IRVINE SENSORS CORP/DE/
AMENDMENT TO ESCROW AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>dex101.htm
<DESCRIPTION>AMENDMENT TO ESCROW AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Amendment to Escrow Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>AMENDMENT TO ESCROW AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">This Amendment to Escrow Agreement dated this 29th day of December, 2006 (this
&#147;<B><I>Amendment</I></B>&#148;), is entered into by and among Irvine Sensors Corporation, a Delaware corporation (&#147;<B><I>ISC</I></B>&#148;), Optex Systems, Inc., a Texas corporation (&#147;<B><I>Optex</I></B>&#148;) and Timothy Looney, an
individual (&#147;<B><I>Looney</I></B>&#148;) (collectively, the &#147;<B><I>Parties</I></B>&#148;), and Wells Fargo Bank, National Association (the &#147;<B><I>Escrow Agent</I></B>&#148;). Terms not otherwise defined herein shall have the meaning
set forth in the Purchase Agreement (defined below) and the Escrow Agreement dated December&nbsp;30, 2005 among the Parties and the Escrow Agent (the &#147;<B><I>Escrow Agreement</I></B>&#148;). </FONT></P> <P
STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>RECITALS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">A. The Parties have entered into a Stock
Purchase Agreement, dated as of December&nbsp;30, 2005 and amended as of December&nbsp;29, 2006, providing for the acquisition from Looney by ISC of all of the outstanding capital stock of Optex (collectively, with all agreements, amendments,
schedules, exhibits and certificates referred to therein, the &#147;<B><I>Purchase Agreement</I></B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">B. The Parties and the Escrow Agent desire to
amend the Escrow Agreement as set forth herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In consideration of the foregoing promises and agreements of the Parties and for other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the Parties and the Escrow Agent agree as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>1. <U>Amendment
to the Escrow Agreement</U></B>. The first sentence of Section&nbsp;1.07 of the Escrow Agreement is hereby amended in its entirety to read in full as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">&#147;Except as otherwise provided in this Escrow Agreement and Article X of the Purchase Agreement, the Cash Escrow shall terminate at 11:59 p.m. Pacific Time on the earlier of (i)&nbsp;thirty (30)&nbsp;days
following the filing of ISC&#146;s consolidated financial statements with the SEC which include Optex&#146;s revenues for the quarter ended December&nbsp;31, 2005 or (ii)&nbsp;ninety (90)&nbsp;days after the Closing (the &#147;<B><I>Cash Escrow
Termination Date</I></B>&#148;), and the Stock Escrow shall terminate at 11:59 p.m. Pacific Time on December&nbsp;29, 2006 (the &#147;<B><I>Stock Escrow Termination Date</I></B>&#148;).&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>2. <U>Instructions</U>.</B> The parties agree that this Amendment shall constitute the written instructions required by Section&nbsp;1.07 of the
Escrow Agreement, and the Stock Escrow Property shall be released to ISC within five (5)&nbsp;business days after the Stock Escrow Termination Date. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>3. <U>Effect of Amendment</U></B>. Except as modified and amended by this Amendment, the Escrow
Agreement is hereby ratified, confirmed and approved, and shall continue in full force and effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4. <U>General Provisions</U></B>.
This Amendment shall be governed by and construed in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. This Amendment and the Escrow Agreement cannot be terminated, altered or amended
except pursuant to an instrument in writing signed in accordance with the terms of the Escrow Agreement as herein amended. If any provision hereof shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable any other provision of this Amendment, and the Amendment shall be carried out as if any such invalid or unenforceable provision were not contained herein. This Amendment
may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. A facsimile signature will be considered an original signature. This Amendment and the
Escrow Agreement (and any exhibits and schedules thereto and certificates delivered thereunder) set forth the entire understanding among the parties hereto and supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof among the parties hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><I>[The remainder of this page left
intentionally blank.] </I></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, this Amendment to Escrow Agreement has been duly executed as of the date first
written above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">IRVINE SENSORS CORPORATION,</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">a Delaware corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ JOHN C. CARSON</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">John Carson</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Executive Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">OPTEX SYSTEMS, INC.,</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">a Texas corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ TIMOTHY LOONEY</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Timothy Looney,</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ TIMOTHY LOONEY</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">Timothy Looney, individually</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">WELLS FARGO BANK, NATIONAL</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2">ASSOCIATION, as
Escrow Agent</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ KYLE LIM</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Kyle Lim</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Assistant Vice President</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">[S<SMALL>IGNATURE</SMALL> <SMALL>PAGE</SMALL> <SMALL>TO</SMALL> A<SMALL>MENDMENT</SMALL>
<SMALL>TO</SMALL> E<SMALL>SCROW</SMALL> A<SMALL>GREEMENT</SMALL>] </FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
