imxform8k090318_ex10-1.htm


    


      Exhibit
10.1

       

      


      March 12,
2009

      


      


      Implant
Sciences Corporation

      600 Research Drive

      Wilmington, Massachusetts 01887

      
      

      
      

      Attn: Mr.
Glenn D. Bolduc

      


      Re:           Bridge Bank Blocked
Account

      


      Mr.
Bolduc:

      


      Reference
is made to the Note and Warrant Purchase Agreement, dated December 10, 2008 (as
amended, modified, restated or supplemented from time to time, the “Purchase Agreement”)
among DMRJ Group LLC (“DMRJ”) and Implant
Sciences Corporation (the “Company”), and the
other agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Purchase Agreement, as the same now exist or may
hereafter be amended, restated, replaced, renewed, extended, supplemented,
substituted or otherwise modified from time to time being collectively referred
to herein as the “Transaction
Documents”).  Capitalized terms used in this letter agreement
and not otherwise defined shall have the meanings ascribed to them in the
Purchase Agreement.

       

      The
Company has advised DMRJ that the Company desires to have access to $250,000
from the funds currently held in the Blocked Account pursuant to Section 3.30 of
the Purchase Agreement (the “Access Right”) and to
decrease the Minimum Balance in the Blocked Account set forth in Section 3.30 of
the Purchase Agreement to $250,000, in each case, solely for the period
commencing on the date hereof up to, but not including, April 15, 2009 (the
“Consent
Period”).  In connection therewith, the Company has requested
that DMRJ consent to the Company’s Access Right during the Consent Period
notwithstanding anything to the contrary contained in Section 3.30 of the
Purchase Agreement.

       

      In
reliance upon the Company’s representations, warranties and covenants set forth
herein, DMRJ hereby consents to the Access Right notwithstanding anything to the
contrary contained in Section 3.30 of the Purchase Agreement (the “Consent Item”); provided, however, that DMRJ’s
consent to the Consent Item contained herein is subject to the satisfaction of
the following conditions precedent:

      


      
        	
                (i)  

              	
                prior
      execution and delivery by the Company of an Amended and Restated Senior
      Secured Convertible Promissory Note pursuant to which the Conversion Price
      (as defined in the Note) shall be eighteen cents ($0.18), subject to
      adjustments as set forth therein;
and

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      
        	
                (ii)  

              	
                prior
      execution and delivery by the Company of an Amended and Restated Warrant
      pursuant to which the Warrant Price (as defined in the Warrant) shall be
      eighteen cents ($0.18), as such price may be adjusted from time to time as
      shall result from the adjustments specified
  therein.

              


      

      


      Such
consent shall in no way constitute a waiver of any default or Event of Default
which may occur or has occurred and shall not obligate DMRJ to provide any
further waiver or consent regarding noncompliance with Section 3.30, including
without limitation, failure to maintain a cleared balance of at least $500,000
in the Blocked Account following the Consent Period, or any other section of the
Purchase Agreement).  Upon the effectiveness of this letter agreement,
all references in the Transaction Documents to the Minimum Balance shall refer
to the amount of $250,000 solely during the Consent Period and to $500,000 at
all other times.  If the Company shall fail to maintain a cleared
balance of at least $500,000 in the Blocked Account on and after April 15, 2009,
DMRJ shall have all rights (and hereby reserves all such rights) available upon
the Company’s failure to comply with the requirements of Section 3.30 of the
Purchase Agreement, including, without limitation, in addition to any other
conditions that DMRJ may then establish, the right to require the Company to
engage in a sale process satisfactory to DMRJ in its sole
discretion.

      


      In order
to induce DMRJ to enter into this letter agreement, the Company represents,
warrants and covenants each of the following: (a) no default or Event of Default
has occurred and is continuing, and (b) each of the representations and
warranties contained in the Transaction Documents made by the Company or any
Guarantor is true and correct in all material respects as of the date
hereof.  Each of the representations and warranties set forth in this
paragraph shall be deemed to be remade by the Company on and as of the date the
Company is granted the Access Right.

       

      Upon the
satisfaction of the conditions precedent set forth above and the effectiveness
of this letter agreement, so long as no Event of Default has occurred and is
continuing, DMRJ agrees to provide Bridge Bank, N.A. (“Bank”) with written
instructions (the “Instructions”) to
accept or comply with any Order (as defined in that certain Deposit Account
Control Agreement among DMRJ, Company and Bank dated December 10, 2008 in
connection with the Blocked Account) thereafter received by the Bank from
the Company with respect to any disposition of funds contained in the Blocked
Account at any time and from time to time prior to the close of business on
April 14, 2009, but not after such time, so long as such Order does not cause or
result in the aggregate cleared balance held in the Blocked Account to be
less than $250,000 at any time; provided, however, the upon the
occurrence and during the continuance of an Event of Default, the Company agrees
and acknowledges that DMRJ may rescind the Instructions upon written notice to
the Bank.  DMRJ further agrees, promptly upon the receipt of the
Amended and Restated Senior Secured Convertible Promissory Note and the Amended
and Restated Warrant, to return to the Company, endorsed for cancellation, the
Company’s Senior Secured Convertible Promissory Note and Warrant, each issued to
DMRJ on December 10, 2008.

       

      This
letter agreement shall supplement the Purchase Agreement.  All of the
terms and conditions of the Purchase Agreement and other Transaction Documents,
except as expressly modified herein, are hereby ratified and confirmed and shall
continue unchanged and in full

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

        force and
effect, including, without limitation, the provisions set forth in Section 3.30
of the Purchase Agreement.  The effectiveness of this letter agreement
shall be subject to the due execution and delivery hereof by the Company and
DMRJ and the conditions precedent set forth above.  This letter
agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one the same agreement.  Delivery of an executed
counterpart of this letter by facsimile or electronic transmission shall be
equally as effective as delivery of an original executed counterpart by this
letter.

      

       

      


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      Very
truly yours,

      


      DMRJ
GROUP LLC

      


      


      By:           /s/
Joan Janczewski

      Name:                      Joan
Janczewski

      Title:                      COO

      


      


      


      


      ACCEPTED
AND AGREED:

      


      IMPLANT
SCIENCES CORPORATION

      


      


      By:           /s/
Roger Deschenes

      Name:                      Roger
Deschenes

      Title:                      Vice
President – Finance