Document:

imxform8k081201_ex10-1.htm

    Exhibit
10.1

    

    PROMISSORY
NOTE

    

    

    $1,625,000                                                  Sunnyvale, California                      November 24,
2008

    

    

    FOR VALUE
RECEIVED, CORE SYSTEMS INCORPORATED, a California corporation ("Maker"),
unconditionally promises to pay to C ACQUISITION CORP., a Delaware corporation
("Holder"), or order, at such address as Holder shall designate by written
notice to Maker, the principal sum of One Million Six Hundred Twenty-five
Thousand Dollars ($1,625,000) with interest from the date of this Note on unpaid
principal at the rate of six percent (6%) per annum.

    

    The Maker
shall make initial payments of principal as follows:

    

    
      	
              ·  

            	
              On
      or before November 28, 2008, $125,000;
and

            

    

    
      	
              ·  

            	
              On
      or before December 24, 2008,
$500,000.

            

    

    

    No
interest shall accrue with respect to either such initial principal payment
until and after its respective due date.

    

    Thereafter,
the remaining principal and accrued interest shall be paid in equal monthly
installments of principal and interest, evenly amortized over a period of sixty
(60) months commencing on February 1, 2009 and continuing on the first day of
each month thereafter until paid in full. Payments shall be applied first to
accrued interest and the balance to principal.

    

    All
principal and interest payments shall be made in lawful money of the United
States. Time is of the essence for each and every obliga­tion under this
Note. Maker shall be entitled to prepay any or all of the principal at any time
without penalty. Maker shall be entitled to a prepayment discount in the amount
of ten percent (10%) of the principal balance then outstanding in the event that
Maker prepays the entire balance of principal and accrued interest.

    

    In the
event of the occurrence of any one or more of the following events, the whole
sum of unpaid principal and accrued interest shall become immediately due and
payable at the option of the Holder:

    

    1.           Failure
to pay an installment of interest or principal when due if such failure
continues for a period of five (5) days after such installment is
due;

    

    
      	
              2.  

            	
              Any
      breach or default by Maker under the Security Agreement given to secure
      this Note;

            

    

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    3.           Insolvency
(however evidenced) or the commission of any act of insolvency;

    

    
      	
              4.  

            	
              The
      making of a general assignment for the benefit of
    creditors;

            

    

    

    5.           The
filing of any petition or the commencement of any proceeding by the Maker for
any relief under any bankruptcy or insolvency laws, or any laws relating to the
relief of debtors; or

    

    6.           The
filing of any petition or the commencement of any proceeding against the Maker
for any relief under any bankruptcy or insolvency laws, or any laws relating to
the relief of debtors, which proceeding is not dismissed within thirty (30)
days.

    

    Maker
shall have the right to offset against the unpaid balance due to Holder under
this Note any sum for which Buyer is entitled to indemnity from Seller under
section 7.1 of that certain Asset Purchase Agreement between Maker and Holder
dated November 14, 2008. For this purpose, the terms “Buyer” and “Seller” shall
have the meanings assigned to them in such Asset Purchase
Agreement.

    

    If under
any circumstance Holder should ever receive as interest an amount that would
exceed the highest lawful rate permitted to be agreed upon by the parties with
respect to the amount due hereunder, such amount as would be excessive interest
shall be applied to the reduction of the unpaid principal balance and not to the
payment of interest. This provision shall control every other provision of this
Note and all agreements between Maker and Holder.

    

    Neither
the acceptance of any payments from any person nor Holder's delay or failure to
exercise its remedies hereunder shall consti­tute a waiver of Holder's
remedies with regard to the current or any subsequent occurrence of the same or
any other default.

    

    Except as
expressly provided in this Note, Maker waives presentment, demand, protest,
notice of protest, notice of dishonor, notice of non-payment, and notice of any
kind with respect to this Note or the performance of the obligations under this
Note.

    

    This Note
shall be governed by and construed according to the laws of the State of
California, and any action or proceeding for the enforcement or collection of
sums due hereunder shall be brought in the County of Santa Clara,
California.

    

    Maker
agrees to pay the following costs, expenses, and attorneys' fees paid or
incurred by the Holder of this Note, or adjudged by a court:

    

    (a)           Actual
and validly claimed costs of collection, costs and expenses and attorneys' fees
paid or incurred in connection with the collection or enforcement of
this

     

    
      
        
        

      

      
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Note,
whether or not suit is filed; and

    

    

    (b)           Costs
of suit in such sum as the court may adjudge as attorneys' fees in any action to
enforce payment of this Note or any part of it.

    

    This Note
and all of the covenants and agreements contained in it shall be binding on and
inure to the benefit of the respective legal and personal representatives,
devisees, heirs, successors, and assigns of the Maker and the
Holder.

    

    This Note
is secured under a written Security Agreement dated November 21,
2008.

    

    MAKER:

    

    CORE
SYSTEMS INCORPORATED,

    a
California corporation

    

    

    By /s/ D. W.
Lindsey

    /s/ Walt
Wriggins

    

    
      
         

      

      
        -3-imxform8k081201_ex10-2.htm

    Exhibit
10.2

    

    

    SECURITY
AGREEMENT

    

    

    THIS AGREEMENT is made and entered into
November 24, 2008, at Sunnyvale, California, by and between C ACQUISITION CORP.,
a Delaware corporation ("Secured Party") and CORE SYSTEMS INCORPORATED, a
California corporation ("Debtor").

    

    Recitals:

    

    A.           Debtor
has executed a Promissory Note in favor of Secured Party in the principal amount
of $1,625,000 (the "Note") incident to the purchase of the business assets of
Secured Party.

    

    B.           Debtor
desires to secure the performance of all obligations to Secured Party under the
Note by granting to Secured Party a security interest in the collateral
described in this Agreement.

    

    NOW, THEREFORE, the parties agree as
follows:

    

    1.           Grant of Security Interest;
Priority.  Debtor hereby grants to Secured Party a security
interest in the property described in paragraph 2 to secure Debtor's obligations
under the Note and under this Agreement.  Secured Party acknowledges
and agrees that the security interest granted hereunder shall be subordinate to
any security interest in the collateral granted by Debtor to secure indebtedness
to an institutional lender for business purposes, and Secured Party agrees to
execute any document or agreement reasonably necessary to give effect to such
subordination, provided,
however, that such agreement  shall permit the payment of
principal and interest on the Note in accordance with its terms for so long as
such institutional lender has not declared Debtor to be in default of its
obligations to such institutional lender.

    

    2.           Collateral.  The
property ("collateral") which is subject to the security interest created hereby
consists of a present and continuing interest in all of the Debtor’s property
and asset of every kind and description, whether now owned or hereafter
acquired, including without limitation the following:

    

    (a)  All accounts receivable,
deposit accounts, general intangibles, or other rights to payment of Debtor;
and

    

    (b) All furniture, fixtures, leasehold
improvements, intellectual property, business equipment, supplies, inventory and
other tangible and intangible assets of Debtor now or at any time prior to the
termination of this Security Agreement owned or acquired by

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        
Debtor,
together with all improvements, replacements, accessions, and additions to
them.

    

    

    3.           Secured
Obligations.  This Security Agreement secures payment of all
existing and future indebtedness and liability of Debtor to Secured Party under
the Note, and the performance of all obligations of Debtor to Secured Party
under this Security Agreement.

    

    4.           Covenants.  Debtor
covenants and agrees:

    

    (a)  To perform and pay when
due all obligations to Secured Party under the Note and this Security
Agreement.

    

    (b)  To pay all expenses,
including attorneys fees, incurred by Secured Party in the perfection,
preservation, enforcement, and exercise of its rights under this Security
Agreement.

    

    (c)  Except as permitted in
Section 1 of this Agreement, not to sell, permit liens on, lease, transfer, or
otherwise dispose or encumber the collateral except, before the occurrence of a
default, for cash proceeds of accounts collected in the ordinary course of
business.

    

    (d)  To perform all acts
necessary to maintain, preserve, and protect the collateral.

    

    (e)  To execute and deliver
to Secured Party all financing statements and other documents that Secured Party
requests, in order to maintain a perfected security interest in the
collateral.

    

     

    (f)  To carry at all times
insurance coverage with respect to the collateral which is reasonably acceptable
to Secured Party.

    

    (g)  To
maintain Debtor’s corporate existence as a California corporation.

    

    (h)  Not
to change Debtor’s legal name unless Secured Party shall have received not less
than 30 days prior written notice from Debtor of such proposed change in its
corporate name, which notice shall accurately set forth the new
name.

    

    (i)  Not
to change Debtor’s chief executive office, or open up any new locations at which
collateral may be held, unless Secured Party shall have received not less than
30 days prior written notice from Debtor of such proposed change, which notice
shall accurately set forth the address of its new chief executive office or
location.

    

    5.           Default.  Debtor
will be in default under this Agreement if:

     

    
      
        
        

      

      
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    (a)  Debtor fails to pay any
amount due under the Note or under the Asset Purchase Agreement dated November
14, 2008, as amended by Amendment dated November 24, 2008, by and among Debtor,
Secured Party and Implant Sciences Corporation, or any other event of default
described in the Note occurs.

    

    (b)  Debtor breaches any of
the covenants, representations, or provisions of this Security
Agreement.

    

    (c)  There is a seizure or
attachment of, or a levy on, any of the collateral.

    

    (d)  Debtor ceases
operations, is dissolved, or becomes insolvent.

    

    6.           Remedies.  When
an event of default occurs Secured Party may:

    

    (a)  Declare the unpaid
balance of principal and interest under the Note immediately due and payable,
without demand, presentment, protest or notice to Debtor, all of which Debtor
expressly waives.

    

    (b)  Exercise all rights and
remedies available to a secured creditor after default, including but not
limited to the rights and remedies of secured creditors under the California
Uniform Commercial Code.

    

    7.           Termination.  This
Security Agreement will terminate and the security interest hereby created shall
be extinguished upon payment in full of all principal and interest due under the
Note, and the performance of all obligations to Secured Party under this
Security Agreement.

    

    8.           Attorneys
Fees.  Debtor will pay all costs and expenses, including
reasonable attorneys fees, incurred by Secured Party in the collection of all
sums due under the Note, and the enforcement of obligations under this Security
Agreement.

    

    9.           Non-Waiver.  No
waiver by Secured Party of any breach or default will be a waiver of any breach
or default occurring later.  A waiver will be valid only if it is in
writing and signed by Secured Party.

    

    10.           Assignment.  This
Security Agreement will bind and benefit the successors and assignees of the
parties, but Debtor may not assign its rights or obligations under this Security
Agreement without Secured Party's prior written consent.

    

    11.           Governing
Law.  This Agreement will be governed by the laws of the State
of California.

    

    12.           Entire
Agreement.  This Security Agreement is the entire agreement,
and

    
      
        
        

      

      
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    supersedes
any prior agreements or understandings, between Secured Party and Debtor
relating to the collateral.  Any modification of this Security
Agreement must be in writing and signed by all parties.

    

    13.           Notice.  Notices
under this Security Agreement are considered to be served two days after they
are deposited in the United States mail, with prepaid, first class postage,
addressed as follows:

    

    Secured
Party:                                           C
Acquisition Corp.

    c/o Implant Sciences
Corporation

    107
Audubon Road

    Wakefield,
Massachusetts  01880

    Attention:
President

    

    
      	
              Debtor:

            	
              Core
      Systems Incorporated

            

    

    
      	
               
      

            	
              1050
      Kifer Road

            

    

    
      	
               
      

            	
              Sunnyvale,
      California 94086

            

    

    

    

    

    

    

    

    
      	
               
      

            	
              [Signature
      Page Follows]

            

    

    

    

    

    

    

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties to this Agreement have executed it on the day and
year first above written.

    

    SECURED
PARTY:

    

    C
ACQUISITION CORP., a Delaware corporation

    

    

    By: /s/ Phillip C.
Thomas                                                                                                           

    

    

    DEBTOR:

    

    CORE
SYSTEMS INCORPORATED,

    a
California corporation

    

    

    

    By:  /s/ D. W.
Lindsey                                                                                                

      /s/ Walt
Wriggins                                                                                           

    
      
         

      

      
        -5-

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