First Allonge to Promissory Note of Joseph P. Mackin


    EXHIBIT
      10.7

    


    FIRST
      ALLONGE TO PROMISSORY NOTE

    


    This
      FIRST ALLONGE dated as of August 4, 2006 between E-OIR TECHNOLOGIES, INC.,
      a
      Virginia corporation (the “Maker”),
      and
      Joseph P. Mackin (the “Payee”),
      to
      the Promissory Note dated as of June 29, 2004 in the amount of Six Hundred
      Sixty-Two Thousand Two Hundred and Eighty-Eight Dollars ($662,288.00) (as the
      same may be further amended, modified or supplemented from time to time, the
      “NOTE”),
      payable to the order of the Payee and made by the Maker.

    


    RECITALS

    


    WHEREAS,
      the Maker is obtaining certain secured loans from Silicon Valley Bank, a
      California-chartered bank (the “Bank”);

    


    WHEREAS,
      the Payee has agreed to subordinate any security interest, indebtedness or
      lien
      that Payee may have in any property of the Maker; 

    


    WHEREAS,
      the Maker and the Payee have agreed to remove certain forfeiture provisions
      set
      forth in the Note; 

    


    WHEREAS,
      the Maker and the Payee have agreed to amend the Note to revise the amount
      of
      principal currently outstanding and to modify the payments of principal and
      interest due under the Note by amending the Note Payment Schedule attached
      to
      the Note as Exhibit A;

    


    NOW,
      THEREFORE, for valuable consideration, the receipt and adequacy of which are
      acknowledged, the Maker and the Payee hereby agree, with effect from the date
      first set forth above, as follows:

    


    1.
      The
      Note is hereby amended as follows:

    


    1.1
      The
      first paragraph of the Note is hereby deleted and replaced with the
      following:

    


    FOR
      VALUE
      RECEIVED, E-OIR TECHNOLOGIES, INC., a Virginia corporation (the “Maker”), hereby
      promises to pay to Joseph P. Mackin (the “Payee”), at
 __________________________________, or at any other place designated by
      the Payee in writing, in lawful money of the United States of America, the
      principal sum of Six Hundred Eight Thousand Nine Hundred Fifty-Four Dollars
      and
      Forty-Six Cents ($608,954.46), plus interest on the principal balance remaining
      outstanding from time to time at the rate of six percent (6%) per annum
      compounded monthly, in the quarterly installment amounts and on the dates set
      forth in the amortization schedule attached hereto as Exhibit A. All payments
      shall be applied first to accrued but unpaid interest owing hereunder and
      thereafter to reduce the principal balance hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    1.2
      The
      following paragraphs of the Note are deleted: 

    


    “Upon
      the
      occurrence of any of the following, Payee's right to receive payments under
      this
      Note shall terminate and be automatically assigned to each of the Sellers other
      than Payee then entitled to payments pursuant to a Buyer Note (as such term
      is
      defined in the Purchase Agreement, the “Buyer
      Note”
or
      “Buyer
      Notes”)
      other
      than the Payee, pro rata as set forth below (the "Assignees"),
      and
      all then unpaid amounts due hereunder, but no amounts previously paid hereunder,
      shall be paid to the Assignees thereafter:

    


    1.
      The
      Payee shall voluntarily terminate Payee's employment with Maker prior to the
      scheduled maturity date of this Note; provided that the death or permanent
      disability of the Payee shall not be considered termination of Payee's
      employment hereunder; or

    


    2.
      The
      Maker shall terminate the Payee's employment with Maker for cause prior to
      the
      scheduled maturity date of this Note; and for purposes of this Note, "cause"
      shall mean:

    


    a.
      repeated, willful and material failure to perform the Payee's duties as an
      officer or employee of the Maker, and Payee has failed to cure such breach
      or
      default within 30 days after receipt of written notice of thereof from the
      Maker; or

    


    b.
      engaging in criminal fraud, misappropriation or embezzlement in connection
      with
      the Maker's business; or

    


    c.
      Payee's conviction or a plea of nolo
      contendere
      (no
      contest) to criminal misconduct of a nature that impairs or impugns the Payee's
      ability to perform Payee's duties for the Maker;

    


    provided
      that
      the
      permanent disability of the Payee shall not be considered “cause" for purposes
      of the foregoing; and

    


    provided
      further that
      resignation following a material, adverse change to the Payee's compensation,
      benefits, responsibilities, status, seniority or working conditions (including
      forced relocation outside of Payee's then-current place of residence) shall
      not
      be deemed voluntary termination by Payee.

    


    Each
      Assignee shall be assigned a pro rata portion of the payments due hereunder
      at
      the time of assignment based on the percentage of the total initial face amount
      of all then unassigned Buyer Notes represented by the initial face amount of
      the
      Buyer Note held by such Assignee. In the event any Assignee loses the right
      to
      receive payments from a Buyer Note issued to such Assignee, such Assignee's
      assigned portion of the right to receive payments under this Note shall be
      redistributed to the then remaining Assignees as set forth above. Payments
      made
      pursuant to this Note are "wages" as that term is defined in Section 3401(a)
      of
      the U.S. Internal Revenue Code of 1986, as amended, and Maker shall withhold
      from payments hereunder the appropriate amount of federal, state and local
      withholding taxes.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    1.3
      The
      Payment Schedule set forth in Exhibit A is hereby deleted in its entirety and
      replaced with the attached Exhibit A.

    


    2.
      The
      Note is, and shall continue to be, in full force and effect as modified hereby,
      and is hereby in all respects ratified and confirmed. The Payee is hereby
      authorized to attach this Allonge to the Note.

    


    IN
      WITNESS the execution hereof under seal as of the day and year first
      above

    written.

    .

    E-OIR
      TECHNOLOGIES, INC.

    


    By:
      /s/
      Gino
      Pereira                      
  

    Name:
      Gino
      Pereira                       
  

    Title:
      Chief
      Financial Officer        

    


    


    


    PAYEE:

    


    


    /s/
      Joseph P. Mackin____  ____ 

       
      Name:
      Joseph P. Mackin

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    Note
      Payment Schedule

    


    


    
      	
              Payment
                Date

            	 	
              Total
                Payment

            	 
	
              1-Oct-06

            	 	
              $

            	
              9,582.06

            	 
	
              1-Jan-07

            	 	
              $

            	
              9,582.06

            	 
	
              1-Apr-07

            	 	
              $

            	
              9,582.06

            	 
	
              1-Jul-07

            	 	
              $

            	
              425,202.52

            	 
	
              1-Oct-07

            	 	
              $

            	
              3,316.53

            	 
	
              1-Jan-08

            	 	
              $

            	
              3,316.52

            	 
	
              1-Apr-08

            	 	
              $

            	
              3,316.53

            	 
	
              1-Jul-08

            	 	
              $

            	
              113,316.53

            	 
	
              1-Oct-08

            	 	
              $

            	
              1,658.26

            	 
	
              1-Jan-09

            	 	
              $

            	
              1,658.26

            	 
	
              1-Apr-09

            	 	
              $

            	
              1,658.26

            	 
	
              1-Jul-09

            	 	
              $

            	
              111,658.26

            	 


    

     

     

    4