Document:

Exhibit 10.5 - Guaranty  (M0629770.DOC;1)

 Exhibit 10.5
 

 GUARANTY
 This GUARANTY (the “Guaranty”), dated as of March 19, 2014, is executed and delivered by C ACQUISITION CORP., a Delaware corporation (“C Acquisition”), ACCUREL SYSTEMS INTERNATIONAL CORPORATION, a California corporation (“Accurel”), and IMX ACQUISITION CORP., a Delaware corporation (“IMX” and together with C Acquisition and Accurel, each a “Guarantor” and collectively, “Guarantors”) in favor of BAM ADMINISTRATIVE SERVICES LLC, in its capacity as agent for the Investors under the Purchase Agreement (as defined below) and as Secured Party under the Security Agreement (as defined below) (in such capacities, and together with its successors, transferees and assigns, the “Secured Party”). 
  
 W I T N E S S E T H:
 

 WHEREAS, each Guarantor is a wholly owned subsidiary of Implant Sciences Corporation (the “Borrower”); and
 WHEREAS, the Borrower is party to that certain Note Purchase Agreement dated as of the date hereof (as may be amended and restated, supplemented, replaced, or otherwise modified from time to time, the “Purchase Agreement”) by and between Borrower, the investors thereto (collectively, the “Investors” and each, individually, an “Investor”) and the Secured Party, as agent for the Investors, pursuant to which the Investors agreed to extend loans to the Borrower in the principal amount of up to $20,000,000 (the “Loans”), repayment of which is evidenced by certain Senior Secured Promissory Notes dated the date hereof issued to each Investor (the “Notes”), and
 WHEREAS, in order to induce the Secured Party and the Investors to enter into the Purchase Agreement and other Transaction Documents (as defined in the Purchase Agreement) and to induce the Investors to extend the Purchase Agreement, each Guarantor  has agreed jointly and severally guarantee the Guarantied Obligations (as defined below) and execute and deliver this Guaranty; and
 WHEREAS, the Loans will be beneficial to the Guarantors inasmuch as the proceeds of the Loans to the Borrower will indirectly benefit the Guarantors.
 NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Guarantors, Each Guarantor hereby agree as follows:
 1.
 Guaranty of Payment and Performance.  Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees to the Secured Party and the Investors the full and punctual payment when due (whether at maturity, pursuant to a mandatory prepayment requirement, by acceleration or otherwise and whether for principal, interest (including all 
 

 

 

 

 
 interest that accrues after the commencement of any Insolvency Proceeding (as defined in the Security Agreement) irrespective of whether a claim therefor is allowed in such case or proceeding), fees, expenses or otherwise), and the performance, of all liabilities, agreements and other obligations of the Borrower to the Secured Party and the Investors, in each case, whether direct or indirect, absolute or contingent, due or to become due, secured or unsecured, now existing or hereafter arising or acquired (whether by way of discount, letter of credit, lease, loan, overdraft or otherwise), including without limitation all Obligations (as defined in the Security Agreement) and any other obligations under the Purchase Agreement, the Notes and other Transaction Documents (collectively, the “Guarantied Obligations”).  This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance of the Guarantied Obligations and not of their collectability only and is in no way conditioned upon any requirement that the Secured Party or the Investors first attempt to collect any of the Guarantied Obligations from the Borrower or resort to any security or other means of obtaining payment of the Guarantied Obligations.  Should the Borrower default in the payment or performance of any of the Guarantied Obligations, the obligations of the Guarantor hereunder shall become immediately due and payable to the Secured Party and the Investors, without demand or notice of any nature, all of which are expressly waived by the Guarantors.  Payments by the Guarantors hereunder may be required by the Secured Party or the Investors on any number of occasions. 
 2.
 Guarantors’ Agreement to Pay.  Each Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to the Secured Party and the Investors, on demand, all costs and expenses (including court costs and reasonable legal expenses) incurred or expended by the Secured Party or any Investor in connection with enforcement of this Guaranty, together with interest on amounts recoverable under this Guaranty from the time such amounts become due under this Guaranty until payment, at the rate per annum equal to the default rate set forth in the Notes; provided that if such interest exceeds the maximum amount permitted to be paid under applicable law, then such interest shall be reduced to such maximum permitted amount.
 3.
 Unlimited Guaranty; Covenant.  The liability of each Guarantor hereunder shall be unlimited to the extent of the Guarantied Obligations and the other obligations of the Guarantors hereunder (including, without limitation, under Section 2 above).
 4.
 Waivers by Guarantors; Secured Party’s Freedom to Act.  Each Guarantor agrees that the Guarantied Obligations will be paid and performed strictly in accordance with their terms regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Party or the Investors with respect thereto.  Each Guarantor waives presentment, demand, protest, notice of acceptance, notice of Guarantied Obligations incurred and all other notices of any kind, all defenses which may be available to the Borrower by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of the Borrower, and all suretyship defenses generally. Without limiting the generality of the foregoing, each Guarantor agrees to the provisions of any instrument evidencing, securing or otherwise executed in connection with any Guarantied Obligation and agrees that the obligations of each Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by () the failure of the Secured Party or any Investor to assert any claim or demand or to enforce any right or remedy against the Borrower; () any extensions, renewals, increases, restatements, 
 

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 replacements, settlements or compromises of any Guarantied Obligation; () any rescissions, forbearances, waivers, amendments or modifications of any of the terms or provisions of any agreement evidencing, securing or otherwise executed in connection with any Guarantied Obligation; () the substitution or release of any entity primarily or secondarily liable for any Guarantied Obligation or of any property or asset subject to a Lien in favor of the Secured Party or any Investor; () the adequacy of any rights the Secured Party or any Investor may have against any collateral or other means of obtaining repayment of the Guarantied Obligations; () the impairment of any collateral securing the Guarantied Obligations, including without limitation the failure to perfect or preserve any rights the Secured Party or any Investor might have in such collateral or the substitution, exchange, surrender, release, loss or destruction of any such collateral; or () any other act or omission which might in any manner or to any extent vary the risk of such Guarantor or otherwise operate as a release or discharge of Borrower or any other guarantor, all of which may be done without notice to such Guarantor.
 5.
 Unenforceability of Obligations Against Borrower.  If for any reason the Borrower has no legal existence or is under no legal obligation to discharge any of the Guarantied Obligations, or if any of the Guarantied Obligations have become irrecoverable from the Borrower by operation of law or for any other reason, this Guaranty shall nevertheless be binding on each Guarantor to the same extent as if such Guarantor at all times had been the principal obligor on all such Guarantied Obligations. In the event that acceleration of the time for payment of the Guarantied Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, or for any other reason, all such amounts otherwise subject to acceleration under the terms of any agreement evidencing, securing or otherwise executed in connection with any Obligation shall be immediately due and payable by the Guarantors.
 6.
 Subrogation; Subordination.  Until the payment and performance in full of all Guarantied Obligations, no Guarantor shall exercise any rights against the Borrower arising as a result of payment by such Guarantor hereunder, by way of subrogation or otherwise, (the Secured Party having no duty or obligation to take any action at any time to protect or preserve any right of subrogation) and will not prove any claim in competition with the Secured Party or any Investor in respect of any payment hereunder in bankruptcy or insolvency proceedings of any nature; no Guarantor will claim any set-off or counterclaim against the Borrower in respect of any liability of such Guarantor to the Borrower; and each Guarantor  waives any benefit of and any right to participate in any collateral which may be held by the Secured Party.  The payment of any amounts due with respect to any indebtedness of the Borrower now or hereafter held by any Guarantor is hereby subordinated to the prior payment in full of the Guarantied Obligations.  Each Guarantor agrees that after the occurrence of any default in the payment or performance of the Guarantied Obligations, after the expiration of any applicable grace period, if any, it will not demand, sue for or otherwise attempt to collect after such time any such indebtedness of the Borrower to such Guarantor until the Guarantied Obligations shall have been paid in full. If, notwithstanding the foregoing sentence, any Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Guarantor as trustee for the Secured Party and the Investors and be paid over to the Secured Party on account of the Guarantied Obligations without affecting in any manner the liability of the Guarantors under the other provisions of this Guaranty.
 7.
 Further Assurances.  Each Guarantor agrees to do all such things and execute all 
 

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 such documents, as the Secured Party may consider reasonably necessary or desirable to give full effect to this Guaranty and to perfect and preserve the rights and powers of the Secured Party hereunder.
 8.
 Termination; Reinstatement.  This Guaranty shall remain in full force and effect until the Guarantied Obligations are paid in full and not subject to any recapture or preference in bankruptcy or similar proceedings.  This Guaranty shall continue to be effective or be reinstated if at any time any payment made or value received with respect to an Obligation is rescinded or must otherwise be returned by the Secured Party or any Investor upon the insolvency, bankruptcy or reorganization of the Borrower, or otherwise, all as though such payment had not been made or value received. 
 9.
 Successors and Assigns.  This Guaranty shall be jointly and severally binding upon each Guarantor, its respective successors and assigns, and shall inure to the benefit of and be enforceable by the Secured Party, the Investors, and their respective successors, transferees and assigns.  The Secured Party may assign or otherwise transfer any agreement or any note held by it evidencing, securing or otherwise executed in connection with the Guarantied Obligations, or sell participations in any interest therein, to any other person or entity, and such other person or entity shall thereupon become vested, to the extent set forth in the agreement evidencing such assignment, transfer or participation, with all the rights in respect thereof granted to the Secured Party or an Investor herein.
 10.
 Amendments and Waivers.  No amendment or waiver of any provision of this Guaranty or consent to any departure by any Guarantor therefrom shall be effective unless the same shall be in writing and signed by the Secured Party.  No failure on the part of the Secured Party or an Investor to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
 11.
 Notices.  All notices and other communications called for hereunder shall be made in writing and, unless otherwise specifically provided herein, shall be deemed to have been duly made or given when delivered by hand or mailed first class mail postage prepaid or, in the case of telegraphic or telexed notice, when transmitted, answer back received, addressed as follows: if to the Guarantors, at the address set forth in the Purchase Agreement for the Borrower, and if to the Secured Party or an Investor, at the address set forth in the Purchase Agreement.
 12.
 Governing Law; Consent to Jurisdiction.  This Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York without reference to its conflicts of laws provisions. Each Guarantor agrees that any suit for the enforcement of this Guaranty may be brought in the courts of the State of New York or any federal court sitting therein and consents to the non-exclusive jurisdiction of such court and to service of process in any such suit being made upon such Guarantor by mail at the address specified in Section 11 hereof.  Each Guarantor hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court.  Any enforcement action relating to this Guaranty may be brought by motion for summary judgment in lieu of a complaint pursuant to Section 3213 of the New York Civil Practice Law 
 

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 and Rules.
 13.
 WAIVER OF JURY TRIAL.  EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THIS GUARANTY, THE SECURED PARTY, HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF: (A) THIS GUARANTY OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION WITH THE OBLIGATIONS; (B) THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; OR (C) ANY OTHER CLAIM OR DISPUTE HOWEVER ARISING BETWEEN ANY GUARANTOR AND THE SECURED PARTY.
 14.
 Certain References.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person, persons, entity or entities may require.  The terms “herein”, “hereof” or “hereunder” or similar terms used in this Guaranty refer to this entire Guaranty and not only to the particular provision in which the term is used.  Capitalized Terms used but not defined herein shall have the meaning ascribed to such terms in the Purchase Agreement.
 15.
 Miscellaneous.  This Guaranty, together with the Security Agreement executed and delivered by the Guarantors as of the date hereof to the Secured Party (the “Security Agreement”), constitutes the entire agreement of the Guarantors with respect to the matters set forth herein.  The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law or any other agreement, and this Guaranty shall be in addition to any other guaranty of the  Guarantied Obligations.  The invalidity or unenforceability of any one or more sections of this Guaranty shall not affect the validity or enforceability of its remaining provisions. Captions are for the ease of reference only and shall not affect the meaning of the relevant provisions.  The meanings of all defined terms used in this Guaranty shall be equally applicable to the singular and plural, masculine, feminine and generic forms of the terms defined.  
 

 

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 IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date appearing in the introductory paragraph of this Guaranty.
 

 

 	
	 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

	  

	  

	  

	  

	  

	  

	  

	  

 

 

 6Exhibit 10.6 - Omnibus Twelfth Amendment  (M0629773.DOC;1)

 Exhibit 10.6
 

 OMNIBUS TWELFTH AMENDMENT TO CREDIT AGREEMENT AND
FOURTEENTH AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
 This Omnibus Twelfth Amendment to Credit Agreement and Fourteenth Amendment to Note and Warrant Purchase Agreement (“Amendment”) is made as of the 19th  day of March, 2014 between Implant Sciences Corporation, a Massachusetts corporation (the “Company”), and DMRJ Group LLC, a Delaware limited liability company (the “Investor”).
 

 BACKGROUND
 A.
 Company and Investor 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, that certain Omnibus Second Amendment to Credit Agreement and Fourth Amendment to Note and Warrant Purchase Agreement dated as of April 23, 2010, that certain Omnibus Third Amendment to Credit Agreement and Fifth Amendment to Note and Warrant Purchase Agreement dated as of September 30, 2010, that certain Omnibus Fourth Amendment to Credit Agreement and Sixth Amendment to Note and Warrant Purchase Agreement dated as of March 30,  2011, that certain Omnibus Fifth Amendment to Credit Agreement and Seventh Amendment to Note and Warrant Purchase Agreement dated as of April 7, 2011, that certain Omnibus Sixth Amendment to Credit Agreement and Eighth Amendment to Note and Warrant Purchase Agreement dated as of September 21, 2011, that certain Omnibus Seventh Amendment to Credit Agreement and Ninth Amendment to Note and Warrant Purchase Agreement dated as of October 13, 2011, that certain Omnibus Eighth Amendment to Credit Agreement and Tenth Amendment to Note and Warrant Purchase Agreement dated as of February 21, 2012, that certain Omnibus Ninth Amendment to Credit Agreement and Eleventh Amendment to Note and Warrant Purchase Agreement dated as of September 5, 2012 (the “Ninth Omnibus Amendment”), that certain Omnibus Tenth Amendment to Credit Agreement and Twelfth Amendment to Note and Warrant Purchase Agreement dated as of February 28, 2013 (the “Tenth Omnibus Amendment”) and that certain Omnibus Eleventh Amendment to Credit Agreement and Thirteenth Amendment to Note and Warrant Purchase Agreement dated as of November 14, 2013 (collectively,  the “Purchase Agreement”), pursuant to which, among other things, Investor 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, Investor 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”)
 C.
 Pursuant to the Ninth Omnibus Amendment, among other things the Company issued to the Investor a Second Senior Secured Convertible Promissory Note (the “September 2012 Note”). Pursuant to the Tenth Omnibus Amendment, among other things the Company issued to the Investor a second Senior Secured Convertible Promissory Note (the “February 2013 Note”, and together with the September 2012 Note, the March 2009 Note and July 2009 Note, the “Term Notes” and each a “Term Note”).
 

 
 
 D.
 The Purchase Agreement and all instruments, documents and agreements executed in connection therewith, or related thereto, including, without limitation, the March 2009 Note, the July 2009 Note, the September 2012 Note and the February 2013  Note, are referred to herein collectively as the “Purchase Documents”.
 E.
 Company and Investor are also parties to a certain Credit Agreement dated September 4, 2009 (as modified or amended from time to time, including, without limitation, the Omnibus Amendments referenced in Paragraph A above, the “Credit Agreement”), pursuant to which, among other things, the Company executed and delivered to Investor 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 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, the July 2009 Note, the September 2012 Note and the February 2013 Note, each a “Note” and collectively, the “Notes”).
 F.
 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”.
 G.
 Company has requested that Investor modify certain definitions, terms and conditions in the Transaction Documents, and Investor is willing to do so on the terms and conditions hereafter set forth.
 H.
 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:
 (a)
 Maturity Date.  Notwithstanding anything to the contrary contained in any of the Transaction Documents (including, without limitation, any of the Notes), the “Maturity Date” (as defined in the March 2009 Note, the July 2009 Note, the September 2012 Note, the February 2013 Note and the Credit Agreement) shall be defined as March 31, 2015.
 (b)
 Financial Covenants. Notwithstanding anything to the contrary contained in the Purchase Agreement, the Credit Agreement and the Transaction Documents, Investor and the Company agree and acknowledge that the financial covenants contained in Sections 3.29(a), 3.30, 3.32 and 3.33 of the Purchase Agreement and Sections 5.1(q)(i), (r), (t) and (u) of the Credit Agreement shall not be tested from the date hereof through March 31, 2015 (it being understood that any failure to comply with such covenants during such period shall not cause or result in any default or Event of Default).
 

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 2.
 Representations and Warranties.  Company represents and warrants to Investor that:
 (a)
 All warranties and representations made to Investor under the Transaction Documents are true and correct, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified by materiality, Material Adverse Effect or dollar thresholds in the text thereof), as to the date hereof unless they specifically relate to an earlier date in which case they shall be true and correct as of such date, other than as set forth on the disclosure schedules (the “Updated Disclosure Schedules”) to be delivered to Investor pursuant to Section 4 below (the numbers of which shall correspond to the numbers of the disclosure schedules to the applicable Transaction Document); notwithstanding the foregoing, the representations and warranties made as of the Closing Date (as defined in the Purchase Agreement) in Section 2.1(c) of the Purchase Agreement shall be made as of the date hereof.
 (b)
 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.
 (c)
 This Amendment and all other documents, instruments and agreements executed in connection with this Amendment and any assignment, instrument, document, or agreement executed and delivered in connection herewith, will be valid, binding, and enforceable in accordance with its respective terms.
 (d)
 Upon the effectiveness of this Amendment, no default or Event of Default is outstanding under any of the Transaction Documents.
 3.
 Effectiveness Conditions.  This Amendment shall be effective upon completion of the following conditions precedent (all documents to be in form and substance satisfactory to Investor and Investor’s counsel):
 (a)
 Execution and delivery by Company and each Person who delivered a Guarantee to Investor in connection with the Transaction Documents (each a “Guarantor” and collectively, the “Guarantors”) to Investor of this Amendment; 
 (b)
 Delivery by Company to Investor of a secretary’s certificate, dated as of the date hereof, as to (i) the resolutions adopted by the Board of Directors approving the transactions contemplated hereby, (ii) the Articles of Organization, (iii) the Bylaws, each as in effect as of the date hereof, and (iv) the authority and incumbency of the officers of the Company and the Guarantors 
 

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 executing this Amendment and any other documents required to be executed or delivered in connection therewith; and
 (c)
 Execution and/or delivery by Company of all agreements, instruments and documents requested by Investor to effectuate and implement the terms hereof and the Transaction Documents.
 4.
 Additional Agreements. Investor hereby consents to the execution and delivery by the Company of that certain Note Purchase Agreement of even date herewith among the Company, certain investors and BAM Administrative Services LLC as agent for such investors (the “BAM Credit Agreement”), and all of the transactions contemplated by the BAM Agreement. Without limiting the generality of the foregoing, Investor hereby waives all prepayment limitations and prepayment notice requirements set forth in any of the Transaction Documents with respect to repayments and prepayments of Obligations from the proceeds of the loans provided under the BAM Credit Agreement.
 5.
 Additional Covenants. Promptly, but in any event not less than fifteen (15) days after the date hereof, the Company shall deliver to Investor the Updated Disclosure Schedules, in form and substance satisfactory to Investor.
 6.
 Expenses.  The Company shall pay any and all costs, fees and expenses of Investor (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.
 7.
 No Waiver.  Investor 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.  Investor 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 Investor will constitute such a waiver, modification or agreement to forbear.  This Amendment does not obligate Investor 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 Investor or a waiver of any other rights or remedies of Investor except as and only to the extent expressly set forth herein.  No omission or delay by Investor 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.
 8.
 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.
 

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 9.
 Confirmation of Indebtedness.  Company confirms and acknowledges that as of the close of business on March 19, 2014, Company was indebted to Investor without any deduction, defense, setoff, claim or counterclaim, of any nature, in the aggregate principal and interest in the amount of $55,311,855.52, of which $5,338,641.16 is due on account of the March 2009 Note, $1,802,582.42 is due on account of the July 2009 Note, $19,440,631.74 is due on account of Advances (as defined in the Credit Agreement), $14,805,000.00 is due on account of the September 2012 Note, and $13,925,000.00 is due on account of the February 2013 Note plus all fees, costs and expenses incurred to date in connection with the Purchase Agreement, the Credit Agreement and the other Transaction Documents.
 10.
 Collateral.  Company and Guarantors hereby confirm and agree that all security interests and liens granted to Investor 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 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 Investor as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.
 11.
 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 Investor dated December 10, 2008 and in the Guaranty from Guarantors to Investor 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 Notes 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 Investor.
 12.
 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.
 13.
 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.
 14.
 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 
 

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 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: President and 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

	 INVESTOR: 
	 DMRJ GROUP LLC
 

 By: /s/ Daniel Small
 Name: Daniel Small
 Title: Managing Director 

  
 [SIGNATURE PAGE TO OMNIBUS AMENDMENT]

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