Document:

imsc8k_100429ex10-2.htm

 

 

Exhibit 10.2

 

AMENDED AND PROMISSORY PROMISSORY NOTE

 

	 $10,000,000	 	 Dated as of April 23, 2010,
	 	 	 effective as of April 7, 2010

                                                                                                                                                                                                                                      but 

 

FOR VALUE RECEIVED, the undersigned, IMPLANT SCIENCES CORPORATION, a Massachusetts corporation (“Borrower”), promises to pay to the order of DMRJ GROUP, LLC (“Lender”), at the place and times provided in the Credit Agreement referred to below, the principal sum of $10,000,000 or, if less, the unpaid principal amount of all Advances made by Lender, in its sole discretion, from time to time pursuant to that certain Credit Agreement, dated as of September 4, 2009 (as amended, supplemented, modified or restated from time to time, the “Credit Agreement”) among the Borrower, the Guarantors and Lender.  Borrower also promises to pay interest on the unpaid outstanding principal amount from the date hereof until this note (the “Note”) is paid in full calculated in the manner and payable at the times and at the rates as are, from time to time, applicable pursuant to and in accordance with the Credit Agreement.  This note amends and restates, but does not extinguish, impair, novate or discharge the obligations evidenced by, that certain Amended and Restated Promissory Note dated January 12, 2010 in the original principal amount of Five Million Dollars ($5,000,000) executed by Borrower in favor of Lender.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

Borrower acknowledges and agrees that the facility is not a committed credit facility and the advances under the facility, if any, shall be made by Lender in its sole discretion.  Lender shall have the right to refuse to make any advances at any time and for any reason without prior notice to Borrower.

 

The unpaid principal amount of this Note from time to time outstanding is subject to mandatory repayment from time to time as provided in the Credit Agreement and shall bear interest as provided in Article II of the Credit Agreement.  This Note may not be voluntarily prepaid except as provided in the Credit Agreement.  All payments of principal and interest on this Note shall be payable in lawful currency of the United States of America in immediately available funds to account or place as Lender shall direct from time to time by notice to the Company.

 

This Note is entitled to the benefits of, and evidences Obligations incurred under, the Credit Agreement, to which reference is made for a description of the security for this Note and for a statement of the terms and conditions on which Borrower is permitted and required to make prepayments and repayments of principal of the Obligations evidenced by this Note and on which such Obligations may be declared to be immediately due and payable.

 

This Note shall be construed in accordance with and governed by the laws of the State of New York without regard to conflict of law principles that would result in the application of other law, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York.

 

  

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BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS ITSELF AND ITS PROPERTY TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY OTHER FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT LENDER FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST ANY LOAN PARTY OR AGAINST ANY PROPERTY WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.

 

Borrower hereby waives, to the fullest extent permitted by Applicable Law, all requirements as to diligence, presentment, demand of payment, protest and (except as required by the Credit Agreement) notice of any kind with respect to this Note.

 

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  BORROWER REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.  THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY AND THE CREDIT AGREEMENT.  THIS PROVISION SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY LENDER’S ABILITY TO PURSUE ITS REMEDIES AS SET FORTH IN THIS NOTE AND THE CREDIT AGREEMENT.

 

This Note shall be binding upon Borrower and its successors and permitted assigns and shall inure to the benefit of Lender and its successors and assigns.  Borrower may not assign or transfer any of its rights or obligations hereunder.  Any purported assignment in violation of the foregoing shall be null and void.

 

IN WITNESS WHEREOF, the undersigned has executed this Note under seal as of the day and year first written above.

 

IMPLANT SCIENCES CORPORATION

By: /s/ Glenn D. Bolduc

Name:           Glenn D. Bolduc

Title:           CEOexhibit101.htm

EXHIBIT 10.1

FIFTH AGREEMENT OF AMENDMENT

TO

REVOLVING LOAN AND SECURITY AGREEMENT

AND OTHER DOCUMENTS

           This  Fifth Agreement of Amendment to Revolving Loan and Security Agreement ("Fifth Amendment") is effective April 23, 2010 by and among SOVEREIGN BANK, a federal savings bank, having an address of 101 Wood Avenue South, Iselin NJ 08830  ("Lender"), MEDIA SCIENCES INTERNATIONAL, INC., a Delaware corporation, MEDIA SCIENCES, INC.,  a New Jersey corporation, and CADAPULT GRAPHIC SYSTEMS, INC., a New Jersey corporation, having their chief executive office at  8 Allerman Road, Oakland  NJ  07436 (either separately, jointly, or jointly and severally, "Borrower").

RECITALS

A.           Borrower has executed and delivered a certain (i) Secured Revolving Loan Note dated February 12, 2008, in the original maximum principal sum of Eight Million Dollars ($8,000,000.00),  as amended, and a certain (ii) Term Loan Note in the original maximum principal sum of One Million Five Hundred Thousand Dollars ($1,500,000.00) payable to the order of Lender (collectively, "Note")

B.           In connection with the execution and delivery of the Note and to secure payment and performance of the Note and other obligations of Borrower to Lender, the Lender and Borrower have executed, among other things, a Revolving Loan and Security Agreement dated February 12, 2008, as amended ("Loan Agreement").

C.           In addition to the foregoing documents, Media Sciences International, Inc. and Media Sciences, Inc. (jointly and severally, "Pledgor") have executed certain Pledge and Control Agreements dated February 12, 2008 ("Pledge Agreement").  For purposes of convenience, the Borrower and Pledgor are jointly and severally referred to as "Obligors."

D.           In addition to the foregoing documents, the Obligors and Lender have executed or delivered other collateral agreements, certificates and instruments perfecting or otherwise relating  to  the security interests created.   For purposes of convenience, the Note, Loan Agreement,  Pledge Agreement and related collateral agreements, certificates and instruments are collectively referred   to as the "Loan Documents.”

E.           Borrower has requested a modification of the Loan Documents.

F.           Lender and Obligors wish to clarify their rights and duties to one another as set forth in the Loan Documents.

  

  

  

NOW, THEREFORE, in consideration of the promises, covenants and understandings set forth in this Fifth Amendment and the benefits to be received from the performance of such promises, covenants and understandings, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENTS

1.            Lender and Obligors reaffirm, consent and agree to all of the terms and conditions of the Loan Documents as binding, effective and enforceable according to their stated terms, except to the extent that such Loan Documents are hereby expressly modified by this Fifth Amendment.

2.           In the case of any ambiguity or inconsistency between the Loan Documents and this Fifth Amendment, the language and interpretation of this Fifth Amendment is to be deemed binding and paramount.

3.           As to the Secured Revolving Loan Note:

The first paragraph is hereby amended to read as follows:

Upon the earlier of (a) August 12, 2011, or (b) in accordance with a certain Revolving Loan and Security Agreement dated February 12, 2008, or as it may be subsequently amended, signed by the undersigned as "Borrower" ("Loan Agreement") FOR VALUE RECEIVED, the undersigned "Borrower" jointly and severally  promises to pay to the order of SOVEREIGN BANK (the "Lender"), at  101 Wood Avenue South, 6th Floor, Iselin, New Jersey 08830, the principal sum of  Four Million Nine Hundred Thousand ($4,900,000.00) Dollars or the amount actually outstanding and unpaid pursuant to the Loan Agreement.

4.           As to the Loan Agreement:

A.  Section 1.1(b)(B) is hereby amended to read as follows:

(B)  up to the lesser of (i) $1,000,000.00 or (ii) seventy-five (75%) percent of the Borrower's "Qualified Foreign Accounts" as that term is defined in this Agreement; plus

 

                    B.  The following is added to the end of Section 7.1 and Section 7.4:

 

; except that the Borrower may engage in the following two transactions:

1.  The Borrower may purchase the Share of SAMC Fund I Limited, a Cayman Islands company, pursuant to and as defined in that certain Share Purchase Agreement executed as of February 10, 2010, provided that:

 

  

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(a)  the net cash outlay of the Borrower does not exceed $25,000.00; and

(b)  the closing documents implementing the foregoing are in form and substance satisfactory to Lender.

2.    The Borrower may acquire all of the issued and outstanding stock  and/or assets of an entity known a "Master Ink" (which entity is operating in China), provided that:

(a)  Borrower provides and executes an agreement of purchase and closing documents in form and substance satisfactory to Lender; and

(b)  the purchase price to be paid in cash will not exceed $1,150,000.00 pursuant to a closing document promissory note providing for  (1) an initial $250,000 payment at execution and no further principal or interest payment until a balloon payment due not earlier than two years after closing; and (2) further payments of not more than ten percent (10%) of gross sales generated by "Master Ink" on a periodic basis until the balloon payment is due as more fully set forth in the documents implementing the forgoing.  Notwithstanding the foregoing terms, no payment may be made by the Borrower in accordance with the foregoing: (i) unless Borrower has Excess Availability of not less than $300,000 following each such payment ("Excess Availability" being defined as the Advance Limit minus the sum of (x) the outstanding amount of such payment plus (y) any reserves otherwise determined by Lender in accordance with this Agreement, plus (z) fees and expenses due Lender which have not been paid by Borrower); (ii) if such payment causes or creates a Default; (iii) if at the time of such payment there then exists a Default; (iv) unless Borrower has maintained a Fixed Charge of not less than 1.25:1 following each such payment or such payment is made either from the proceeds of equity investment approved by Lender or indebtedness subordinated to the Debt on terms acceptable to Lender; and (v) until Lender has received a financial statement pursuant to Section 6.7(b) demonstrating compliance with each of the foregoing.

  B.  The first sentence of Section 14.1 is hereby amended to read as follows:

The Revolving Loan terminates on August 12, 2011.

5.        In consideration of this Fifth Amendment, Borrower is to pay to Lender a fee of Twelve Thousand Dollars ($12,000.00) upon execution of this Fifth Amendment.

6.         Obligors represent and warrant that there are no defaults or events of Default pursuant to or defined in any of the Loan Documents, and that all warranties and covenants which have been made or

 

  

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performed by Obligors in connection with the Loan Documents were true and complete when made or performed.

7.           The Loan Documents are hereby amended to provide that a default, breach or failure on the part of Obligors to perform any covenant or condition hereunder or an event of Default otherwise defined in either this Fifth Amendment or any document executed in connection with this Fifth Amendment is to be deemed an event of Default for purposes of the Loan Documents.

8.           All representations, warranties and covenants made by Obligors to Lender in the Loan Documents are hereby repeated as though first made expressly in this Fifth Amendment.

9.            Except as otherwise provided herein, the Loan Documents  continue in full force and effect, in accordance with their respective terms.  The parties hereto hereby expressly confirm and reaffirm all of their respective liabilities, obligations, duties and responsibilities under and pursuant to said Loan Documents and consent to the terms of this Fifth Amendment. Capitalized terms used in this Fifth Amendment which are not otherwise defined herein have the meaning ascribed thereto in the Loan Documents.

10.           The parties agree to sign, deliver and file any additional documents and take any other actions that may reasonably be required by Lender including, but not limited to, affidavits, resolutions, or certificates for a full and complete consummation of the matters covered by this Fifth Amendment.

11.           This Fifth Amendment is binding upon, inures to the benefit of, and is enforceable by the heirs, personal representatives, successors and assigns of the parties.  This Fifth Amendment is not assignable by Obligors without the prior written consent of Lender.

12.           To the extent that any provision of this Fifth Amendment is determined by any court or legislature  to be invalid or unenforceable in whole or part either in a particular case or in all cases, such provision or part thereof is to be deemed surplusage.  If that occurs, it does not have the effect of rendering any other provision of this Fifth Amendment invalid or unenforceable.  This Fifth Amendment is to be construed and enforced as if such invalid or unenforceable provision or part thereof were omitted.

13.            This Fifth Amendment may only be changed or amended by a written agreement signed by all of the parties.  By the execution of this Fifth Amendment, Lender is not to be deemed to consent to any future renewal or extension of the loan. This Fifth Amendment may only be changed or amended by a written agreement signed by all of the parties. This Fifth Amendment is deemed to be part of and integrated into the Loan Documents.

14.            This Fifth Amendment is governed by and is to be construed and enforced in accordance with the laws of New Jersey as though made and to be fully performed in New Jersey (without regard to the conflicts of law rules of New Jersey).

15.           The parties to this Fifth Amendment acknowledge that each has had the opportunity to consult independent counsel of their own choice, and that each has relied upon such counsel's advice concerning this Fifth Amendment, the enforceability and interpretation of the terms contained in this Fifth Amendment and the consummation of the transactions and matters covered by this Fifth Amendment.

 

  

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16.           Obligors are to reimburse Lender for its costs, expenses, and reasonable attorneys' fees incurred in connection with this Fifth Amendment, upon execution of this Fifth Amendment.

THE OBLIGORS, FOR THEMSELVES, THEIR SUBSIDIARIES (IF ANY) AND LENDER HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS FIFTH AMENDMENT OR THE DEBT AS AN INDUCEMENT TO THE EXECUTION OF THIS FIFTH AMENDMENT.

IN WITNESS WHEREOF, the parties have signed this Fifth Amendment.

Attest/Witness:                                                             MEDIA SCIENCES

                                                                                          INTERNATIONAL, INC

Jennifer Mejia                                                                 By:           /s/ Michael W. Levin                                           

Print Name:   Jennifer Mejia                                          Print Name:  MICHAEL W. LEVIN

Title:                                                                                 Title:              CEO

Attest/Witness:                                                              MEDIA SCIENCES, INC

Jennifer Mejia                                                                 By:           /s/ Michael W. Levin                                           

Print Name:   Jennifer Mejia                                          Print Name:  MICHAEL W. LEVIN

Title:                                                                                 Title:              CEO

 

Attest/Witness:                                                              CADAPULT GRAPHIC SYSTEMS, INC.

 

 

Jennifer Mejia                                                                 By:           /s/ Michael W. Levin                                           

Print Name:   Jennifer Mejia                                          Print Name:  MICHAEL W. LEVIN

Title:                                                                                 Title:              CEO

 

 

                            SOVEREIGN BANK

 

                                                                                           By:                                               

                                                                                           Print Name:

                                                                                           Title:

 

 

  

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STATE OF NEW JERSEY              )

                                                           ) ss.

COUNTY OF Bergen                      )

I certify that on April 27, 2010, MICHAEL W. LEVIN personally appeared  before  me and that this person acknowledged under oath, to my satisfaction, that this person is the Chief Executive Officer of Media Sciences, Inc., Media Sciences International, Inc. and Cadapult Graphic Systems, Inc., the corporations named in the attached document; this person executed and delivered the attached document on behalf of and as the voluntary act and deed of the corporations, and this person was authorized by the corporations to execute and deliver the attached document on behalf of the corporations.

/s/ Denise S. Hawkins                                                                

 

  

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