Ex. 10.58


                               SECURITY AGREEMENT

     SECURITY  AGREEMENT,  made  as of the 10th day of October, 2001, by IMPLANT
SCIENCES  CORPORATION,  a  Massachusetts  corporation  ("Grantor"),  in favor of
                                                         -------
CARDIOTECH  INTERNATIONAL,  INC.,  a  Massachusetts  corporation  ("Grantee").
                                                                    -------

                              W I T N E S S E T H :
                              - - - - - - - - - -

     WHEREAS,  on  the  date hereof, Grantee is making a loan to Grantor, in the
principal  amount  of  up  to  FIVE  HUNDRED THOUSAND DOLLARS ($500,000.00) (the
"Loan"),  which  is  evidenced by a term grid note of even date herewith, in the
principal  amount  of  up to FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) made by
Grantor  in  favor  of  Grantee  (the "Note") and secured by and entitled to the
                                       ----
benefits  of, among other things, (i) a Credit Line Letter, dated as of the date
hereof,  executed  by  Grantor  and  Grantee  (the  "Loan Agreement"), (ii) this
                                                     ---- ---------
Security  Agreement, and (iii) a Guaranty, dated as of the date hereof, executed
by  Anthony  J.  Armini  in  favor  of  Grantee;

     WHEREAS,  it  is a condition precedent to the execution and the delivery of
the Loan Agreement by Grantee and the making of the Loan by Grantee that Grantor
shall  have  executed and delivered to Grantee a security agreement securing the
obligations  of  Grantor to Grantee under the Loan Agreement, the Note and other
documents  relating  to  the  Loan  (collectively,  the  "Loan  Documents");
                                                          ---------------

     WHEREAS,  as  an inducement to Grantee to the execution and the delivery of
the  Loan  Agreement  by Grantee and the making of the Loan by Grantee,  Grantor
has  agreed  to  enter  into  this  Agreement.

     NOW,  THEREFORE, in consideration of the premises and the agreements herein
and in order to induce Grantee to make and maintain the Loan, Grantor, intending
to  be  legally  bound,  hereby  agrees  with  Grantee  as  follows:

SECTION 1.     Definitions.  Reference is hereby made to the Loan Agreement, the
               -----------
Note  and  the  other  Loan Documents for a statement of the terms thereof.  All
terms  used  in  this  Agreement  which  are defined in Article 9 of the Uniform
Commercial  Code  (the  "UCC")  currently  in  effect  in  the  Commonwealth  of
                         ---
Massachusetts  and  which  are  not otherwise defined herein shall have the same
meanings  as  set  forth  therein.  All  capitalized  terms used and not defined
herein  or  in  the  UCC  shall  have  the meanings ascribed to them in the Loan
Agreement.

SECTION  2.     Grant  of  Security Interest.  As collateral security for all of
                ----------------------------
the  Obligations  (as  defined  in Section 3 hereof), Grantor hereby pledges and
assigns to Grantee, and grants to Grantee a continuing security interest in, all
personal property and fixtures of such Grantor, wherever located and whether now
or hereafter existing and whether now owned or hereafter acquired, of every kind
and  description,  tangible or intangible (the "Collateral"), including, without
                                                ----------
limitation,  the  following:


<PAGE>
(a)     all  of  Grantor's right, title and interest  in and to all equipment of
any kind, wherever located and whether now or hereafter existing and whether now
owned  or hereafter acquired and all parts there-of and accessions thereto being
(collectively,  the  "Equipment");
                      ---------

(b)  all  of  Grantor's right, title and interest in and to all inventory of any
kind,  in  all  of  its  forms,  wherever  located  and whether now or hereafter
existing  and  whether  now  owned or here-after acquired, and raw materials and
works  in  process  therefor,  finished  goods  thereof,  and  materials used or
consumed  in  the  manufacture  or  production  thereof  (including,  without
limitation,  goods  in which Grantor has an interest in mass or a joint or other
interest  or  right of any kind), and goods which are returned to or repossessed
by  Grantor, and all accessions thereto, products thereof and documents therefor
(any  and  all  such  inventory,  accessions,  products  and  documents  being
herein-after  collectively  referred  to  as  the  "Inventory");
                                                    ---------

(c)     all  of  Grantor's  right,  title  and interest in and to all accounts,
whether  now  or hereafter existing and whether now owned or hereafter acquired,
arising out of or in connection with the sale or lease of goods or the rendering
of  services  located  at  the  premises or other facilities owned by Grantor or
otherwise,  including,  without limitation, all rights now or hereafter existing
and  securing  or  otherwise  relating  to  any  such  accounts  (collectively,
"Accounts");

(d)     all  of  Grantor's right, title  and interest in and to (i) all contract
rights,  chattel  paper,  instruments,  documents, general intangibles and other
rights or obligations of any kind, whether now or hereafter existing and whether
now  owned  or hereafter acquired, arising out of or in connection with the sale
or  lease of goods or the rendering of services located at the premises or other
facilities owned by Grantor or otherwise, including, without limitation, (i) all
rights  relating  to  the performance by or for Grantor of management, advisory,
consulting  or  other  similar services, (ii) all rights relating to the sale or
other  transfer  of  property  to,  or  the  construction,  renovation  or other
improvement  of  property by or for, Grantor or any of its affiliates, (iii) all
rights  relating  to  any  partnership  in  which  Grantor has any interest as a
general  or  limited partner or otherwise, including all moneys due from time to
time  in  respect  thereof,  and  (iv) all rights relating to any lease to which
Grantor  is  a  party as lessee or lessor, including all moneys due from time to
time  in respect thereof, and (v) all rights now or hereafter existing in and to
all  security  agreements, leases and other contracts, now or hereafter existing
and  securing  or otherwise relating to any such contract rights, chattel paper,
instruments,  documents, general intangibles or other rights or obligations (any
and  all  such  contract  rights, chattel paper, instruments, documents, general
intangibles  and  rights and obligations being hereinafter collectively referred
to  as  the  "General  Intangibles";
              --------------------

(e)     all  patents,  patent  registrations,  patent  applications  pending,
trademarks,  trademark  registrations,  trademark  applications pending, service
marks, service mark registrations, service mark applications pending, processes,
formulas,  royalties,  licenses,  sublicenses,  rights,  trade secrets and other
intellectual  property  held or hereafter acquired by Grantor including, without
limitation,  registrations,  recordings  and  applications  in the United States
Patent  and  Trademark  Office or any similar governmental agency in any foreign


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<PAGE>
country  (which  Grantor has adopted and used and is using or hereafter acquires
or  under  which  Grantor  is  licensed),  as  well  as  all  other  trademarks,
tradenames,  fictitious  business names, business names, company names, business
identifiers,  prints, labels, trade styles and service marks not registered, and
trade dresses, including logos and/or designs, (all the foregoing being referred
to  herein  collectively  as  the  "Marks"), together with the registrations and
                                    -----
right  to  all  renewals,  reissues  and extensions thereof, the goodwill of the
business  of  Grantor  symbolized by the Marks, and any and all causes of action
which  may exist by reason of infringement or dilution thereof, or injury to the
associated  goodwill, with the right to sue for and collect said damages and the
right  to collect all royalties under any license agreements with respect to any
such  Marks;

(f)     all  copyrights,  copyright registrations and copyright applications now
held or hereafter acquired by Grantor, including, without limitation, any United
States  copyrights  to  which  Grantor now or hereafter has an interest (all the
foregoing  being  referred  to  herein  collectively  as  the  "Copyrights");
                                                                ----------

(g)     all  software  and  source  codes  and  documentations  and other rights
relating  thereto  now  held  or  hereafter  acquired  by Grantor (collectively,
"Software");
 --------

(h)     all proceeds of any and all of the foregoing Collateral in whatever form
and, to the extent not otherwise included, all payments under insurance (whether
or  not  Grantee  is  the  loss  payee  thereof),  or any indemnity, warranty or
guaranty,  payable  by  reason of loss or damage to or otherwise with respect to
any  of  the  foregoing  Collateral;

in  each case, howsoever Grantor's interest therein may arise or appear (whether
by  ownership,  security  interest,  claim  or  otherwise).

SECTION  3.     Security  for Obligations.  The security interest created hereby
                -------------------------
in  the  Collateral  constitutes  continuing  collateral security for all of the
following  obligations,  whether  now  existing  or  hereafter  incurred  (the
"Obligations"):
 -----------

(a)     the  prompt  payment  by  Grantor,  as  and when due and payable, of all
amounts  from  time to time owing by it hereunder or in respect of the Note, the
Loan  Agreement  and  the  other  Loan  Documents;  and

(b)     the  due performance and observance by Grantor of all of its obligations
from  time  to  time  existing  in  respect of this Agreement and the other Loan
Documents.

SECTION  4.     Representations and Warranties.  Grantor represents and warrants
                ------------------------------
to  Grantee  as  follows:

(a)     Grantor  (i)  is  a corporation duly organized,  validly existing and in
good  standing under the laws of the Commonwealth of Massachusetts, and (ii) has
all necessary licenses, authorizations, registrations, permits and approvals and
all  requisite corporate power and authority, to own its properties and carry on
its  business  as  presently  conducted.  Grantor is duly qualified as a foreign
corporation and is in good standing in such states or jurisdictions in which the
business conducted by it and the location of its assets require it to qualify as
a  foreign  corporation.


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<PAGE>
(b)     The execution, delivery and performance by Grantor of this Agreement and
of the other Loan Documents (i) do not and will not violate any provision of any
applicable  law  or  regulation  or  of any order, writ, judgment, injunction or
decree  of the United States, the Commonwealth of Massachusetts or any political
subdivision  thereof,  or  any  agency, department, commission, board, bureau or
instrumentality  which  exercises or claims to have jurisdiction over Grantor or
any  of  its  properties,  (ii) do not and will not violate any provision of the
charter  or  By-Laws of Grantor, (iii) will not violate, be in conflict with, or
result in a breach of or constitute (with or without the giving of notice or the
passage  of  time or both) a default under any material indenture, agreement, or
other  instrument  to which Grantor is a party or by which Grantor or any of its
properties  or  assets  are  or  may  be  bound,  and  (iv)  except as otherwise
contemplated  by  the  Loan  Documents,  will  not  result  in  the  creation or
imposition of any lien, charge or encumbrance upon, or any security interest in,
any  of  Grantor's  properties  or  assets.

(c)     Grantor  has  all requisite corporate power and authority, and has taken
all  necessary  corporate action to authorize, execute, deliver and perform this
Agreement  and  the other Loan Documents.   Each of this Agreement and the other
Loan  Documents  has been duly executed and delivered by Grantor and is a legal,
valid  and  binding  obligation  of  Grantor,  enforceable  against  Grantor  in
accordance  with  its  terms.

(d)     Grantor has previously delivered to Grantee (i) resolutions of the Board
of  Directors of  Grantor, certified by its secretary, authorizing the execution
and delivery of this Agreement and any other Loan Documents and the transactions
contemplated  hereby  and  thereby,  and  such resolutions are in full force and
effect  and  have  not  been  modified,  amended  or rescinded and (ii) Granto's
charter  documents  certified  by  the  Secretary  of  the  Commonwealth  of
Massachusetts  and  Grantor's secretary, and By-Laws of Grantor certified by its
secretary, all of which are in full force and effect and have not been modified,
amended  or  rescinded.

(e)     None  of  the  Accounts  is  evidenced  by  a  promissory  note or other
instrument.  Set  forth  as  Schedule I hereto is a complete and correct list of
                             ----------
each  trade  name  used  by  Grantor.

(f)     Grantor  has  delivered  to  Grantee  complete and correct copies of all
written  contracts  of  Grantor  included in the Collateral, all as described in
Schedule  II  hereto,  including  all schedules and exhibits thereto.  Each such
------------
contract  sets  forth  the  entire  agreement  and  understanding of the parties
thereto  relating  to  the  subject  matter  thereof,  and  there  are  no other
agreements,  arrangements  or  understandings,  written or oral, relating to the
matters  covered  thereby  or  the rights of Grantor or any of its affiliates in
respect  thereof.  Each  such  contract  now  existing  is,  and each other such
Contract  will  be,  the  legal,  valid  and  binding  obligation of the parties
thereto,  enforceable  against  such  parties  in accordance with its terms.  No
default thereunder by any such party has occurred, nor does any defense, offset,
deduction  or  counter-claim  exist  thereunder  in  favor  of  any  such party.

(g)     Grantor  is  and  will  be  at  all  times  the  owner of its respective
Collateral  free  and  clear  of  any  lien except for (i) the security interest


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<PAGE>
created  by  this  Agreement  and  (ii)  the  security  interests  and  other
en-cumbrances  described  in  Schedule  III  hereto.  No  effective  financing
                              -------------
statement or other instrument  similar in effect covering all or any part of the
Collateral  is on file  in any recording or filing office except (i) such as may
have  been filed in favor of Grantee relating to this Agreement and (ii) such as
may  have  been filed to perfect or protect any security interest or encumbrance
described  in  Schedule  III  hereto.
               -------------

(h)     Except  as  set forth in Schedule IV hereto, there are not, in any court
                                 -----------
or  before  any  arbitrator  of  any  kind  or  before or by any governmental or
non-governmental  body, any actions, suits or proceedings, pending or threatened
(nor,  to  the  knowledge of Grantor, is there any basis therefor) against or in
any  other  way  relating  to  or affecting (i) this Agreement or any other Loan
Document,  or  (ii)  Grantor  or  the  assets  or  properties  of  Grantor.

(i)     No  (a)  consent,  approval  or  authorization  of,  or  registration,
declaration  or filing with any governmental authority, or (b) consent, approval
or authorization (other than from Citizens Bank is required is required from any
other  person  or  entity, in connection with or as a condition precedent to the
due  and  valid execution and delivery by Grantor of the Loan Documents to which
it is a party, the performance of its obligations hereunder, or to the legality,
validity, binding effect, performance or enforceability of any of the respective
terms,  provisions  or  conditions  thereof.

(j)     This  Agreement creates a valid security interest in favor of Grantee in
the  Collateral as security for the Obligations. Grantee's having pos-session of
all  instruments  and  cash  constituting  Collateral  from time to time and the
filing  of  the  financing  statements  required  to  be  filed  results  in the
perfection  of such security interest. Such security interest is, or in the case
of Col-lateral in which a Grantor obtains rights after the date hereof, will be,
a  perfected,  second  priority  security interest, subject only to the security
interests  and  other  encumbrances of Citizens Bank. Such filings and all other
action necessary or desirable to perfect and protect such security interest have
been  duly taken, except for Grantee's having possession of instruments and cash
constituting  Collateral  after  the  date  hereof.

(k)     Neither  this  Agreement,  any Loan Document, the exhibits and schedules
hereto  and  thereto,  nor  any  certificate  or  document furnished by Grantor,
hereunder  or  thereunder,  contains  any untrue statement of a material fact or
omits  to  state  a  material  fact  necessary  in  order to make the statements
contained  herein or therein not misleading.  There is no fact which Grantor has
not  disclosed  to Grantee in writing which would have an adverse effect that is
material  to  the  business,  assets,  condition  or  operations  (financial  or
otherwise)  or  prospects  of  Grantor.

(l)     Grantor  owns  or is licensed to use all Marks that it uses.  Grantor is
not  aware  of  any  third  party  claim that any aspect of Grantor's present or
contemplated  business  operations  infringes  or  will  infringe  any  Mark.

(m)     Grantor owns or is licensed to practice under all Copyrights that it now
owns,  uses  or  practice  under.  Grantor is not aware of any third party claim
that  any  aspect  of  Grantor's  present  or  contemplated  business operations
infringes  or  will  infringe  any  Copyright.


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<PAGE>
(n)     Grantor  owns  or is licensed to practice under all Software that it now
owns,  uses  or  practice  under.  Grantor is not aware of any third party claim
that  any  aspect  of  Grantor's  present  or  contemplated  business operations
infringes  or  will  infringe  any  Software.

SECTION  5.     Covenants  as  to  the  Collateral.  So  long  as  any  of  the
                ----------------------------------
Obligations  shall remain outstanding, unless Grantee shall otherwise consent in
writing:

(a)     Further  Assurances.  Grantor  will at its expense, at any time and from
        -------------------
time to time, promptly execute and deliver all further instruments and documents
and  take  all further action that may be necessary or desirable or that Grantee
may  request  in  order  to  (i) fully perfect and protect the security interest
purported  to be created hereby, (ii) enable Grantee to exercise and enforce its
rights  and  remedies  hereunder in respect of the Collateral or (iii) otherwise
effect  the  purposes  of  this  Agreement,  including,  without limitation: (A)
marking  conspicuously  each  chattel  paper  and  each contract included in the
Collateral and, at the request of Grantee, each of its records pertaining to the
Collateral  with  a  legend,  in  form  and  substance  satisfactory to Grantee,
indicating  that  such  chattel  paper, contract or Collateral is subject to the
security  interest  created  hereby, (B) if any Accounts shall be evidenced by a
promissory note or other instrument or chattel paper, delivering and pledging to
Grantee  hereunder  such  note,  instrument  or  chattel paper duly indorsed and
accompanied  by  executed instruments of transfer or assignment, all in form and
substance  satisfactory  to  Grantee, (C) executing and filing such financing or
continuation statements, or amendments thereto, as may be necessary or desirable
or  that Grantee may request in order to fully perfect and preserve the security
interest  purported to be created hereby and (D) furnishing to Grantee from time
to  time  statements  and  schedules  further  identifying  and  describing  the
Collateral  and  such other reports in connection with the Collateral as Grantee
may  reasonably  request,  all  in  reasonable  detail.

(b)     Jurisdiction  of  Organization;  Change  of  Name.  Grantor shall notify
        -------------------------------------------------
Grantee  in writing five (5) business days prior to the filing of any instrument
which  will  have the effect of either changing the jurisdiction of organization
of Grantor or the Grantor's.  At the end of each calendar quarter, Grantor shall
submit  to  Grantee  a  certificate  certifying  that  Grantor's jurisdiction of
organization  and  Grantor's  name  have  not  been  changed.

(c)     Condition  of  Equipment.  Grantor  will  cause  its  Equipment  to  be
        ------------------------
maintained and preserved in the same condition, repair and working order as when
acquired  and  in accordance with any manufacturer's manual, and will forthwith,
or  in  the  case  of  any  loss  or  damage to any such Equipment as quickly as
practicable  after the occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection therewith which are necessary
or  desirable  or  that  Grantee  may request to such end. Grantor will promptly
furnish  to  Grantee  a  statement  respecting  any  loss or damage in excess of
$25,000  to  any  of  its  Equipment.

(d)     Taxes.  Grantor will pay promptly when due all property and other Taxes,
        -----
imposed  upon,  and  all  claims  (including  claims  for  labor,  materials and
supplies)  against,  its  Equipment  and  Inventory,  except  to  the extent the
validity  thereof  is  being contested in good faith by proper proceedings which
stay  the imposition of any penalty, fine or lien resulting from the non-payment
thereof  and with respect to which adequate reserves have been set aside for the
payment  thereof.


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<PAGE>
(e)     Insurance. (i) Grantor will, at its own expense, maintain insurance with
        ---------
respect  to  its Equipment and Inventory in such amounts, against such risks, in
such  form and with such insurers, as shall be satisfactory to Grantee from time
to  time. Each policy for liability insurance shall provide for all losses to be
paid  on behalf of Grantee and Grantor as their respective interests may appear,
and  each  policy  for  property  damage  insurance shall provide for all losses
(except  for  losses of less than $25,000 per occurrence) to be paid directly to
Grantee.  Each  such  policy  shall  in addition (A) name Grantor and Grantee as
insured  parties  thereunder  (without  any  representation  or  warranty  by or
obligation  upon  Grantee)  as  their  interests  may  appear,  (B)  contain the
agreement  by  the insurer that any loss thereunder shall be pay-able to Grantee
notwithstanding  any action, inaction or breach of representation or warranty by
Grantor, (C) provide that there shall be no recourse against Grantee for payment
of premiums or other amounts with respect thereto, and (D) provide that at least
30  days'  prior  written  notice  of cancellation or of lapse shall be given to
Grantee  by  the  insurer.  Grantor will, if so requested by Grantee, deliver to
Grantee  original  or  duplicate  policies  of  such  insurance and, as often as
Grantee  may  reasonably  request, a report of a reputable insurance broker with
respect  to  such  insurance. Grantor will also, at the request of Grantee, duly
exercise  and  deliver  instruments of assignment of such insurance policies and
cause  the  respective  insurers  to  acknowledge  notice  of  such  assignment.

     (ii)     Reimbursement under any liability insurance maintained by Grantor
pursuant  to this Section 5(e) may be paid directly to the person who shall have
incurred  liability covered by such insurance. In the case of any loss involving
damage  to  Equipment  or  Inventory as to which paragraph (iii) of this Section
5(e)  is  not  applicable,  Grantor  will make or cause to be made the necessary
repairs  to  or replacements of such Equipment or Inventory, and any proceeds of
insurance  maintained  by Grantor pursuant to this Section 5(e) shall be paid to
Grantor  as  reimbursement  for  the  costs  of  such  repairs  or replacements.

     (iii)     Upon  the  occurrence  and  during the continuance of an Event of
Default  (as  hereinafter  defined) or the actual or constructive total loss (in
excess  of  $25,000 per occurrence) of any Equipment or Inventory, all insurance
payments  in respect of such Equipment or Inventory shall be paid to Grantee and
applied  as  specified  in  Section  8(b)  hereof.

(f)     Provisions  Concerning  the  Accounts  and  General  Intangibles.
        ----------------------------------------------------------------

     (i)     Grantor  will  keep  adequate  records  concerning all Accounts and
General Intangibles and permit representatives of Grantee at any reasonable time
and  from  time  to  time  to  inspect  and  make  abstracts  from such records.

     (ii)     Grantor will duly perform and observe all of its obligations under
each  contract  included in the Collateral and, except as other-wise provided in
this Subsection (f), continue to collect, at its own expense, all amounts due or
to  become due under the Accounts.  In connection with such collections, Grantor
may  (and,  at Grantee's direction, will) take such action as Grantor or Grantee
may  deem  necessary  or  advisable  to enforce collection or performance of the
Accounts; provided, however, that Grantee shall have the right at any time, upon
          --------  -------
the  occurrence  and  during  the  continuance  of an Event of Default, and upon


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<PAGE>
written  notice  to  Grantor  of  its  intention to do so, to notify the account
debtors  or  obligors  under  any Accounts of the assignment of such Accounts to
Grantee  and  to  direct such account debtors or obligors to make payment of all
amounts due or to become due to Grantor thereunder directly to Grantee and, upon
such  notification  and at the expense of Grantor and to the extent permitted by
law,  to  enforce  collection  of  any  such  Accounts  and to adjust, settle or
compromise  the  amount  or payment there-of, in the same manner and to the same
extent  as Grantor might have done.  After receipt by Grantor of the notice from
Grantee  referred to in the proviso to the immediately  preceding  sentence, (A)
                            -------
all  amounts and proceeds (including instruments) received by Grantor in respect
of the Accounts shall be received in trust for the benefit of Grantee hereunder,
shall be segregated from other funds of Grantor and shall be forthwith paid over
to  Grantee  in the same form as so received (with any necessary endorsement) to
be  held  as  cash  collateral  and either (1) released to Grantor so long as no
Event  of  Default  shall have occurred and be continuing or (2) if any Event of
Default  shall  have occurred and be continuing, applied as specified in Section
8(b) hereof, and (B) Grantor will not adjust, settle or compromise the amount or
payment  of  any  Accounts  or  release  wholly  or partly any account debtor or
obligor  thereof  or  allow  any  credit  or  discount  thereon.

     (iii)     Upon  the  occurrence and during the continuance of any breach of
or  default  under any Related Contract referred to in Schedule II hereto by any
                                                       -----------
party  thereto  other  than  Grantor, (A) Grantor will, promptly after obtaining
knowledge  thereof,  give  Grantee  written  notice  of  the nature and duration
thereof,  specifying what action, if any, it has taken and proposes to take with
respect  thereto,  (B)  Grantor  will  not, without the prior written consent of
Grantee, declare or waive any such breach or default or affirmatively consent to
the  cure  thereof  or  exercise any of its remedies in respect thereof, and (C)
Grantor  will,  upon written instructions from Grantee and at Grantor's expense,
take  such action as Grantee may deem necessary or advisable in respect thereof.

     (iv)     Grantor  will,  at its expense, promptly deliver to Grantee a copy
of each notice or other communication received by it by which any other party to
any  Related Contract referred to in Schedule II hereto purports to exercise any
                                     -----------
of  its rights or affect any of its obligations thereunder, together with a copy
of  any  reply  by  Grantor  thereto.

     (v)     Grantor  will  not,  without  the prior written consent of Grantee,
cancel,  terminate,  amend,  modify,  or  waive  any  provision  of, any Related
Contract  referred  to  in  Schedule  II  hereto.
                            ------------

(g)     Transfers  and  Other  Liens.  Grantor  will  not  (i)  sell, assign (by
        ----------------------------
operation  of  law  or  otherwise),  exchange or otherwise dispose of any of the
Collateral  or (ii) create or suffer to exist any liens or encumbrances, upon or
with  respect  to  any  of  the  Collateral except for (A) the security interest
created  hereby  and (B) the security interests and other encumbrances described
in  Schedule  III  hereto.
    -------------

(h)     Provisions  Concerning  the  Marks.
        ----------------------------------

     (i)     Grantor  hereby  agrees  not  to  divest  itself of any right in or
affecting  a  Mark,  whether  or  not  such  right is presently held by Grantor.


                                        8
<PAGE>
     (ii)     Promptly  upon  learning  thereof, Grantor shall notify Grantee in
writing  of  all  pertinent  details  available  to  it,  with  respect  to  any
infringement  or  other violation of Grantor's right in any Mark, whether or not
such  right  is  presently  held  by  Grantor.  As to each such instance, absent
Grantee's  authorization  to  proceed  otherwise, and to the extent permitted by
law,  Grantor shall diligently pursue a remedy.  Promptly upon learning thereof,
Grantor shall notify Grantee in writing of all pertinent details available to it
regarding  any  claim that Grantor's use of any Mark violates the property right
of  another.

     (iii)     As  to all Marks as to which Grantor has or shall have title, and
at  its  own expense, Grantor shall comply with all requirements for maintaining
registration,  including  but not limited to the filing of affidavits of use and
applications  for  renewal  of  registration  and  shall  pay  all  fees  and
disbursements  in  connection  therewith.  Grantor  shall  not  abandon any such
filing  of  an  affidavit  of  use  or any such application of renewal, prior to
exhaustion  of  all  administrative  and  judicial  remedies.

     (iv)     Grantor  agrees to use its Marks in interstate commerce during the
time in which this Agreement is in effect sufficiently to preserve such Marks as
trademarks  or  service  marks  under  the  laws  of  the  United  States.

     (v)     If  Grantor hereafter becomes the owner of any Mark, then within 30
days  of  becoming  the owner of such Mark, or as soon thereafter as reasonable,
Grantor  shall  deliver to Grantee, a certificate or registration or copy of the
application,  and  a  grant  of  security  in  such  Mark  in  favor of Grantee,
confirming  the grant thereof hereunder.  If Grantor hereafter secures a license
under  any  Mark,  then  within  30  days of execution of the license agreement,
Grantor shall deliver to Grantee a copy of the certificate of registration or of
the  application,  and  a  grant  of  security  in  Grantor's  rights under such
agreement, confirming the grant thereof hereunder.  The form of any confirmatory
grants  shall  be  substantially  the  same  as  the  form  hereof.

     (vi)     If  an Event of Default shall occur and be continuing, Grantee may
by  written  notice  to  Grantor  take  any or all of the following actions: (A)
declare  Grantor's  entire  right,  title  and interest in any Marks under which
Grantor  has  an  interest  to  be vested in Grantee, in which event such right,
title  and  interest shall immediately vest in Grantee and Grantor shall execute
an assignment, in form and substance satisfactory to Grantee, of all its rights,
under  such  Marks to Grantee, (B) take and use or sell Grantor's rights in said
Marks,  along  with  the goodwill and other assets secured under this Agreement,
and all other elements of Grantor's ongoing business symbolized by the Marks and
secured  under this Agreement, and the right to carry on the business of Grantor
in  connection  with which these Marks have been used, and (C) direct Grantor to
refrain  from  using  the  Marks  in  any manner, directly of indirectly, and if
requested  by  Grantee,  Grantor  shall  change  its corporate name to eliminate
therefrom any use of any Mark, and execute any other and further documents which
Grantee  may request further to confirm the foregoing and to transfer to Grantee
ownership  of  Grantor's  rights  to  such  Marks.

(i)     Provisions  Concerning  Copyrights.
        ----------------------------------


                                        9
<PAGE>
     (i)     Grantor shall not divest itself of any rights under any Copyrights,
whether  or  not  Grantor  currently  holds  such  rights.

     (ii)     Promptly  upon  learning  thereof, Grantor shall notify Grantee in
writing  of  all  pertinent  details  available  to  it,  with  respect  to  any
infringement  or  other  violation  of any Grantor's right under any Copyrights,
whether  or  not  such  right  is  presently  held  by Grantor.  As to each such
instance, absent Grantee's authorization to proceed otherwise, and to the extent
permitted  by  law,  Grantor  shall  diligently  pursue a remedy.  Promptly upon
learning  thereof,  Grantor  shall  notify  Grantee  in writing of all pertinent
details  available  to  them  regarding any claim that any activities of Grantor
infringes or otherwise violates the right of any third party with respect to any
Copyright.

     (iii)     If  Grantor  hereafter  acquires  rights  in  any Copyright, then
within  30  days  of becoming the owner of such rights, or as soon thereafter as
reasonable,  Grantor  shall  deliver  to  Grantee a copy of such Copyright and a
grant  of security in such Grantor's rights under such Copyright, confirming the
grant  thereof  hereunder.  The  form  of  any  confirmatory  grants  shall  be
substantially  the  same  as  the  form  hereof.

     (iv)     If  an Event of Default shall occur and be continuing, Grantee may
by  written  notice  to  Grantor  take  any or all of the following actions: (A)
declare  Grantor's entire right, title and interest in each of the Copyrights to
be  vested  in  Grantee,  in  which  event  such right, title and interest shall
immediately vest in Grantee and Grantor shall execute an assignment, in form and
substance  satisfactory  to Grantee, of all its rights, under such Copyrights to
Grantee, (B) take and practice or sell the Copyrights, and (C) direct Grantor to
refrain from using or practicing under the Copyrights in any manner, directly of
indirectly, and if requested by Grantee, execute any other and further documents
which  Grantee  may  request further to confirm the foregoing and to transfer to
Grantee  ownership  of  Grantor's  rights  to  such  Copyrights.

(j)     Provisions  Concerning  Software.
        --------------------------------

     (i)     Grantor  shall  not divest itself of any rights under any Software,
whether  or  not  Grantor  currently  holds  such  rights.

     (ii)     Promptly  upon  learning  thereof, Grantor shall notify Grantee in
writing  of  all  pertinent  details  available  to  it,  with  respect  to  any
infringement  or  other  violation  of  any  Grantor's right under any Software,
whether  or  not  such  right  is  presently  held  by Grantor.  As to each such
instance, absent Grantee's authorization to proceed otherwise, and to the extent
permitted  by  law,  Grantor  shall  diligently  pursue a remedy.  Promptly upon
learning  thereof,  Grantor  shall  notify  Grantee  in writing of all pertinent
details  available  to  them  regarding any claim that any activities of Grantor
infringes or otherwise violates the right of any third party with respect to any
Software.

     (iii)     If Grantor hereafter acquires rights in any Software, then within
30  days  of  becoming  the  owner  of  such  rights,  or  as soon thereafter as
reasonable, Grantor shall deliver to Grantee a copy of such Software and a grant
of  security  in such Grantor's rights under such Software, confirming the grant


                                       10
<PAGE>
thereof  hereunder.  The  form of any confirmatory grants shall be substantially
the  same  as  the  form  hereof.

     (iv)     If  an Event of Default shall occur and be continuing, Grantee may
by  written  notice  to  Grantor  take  any or all of the following actions: (A)
declare Grantor's entire right, title and interest in each of the Software to be
vested  in  Grantee,  in  which  event  such  right,  title  and  interest shall
immediately vest in Grantee and Grantor shall execute an assignment, in form and
substance  satisfactory  to  Grantee,  of all its rights, under such Software to
Grantee,  (B)  take and practice or sell the Software, and (C) direct Grantor to
refrain  from  using or practicing under the Software in any manner, directly of
indirectly, and if requested by Grantee, execute any other and further documents
which  Grantee  may  request further to confirm the foregoing and to transfer to
Grantee  ownership  of  Grantor's  rights  to  such  Software.

SECTION  6.     Additional  Provisions  Concerning  the  Collateral.
                ---------------------------------------------------

(a)     Grantor  hereby  authorizes  Grantee  to  file, without the signature of
Grantor  where  permitted  by  law,  one  or  more  financing  or  continuation
statements,  and  amendments  thereto,  relating  to  the  Collateral.

(b)     Grantor  hereby  irrevocably  appoints  Grantee  as  Grantor's
attorney-in-fact  and  proxy,  with  full  authority  in  the place and stead of
Grantor  and in the name of Grantor or otherwise, from time to time in Grantee's
discretion,  to  take any action and to execute any instrument which Grantee may
deem  necessary  or  advisable  to  accomplish  the  purposes  of this Agreement
(subject to the rights of Grantor under Section 5(f) hereof), including, without
limitation:  (i)  to  obtain and adjust insurance required to be paid to Grantee
pursuant  to  Section  5(e)  here-of,  (ii)  to  ask,  demand, collect, sue for,
recover,  compound, receive and give acquittance and receipts for moneys due and
to  become due under or in respect of any Collateral, (iii) to receive, indorse,
and  collect  any  drafts  or  other instruments, documents and chattel paper in
connection  with  clause  (i) or (ii) above, and (iv) to file any claims or take
any  action  or  institute  any  proceedings which Grantee may deem necessary or
desirable  for  the  collection  of  any Col-lateral or otherwise to enforce the
rights  of  Grantee  with  respect  to  any  Collateral.

(c)     If  Grantor fails to perform any agreement contained herein, Grantee may
itself  perform, or cause  performance of, such agreement or obligation, and the
expenses  of  Grantee  incurred  in  connection  therewith  shall be pay-able by
Grantor  pursuant  to  Section  8  hereof.

(d)     The  powers  conferred  on  Grantee  hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Other than the exercise of reasonable care to provide for the safe
custody  of  any  Collateral  in  its  possession  and the accounting for moneys
actually  received  by  it  hereunder,  Grantee  shall  have  no  duty as to any
Collateral.  Grantee  shall  be  deemed to have exercised reasonable care in the
custody  and preservation of the Collateral in its possession if such Collateral
is  accorded treatment substantially equal to that which Grantee accords its own
property, it being understood that Grantee shall not have responsibility for the
taking  of  any  necessary steps to preserve rights against prior parties or any
other  rights  pertaining  to  any  Collateral.


                                       11
<PAGE>
(e)     Anything  herein  to  the  contrary  notwithstanding, (i)  Grantor shall
remain  liable  under  the  Related Contracts to the extent set forth therein to
perform  all  of  its  obligations  thereunder  to  the  same  extent as if this
Agreement  had  not  been  executed,  (ii) the exercise by Grantee of any of its
rights hereunder shall not release Grantor from any of its obligations under the
Related  Contracts, and (iii) Grantee shall not have any obligation or liability
by  reason  of  this  Agreement under the Related Contracts nor shall Grantee be
obligated  to  perform any of the obligations or duties of Grantor thereunder or
to  take  any  action  to  collect  or  enforce  any  claim for payment assigned
hereunder.

SECTION  7.  Events of Default.  Each of the following shall constitute an event
             -----------------
of  default  (an  "Event  of  Default")  under  this  Agreement:
                   ------------------

(a)     default  in the observance or performance of any of the terms, covenants
or  conditions  contained  in  this  Agreement;

(b)     should  any representation, warranty or statement made in this Agreement
prove  to  be  untrue,  incorrect  or  misleading  in  any  material  respect;

(c)     If Grantor (i) shall commence any case, proceeding or other action under
any law relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking  to  have  an order for relief entered with respect to it, or seeking to
adjudicate  Grantor  a  bankrupt  or  insolvent,  or  seeking  reorganization,
arrangement,  adjustment,  winding-up,  liquidation, dissolution, composition or
other relief with respect to Grantor or any of its debts, or seeking appointment
of  a  receiver, trustee, custodian or other similar official for Grantor or for
all  or  any  substantial  part  of  its assets, or Grantor shall make a general
assignment for the benefit of its creditors, or there shall be commenced against
Grantor  any  case,  proceeding  or other action of a nature referred to in this
Section  (c), (ii) there shall be commenced against Grantor any case, proceeding
or  other  action  seeking  issuance  of  a  warrant  of attachment,  execution,
distraint  or  similar process against all or any substantial part of the assets
of  Grantor  which  results  in  the  entry  of an order for any such relief, or
Grantor  shall  take any action in furtherance of, or indicating its consent to,
approval  of,  or acquiescence in, any of the acts set forth in this Section (c)
or Grantor shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due, (iii) entry of a judgment in
excess  of  $25,000  against  Grantor, (iv) failure to pay or remit any tax when
assessed or due unless contested in good faith; (v) dissolution of Grantor, (vi)
making a bulk transfer or sending notice of intent to do so, (vii) suspension or
liquidation  of  the  usual  business,  or (viii) the occurrence of a default or
Event  of Default (as such term is defined in the applicable document) under any
Loan  Document  or  any  other  guarantee  or security agreement guaranteeing or
securing  any  Grantor,  or under any agreement, contract or instrument with any
lender;

(c)     if there is an attachment or sequestration of any part of the Collateral
and  the  same  is  not  discharged  or  bonded  within  ten  (10)  days;

(d)     the  occurrence  of  a default under any of the other Loan Documents and
the  continuance  thereof  beyond any applicable grace period stated therein, if
any;

(e)     if  Grantor  shall  cease  business  operations;


                                       12
<PAGE>
(f)     if  Grantor shall merge or consolidate with any entity or sell, transfer
or  otherwise  dispose of any of its assets other than in the ordinary course of
business;

(g)     if  any  provision of this Agreement or any other Loan Document to which
Grantor  is  a  party  shall  at  any  time after their respective execution and
delivery  and  for  any reason (except by their respective terms) cease to be in
full  force  and  effect  or  the  validity  or  enforceability thereof shall be
contested by Grantor, or Grantor shall deny that it has any further liability or
obligation under this Agreement or such other Loan Document, as the case may be,
except  in  accordance  with  their  respective  terms  thereof;  or

(h)     the occurrence of a default under any of the loan documents described on
Schedule  III hereto executed by Grantor and USTrust and the continuance thereof
-------------
beyond  any  applicable  grace  period  stated  therein,  if  any.

     Grantor  shall  give  prompt  notice  to Grantee of any default or Event of
Default  hereunder.

SECTION  8.  Remedies  Upon Default.  If an Event of Default shall have occurred
             ----------------------
and  be  continuing:

(a)     Grantee  may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all of the
rights  and remedies of a secured party on default under the UCC (whether or not
the  UCC  applies  to the affected Collateral), and also may (i) require Grantor
to,  and  Grantor  hereby agrees that it will at its expense and upon request of
Grantee forthwith, assemble all or part of the Collateral as directed by Grantee
and make it available to Grantee at a place to be designated by Grantee and (ii)
without  notice  except  as  specified  below,  sell  the Collateral or any part
thereof  in  one  or more parcels at public or private sale, at any of Grantee's
offices  or  elsewhere,  for cash, on credit or for future delivery, and at such
price  or  prices  and  upon  such  other terms as Grantee may deem commercially
reasonable.  Grantor agrees that, to the extent notice of sale shall be required
by  law, at least 10 days' notice to Grantor of the time and place of any public
sale  or  the  time  after which any private sale is to be made shall constitute
reasonable  notification.  Grantee  shall  not  be obligated to make any sale of
Collateral  regardless of notice of sale having been given.  Grantee may adjourn
any  public  or  private  sale from time to time by announcement at the time and
place  fixed therefor, and such sale may, without further notice, be made at the
time  and  place  to  which  it  was  so  adjourned.

(b)     Any cash held by Grantee as Collateral and all cash proceeds received by
Grantee  in  respect of any sale of, collection from, or other realization upon,
all  or any part of the Collateral may, in the discretion of Grantee, be held by
Grantee as collateral for, and/or then or at any time there-after applied (after
payment of any amounts payable to Grantee pursuant to Section 9 hereof) in whole
or  in part by Grantee against, all or any part of the Obligations in such order
as  Grantee  shall  elect.  Any  surplus  of  such cash or cash proceeds held by
Grantee  and  remaining after payment in full of all of the Obligations shall be
paid  over  to  Grantor or to such person as may be lawfully entitled to receive
such  surplus.


                                       13
<PAGE>
(c)     The  purchase  money, proceeds or avails of any sale referred to or made
under  or  by  virtue of this Section 8, together with any other sums which then
may  be  held  by  Grantee,  whether  under  the provisions of this Section 8 or
otherwise,  shall,  except  as  herein  expressly  provided  to the contrary, be
applied  as  follows:

          First:  To  the  payment of the costs and expenses of any such sale in
          -----
          such  order  as  Grantee  shall  determine  in  its  sole  discretion,
          including,  without  limitation,  (i)  any  and all recording taxes or
          fees,  municipal  and state transfer taxes payable, (ii) the costs and
          expenses of entering upon, taking possession of, removing others from,
          holding,  operating  and  managing the Collateral any part thereof, as
          the  case  may  be,  including,  without  limitation,  compensation to
          Grantee,  its  agents and counsel, (iii) the costs and expenses of any
          judicial  proceedings,  (iv)  the  costs,  expenses,  liabilities  and
          advances  made  or  incurred by Grantee under this Security Agreement,
          and (v) all taxes, governmental impositions and other similar charges,
          subject  to  which  the  Collateral  shall  have  been  sold.

          Second:  To  the  payment of the amount then due, owing or unpaid upon
          ------
          the  Note,  first  to  interest  (including,  without  limitation, any
          interest compensation amounts, premium, fees and additional interest),
          and  then  to  principal, with interest on the unpaid principal at the
          default  rate from the due date of any such payment of principal until
          the  same  is  paid  in  full.

          Third:  To the payment of any other sums secured hereunder or required
          -----
          to  be  paid  by  Grantor  pursuant to any provision of any other Loan
          Documents.

          Fourth:  To  the  extent  not  prohibited by applicable law, to be set
          ------
          aside  by Grantee as adequate security in its judgment for the payment
          of  sums which would have been paid by application under clauses First
                                                                           -----
          through  Third  above  to  Grantee,  arising  out  of an obligation or
                   -----
          liability  with  respect  to  which  Grantor  has  agreed to indemnify
          Grantee,  but  which  sums  are not yet due and payable or liquidated.

          Fifth:  To  the  payment  of the surplus, if any, to whomsoever may be
          -----
          lawfully  entitled  to  receive  the  same.

SECTION  9.  Indemnity  and  Expenses.
             ------------------------

(a)     Grantor agrees to indemnify Grantee from and against any and all claims,
losses,  obligations,  liabilities  and  costs  (including,  without limitation,
reasonable attorneys' fees and expenses) suffered or incurred by Grantee arising
out  of  or  resulting  from  this  Agreement.

(b)     Grantor  will upon demand pay to Grantee the amount of any and all costs
and  expenses,  including the fees and disbursements of Grantee's counsel and of
any experts and Grantee's representatives, which Grantee may incur in connection
with  (i) the administration of this  Agreement, (ii) the custody, preservation,
use  or  operation  of,  or  the sale of, collection from, or other realization
upon,  any Collateral, (iii) the exercise or enforcement of any of the rights of
Grantee  hereunder,  or (iv) the failure by Grantor to perform or observe any of
the  provisions  hereof.


                                       14
<PAGE>
SECTION  10.  Notices,  Etc.  All  notices,  requests,  consents  or  other
              --------------
communications  provided  for in or to be given under this Agreement shall be in
writing,  may  be  delivered  in  person,  by  facsimile  transmission (fax), by
overnight air courier or by certified or registered mail, and shall be deemed to
have  been duly given and to have become effective (a) upon receipt if delivered
in person or by fax (and followed by the same or next business day of mailing of
such  faxed notice by one of the other methods of delivery permitted hereunder),
(b)  one  day  after  having  been delivered to an overnight air courier, or (c)
three  days  after having been deposited in the mails as certified or registered
mail,  all  fees prepaid, directed to the parties at the following addresses (or
at  such  other  address  as  shall  be  given  in  writing  by a party hereto):

               If  intended  for  Grantee:

               Cardiotech  International,  Inc.
               78-E  Olympia  Avenue
               Woburn,  MA  01801
               Attention:   Michael  Szycher
               Tel:  (781)  933-4772
               Fax:  (781)  937-4218

               With  a  copy  to:

               Ellenoff  Grossman  Schole  &  Cyruli,  LLP
               370  Lexington  Avenue,  Suite  1900
               New  York,  New  York  10017
               Attention:  Barry  Grossman,  Esq.
               Tel:  (212)  370-1300
               Fax:  (212)  370-7889

               If  intended  for  Grantor:

               Implant  Sciences  Corporation
               107  Audubon  Road
               Wakefield,  Massachusetts  01880-1246
               Tel:  (781)  246-0700
               Fax:  (781)  246-3561

               With  a  copy  to:

               Law  Office  of  Bruce  A.  Bierhans  LLC
               294  Pleasant  Street
               Stoughton,  Mass.  02072
               Attention:  Bruce  A.  Bierhans,  Esq.
               Tel:  (781)  297-0005
               Fax:  (781)  297-7427


                                       15
<PAGE>
SECTION  11.  Consent  to  Jurisdiction;  Service of Process; Waiver of Right of
              ------------------------------------------------------------------
Jury  Trial.
-----------

(a)     Grantor  hereby  irrevocably submits to the jurisdiction of any state or
federal court located in the Commonwealth of Massachusetts located in or closest
in  geographic proximity to Middlesex County, Massachusetts, in any action, suit
or proceeding brought against Grantor under or in connection with this Agreement
or  any  of  the  other  Loan  Documents,  and hereby irrevocably waives, to the
fullest  extent  it may effectively do so, the defense of forum non convenience.

(b)     Grantor  and  Grantee  hereby  waive  the  right of trial by jury in any
litigation  arising  hereunder.

SECTION  12.  Miscellaneous.
              -------------

(a)     Any  term,  covenant,  agreement  or  condition of this Agreement may be
amended  or  waived,  and  any departure there-from may be consented to, if, but
only  if, such  amendment, waiver or consent is in writing and signed by Grantee
and,  in the case of any amendment, Grantor.  Unless otherwise specified in such
waiver  or  consent, a waiver or consent given hereunder shall be effective only
in  the  specific  instance  and  for  the  specific  purpose  for  which given.

(b)     The  rights  and  remedies of Grantee, hereunder or under any other Loan
Document  shall be  cumulative and not exclusive of any rights or remedies which
Grantee  would  otherwise have, and no failure or delay by Grantee in exercising
any  right  shall  operate  as a waiver thereof, nor shall any single or partial
exercise  of  any  power  or right preclude its other or further exercise or the
exercise  of  any  other  power  or  right.  The  rights and remedies of Grantee
provided  herein  or  in  any  other  Loan  Document  against any person are not
conditional  or  contingent  upon  any attempt by Grantee to exercise any of its
rights  and remedies under any other Loan Document against such party or against
any  other  person.

(c)     Any  provision of this Agreement which is prohibited or unenforceable in
any  jurisdiction  shall, as to such jurisdiction, be ineffective to the extent
of  such  prohibition  or  unenforceability  without  invalidating the remaining
provisions hereof or thereof or affecting the validity or enforceability of such
provision  in any other jurisdiction. To the extent permitted by applicable law,
Grantor  hereby  waives  any provision of law which renders any provision hereof
prohibited  or  unenforceable  in  any  respect.

(d)     This  Agreement  shall  create  a  continuing  security  interest in the
Collateral  and  shall  (i) remain in full force and effect until the payment in
full  or  release  of  the  Obligations,  and (ii) be binding on Grantor and its
successors  and  permitted assigns and shall inure, together with all rights and
remedies  of  Grantee  hereunder,  to the benefit of Grantee and its successors,
transferees  and  assigns. Without limiting the generality of clause (ii) of the
immediately  preceding  sentence, Grantee may from time to time assign to one or
more persons all or any part of or otherwise grant participations to one or more
persons  in  all or any part of the Loan and the Note, and Grantee may assign or


                                       16
<PAGE>
otherwise  transfer any of its rights hereunder or under any other Loan Document
to  any  other  such  person,  and  the  holder  of  any  such  assignment  or
participation,  if the assignment or participation agreement so provides, shall,
with  respect  thereto, be entitled to all of the rights and benefits of Grantee
hereunder or under the other Loan Documents. Grantee may, in connection with any
such  assignment  or  participation  or  proposed  assignment  or participation,
disclose  any  non-public  information  relating  to  Grantor furnished by or on
behalf  of  Grantor  to  Grantee.  None  of the rights or obligations of Grantor
hereunder  or  any  interest  of  Grantor  herein  may  be assigned or otherwise
transferred  with-out  the  prior  written  consent  of  Grantee,  and  no  such
at-tempted  assignment  or transfer of any such obligation shall relieve Grantor
therefrom  unless  Grantee  shall  have  consented  to such release in a writing
specifically  referring  to the obligation from which Grantor is to be released.

(e)     Upon the satisfaction in full of the Obligations, (i) this Agreement and
the  security  interest  created  hereby  shall  terminate and all rights to the
Collateral  shall  revert  to  Grantor,  and  (ii)  Grantee will, upon Grantor's
request  and  at Grantor's expense, (A) return to Grantor such of the Collateral
as  shall not have been sold or otherwise disposed of or applied pursuant to the
terms  hereof  and  (B) execute and deliver to Grantor such documents as Grantor
shall  reasonably  request  to  evidence  such  termination.

(f)     This  Agreement and the other Loan Documents to which Grantor is a party
embody  the entire agreement between Grantor and Grantee relating to the subject
matter  thereof  and  supersede  all  prior  agreements,  representations  and
understandings,  if  any,  relating  to  the  subject  matter  thereof.

(g)     Section  headings  herein are included for convenience of reference only
and  shall  not  constitute  a  part  of  this  Agreement for any other purpose.

(h)     This  Agreement  shall  be  governed by and construed in accordance with
the  laws  of  the  Commonwealth  of  Massachusetts  with  giving  effect to the
principles  of  conflicts  of  law.

     IN  WITNESS  WHEREOF,  Grantor has caused this Agreement to be executed and
delivered  by  its officer there-unto duly authorized in favor of Grantee, as of
the  date  first  above  written.


                                   IMPLANT  SCIENCES  CORPORATION



                                   By:  /s/  Anthony  J.  Armini
                                      --------------------------
                                         Anthony  J.  Armini
                                         President


                                       17
<PAGE>
                                   SCHEDULE I

                                       TO

                               SECURITY AGREEMENT

                                   Trade Names
                                   -----------






                                       18
<PAGE>
                                   SCHEDULE II

                                       TO

                               SECURITY AGREEMENT

                                    Contracts
                                    ---------






                                       19
<PAGE>
                                  SCHEDULE III

                                       TO

                               SECURITY AGREEMENT

                             Permitted Encumbrances
                             ----------------------






                                       20
<PAGE>
                                  SCHEDULE III

                                       TO

                               SECURITY AGREEMENT

                             Permitted Encumbrances
                             ----------------------






                                       21
<PAGE>
                                   SCHEDULE IV

                                       TO

                               SECURITY AGREEMENT

                                   Litigation
                                   ----------






                                       22
<PAGE>