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: July 6, 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