exv10w78



 





Exhibit 10.78






SEPTEMBER 2007 AMENDMENT OF SERIES 1 NOTES

ISSUED BY IRVINE SENSORS CORPORATION

AND HELD BY LONGVIEW FUND L.P. AND ALPHA CAPITAL ANSTALT




     This Agreement entered into effective as of September 30, 2007 (the “September 2007 Amendment
of Series 1 Notes”) by and among IRVINE SENSORS CORPORATION, a Delaware corporation (hereinafter
called “Company”), and LONGVIEW FUND L.P. and ALPHA CAPITAL ANSTALT (each a “Holder”). The Company
and Holders are entering into this September 2007 Amendment of Series 1 Notes to amend certain
provisions of certain Series 1 Senior Subordinated Secured Convertible Notes dated December 30,
2005 (as amended, each a “Series 1 Note”), issued by the Company pursuant to a Securities Purchase
Agreement dated as of December 30, 2005 (as amended, the “Purchase Agreement”).



     The Series 1 Notes were subsequently assigned by the original holders of the Series 1 Notes to
the Holders pursuant to that certain Assignment of Series 1 and Series 2 Senior Subordinated
Secured Convertible Notes, dated December 29, 2006, and Addendum thereto (“Assignment Agreement”).
Capitalized terms used but not defined herein shall have the respective meanings given to such
terms in the Series 1 Notes, Purchase Agreement and Assignment Agreement.



     NOW THEREFORE, in consideration of the mutual covenants and other agreements contained in this
Amendment and other good and valuable consideration, receipt of which is acknowledged, the Company
and the Holder hereby agree as follows:



     1. The Interest Payment Date with respect to all interest payable under the Series 1 Notes
shall be the Maturity Date, accelerated or otherwise. All interest shall compound monthly.



     2. The Company may, upon ten (10) Trading Days prior written notice to the Holders, defer the
Principal Payment Date with respect to any or all Monthly Installments until the Maturity Date,
accelerated or otherwise. The Interest Rate with respect to any such deferred Monthly Installments
shall be ten percent (10%) per year (the “Deferral Interest Rate”). For the avoidance of doubt,
neither the Company nor a Holder may exercise any rights to convert into Common Stock any interest
constituting the incremental increase in interest above the Interest Rate up to the Deferral
Interest Rate as a result of a deferred Monthly Installment. Interest which accrues on the
deferred Monthly Installment at the unamended Interest Rate shall be convertible in the same manner
as set forth in the Series 1 Note.



     3. The Interest Rate shall not be reduced upon the occurrence of an Interest Rate Adjustment
Event.



     4. Except as expressly amended hereby, the Series 1 Notes, the Assignment Agreement, the
surviving provisions of the Purchase Agreement described in the Assignment Agreement, and all other
agreements made in connection therewith and all terms thereof shall remain in full force and
effect.



     5. This September 2007 Amendment of Series 1 Notes may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to any other
party, it being understood that all parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile or electronic transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such signature is executed)
same with the same force and effect as if such signature were an original thereof.




 









 








     IN WITNESS WHEREOF, Company and Holder hereby execute this September 2007 Amendment of Series
1 Notes as of the date first written above.



	 	 	 	 	 
	 	IRVINE SENSOR CORPORATION

“Company”

 	 
	 	By:  	/S/ JOHN C. CARSON
 	 
	 	 	Name:  	John C. Carson 	 
	 	 	Title:  	President & CEO 	 
	 



	 	 	 	 	 
	 	LONGVIEW FUND, L.P.

“Holder”

 	 
	 	By:  	/S/ S. MICHAEL RUDOLPH
 	 
	 	 	Name:  	S. Michael Rudolp 	 
	 	 	Title:  	CFO — Investment Adviser 	 
	 



	 	 	 	 	 
	 	ALPHA CAPITAL ANSTALT

“Holder”

 	 
	 	By:  	KONRAD ACKERMAN
 	 
	 	 	Name:  	Konrad Ackerman 	 
	 	 	Title:  	Director