Exhibit 10.6
IMPLANT SCIENCES CORPORATION AND CERTAIN OF ITS SUBSIDIARIES
MASTER SECURITY AGREEMENT
To:
Laurus Master Fund, Ltd.
c/o M&C Corporate Services Limited
P.O. Box 309 GT
Ugland House
South Church Street
George Town
Grand Cayman, Cayman Islands
Date: September 30, 2005
To Whom It May Concern:
1.
TO SECURE THE PAYMENT OF ALL OBLIGATIONS (AS HEREAFTER DEFINED),
IMPLANT SCIENCES CORPORATION A MASSACHUSETTS CORPORATION (THE "COMPANY"), AND
EACH OTHER ENTITY THAT IS REQUIRED TO ENTER INTO THIS MASTER SECURITY AGREEMENT
(EACH AN "ASSIGNOR" AND, COLLECTIVELY, THE "ASSIGNORS") HEREBY ASSIGNS AND
GRANTS TO LAURUS A CONTINUING SECURITY INTEREST IN ALL OF THE FOLLOWING PROPERTY
NOW OWNED OR AT ANY TIME HEREAFTER ACQUIRED BY SUCH ASSIGNOR, OR IN WHICH SUCH
ASSIGNOR NOW HAS OR AT ANY TIME IN THE FUTURE MAY ACQUIRE ANY RIGHT, TITLE OR
INTEREST (THE "COLLATERAL"): ALL CASH, CASH EQUIVALENTS, ACCOUNTS, ACCOUNTS
RECEIVABLE, DEPOSIT ACCOUNTS, INVENTORY, EQUIPMENT, GOODS, FIXTURES, DOCUMENTS,
INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, PROMISSORY NOTES), CONTRACT RIGHTS,
GENERAL INTANGIBLES (INCLUDING, WITHOUT LIMITATION, PAYMENT INTANGIBLES AND AN
ABSOLUTE RIGHT TO LICENSE ON TERMS NO LESS FAVORABLE THAN THOSE CURRENT IN
EFFECT AMONG SUCH ASSIGNOR'S AFFILIATES), CHATTEL PAPER, SUPPORTING OBLIGATIONS,
INVESTMENT PROPERTY (INCLUDING, WITHOUT LIMITATION, ALL PARTNERSHIP INTERESTS,
LIMITED LIABILITY COMPANY MEMBERSHIP INTERESTS AND ALL OTHER EQUITY INTERESTS
OWNED BY ANY ASSIGNOR), LETTER-OF-CREDIT RIGHTS, TRADEMARKS, TRADEMARK
APPLICATIONS, TRADESTYLES, PATENTS, PATENT APPLICATIONS, COPYRIGHTS, COPYRIGHT
APPLICATIONS AND OTHER INTELLECTUAL PROPERTY IN WHICH SUCH ASSIGNOR 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.
IN THE EVENT ANY
ASSIGNOR WISHES TO FINANCE THE ACQUISITION IN THE ORDINARY COURSE OF BUSINESS OF
ANY HEREAFTER ACQUIRED EQUIPMENT AND HAS OBTAINED A WRITTEN COMMITMENT FROM AN
UNRELATED THIRD PARTY FINANCING SOURCE TO FINANCE SUCH EQUIPMENT, LAURUS SHALL
RELEASE ITS SECURITY INTEREST ON SUCH HEREAFTER ACQUIRED EQUIPMENT SO FINANCED
BY SUCH THIRD PARTY FINANCING SOURCE.
EXCEPT AS OTHERWISE DEFINED HEREIN, ALL
CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANINGS PROVIDED SUCH TERMS IN THE
SECURITIES PURCHASE AGREEMENT REFERRED TO BELOW.
2.
THE TERM "OBLIGATIONS" AS USED HEREIN SHALL MEAN AND INCLUDE ALL
DEBTS, LIABILITIES AND OBLIGATIONS OWING BY EACH ASSIGNOR TO LAURUS ARISING
UNDER, OUT OF, OR IN CONNECTION WITH: (I) THAT CERTAIN SECURITIES PURCHASE
AGREEMENT DATED AS OF THE DATE HEREOF BY AND BETWEEN THE COMPANY AND LAURUS (THE
"SECURITIES PURCHASE AGREEMENT") AND (II) THE RELATED AGREEMENTS
REFERRED TO IN THE SECURITIES PURCHASE AGREEMENT (THE SECURITIES PURCHASE
AGREEMENT AND EACH RELATED AGREEMENT AS EACH MAY BE AMENDED, MODIFIED, RESTATED
OR SUPPLEMENTED FROM TIME TO TIME, COLLECTIVELY, THE "DOCUMENTS"), AND IN
CONNECTION WITH ANY DOCUMENTS, INSTRUMENTS OR AGREEMENTS RELATING TO OR EXECUTED
IN CONNECTION WITH THE DOCUMENTS OR ANY DOCUMENTS, INSTRUMENTS OR AGREEMENTS
REFERRED TO THEREIN OR OTHERWISE, AND IN CONNECTION WITH ANY OTHER INDEBTEDNESS,
OBLIGATIONS OR LIABILITIES OF EACH SUCH ASSIGNOR TO LAURUS, WHETHER NOW EXISTING
OR HEREAFTER ARISING, DIRECT OR INDIRECT, LIQUIDATED OR UNLIQUIDATED, ABSOLUTE
OR CONTINGENT, DUE OR NOT DUE AND