SECURITY AGREEMENT (PATENTS)


         WHEREAS,  STAR MEDICAL  TECHNOLOGIES,  INC., a California  corporation,
with a principal  place of business at 1249 Quarry  Lane,  Pleasanton,  CA 94566
(the "Company") and FLEET NATIONAL BANK, with a place of business at One Federal
Street, Boston, Massachusetts 02110 (the "Bank") have entered into an Inventory,
Accounts  Receivable and Intangibles  Security Agreement dated November 16, 1998
(the "Security  Agreement") and are also parties to a related Guaranty Agreement
(the "Guaranty Agreement") between the Bank and the Company; and

         WHEREAS, the Company is the owner and user of the United States Patents
and Patent  Applications  listed on  Schedule A hereto  and  identified  in said
Guaranty Agreement and said Security Agreement (collectively,  the "U.S. Patents
and Patent Applications"); and

         WHEREAS,  among the  security  interests  granted by the Company to the
Bank  pursuant  to the  Security  Agreement  is a security  interest in the U.S.
Patents  and  Patent  Applications  listed  on  Schedule  A  hereto  and  in any
registered patents arising from such Patent Applications; and

         WHEREAS,  the parties to the Security Agreement  contemplate and intend
that, if an Event of Default (as defined in the Guaranty  Agreement) shall occur
and be continuing, the Bank shall have all rights of a foreclosing secured party
in and to the U.S. Patents and Patent Applications and in any registered patents
arising therefrom and any proceeds thereof,  including,  without limitation, the
right,  following  such  foreclosure,  to  transfer  to a  purchaser  all of the
Company's  right,  title and  interest  in and to the U.S.  Patents  and  Patent
Applications and in any registered patents arising therefrom;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties reconfirm the terms of
the Security  Agreement,  as if set forth fully herein, and acknowledge that the
Bank has a security interest in the U.S. Patents and Patent  Applications listed
on  Schedule  A hereto  and in any  registered  patents  arising  therefrom;  as
security for the Obligations (as defined in the Security Agreement), the Company
hereby  collaterally  assigns to the Bank, and grants a security interest to the
Bank in and to, all of the  Company's  right,  title and interest in and to said
U.S.  Patents and Patent  Applications  and in any  registered  patents  arising
therefrom;  the  Company  agrees that it will not sell or assign any of the U.S.
Patents or Patent  Applications  nor any registered  patents  arising  therefrom
without  the prior  written  consent of the Bank;  and the  Company and the Bank
request that the  Commissioner  of Patents and  Trademarks  record this document
with respect to the U.S. Patents and Patent Applications.

         The Company hereby appoints the Bank as the Company's  attorney-in-fact
(with  full  power  of  substitution  and  resubstitution)  with the  power  and
authority,  after the  occurrence  of any Event of  Default  (as  defined in the
Guaranty  Agreement),  to execute and deliver,  in the name and on behalf of the
Company,  and to cause the recording of all such further  assignments  and other
instruments as the Bank may  reasonably  deem necessary or desirable in order to
carry out the  intent of the  Security  Agreement  and this  Security  Agreement
(Patents). The Company agrees

<PAGE>

that all third parties may conclusively  rely on any such further  assignment or
other instrument, so executed, delivered and recorded by the Bank (or the Bank's
designee  in  accordance  with the  terms  hereof)  and on the  statements  made
therein.

STAR MEDICAL TECHNOLOGIES, INC.                     FLEET NATIONAL BANK


By:  /s/ Joseph P. Caruso                           By:  /s/ Lucie Burke
     -------------------------                           -----------------------
     Name:  Joseph P. Caruso                             Its:  Vice President
     Title: Vice President of Finance



COMMONWEALTH OF MASSACHUSETTS )
                              ) ss.
COUNTY OF  MIDDLESEX          )


         Then personally  appeared  before me the above-named  JOSEPH P. CARUSO,
the _VICE  PRESIDENT OF FINANCE of Star Medical  Technologies,  Inc., and stated
that he/she  executed  the  foregoing  instrument  under the  authority  of said
corporation's Board of Directors and acknowledged the foregoing instrument to be
the free act and deed of said corporation.

         WITNESS my hand and seal this 16th day of November, 1998.


                                                    /s/ Marianne Barrett
                                                    ----------------------------
                                                    Notary Public
                                                    My commission expires:
                                                       November 19, 2004

<PAGE>


                                   SCHEDULE A

                                       TO

                          SECURITY AGREEMENT (PATENTS)


Patents with United States Registration
---------------------------------------

<TABLE>
<S>                                                <C>                             <C>

Patent Description                                 Registration No.                Registration Date
------------------                                 ----------------                -----------------
High fluence diode laser device 
and method for the  
fabrication and use thereof                        5,743,901                       April 28, 1998

Method for the laser treatment of 
subsurface blood vessels                           5,707,403                       January 13, 1998

Pulsed infrared laser treatment of psoriasis       5,527,350                       June 18, 1996
</TABLE>


Patent Applications
-------------------

Patent Description                                   Serial No./Filing Date
------------------                                   ----------------------

Integrated cooling mechanism                         08/845,630/January 17, 1997
for diode-pumped solid state laser

Laser diode array packaging                          08/789,968/January 31, 1997