, and John J. Stuart,
Jr., its Secretary, this 23rd day of December 2002.

                                  /s/ Robert G. Richards
                                  ___________________________________________
                                  Robert G. Richards, Chief Executive Officer

Attest:

/s/ John J. Stuart
______________________________
John J. Stuart, Jr., Secretary

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