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