Filed by Bowne Pure Compliance





Exhibit 10.2





THE TRANSFER OF THIS NOTE IS SUBJECT TO RESTRICTIONS CONTAINED HEREIN. THIS NOTE HAS BEEN
ISSUED IN RELIANCE UPON THE REPRESENTATION OF PAYEE THAT IT HAS BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.



FORM OF SECURED PROMISSORY NOTE




			
	 	 	 
	PN-
	 	
 _____, 2009
	$
 _____ 

	 	Costa Mesa, California






1. Principal and Interest. For value received, IRVINE SENSORS CORPORATION, a Delaware
corporation (“Company”), hereby promises to pay to the order of                     , a                     
(“Payee”), whose address is as set forth below, or such other address as the holder of this Secured
Promissory Note (this “Note”) may designate in writing, the principal sum of $                    ,
together with interest on the unpaid principal balance from time to time remaining at a rate per
annum (calculated on the basis of actual days elapsed, but computed as if each calendar year
consisted of 365 days) which shall from day to day be equal to 12%. The principal of and accrued
interest on this Note shall be due and payable in full six (6) months from the date hereof. This
Note is part of an offering of up to $1,000,000 in principal balance being made by the Company (the
“Offering”) and the other purchasers of notes in such Offering are referred to as the “Other
Payees” and all the notes issued in such Offering, including this Note are referred to as the
“Notes”.



2. Security and Priority. The Payee and each of the Other Payees shall be a party to
that certain Intercreditor Agreement with Longview Fund L.P. and Alpha Capital Anstalt (the
“Original Lenders”), pursuant to which the Original Lenders have subordinated certain of their
obligations to the repayment of all amounts owed for principal, interest and any other amounts owed
to the Payee and each of the other Payees are entitled to under the Notes. The Notes are secured
by a Security Agreement in substantially all assets of the Company on the terms set forth in the
Security Agreement. The lien in the collateral under the Security Agreement is senior to the lien
of the Original Lenders and all collateral is being held in the name of the collateral agent under
that certain Collateral Agent Agreement.



3. Equity Securities. As consideration for making the advance under this Note, the
Company shall issue shares (the “Shares”) of its Common Stock to Payee with a value equal to 25% of
the principal amount of the Note, based on the greater of (i) $0.40, (ii) the last reported closing
sale price of the Company’s Common Stock on the Nasdaq Capital Market immediately prior to the
issuance of the Notes and (iii) the consolidated closing bid price of the Company’s Common Stock on
the Nasdaq Capital Market immediately prior to the issuance of the Notes (the “Market Value”). The
Shares will be issued to Payee as soon as reasonably practicable following the earlier of (i) the
closing of an equity private placement to be conducted by J.P. Turner & Company, L.L.C. with gross
proceeds of at least $2.0 million (the “J.P. Turner Financing”) or (ii) seven months following the
issuance date of the Note or as soon as practicable thereafter as permitted by the NASDAQ Stock
Market, LLC (“Nasdaq”). Notwithstanding the foregoing, the Company may, at its discretion, issue
the Shares earlier than the foregoing if permitted by Nasdaq and if it can legally do so.



4. Prepayment. Company shall have the right to prepay all or any portion of the
principal hereof at any time without premium or penalty; provided, however, that with any
prepayment Company shall also pay all accrued but unpaid interest on the principal being prepaid.



5. Default. Holders with more than 50% of the principal balance of all of the Notes
issued in connection with the Offering shall have the right upon the occurrence of any of the
following events to declare an event of default and elect to accelerate the amount owing hereunder
(individually, “an Event of Default” and collectively, “Events of Default”):


 


 









 






(i) the termination of existence of Company, whether by dissolution or otherwise, or
the appointment of a receiver or custodian for the Company or any part of its property if
such appointment is not terminated or dismissed within thirty (30) days;




(ii) the institution against Company of any proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership or
other similar law affecting the rights of creditors generally, which proceeding is not
dismissed within sixty (60) days of filing;




(iii) the commencement by Company of any voluntary proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership or
other similar law affecting the rights of creditors generally; or




(iv) an assignment by Company for the benefit of its creditors or an admission in
writing by the Company of its inability to pay its debts as they become due.



6. Cumulative Rights. No delay on the part of Payee in the exercise of any power or
right under this Note shall operate as a waiver thereof, nor shall a single or partial exercise of
any other power or right. Enforcement by the Payee of any right or remedy for the payment hereof
shall not constitute any election by it of remedies so as to preclude the exercise of any other
remedy available to it, him or her.



7. Waivers. Except as otherwise set forth in this Note, Company, for itself and its
legal representatives, successors and assigns, expressly waives presentment, protest, demand,
notice of dishonor, notice of nonpayment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, and diligence in collection.



8. Modifications in Writing. No waiver or modification of any of the terms or
provisions of this Note shall be valid or binding unless set forth in a writing signed by Company
and Payee, and then only to the extent therein specifically set forth.



9. Notices. All notices required or permitted hereunder shall be in writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent
by confirmed facsimile if sent during the normal business hours of the recipient, if not, then on
the next business day; (iii) one (1) business day after deposit with a nationally recognized
overnight courier designating next business day delivery; or (iv) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid. All communications
shall be sent to the address or facsimile number as set forth on the signature page hereof or at
such other address as such party may designate by ten (10) days’ advance written notice to the
other parties.



10. Entire Agreement; Severability. This Note and the Intercreditor Agreement
constitute the full and entire understanding, promise and agreement between Company and Payee with
respect to the subject matter hereof, and it supersedes, merges and renders void every other prior
written and/or oral understanding, promise or agreement between Company and Payee. If one or more
provisions of this Note are held to be unenforceable under applicable law, such provision shall be
excluded from this Note, the balance of the Note shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms, and the parties shall use good
faith to negotiate a substitute, valid and enforceable provision that replaces the excluded
provision and that most nearly effects the parties’ intent in entering into this Note.



THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.



11. Governing Law. This Note is being executed and delivered and is intended to be
performed, in the State of New York, and the laws of such state shall govern the construction,
validity, enforcement and interpretation hereof, except to the extent federal laws otherwise govern
the validity, construction, enforcement and interpretation hereof.


 


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12. Headings. The headings of the paragraphs of this Note are inserted for convenience
only and shall not be deemed to constitute a part hereof.



13. Successors and Assigns. All of the promises and agreements in this Note contained
by or on behalf of Company shall bind its successors and assigns, whether so expressed or not;
provided, however, that Company may not, without the prior written consent of Payee, assign any
rights, duties, or obligations under this Note.



14. Counterparts. This instrument may be executed in counterparts and delivered by
facsimile, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.



15. New Intercreditor Documents upon Qualified New Debt Facility. In the event that
the Company refinances the obligations owing to the Original Lenders or these obligations are
extinguished upon the conversion into Convertible Preferred Stock as described in the Offering and
the Company elects to incur additional indebtedness that meets the definition of “Qualified New
Debt Facility” below, then Payee shall execute and deliver to the Company promptly upon demand the
following: (i) written instruction to the Collateral Agent to subordinate any security interest in
any collateral securing the Notes; (ii) a new subordination agreement on terms substantially
similar to the Intercreditor Agreement being executed in connection with the Offering, with the
exception that the Qualified New Debt Facility shall be secured senior debt and the Notes shall be
secured junior debt; and (iii) such other documents as the Placement Agent in the Offering
reasonably concludes are necessary in order to consummate the Qualified New Debt Facility. Payee
acknowledges that this covenant is a material inducement of the Company to consummate the Offering
and that the failure of the Payee to execute such documents will cause the Company irreparable
harm, entitling the Company to bring an action for specific performance. In the event of any action
to enforce the terms of this Section 15, the Company shall be entitled to reasonable attorneys fees
in addition to any damages. As used herein “Qualified New Debt Facility” shall mean a credit
facility arranged by the Placement Agent in this Offering with a maximum principal amount of up to
$5.0 million, a non-default interest rate not to exceed 12% per annum, and a maturity date of at
least 12 months.



[Signatures appear on the following page.]



 


Annex A - Page 3









 





IN WITNESS WHEREOF, Company has caused this instrument to be duly executed as of the date
first set forth above.



	 	 	 	 	 
	 	COMPANY:

IRVINE SENSORS CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	John J. Stuart, Jr. 	 
	 	 	Title:  	Chief Financial Officer
 	 
	 	 	Address:  	3001 Red Hill Ave. 
Costa Mesa, CA  92626	 
	 	 	Fax No.:  	714-444-8773 	 



	 	 	 	 	 
	ACKNOWLEDGED AND AGREED:
	 	 	 	 
	 
	 	 	 	 
	PAYEE:

	 	 	 	Acknowledgement contained in
the Omnibus Signature Page in
the Subscription Agreement
	 
	 	 	 	 
	 


	 	 	 	 
	Name:
	 	 	 	 






[Signature Page – Secured Promissory Note]