<PAGE>   1
                                                                    EXHIBIT 4.8



                               SECURITY AGREEMENT

           
                                               Date: October 17, 1996


<TABLE>
<S><C>
A. PARTIES

   1. Debtor: AMERICAN DENTAL TECHNOLOGIES, INC.  
             ---------------------------------------------------------------------------
          Check one: [  ] individual [  ] partnership [ X ] corporation [   ] other

   2. Address: 28411 Northwestern Highway, Suite 1100, Southfield, Michigan 48034 
              --------------------------------------------------------------------------
     Address shown is [   ] place of business [ X ] chief executive office (if more than 
     one place of business) [   ] residence


   3. Secured Party: THE INTERNATIONAL BANK
                    --------------------------------------------------------------------

   4. Address: P. O. Drawer 4956, Corpus Christi, Texas 78469 
              --------------------------------------------------------------------------
              (Information concerning this security interest may be obtained at the 
               office of the Secured Party shown above).
</TABLE>


B. AGREEMENT

   Subject to the applicable terms of this Security Agreement, Debtor grants
   to Secured Party a security interest in the collateral to secure the
   payment of the obligations.  A carbon, photographic, or other
   reproduction of this Security Agreement may be filed as a financing
   statement.

C. OBLIGATIONS

   1. The following are the obligations secured by this Agreement:

      a. All past, present, and future advances, of whatever, type, by Secured 
         Party to Debtor, and extensions and renewals thereof.

      b. All existing and future liabilities of whatever type, of Debtor to 
         Secured Party, and including (but not limited to) liability for 
         overdrafts and as indorser and surety.

      c. All costs incurred by Secured Party to obtain, preserve, and enforce 
         this security interest, collect the obligation, and maintain and 
         preserve the collateral, including (but not limited to) taxes,
         assessments, insurance premiums, repairs, reasonable attorney's fees 
         and legal expenses, feed, rent, storage costs, and expenses of sale.

      d. Interest on the above amounts, as agreed between Secured Party and 
         Debtor, or if no such agreement, at the maximum rate permitted by law.

2.    List notes included in the obligations as of the date of this Agreement
      (show date and amount):

      a. Revolving Credit Promissory Note of even date herewith in the 
         principal face amount of $2,500,000.00 executed by Texas AirSonics, 
         Inc. and American Dental Technologies, Inc. payable to the order of 
         Secured Party.

D. COLLATERAL

   1. The security interest is granted in the following collateral:

      All of Debtor's present and future and now or hereafter acquired
      accounts receivable and inventory; and all proceeds of the foregoing.

   2. Classify goods under one or more of the following Uniform Commercial 
      Code categories:

      [  ] Consumer goods           [  ] Equipment (farm use)    [ X ] Inventory
      [  ] Equipment (business use) [  ] Farm products


E. AGREEMENTS OF DEBTOR

   1. Debtor will: take adequate care of the collateral; insure the collateral
      for such hazards and in such amounts as Secured Party directs, policies
      to be satisfactory to Secured Party; pay all costs necessary to obtain,
      preserve, and enforce this security interest, collect the obligation,
      and preserve the collateral, including (but not limited to) taxes,
      assessments, insurance premiums, repairs, reasonable attorneys' fees and
      legal expenses, feed, rent, storage costs, and expenses of sale; furnish
      Secured Party with any information on the collateral requested by
      Secured Party; allow Secured Party to inspect the collateral, and
      inspect and copy all records relating to the collateral and the
      obligation; sign any papers furnished by Secured Party which are
      necessary to obtain and maintain this security interest; assist Secured
      Party in complying with the Federal Assignment of Claims Act, where
      necessary to enable Secured Party to become an assignee under such Act;
      take necessary steps to preserve the liability of account debtors,
      obligors, and secondary
<PAGE>   2


      parties whose obligations are part of the collateral; transfer
      possession of all instruments, documents, and chattel paper which are
      part of the collateral to Secured Party immediately, or as to those
      hereafter acquired, immediately following acquisition; perfect a
      security interest (using a method satisfactory to Secured Party) in
      goods covered by chattel paper which is part of the collateral; notify
      Secured Party of any change occurring in or to the collateral, or in any
      fact or circumstance warranted or represented by Debtor in this
      agreement or furnished to Secured Party, or if any event of default
      occurs.

   2. Debtor will not (without Secured Party's consent): remove the collateral 
      from the locations specified herein; allow the collateral to become an 
      accession to other goods; sell, lease, otherwise transfer, manufacture, 
      process, assemble, or furnish under contracts of service, the collateral,
      except goods identified herein as inventory; allow the collateral to
      be affixed to real estate, except goods identified herein as fixtures.

   3. Debtor warrants: no financing statement has been filed with respect to 
      the collateral, other than relating to this security interest; Debtor is 
      absolute owner of the collateral, and it is not encumbered other
      than by this security interest (and the same will be true of collateral
      acquired hereafter when acquired); none of the collateral is affixed to
      real estate or an accession to other goods, nor will collateral acquired
      hereafter be affixed to real estate or an accession to other goods when
      acquired, unless Debtor has furnished Secured Party the consents or
      disclaimers necessary to make this security interest valid against persons
      holding interests in the real estate or other goods: all account debtors
      and obligors, whose obligations are part of the collateral, are to the
      extent permitted by law prevented from asserting against Secured Party any
      claims or defenses they have against sellers, or can be so prevented by
      Secured Party taking action provided by law for such purposes.

F. RIGHTS OF SECURED PARTY

   Secured Party may, in its discretion, after default: terminate, on notice
   to Debtor, Debtor's authority to sell, lease, otherwise transfer,
   manufacture, process or assemble, or furnish under contracts of service,
   inventory collateral, or any other collateral as to which such permission has
   been given; require Debtor to give possession or control of the collateral to
   Secured Party; indorse as Debtor's agent any instruments or chattel paper in
   the collateral; notify account debtors and obligors on instruments to make
   payment direct to Secured Party; contact account debtors directly to verify
   information furnished by Debtor; take control of proceeds and use cash
   proceeds to reduce any part of the obligation; take any action Debtor is
   required to take or otherwise necessary to obtain, preserve, and enforce this
   security interest, and maintain and preserve the collateral, without notice
   to Debtor, and add costs of same to the obligation (but Secured Party is
   under no duty to take any such action); release collateral in its possession
   to Debtor, temporarily or otherwise; take control of funds generated by the
   collateral, such as dividends, interest, and proceeds or refunds from
   insurance, and use same to reduce any part of the obligation; vote any stock
   which is part of the collateral, and exercise all other rights which an owner
   of such stock may exercise; waive any of its rights hereunder without such
   waiver prohibiting the later exercise of the same or similar rights; revoke
   any permission or waiver previously granted to Debtor.

G. MISCELLANEOUS

   The rights and privileges of Secured Party shall inure to its successors     
   and assigns.  All representations, warranties, and agreements of Debtor are
   joint and several if Debtor is more than one and shall bind Debtor's personal
   representatives, heirs, successors, and assigns.  Definitions in the Uniform
   Commercial Code apply to words and phrases in this agreement; if Code
   definitions conflict, Article 9 definitions apply.  Debtor waives
   presentment, demand, notice of dishonor, protest, and extension of time
   without notice as to any instruments and chattel paper in the collateral.
   Notice mailed to Debtor's address in Item A2, or to Debtor's most recent
   changed address on file with Secured Party, at least five (5) days prior to
   the related action (or, if the Uniform Commercial Code specifies a longer
   period, such longer period prior to the related action), shall be deemed
   reasonable.

H. DEFAULT

   1. Any of the following is an event of default: failure of Debtor to pay 
      any note in the obligation in accordance with its terms, or any other     
      liability in the obligation on demand, or to perform any act or duty
      required by this agreement; falsity of any warranty or representation in
      this agreement when made; substantial change in any fact warranted or
      represented in this agreement; involvement of Debtor in bankruptcy or
      insolvency proceedings, death, dissolution, or other termination of
      Debtor's existence; merger or consolidation of Debtor with another;
      substantial loss, theft, destruction, sale, reduction in value,
      encumbrance of, damage to, or change in the collateral; modification of
      any contract, the rights to which are part of the collateral; levy on,
      seizure, or attachment of the collateral; judgment against Debtor; filing
      any financing statement with regard to the collateral, other than relating
      to this security interest; Secured Party's belief that the prospect of
      payment of any part of the obligation, or the performance of any part of
      this agreement, is impaired.

2.    When an event of default occurs, the entire obligation becomes immediately
      due and payable at Secured Party's option without notice to Debtor, and   
      Secured Party may proceed to enforce payment of same and exercise any and
      all of the rights and remedies available to a secured party under the
      Uniform Commercial Code as well as all other rights and remedies. When
      Debtor is in default, Debtor, upon demand by Secured Party, shall assemble
      the collateral and make it available to Secured Party at a place
      reasonably convenient to both parties.  Debtor is entitled to any surplus
      and shall be liable to Secured Party for any deficiency.


                                     -2-

<PAGE>   3


I. FIRST AND PRIOR LIEN

   This security interest grants to Secured Party, a first and prior lien to    
   secure the payment of the notes and obligations listed herein, and extensions
   and renewals thereof.  If Secured Party disposes of the collateral following
   default, the proceeds of such disposition available to satisfy the
   indebtedness shall be applied first to the notes herein, and renewals and
   extension thereof, in the order of execution, and there after to all
   remaining indebtedness and obligations secured hereby, in the order in which
   such remaining indebtedness and obligations were executed or contracted.  For
   the purpose of this paragraph, an extended or renewed note will be considered
   executed on the date of the original note.



                                            DEBTOR:
                                            AMERICAN DENTAL TECHNOLOGIES, INC.



                                            By: Benjamin J. Gallant, President
                                               -------------------------------
                                                Benjamin J. Gallant, President
                                               -------------------------------
                                                          Typed Name and Title





                                      -3-