Exhibit 10.5
FUNDS ESCROW AGREEMENT
This Agreement (this "Agreement") is dated as of the 30th day of September 2005
among Implant Sciences Corporation, a Massachusetts corporation (the "Company"),
Laurus Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP (the "Escrow
Agent"):
W I T N E S S E T H:
WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company and the
Purchaser have entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") for the sale by the Company to the Purchaser of Series D
Preferred Stock (the "Preferred Stock"), and (b) the Company will issue to the
Purchaser a common stock purchase warrant (the "Warrant") in connection with the
issuance of the Term Note,;
WHEREAS, the Company and the Purchaser wish the Purchaser to deliver to the
Escrow Agent copies of the Documents (as hereafter defined) and the Escrowed
Payment (as hereafter defined) to be held and released by Escrow Agent in
accordance with the terms and conditions of this Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the
terms and conditions of this Agreement;
NOW THEREFORE, the parties agree as follows:
ARTICLE I
INTERPRETATION
1.1.
DEFINITIONS.
WHENEVER USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW.
(A)
"AGREEMENT" MEANS THIS AGREEMENT, AS AMENDED, MODIFIED
AND/OR SUPPLEMENTED FROM TIME TO TIME BY WRITTEN AGREEMENT AMONG THE PARTIES
HERETO.
(B)
"CLOSING PAYMENT" MEANS THE CLOSING PAYMENT TO BE PAID TO
LAURUS CAPITAL MANAGEMENT, LLC, THE FUND MANAGER, AS SET FORTH ON SCHEDULE A
HERETO.
(C)
"DISBURSEMENT LETTER" MEANS THAT CERTAIN LETTER DELIVERED
TO THE ESCROW AGENT BY EACH OF THE PURCHASER AND THE COMPANY SETTING FORTH WIRE
INSTRUCTIONS AND AMOUNTS TO BE FUNDED AT THE CLOSING.
(D)
"DOCUMENTS" MEANS COPIES OF THE DISBURSEMENT LETTER, THE
SECURITIES PURCHASE AGREEMENT, WARRANT AND THE PREFERRED STOCK.
(E)
"ESCROWED PAYMENT" MEANS $5,000,000.
1.2.
ENTIRE AGREEMENT.
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS CONTAINED HEREIN AND
SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS, NEGOTIATIONS AND DISCUSSIONS OF
THE PARTIES, WHETHER ORAL OR WRITTEN.
THERE ARE NO WARRANTIES, REPRESENTATIONS
AND OTHER AGREEMENTS MADE BY THE PARTIES IN CONNECTION WITH THE SUBJECT MATTER
HEREOF EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.
1.3.
EXTENDED MEANINGS.
IN THIS AGREEMENT WORDS IMPORTING THE SINGULAR
NUMBER INCLUDE THE PLURAL AND VICE VERSA; WORDS IMPORTING THE MASCULINE GENDER
INCLUDE THE FEMININE AND NEUTER GENDERS.
THE WORD "PERSON" INCLUDES AN
INDIVIDUAL, BODY CORPORATE, PARTNERSHIP, TRUSTEE OR TRUST OR UNINCORPORATED
ASSOCIATION, EXECUTOR, ADMINISTRATOR OR LEGAL REPRESENTATIVE.
1.4.
WAIVERS AND AMENDMENTS.
THIS AGREEMENT MAY BE AMENDED, MODIFIED,
SUPERSEDED, CANCELLED, RENEWED OR EXTENDED, AND THE TERMS AND CONDITIONS HEREOF
MAY BE WAIVED, IN EACH CASE ONLY BY A WRITTEN INSTRUMENT SIGNED BY ALL PARTIES
HERETO, OR, IN THE CASE OF A WAIVER, BY THE PARTY WAIVING COMPLIANCE.
EXCEPT AS
EXPRESSLY STATED HEREIN, NO DELAY ON THE PART OF ANY PARTY IN EXERCISING ANY
RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS