Exhibit 10.8

 

AMENDMENT

 

This Amendment (this “Amendment”), dated as of May 31, 2006, is entered into by
and between IMPLANT SCIENCES CORPORATION, a Massachusetts corporation (the
“Company”), and LAURUS MASTER FUND, LTD., a Cayman Islands company (“Laurus”),
for the purpose of amending the terms of (i) the Securities Purchase Agreement,
dated September 30, 2005 (the “Purchase Agreement”) by and between the Company
and Laurus and (ii) the Certificate of Vote of Directors Establishing a Class or
Series of Stock, dated September 30, 2005 (the “Certificate of Vote of
Directors”). Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Purchase Agreement.

 

WHEREAS, the Company and Laurus have agreed to make certain changes to the
Purchase Agreement and the Certificate of Vote of Directors as set forth herein;

 

WHEREAS, the Company and Laurus have previously agreed to postpone the
obligations of the Company to make the scheduled amortization payments for
January 2006, February 2006 and March 2006 on such dates, and instead such
payments are due and payable on the Mandatory Redemption Date; and

 

WHEREAS, Laurus has agreed to postpone the obligation of the Company to make
certain scheduled amortization payments in accordance with the terms of the
Purchase Agreement as set forth herein and, in consideration therefore and in
consideration of the other agreements set forth herein, the receipt of which is
hereby acknowledged, the Company has agreed to issue an additional common stock
purchase warrant to Laurus to purchase up to 150,000 shares of the Common Stock
of the Company at an exercise price of $4.26 per share (the “New Warrant”).

 

NOW, THEREFORE, in accordance with the Purchase Agreement and in consideration
of the above, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto amend the
Purchase Agreement and, as applicable, all the Related Agreements, and agree as
follows:

 

1.                                       Laurus hereby agrees that:

 

(a)                                  the Company shall not be required to pay
the Monthly Amount due on the first business day of October 2006 on such date,
and instead such Monthly Amount shall be due and payable, in cash, or as
provided for in the Purchase Agreement, on the Mandatory Redemption Date;

 

(b)                                 Section 4(c) of the Certificate of Vote of
Directors shall be amended by reducing the Fixed Conversion Price (as defined in
the Certificate of Vote of Directors) from $6.80 per share to $4.15 per share;

 

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(c)                                  the scheduled amortization payments due by
the Company on the first business day of April 2006, May 2006, June 2006,
July 2006, August 2006 and September 2006, as provided in the Purchase
Agreement, shall be converted into 261,233 shares of Common Stock of the Company
at a conversion price of $3.48 per share, and the Company shall register such
shares in addition to any other shares the Company is required to register
pursuant to the Purchase Agreement; and

 

(d)                                 In consideration of the agreements set forth
in (a), (b) and (c) above, and the other agreements contained herein, the
receipt of which is hereby acknowledged, the Company hereby agrees to issue to
Laurus the New Warrant. The Company and Laurus hereby agree that the New Warrant
constitutes a “Warrant” under and as defined in the Registration Rights
Agreement, dated September 30, 2005, between the Company and Laurus.

 

2.                                       The Company shall amend the Certificate
of Vote of Directors in accordance with the terms and provisions of this
Amendment and file such amendment with the Commonwealth of Massachusetts.

 

3.                                       This Amendment shall be effective as of
the date hereof upon the execution and delivery of same by each of the Company
and Laurus.

 

4.                                       Except as specifically set forth in
this Amendment, there are no other amendments to the Purchase Agreement or the
Certificate of Vote of Directors, or any of the Related Agreements entered into
therewith, and all of the other forms, terms and provisions of the Purchase
Agreement and the Certificate of Vote of Directors and such Related Agreements
shall remain unmodified and in full force and effect. Further, the Company and
Laurus hereby acknowledge that no penalties or fees are currently due by the
Company under the terms of the Purchase Agreement or such Related Agreements.

 

5.                                       The Company and Laurus hereby represent
and warrant that as of the date hereof, after giving effect to this Amendment
(the terms of which shall not constitute an Event of Default), (i) no Event of
Default exists and is continuing and (ii) all representations, warranties and
covenants made by the parties in connection with the Purchase Agreement are
true, correct and complete and all of Company’s and its Subsidiaries’ covenant
requirements have been met.

 

6.                                       This Amendment shall be binding upon
the parties hereto and their respective successors and permitted assigns and
shall inure to the benefit of and be enforceable by each of the parties hereto
and its successors and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
This Amendment may be executed in any number of counterparts, each of which
shall be an original, but all of which shall constitute one instrument.

 

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IN WITNESS WHEREOF, each of the Company and Laurus has caused this Amendment to
be effective and signed in its name effective as of the date set forth above.

 

 

 

IMPLANT SCIENCES CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

LAURUS MASTER FUND, LTD.

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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