<PAGE>   1
                                                                   EXHIBIT 10.52


*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN
 OMITTED AND HAVE BEEN FILED SEPARATELY WITH SECURITIES AND EXCHANGE COMMISSION.

                       * CONFIDENTIAL TREATMENT REQUESTED

                            DISTRIBUTORSHIP AGREEMENT


      This Agreement is made as of the 26th day of January, 2000 by and between
Implant Sciences Corporation, a corporation organized under the laws of the
Commonwealth of Massachusetts, with an office at 107 Audubon Road #5, Wakefield,
Massachusetts 01880 (hereinafter called "Manufacturer") and MED-TEC Iowa, Inc.,
a corporation organized under the laws of Iowa, with its principal office at
1401 8th Street, Orange City, Iowa 51041 (hereinafter called "Distributor").

      WHEREAS, Distributor is in the business of marketing and distributing
products manufactured by various manufacturers and wishes to act as the
exclusive distributor of the Product (as hereinafter defined) within or into the
Territory (as hereinafter defined);

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, the parties hereto agree as follows:

      1.    Appointment of Distributor.

            1.1 Appointment of Distributor. Subject to the terms and conditions
of this Agreement, Manufacturer appoints Distributor, and Distributor agrees to
act as, the exclusive distributor of the Product in or into the Territory for
the term of this Agreement. As used herein, "Product" means Implant Sciences
I-Plant Iodine-125 Brachytherapy Seeds, which are indicated for temporary or
permanent interstitial or intracavity implantation or surface application to
treat selected localized tumors, can be used either as primary treatment (such
as for prostate cancer or unresectable tumors) or as treatment for residual
disease after excision of primary or recurrent tumors, and may be used
concurrently with, or following treatment with, other interventions, such as
external beam therapy, hyperthermia or chemotherapy; tumors of the head, neck,
lung, pancreas, prostate and other accessible tumors are commonly treated, as
such above-referenced seeds may be improved or enhanced during the term of this
Agreement provided that regulatory approvals are obtained. As used herein,
"Territory" means the fifty states of the United States of America, the District
of Columbia, and Puerto Rico. Manufacturer represents and warrants that as of
the date of execution of this Agreement, no person other than Distributor has
any rights to distribute the Product in or into the Territory. *


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                       * CONFIDENTIAL TREATMENT REQUESTED
            *

            1.2 Exclusive U.S. Distributorship; Conditions Pertaining to
Maintenance Thereof. Provided that Distributor complies with the minimum
purchase requirements of Section 1.1, Manufacturer shall not directly or
indirectly sell or distribute the Product to any person other than Distributor
for sale in or into the Territory during the Start Up Period. * if Distributor
fails to satisfy the foregoing exclusivity requirements (except in the case of a
shortfall caused by Manufacturer's inability to provide Product), appoint other
distributors without restriction, and sell Products to other distributors or to
any person, corporation or other entity in the Territory, or, should
Manufacturer wish to appoint a new exclusive distributor, terminate this
Agreement as set forth in Section 14.1. Termination of Distributor's exclusivity
or termination of the Agreement as set forth in this Section 1.2 shall be
Manufacturer's sole remedy for Distributor's failure to purchase the Weekly
Exclusivity Minimums. In the event of appointment of other distributors in the
Territory in accordance with this Agreement, provided that Distributor continues
to serve as a non-exclusive distributor of the Product, Manufacturer shall sell
to Distributor Product at a price and on terms at least as favorable as the best
price and term offered to the other distributors of the Product in the
Territory.

            1.3 Responsibilities of Distributor. During the term of this
Agreement, Distributor shall at Distributor's sole expense:


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                       *Confidential Treatment Requested


            (a) Faithfully and diligently use commercially reasonable efforts to
promote, advertise, market, offer for sale and sell the Product in the Territory
and reasonably cooperate with Manufacturer in maximizing sales of the Product in
the Territory as well as servicing and satisfying customer demands and requests;

            (b) Giving due regard to Manufacturer's suggested procedures, for
all Product sold by Distributor in the Territory, process customers' claims for
replacement of Product pursuant to the applicable warranties;

            (c) Simultaneously with the execution of this Agreement, and on the
first day of each calendar quarter thereafter, provide Manufacturer with a
forecast of quantities by apparent activity strengths (as offered by the
Manufacturer) of the Product to be ordered by Distributor for each week during
the twelve month (12) month period commencing on the date of delivery of the
applicable forecast. Beginning forty-five (45) days before the commencement of
the Start Up Period, the following provision shall become applicable: *

            (d) Submit a draft of its sales and public relations materials
relating to the Product to Manufacturer for Manufacturer's written approval
prior to any disclosure or use of such material;

            (e) Undertake such education and instruction of physicians, patients
and other third parties as may be necessary and appropriate in Distributor's
reasonable judgment; and

            (f) Comply in all material respects with all laws applicable to
Distributor relating to the sale of the Product in the Territory and, at its
expense, verify that its customers are qualified in all material respects to
purchase and receive the Product and have obtained all material consents,
licenses and approvals necessary for the purchase and receipt of the Product,
and provide information and documentation pertaining to the foregoing compliance
and verification to Manufacturer on a regular and timely basis.


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                       *Confidential Treatment Requested

            1.4 Responsibilities of Manufacturer. During the term of this
Agreement, Manufacturer, to assist Distributor in the marketing and distribution
of the Product, shall at Manufacturer's sole expense:

            (a) Make reasonable efforts to invest sufficient capital to ensure
production capacity adequate to meet Distributor's projected needs as set forth
in this Agreement;

            (b) Manufacture and deliver Product pursuant to and in accordance
with Distributor Non-Cancelable Orders, provide non-sterile packaging therefor,
and ship such Product to Distributor's customers upon receipt of appropriate
shipping instructions;

            (c) Provide technical advice and assistance to Distributor with
respect to the marketing, distribution, and sale of the Product, including but
not limited to access to a trained sales specialist designated for Distributor's
account;

            (d)   Provide Distributor with appropriate sales leads;

            (e) Implement various sales promotion activities which may include
media advertising, direct mail campaigns, trade show participation, for the
purpose of generating leads for the Product;

            (f) Make available to Distributor collateral materials to be used in
selling the Product;

             *

            (h) Exercise those efforts that it deems appropriate to protect its
intellectual property rights from infringement and preserve the distributorship
granted to Distributor hereunder.



      2. Trademarks. So long as this Agreement is in effect, and Distributor
complies with all of Distributor's obligations hereunder, Distributor shall have
the right to use Manufacturer's trademarks listed on Exhibit C (each a "Mark"
and together the "Marks") in the Territory in connection with the marketing,
sale and distribution of the Product. Distributor shall


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not use any Mark other than as specifically permitted by the immediately
preceding sentence, shall not remove the Marks from any Product furnished by
Manufacturer and shall not make any use of any Marks in connection with any
goods or services other than the Product. So long as this Agreement is in effect
and thereafter, Distributor shall not adopt, register or make any use of any
trademark or brand name that is confusingly similar to any Mark. All rights in
the Marks shall, at all times during the term of this Agreement and thereafter,
be and remain the sole property of Manufacturer, and all goodwill and other
benefits associated therewith are hereby assigned to, and shall inure to,
Manufacturer. Distributor agrees to assist in the registration of the Marks in
the Territory in the name of Manufacturer, in renewal and maintenance of such
registration and in such recording of the Distributor as a registered user as
the Manufacturer may reasonably request. Any costs incurred by Distributor in
connection with such registration, maintenance and recording shall be at
Manufacturer's expense.

      3. Purchase and Sale Requirements. Following notification that
Manufacturer is ready to deliver Product, and commencing no later than ninety
(90) days following such notification, Distributor shall commence purchasing
Product in accordance with Sections 1.1 and 1.2, as applicable. Manufacturer
shall supply and Distributor shall pay for such Product.

      4. Distributor not Manufacturer's Agent. This Agreement shall not
constitute Distributor as the agent or legal representative of Manufacturer for
any purpose whatsoever, and Distributor shall not hold itself out as an agent of
Manufacturer. This Agreement creates no relationship of joint venturers,
partners, associates, employment or principal and agent between the parties, and
both parties are acting as independent contractors. Distributor is not granted
herein any right or authority to, and shall not attempt to, assume or create any
obligation or responsibility for or on behalf of Manufacturer. Distributor and
Manufacturer shall bear all of their own expenses for their respective
operations, including, without limitation, the compensation of their employees
and salesmen and the maintenance of their offices and other facilities and shall
be solely responsible for their own employees and salesmen and for their acts
and the things done by them.

      5. Terms of Orders and Sales.

            5.1 Terms to Govern. This Agreement shall govern all orders for
Product by Distributor and sales of Product by Manufacturer to Distributor. Any
different, conflicting or additional terms (other than terms as to quantities
and proposed delivery dates) in any purchase order or other writing from
Distributor or in any order acknowledgment or other writing from Manufacturer
shall be of no force or effect unless they shall constitute a waiver,
modification or amendment of this Agreement duly made in accordance with Section
16.6 or as specifically permitted by this Agreement.


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                       *Confidential Treatment Requested

            5.2 Orders. Distributor shall forward all purchase orders to
Manufacturer at its head office. No order shall be final as to Manufacturer
until accepted in writing by Manufacturer. Orders shall be deemed accepted
unless rejected by Manufacturer in writing within ten (10) days of the date
thereof. Provided that Distributor is in compliance with the terms and
conditions of this Agreement (including, without limitation, the payment terms)
and the Product ordered are available from Manufacturer on a timely basis,
Manufacturer shall not reject Distributor's order. After acceptance of the
Distributor's order, it shall not be subject to cancellation. All sales are
final. No product will be accepted for return and no credit will be allowed on
any product returned unless Manufacturer has granted prior written permission.
Manufacturer and Distributor agree that end-user shall be permitted on a bases
mutually agreed between Manufacturer and Distributor to return unused Product to
Manufacturer for a credit.

            5.3 Shipment, Delivery and Title. All Product will be tendered and
shipped F.O.B. Manufacturer's plant in Massachusetts, may be so tendered in
several lots, and, unless otherwise instructed by Distributor, shall be
drop-shipped to Distributor's customer in accordance with Manufacturer's usual
practices (generally by Federal Express next-day service, where available).
Shipments will be freight prepaid with the cost of shipping added to the price
of the relevant Product. In cases where Distributor, for any reason, requests
deliveries of Product on a basis that is not in conformity with Manufacturer's
usual practices, Distributor shall be responsible for all additional costs
associated with meeting Distributor's required delivery schedule. Distributor
will obtain all-risks insurance for all shipments at the Distributor's sole
expense in the amount of the purchase price of the relevant Product.
Manufacturer will not be deemed to assume any liability in connection with any
shipment because of the selection of a carrier or its failure to obtain
insurance. Title and risk of loss or damage to Product will pass to the
Distributor's customer when delivery is made to the possession of the carrier.

            * All prices are F.O.B. Manufacturer's factory, warehouse or other
point of shipment by Manufacturer. Manufacturer reserves the right to correct
all typographical and clerical errors which may be present in the prices or
specifications contained in any list or invoice. The actual price charged by
Distributor to its customers for Products shall be set by Distributor in its
sole discretion.


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                       *Confidential Treatment Requested

            5.5 Taxes and Governmental Charges. Prices do not include any taxes
or other governmental charges, including, without limitation, value-added,
sales, use or privileges taxes, or excise or similar taxes levied by any
government, now or hereafter enacted. In Manufacturer's discretion, any such
taxes and charges may be added to the price for any Product or may be billed
separately. The Distributor will, in any event, pay all such taxes and charges,
on or before their due dates. In the event Manufacturer is required at any time
to pay any such tax or charge, the Distributor will reimburse Manufacturer
therefor promptly on demand.

            5.6 Terms of Payment. Provided that Distributor remains up-to-date
in its payment obligations and maintains an acceptable credit history, for
purchases of Product up to and including the minimum purchase commitments set
forth in Exhibit A, * Manufacturer will invoice Distributor as appropriate. All
payments by Distributor shall be made in United States Dollars and shall be paid
fully net, without set-off, deduction or counterclaim. Payment shall be by wire
transfer to Manufacturer's account at a commercial bank Manufacturer shall
designate. Distributor understands that, given the continuous nature of customer
orders, Manufacturer may from time to time calculate an invoice amount based on
a customer monthly sales volume assumption that proves to be incorrect. In such
case, the invoice shall, at Manufacturer's discretion, be adjusted or the
adjustment shall be made on the next invoice.

            5.7 Late Charges. If the Distributor fails to pay the price or any
other payment due to Manufacturer promptly and when due, Manufacturer may
recover, in addition to the price or payment, interest thereon at a rate equal
to the lesser of 1-1/2% per month and the maximum rate of interest allowable
under applicable law.

            5.8 Distributor's Customers. Distributor shall be solely responsible
for invoicing its customers, collecting and paying sales taxes (if applicable),
for customer credit, and for collection of payments for Product from its
customers and shall bear all credit risk with respect to customer non-payment.

            5.9 Packing. Manufacturer will provide standard non-sterile
packaging and packing as required by regulations, and the cost of such standard
packaging and packing, as actually incurred by Manufacturer, shall be paid by
Manufacturer and included in the price of the Product. The parties may agree to
non-standard packaging and packing in which case the cost of such non-standard
packaging and packing, as actually incurred by Manufacturer, shall be paid by
the Distributor.

             5.10 Specifications. Manufacturer may modify the specifications of
any Product furnished under any order or contract, provided the modifications do
not adversely affect


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the performance of the Product. In addition, Manufacturer may furnish suitable
substitutes for materials unobtainable because of priorities or regulations
established by government authority or nonavailability of materials from
suppliers.

      6. Sales Outside of Territory. Distributor shall advertise the Product
only in the Territory and shall not maintain branch offices, salesmen, or
representatives for the sale of the Product outside of the Territory, without
Manufacturer's prior written consent, which Manufacturer may withhold for any
reason. Distributor shall promptly transmit to Manufacturer any inquiries it
shall receive concerning the Product, whether (a) from outside the Territory or
(b) from within the Territory if the inquiry relates to a use of any Product
outside the Territory. Provided that neither Manufacturer nor another
distributor or sales agent is servicing the region outside the Territory to
which such inquiry relates, that Manufacturer has the appropriate licenses and
other governmental approvals necessary to sell the Product in such region, that
Distributor is prepared to comply with Section 10 hereof, and that Manufacturer
otherwise deems it appropriate that such extra-territorial sale be made,
Manufacturer expects that it will permit Distributor to make such
extra-territorial sale if Distributor so wishes, provided that Manufacturer's
permission must be in writing and may be granted or withheld in Manufacturer's
sole discretion.

      7. Limitation of Warranties and Remedies.

            7.1 Limited Warranty. Manufacturer represents and warrants that
Manufacturer shall pass to Distributor good and marketable title to the Product
free and clear of all liens, claims, options, changes, security interests,
encumbrances and restrictions of any kind. Manufacturer warrants to the
Distributor that each Product manufactured and sold by it will be newly
manufactured within Manufacturer's normal course of production, conform to the
Specifications when delivered to Distributor, be free from defects in materials
and workmanship and have passed tests required by the Manufacturer's FDA 510(k),
will meet applicable requirements of law, including, without limitations, FDA
requirements and the Commonwealth of Massachusetts Sealed Source requirements
for the Product. If any Product covered by this warranty is returned to the
original shipping point, transportation charges prepaid, within the applicable
warranty period set forth above and upon examination Manufacturer determines to
its satisfaction that such Product was defective in material or workmanship at
the time of delivery to the Distributor, Manufacturer will, at its option,
replace the Product or refund the original purchase price of the Product to the
Distributor and any transportation charges incurred in connection with the
return of the Product. The foregoing notwithstanding, Manufacturer will not be
responsible for damage to any product or person resulting from misuse,
negligence or accident or resulting from misrepresentations about the Product or
alterations to the Product, the labeling, or the instructions for use provided
therewith made by any person or firm not duly authorized by Manufacturer in
writing. Each Product distributed to end users will be subject to the
MANUFACTURER'S LIMITED WARRANTY included by Manufacturer with such


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Product. Distributor shall process warranty requests by end users as set forth
in Section 1.4(b), and, if Manufacturer determines that the appropriate remedy
for a defective Product is refund of Distributor's purchase price, refund to the
end user (or arrange for the refund to the end user of) the full purchase price
paid by the end user to Distributor for such defective Product. For purposes of
this Agreement, "Specifications" shall mean the specifications set forth in
Manufacturer's FDA 510(k).

            7.2 No Implied Warranties. THE WARRANTIES GIVEN IN THIS AGREEMENT
ARE THE ONLY WARRANTIES GIVEN BY THE MANUFACTURER WITH RESPECT TO THE PRODUCT
AND ARE GIVEN IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A
PARTICULAR PURPOSE. DISTRIBUTOR'S EXCLUSIVE REMEDIES, AND MANUFACTURER'S SOLE
LIABILITY, FOR ANY NONCONFORMITY OR DEFECT IN ANY PRODUCT SHALL BE THOSE
EXPRESSED HEREIN.

            7.3 No Additional Warranties. The Distributor shall make no
representation or warranty concerning the quality, performance or other
characteristics of the Product other than those which are consistent in all
respects with, and do not expand the scope of, the warranties of Manufacturer
set forth in this Agreement.

      8. Limitation of Liability. An essential purpose of the limited exclusive
liabilities and remedies in this Agreement is allocation of risks between
Manufacturer and Distributor, which allocation of risks is reflected in the
purchase price for the Product. UNDER NO CIRCUMSTANCES SHALL MANUFACTURER'S OR
DISTRIBUTOR'S LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
MANUFACTURER'S PERFORMANCE OR ASSERTED FAILURE TO PERFORM HEREUNDER, IN
CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE PURCHASE PRICE OF
THE PRODUCT TO WHICH SUCH LIABILITY RELATES, EXCEPT FOR LIABILITY ARISING UNDER
SECTION 12 OF THIS AGREEMENT. IN NO EVENT SHALL MANUFACTURER OR DISTRIBUTOR BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, DAMAGES RESULTING FROM LOSS OF USE, PROFITS, BUSINESS OR GOODWILL,
WHETHER OR NOT MANUFACTURER OR DISTRIBUTOR HAS BEEN ADVISED OF THE POSSIBILITY
THEREOF.

      9. Protection of Proprietary Data.

            9.1 Proprietary Data. The term "Proprietary Data", as used in this
Agreement, shall mean information and data in written, graphic, machine-readable
or machine-executable form (or in oral form if such information and data is
provided by Manufacturer to Distributor


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during the course of consultation or training sessions) which is received by
Distributor from Manufacturer and is identified as being proprietary or
confidential, or which is not generally known or available to others in the
trade and about which Distributor may learn during the term of this Agreement.
"Proprietary Data" shall include, without limitation, all technical manuals
relating to the Product, and all know-how and technology required to utilize the
Product and such manuals including any of the foregoing information, including,
without limitation, instructions for use of the Product and product
specifications, and all inventions, developments, specifications, methods,
supply sources, customer lists, financial and cost information, marketing plans,
manufacturing methods, processes or techniques, treatments and compositions of
materials, plant layout and tooling, technical and engineering data, methods and
reports, and other intellectual property relating to the Product or the business
of Manufacturer which are not generally known or available to others in the
trade.

            9.2 Non-Disclosure. Distributor shall (a) hold strictly confidential
all Proprietary Data, (b) limit use of and access to all Proprietary Data to
such of Distributor's employees, agents and independent contractors as must have
such access for the efficient operation of Distributor's business, (c) use such
Proprietary Data only in connection with the sale and service of the Product
under this Agreement and (d) take all such actions, including, without
limitation, instituting legal proceedings and requiring all persons having
access to Proprietary Data by or through Distributor to enter into
non-disclosure agreements, necessary to prevent disclosure or publication of any
of the Proprietary Data by Distributor's present and former employees, agents
and independent contractors. Distributor shall provide to Manufacturer such
information and data, and permit Manufacturer to review and copy all such
agreements, as Manufacturer shall reasonably request in connection with any
investigation of compliance with Distributor's foregoing obligation of
confidentiality.

            9.3 Reproduction of Notices. Distributor shall reproduce and include
Manufacturer's patent, copyright, trademark and proprietary data notices with
any copies (in whole or in part) of any Proprietary Data in any form, including,
without limitation, any Product or related material.

            9.4 Return of Proprietary Data. Upon termination of this Agreement,
Distributor shall return to Manufacturer all Proprietary Data and shall provide
to Manufacturer a certificate, executed by Distributor's chief executive
officer, to the effect that all documents and materials containing Proprietary
Data have been returned or destroyed.

            9.5 Confidential Information of Distributor. Distributor
acknowledges and agrees that Manufacturer is in the business of developing new
applications, new fields of use and new customers for its products and
technology. To insure that Manufacturer is not constrained in its future
activities, Manufacturer does not wish to receive and Distributor agrees not to
provide Manufacturer with any information that Distributor deems confidential.
In the event that


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Distributor wishes to share its confidential information with Manufacturer,
Distributor shall describe the general nature of such information to
Manufacturer and, if Manufacturer wants access to such information, the parties
shall negotiate in good faith a confidentiality and non-disclosure agreement
that pertains specifically to such information.

      10. Export; Compliance With Laws. Distributor acknowledges and agrees that
this Agreement does not authorize Distributor to sell Product outside the
Territory. In the event that Manufacturer in the future authorizes Distributor
to sell Product outside the Territory pursuant to Section 6 hereof, Distributor
shall comply with all applicable laws within and without the Territory,
including, without limitation, the export control laws of the United States and
prevailing regulations which may be issued from time to time by the United
States government concerning the exporting, importing and reexporting of the
Product and the direct Product thereof. Without limiting the generality of the
foregoing, Distributor agrees that it shall not export or re-export any Product
or the direct product thereof without the prior written approval of
Manufacturer, which approval may be granted or denied in Manufacturer's sole
discretion. Distributor acknowledges that shipments of the Product are subject
to the export laws of the United States and that such laws could delay or
preclude delivery of Product in the future. Distributor shall also comply with
the United States Foreign Corrupt Practices Act, and shall indemnify the
Manufacturer from any failure to comply or violation of such Act by Distributor.
Distributor shall, at its sole cost and expense, obtain and maintain in effect
all permits, licenses and other consents necessary to the conduct of its
activities hereunder.

      11. Distributor's Line of Products; Non-competition. From time to time on
request by Manufacturer, Distributor shall furnish Manufacturer with a list
containing the name and address of each manufacturer for whom Distributor is
acting as a representative, dealer, distributor or sales agent, and of the name
and description of all products of such manufacturer which Distributor currently
sells or markets. Distributor agrees that, during the term of this Agreement, it
will not purchase, market, sell, or offer for sale any product that is
competitive with the Product or assist any third party in doing any of the
foregoing.

      12. Indemnification.

            12.1 Mutual Indemnification. If notified promptly in writing and
given sole control of the defense and all related settlement negotiations, a
party shall indemnify and hold harmless the other party and its officers,
directors, agents, employees, affiliates, representatives, successors, and
assigns from and against all losses, liabilities, costs and expenses (including,
without limitation, attorneys' fees) arising out of or in connection with the
indemnifying party's negligent or intentionally wrongful acts or omissions
pertaining to the Product and their respective duties under this Agreement.


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            12.2 Intellectual Property Indemnification. If notified promptly in
writing and given sole control of the defense and all related settlement
negotiations, Manufacturer will defend Distributor against any claim based on an
allegation that a Product supplied hereunder or the Marks licensed pursuant to
Section 2 hereof infringe a U.S. or applicable foreign (within the Territory)
patent, copyright or trademark. Manufacturer will pay any resulting costs,
damages and attorney's fees finally awarded against Distributor by a court with
respect to any such claims. The foregoing obligation of Manufacturer does not
apply with respect to Product or portions or components thereof (i) made in
whole or in part in accordance with Distributor specifications, (ii) which are
modified by Distributor or Distributor's customer after shipment by
Manufacturer, if the alleged infringement relates to such modification, (iii)
combined by Distributor or Distributor's customer with other products, processes
or materials where the alleged infringement relates to such combination, (iv)
where Distributor continues the allegedly infringing activity after being
notified thereof and after being informed of actions that would have avoided the
alleged infringement, or (v) where the alleged use of the Product is not
strictly in accordance with instructions provided with the Product. If the
Product, or the operation thereof, becomes, or in Manufacturer's opinion are
likely to become, the subject of such a claim, Distributor will obtain
authorization for Manufacturer, at Manufacturer's option and expense, either to
procure the right for Distributor's customers to continue using such Product, or
replace the Product so that they become non-infringing. If neither of the
foregoing alternatives is available on terms that Manufacturer in its sole
discretion deems reasonable, all orders for the Product will be canceled and,
Manufacturer will authorize Distributor's customers to return, at Manufacturer's
expense, such Product on written request to Manufacturer. Manufacturer will
grant Distributor a credit equal to the prices paid by Distributor for such
returned Product, provided that such returned Product is in an undamaged
condition. The foregoing obligation of Manufacturer does not apply with respect
to any Mark used by Distributor after Manufacturer has terminated the license
granted in Section 2 hereof with respect to such Mark. Manufacturer may
terminate the trademark license granted in Section 2 with respect to any Mark in
the Territory or in any portion thereof by providing written notice of such
termination to Distributor, provided that Manufacturer provides such notice to
all similarly situated distributors and ceases its own use of such Mark to the
same extent that it requires Distributor to cease such use. This Section 12.2
sets forth Distributor's sole and exclusive remedies and Manufacturer's entire
liability with respect to intellectual property infringement. Manufacturer shall
have no obligation to Distributor for any suit or other action brought by a
third party with respect to the Product or marks beyond that stated in this
Section 12.

      13. Duration of Agreement; Initial Term. This Agreement shall become
effective as of the date first above written upon its execution by both parties
hereto by their authorized representatives and, unless terminated as provided
elsewhere in this Agreement, shall remain in effect for an initial term of
thirty-six (36) months from the receipt by Manufacturer of Distributor's first
order of Product (which shall occur no later than ninety (90) days following
notification that Manufacturer is ready to deliver Product). This Agreement may
be extended for


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                       *Confidential Treatment Requested

one or more additional terms of two (2) years each by notice in writing to the
Manufacturer from Distributor at least 120 days prior to the expiration of the
then-current term of the Agreement, *

14.   Termination of Agreement.

            14.1 Termination. Distributor and Manufacturer shall each have the
right to terminate this Agreement upon the giving of at least 120 days prior
written notice to the other party in the event of a material breach by the other
party of any provision of the Agreement, provided that the party asserting such
breach specifies by written notice in reasonable detail the nature of such
breach; further provided that the party asserted to be in breach shall have
fifteen business days to correct the alleged breach from the date of such
notice. If such alleged breach is not so corrected, then this Agreement shall
terminate in accordance with such notice of termination. Manufacturer shall have
the right to terminate this Agreement pursuant to Section 1.1 and Section 1.2
hereof. The Agreement may also be terminated by a party who is deprived of the
benefits of the Agreement by the non-performance of the other party as a result
of a Force Majeure Event that lasts for a period of more than 120 days Upon any
termination of this Agreement other than pursuant to a breach by Distributor or
termination of Distributor for the reasons set forth in Section 14.2,
Manufacturer shall continue to supply Product to Distributor's customers with
respect to which Distributor has a contractual obligation to supply Products
which obligation continues beyond the effective date of termination, provided
that Manufacturer's obligation to supply such Products to Distributor's customer
shall terminate no later than the earlier of (a) one (1) year from the effective
date of termination of this Agreement or (b) one (1) year from the commencement
date of Distributor's supply agreement with its customer; further provided that
this post-termination supply obligation shall not apply to any agreement between
Distributor and a customer that was entered into after receipt by Distributor of
Manufacturer's written notice of its intent to terminate this Agreement.

            14.2 Bankruptcy, etc. Either party upon written notice to the other
party may terminate this Agreement at any time in the event the other party
shall make an assignment or trust mortgage for the benefit of its creditors, or
shall file a voluntary petition under the bankruptcy, reorganization, insolvency
or similar laws of any jurisdiction to which it is subject, or shall suffer an
involuntary petition under such laws to be filed against it, or shall be


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adjudicated bankrupt or insolvent, or have an order for relief in bankruptcy
entered concerning it, under the laws of any jurisdiction to which it is
subject.

            14.3 No Indemnity for Termination or Expiration. Distributor
acknowledges that this Agreement is for a limited period only. The expiration or
termination of this Agreement at the end of the original term or any renewal
term shall not give rise to the payment of any indemnity, compensation or
damages whatsoever by either party to the other. Without limiting the generality
of the foregoing, Distributor agrees that the expiration of this Agreement or
the termination of this Agreement by either party shall not entitle Distributor
to any termination or severance compensation or to any payment in respect of any
goodwill established by Distributor during the initial term of this Agreement,
or any renewals hereof, or render Manufacturer liable for damages on account of
the loss of prospective profits or on account of any expenditure, investment or
obligation incurred or made by Distributor. Distributor further agrees to make
every effort to minimize its costs and expenses related to this Agreement in the
event this Agreement is terminated or not extended for an additional term.

            14.4 Discontinuance of Use of Marks. Upon and following any
expiration or termination of this Agreement in accordance with its terms for any
reason, Distributor shall immediately cease holding itself out as an authorized
distributor for Manufacturer and shall cease using the Marks and any and all
trade names and brand names owned by or associated with the Manufacturer.

      15. Notices. Any notice or other communication in connection with this
Agreement shall be in writing and shall be deemed to be duly delivered if sent
to the address first set forth above (or to such other address as the addressee
shall have specified in a notice actually received by the addressor), Attention:
President; and if sent by certified or registered mail, postage prepaid, return
receipt requested, or by DHL or other express courier service., .

      16.   General.

            16.1 Arbitration. In the event a dispute should arise between the
parties with respect to whether either party has performed its obligations
hereunder, the parties agree to use their best efforts to resolve such dispute
through good faith discussions, recognizing their mutual interests. If such
dispute is not resolved within fifteen (15) days of when the dispute arose,
except as otherwise set forth in this Section 16.1 and except for any
differences, disputes or claims that may arise out of or in connection with
Distributor's covenants and agreements in Section 9 hereof and for which
Manufacturer shall seek equitable relief, all differences, disputes or claims
arising out of or in connection with this Agreement or any transaction or
occurrence contemplated hereby shall be finally settled under the Arbitration
Rules of the American Arbitration Association in Boston, Massachusetts, by a
panel of three arbitrators. Within fifteen


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                       *Confidential Treatment Requested.

(15) days of the date of filing for arbitration by either party, each party
shall select one arbitrator, and within fifteen (15) days of their selection,
the two arbitrators so selected shall select a third neutral arbitrator. The
arbitration hearing shall occur within thirty (30) days of the selection of the
panel of arbitrators. All decisions shall be made by a majority of the
arbitrators, and the parties shall request that they render their decision
within thirty (30) days of the completion of the hearing. The arbitration
decision shall be in writing, shall be binding on both parties, and shall be
unappealable. All costs of the arbitration shall be borne by the losing party,
provided, however, that each party shall bear the expense of its own counsel,
experts and witnesses. The arbitrators shall not be empowered to award punitive
or multiple damages. The arbitrators' award, which may include an award of
damages, may be entered in any court having jurisdiction.

            16.2 Force Majeure. In the event that, from time-to-time during the
term of this Agreement, orders submitted by Distributor and other persons for
Product manufactured by Manufacturer exceed Manufacturer's capacity to fill all
such orders in accordance with the terms and conditions of this Agreement (an
"Overutilization Period"), Manufacturer agrees to allocate to Distributor at
least * of its manufactured Product during the duration of
the Overutilization Period. Neither party shall be responsible for and the terms
of this Agreement shall be inapplicable to any defaults or delays (other than
payment defaults or delays) which are due to unforeseen causes beyond such
party's control when acting in good faith and with due diligence (each, a "Force
Majeure Event"), including, without limitation, the following, to the extent
beyond the reasonable control of the defaulting or delaying party seeking relief
under this provision: occurrence of any war and war measures (whether an actual
declaration thereof is made or not), sabotage, insurrection, riot or other act
of civil disobedience, act of a public enemy, force majeure, flood, storm or
other acts of God, acts of public authorities or courts, government orders and
requirements, strikes, lockouts, fires, explosions, natural disasters, shortages
of labor, fuel, raw materials or machinery or failures or delays of suppliers or
carriers. In the event that a Force Majeure Event is likely to result in any
failure or delay in the performance of such party's (an "Affected Party")
obligations under this Agreement, the Affected Party shall promptly inform the
other party (the "Nonaffected Party") of the occurrence of such Force Majeure by
telefax and confirm the same by written notice to the Nonaffected Party
delivered by registered letter (return receipt requested) to the address of the
Nonaffected Party first set forth above.

            The Affected Party shall, following the occurrence of any Force
Majeure Event, thereafter undertake to use its best efforts to cure or remove
the Force Majeure Event as promptly as possible and limit damages to the
Nonaffected Party resulting from such Force Majeure Event as far as reasonably
possible, provided, that, neither party shall be liable for any cost, expense,
loss or other damages incurred by the other party by reason of any failure or
delay in performance under this Agreement occasioned by the occurrence of a
Force Majeure Event; provided, further that, Distributor shall in all
circumstances during the occurrence of a Force


                                      -15-
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                       *Confidential Treatment Requested.

Majeure Event receive at least * of Manufacturer's output of Product up to the
amount ordered from time-to-time pursuant to Non-Cancelable Orders.

            Declaration of a Force Majeure Event by Manufacturer that affects
the amount of Product shipped under Distributor's orders shall at Distributor's
option suspend Distributor's obligations and the rights of Manufacturer under
this Agreement relating to minimum weekly purchase amounts for all purposes
(including any obligations to purchase the Weekly Minimum Amounts, Weekly
Exclusivity Amounts and any rights of Manufacturer to terminate, fail to renew
or render non-exclusive this Agreement) for so long as such Force Majeure Event
remains in effect and for so long as the effects of such Force Majeure Event are
reflected in the marketplace, at the conclusion of which period such rights and
obligations shall recommence and the dates and deadlines set forth in this
Agreement shall be extended accordingly.

            Notwithstanding the foregoing, in no event shall the occurrence of a
Force Majeure Event excuse the timely payment of monies owed pursuant to this
Agreement.

            16.3 Construction of Agreement; Language. This Agreement shall be
governed by, and construed and enforced in accordance with, and the relations of
the parties shall be determined in accordance with, the substantive laws of The
Commonwealth of Massachusetts without regard to its principles of conflicts of
laws.

            16.4. Survival of Provisions. Distributor agrees that the provisions
of Sections 7, 8, 9, 10, 12, the last sentence of 14.1, 14.3, 14.4, 15 and 16
shall survive the expiration or earlier termination of this Agreement for any
reason.

            16.5 Prior Agreements. This Agreement (including, without
limitation, the Exhibits hereto) contains the entire agreement between the
parties concerning the subject hereof and supersedes all prior agreements and
understandings, written or oral, between them concerning such subject matter.

            16.6 Non-Waiver and Amendment. This Agreement and the warranties,
representations and agreements contained herein may not be waived, modified or
amended, in whole or in part, except by written agreement executed by authorized
officers of the two parties, and no course of dealing or failure or delay by
Manufacturer shall constitute a waiver hereunder.

            16.7 Severability. In the event that any provision of this Agreement
shall be determined to be unenforceable by any court of competent jurisdiction
by reason of its extending for too great a period of time or over too large a
geographic area or over too great a range of activities, it shall be interpreted
to extend over a maximum period of time, geographic area or range of activities
as to which it may be enforceable. If any provision of this Agreement or any
part thereof shall be found to be invalid, illegal or otherwise unenforceable by
a court of


                                      -16-
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                       * Confidential treatment requested

competent jurisdiction, such provision shall to such extent be deemed null and
void and severed from this Agreement, and the remainder of the Agreement shall
remain in full force and effect.

      16.8  ASSIGNMENT, ACQUISITION AND BENEFITS.  Neither this Agreement nor
any interest in it shall be assigned directly or indirectly by either party
without the prior written consent of the other party, which consent may be
withheld for any reason. Notwithstanding the foregoing, in the event that the
Manufacturer is acquired, either through merger of acquisition of all of its
equity or substantially all of its assets by a third party, this Agreement may
be assigned by Manufacturer to its successor without the requirement of
obtaining Distributor's consent to such assignment. In the event of such a
transaction, Distributor, at its sole option, may require that this Agreement be
assigned to Manufacturer's successor in which case Manufacturer's successor
shall agree in writing to be bound by this Agreement and shall assume all of
Manufacturer's obligations hereunder and Manufacturer (if it survives such
transaction) shall be released from this Agreement and shall have no rights or
obligations hereunder. Subject to the foregoing provisions of this Section 16.8
this Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective legal representatives, successors and permitted
assigns.

      IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
a contract under seal as of the date first above written.


MED-TEC IOWA, INC.                    IMPLANT SCIENCES CORPORATION:


By: /s/ Michael J. Richards          By: /s/ Anthony J. Armini
   -------------------------            ---------------------------------------
      Michael J. Richards                         Anthony J. Armini
   Its Chairman of the Board          Its President and Chief Executive Officer


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                                    EXHIBIT A

            Minimum Purchases; Seed Ramp Up Plan; Production Capacity

* Confidential Treatment Requested

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* Confidential Treatment Requested

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                                    EXHIBIT B

                                 Price Schedule

* Confidential Treatment Requested

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                                    EXHIBIT C

                                   Trademarks



I-Plant

Implant Sciences


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