jmar_10q-ex1009.htm


    EXHIBIT
      10.9


     

    SECURED
      TERM NOTE

     

    FOR
      VALUE
      RECEIVED, JMAR TECHNOLOGIES, INC., a Delaware corporation (the
“Company”), promises to pay to LAURUS MASTER FUND, LTD., c/o
      M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church
      Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the
“Holder”) or its registered assigns or successors in interest,
      the sum of Seven Million Five Hundred  Thousand Dollars ($7,500,000),
      together with any accrued and unpaid interest hereon, on August  31,
      2009 (the “Maturity Date”) if not sooner indefeasibly paid in
      full.  The original principal amount of this Secured Term Note is
      hereinafter referred to as the “Principal Amount”.

     

    Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in that certain Securities Purchase Agreement dated as of the date hereof
      between the Company and the Holder (as amended, modified and/or supplemented
      from time to time, the “Purchase Agreement”).

     

    The
      Principal Amount of this Secured Term Note that is contained in the Restricted
      Account (as defined in the Restricted Account Agreement referred to in the
      Purchase Agreement) on the date of the issuance of this Secured Term Note is
      $6,420,600.61.

     

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

     

    ARTICLE
      I

    CONTRACT
      RATE

     

    1.1           Contract
      Rate.  Subject to Sections 3.2 and 4.10, interest payable on the
      outstanding Principal Amount of this Note shall accrue at a rate per annum
      equal
      to the “prime rate” published in The Wall Street Journal from time to
      time (the “Prime Rate”), plus two percent (2.0%) (the
“Contract Rate”).  The Contract Rate shall be
      increased or decreased as the case may be for each increase or decrease in
      the
      Prime Rate in an amount equal to such increase or decrease in the Prime Rate;
      each change to be effective as of the day of the change in the Prime
      Rate.  The Contract Rate shall not at any time be less than Ten and
      one quarter percent  (10.25%).  Interest shall be calculated
      on the basis of a 360 day year.  Interest shall be payable monthly, in
      arrears, commencing on October  1, 2007, on the first business day of
      each consecutive calendar month thereafter through and including the Maturity
      Date, and on the Maturity Date, whether by acceleration or
      otherwise.

     

    1.2           Contract
      Rate Payments.  The Contract Rate shall be calculated on the last
      business day of each calendar month hereafter (other than for increases or
      decreases in the Prime Rate which shall be calculated and become effective
      in
      accordance with the terms of Section 1.1) until the Maturity Date and shall
      be
      subject to adjustment as set forth herein.

     

    1.3           Principal
      Payments.  Any outstanding Principal Amount together with any
      accrued and unpaid interest and any and all other unpaid amounts which are
      then
      owing by the Company to the Holder under this Note, the Purchase Agreement
      and/or any other Related Agreement shall be due and payable on the Maturity
      Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    [INTENTIONALLY
      OMITTED]

     

    ARTICLE
      III

    EVENTS
      OF DEFAULT

     

    3.1           Events
      of Default.  The occurrence of any of the following events set
      forth in this Section 3.1 shall constitute an event of default (“Event
      of Default”) hereunder:

     

    (a)           Failure
      to Pay.  The Company fails to pay when due any installment of
      principal, interest or other fees hereon in accordance herewith, or the Company
      fails to pay any of the other Obligations (under and as defined in the Pledge
      and Security Agreement and the Security Agreement, as such terms are defined
      in
      the Reaffirmation Agreement) when due, and, in any such case, such failure
      shall
      continue for a period of three (3) days following the date upon which any such
      payment was due.

     

    (b)           Breach
      of Covenant.  The Company or any of its Subsidiaries breaches any
      covenant or any other term or condition of this Note in any material respect
      and
      such breach, if subject to cure, continues for a period of fifteen (15) days
      after the occurrence thereof.

     

    (c)           Breach
      of Representations and Warranties.  Any representation, warranty
      or statement made or furnished by the Company or any of its Subsidiaries in
      this
      Note, the Purchase Agreement or any other Related Agreement shall at any time
      be
      false or misleading in any material respect on the date as of which made or
      deemed made.

     

    (d)           Default
      Under Other Agreements.  The occurrence of any default (or similar
      term) in the observance or performance of any other agreement or condition
      relating to any indebtedness or contingent obligation of the Company or any
      of
      its Subsidiaries beyond the period of grace (if any), the effect of which
      default is to cause, or permit the holder or holders of such indebtedness or
      beneficiary or beneficiaries of such contingent obligation to cause, such
      indebtedness to become due prior to its stated maturity or such contingent
      obligation to become payable;

     

    (e)           Material
      Adverse Effect.  Any change or the occurrence of any event which
      could reasonably be expected to have a Material Adverse Effect;

     

    (f)           Bankruptcy.  The
      Company or any of its Subsidiaries shall (i) apply for, consent to or
      suffer to exist the appointment of, or the taking of possession by, a receiver,
      custodian, trustee or liquidator of itself or of all or a substantial part
      of
      its property, (ii) make a general assignment for the benefit of creditors,
      (iii) commence a voluntary case under the federal bankruptcy laws (as now or
      hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file
      a
      petition seeking to take advantage of any other law providing for the relief
      of
      debtors, (vi) acquiesce to, without challenge within ten (10) days of the filing
      thereof, or failure to have dismissed, within thirty (30) days, any petition
      filed against it in any involuntary case under such bankruptcy laws, or (vii)
      take any action for the purpose of effecting any of the foregoing;

     

    
      
        
        

      

      
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    (g)           Judgments.  Except
      with regard to JSI Microelectronics, Inc., attachments or levies in excess
      of
      $50,000 in the aggregate are made upon the Company or any of its Subsidiary’s
      assets or a judgment is rendered against the Company’s property involving a
      liability of more than $50,000 which shall not have been vacated, discharged,
      stayed or bonded within thirty (30) days from the entry thereof;

     

    (h)           Change
      of Control.  A Change of Control (as defined below) shall occur
      with respect to the Company, unless Holder shall have expressly consented to
      such Change of Control in writing.  A “Change of Control” shall mean
      any event or circumstance as a result of which (i) any “Person” or “group” (as
      such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as
      in
      effect on the date hereof), other than the Holder, is or becomes the “beneficial
      owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
      directly or indirectly, of 35% or more on a fully diluted basis of the then
      outstanding voting equity interest of the any Company, (ii) the Board of
      Directors of the Company shall cease to consist of a majority of the Company’s
      board of directors on the date hereof (or directors appointed by a majority
      of
      the board of directors in effect immediately prior to such appointment) or
      (iii)
      the Company or any of its Subsidiaries merges or consolidates with, or sells
      all
      or substantially all of its assets to, any other person or entity;

     

    (i)           Indictment;
      Proceedings.  The indictment or threatened indictment of the
      Company or any of its Subsidiaries or any executive officer of the Company
      or
      any of its Subsidiaries under any criminal statute, or commencement or
      threatened commencement of criminal or civil proceeding against the Company
      or
      any of its Subsidiaries or any executive officer of the Company or any of its
      Subsidiaries pursuant to which statute or proceeding penalties or remedies
      sought or available include forfeiture of any of the property of the Company
      or
      any of its Subsidiaries;

     

    (j)           The
      Purchase Agreement and Related Agreements.  (i) An Event of
      Default shall occur under and as defined in the Purchase Agreement or any other
      Related Agreement, (ii) the Company or any of its Subsidiaries shall breach
      any
      term or provision of the Purchase Agreement or any other Related Agreement
      in
      any material respect and such breach, if capable of cure, continues unremedied
      for a period of fifteen (15) days after the occurrence thereof, (iii) the
      Company or any of its Subsidiaries attempts to terminate, challenges the
      validity of, or its liability under, the Purchase Agreement or any Related
      Agreement, (iv) any proceeding shall be brought to challenge the validity,
      binding effect of the Purchase Agreement or any Related Agreement or (v) the
      Purchase Agreement or any Related Agreement ceases to be a valid, binding and
      enforceable obligation of the Company or any of its Subsidiaries (to the extent
      such persons or entities are a party thereto);

     

    3.2           Default
      Interest.  Following the occurrence and during the continuance of
      an Event of Default, the Company shall pay additional interest on the
      outstanding principal balance of this Note in an amount equal to one percent
      (1.0%) per month, and all outstanding obligations under this Note, the Purchase
      Agreement and each other Related Agreement, including unpaid interest, shall
      continue to accrue interest at such additional interest rate from the date
      of
      such Event of Default until the date such Event of Default is cured or
      waived.

     

    
      
        
        

      

      
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    3.3           Default
      Payment.  Following the occurrence and during the continuance of
      an Event of Default, the Holder, at its option, may demand repayment in full
      of
      all obligations and liabilities owing by the Company to the Holder under this
      Note, the Purchase Agreement and/or any other Related Agreement or may elect,
      in
      addition to all rights and remedies of the Holder under the Purchase Agreement
      and the other Related Agreements and/or all obligations and liabilities of
      the
      Company under the Purchase Agreement and the other Related Agreements, to
      require the Company to make a Default Payment (“Default
      Payment”).  The Default Payment shall be one hundred thirty
      percent (130%) of the outstanding principal amount of the Note, plus accrued
      but
      unpaid interest, all other fees then remaining unpaid, and all other amounts
      payable hereunder.  The Default Payment shall be applied first to any
      fees due and payable to the Holder pursuant to this Note, the Purchase
      Agreement, and/or the other Related Agreements, then to accrued and unpaid
      interest due on this Note and then to the outstanding principal balance of
      this
      Note.  The Default Payment shall be due and payable immediately on the
      date that the Holder has demanded payment of the Default Payment pursuant to
      this Section 3.3.

     

    ARTICLE
      IV

    MISCELLANEOUS

     

    4.1           Issuance
      of New Note.  Upon any partial redemption of this Note, a new Note
      containing the same date and provisions of this Note shall, at the request
      of
      the Holder, be issued by the Company to the Holder for the principal balance
      of
      this Note and interest which shall not have been paid as of such
      date.  Subject to the provisions of Article III of this Note, the
      Company shall not pay any costs, fees or any other consideration to the Holder
      for the production and issuance of a new Note.

     

    4.2           Cumulative
      Remedies.  The remedies under this Note shall be
      cumulative.

     

    4.3           Failure
      or Indulgence Not Waiver.  No failure or delay on the part of the
      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.

     

    4.4           Notices.  Any
      notice herein required or permitted to be given shall be in writing and shall
      be
      deemed effectively given: (a) upon personal delivery to the party notified,
      (b)
      when sent by confirmed telex or facsimile if sent during normal business hours
      of the recipient, if not, then on the next business day, (c) five days after
      having been sent by registered or certified mail, return receipt requested,
      postage prepaid, or (d) one day after deposit with a nationally recognized
      overnight courier, specifying next day delivery, with written verification
      of
      receipt.  All communications shall be sent to the Company at the
      address provided in the Purchase Agreement executed in connection herewith,
      and
      to the Holder at the address provided in the Purchase Agreement for the Holder,
      with a copy to Laurus Capital Management, LLC, Attn: Portfolio Services, 335
      Madison Avenue, 10th Floor,
      New York,
      New York 10017, facsimile number (212) 581-5037, or at such other address as
      the
      Company or the Holder may designate by ten days advance written notice to the
      other parties hereto.

     

    
      
        
        

      

      
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    4.5           Amendment
      Provision.  The term “Note” and all references 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, and
      any
      successor instrument as such successor instrument may be amended or
      supplemented.

     

    4.6           Assignability.  This
      Note shall be binding upon the Company and its successors and assigns, and
      shall
      inure to the benefit of the Holder and its successors and assigns, and may
      be
      assigned by the Holder in accordance with the requirements of the Purchase
      Agreement.  The Company may not assign any of its obligations under
      this Note without the prior written consent of the Holder, any such purported
      assignment without such consent being null and void.

     

    4.7           Cost
      of Collection.  In case of any Event of Default under this Note,
      the Company shall pay the Holder the Holder’s reasonable costs of collection,
      including reasonable attorneys’ fees.

     

    4.8           Governing
      Law, Jurisdiction and Waiver of Jury Trial.

     

    (a)           THIS
      NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
      LAWS
      OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAW.

     

    (b)           THE
      COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
      IN
      THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
      TO
      HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND,
      AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER
      RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE
      OR
      ANY OF THE RELATED AGREEMENTS; PROVIDED, THAT THE COMPANY ACKNOWLEDGES
      THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
      OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
FURTHERPROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR
      OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
      IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
      COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
      OR OTHER COURT ORDER IN FAVOR OF THE HOLDER.  THE COMPANY EXPRESSLY
      SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
      COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH
      IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
      NON CONVENIENS.  THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE
      SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
      AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE
      BY
      REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH
      IN THE PURCHASE AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
      UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
      DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

     

    
      
        
        

      

      
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    (c)           THE
      COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
      APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
      BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY HERETO WAIVES
      ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
      RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
      THE
      HOLDER AND/OR THE COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
      TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE,
      ANY
      OTHER RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR
      THERETO.

     

    4.9           Severability.  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 enforceability of any other provision of this
      Note.

     

    4.10           Maximum
      Payments.  Nothing contained herein shall be deemed to establish
      or require the payment of a rate of interest or other charges in excess of
      the
      maximum permitted by applicable law.  In the event that the rate of
      interest required to be paid or other charges hereunder exceed the maximum
      rate
      permitted by such law, any payments in excess of such maximum rate shall be
      credited against amounts owed by the Company to the Holder and thus refunded
      to
      the Company.

     

    4.11           Security
      Interest and Guarantee.  The Holder has been granted a security
      interest in certain assets of the Company and its Subsidiaries as more fully
      described in the Reaffirmation Agreement dated as of the date
      hereof.  The obligations of the Company under this Note are guaranteed
      by certain Subsidiaries of the Company pursuant to the Subsidiary Guaranty
      dated
      as of the date hereof.

     

    4.12           Construction.  Each
      party acknowledges that its legal counsel participated in the preparation of
      this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party against the
      other.

     

    4.13           Registered
      Obligation. This Note is intended to be a registered obligation within the
      meaning of Treasury Regulation Section 1.871-14(c)(1)(i) and the Company (or
      its
      agent) shall register this Note (and thereafter shall maintain such
      registration) as to both principal and any stated
      interest.  Notwithstanding any document, instrument or agreement
      relating to this Note to the contrary, transfer of this Note (or the right
      to
      any payments of principal or stated interest thereunder) may only be effected
      by
      (i) surrender of this Note and either the reissuance by the Company of this
      Note
      to the new holder or the issuance by the Company of a new instrument to the
      new
      holder, or (ii) transfer through a book entry system maintained by the Company
      (or its agent), within the meaning of Treasury Regulation Section
      1.871-14(c)(1)(i)(B).

     

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    IN
      WITNESS WHEREOF, the Company has caused this Secured Term Note to be
      signed in its name effective as of this 31st day of August, 2007.

     

    JMAR
      TECHNOLOGIES, INC.

     

    By:
      /s/
      C. NEIL BEER

    Name:  C.
      Neil
      Beer

    Title:  Chief
      Executive
      Officer

     

    WITNESS:

    


     

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