exv10w80



 





Exhibit 10.80




SECURED PROMISSORY NOTE (RESTRUCTURING)




     FOR VALUE RECEIVED, IRVINE SENSORS CORPORATION, a Delaware corporation (hereinafter called
“Borrower”), hereby promises to pay to ALPHA CAPITAL ANSTALT, Pradafant 7, 9490 Furstentums, Vaduz,
Lichtenstein, Fax: 011-42-32323196, (the “Holder”) or order, without demand, the sum of One Hundred
Fifteen Thousand Dollars ($115,000.00) (“Principal Amount”) on December 30, 2009 (the “Maturity
Date”), if not sooner paid.



     The following terms shall apply to this Secured Promissory Note (the “Note”):



ARTICLE I




PAYMENT




     1.1. Principal Payment. Payments made hereunder shall be made in cash and all amounts
due hereunder shall be payable in full on the Maturity Date, accelerated or otherwise. This Note
shall not accrue any interest.



     1.2. Late Charges. If the entire amount of any required principal, interest or other
payment hereunder is not paid in full within ten (10) days after the same is due, Borrower shall
pay to the Holder a late fee equal to five percent (5%) of the required payment. Other than the
foregoing, this Note shall not accrue interest.



ARTICLE II




EVENT OF DEFAULT




     The occurrence of any of the following events of default (“Event of Default”) shall, at the
option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon
and all other amounts payable hereunder immediately due and payable, upon demand, without
presentment, or grace period, all of which hereby are expressly waived, except as set forth below:



     2.1 Failure to Repay the Note. The Borrower fails to pay any installment of principal
or other sum due under this Note when due.



     2.2 Receiver or Trustee. The Borrower shall make an assignment for the benefit of
creditors, or apply for or consent to the appointment of a receiver or trustee for Borrower for a
substantial part of Borrower’s property or business; or such receiver or trustee shall be
involuntarily appointed.



     2.3 Judgments. Any money judgment, writ or similar final process shall be entered or
filed against Borrower or any of Borrower’s property or other assets for more than $100,000, and
shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days.



     2.4 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of
any notice in relation to such event, for the relief of debtors shall be instituted by or against
the Borrower.



     2.5 Cross Default. Subject to any applicable grace period or waivers then in effect, a
default in any other instrument evidencing or governing indebtedness for borrowed money in excess
of, in the aggregate, $100,000, of Borrower now or hereafter outstanding; or any event or condition
which gives any holder or trustee of such indebtedness for borrowed money the right to accelerate
its maturity. The foregoing shall not apply to trade payables incurred in the ordinary course of
business or professional fees. For the purposes of this Agreement, the failure of the Borrower or
its wholly-owned subsidiary, Optex Systems, Inc. (“Optex”) to pay to Timothy Looney or TWL Group,
L.P. (collectively, “Looney”) any of the indebtedness for borrowed money in excess of $100,000
shall



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not be deemed to be a cross default unless or until any of the foregoing occur: (i) Looney
accelerates or collects any obligations owed to Looney; (ii) Looney forecloses on any of Looney’s
security interests in any of the assets of the Borrower; or (iii) Looney gives further written
notice to Borrower in accordance with the terms of any of the loan documents between Looney and the
Borrower to so accelerate, collect or foreclose). No provision of this Note shall be deemed a
waiver of any default by Borrower under any other agreement between the Borrower and/or a
Subsidiary and the Holder.



     2.6 Non-Payment. Except with respect to payments for professional fees or payments to
Looney, a default by the Borrower under any one or more obligations in an aggregate monetary amount
in excess of $1,000,000 (or $2,000,000 with respect to accounts payable) for more than thirty days
after the due date, unless the Borrower is contesting the validity of such obligation in good faith
and has segregated cash funds equal to not less than one-half of the disputed amount, or the other
party thereto commences litigation or arbitration proceedings to exercise its rights and remedies
under such contract or agreement as a consequence of such default and such default is not waived or
cured within 90 days of the occurrence thereof.



ARTICLE III




SECURITY INTEREST




     3.1 Security Interest/Waiver of Automatic Stay. This Note is secured by a security
interest granted to the Holder pursuant to an Omnibus Security Interest Acknowledgement executed
and delivered by Borrower in favor of Holder, on or about July 19, 2007 and other agreements
referred to therein, as delivered by Borrower to Holder. Furthermore, this Note shall be deemed to
be a New Loan as defined in the aforesaid Omnibus Security Interest acknowledgement. The Borrower
acknowledges and agrees that should a proceeding under any bankruptcy or insolvency law be
commenced by or against the Borrower, or if any of the Collateral (as defined in the an Omnibus
Security Interest Acknowledgement and other agreements referred to therein) should become the
subject of any bankruptcy or insolvency proceeding, then the Holder should be entitled to, among
other relief to which the Holder may be entitled under this Note, the an Omnibus Security Interest
Acknowledgement and other agreements referred to therein and any other agreement to which the
Borrower and Holder are parties (collectively, “Loan Documents”) and/or applicable law, an order
from the court granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section 362
to permit the Holder to exercise all of its rights and remedies pursuant to the Loan Documents
and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY
11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11
U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE
(INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR
INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE
LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents to any motion for relief from
stay that may be filed by the Holder in any bankruptcy or insolvency proceeding initiated by or
against the Borrower and, further, agrees not to file any opposition to any motion for relief from
stay filed by the Holder. The Borrower represents, acknowledges and agrees that this provision is a
specific and material aspect of the Loan Documents, and that the Holder would not agree to the
terms of the Loan Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently and voluntarily
made, that neither the Holder nor any person acting on behalf of the Holder has made any
representations to induce this waiver, that the Borrower has been represented (or has had the
opportunity to he represented) in the signing of the Loan Documents and in the making of this
waiver by independent legal counsel selected by the Borrower and that the Borrower has discussed
this waiver with counsel.



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ARTICLE IV




MISCELLANEOUS




     4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof
in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege. All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise
available.



     4.2 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable overnight courier service with
charges prepaid, or (iv) transmitted by hand delivery, electronic mail, or facsimile, addressed as
set forth below or to such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by electronic mail or facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is
to be received), or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be: (i) if to the Borrower, to: Irvine Sensors Corporation, 3001 Red
Hill Avenue, Costa Mesa, CA 92650, Attn: Chief Financial Officer, telecopier: (714) 444-8773, with
a copy by telecopier only to: Dorsey & Whitney LLP, 38 Technology Drive, Irvine, CA 92618, Attn:
Ellen S. Bancroft, Esq., telecopier: (949) 932-3601, and (ii) if to the Holder, to: Alpha Capital
Anstalt, Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein, telecopier: 011-42-32323196, with an
additional copy by telecopier only to: Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New
York, New York 10176, telecopier: (212) 697-3575.



     4.3 Amendment Provision. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented.



     4.4 Assignability. This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to the benefit of the Holder and its successors and assigns.



     4.5 Cost of Collection. If default is made in the payment of this Note, Borrower shall
pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.



     4.6 Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its conflict of laws principles. Any action
brought by either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the civil or state courts of New York or in the federal courts
located in the State and county of New York. Both parties and the individual signing this Agreement
on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party
shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the
event that any provision of this Note is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not affect the validity or
unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Borrower
in any other jurisdiction to collect on the Borrower’s obligations to Holder, to realize on any
collateral or any other security for such obligations, or to enforce a judgment or other decision
in favor of the Holder. This Note shall be deemed an unconditional obligation of Borrower for the
payment of money and, without limitation to any other remedies of Holder, may be enforced against
Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or
any similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such
rule or statute, any other document or agreement to which Holder and Borrower are parties or which
Borrower delivered to Holder, which may be convenient or necessary to



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determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of
this Note, whether or not such other document or agreement was delivered together herewith or was
executed apart from this Note.



     4.7 Limitation on Interest. All agreements between Borrower and Holder are hereby
expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to lender for the use or the forbearance of the indebtedness evidenced hereby exceed the
maximum permissible under applicable law. As used herein, the term “applicable law” shall mean the
law in effect as of the date hereof, provided, however that in the event there is a change in the
law which results in a higher permissible rate of interest, then this Agreement shall be governed
by such new law as of its effective date. In this regard, it is expressly agreed that it is the
intent of Borrower and Holder in the execution, delivery and acceptance of the Note to comply in
strict compliance with the laws of the State of New York and any other applicable state from time
to time in effect. If, under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the Loan Documents at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if
under or from circumstances whatsoever Lender should ever receive as interest an amount which would
exceed the then highest lawful rate, such amount which would be excessive interest shall be applied
to the reduction of the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between Borrower and Holder.



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     IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized
officer as of the 28th day of November, 2007.




	 	 	 	 	 
	 	IRVINE SENSORS CORPORATION 

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



	 	 	 	 	 
	 	WITNESS: 

 	 
	 	/S/
 	 
	 	 	 
	 	 	 
	 





[Signature Page to Contingent Secured Promissory Note (Restructuring — Alpha)




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ANNEX 1




Outstanding Obligations Loan Documents





	1.	 	Subscription Agreement among the Borrower, Longview and Alpha (the “Subscription
Agreement”);






	2.	 	The Irvine Sensors Corporation Series 1 Senior Subordinated Secured Convertible Notes
(the “Series 1 Notes”) dated as of December 30, 2005 issued by the Borrower in favor of
Pequot Private Equity Fund III, L.P. and Pequot Offshore Private Equity Partners III,
L.P.(collectively, “Pequot”) as assigned to Longview and Alpha Capital Anstalt (“Alpha”);






	3.	 	The Irvine Sensors Corporation Series 2 Senior Subordinated Secured Convertible Note
(the “Series 2 Notes”) dated as of December 30, 2005 by the Borrower in favor of Pequot as
assigned to Longview,





4. The September 2007 Amendment of Series 1 Notes among Borrower, Longview and Alpha;




5. The September 2007 Amendment of Series 2 Note between Borrower and Longview;





	6.	 	The Securities Purchase Agreement dated December 30, 2005 originally between the
Borrower and Pequot, as assigned to Alpha and Longview;






	7.	 	The Assignment of Series 1 and Series 2 Senior Subordinated Secured Convertible Notes
dated December 30, 2005, and the related Addendum thereto;






	8.	 	The Term Loan and Security Agreement among the Borrower, Longview and Alpha and related
Term Notes issued by the Borrower to Longview and Alpha;





9. The Loan Agreement between the Borrower and Longview dated July 19, 2007; and





	10.	 	The Secured Promissory Note dated July 19, 2007 payable to Longview in the principal
amount of $2.1 million.






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November 28, 2007




ALPHA CAPITAL ANSTALT

Pradafant 7

9490 Furstentums

Vaduz, Lichtenstein

Fax: 011-42-32323196




     Re: Restructuring Fee


Ladies and Gentlemen:



The purpose is to set forth Irvine’s agreement to pay certain fees to Alpha Capital Anstalt
(“Alpha”) in connection with Alpha’s assistance in restructure of its debt obligations over the
past year.



Specifically, Alpha has assisted in the original transfer and restructure of the various Notes with
the Pequot Funds in December 2006 and the subsequent restructure of the transferred notes in
September 2007. Additionally, Alpha has structured and assisted with funding the December 2006
Term Loan Agreement, July 2007 Secured Note, and November 2007 Debt Restructuring. Lastly, Alpha
has previously worked with Irvine to coordinate certain subordination arrangements with other
Irvine Lenders, as well as worked out waivers of certain obligations of Irvine under certain of its
agreements with its Lenders during the same time period. Collectively, the services described in
this paragraph are the “Services”.



In consideration for provision of the Services, Irvine agrees to pay Alpha the sum of One Hundred
Fifteen Thousand Dollars ($115,000), which are deemed to be fully earned as of the date of this
letter. Irvine is delivering to Alpha simultaneously with this letter a fully executed Secured
Promissory Note (Restructuring), in the amount of One Hundred Fifteen Thousand Dollars ($115,000)
as consideration for payment of the amounts due hereunder for Services. Terms of payment are as
set forth in the Secured Promissory Note.




Very truly yours,




IRVINE SENSORS CORPORATION





	 	 	 	 	 	 	 
	By: 
	/S/ JOHN C. CARSON
	 	 
	 
	 	 	 
	Print Name:	 	John C. Carson	 	 
	 

	 	 	 	 	 	 
	Title:

	President & CEO