imxform8k081216_ex10-5.htm


    Exhibit
10.5

     

    PATENT SECURITY
AGREEMENT

     

    This
PATENT SECURITY AGREEMENT (this “Patent Security
Agreement”) is made this 10th day of December, 2008, among the Grantors
listed on the signature pages hereof (collectively, jointly and severally,
“Grantors” and
each individually “Grantor”), and DMRJ GROUP, LLC (together with its successors,
the “Secured
Party”).

     

    W I T N E S S E T H:

     

     

    WHEREAS, the Secured Party is
the holder of that certain Senior Secured Convertible Promissory Note bearing
even date herewith in the principal amount of $5,600,000 (together with any and
all promissory notes issued by the Company after the date hereof pursuant to the
Purchase Agreement, collectively and each individually, the “Note”) issued or to
be issued by the Implant Sciences Corporation (“Company”) pursuant to
the terms of the Note and Warrant Purchase Agreement bearing even date herewith
(as may be amended, restated, supplemented, replaced or otherwise modified from
time to time, the “Purchase Agreement”)
by and between the Company and the Secured Party, and

     

     

    WHEREAS, pursuant to the terms
and conditions of the Purchase Agreement, the Secured Party has agreed to extend
a loan to the Company, repayment of which is evidenced by the Note,
and

     

     

    WHEREAS, in order to induce
the Secured Party to enter into the Note, the Purchase Agreement and the other
Transaction Documents and to induce the Secured Party to make financial
accommodations to the Company as provided for in the Purchase Agreement,
Grantors have executed and delivered to Secured Party that certain Security
Agreement of even date herewith (including all annexes, exhibits or schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the “Security
Agreement”);

     

     

    WHEREAS, pursuant to the
Security Agreement, Grantors are required to execute and deliver to Secured
Party this Patent Security Agreement;

     

    NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Grantor hereby agrees as follows:

     

    1. DEFINED
TERMS.  All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Security Agreement or the Note or
the Purchase Agreement.

     

    2. GRANT OF SECURITY INTEREST
IN PATENT COLLATERAL.  Each Grantor hereby unconditionally
grants, assigns and pledges to Secured Party a Security Interest in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising and wherever located (collectively, the “Patent
Collateral”):

     

    (a) all of
its Patents including those referred to on Schedule I hereto;
and

     

    (b) all
Proceeds of the foregoing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. SECURITY FOR
OBLIGATIONS.  This Patent Security Agreement and the Security
Interest created hereby secures the payment and performance of the Secured
Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Patent Security Agreement secures
the payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Secured Party whether or not they
are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

     

    4. SECURITY
AGREEMENT.  The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the Security Interest
granted to Secured Party pursuant to the Security Agreement.  Each
Grantor hereby acknowledges and affirms that the rights and remedies of Secured
Party with respect to the Security Interest in the Patent Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.  To the extent there is any inconsistency between this Patent
Security Agreement and the Security Agreement, the Security Agreement shall
control.

     

    5. AUTHORIZATION TO
SUPPLEMENT.  If any Grantor shall obtain rights to any new
patentable inventions or become entitled to the benefit of any patent
application or patent for any reissue, division, or continuation, of any patent,
the provisions of this Patent Security Agreement shall automatically apply
thereto. Grantors shall give prompt (and in any event within fifteen (15)
Business Days) notice in writing to Secured Party with respect to any such new
patent rights.  Without limiting Grantors’ obligations under this
Section 5,
Grantors hereby authorize Secured Party unilaterally to modify this Agreement by
amending Schedule
I to include any such new patent rights of
Grantors.  Notwithstanding the foregoing, no failure to so modify this
Patent Security Agreement or amend Schedule I shall in
any way affect, invalidate or detract from Secured Party’s continuing Security
Interest in all Collateral, whether or not listed on Schedule
I.

     

    6. TERMINATION AND
RELEASE.  Upon indefeasible payment in full in cash of the
Obligations in accordance with the provisions of the Note and the Purchase
Agreement, the Security Interest granted hereby shall terminate and all rights
to the Patent Collateral shall revert to Grantors or any other Person entitled
thereto.  At such time, Secured Party shall execute and deliver, and
authorize the filing of, appropriate termination and release statements or other
documents to terminate and release such Security Interests.

     

    7. COUNTERPARTS.  This
Patent Security Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.  In proving
this Patent Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is
sought.  Any signatures delivered by a party by facsimile transmission
or by e-mail transmission shall be deemed an original signature
hereto.

     

    8. CONSTRUCTION.  Unless
the context of this Patent Security Agreement or any other Transaction Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the terms “includes”
and  “including” are

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

      not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.”  The words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Patent Security
Agreement or any other Transaction Document refer to this Patent Security
Agreement or such other Transaction Document, as the case may be, as a whole and
not to any particular provision of this Patent Security Agreement or such other
Transaction Document, as the case may be.  Section, subsection,
clause, schedule, and exhibit references herein are to this Patent Security
Agreement unless otherwise specified.  Any reference in this Patent
Security Agreement or in any other Transaction Document to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein or in
the other Transaction Documents).  Any reference herein or in any
other Transaction Document to the satisfaction or repayment in full of the
Obligations shall mean the repayment in full in cash (or cash collateralization
in accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations.  Any reference herein to any
Person shall be construed to include such Person’s successors and
assigns.  Any requirement of a writing contained herein or in any
other Transaction Document shall be satisfied by the transmission of a Record
and any Record so transmitted shall constitute a representation and warranty as
to the accuracy and completeness of the information contained
therein.

    

     

    9. GOVERNING
LAW.  THE VALIDITY OF THIS PATENT SECURITY AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN
ANOTHER TRANSACTION DOCUMENT IN RESPECT OF SUCH OTHER TRANSACTION DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

     

    


    [signature
page follows]

     


    
      
        
        

         


      

      
        3

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.

     

    
      	 
      	
              IMPLANT
      SCIENCES CORPORATION

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ Phillip C.
      Thomas

            
	 
      	
              Name:  Phillip C.
    Thomas

            
	 
      	
              Title:  President                                                                

            
	 
      	 
      
	 
      	 
      
	 
      	
              C
      ACQUISITION CORP.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ Phillip C.
      Thomas

            
	 
      	
              Name:  Phillip C.
    Thomas

            
	 
      	
              Title:  President                                                                

            
	 
      	 
      
	 
      	 
      
	 
      	
              ACCUREL
      SYSTEMS INTERNATIONAL CORPORATION

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ Phillip C.
      Thomas

            
	 
      	
              Name:  Phillip C.
    Thomas

            
	 
      	
              Title:  President                                                                

            
	 
      	 
      
	 
      	 
      
	 
      	
              IMX
      ACQUISITION CORP.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ Phillip C.
      Thomas

            
	 
      	
              Name:  Phillip C.
    Thomas

            
	 
      	
              Title:  President                                                                

            
	 
      	 
      
	 
      	 
      
	 
      	
              ACCEPTED AND ACKNOWLEDGED
      BY:

            
	 
      	 
      
	 
      	
              DMRJ GROUP, LLC, as
      Secured Party

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ D. I.
      Small                                                                

            
	 
      	
              Name:  Daniel Small

            
	 
      	
              Title:  MD                                                                

            


    

    



    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
I

     

    to

     

    PATENT SECURITY
AGREEMENT

     

    U.S. Patent Registrations
and Applications

     

    


    


    
    

     

    
      	 Security Products Patents
      Issued	
               Number

            	
               PCT

            
	 Explosives
      Detection System	
               6,828,795

            	 
	
               Cyclone
      Sampling Nozzle for an Ion Mobility Spectrometer

            	
               6,861,646

            	 
	 Modified
      Vortex for an ION Mobility Spectrometer	
               6,870,155

            	 
	 Virtual Wall
      Gas Sampling for an ION Mobility Spectrometer	
               6,888,128

            	 
	 Flash Vapor
      Sampling for a Trace Chemical Detector	
               7,098,672

            	 
	 Pulsed Vapor
      Desorber	
               7,244,288

            	 
	 	 	 
	 Security Products Patent
      Applications	 	 
	 Photoelectric
      Ion Source Photocathode Regeneration System	
               11/248,603

            	 
	 Narcotics and
      Explosives Particle Removal System	
               11/258,477

            	 
	 Long Lifetime
      Chemical Desorber	
               11/492,672

            	 
	 Trace Chemical
      Particle Release Nozzle	
               11/654,900

            	 
	 Trace Chemical
      Sensing	
               11/654,394

            	
              US07/24385 

            
	 Chemical
      Calibration Method and System	
               12/006,246

            	 
	 Flash Heating
      for Tubing	
               12/077190

            	 
	 Pulsed UV Ion
      Source	
               12/151273

            	 
	 Trace Particle
      Collection System	
               12/152441

            	
              US08/06102 

            
	 Real-time
      Trace Detection by High Field and Low Field Ion Mobility and Mass
      Spectrometry	
               11/941,939