exhibit10-101.htm


     

    
      

      

    

    EXHIBIT
10.101

     

    AMENDMENT
AGREEMENT

    


    THIS
AMENDMENT AGREEMENT (this “Agreement”), dated as
of March 20, 2009 is entered into by and between Imaging Diagnostic Systems,
Inc., a Florida corporation (the “Company”), Whalehaven
Capital Fund Limited (“Whalehaven”) and
Alpha Capital Anstalt (“Alpha” and
collectively with Whalehaven, the “Holders”).

    


    WHEREAS, the Company and
Whalehaven are parties to that certain Securities Purchase Agreement (the “August Purchase
Agreement”), dated August 1, 2008, as amended, pursuant to which the
Company issued to Whalehaven a 8% Senior Secured Convertible Debentures due,
subject to the terms therein, August 1, 2009 (the “August Debentures”)
with an aggregate principal amount of $400,000 and common stock purchase
warrants (the “Warrants”) to
purchase up to 22,222,222 shares of Common Stock;

    


    WHEREAS, pursuant to the
August Purchase Agreement, the Company and Whalehaven entered into that certain
Registration Rights Agreement, dated August 1, 2008 (the “August Registration Rights
Agreement”) pursuant to which the Company is obligated to register all of
the Registrable Securities (as defined in the August Registration Rights
Agreement);

    


    WHEREAS, on November 26, 2008,
Whalehaven sold a portion of the August Debentures and the Warrants to Alpha
pursuant to the Securities Purchase Agreement, dated as of such date, by and
among Whalehaven and Alpha, and, as a result, Alpha and Whalehaven are holders
of the August Debentures and the Warrants;

    


    WHEREAS, the Company and the
Holders are parties to that certain Securities Purchase Agreement (the “November Purchase
Agreement” and together with the August Purchase Agreement, the “Purchase
Agreements”), dated November 20, 2008, as amended, pursuant to which the
Company issued to the Holders 8% Senior Secured Convertible Debentures due,
subject to the terms therein, November 20, 2009 (the “November Debentures”
and together with the August Debentures, the “Debentures”) with an
aggregate principal amount of $400,000;

    


    WHEREAS, pursuant to the
November Purchase Agreement, the Company and the Holders entered into that
certain Registration Rights Agreement, dated November 20, 2008 (the “November Registration Rights
Agreement” and together with the August Registration Rights Agreement,
the “Registration
Rights Agreements”) pursuant to which the Company is obligated to
register all of the Registrable Securities (as defined in the November
Registration Rights Agreement);

    


    WHEREAS, the Company has
requested that the Holders agree to certain waivers and amendments under the
Transaction Documents, and the Holders have agreed to such request, subject to
the terms and conditions of this Agreement; and

    


    WHEREAS, capitalized terms
used herein, but not otherwise defined, shall have the meanings ascribed to such
terms as set forth in the Purchase Agreements.

    


    
      
        
           


        

        
           

          
            

          

        

        
           


        

      

    

    


    


    NOW, THEREFORE, in
consideration of the terms and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:

    


    1.           Adjustment of Conversion
Price of August Debentures.  The Company and the Holders hereby
agree to reduce (a) the Floor Price for the August Debentures to equal to $0.005
per share, subject to further adjustment as set forth in the August Debentures
and (b) the Set Price for the August Debentures to equal $0.01 per share,
subject to further adjustment as set forth in the August
Debentures.  As such, Section 4(b) of the August Debentures is hereby
deleted in its entirety and replaced with the following:

     

    “(b)           “Conversion
Price.  The conversion price in effect on any Conversion Date
shall be equal to the lesser of (a) $0.01, subject to adjustment herein (the
“Set Price”)
and (b) 80% of the average of the 3 lowest Closing Prices during the 10 Trading
Days immediately prior to the applicable Conversion Date (subject to adjustment
herein) (the “Conversion Price”);
provided, however, the
Conversion Price shall in no event be less than $0.005, subject to further
adjustment herein (the “Floor
Price”).”

    


    2.           Adjustment of Conversion
Price of November Debentures.  The Company and the Holders
hereby agree to reduce (a) the Floor Price for the November Debentures to equal
to $0.005 per share, subject to further adjustment as set forth in the November
Debentures and (b) the Set Price for the November Debentures to equal $0.01 per
share, subject to further adjustment as set forth in the November
Debentures.  As such, Section 4(b) of the November Debentures is
hereby deleted in its entirety and replaced with the following:

     

    “(b)           “Conversion
Price.  The conversion price in effect on any Conversion Date
shall be equal to the lesser of (a) $0.01 subject to adjustment herein (the
“Set Price”)
and (b) 80% of the average of the 3 lowest Closing Prices during the 10 Trading
Days immediately prior to the applicable Conversion Date (subject to adjustment
herein)(the “Conversion Price”);
provided, however, the
Conversion Price shall in no event be less than $0.005 per share, subject to
further adjustment herein (the “Floor
Price”).”

    


    3.           Suspension of the
Registration Rights Agreements. As a result of the changes made to Rule
144 promulgated under the Securities Act which were effective February 15, 2008,
the Company’s obligations pursuant to each of the Registration Rights Agreements
to register the Registrable Securities (as defined in each of the Registration
Rights Agreements) (collectively, the “144 Eligible
Securities”), are hereby suspended, so long as (a) the Company is in
compliance with the current public information requirements under Rule 144 and
(b) the Holders may sell the 144 Eligible Securities without any restriction or
limitation under Rule 144 as of that date.  Subject to the terms and
conditions set forth herein, the Holders hereby agree, severally, and not
jointly, that the Company can withdraw each of the registration statements filed
pursuant to each of the Registration Rights Agreements and agree that the
Company shall not be required to file or maintain the effectiveness with respect
to any Registrable Securities (as defined in each of the Registration Rights
Agreements) that are eligible for resale without volume or
manner-of-sale

     

    


    
      
        
           


        

        
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    restrictions
so long as the Company is in compliance with the current public information
requirements pursuant to Rule 144. The Company hereby agrees to cause the
Transfer Agent to accept a legal opinion from counsel, reasonably acceptable to
the Transfer Agent and each undersigned Holder, addressed to the undersigned
Holders and the Transfer Agent opining that all of the 144 Eligible Securities
may be sold pursuant to Rule 144 without volume restrictions or manner-of-sale
limitations as of (a) with respect to the Registrable Securities pursuant to the
August Registration Statement, February 2, 2009 and (b) with respect to the
Registrable Securities pursuant to the November Registration Statement, May 21,
2009, and that certificates representing such 144 Eligible Securities issuable
upon conversion of the Debentures or a “cashless exercise” of the Warrants may
be issued without a restrictive legend.  The consents, waivers and
amendments of the Holders hereunder shall not be effective unless and until such
legal opinion is delivered to the Transfer Agent and each of the
Holders.

     

    4.           Right of First
Refusal. Each of the undersigned Holders hereby agrees to waive its
respective rights and the Company’s obligations pursuant to Section 4.12 of the
Purchase Agreements; provided, however, any
capitalized terms that are used in Section 4.12 of the Purchase Agreements and
not otherwise defined in each of the Purchase Agreements, respectively, shall
continue to be in full force and effect and shall have the meaning set forth in
Section 4.12 of each of the Purchase Agreements.

     

    5.           Equity Line. The
Company and each of the undersigned Holders hereby agree that the term “Equity
Line” as defined in Section 4.18 of each of the Purchase Agreements shall be
revised to include any equity line of credit between the Company and Charlton
Avenue LLC (“Charlton”) as the
selling stockholder, pursuant to the $15 million Sixth Private Equity Credit
Agreement dated April 21, 2008 between the Company and Charlton. As such,
Section 4.18 of each of the Purchase Agreements is hereby deleted in its
entirety and replaced with the following:

     

    “4.18   Equity Line. For so
long as the Debentures are outstanding, the Holder shall have the right to
request a spreadsheet setting forth each previous draw down by the Company on
the Equity Line (as defined herein) but (a) the Holder shall otherwise rely upon
the SEC Reports for notice of any draw down and (b) the Company shall not
provide the Holders with any notice of a draw down on the Equity Line prior to
the disclosure required by the Securities Act in the SEC Reports. For the
purpose of this Section 4.18 and Section 4.13, an “Equity Line” shall mean any
equity line of credit between the Company and Charlton Avenue LLC (“Charlton”), as the
selling stockholder, pursuant to the $15 million Sixth Private Equity Credit
Agreement dated April 21, 2008 between the Company and Charlton.”

    


     

    6.           Amendment to Subsequent
Equity Sales. The Company and each of the undersigned Holders hereby
agree that Section 4.13 of each of the Purchase Agreements shall not prohibit an
Equity Line (as defined in the revised Section 4.18 of each of the Purchase
Agreements). As such, Section 4.13(c) of each of the Purchase Agreements is
hereby deleted in its entirety and replaced with the following:

     

    


    
      
        
           


        

        
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    “(c)           Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt
Issuance or an Equity Line (as defined in Section 4.18), except that no Variable
Rate Transaction shall be an Exempt Issuance.”

    


     

    7.           Representations and
Warranties of the Company.  The Company hereby makes the
representations and warranties set forth below to the Holders as of the date of
its execution of this Agreement:

     

    (a)          Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection therewith other than in connection
with the Required Approvals.  This Agreement has been duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    (b)          No
Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby or thereby to which it is a party do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

     

    (c)          No
Defaults.  As of the date of this Agreement, no Event of
Default (as defined in each of the Debentures) has occurred and is continuing as
of the date hereof.

     

    (d)          Equal
Consideration.  Except as set forth in this Agreement, no
consideration has been offered or paid to any person to amend or consent to a
waiver, modification, forbearance or otherwise of any provision of any of the
Transaction Documents.

     

    


    
      
        
           


        

        
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    (e)          Survival and Bring
Down.  All of the Company’s representations and warranties
contained in this Agreement shall survive the execution, delivery and acceptance
of this Agreement by the parties hereto.  The Company expressly
reaffirms that each of the representations and warranties set forth in the
Purchase Agreements, continues to be true, accurate and complete in all material
respects as of the date hereof (except for any representation and warranty made
as of a certain date, in which case such representation and warranty shall be
true, accurate and complete as of such date), and the Company hereby remake and
incorporate herein by reference each such representation and warranty as though
made on the date of this Agreement.

     

    8.           Representations and
Warranties of the Holders.  Each of the Holders hereby makes
the representation and warranty set forth below to the Company as of the date of
its execution of this Agreement. Each Holder represents and warrants that (a)
the execution and delivery of this Agreement by it and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
action on its behalf and (b) this Agreement has been duly executed and delivered
by such Holder and constitutes the valid and binding obligation of such Holder,
enforceable against it in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    9.           The
waivers and amendments set forth herein shall not be effective unless and until
(a) all of the Holders shall have agreed to the terms and conditions hereunder
and executed and delivered their signature page hereto to the Company and (b)
all conditions precedent to the effectiveness of this Agreement shall have been
satisfied. In addition, the respective obligations, amendments, agreements and
waivers of the Holders hereunder are subject to the following conditions being
met: (a) the accuracy in all material respects of the representations and
warranties of the Company contained herein and (b) the performance by the
Company of all if its obligations, covenants and agreements required to be
performed hereunder.

     

    10.           Public
Disclosure.  On or before 8:30 am (NY time) on the Trading Day
immediately following the date hereof, the Company shall file a Current Report
on Form 8-K, reasonably acceptable to the Holders disclosing the material terms
of the transactions contemplated hereby and attaching this Agreement as an
exhibit thereto. The Company shall consult with the Holders in issuing any other
press releases with respect to the transactions contemplated
hereby.

     

    11.           Effect on Transaction
Documents. Except as expressly set
forth above, all of the terms and conditions of the Transaction Documents shall
continue in full force and effect after the execution of this Agreement and
shall not be in any way changed, modified or superseded by the terms set forth
herein, including, but not limited to, any other obligations the Company may
have to the Holders under the Transaction Documents.  Notwithstanding the
foregoing, this Agreement shall be deemed for all purposes as an amendment to
any Transaction Document as required to serve the purposes hereof, and in the
event of any conflict between the terms and provisions of any other Transaction
Document, on the one hand, and the terms and provisions of this Agreement, on
the other hand, the terms and provisions of this Agreement shall
prevail.

    


    
      
        
           


        

        
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    12.           Termination.  This
Agreement may be terminated by any Holder, as to such Holder’s obligations
hereunder, by written notice to the other parties, if the Closing has not been
consummated on or before March 16, 2009.

    


    13.           Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders.

    


    14.           Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in each of the Purchase
Agreements.

     

    15.           Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties; provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties
hereto.

     

    16.           Execution and
Counterparts. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

     

    17.           Fees and
Expenses.  The Company shall pay the fees and expenses of
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by the parties incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.

    


     

    18.           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the Purchase Agreements.

     

    19.           Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    


    
      
        
           


        

        
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    20.           Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Agreement and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments hereto. In addition, each and every reference to share prices in
this Agreement shall be subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.

     

    21.           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof

     

    22.           Entire
Agreement.  The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    23.           Independent Nature of
Holders’ Obligations and Rights.  The Company has elected to
provide all Holders with the same terms and form of amendment, consent and
waiver for the convenience of the Company and not because it was required or
requested to do so by the Holders. The obligations of each Holder under this
Amendment and any Transaction Documents are several and not joint with the
obligations of any other Holders hereunder or thereunder, and no Holder shall be
responsible in any way for the performance or non-performance of the obligations
of any other Holder under this Amendment or any Transaction Documents. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Holder pursuant thereto or hereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any Transaction Documents. Each
Holder shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement and any
Transaction Documents, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose. Each Holder
has been represented by its own separate legal counsel in their review and
negotiation of this Amendment and the Transaction Documents.

     

    


     

     

    


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    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

     

     

    IMAGING
DIAGNOSTIC SYSTEMS, INC.

     

    


    


    By: /s/ Linda B.
Grable

          Name:
Linda B. Grable

      Title:
Chief Executive Officer

    


    


    


    


    


    ********************

    


    [REMAINDER
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    SIGNATURE
PAGE FOR HOLDERS FOLLOWS]

    [HOLDER’S
SIGNATURE PAGE TO IMDS AMENDMENT AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

     

    


    Name of
Holder: Whalehaven Capital Fund Limited

    


    Signature of Authorized Signatory of
Holder: /s/
Brian Mazzella

    


    Name of
Authorized Signatory: Brian Mazzella

    


    Title of
Authorized Signatory: CFO

    


    [SIGNATURE
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    [HOLDER’S
SIGNATURE PAGE TO IMDS AMENDMENT AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

     

    


    Name of
Holder: Alpha Capital Anstalt

    


    Signature of Authorized Signatory of
Holder: /s/
Konrad Ackerman

    


    Name of
Authorized Signatory: Konrad Ackerman

    


    Title of
Authorized Signatory: Director

    


    [SIGNATURE
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