Exhibit 10.76

 

SECURITY AGREEMENT

 

This Security Agreement, made as of the 25th of November, 2003 is entered into
by and between Laurus Master Fund, Ltd. (“Laurus”) and Implant Sciences
Corporation, a Massachusetts company (the “Company”) (the “Agreement”).

 

1.                                       TO SECURE THE PAYMENT OF ALL
OBLIGATIONS (AS HEREAFTER DEFINED), THE COMPANY HEREBY GRANTS TO LAURUS A
CONTINUING SECURITY INTEREST IN ALL OF THE FOLLOWING PROPERTY NOW OWNED OR AT
ANY TIME HEREAFTER ACQUIRED BY THE COMPANY, OR IN WHICH THE COMPANY NOW HAS OR
AT ANY TIME IN THE FUTURE MAY ACQUIRE ANY RIGHT, TITLE OR INTEREST (THE
“COLLATERAL”):  ALL ACCOUNTS (THE “ACCOUNTS”), INVENTORY, EQUIPMENT, GOODS,
DOCUMENTS, INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, PROMISSORY NOTES),
CONTRACT RIGHTS, GENERAL INTANGIBLES (INCLUDING, WITHOUT LIMITATION, PAYMENT
INTANGIBLES), CHATTEL PAPER, SUPPORTING OBLIGATIONS, INVESTMENT PROPERTY,
LETTER-OF-CREDIT RIGHTS, TRADEMARKS AND TRADESTYLES IN WHICH THE COMPANY NOW HAS
OR HEREAFTER MAY ACQUIRE ANY RIGHT, TITLE OR INTEREST, ALL PROCEEDS AND PRODUCTS
THEREOF (INCLUDING, WITHOUT LIMITATION, PROCEEDS OF INSURANCE) AND ALL
ADDITIONS, ACCESSIONS AND SUBSTITUTIONS THERETO OR THEREFOR.  TERMS USED IN THIS
PARAGRAPH WHICH ARE DEFINED IN THE UNIFORM COMMERCIAL CODE AS ENACTED AND IN
EFFECT FROM TIME TO TIME IN THE COMMONWEALTH OF MASSACHUSETTS (THE “CODE”) ARE
USED HEREIN AS SO DEFINED IN THE CODE.

 

2.                                       THE TERM “OBLIGATIONS” AS USED HEREIN
SHALL MEAN AND INCLUDE ALL DEBTS, LIABILITIES AND OBLIGATIONS OWING BY THE
COMPANY TO LAURUS AND ALL LOANS, ADVANCES, EXTENSIONS OF CREDIT, ENDORSEMENTS,
GUARANTIES, BENEFITS AND/OR FINANCIAL ACCOMMODATIONS HERETOFORE OR HEREAFTER
MADE, GRANTED OR EXTENDED BY LAURUS TO THE COMPANY OR WHICH LAURUS HAS OR WILL
BECOME OBLIGATED TO MAKE, GRANT OR EXTEND TO US OR FOR THE COMPANY’S ACCOUNT OR
ANY OF ITS ACCOUNTS AND ANY AND ALL INTEREST, CHARGES AND/OR EXPENSES HERETOFORE
OR HEREAFTER OWING BY THE COMPANY TO LAURUS AND ANY AND ALL RENEWALS OR
EXTENSIONS OF ANY OF THE FOREGOING, NO MATTER HOW OR WHEN ARISING, DIRECT OR
INDIRECT, ABSOLUTE OR CONTINGENT, LIQUIDATED OR UNLIQUIDATED, AND WHETHER UNDER
ANY PRESENT OR FUTURE AGREEMENT OR INSTRUMENTS BETWEEN THE COMPANY, LAURUS AND
ANY OR ALL SUBSIDIARIES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ALL
OBLIGATIONS OWING BY THE COMPANY TO LAURUS UNDER THE SECURITIES PURCHASE
AGREEMENT OF EVEN DATE HEREWITH AND RELATED SERIES C PREFERRED STOCK IN THE
ORIGINAL STATED VALUE OF $2,500,000 (AS AMENDED, MODIFIED AND SUPPLEMENTED FROM
TIME TO TIME, THE “PREFERRED STOCK”).

 

3.                                       THE COMPANY HEREBY WARRANTS AND
COVENANTS TO LAURUS THAT:  (A) IT IS A CORPORATION VALIDLY EXISTING, IN GOOD
STANDING AND FORMED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND IT
WILL PROVIDE LAURUS THIRTY DAYS PRIOR WRITTEN NOTICE OF ANY CHANGE IN ITS STATE
OF FORMATION; (B) IT IS THE LAWFUL OWNER OF THE COLLATERAL, AND HAS THE SOLE
RIGHT TO GRANT A SECURITY INTEREST THEREIN AND WILL DEFEND THE COLLATERAL
AGAINST ALL CLAIMS AND DEMANDS OF ALL PERSONS AND ENTITIES; (C) IT WILL KEEP THE
COLLATERAL FREE AND CLEAR OF ALL ATTACHMENTS, LEVIES, TAXES, LIENS, SECURITY
INTERESTS AND ENCUMBRANCES OF EVERY KIND AND NATURE, EXCEPT FOR LIENS GRANTED IN
FAVOR OF LAURUS, OR THOSE PREVIOUSLY DISCLOSED BY THE COMPANY ON THE DATE HEREOF
AS REQUIRED BY APPLICABLE SECURITIES LAW; (D) IT WILL NOT WITHOUT LAURUS’ PRIOR
WRITTEN CONSENT, SELL, EXCHANGE OR OTHERWISE DISPOSE OF THE COLLATERAL OR ANY OF
THE COMPANY’S RIGHTS THEREIN OR PERMIT ANY LIEN OR SECURITY INTEREST TO ATTACH
TO SAME, EXCEPT THAT CREATED BY THIS AGREEMENT OR SALES OF INVENTORY OR THE
DISPOSITION OF OBSOLETE OR WORN OUT EQUIPMENT IN THE ORDINARY COURSE OF BUSINESS
OR OTHERWISE

 

--------------------------------------------------------------------------------

 

4.                                       SELL THE COLLATERAL IN EXCESS OF
$150,000, IN THE ORDINARY COURSE OF BUSINESS ; (E) IT WILL ALLOW LAURUS AND/OR
LAURUS’ REPRESENTATIVES FREE ACCESS TO AND THE RIGHT OF INSPECTION OF THE
COMPANY’S PREMISES WHERE THE BOOKS AND RECORDS RELATING TO THE COLLATERAL ARE
LOCATED; AND (F) IT HEREBY INDEMNIFIES AND SAVES LAURUS HARMLESS FROM ALL LOSS,
COSTS, DAMAGE, LIABILITY AND/OR EXPENSE, INCLUDING REASONABLE ATTORNEYS’ FEES,
THAT LAURUS MAY SUSTAIN OR INCUR TO ENFORCE PAYMENT, PERFORMANCE OR FULFILLMENT
OF ANY OF THE OBLIGATIONS OR IN THE ENFORCEMENT OF THIS AGREEMENT OR IN THE
PROSECUTION OR DEFENSE OF ANY ACTION OR PROCEEDING EITHER AGAINST LAURUS OR THE
COMPANY CONCERNING ANY MATTER GROWING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND/OR ANY OF THE OBLIGATIONS AND/OR ANY OF THE COLLATERAL.

 

5.                                       LAURUS AGREES TO TERMINATE THE SECURITY
INTEREST IN THE COLLATERAL UPON THE COMPANY TENDERING THE FINAL PAYMENT IN
SATISFACTION OF THE OBLIGATIONS.  LAURUS AGREES TO JOIN WITH THE COMPANY IN
EXECUTING TERMINATION STATEMENTS AND OTHER INSTRUMENTS PURSUANT TO THE CODE IN
FORM SATISFACTORY TO THE COMPANY AND IN EXECUTING SUCH OTHER DOCUMENTS OR
INSTRUMENTS AS MAY BE REQUIRED OR DEEMED NECESSARY BY THE COMPANY FOR PURPOSES
OF TERMINATING THE SECURITY INTEREST IN THE COLLATERAL.

 

6.                                       THE COMPANY SHALL BE IN DEFAULT UNDER
THIS AGREEMENT UPON THE HAPPENING OF ANY OF THE FOLLOWING EVENTS OR CONDITIONS
(EACH, A “DEFAULT”):  (A) IT SHALL FAIL TO PAY WHEN DUE OR PUNCTUALLY PERFORM
ANY OF THE OBLIGATIONS; (B) ANY COVENANT, WARRANTY, REPRESENTATION OR STATEMENT
MADE OR FURNISHED TO LAURUS BY THE COMPANY OR ON ITS BEHALF WAS FALSE IN ANY
MATERIAL RESPECT WHEN MADE OR FURNISHED AND SUCH FAILURE SHALL HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY; (C) IT SHALL FAIL TO COMPLY WITH ANY TERM OR
PROVISION SET FORTH IN THIS AGREEMENT AND SUCH FAILURE (TO THE EXTENT NOT
COVERED BY ANY OTHER CLAUSE OF THIS SECTION 5) SHALL REMAIN UNCURED FOR A PERIOD
OF TWO (2) BUSINESS DAYS AFTER THE DATE ON WHICH LAURUS NOTIFIED THE COMPANY OF
SUCH FAILURE UNLESS THE COMPANY CAN NOT REMEDY SUCH DEFAULT WITHIN SUCH TIME
PERIOD; (D) A DEFAULT SHALL OCCUR UNDER THE PREFERRED STOCK OR (E) DEFAULT SHALL
OCCUR UNDER ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN LAURUS AND THE
COMPANY AND/OR SECURITY ISSUED IN CONNECTION THEREWITH, WHICH SUCH DEFAULT IS
NOT CURED WITHIN ANY APPLICABLE CURE OR GRACE PERIOD.

 

7.                                       UPON THE OCCURRENCE OF ANY DEFAULT AND
AT ANY TIME THEREAFTER, LAURUS MAY DECLARE ALL OBLIGATIONS IMMEDIATELY DUE AND
PAYABLE AND LAURUS SHALL HAVE THE REMEDIES OF A SECURED PARTY PROVIDED IN THE
CODE, THIS AGREEMENT AND OTHER APPLICABLE LAW.  UPON THE OCCURRENCE OF ANY
DEFAULT AND AT ANY TIME THEREAFTER, LAURUS WILL HAVE THE RIGHT TO TAKE
POSSESSION OF THE COLLATERAL AND TO MAINTAIN SUCH POSSESSION ON OUR PREMISES OR
TO REMOVE THE COLLATERAL OR ANY PART THEREOF TO SUCH OTHER PREMISES AS YOU MAY
DESIRE, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO CONTACT ACCOUNT DEBTORS
LIABLE IN RESPECT OF THE ACCOUNTS FOR THE PURPOSE OF ENGAGING IN COLLECTION
ACTIVITIES WITH RESPECT THERETO.  UPON LAURUS’ REQUEST, THE COMPANY SHALL
ASSEMBLE THE COLLATERAL AND MAKE IT AVAILABLE TO LAURUS AT A PLACE DESIGNATED BY
LAURUS.  IF ANY NOTIFICATION OF INTENDED DISPOSITION OF ANY COLLATERAL IS
REQUIRED BY LAW, SUCH NOTIFICATION, IF MAILED, SHALL BE DEEMED PROPERLY AND
REASONABLY GIVEN IF MAILED AT LEAST TEN BUSINESS DAYS BEFORE SUCH DISPOSITION,
POSTAGE PREPAID, ADDRESSED TO US EITHER AT OUR ADDRESS SHOWN HEREIN OR AT ANY
ADDRESS APPEARING ON LAURUS’ RECORDS FOR THE COMPANY.  ANY PROCEEDS OF ANY
DISPOSITION OF ANY OF THE COLLATERAL SHALL BE APPLIED BY LAURUS TO THE PAYMENT
OF ALL EXPENSES IN CONNECTION WITH THE SALE OF THE COLLATERAL, INCLUDING
REASONABLE ATTORNEYS’ FEES AND OTHER LEGAL EXPENSES AND DISBURSEMENTS AND THE
REASONABLE EXPENSE OF RETAKING, HOLDING, PREPARING FOR SALE, SELLING, AND

 

2

--------------------------------------------------------------------------------

 

THE LIKE, AND ANY BALANCE OF SUCH PROCEEDS MAY BE APPLIED BY LAURUS TOWARD THE
PAYMENT OF THE OBLIGATIONS IN SUCH ORDER OF APPLICATION AS LAURUS MAY ELECT, AND
THE COMPANY SHALL BE LIABLE FOR ANY DEFICIENCY.

 

8.                                       IF THE COMPANY DEFAULTS IN THE
PERFORMANCE OR FULFILLMENT OF ANY OF THE TERMS, CONDITIONS, PROMISES, COVENANTS,
PROVISIONS OR WARRANTIES ON OUR PART TO BE PERFORMED OR FULFILLED UNDER OR
PURSUANT TO THIS AGREEMENT, LAURUS MAY, AT ITS SOLE OPTION WITHOUT WAIVING ITS
RIGHT TO ENFORCE THIS AGREEMENT ACCORDING TO ITS TERMS, IMMEDIATELY OR AT ANY
TIME THEREAFTER AND WITHOUT NOTICE TO THE COMPANY, PERFORM OR FULFILL THE SAME
OR CAUSE THE PERFORMANCE OR FULFILLMENT OF THE SAME FOR THE COMPANY’S ACCOUNT
AND AT ITS SOLE COST AND EXPENSE, AND THE COST AND EXPENSE THEREOF (INCLUDING
REASONABLE ATTORNEYS’ FEES) SHALL BE ADDED TO THE OBLIGATIONS AND SHALL BE
PAYABLE ON DEMAND WITH INTEREST THEREON AT THE HIGHEST RATE PERMITTED BY LAW.

 

9.                                       UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT, THE COMPANY APPOINTS LAURUS, ANY OF ITS OFFICERS, EMPLOYEES OR ANY
OTHER PERSON OR ENTITY WHOM LAURUS MAY DESIGNATE AS THE COMPANY’S ATTORNEY, WITH
POWER TO EXECUTE SUCH DOCUMENTS IN ITS BEHALF AND TO SUPPLY ANY OMITTED
INFORMATION AND CORRECT PATENT ERRORS IN ANY DOCUMENTS EXECUTED BY THE COMPANY
OR ON ITS BEHALF; TO FILE FINANCING STATEMENTS AGAINST THE COMPANY COVERING THE
COLLATERAL; TO SIGN THE COMPANY’S NAME ON PUBLIC RECORDS; AND TO DO ALL OTHER
THINGS LAURUS DEEM NECESSARY TO CARRY OUT THIS AGREEMENT.  THE COMPANY HEREBY
RATIFIES AND APPROVES ALL ACTS OF THE ATTORNEY AND NEITHER LAURUS NOR THE
ATTORNEY WILL BE LIABLE FOR ANY ACTS OF COMMISSION OR OMISSION, NOR FOR ANY
ERROR OF JUDGMENT OR MISTAKE OF FACT OR LAW.  THIS POWER BEING COUPLED WITH AN
INTEREST, IS IRREVOCABLE SO LONG AS ANY OBLIGATIONS REMAINS UNPAID.

 

10.                                 NO DELAY OR FAILURE ON LAURUS’ PART IN
EXERCISING ANY RIGHT, PRIVILEGE OR OPTION HEREUNDER SHALL OPERATE AS A WAIVER OF
SUCH OR OF ANY OTHER RIGHT, PRIVILEGE, REMEDY OR OPTION, AND NO WAIVER WHATEVER
SHALL BE VALID UNLESS IN WRITING, SIGNED BY LAURUS AND THEN ONLY TO THE EXTENT
THEREIN SET FORTH, AND NO WAIVER BY LAURUS OF ANY DEFAULT SHALL OPERATE AS A
WAIVER OF ANY OTHER DEFAULT OR OF THE SAME DEFAULT ON A FUTURE OCCASION. 
LAURUS’ BOOKS AND RECORDS CONTAINING ENTRIES WITH RESPECT TO THE OBLIGATIONS
SHALL BE ADMISSIBLE IN EVIDENCE IN ANY ACTION OR PROCEEDING, SHALL BE BINDING
UPON THE COMPANY FOR THE PURPOSE OF ESTABLISHING THE ITEMS THEREIN SET FORTH AND
SHALL CONSTITUTE PRIMA FACIE PROOF THEREOF.  LAURUS SHALL HAVE THE RIGHT TO
ENFORCE ANY ONE OR MORE OF THE REMEDIES AVAILABLE TO LAURUS, SUCCESSIVELY,
ALTERNATELY OR CONCURRENTLY.  THE COMPANY AGREES TO JOIN WITH LAURUS IN
EXECUTING FINANCING STATEMENTS OR OTHER INSTRUMENTS PURSUANT TO THE CODE IN FORM
SATISFACTORY TO LAURUS AND IN EXECUTING SUCH OTHER DOCUMENTS OR INSTRUMENTS AS
MAY BE REQUIRED OR DEEMED NECESSARY BY LAURUS FOR PURPOSES OF AFFECTING OR
CONTINUING LAURUS’ SECURITY INTEREST IN THE COLLATERAL.

 

11.                                 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND CANNOT BE
TERMINATED ORALLY.  ALL OF THE RIGHTS, REMEDIES, OPTIONS, PRIVILEGES AND
ELECTIONS GIVEN TO LAURUS HEREUNDER SHALL ENURE TO THE BENEFIT OF ITS SUCCESSORS
AND ASSIGNS.  THE TERM “LAURUS” AS HEREIN USED SHALL INCLUDE LAURUS, ANY PARENT
OF LAURUS, ANY OF LAURUS’ SUBSIDIARIES AND ANY CO-SUBSIDIARIES OF ITS PARENT,
WHETHER NOW EXISTING OR HEREAFTER CREATED OR ACQUIRED, AND ALL OF THE TERMS,
CONDITIONS, PROMISES, COVENANTS, PROVISIONS AND WARRANTIES OF THIS AGREEMENT
SHALL ENURE TO THE BENEFIT OF AND SHALL BIND THE REPRESENTATIVES, SUCCESSORS AND
ASSIGNS OF EACH OF THE COMPANY AND THEM.  LAURUS AND THE COMPANY HEREBY (A)
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN LITIGATION RELATING TO THIS
AGREEMENT AND THE COMPANY

 

3

--------------------------------------------------------------------------------

 

AGREES NOT TO ASSERT ANY COUNTERCLAIM IN SUCH LITIGATION, (B) SUBMIT TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE
OF NEW YORK AND (C) WAIVE ANY OBJECTION LAURUS OR THE COMPANY MAY HAVE AS TO THE
BRINGING OR MAINTAINING OF SUCH ACTION WITH ANY SUCH COURT.

 

12.                                 ALL NOTICES AND OTHER COMMUNICATIONS
HEREUNDER SHALL BE DEEMED GIVEN THREE (3) BUSINESS DAYS AFTER DELIVERED OR
DEPOSITED IN THE MAILS, FIRST CLASS POSTAGE PREPAID (PROVIDED, HOWEVER, THAT
NOTICES GIVEN BY TELEGRAM, TELEX OR TELEFAX SHALL BE DEEMED GIVEN WHEN
DISPATCHED BY TELEGRAM, TELEX OR TELEFAX, AS THE CASE MAY BE) AND IF TO (A) THE
COMPANY ADDRESSED AS SET FORTH BENEATH THE COMPANY’S NAME ON THE SIGNATURE PAGE
UNLESS THE COMPANY SHALL GIVE NOTICE IN WRITING OF A DIFFERENT ADDRESS OR
TELEFAX NUMBER IN THE MANNER PROVIDED HEREIN, WITH A COPY TO ELLENOFF GROSSMAN
AND SCHOLE LLP, 370 LEXINGTON AVENUE NEW YORK, NEW YORK 10017 ATTENTION: BARRY
I. GROSSMAN, ESQ. FACSIMILE NUMBER (212) 370-7889 AND (B) LAURUS, AT THE ADDRESS
SET FORTH FOR LAURUS ON THE LAST PAGE OF THIS AGREEMENT UNLESS LAURUS SHALL GIVE
THE COMPANY NOTICE IN WRITING OF A DIFFERENT ADDRESS.

 

13.                                 NO AMENDMENT, MODIFICATION, TERMINATION, OR
WAIVER OF ANY PROVISION OF THIS AGREEMENT SHALL BE EFFECTIVE UNLESS THE SAME
SHALL BE IN WRITING AND SIGNED BY LAURUS, AND THEN SUCH WAIVER OR CONSENT SHALL
BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR
WHICH GIVEN.

 

14.                                 NO COURSE OF DEALING BETWEEN LAURUS AND THE
COMPANY, NOR ANY FAILURE OR DELAY ON LAURUS’ PART IN EXERCISING ANY RIGHT,
POWER, OR REMEDY UNDER THIS AGREEMENT SHALL OPERATE AS A WAIVER THEREOF; NOR
SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER, OR REMEDY
PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER
RIGHT, POWER, OR REMEDY UNDER THIS AGREEMENT.  THE RIGHTS AND REMEDIES PROVIDED
IN THIS AGREEMENT AND THE PREFERRED STOCK ARE CUMULATIVE, AND ARE NOT EXCLUSIVE
OF ANY OTHER RIGHTS, POWERS, PRIVILEGES, OR REMEDIES, NOW OR HEREAFTER EXISTING,
AT LAW OR IN EQUITY OR OTHERWISE.  THE COMPANY HEREBY WAIVES IN FAVOR OF LAURUS
ALL SURETYSHIP DEFENSES AND WAIVES NOTICE OF (A) ACCEPTANCE HEREOF AND OF ALL
NOTICES AND DEMANDS OF ANY KIND TO WHICH THE COMPANY MAY BE ENTITLED AND (B)
PRESENTMENT TO OR DEMAND OF PAYMENT FROM ANYONE WHOMSOEVER LIABLE UPON THE
ACCOUNTS OR THE OBLIGATIONS, PROTEST, NOTICES OF PRESENTMENT, NON-PAYMENT OR
PROTEST AND NOTICE OF ANY SALE OF THE COLLATERAL OR ANY DEFAULT OF ANY SORT. 
THE COMPANY FURTHER WAIVES ALL OF THE COMPANY’S RIGHTS OF SUBROGATION,
REIMBURSEMENT, INDEMNITY, EXONERATION, CONTRIBUTION OR ANY OTHER CLAIM WHICH ANY
OF THE COMPANY OR LAURUS MAY NOW OR HEREAFTER HAVE AGAINST ANY PARTY LIABLE FOR
THE OBLIGATIONS.

 

15.                                 ANY PROVISION OF THIS AGREEMENT WHICH IS
PROHIBITED OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION,
BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT
INVALIDATING THE REMAINING PROVISIONS OF THIS AGREEMENT OR AFFECTING THE
VALIDITY OR ENFORCEABILITY OF SUCH PROVISION IN ANY OTHER JURISDICTION.  IN NO
EVENT SHALL ANY PAYMENTS HEREUNDER (IF DEEMED INTEREST UNDER APPLICABLE LAW OR
REGULATION) EXCEED THE MAXIMUM RATE PERMITTED UNDER APPLICABLE LAW OR
REGULATION.  IF ANY PROVISION OF THIS AGREEMENT IS IN CONTRAVENTION OF ANY SUCH
LAW OR REGULATION, THEN SUCH PROVISION SHALL BE DEEMED AMENDED TO PROVIDE FOR
INTEREST AT SAID MAXIMUM RATE AND ANY EXCESS AMOUNT SHALL BE APPLIED TO THE
OBLIGATIONS IN SUCH ORDER AS LAURUS SHALL ELECT.

 

4

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF the parties hereto have executed and delivered this Security
Agreement as of the date first written above.

 

 

 

IMPLANT SCIENCES CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Anthony J. Armini

 

 

 

 

Name:

Anthony J. Armini

 

 

 

Title:

President

 

 

 

Address:

107 Audubon Road, #5

 

 

 

 

Wakefield, Massachusetts 01880

 

 

 

 

 

 

 

 

LAURUS MASTER FUND, LTD.

 

 

 

 

 

 

 

 

By:

/s/ David Grin

 

 

 

 

Name:

David Grin

 

 

 

Title:

Director

 

 

 

 

 

 

 

 

Address:  c/o Ironshore Corporate Services, Ltd.

 

P.O. Box 1234 G.T.

 

 

Queensgate House

 

 

South Church Street

 

 

Grand Cayman, Cayman Islands

 

 

5

--------------------------------------------------------------------------------

 

[Security Agreement Signature Page]

 

6

--------------------------------------------------------------------------------