<PAGE>   1

                                                                 EXHIBIT 10.4.48


                          CONTINUING SECURITY AGREEMENT


         THIS CONTINUING SECURITY AGREEMENT is entered into as of January 26,
2001 by and between Neoprobe Corporation, a Delaware corporation having its
principal office at 425 Metro Place North, Suite 300, Dublin, Ohio 43017 (the
"Borrower"), and Firstar Bank, N.A., a national banking association having its
principal office at 175 South Third Street, Columbus, Ohio 43215 (the "Bank").

                             BACKGROUND INFORMATION
                             ----------------------

         The Borrower and the Bank are entering into a Revolving Credit Loan
Agreement of even date herewith (as it may be amended, modified, supplemented,
extended, restated or replaced from time to time, the "Credit Agreement"). The
Borrower is entering into this Continuing Security Agreement (as it may be
amended, modified, supplemented, extended, restated or replaced from time to
time, the "Security Agreement") in order to induce the Bank to enter into and
extend credit from time to time to the Borrower, including without limitation
under the Credit Agreement.

                                   PROVISIONS
                                   ----------

       NOW, THEREFORE, as an inducement to and in consideration of the Bank
providing such credit facilities, the mutual obligations contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrower and the Bank do hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         SECTION 1.1 TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement.

         SECTION 1.2 TERMS DEFINED IN OHIO UNIFORM COMMERCIAL CODE. Terms
defined in the Ohio Uniform Commercial Code which are not otherwise defined in
this Security Agreement are used herein as defined in the Ohio Uniform
Commercial Code as in effect from time to time (the "UCC").

         SECTION 1.3 DEFINITIONS OF CERTAIN TERMS USED HEREIN. As used in this
Security Agreement, in addition to the terms defined in the Background
Information section above, the following terms shall have the following
meanings:

                  "ACCOUNTS" means "accounts" as defined in the UCC and shall
also include a right to payment of a monetary obligation, whether or not earned
by performance, (i) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of, (ii) for services

<PAGE>   2


rendered or to be rendered, (iii) for a policy of insurance issued or to be
issued, (iv) for a secondary obligation incurred or to be incurred, (v) for
energy provided or to be provided, (vi) for the use or hire of a vessel under a
charter or other contract, (vii) arising out of the use of a credit or charge
card or information contained on or for use with the card, or (viii) as winnings
in a lottery or other game of chance operated or sponsored by a state,
governmental unit of a state, or Person licensed or authorized to operate the
game by a state or governmental unit of a state.

                  "ARTICLE" means a numbered article of this Security Agreement,
unless another document is specifically referenced.

                  "CHATTEL PAPER" means "chattel paper" as defined in the UCC
and shall also include a record or records that evidence both a monetary
obligation and a security interest in or a lease of specific goods or of
specific goods and software used in the goods.

                  "COLLATERAL" means all Accounts, Chattel Paper, Deposit
Accounts, Documents, Equipment, Fixtures, General Intangibles, Investment
Property, Instruments, Inventory, Payment Intangibles, Pledged Deposits, Stock
Rights and Other Collateral, wherever located, in which the Borrower now has or
hereafter acquires any right or interest, and the proceeds, insurance proceeds
and products thereof, together with all books and records, customer lists,
credit files, software, computer files, programs, printouts and other computer
materials and records related thereto.

                  "CONTROL" shall have the meaning set forth in the UCC.

                  "DEPOSIT ACCOUNT" means "deposit account" as defined in the
UCC and shall also include a demand, time, savings, passbook, or similar account
maintained with a bank.

                  "DOCUMENTS" means "documents" as defined in the UCC and shall
also include all documents of title and goods evidenced thereby, including
without limitation all bills of lading, dock warrants, dock receipts, warehouse
receipts and orders for the delivery of goods, and also any other document which
in the regular course of business or financing is treated as adequately
evidencing that the Person in possession of it is entitled to receive, hold and
dispose of the document and the goods it covers.

                  "EQUIPMENT" means "equipment" as defined in the UCC and shall
also include all equipment, machinery, furniture and goods used or usable by the
Borrower in its business and all other tangible personal property (other than
Inventory), and all accessions and additions thereto.

                  "EVENT OF DEFAULT" means an event described in Section 5.1.

                  "EXHIBIT" refers to a specific exhibit to this Security
Agreement, unless another document is specifically referenced.

                  "FIXTURES" means "fixtures" as defined in the UCC and shall
also include all goods which become so related to particular real estate that an
interest in such goods arises under any real estate law applicable thereto,
including, without limitation, all trade fixtures.



                                       2
<PAGE>   3

                  "GENERAL INTANGIBLES" means "general intangibles" as defined
in the UCC and shall also include all intangible personal property (other than
Accounts) including, without limitation, Payment Intangibles, all contract
rights, rights to receive payments of money, choses in action, causes of action,
judgments, tax refunds and tax refund claims, patents, trademarks, trade names,
copyrights, licenses, franchises, computer programs, software, goodwill,
customer and supplier contracts, interests in general or limited partnerships,
joint ventures or limited liability companies, reversionary interests in pension
and profit sharing plans and reversionary, beneficial and residual interests in
trusts, leasehold interests in real or personal property, rights to receive
rentals of real or personal property and guarantee and indemnity claims.

                  "INVESTMENT PROPERTY" means a security, whether certificated
or uncertificated; a security entitlement; a securities account; a commodity
contract; or a commodity account (all as defined in the UCC).

                  "INSTRUMENTS" means "instruments" as defined in the UCC and
shall also include all negotiable instruments (as defined in ss.3-104 of the
UCC), certificated and uncertificated securities and any replacements therefor
and Stock Rights related thereto, and other writings which evidence a right to
the payment of money and which are not themselves security agreements or leases
and are of a type which in the ordinary course of business are transferred by
delivery with any necessary endorsement or assignment, including, without
limitation, all checks, drafts, notes, bonds, debentures, government securities,
certificates of deposit, letters of credit, preferred and common stocks, options
and warrants.

                  "INVENTORY" means "inventory" as defined in the UCC and shall
also include all goods, other than farm products, which: (A) are leased by a
Person as lessor; (B) are held by a Person for sale or lease or to be furnished
under contracts of service; (C) are furnished by a Person under a contract of
service; or (D) consist of raw materials, work in process, or materials used or
consumed in a business. Without limiting the generality of the foregoing
description of Inventory, Inventory shall include all the following described
property owned by the Debtor which may now or hereafter be physically stored at
premises occupied by Electronic Assembly Corporation at 2121 Harrison Street,
Neenah, Wisconsin 54957: (i) all "neo2000" gamma detection system units, each of
which consists of a 14mm probe and a control box; (ii) all "neoprobe 1500"
portable radioisotope detectors; and (iii) all probe tip accessories which are
"ad-on" products to the items described in the foregoing subparts (i) and (ii),
which accessories are referred to as models 2001, 2002 and 2003, and the model
2050, which is a storage tray for the tips.

                  "OBLIGATIONS" means any and all existing and future
indebtedness, obligation and liability of every kind, nature and character,
direct or indirect, absolute or contingent (including all renewals, extensions
and modifications thereof and all fees, costs and expenses incurred by the Bank
in connection with the preparation, administration, collection or enforcement
thereof), of the Borrower to the Bank or any branch, subsidiary or affiliate
thereof, including without limitation all obligations arising under or pursuant
to this Security Agreement, the Credit Agreement and the other Loan Documents
and any promissory note or notes now or hereafter issued under the Credit
Agreement.


                                       3
<PAGE>   4

                  "OTHER COLLATERAL" means any property of the Borrower, other
than real estate, not included within the defined terms Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, Inventory,
Investment Property, Payment Intangibles, Pledged Deposits and Stock Rights,
including, without limitation, all cash on hand and all deposit accounts or
other deposits (general or special, time or demand, provisional or final) with
any bank or other financial institution, it being intended that the Collateral
include all property of the Borrower other than real estate.

                  "PAYMENT INTANGIBLES" means a general intangible under which
the account debtor's principal obligation is a monetary obligation.

                  "PLEDGED DEPOSITS" means all time deposits of money, whether
or not evidenced by certificates, of the Borrower, and all rights to receive
interest on said deposits.

                  "RECEIVABLES" means the Accounts, Chattel Paper, Documents,
Investment Property, Instruments or Pledged Deposits, and any other rights or
claims to receive money which are General Intangibles or which are otherwise
included as Collateral.

                  "SECTION" means a numbered section of this Security Agreement,
unless another document is specifically referenced.

                  "SECURITY" has the meaning set forth in the UCC.

                  "STOCK RIGHTS" means any securities, dividends or other
distributions and any other right or property which the Borrower shall receive
or shall become entitled to receive for any reason whatsoever with respect to,
in substitution for or in exchange for any securities or other ownership
interests in a corporation, partnership, joint venture or limited liability
company constituting Collateral and any securities, any right to receive
securities and any right to receive earnings, in which the Borrower now has or
hereafter acquires any right, issued by an issuer of such securities.

                  "UCC" has the meaning set forth in Section 1.2

         The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.


                                   ARTICLE II

                           GRANT OF SECURITY INTEREST
                           --------------------------

         The Borrower hereby pledges, assigns and grants to the Bank and (to the
extent specifically provided herein) its affiliates, a security interest in all
of the Borrower's right, title and interest in and to the Collateral to secure
the prompt and complete payment and performance of the Obligations.



                                       4
<PAGE>   5


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         The Borrower represents and warrants to the Bank that:

         SECTION 3.1 TITLE, AUTHORIZATION, VALIDITY AND ENFORCEABILITY. The
Borrower has good and valid rights in and title to the Collateral with respect
to which it has purported to grant a security interest hereunder, free and clear
of all Liens except for Liens permitted under Section 4.1(f), and has full power
and authority to grant to the Bank the security interest in such Collateral
pursuant hereto. The execution and delivery by the Borrower of this Security
Agreement has been duly authorized by proper corporate proceedings, and this
Security Agreement constitutes a legal, valid and binding obligation of the
Borrower and creates a security interest which is enforceable against the
Borrower in all now owned and hereafter acquired Collateral. When financing
statements have been filed in the appropriate offices against the Borrower in
the locations listed on Exhibit "E", the Bank will have a fully perfected first
priority security interest in that Collateral in which a security interest may
be perfected by filing, subject only to Liens permitted under Section 4.1(f).

         SECTION 3.2 CONFLICTING LAWS AND CONTRACTS. Neither the execution and
delivery by the Borrower of this Security Agreement, the creation and perfection
of the security interest in the Collateral granted hereunder, nor compliance
with the terms and provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Borrower or
the Borrower's articles or certificate of incorporation or by-laws, the
provisions of any indenture, instrument or agreement to which the Borrower is a
party or is subject, or by which it, or its property, is bound, or conflict with
or constitute a default thereunder, or result in the creation or imposition of
any Lien pursuant to the terms of any such indenture, instrument or agreement
(other than any Lien of the Bank).

         SECTION 3.3 PRINCIPAL LOCATION. The Borrower's mailing address, and the
location of its chief executive office and of the books and records relating to
the Receivables, is disclosed in Exhibit "A"; the Borrower has no other places
of business except those set forth in Exhibit "A".

         SECTION 3.4 PROPERTY LOCATIONS. The Inventory, Equipment and Fixtures
are located solely at the locations described in Exhibit "A". All of said
locations are owned by the Borrower except for locations (i) which are leased by
the Borrower as lessee and designated in Part B of Exhibit "A" and (ii) at which
Inventory is held in a public warehouse or is otherwise held by a bailee or on
consignment as designated in Part C of Exhibit "A", with respect to which
Inventory the Borrower has delivered bailment agreements, warehouse receipts,
financing statements or other documents satisfactory to the Bank to protect the
Bank's security interest in such Inventory.

         SECTION 3.5 NO OTHER NAMES. The Borrower has not conducted business
under any name except the name in which it has executed this Security Agreement.

         SECTION 3.6 NO DEFAULT. No Event of Default or Default exists.


                                       5
<PAGE>   6

         SECTION 3.7 ACCOUNTS AND CHATTEL PAPER. The names of the obligors,
amounts owing, due dates and other information with respect to the Accounts and
Chattel Paper are and will be correctly stated in all records of the Borrower
relating thereto and in all invoices and reports with respect thereto furnished
to the Bank by the Borrower from time to time. As of the time when each Account
or each item of Chattel Paper arises, the Borrower shall be deemed to have
represented and warranted that such Account or Chattel Paper, as the case may
be, and all records relating thereto, are genuine and in all respects what they
purport to be.

         SECTION 3.8 FILING REQUIREMENTS. None of the Equipment is covered by
any certificate of title, except for the vehicles described in Part A of Exhibit
"B". None of the Collateral is of a type for which security interests or liens
may be perfected by filing under any federal statute except for (i) the vehicles
described in Part B of Exhibit "B" and (ii) patents, trademarks and copyrights
held by the Borrower and described in Part C of Exhibit "B". The legal
description, county and street address of the property on which any Fixtures are
located is set forth in Exhibit "C" together with the name and address of the
record owner of each such property.

         SECTION 3.9 NO FINANCING STATEMENTS. No financing statement describing
all or any portion of the Collateral which has not lapsed or been terminated
naming the Borrower as debtor has been filed in any jurisdiction except (i)
financing statements naming the Bank as the secured party, (ii) as described in
Exhibit "D" and (iii) as permitted by Section 4.1(f).

         SECTION 3.10 FEDERAL EMPLOYER IDENTIFICATION NUMBER. The Borrower's
Federal employer identification number is 31-1080091.


                                   ARTICLE IV

                                    COVENANTS
                                    ---------

         From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated:

         SECTION 4.1   GENERAL.


                   (a) INSPECTION. The Borrower shall permit the Bank, by its
         representatives and agents (i) to inspect the Collateral, (ii) to
         examine and make copies of the records of the Borrower relating to the
         Collateral and (iii) to discuss the Collateral and the related records
         of the Borrower with, and to be advised as to the same by, the
         Borrower's officers and employees (and, in the case of any Receivable,
         with any Person which is or may be obligated thereon), all at such
         reasonable times and intervals as the Bank may determine, and all at
         the Borrower's expense.

                   (b) TAXES. The Borrower shall pay when due all taxes,
         assessments and governmental charges and levies upon the Collateral,
         except those which are being contested in good faith by appropriate
         proceedings and with respect to which no Lien exists.


                                       6
<PAGE>   7

                   (c) RECORDS AND REPORTS; NOTIFICATION OF DEFAULT. The
         Borrower shall maintain complete and accurate books and records with
         respect to the Collateral, and furnish to the Bank, such reports
         relating to the Collateral as the Bank shall from time to time request.
         The Borrower shall give prompt notice in writing to the Bank of the
         occurrence of any Event of Default or Default and of any other
         development, financial or otherwise, which might materially and
         adversely affect the Collateral.

                   (d) FINANCING STATEMENTS AND OTHER ACTIONS; DEFENSE OF TITLE.
         The Borrower shall execute and deliver to the Bank all financing
         statements and other documents and take such other actions as may from
         time to time be requested by the Bank in order to maintain a first
         perfected security interest in and, in the case of Investment Property,
         Control of, the Collateral. The Borrower shall take any and all actions
         necessary to defend title to the Collateral against all Persons and to
         defend the security interest of the Bank in the Collateral and the
         priority thereof against any Lien not expressly permitted hereunder.

                   (e) DISPOSITION OF COLLATERAL. The Borrower shall not sell,
         lease or otherwise dispose of the Collateral except (i) prior to the
         occurrence of an Event of Default or a Default, dispositions
         specifically permitted pursuant to the Credit Agreement, (ii) until
         such time following the occurrence of a Default or an Event of Default
         as the Borrower receives a notice from the Bank instructing the
         Borrower to cease such transactions, sales or leases of Inventory in
         the ordinary course of business, and (iii) until such time as the
         Borrower receives a notice from the Bank pursuant to Article VII,
         proceeds of Inventory and Accounts collected in the ordinary course of
         business.

                   (f) LIENS. The Borrower shall not create, incur, or suffer to
         exist any Lien on the Collateral except (i) the security interest
         created by this Security Agreement, (ii) existing Liens described in
         Exhibit "D" and (iii) other Liens permitted pursuant to Section 6.1 of
         the Credit Agreement.

                   (g) CHANGE IN LOCATION OR NAME. The Borrower shall not (i)
         have any Inventory, Equipment or Fixtures or proceeds or products
         thereof (other than Inventory and proceeds thereof disposed of as
         permitted by Section 4.1(e)) at a location other than a location
         specified in Exhibit "A", (ii) maintain records relating to the
         Receivables at a location other than at the location specified on
         Exhibit "A", (iii) maintain a place of business at a location other
         than a location specified on Exhibit "A", (iv) change its name or
         taxpayer identification number, (v) change its mailing address, or (vi)
         change the jurisdiction of its incorporation, whether by
         "reincorporation" in another state or otherwise, unless the Borrower
         shall have given the Bank not less than 30 days' prior written notice
         thereof, and the Bank shall have determined that such change will not
         adversely affect the validity, perfection or priority of the Bank's
         security interest in the Collateral.


                                       7
<PAGE>   8

                   (h) OTHER FINANCING STATEMENTS. The Borrower shall not sign
         or authorize the signing on its behalf of any financing statement
         naming it as debtor covering all or any portion of the Collateral,
         except as permitted by Section 4.1(f).

         SECTION 4.2   RECEIVABLES.

                   (a) CERTAIN AGREEMENTS ON RECEIVABLES. The Borrower shall not
         make or agree to make any discount, credit, rebate or other reduction
         in the original amount owing on a Receivable or accept in satisfaction
         of a Receivable less than the original amount thereof, except that,
         prior to the occurrence of a Default or an Event of Default, the
         Borrower may reduce the amount of Accounts arising from the sale of
         Inventory in accordance with its present policies and in the ordinary
         course of business.

                   (b) COLLECTION OF RECEIVABLES. Except as otherwise provided
         in this Security Agreement, the Borrower shall collect and enforce, at
         the Borrower's sole expense, all amounts due or hereafter due to the
         Borrower under the Receivables.

                   (c) DELIVERY OF INVOICES. The Borrower shall deliver to the
         Bank immediately upon its request after the occurrence of a Default or
         an Event of Default duplicate invoices with respect to each Account
         bearing such language of assignment as the Bank shall specify.

                   (d) DISCLOSURE OF COUNTERCLAIMS ON RECEIVABLES. If (i) any
         discount, credit or agreement to make a rebate or to otherwise reduce
         the amount owing on a Receivable exists or (ii) if, to the knowledge of
         the Borrower, any dispute, setoff, claim, counterclaim or defense
         exists or has been asserted or threatened with respect to a Receivable,
         the Borrower shall disclose such fact to the Bank in writing in
         connection with the inspection by the Bank of any record of the
         Borrower relating to such Receivable and in connection with any invoice
         or report furnished by the Borrower to the Bank relating to such
         Receivable.

         SECTION 4.3   INVENTORY AND EQUIPMENT.

                   (a) MAINTENANCE OF GOODS. The Borrower shall do all things
         necessary to maintain, preserve, protect and keep the Equipment
         (ordinary wear and tear excepted) and the Inventory in good repair and
         working and saleable condition.

                   (b) INSURANCE.

                       (i) The Borrower shall (A) maintain fire and extended
         coverage insurance on the Inventory and Equipment containing a lender's
         loss payable clause in favor of the Bank, and providing that said
         insurance will not be terminated except after at least 30 days' written
         notice from the insurance company to the Bank, (B) maintain such other
         insurance on the Collateral for the benefit of the Bank as the Bank
         shall from time to time request, (C) furnish to the Bank upon the
         request of the Bank from time to time the originals of all policies of
         insurance on the Collateral and certificates with respect to


                                       8
<PAGE>   9

         such insurance, and (D) maintain general liability insurance naming the
         Bank as an additional insured.

                       (ii) In the event of any loss or damage to any Collateral
         occasioned by fire or other hazard, the Borrower shall give immediate
         written notice to the insurance carrier and to the Bank. The Bank shall
         have the right, on behalf of the Borrower, to make proof of loss, to
         adjust and compromise any claim under insurance policies, to appear in
         and prosecute any action arising from such insurance policies, to
         collect and receive insurance proceeds, and to deduct therefrom the
         Bank's reasonable expenses incurred in the collection of such proceeds;
         provided however, that nothing contained in this Section 4.3 shall
         require Bank to incur any expense or take any action hereunder. In the
         event of any such loss or damage, provided that no Default or Event of
         Default shall have then occurred and be continuing and the aggregate
         amount of such insurance proceeds received and/or equity funds which
         may be provided by the Borrower will be sufficient, in the Bank's
         reasonable judgment, to pay all projected costs of the restoration,
         repair or replacement of the Collateral, the Borrower, at its option,
         shall have the right to (x) have the balance of such insurance proceeds
         used for the purpose of reimbursing the Borrower for the cost of such
         restoration, repair or replacement of the Collateral, or (y) apply the
         balance of such proceeds to the payment of the Obligations, whether or
         not then due, in such order of application as determined by the Bank;
         provided further, that if a Default or an Event of Default shall have
         occurred and be continuing or the aggregate amount of such insurance
         proceeds and/or equity funds will not be sufficient, in the Bank's
         reasonable judgment, to pay all projected costs of the restoration,
         repair or replacement of the Collateral, the Bank, at its option, shall
         have the right to (x) have the balance of such insurance proceeds used
         for the purpose of reimbursing the Borrower for the cost of such
         restoration, repair and replacement of the Collateral, or (b) apply the
         balance of such proceeds to the payment of the Obligations, whether or
         not then due, in such order of application as determined by the Bank.
         In either case, all such insurance proceeds shall be paid to and held
         by the Bank for disbursement and use in accordance with the terms of
         this Security Agreement and the Borrower hereby assigns to the Bank all
         rights of Borrower in and to any insurance proceeds paid as a result of
         any such loss or damage.

                       (iii) If the insurance proceeds held by the Bank are to
         be used to reimburse Borrower for the cost of restoration, repair or
         replacement of the Collateral, the Borrower shall, notwithstanding the
         adequacy of the insurance proceeds, promptly restore, repair and/or
         replace the Collateral, such that the Collateral shall be at least
         equal in value and general use as it was prior to the damage or
         destruction.

                   (c) TITLED VEHICLES. The Borrower shall give the Bank notice
         of its acquisition of any vehicle covered by a certificate of title and
         deliver to the Bank, upon request, the original of any vehicle title
         certificate and do all things necessary to have the Lien of the Bank
         noted on any such certificate.

         SECTION 4.4   INSTRUMENTS, SECURITIES, CHATTEL PAPER, DOCUMENTS AND
PLEDGED DEPOSITS. Upon the request of the Bank at any time and from time to
time, the Borrower shall (i) deliver to


                                       9
<PAGE>   10

the Bank the originals of all Chattel Paper, Securities and Instruments, (ii)
deliver to the Bank such Pledged Deposits which are evidenced by certificates
included in the Collateral endorsed in blank, marked with such legends and
assigned as the Bank shall specify, and (iii) deliver to the Bank (and
thereafter hold in trust for the Bank upon receipt and immediately deliver to
the Bank) any Document evidencing or constituting Collateral.

         SECTION 4.5   PLEDGED DEPOSITS. The Borrower shall not withdraw all or
any portion of any Pledged Deposit or fail to rollover said Pledged Deposit
without the prior written consent of the Bank.

         SECTION 4.6   DEPOSIT ACCOUNTS. The Borrower shall (i) upon the Bank's
request, notify each bank or other financial institution in which it maintains a
deposit account or other deposit (general or special, time or demand,
provisional or final) of the security interest granted to the Bank hereunder and
cause each such bank or other financial institution to acknowledge such
notification in writing and (ii) upon the Bank's request after the occurrence
and during the continuance of a Default or an Event of Default, deliver to each
such bank or other financial institution a letter, in form and substance
acceptable to the Bank, transferring dominion and control over each such account
to the Bank until such time as no Default or Event of Default exists.

         SECTION 4.7   FEDERAL, STATE OR MUNICIPAL CLAIMS. The Borrower shall
notify the Bank of any Collateral which constitutes a claim against the United
States government or any state or local government or any instrumentality or
agency thereof, the assignment of which claim is restricted by federal, state or
municipal law.


                                    ARTICLE V

                                EVENTS OF DEFAULT
                                -----------------

          SECTION 5.1  The occurrence of any one or more of the following events
shall constitute an Event of Default:

                   (a) Any representation or warranty made by or on behalf of
         the Borrower under or in connection with this Security Agreement shall
         be materially false as of the date on which made.

                   (b) The breach by the Borrower of any of the terms or
         provisions of Article IV or Article VII.

                   (c) The breach by the Borrower (other than a breach which
         constitutes an Event of Default under Section 5.1(a) or 5.1(b)) of any
         of the terms or provisions of this Security Agreement.



                                       10
<PAGE>   11

                   (d) Any material portion of the Collateral shall be
         transferred or otherwise disposed of, either voluntarily or
         involuntarily, in any manner not permitted by Section 4.1(e) or 8.7 or
         shall be lost, stolen, damaged or destroyed.

                   (e) Any Obligation shall not be paid when due, whether at
         stated maturity, upon acceleration, or otherwise.

                   (f) The occurrence of any "Event of Default" under, and as
         defined in, the Credit Agreement.

         SECTION 5.2   ACCELERATION AND REMEDIES. Upon the acceleration of the
Obligations under the Credit Agreement pursuant to terms thereof, the
Obligations shall immediately become due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and the Bank may exercise any or all of the following rights and remedies:

                   (a) Those rights and remedies provided in this Security
         Agreement, the Credit Agreement, or any other Loan Document, PROVIDED
         that this Section 5.2(a) shall not be understood to limit any rights or
         remedies available to the Bank prior to an Event of Default.

                   (b) Those rights and remedies available to a secured party
         under the UCC (whether or not the UCC applies to the affected
         Collateral) or under any other applicable law (including, without
         limitation, any law governing the exercise of a bank's right of setoff
         or bankers' lien) when a debtor is in default under a security
         agreement.

                   (c) Without notice except as specifically provided in Section
         8.1 or elsewhere herein, sell, lease, assign, grant an option or
         options to purchase or otherwise dispose of the Collateral or any part
         thereof in one or more parcels at public or private sale, for cash, on
         credit or for future delivery, and upon such other terms as the Bank in
         good faith may deem commercially reasonable.

         SECTION 5.3   BORROWER'S OBLIGATIONS UPON AN EVENT OF DEFAULT. Upon the
request of the Bank after the occurrence of an Event of Default, the Borrower
shall:

                   (a) ASSEMBLY OF COLLATERAL. Assemble and make available to
         the Bank the Collateral and all records relating thereto at any place
         or places specified by the Bank.

                   (b) SECURED PARTY ACCESS. Permit the Bank, by the Bank's
         representatives and agents, to enter any premises where all or any part
         of the Collateral, or the books and records relating thereto, or both,
         are located, to take possession of all or any part of the Collateral
         and to remove all or any part of the Collateral.

         SECTION 5.4  LICENSE. The Bank is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, the Borrower's labels, patents, copyrights, rights of
use of any name, trade secrets, trade names,


                                       11
<PAGE>   12

trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, for the limited
purpose in completing production of, advertising for sale, and selling any
Collateral, and, following the occurrence and during the continuance of an Event
of Default, the Borrower's rights under all licenses and all franchise
agreements shall inure to the Bank's benefit. In addition, the Borrower hereby
irrevocably agrees that the Bank may, following the occurrence and during the
continuance of an Event of Default, sell any of the Borrower's Inventory
directly to any Person, including without limitation Persons who have previously
purchased the Borrower's Inventory from the Borrower and in connection with any
such sale or other enforcement of the Bank's rights under this Agreement, may
sell Inventory which bears any trademark owned by or licensed to the Borrower
and any Inventory that is covered by any copyright owned by or licensed to the
Borrower and the Bank may finish any work in process and affix any trademark
owned by or licensed to the Borrower and sell such Inventory as provided herein.


                                   ARTICLE VI

                        WAIVERS, AMENDMENTS AND REMEDIES
                        --------------------------------

         No delay or omission of the Bank to exercise any right or remedy
granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Event of Default or an acquiescence therein, and
any single or partial exercise of any such right or remedy shall not preclude
any other or further exercise thereof or the exercise of any other right or
remedy. No waiver, amendment or other variation of the terms, conditions or
provisions of this Security Agreement whatsoever shall be valid unless in
writing signed by the Bank and then only to the extent in such writing
specifically set forth. All rights and remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Bank until the Obligations have been paid in full.



                                   ARTICLE VII

                       PROCEEDS; COLLECTION OF RECEIVABLES
                       -----------------------------------

         SECTION 7.1   LOCKBOXES. Upon request of the Bank after the occurrence
of a Default or an Event of Default, the Borrower shall execute and deliver to
the Bank irrevocable lockbox agreements in the form provided by or otherwise
acceptable to the Bank, which agreements shall be accompanied by an
acknowledgment by the bank where the lockbox is located of the Lien of the Bank
granted hereunder and of irrevocable instructions to wire all amounts collected
therein to a special collateral account at the Bank.

         SECTION 7.2   COLLECTION OF RECEIVABLES. The Bank may at any time after
the occurrence of a Default or an Event of Default, by giving the Borrower
written notice, elect to require that the Receivables be paid directly to the
Bank. In such event, the Borrower shall, and shall permit the Bank to, promptly
notify the account debtors or obligors under the Receivables of the Bank'


                                       12
<PAGE>   13

interest therein and direct such account debtors or obligors to make payment of
all amounts then or thereafter due under the Receivables directly to the Bank.
Upon receipt of any such notice from the Bank, the Borrower shall thereafter
hold in trust for the Bank, all amounts and proceeds received by it with respect
to the Receivables and Other Collateral and immediately and at all times
thereafter deliver to the Bank all such amounts and proceeds in the same form as
so received, whether by cash, check, draft or otherwise, with any necessary
endorsements. The Bank shall hold and apply funds so received as provided by the
terms of Sections 7.3 and 7.4.

        SECTION 7.3    SPECIAL COLLATERAL ACCOUNT. The Bank may at any time
after the occurrence of a Default or an Event of Default, by giving the Borrower
written notice, elect to require that all cash proceeds of the Collateral to be
deposited in a special non-interest bearing cash collateral account with the
Bank and held there as security for the Obligations. The Borrower shall have no
control whatsoever over said cash collateral account. At the option of the Bank,
the Bank may from time to time (x) deposit the collected balances in said cash
collateral account into the Borrower's general operating account with the Bank,
and/or (y) apply the collected balances in said cash collateral account to the
payment of the Obligations whether or not the Obligations shall then be due.

         SECTION 7.4   APPLICATION OF PROCEEDS. The proceeds of the Collateral
shall be applied by the Bank to payment of the Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:

                  (a)  FIRST, to payment of all costs and expenses of the Bank
         incurred in connection with the collection and enforcement of the
         Obligations or of the security interest granted to the Bank pursuant to
         this Security Agreement;

                  (b)  SECOND, to payment of that portion of the Obligations
         constituting accrued and unpaid interest and fees owing to the Bank;

                  (c)  THIRD, to payment of the principal of the Obligations
         then due and unpaid from the Borrower to the Bank or its affiliates,
         owing to each of them;

                  (d)  FOURTH, to payment of any Obligations (other than those
         listed above) pro rata among those parties to whom such Obligations are
         due in accordance with the amounts owing to each of them; and

                  (e)  FIFTH, the balance, if any, after all of the Obligations
         have been satisfied, shall be deposited by the Bank into the Borrower's
         general operating account with the Bank.





                                       13
<PAGE>   14


                                  ARTICLE VIII

                               GENERAL PROVISIONS
                               ------------------

         SECTION 8.1   NOTICE OF DISPOSITION OF COLLATERAL. The Borrower hereby
waives notice of the time and place of any public sale or the time after which
any private sale or other disposition of all or any part of the Collateral may
be made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to the Borrower, addressed as set
forth in Article IX, at least seven days prior to (i) the date of any such
public sale or (ii) the time after which any such private sale or other
disposition may be made.

          SECTION 8.2  COMPROMISES AND COLLECTION OF COLLATERAL. The Borrower
and the Bank recognize that setoffs, counterclaims, defenses and other claims
may be asserted by obligors with respect to certain of the Receivables, that
certain of the Receivables may be or become uncollectible in whole or in part
and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, the Borrower agrees that
the Bank may at any time and from time to time, if an Event of Default has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Bank in its sole
discretion shall determine or abandon any Receivable, and any such action by the
Bank shall be commercially reasonable so long as the Bank acts in good faith
based on information known to it at the time it takes any such action.

          SECTION 8.3  SECURED PARTY PERFORMANCE OF BORROWER OBLIGATIONS.
Without having any obligation to do so, the Bank may perform or pay any
obligation which the Borrower has agreed to perform or pay in this Security
Agreement and the Borrower shall reimburse the Bank for any amounts paid by the
Bank pursuant to this Section 8.3. The Borrower's obligation to reimburse the
Bank pursuant to the preceding sentence shall be a Obligation payable on demand.

         SECTION 8.4   AUTHORIZATION FOR SECURED PARTY TO TAKE CERTAIN ACTION.
The Borrower irrevocably authorizes the Bank at any time and from time to time
in the sole discretion of the Bank and appoints the Bank as its attorney in fact
(i) to execute on behalf of the Borrower as debtor and to file financing
statements necessary or desirable in the Bank's sole discretion to perfect and
to maintain the perfection and priority of the Bank's security interest in the
Collateral, (ii) to indorse and collect any cash proceeds of the Collateral,
(iii) to file a carbon, photographic or other reproduction of this Security
Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as the Bank in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the Bank's security interest in the Collateral, (iv) to contact and enter into
one or more agreements with the issuers of uncertificated securities which are
Collateral and which are Securities or with financial intermediaries holding
other Investment Property as may be necessary or advisable to give the Bank
Control over such Securities or other Investment Property, (v) subject to the
terms of Section 4.1(e), to enforce payment of the Receivables in the name of
the Bank or the Borrower, (vi) to apply the proceeds of any Collateral received
by the Bank to the Obligations as provided in Article VII and (vii) to discharge
past due taxes, assessments, charges, fees or Liens on the Collateral (except
for such Liens as are specifically permitted hereunder), and the Borrower


                                       14
<PAGE>   15

agrees to reimburse the Bank on demand for any payment made or any expense
incurred by the Bank in connection therewith, PROVIDED that this authorization
shall not relieve the Borrower of any of its obligations under this Security
Agreement or under the Credit Agreement.

         SECTION 8.5   SPECIFIC PERFORMANCE OF CERTAIN COVENANTS. The Borrower
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1(e), 4.1(f), 4.4, 5.3, or 8.7 or in Article VII will cause
irreparable injury to the Bank, that the Bank has no adequate remedy at law in
respect of such breaches and therefore agrees, without limiting the right of the
Bank to seek and obtain specific performance of other obligations of the
Borrower contained in this Security Agreement, that the covenants of the
Borrower contained in the Sections referred to in this Section 8.5 shall be
specifically enforceable against the Borrower.

         SECTION 8.6   USE AND POSSESSION OF CERTAIN PREMISES. Upon the
occurrence of an Event of Default, the Bank shall be entitled to occupy and use
any premises owned or leased by the Borrower where any of the Collateral or any
records relating to the Collateral are located until the Obligations are paid or
the Collateral is removed therefrom, whichever first occurs, without any
obligation to pay the Borrower for such use and occupancy.

         SECTION 8.7   DISPOSITIONS NOT AUTHORIZED. The Borrower is not
authorized to sell or otherwise dispose of the Collateral except as set forth in
Section 4.1(e) and notwithstanding any course of dealing between the Borrower
and the Bank or other conduct of the Bank, no authorization to sell or otherwise
dispose of the Collateral (except as set forth in Section 4.1(e)) shall be
binding upon the Bank unless such authorization is in writing signed by the
Bank.

         SECTION 8.8   BENEFIT OF AGREEMENT. The terms and provisions of this
Security Agreement shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights or delegate its
obligations under this Security Agreement or any interest herein, without the
prior written consent of the Bank.

         SECTION 8.9   SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Borrower contained in this Security Agreement shall survive
the execution and delivery of this Security Agreement.

         SECTION 8.10  TAXES AND EXPENSES. Any taxes (including income taxes)
payable or ruled payable by Federal or State authority in respect of this
Security Agreement shall be paid by the Borrower, together with interest and
penalties, if any. The Borrower shall reimburse the Bank for any and all
out-of-pocket expenses and internal charges (including reasonable attorneys',
auditors' and accountants' fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Bank) paid or
incurred by the Bank in connection with the preparation, execution, delivery,
administration, collection and enforcement of this Security Agreement and in the
audit, analysis, administration, collection, preservation or sale of the
Collateral (including the expenses and charges associated with any periodic or
special audit of the Collateral). Any and all costs and expenses incurred by the
Borrower in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Borrower.


                                       15
<PAGE>   16

         SECTION 8.11  HEADINGS. The title of and section headings in this
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Security
Agreement.

         SECTION 8.12  TERMINATION. This Security Agreement shall continue in
effect (notwithstanding the fact that from time to time there may be no
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Obligations have been indefeasibly paid
and performed in full and no commitments of the Bank which would give rise to
any Obligations are outstanding.

         SECTION 8.13  ENTIRE AGREEMENT. This Security Agreement embodies the
entire agreement and understanding between the Borrower and the Bank relating to
the Collateral and supersedes all prior agreements and understandings between
the Borrower and the Bank relating to the Collateral.

         SECTION 8.14  CHOICE OF LAW. This Security Agreement shall be governed
by and construed in accordance with the law of the State of Ohio.

         SECTION 8.15  INDEMNITY. The Borrower hereby agrees to indemnify the
Bank, and its successors, assigns, agents and employees, from and against any
and all liabilities, damages, penalties, suits, costs, and expenses of any kind
and nature (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Bank is a party thereto) imposed on,
incurred by or asserted against the Bank, or its successors, assigns, agents and
employees, in any way relating to or arising out of this Security Agreement, or
the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Bank or the Borrower, and any claim for patent,
trademark or copyright infringement).


                                   ARTICLE IX

                                     NOTICES
                                     -------

         SECTION 9.1   SENDING NOTICES. Any notice required or permitted to be
given under this Security Agreement shall be sent (and deemed received) in the
manner and to the addresses set forth in Section 9.4 of the Credit Agreement.

         SECTION 9.2   CHANGE IN ADDRESS FOR NOTICES. Each of the Borrower and
the Bank may change the address for service of notice upon it by a notice in
writing to the other party.





                                       16
<PAGE>   17


         IN WITNESS WHEREOF, the Borrower and the Bank have executed this
Security Agreement as of the date first above written.


                                  Neoprobe Corporation,
                                    a Delaware corporation


                                  By:    /s/ David Bupp
                                         -------------------------
                                  Name:    David Bupp
                                         -------------------------
                                  Title:     President, CEO
                                         -------------------------



                                  Firstar Bank, N.A.,
                                    a national banking association


                                  By:    /s/ J. Todd Price
                                         -------------------------
                                        J. Todd Price, Vice President







                                       17