SECURITY AGREEMENT
                               ------------------


     THIS  SECURITY  AGREEMENT  is made and  entered as of the 29th day of June,
2001 by and between POSITRON CORPORATION ("Borrower"),  a Texas corporation with
its  principal  place of business at 1304 Langham  Creek Drive,  Houston,  Texas
77084 and  IMATRON  INC.  ("Secured  Party") a New Jersey  corporation  with its
principal  place of business at 389 Oyster Point Blvd.,  So. San  Francisco,  CA
94080.


     1. Definitions.
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     As used in this  Security  Agreement,  the  following  terms shall have the
following meanings unless the context requires otherwise:

     Loan  Agreement  means that certain  Loan  Agreement  between  Borrower and
Lender of even date herewith and pursuant to which this Agreement is given.

     Collateral means all of Borrower's right,  title and interest in and to the
following,  whether now owned or existing or  hereafter  arising or acquired and
wheresoever located: accounts,  accounts receivable and other rights of Borrower
to  payment  for goods sold or leased or for  services  rendered  (except  those
evidenced by  instruments  or chattel  paper);  computer  hardware and software,
including  but not  limited  to  computer  systems  and units,  drives,  cables,
generators,  accessories and all peripheral  devices,  software programs whether
now owned or licensed or leased or hereafter acquired by Borrower,  all firmware
associated  therewith,  all  documentation  and all rights  with  respect to the
foregoing;  copyrights,  registered or  unregistered,  now or hereafter in force
throughout the world, and all applications,  extensions and renewals;  equipment
of every  type  whether  owned  or  hereafter  acquired  and  wherever  located;
inventory and goods now owned or hereafter acquired held for sale or lease or to
be furnished  under any contract or which are raw materials,  work in process or
materials used or consumed in Borrower's business; licenses including all rights
under or interest in any trademark or service mark license  agreements  with any
other  party,  whether  Borrower  is  licensee or  licensor,  together  with any
goodwill  connection with such agreements;  patents including all letters patent
and  applications,   all  patent  licenses  and  all  reissues,   continuations,
extensions,  renewals and the like,  and all  proceeds of and rights  associated
with the foregoing; trade secrets, whether common law or statutory and all other
confidential  or proprietary  information  and know-how;  trademarks and service
marks now owned or existing or hereafter  acquired or arising and all  renewals,
income, royalties and rights associated therewith; general intangibles including
all rights, interests, choses in action, claims and other intangible property of
Borrower of every kind and nature now owned or  hereafter  acquired  and however
and whenever arising;  chattel paper, instruments and documents and all payments
thereunder; and all other property now owned or hereafter acquired.

     Borrower means the owner of the Collateral.

     Lien means any security interest,  mortgage,  deed of trust,  pledge, lien,
attachment,  claim, charge, encumbrance,  agreement retaining title, or lessor's
interest covering the Collateral.

     Obligations means Borrower's existing and future obligations under the Loan
Agreement and this Security Agreement.

     Service  Contract  means  each  and  every  agreement,  whether  oral or in
writing,  pursuant to which  Borrower  provides  service  under  warranty to its
customers with respect to products  manufactured  and sold by Borrower to any of
its customers.

     2. Grant of  Security  Interest.  To secure  prompt and  complete  payment,
observance and  performance of all obligations and liabilities of Borrower under
the Loan Agreement, the Note and this Agreement:

          a. Borrower  hereby assigns and pledges to Secured  Party,  and hereby
grants  to  Lender,  a lien  and  first  priority  security  interest  in all of
Borrower's right, title and interest in and to the Collateral.

          b. Anything herein to the contrary notwithstanding, (i) Borrower shall
remain  solely  liable  under  the  contracts  and  agreements  included  in the
collateral  to the  extent set forth  therein  to perform  all of its duties and
obligations  thereunder  to the same extent as if this  Agreement  and any other
security  documents  executed in  connection  with this  Agreement  had not been
executed;  (ii) the exercise by Lender of any of its rights  hereunder shall not
release  Borrower from any of its duties or obligations  under the contracts and
agreements  included in the  Collateral;  and, unless  specifically  accepted by
Lender in writing, (iii) Lender shall not have any responsibility, obligation or
liability  under the  contracts  and  agreements  included in the  Collateral by
reason of this  Agreement or any other  Security  Document,  nor shall Lender be
required or  obligated,  in any manner,  to perform or fulfill any of Borrower's
obligations or duties thereunder, make any payment or make any inquiry as to the
nature or sufficiency of any payment  received by Borrower or the sufficiency of
any performance by any party under any such contract or agreement, or present or
file any claim or take any action to collect  or enforce  any claim for  payment
assigned thereunder.

     3. Promises of Borrower. Borrower promises:
        --------------------


          a. To perform the Obligations to Secured Party when they are due.

          b.  To  preserve  all  rights,  privileges,  and  franchises  held  by
Borrower's business.

          c. To keep the Collateral in good repair.

          d. To keep the Service  Contracts  listed on Schedule 5 hereto in full
force and effect and  otherwise not to breach or otherwise not to default on any
of its obligations pursuant to the Service Contracts.

          e. To give  Secured  Party  notice of any  litigation  that may have a
material adverse affect on the Collateral or the Service Contracts.

          f. Not to change its name or place of business, or to use a fictitious
business name, without first notifying Secured Party in writing.

          g. Not to permit  Liens on the  Collateral,  nor to assign  its rights
under the Service Contracts to any third party..

          h. To permit Secured  Party,  its  representatives,  and its agents to
inspect the Collateral, the Service Contracts and records relating to either the
Collateral  or the Service  Contracts  at any  reasonable  time  during  regular
business  hours,  and to  make  copies  of  records  pertaining  to  either  the
Collateral and/or the Service Contracts,  at reasonable times at Secured Party's
request.

          i. To  notify  Secured  Party  promptly  in  writing  of any  default,
potential default,  or any development that might have a material adverse affect
on the Collateral or the Service Contracts.

          j. To execute and deliver to Secured  Party all  financing  statements
and other  documents that Secured Party  requests,  in order to maintain a first
perfected  security  interest  in the  Collateral,  and to pay the  costs of, or
incidental to, all  recordings or filings of all financing  statements and other
security documents.

          k. To furnish  Secured  Party the reports,  statements  and  schedules
further  describing the Collateral and Service  Contracts and such other reports
in connection  with the  Collateral  and Service  Contracts as Secured Party may
reasonably request, all in reasonable detail.

          l. To maintain all such casualty and liability  insurance covering the
Collateral as Secured Party may reasonably request and to cause Secured Party to
be named as a loss payee.

     4.  Appointment  of  Secured  Party as  Attorney-in-Fact.  Borrower  hereby
appoints Secured Party or any other person whom Secured Party may designate,  as
Borrower's  attorney-in-fact  (exercisable  only  during  the  continuance  of a
Default) with the following powers:

          a. To perform any of Borrower's  obligations  under this  Agreement in
Borrower's name or otherwise.

          b. To prepare and file financing statements,  continuation statements,
statements of assignment,  termination statements, and the like, as necessary to
perfect,  protect,   preserve,  or  release  Secured  Party's  interest  in  the
Collateral.

          c. To endorse  Borrower's  name on  instruments,  documents,  or other
forms of payment or security that come into Secured Party's possession.

          d. To give  notice of  Borrower's  right to payment,  to enforce  that
right, and to make extension agreements with respect to it.

          e. To  release  persons  liable on rights to  payment,  to  compromise
disputes with those  persons,  and to surrender  security,  all as Secured Party
determines  in its  sole  discretion  when  acting  in good  faith  based on the
information known to it when it acts.

          f. To take cash in payment of Obligations.

          g. To verify  information  concerning  rights to payment by inquiry in
its own name or in a fictitious name.

     5.  Borrower's   Covenants,   Warranties  and   Representations.   Borrower
covenants, warrants, and represents as follows:

          a. Borrower is a corporation duly organized,  validly existing, and in
good standing under the laws of the  jurisdiction of its  organization,  and has
all necessary authority to conduct its business wherever it is conducted.

          b. Borrower has been authorized to execute and deliver this Agreement.
This Agreement is a valid and binding obligation of Borrower. Borrower will file
all  appropriate   financing  statements  pursuant  to  the  applicable  Uniform
Commercial Code and filings with the U.S.  Patent and Trademark  Office in order
to create perfected  security interests against the Collateral in which Borrower
now has rights

          c.  Neither the  execution  and  delivery of this  Agreement,  nor the
taking of any action in compliance  with it, will (1) violate or breach any law,
regulation,  rule, order, or judicial action binding on Borrower,  any agreement
to which Borrower is party,  Borrower's  articles or incorporation or bylaws; or
(2) result in the creation of a lien against the Collateral  except that created
by this Agreement.

          d.  Borrower  owns  and  has  possession  of the  Collateral,  and the
Collateral  is not subject to any Liens or adverse  claims,  except as disclosed
and set forth in Schedule 4.5 to the Loan Agreement.

          e. All of the  properties  and assets owned by Borrower are owned free
and clear of any lien of any  nature  whatsoever,  except as  permitted  by this
Agreement  and/or  by  the  arrangements  contemplated  by  the  Lien  Agreement
("Permitted  Liens")  which  for this  purpose  means:  liens for taxes or other
governmental charges or levies, or claims of landlords,  carriers, mechanics and
the like  arising by  operation of law for which sums are not yet payable or are
fully stayed and being  contested;  liens created by this Agreement,  other Loan
documents  and/or the Lien  Agreements;  deposits or pledges to secure public or
statutory  obligations;  inchoate  liens arising  under the Employee  Retirement
Income Security Act of 1974 as amended to secure benefit plans from time to time
in  effect;  and  rights  reserve  to or  vested  in an  governmental  or public
authority to control or regulate  any property of Borrower or use such  property
in a manner which does not  materially  impair the use of such  property for the
purposes for which it is held by Borrower.  The liens created and granted by the
Security  Agreement and related  security  documents  constitute valid perfected
liens on the  Collateral,  subject  to no prior or equal lien  except  Permitted
Liens.

          f. The Service  Contracts  listed on Schedule 5 constitute all Service
Contracts which currently exist by and between  Borrower and its customers;  all
such Service Contracts are legal, valid, binding,  enforceable and in full force
and  effect  and are  materially  in the  form of  Service  Contract  previously
supplied to Lender as a sample of such Service Contracts;  no party is in breach
or default,  and no event has occurred  which with notice or lapse of time would
constitute a material breach or default, or permit termination, modification, or
acceleration, and no such action is threatened.

     6.  Continuing  Security  Interest.  This Agreement will terminate when (a)
Borrower  completes  performance of all obligations to Secured Party,  including
without  limitation  the  repayment of all  indebtedness  by Borrower to Secured
Party; and (b) Borrower has notified Secured Party in writing of the termination
and  Secured  Party   acknowledges  that  Borrower  has  fulfilled  its  payment
obligations  pursuant to the Loan Agreement and this Agreement.  Borrower agrees
that until all liabilities hereunder have been fully satisfied,  Secured Party's
security  interest in and liens on and against the Collateral,  and all proceeds
and  products  thereof,  shall  continue in full force and effect,  and Borrower
shall  perform  any and all  steps  reasonably  requested  by  Secured  Party to
perfect, maintain and protect Secured Party's security interests in and liens on
and against the Collateral  granted or purported to be granted hereby and by the
other security documents,  or to enable Secured Party to exercise its rights and
remedies hereunder with respect to the Collateral.

     7. Default. Borrower will be in default under this Agreement if:


          a. A Default  occurs  under the Loan  Agreement  or Borrower  fails to
perform any Obligation.

          b.  Borrower  commits any material  breach of this  Agreement,  or any
present or future rider or supplement to this Agreement.

          c. Any warranty, representation, or statement, made by or on behalf of
Borrower in or with respect to the Loan  Agreement or this  Agreement,  is false
when made in a material way.

          d. There is a seizure or attachment  of, or a levy on, the  Collateral
or any material part of it.

          e.  There is a  termination  of any  Service  Contract,  other than by
expiration or by the normal operation of its own terms.

          f. Borrower ceases operations, is dissolved, terminates its existence,
does or fails to do  anything  that allows  obligations  in excess of $25,000 to
become due before their stated maturity.

     8.   Secured   Party's   Remedies.   When  an  event  of  default   occurs:


          a. Secured Party may:

               (i)  Declare  the  Obligations  immediately  due and  payable  --
without  demand,  presentment,  protest,  or  notice to  Borrower,  all of which
Borrower expressly waives.

               (ii) Exercise all rights and remedies available to it pursuant to
this Agreement  and/or all rights and remedies  available to a secured  creditor
after  default,  including but not limited to the rights and remedies of secured
creditors under the California Uniform Commercial Code.

     9. No Waiver. No waiver by Secured Party of any breach or default will be a
waiver of any breach or default  occurring later. A waiver will be valid only if
it is in writing and signed by the Secured Party.

     10.  Survival.  Borrower's  representations  and  warranties  made  in this
Agreement will survive its execution, delivery and termination.

     11.  Governing  Law.  This Security  Agreement is hereby  delivered in, and
shall be governed,  interpreted and enforced in accordance with the laws, of the
State of California.

     12. Dispute Resolution.


          a. Any  controversy or claim between or among the parties  arising out
of or  relating  to  this  Security  Agreement  or  any  related  agreements  or
instruments ("Subject Documents"),  including any claim based on or arising from
an alleged tort, shall be submitted to and determined by arbitration  before one
(1) arbitrator who shall be an attorney admitted to practice law in the state of
California  in  accordance  with  Title 9 of the U.S.  Code  and the  Commercial
Arbitration  Rules  of the  American  Arbitration  Association  ("AAA")  then in
effect,  and shall be held in the county of San  Francisco,  CA. All statutes of
limitations  which would otherwise be applicable  shall apply to any arbitration
proceeding under this subparagraph  12(a).  Judgment upon the award rendered may
be entered in any court having jurisdiction. This subparagraph 12(a) shall apply
only if, at the time of the proposed  submission to AAA, none of the obligations
to Lender described in or covered by any of the Subject Documents are secured by
real  property  collateral  or,  if so  secured,  all  parties  consent  to such
submission.

          b. If the  controversy  or claim is not  submitted to  arbitration  as
provided  and  limited in Section  12(a),  but becomes the subject of a judicial
action,  any party may elect to have all decisions of fact and law determined by
a referee in accordance with applicable  state law. If such an election is made,
the parties shall  designate to the court a referee or referees  selected  under
the  auspices  of the AAA in the same  manner as  arbitrators  are  selected  in
AAA-sponsored proceedings. The referee, or presiding referee of the panel, shall
be an active  attorney or retired judge.  Judgment upon the award rendered shall
be entered in the court in which such proceeding was commenced.

          c. Except as provided herein,  no provision of, or the exercise of any
rights  under,  Section 12, shall limit the right of any party to exercise  self
help remedies such as setoff,  or to obtain  provisional  or ancillary  remedies
such as injunctive  relief or the  appointment of a receiver from a court having
jurisdiction  before,  during  or after the  pendency  of any  arbitration.  The
institution  and  maintenance  of an action  for  judicial  relief or pursuit of
provisional  or ancillary  remedies or exercise of self help remedies  shall not
constitute  a waiver of the right of any  party,  including  the  plaintiff,  to
submit the controversy or claim to arbitrators.

          d. The  parties  understand  and agree the  arbitration  will be their
exclusive form of resolving  disputes  between them regarding the issues covered
by this Agreement.  BOTH PARTIES EXPRESSLY WAIVE THEIR  ENTITLEMENT,  IF ANY, TO
HAVE CONTROVERSIES BETWEEN THEM DECIDED BY A JURY OR COURT OF LAW.

     13.  Notices.  Notices  under this  Agreement  shall be given in the manner
provided in the Loan Agreement.  Either party may change its address for service
of notice by notice to the other.

     14.  Counterparts.  This Agreement may be executed in counterparts  and all
said counterparts  taken together shall be deemed to constitute one and the same
instrument.

     IN WITNESS  WHEREOF,  the  parties  to this  Security  Agreement  have duly
executed it as of the date first above written.


                                          BORROWER:

                                          POSITRON CORPORATION


Tax ID No:                                By__________________________________
_______________________________           Its:__________________________________

                                          SECURED PARTY:

                                          IMATRON INC.


Tax ID No:                                By__________________________________
_______________________________           Its:__________________________________



<PAGE>



                                   Schedule 5

                          Listing of Service Contracts