Exhibit 10.1
 

 
OMNIBUS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND
NINTH AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
 
This Omnibus Seventh Amendment to Credit Agreement and Ninth Amendment to Note
and Warrant Purchase Agreement (“Amendment”) is made as of the 13th day of
October, 2011 between Implant Sciences Corporation, a Massachusetts corporation
(the “Company”), and DMRJ Group LLC, a Delaware limited liability company (the
“Lender”).

BACKGROUND
 
A. Company and Lender are parties to a certain Note and Warrant Purchase
Agreement dated as of December 10, 2008 (as modified or amended from time to
time, including, without limitation, as amended by that certain Omnibus Waiver
and First Amendment to Credit Agreement and Third Amendment to Note and Warrant
Purchase Agreement dated as of January 12, 2010 (the “First Omnibus Amendment”),
that certain Omnibus Second Amendment to Credit Agreement and Fourth Amendment
to Note and Warrant Purchase Agreement dated as of April 23, 2010 (the “Second
Omnibus Amendment”), that certain Omnibus Third Amendment to Credit Agreement
and Fifth Amendment to Note and Warrant Purchase Agreement dated as of September
30, 2010 (the “Third Omnibus Amendment”), that certain Omnibus Fourth Amendment
to Credit Agreement and Sixth Amendment to Note and Warrant Purchase Agreement
dated as of March 30,  2011 (the “Fourth Omnibus Amendment”), that certain
Omnibus Fifth Amendment to Credit Agreement and Seventh Amendment to Note and
Warrant Purchase Agreement dated as of April 7, 2011 (the “Fifth Omnibus
Amendment”) and that certain Omnibus Sixth Amendment to Credit Agreement and
Eighth Amendment to Note and Warrant Purchase Agreement dated as of September
29, 2011 (the “Sixth Omnibus Amendment” and, collectively,  the “Purchase
Agreement”), pursuant to which, among other things, Lender purchased that
certain Amended and Restated Senior Secured Convertible Promissory Note dated
March 12, 2009 in the original aggregate principal amount of $5,600,000 (the
“March 2009 Note”).
 
B. Pursuant to the Purchase Agreement, Lender subsequently purchased that
certain Senior Secured Promissory Note dated July 1, 2009 in the original
aggregate principal amount of $1,000,000 (the “July 2009 Note” and together with
the March 2009 Note, the “Term Notes” and each a “Term Note”).
 
C.   The Purchase Agreement and all instruments, documents and agreements
executed in connection therewith, or related thereto, including, without
limitation, the March 2009 Note and the July 2009 Note, are referred to herein
collectively as the “Purchase Documents”.
 
D. Company and Lender are also parties to a certain Credit Agreement dated
September 4, 2009 (as modified or amended from time to time, including, without
limitation, as amended by the First Omnibus Amendment and the Second Omnibus
Amendment, the “Credit Agreement”), pursuant to which, among other things, the
Company executed and delivered to Lender that certain Promissory Note dated
September 4, 2009 in the original aggregate principal amount of $3,000,000 (as
amended by that certain Amended and Restated Promissory Note dated January 12,
2010 in the
 
 
 
 

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original aggregate principal amount of $5,000,000 and that certain Amended and
Restated Promissory Note dated as of April 23, 2010 but effective as of April 7,
2010 in the original aggregate principal amount of $10,000,000, that certain
Amended and Restated Promissory Note dated as of March 30, 2011 in the original
aggregate principal amount of $15,000,000, and that certain Amended and Restated
Promissory Note dated as of September 29, 2011 in the original aggregate
principal amount of $23,000,000, the “Revolver Note” and together with the March
2009 Note and the July 2009 Note, each a “Note” and collectively, the “Notes”).
 
E.   The Credit Agreement and all instruments, documents and agreements executed
in connection therewith, or related thereto, including, without limitation, the
Revolver Note, are referred to herein collectively as the “Credit Documents” and
together with the Purchase Documents, each a “Transaction Document” and
collectively, the “Transaction Documents”.
 
F. Company has requested that Lender modify certain definitions, terms and
conditions in the Transaction Documents, and Lender is willing to do so on the
terms and conditions hereafter set forth.
 
G. All capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Transaction Documents.
 
NOW, THEREFORE, with the foregoing Background incorporated by reference and made
a part hereof and intending to be legally bound, the parties agree as follows:
 
1. Amendments to the Transaction Documents.  Upon the effectiveness of this
Amendment, Section 1(c) of the Sixth Omnibus Amendment is hereby deleted and of
no further force or effect.
 
2. Representations and Warranties.  Company represents and warrants to Lender
that:
 
(a) The Company and the Guarantors (as applicable) have the requisite corporate
power and authority to enter into and perform this Amendment in accordance with
the terms hereof.  The execution, delivery and performance of this Amendment by
the Company and the consummation by it of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action, no
further consent or authorization of the Company, its Board of Directors,
stockholders or any other third party is required.  When executed and delivered
by the Company and the Guarantors, this Amendment shall constitute a valid and
binding obligation of the Company and the Guarantors enforceable against the
Company and the Guarantors in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating
to, or affecting generally the enforcement of, creditor’s rights and remedies or
by other equitable principles of general application.
 
(b) This Amendment is valid, binding, and enforceable against the Company and
the Guarantors in accordance with its terms.
 
(c) Upon the effectiveness of this Amendment, no default or Event of Default is
outstanding under any of the Transaction Documents.
 
 
 
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3. Effectiveness Conditions.  This Amendment shall be effective upon the
execution and delivery by Company and each Person who delivered a Guarantee to
Lender in connection with the Transaction Documents (each a “Guarantor” and
collectively, the “Guarantors”) to Lender of this Amendment.
 
4. Expenses.  The Company shall pay any and all costs, fees and expenses of
Lender (including without limitation, attorneys’ fees) in connection with this
Amendment and the transaction contemplated hereby.  The Company shall pay such
amounts upon execution of this Amendment.
 
5. No Waiver.  Lender reserves all of its rights and remedies arising with
respect to any and all defaults or events of defaults under the Transaction
Documents that may be in existence on the date hereof, regardless of whether
such defaults or events of default have been identified, or which may occur in
the future.  Lender has not modified, is not waiving and has not agreed to
forbear in the exercise of, any of its present or future rights and
remedies.  No action taken or claimed to be taken by Lender will constitute such
a waiver, modification or agreement to forbear.  This Amendment does not
obligate Lender to agree to any other extension or modification of the
Transaction Documents nor does it constitute a course of conduct or dealing on
behalf of Lender or a waiver of any other rights or remedies of Lender except as
and only to the extent expressly set forth herein.  No omission or delay by
Lender in exercising any right or power under the Transaction Documents, this
Amendment or any related instruments, agreements or documents will impair such
right or power or be construed to be a waiver of any default or Event of Default
or an acquiescence therein, and any single or partial exercise of any such right
or power will not preclude other or further exercise thereof or the exercise of
any other right, and no waiver will be valid unless in writing and then only to
the extent specified.
 
6. Ratification of Loan Documents.  Except as expressly set forth herein, all of
the terms and conditions of the Purchase Agreement, the Credit Agreement and the
other Transaction Documents are hereby ratified and confirmed and continue
unchanged and in full force and effect.  All references to any of the
Transaction Documents shall mean the applicable Transaction Document as modified
by this Amendment.
 
7. Confirmation of Indebtedness.  Company confirms and acknowledges that as of
the close of business on October 12, 2011, Company was indebted to Lender
without any deduction, defense, setoff, claim or counterclaim, of any nature, in
the aggregate principal and interest in the amount of $24,217,000 of which
$4,661,000 is due on account of the March 2009 Note, $1,432,000 is due on
account of the July 2009 Note and $18,524,000 is due on account of Advances (as
defined in the Credit Agreement), plus all fees, costs and expenses incurred to
date in connection with the Purchase Agreement, the Credit Agreement and the
other Transaction Documents.
 
8. Collateral.  Company and Guarantors hereby confirm and agree that all
security interests and liens granted to Lender pursuant to the Transaction
Documents continue in full force and effect and shall continue to secure the
Obligations (as defined in the Security Agreements (as defined in the Purchase
Agreement and as defined in the Credit Agreement)), including all liabilities
and obligations (primary, secondary, direct, contingent, sole, joint or several)
due or to become due, or that are now or may be hereafter contracted or
acquired, or owing, under the Notes and any other instruments, agreements or
other documents executed and/or delivered in connection herewith or therewith,
in each case, whether now or hereafter existing, voluntary or involuntary,
direct or
 
 
 
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indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Lender as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
 
9. Acknowledgment of Guarantors.  By execution of this Amendment, each Guarantor
hereby acknowledges the terms and conditions of this Amendment and confirms that
Guarantors jointly and severally and absolutely and unconditionally guarantee,
as surety, all of Guarantied Obligations (as defined in the Guaranty from
Guarantors to Lender dated December 10, 2008 and in the Guaranty from Guarantors
to Lender dated September 4, 2009) including all liabilities and obligations
(primary, secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or acquired, or
owing, under the A&R Revolver Note and covenants that each such Guaranty remains
unchanged and in full force and effect and shall continue to cover the existing
and future Obligations of Company to Lender.
 
10. Governing Law.  This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.  This Amendment
shall not be interpreted or construed with any presumption against the party
causing this Amendment to be drafted.
 
11. Signatories:  Each individual signatory hereto represents and warrants that
he or she is duly authorized to execute this Amendment on behalf of his or her
principal and that he or she executes the Amendment in such capacity and not as
a party.
 
12. Duplicate Originals:  Two or more duplicate originals of this Amendment may
be signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument.  This Amendment may be
executed in counterparts, all of which counterparts taken together shall
constitute one completed fully executed document.  Signature by facsimile or PDF
shall bind the parties hereto.
 

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IN WITNESS WHEREOF, the parties have executed this Amendment the day and year
first above written.
 

COMPANY:
IMPLANT SCIENCES CORPORATION
 
By: /s/ Glenn D. Bolduc
Name: Glenn D. Bolduc
Title: Chief Executive Officer
 
GUARANTORS:
C ACQUISITION CORP.
 
 
By: /s/ Glenn D. Bolduc
Name: Glenn D. Bolduc
Title: President
 
 
ACCUREL SYSTEMS INTERNATIONAL CORPORATION
 
 
By: /s/ Glenn D. Bolduc
Name: Glenn D. Bolduc
Title: President
 
 
IMX ACQUISITION CORP.
 
 
By: /s/ Glenn D. Bolduc
Name: Glenn D. Bolduc
Title: President
 
LENDER:
DMRJ GROUP LLC
 
By: /s/ Daniel Small
Name: Daniel  Small
Title: Managing Director
 

 
 
 
[SIGNATURE PAGE TO OMNIBUS AMENDMENT]

 
 

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