Document:

<PAGE>

                                                                    EXHIBIT 10.8

                                   CORPERATE

<TABLE>
<S>                                   <C>
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     AWARD/CONTRACT                   THIS CONTRACT IS A RATED ORDER            RATING                    PAGE OF PAGES
                                      UNDER DPAS (15 CFR 350)                                 DO           1        34
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CONTRACT (Proc.Inst.Ident.) NO.       3. EFFECTIVE DATE          4. REQUISITION/PURCHASE REQUEST/PROJECT NO.

               N39998-00-C-0818                                                         0151-00
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ISSUED BY                 CODE          N39998            6.  ADMINISTERED BY  (If other than Item 5)       CODE      N39998
                                -----------------------                                                          -------------------
Office of Special Technology                              See Blk #6                                Ser: ___________________
10530 Riverview Road
Fort. Washington, Md. 20744                                  Approved as to form
                                                          and legality: DBH
                                                                       ----
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NAME AND ADDRESS OF CONTRACTOR (No, street, city, county, State and ZIP Code)          8. DELIVERY

Irvine Sensors                                                                           [_] FOB ORIGIN       [X] OTHER (See below)
                                                                                      ----------------------------------------------
001 Redhill Avenue, #3                                                                 9. DISCOUNT FOR PROMPT PAYMENT
Costa Mesa, CA 92626
                                                                                       See Section G
                                                                                      ----------------------------------------------
                                                                                      10. SUBMIT INVOICES       ITEM
                                                                                      (4 copies unless other-
                                                                                       wise specified) TO THE
-------------------------------------------------------------------------------------
CODE                              FACILITY CODE                                        ADDRESS SHOWN IN:           See Section G
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1.  SHIP TO/MARK FOR       CODE          N39998              12. PAYMENT WILL BE MADE BY                    CODE      N39998
                                ---------------------------                                                      -------------------
See Section D                                                See Section G

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13. AUTHORITY FOR USING OTHER THAN FULL, AND OPEN COMPETI-   14. ACCOUNTING AND APPROPRIATION DATA
    TION:
[X] 10 U.S.C. 2304 (c) (    )   [_] 41 U.S.C. 253 (C) (    )
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15A. ITEM NO.            15B. SUPPLIES/SERVICES                15C. QUANTITY      15D. UNIT           15E. UNIT PRICE   15F. AMOUNT
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      0001          3D Imager

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                                                                   15G. TOTAL AMOUNT OF CONTRACT                    $ 3,045,096.00
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                                                       16. TABLE OF CONTENTS
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 (X)  SEC.             DESCRIPTION             PAGE(S)   (X)     SEC.           DESCRIPTION                           PAGE(S)
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                 PART I - THE SCHEDULE                                      PART II - CONTRACT CLAUSES
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 X   A   SOLICITATION/CONTRACT FORM                       X     I       CONTRACT CLAUSES
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 X   B   SUPPLIES OR SERVICES AND PRICES/COSTS                  PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
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 X   C   DESCRIPTION/SPECS./WORK STATEMENT                X     J       LIST OF ATTACHMENTS
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 X   D   PACKAGING AND MARKING                                           PART IV - REPRESENTATIONS AND INSTRUCTIONS
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 X   E   INSPECTION AND ACCEPTANCE                              K       REPRESENTATIONS, CERTIFICATIONS AND
-------------------------------------------------------
 X   F   DELIVERIES OR PERFORMANCE                                      OTHER STATEMENTS OF OFFERORS
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 X   G   CONTRACT ADMINISTRATION DATA                           L       INSTRS., CONDS., AND NOTICES TO OFFERORS
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 X   H   SPECIAL CONTRACT REQUIREMENTS                          M       EVALUATION FACTORS FOR AWARD
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                                   CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
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17. [X]  CONTRACTOR'S NEGOTIATED AGREEMENT (Contractor is re-     18.   [_]  AWARD  (Contractor is not required to sign this
  quired to sign this document and return  2 copies to               document.) Your offer on Solicitation Number________________.
  issuing office.) Contractor agrees to furnish and                  including the additions or changes made by you which additions
  deliver all items or perform all the services set forth            or changes are set forth in full above, is hereby accepted as
  or otherwise identified above and on any continuation              to items listed above and on any continuation sheets. This
  sheets for the consideration stated herein. The rights             award consummates the contract which consists of the
  and obligations of the parties to this contract shall              following documents: (a) the Government's solicitation and
  be subject to and governed by the following documents: (a)         your offer, and (b) this award/contract. No further contractual
  this award/contract, (b) the solicitation, if any,                 document is necessary.
  and (c) such provisions, representations,
  certifications, and specifications, as are attached or
  incorporated by reference herein. (Attachments are
  listed herein.)
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19A. NAME AND TITLE OF SIGNER (Type or print)                     20A. NAME OF CONTRACTING OFFICER

      JOHN J. STUART, JR.                                         Darlene Abel
      SR. VICE PRESIDENT                                          CONTRACTING OFFICER
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19B. NAME OF CONTRACTOR                    19C. DATE SIGNED       20B. UNITED STATES OF AMERICA                    20C. DATE SIGNED

BY  /s/ John J. Stuart, Jr.                       31AUG00         BY        /s/ Darlene M Abel                        8/31/00
   ---------------------------------                                 ----------------------------------
   (Signature of person authorized to sign)                          (Signature of Contracting Officer)
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</TABLE>

NSN 7540-01-152-8069               26-107           STANDARD FORM 26 (REV. 4-B5)
PREVIOUS EDITION UNUSUABLE                          Prescribed by GSA
                                                    FAR (48 CFR) B3.214 (a)

<PAGE>

SECTION B:     SUPPLIES/SERVICES AND PRICES/COSTS

Item           Description                        Amount
----           -----------                        ------
0001           Development of                     $1,192,006
               3D Imaging Sensors
               (Phase I)

          Cost Sharing Agreement                  Cost to Government
          ----------------------                  ------------------
     Total Estimated Cost:     $1,338,018    Total Estimated Cost:    $1,068,980
     FCCM:                     $   53,704    FCCM:                    $   42,906
     Fixed Fee:                $  100,284    Fixed Fee:               $   80,120
                               ----------                             ----------
     CPFF:                     $1,492,006    CPFF:                    $1,192,006
     Irvine Cost Share:        $  300,000
                               ----------
     Total Cost to Government: $1,192,006

0002           Data in Support                    NSP
               of Item 0001

PAYMENT OF FIXED FEE:  The Government shall make payments on account of the
fixed fee equal to 7.495% of the amount of each invoice (less FCCM) submitted by
the contractor under the Clauses entitled "Allowable Cost and Payment," FAR
52.216-7 and "Fixed Fee," 52.216-8 of the General Clauses hereto, subject to the
withholding provisions of paragraph (b) of FAR 52.216-8; provided that the total
of all such payments shall not exceed 85 percent of the fixed fee. Any balance
of fixed fee shall be paid to the contractor or any overpayment of fixed fee
shall be refunded by the contractor or credited to the Government at the time of
final payment.

OPTION ITEMS

Item           Description                        Amount
----           -----------                        ------
0003           Development of                     $1,853,090
               3D Imaging Sensors
               (Phase II)

     Cost Sharing Agreement                  Cost to Government
     ----------------------                  ------------------
     Total Estimated Cost:     $2,065,743    Total Estimated Cost:    $1,662,119
     FCCM:                     $   82,086    FCCM:                    $   66,047
     Fixed Fee:                $  155,261    Fixed Fee:               $  124,925
                               ----------                             ----------
     CPFF:                     $2,303,090    CPFF:                    $1,853,090
     Irvine Cost Share:        $  450,000
                               ----------
     Total Cost to Government: $1,853,090

0004           Data in Support                    NSP
               of Item 0003

PAYMENT OF FIXED FEE:  The Government shall make payments on account of the
fixed fee equal to 7.516% of the amount of each invoice (less FCCM) submitted by
the contractor under the Clauses entitled "Allowable Cost and Payment," FAR
52.216-7 and "Fixed Fee," 52.216-8 of the General Clauses hereto, subject to the
withholding provisions of paragraph (b) of FAR 52.216-8; provided that the total
of all such payments shall not exceed 85 percent of the fixed fee. Any balance
of fixed fee shall be paid to the contractor or any overpayment of fixed fee
shall be refunded by the contractor or credited to the Government at the time of
final payment.
<PAGE>

SECTION C: DESCRIPTION/WORK STATEMENT

Items 0001-0004:         Shall be performed in accordance with the Statement of
                         Work, attachment II, hereto.

SECTION D: PACKAGING/MARKING

All deliverables shall be sent to the Office of Special Technology (OST) at the
following address unless otherwise noted:

                         Office of Special Technology
                         10530 Riverview Road
                         Fort Washington, MD 20744-5821

SECTION E: INSPECTION/ACCEPTANCE

Inspection and acceptance for all deliverables under this contract shall be
performed by the Contracting Officer's Representative (COR) or his duly
appointed Government representative at the address stated in Section D.

SECTION F: DELIVERIES/PERFORMANCE

The period of performance for Items 0001-0002 (Phase I) is from date of contract
award through 12 months.

The period of performance for Items 0003-0004 (Phase II) is from date of option
exercise date through 18 months.

SECTION G: CONTRACT ADMINISTRATION

G-1  Contract Administration
----------------------------

Purchasing Office Representative                  Mark Mehler
                                                  (301)203-2659

Contracting Officer Representative                Sylvia Morales
                                                  (301)203-2636

Contractor Representative                         Gail Lafferry
                                                  (714)444-8712

G-2  Invoicing and Paving Instructions
--------------------------------------

a.   Attention should be directed to FAR 52.232-25 entitled "Prompted Payment,"
     which is incorporated into this contract by the applicable general
     provision in Section I herein.

b.   The contractor shall submit proper invoices/vouchers on Standard Form (SF)
     1034 Public Voucher. An original and one (1) copy is required. All vouchers
     shall be submitted to the Contracting Officer at the following address:

                              Office of Special Technology
                              10530 Riverview Road
                              Fort Washington, MD 20744
<PAGE>

c.        Any invoices/vouchers that do not conform to the above mentioned
          specifications will be returned to the contractor for corrections.
          Payment will only be made on properly submitted invoices/vouchers.

d.        The Contracting Office will forward the original, approved voucher to
          the following address for payment:

                         Navy Systems Management Activity
                         1931 Jefferson Davis Highway, Suite 802 (S. Casteel)
                         Arlington, VA 22202

G-3       Administrative Procedures Relating to Electronic Funds Transfer
-------------------------------------------------------------------------
          Payment Methods
          ---------------

(U)  Electronic Funds Transfer (EFT) is available under the proposed contract.
     It is required that your financial institution be a participating member of
     the National Automated Clearing House Association.

(U)  It is the responsibility of the payee to authorize the payers to forward
     payments in accordance with EFT methods. This authorization must be
     communicated in writing via the SF 3881, Payment Information Form; the
     Automated Clearing House (ACH) Vendor Payment System form will be provided
     for use in enrolling in the program upon award. We have filled in the
     Agency Information Section of the form. It will be necessary to complete
     the Financial Institution section. In addition to the signature/title of
     your bank representative, please the ACH form notarized by the bank. This
     will avoid delays in processing payments. If you already have and ACH form
     on file for another of this Contracting Activity's contracts, a letter
     signed by the Authorized official on the SF 3881 identifying the new
     contract number will suffice. The forms or letters should be mailed to the
     address shown below;

                         Navy Systems Management Activity
                         1931 Jefferson Davis Highway, Suite 802 (S. Casteel)
                         Arlington, VA 22202

(U)  To assist your company in identifying its payments, an addendum record will
     be included with each payment issued to your bank. An addendum contains
     accounting or payment information (e.g. invoice number, discount terms).
     You and your bank should agree how and when the addendum information will
     be provided to your company. We will use the CTX ACH payment format to
     transmit your payments and addenda records to your bank.

G-4       Accounting and Appropriation Data
-------------------------------------------

See Attachment I

G-5       Contracting Officer's Representative (252,201-7000) DEC 91
--------------------------------------------------------------------

(a)  (U) Definition: Contracting Officer's Representative means an individual
     designated in accordance with subsection 201,602-2 of the Defense Federal
     Acquisition Regulation Supplement and authorized in writing by the
     contracting officer to perform specific technical or administrative
     functions.

(b)  (U) If the Contracting Officer designates a contracting officer
     representative (COR), the Contractor will receive a copy of the written
     designation. It will specify the extent of the COR's authority to act on
     behalf of the contracting officer. The COR is not authorized to make any
     commitments or changes that will affect price, quality, quantity, delivery,
     or any other term or condition of the contract.
<PAGE>

SECTION H:  SPECIAL CONTRACT REQUIREMENTS

H-1   Contracting Officer Authority
H-2   Availability of Funds
H-3   Estimated Cost and Cost Sharing
H-4   Allotment of Funds

H-1   Contracting Officer Authority (Jun 1994) (FAC 5252,201-9300)
------------------------------------------------------------------

In no event shall any understanding or agreement between the Contractor and any
Government employee other than the Contracting Officer on any contract,
modification, change order, letter or verbal direction to the Contractor be
effective or binding upon the Government. All such actions must be formalized by
a proper contractual document executed by an appointed Contracting Officer. The
Contractor is hereby put on notice that in the event a Government employee other
than the Contracting Officer directs a change in the work to be performed or
increases the scope of the work to be performed, it is the Contractor's
responsibility to make an inquiry of the Contracting Officer before making the
deviation. Payments will not be made without being authorized by an appointed
Contracting Officer with the legal authority to bind the Government.

H-2   Availability Of Funds (APR 1984) (FAR 52,232-18)
------------------------------------------------------

Funds are not presently available for this contract. The Government's obligation
under this contract is contingent upon the availability of appropriated funds
from which payment for contract purposes can be made. No legal liability on the
part of the Government for any payment may arise until funds are made available
to the Contracting Officer for this contract and until the Contractor receives
notice of such availability, to be confirmed in writing by the Contracting
Officer.

H-3   Estimated Cost and Cost Sharing (NFS 18-52.216-73) (DEC. 1991)
--------------------------------------------------------------------

      a.  It is estimated that the total cost of performing the work under this
          contract will be $1,492,006 for Phase I and $2,303,090 for Phase II.

      b.  For performance of the work under this contract, the Contractor shall
          be reimbursed for not more than 79.893% for Phase I and 80.461% for
          Phase II of the costs of performance determined to be allowable under
          the Allowable Cost and Payment clause. The remaining 20.107% for Phase
          I and 19.539% for Phase II or more of the costs of performance so
          determined shall constitute the Contractor's share for which it will
          not be reimbursed by the Government.

      c.  For purposes of the Limitation of Funds clause, the total estimated
          cost to the Government is hereby established as $1,192,606 for Phase I
          and $1,853,090 for Phase II; this amount is the maximum cost for which
          the Government is obligated.

      d.  The Contractor shall maintain records of all contract costs claimed by
          the Contractor as constituting part of its share. Those records shall
          be subject to audit by the Government. Cost contributed by the
          Contractor shall not be charged to the Government under any other
          grant, contract, or agreement (including allocation to other grants,
          contracts or agreements as part of an independent research and
          development program).
<PAGE>

H-4   Allotment of Funds (S-89 JAN) SPA 5252.232-9200
-----------------------------------------------------

a. This contract is incrementally funded with respect to both cost and fee.

b. The amounts presently available and allotted to this contract for payment of
fee, as provided in the Section I clause of this contract entitled "Fixed Fee",
are as follows;

                 Items                   Allotted to Fixed Fee
                 -----                   ---------------------
                 0001                            $2966

c. The amounts presently available and allotted to this contract for payment of
cost, subject to the Section I, "Limitation of Funds" clause, the items covered
thereby and the period of performance which it is estimated the allotted amount
will cover are as follows:

                   Items                     Allotted to Cost
                   -----                     ----------------
                   0001                           $41.163

d. The parties contemplate that the Government will allot additional amounts to
this contracts from time to time by unilateral contract modification, and any
such modification shall state separately the amounts allotted for cost and for
fee, the items covered thereby, and the period of performance the amounts are
expected to cover.
<PAGE>

                     License Agreement for a Non-Standard
                   License to Possess and Use Technical Data
                   -----------------------------------------

The parties hereby agree as follows:

1.   Definitions: The following items shall have the meanings specified below.

     a.   U.S. Government - The United States Government

     b.   Government Contract - U.S. Government Contract No. N39998-00-C-0818.

     c.   Contractor - Irvine Sensors Corp.

     d.   Technical Data - Technical data as defined in Department of Defense
          Federal Acquisition Regulations Supplement (DFARS) 252,227-7013.

2.   The Contract agrees that in exchange for consideration negotiated as part
     of the Government Contract's estimated cost and fixed fee, the U.S.
     Government shall have unlimited rights to all technical data (as that term
     is defined in DFARS 252,227-7013) delivered under the Government Contract
     including data developed under Contract Line Item Number 0001 and Option
     Contract Line Item Number 0003 (if and to the extent exercised) under a
     cost-sharing agreement.

3.   Any modifications to this agreement shall not be effective unless the same
     are by mutually agreed to the U.S. Government and the Contractor.

4.   This specifically negotiated license rights agreement shall be incorporated
     as an Attachment to the Government Contract. The Contractor is hereby
     agreeing to provide unlimited rights in all Technical Data delivered under
     the contract. The rights granted by this License Agreement shall replace
     and supercede in their entirety any Contractor rights that would have been
     created in the technical data by any clause or specification contained in
     the Government Contract, including without limitation, clauses entitled
     "Rights in Technical Data-Noncommercial Items," "Rights in Noncommercial
     Computer Software and Noncommercial Software Documentation." "Technical
     Data," "Rights in Bid or Proposal Information," or "Deferred Ordering of
     Technical Data or Computer Software."

     /s/ Darlene M. Abel                        /s/ [ILLEGIBLE]
     -------------------------------         ----------------------------------
     Darlene Abel                            [Name of Contractor Signatory]
     Procuring Contracting Officer           [Position] Chief Financial Officer
     Office of Special Technology            Irvine Sensors Corp.
     Date:                                   Date: 31 August 2000<PAGE>

                                                                    EXHIBIT 10.9

                           INDEMNIFICATION AGREEMENT

     THIS AGREEMENT is made as of the ___ day of ___________, between IRVINE
SENSORS CORPORATION, a Delaware corporation (the "Company"), and
________________________________________________________, an officer, member of
the Board of Directors and/or key employee of the Company or a subsidiary
thereof ("Indemnitee"), with reference to the following facts:

                                   RECITALS:

     A.   Indemnitee is an officer and/or member of the Board of
          Directors of the Company or a subsidiary thereof and in such
          capacity is performing a valuable service for the Company.

     B.   Recent developments with respect to the terms and
          availability of directors' and officers' liability insurance
          ("D & O Insurance") and with respect to the application,
          amendment and enforcement of statutory and by-law
          indemnification provisions generally have raised questions
          concerning the adequacy and reliability of the protection
          afforded to officers and directors thereby.

     C.   The Company and Indemnitee further recognize the substantial
          increase in corporate litigation subjecting officers and
          directors to expensive litigation risks at the same time as
          D & O Insurance has been severely limited.

     D.   Indemnitee does not regard the current protection available
          as adequate given the present circumstances, and Indemnitee
          and other officers and directors of the Company may not be
          willing to serve as such without adequate protection.

     E.   In order to resolve such questions and thereby induce
          Indemnitee to serve as an officer and/or director of the
          Company, the Company has determined and agreed to enter into
          this contract with Indemnitee, and the Board of Directors of
          the Company has approved the same.

     NOW, THEREFORE, in consideration of Indemnitee's continued service as an
officer and/or director after the date hereof, the parties hereto hereby agree
as follows:

///

///
<PAGE>

                                  AGREEMENT:

     1.  Indemnification of Indemnitee. The Company hereby agrees to hold
harmless and indemnify Indemnitee to the full extent authorized or permitted by
the General Corporation Law of the State of Delaware, or by any amendment
thereof or other statutory provision authorizing or permitting such
indemnification which is adopted after the date hereof.

     2.  Additional Indemnity. Subject only to the exclusions set forth in
section 3 hereof, the Company hereby further agrees to hold harmless and
indemnify Indemnitee:

     (a)  Against any and all expenses (including attorneys' fees),
          witness fees, damages, judgments, fines and amounts paid in
          settlement actually and reasonably incurred by Indemnitee in
          connection with any threatened, pending or completed action,
          suit or proceeding, whether civil, criminal, arbitrational,
          administrative or investigative or in connection with any
          appeal related thereto (including an action by or in the
          right of the Company), and whether in law, equity or
          otherwise, to which Indemnitee is, was or at any time
          becomes a party, or is threatened to be made a party or
          otherwise, by reason of the fact that Indemnitee is, was or
          at any time becomes a director, officer, employee or agent
          of the Company, or is or was serving or at any time serves
          at the request of the Company as a director, officer,
          employee or agent or another corporation, partnership, joint
          venture, trust, employee benefit plan or other enterprise;
          and

     (b)  Otherwise to the fullest extent as may be provided to
          Indemnitee by the Company under the provisions of Article X
          of the Certificate of Incorporation of the Company, Article
          VII of the By-laws of the Company and the Delaware General
          Corporation law.

     3.  Limitations on Additional Indemnity. No indemnity pursuant to section 2
hereof shall be paid by the Company:

     (a)  in respect to remuneration paid to Indemnitee if it shall be
          determined by a final judgment or other final adjudication
          that such remuneration was in violation of law;

     (b)  on account of any suit in which judgment is rendered against
          Indemnitee for an accounting of profits made from the
          purchase or sale by Indemnitee of securities of the Company
          pursuant to the provisions of section 16(b) of the
          Securities Exchange Act of 1934 and amendments thereto or
          similar provisions of any federal, state or local statutory
          law;

                                       2
<PAGE>

     (c)  on account of Indemnitee's conduct which is finally adjudged
          to have been knowingly fraudulent, deliberately dishonest or
          willful misconduct;

     (d)  on account of Indemnitee's conduct on which it is finally
          adjudged that Indemnitee derived an improper personal
          benefit;

     (e)  if a final decision by a Court having jurisdiction in the
          matter shall determine that such indemnification is not
          lawful;

     (f)  under the circumstances described in section 6.2 hereof; or

     (g)  in respect of any action brought by Indemnitee unless (i)
          the bringing of said action shall have been approved by the
          Board of Directors of the Company, (ii) such indemnification
          is expressly required to be made by law, (iii) such
          indemnification is provided by the Company, in its sole
          discretion, pursuant to the powers vested in the Company
          under the Delaware General Corporation law, or (iv) the
          proceeding is initiated pursuant to section 4.2 hereof.

     4.   Advancement of Expenses; Indemnification Procedure.

          4.1. Expenses incurred by Indemnitee in defending a civil or criminal
action, suit or proceeding referenced in section 2 hereof shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
at the written request of Indemnitee, provided Indemnitee undertakes to repay
such amount to the extent that it is ultimately determined that Indemnitee is
not entitled to indemnification.

          4.2. Any indemnification and advances provided for in section 1,
section 2 or section 4.1 hereof shall be made no later than 45 days after
receipt of the written request of Indemnitee, and Indemnitee shall be deemed
entitled to indemnification in accordance with said request, unless a reasonable
and good faith determination is made within said 45-day period by (i) the Board
of Directors by a majority vote of a quorum consisting of directors who are not
parties to such proceeding, (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion or (iii) by the Company's shareholders, that the
facts known to the decision-making party at the time such determination is made
demonstrate clearly and convincingly that Indemnitee is not entitled to
indemnification because his conduct falls within one of the exceptions set forth
in section 3 hereof or he is otherwise not entitled to indemnification as a
matter of law.

     5.   Continuation of Indemnity. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee is a
director, officer, employee or agent of the Company (or is or was serving at the
request of the Company as a director, officer, employee or agent of another
company, partnership, joint venture, trust, employee benefit plan or

                                       3
<PAGE>

other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal, arbitrational, administrative or
investigative, or in connection with any appeal related thereto, and whether in
law, equity or otherwise, by reason of the fact that Indemnitee was an officer,
director and/or key employee of the company or serving in any other capacity
referred to herein.

     6. Notification and Defense of Claim.

          6.1. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee will, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability which it may have to Indemnitee
otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee notifies the Company of the commencement
thereof:

          (a)  the Company will be entitled to participate therein at
               its own expense; and

          (b)  except as otherwise provided below, to the extent that
               it may wish, the Company jointly with any other
               indemnifying party similarly notified will be entitled
               to assume the defense thereof, with counsel
               satisfactory to Indemnitee. After notice from the
               Company to Indemnitee of its election so to assume the
               defense thereof, the Company will not be liable to
               Indemnitee under this Agreement for any legal or other
               expenses subsequently incurred by Indemnitee in
               connection with the defense thereof other than
               reasonable costs of investigation or as otherwise
               provided below. Indemnitee shall have the right to
               employ its counsel in such action, suit or proceeding
               but the fees and expenses of such counsel incurred
               after notice from the Company of its assumption of the
               defense thereof shall be at the expense of Indemnitee
               unless (i) the employment of counsel by Indemnitee has
               been authorized by the Company, (ii) Indemnitee shall
               have reasonably concluded that there may be a conflict
               of interest between the Company and Indemnitee in the
               conduct of the defense of such action or (iii) the
               Company shall not in fact have employed counsel to
               assume the defense of such action, in each of which
               cases the fees and expenses of counsel shall be at the
               expense of the Company. The Company shall not be
               entitled to assume the defense of any action, suit or
               proceeding brought by or on behalf of the Company or as
               to which Indemnitee shall have made the conclusion
               provided for in (ii) above.

                                       4
<PAGE>

          6.2. The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably withheld.
The Company shall not settle any action or claim in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's written
consent, which shall be given or withheld in Indemnitee's sole discretion.

     7.  Enforcement.

          7.1. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Company hereby in
order to induce Indemnitee to continue as an officer, director and/or key
employee of the Company, and acknowledges that Indemnitee is relying upon this
Agreement in continuing in such capacity.

          7.2. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
the forum in which the proceeding is or was pending, or, if such forum is not
available or a determination is made that such forum is not convenient, in any
court of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. In the event Indemnitee is required
to bring any action to enforce rights or to collect moneys due under this
Agreement and is successful, in whole or in part, in such action, the Company
shall reimburse Indemnitee for all of Indemnitee's reasonable fees and expenses
in bringing and pursuing such action. The Company shall be entitled to raise by
pleading as an affirmative defense to any action for which a claim for
indemnification is made under sections 1 and 2 hereof that Indemnitee is not
entitled to indemnification because of the limitations set forth in section 3
hereof. Neither the failure of the Company (including its Board of Directors,
its shareholders or independent legal counsel) to have made a determination
prior to the commencement of such enforcement action that indemnification of
Indemnitee is proper in the circumstances, nor an actual determination by the
Company (including its Board of Directors, its shareholders or independent legal
counsel) that such indemnification is improper shall be a defense to the action
or create a presumption that Indemnitee is not entitled to indemnification under
this Agreement or otherwise.

     8.  Additional Indemnification Rights. Notwithstanding any other provision
of this Agreement, the Company hereby agrees to indemnify Indemnitee to the full
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the By-laws or by statute. In the event of any
changes, after the date of this Agreement, in any applicable law, statute or
rule which expand the right of a Delaware corporation to indemnify an officer,
director or key employee, such changes shall be, ipso facto, within the purview
of Indemnitee's rights and the Company's obligations under this Agreement. In
the event of any changes in any applicable law, statute or rule which narrow the
right of a Delaware corporation to indemnify an officer, director or key
employee, such changes, to the extent not otherwise required by such law,
statute

                                       5
<PAGE>

or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.

     9.  Contract Rights Not Exclusive. The contract rights conferred by this
Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or By-laws, agreement, vote of
stockholders or disinterested directors or otherwise.

     10. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that
in certain instances, federal law may override Delaware law and prohibit the
Company from indemnifying its directors and officers. For example, the Company
and Indemnitee acknowledge that the Securities and Exchange Commission has taken
the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and that other federal legislation
prohibits indemnification for certain ERISA violations.

     11. Miscellaneous Provisions.

          11.1. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware.

          11.2. This Agreement shall be binding upon Indemnitee and upon the
Company, its successors and assigns, and shall inure to the benefit of
Indemnitee, his heirs, personal representatives and assigns and to the benefit
of the Company, its successors and assigns.

          (a)   The rights conferred on Indemnitee by this Agreement
                shall continue after Indemnitee has ceased to be a
                director, officer, employee or other agent of the
                Company or to serve at the request of the Company as a
                director, officer, employee or other agent of another
                corporation, partnership, joint venture, trust,
                employee benefit plan or other enterprise and shall
                inure to the benefit of Indemnitee's heirs, executors
                and administrators.

          (b)   The Company shall require any successor (whether
                direct or indirect, by purchase, merger, consolidation
                or otherwise) to all or substantially all of the
                business or assets of the Company, expressly to assume
                and agree to perform this Agreement in the same manner
                and to the same extent that the Company would be
                required to perform if no such succession had taken
                place.

          11.3. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.

                                       6
<PAGE>

          11.4. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provision hereof. Furthermore, if this Agreement shall be
invalidated in its entirety on any ground, then the Company shall nevertheless
indemnify Indemnitee to the fullest extent provided by the By-laws, the
corporate law of the State of Delaware or any other applicable law.

          11.5. This Agreement sets forth the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect thereto, whether written or oral.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                   IRVINE SENSORS CORPORATION
                                   a Delaware corporation

                                   By: ________________________________

                                   Indemnitee

                                   ____________________________________

                                       7

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