Document:

EXHIBIT  10.1
                              SETTLEMENT AGREEMENT

     This  Settlement  Agreement (the "Agreement") is entered into as of the20th
day  of  September, 2001 by and among CyPost Corporation, a Delaware corporation
with  offices  at  1281  West  Georgia  Street,  Suite  900,  Vancouver, British
Columbia,  Canada  V6E 3J7 ("CyPost"); Kelly Shane Montalban, an individual with
an address at P.O. Box 700, Lions Bay, British Columbia, Canada V0N 2E0 ("KSM");
and  Pacific Gate Capital Corporation, a corporation with an address at P.O. Box
700,  Lions  Bay,  British  Columbia,  Canada  VON  2EO  ("PGCC").

     WHEREAS,  several  shareholders  of  CyPost  have, through their respective
counsel,  requested  that  CyPost  investigate  whether  KSM  has  engaged  in
transactions  in  violation  of  Section 16(b) of the Securities Exchange Act of
1934,  as  amended  (the  "Exchange  Act:");  and

     WHEREAS,  CyPost  has  conducted  such  an  investigation  with  the  full
cooperation  of KSM, who has supplied CyPost with, among other things, brokerage
statements  and  accountant's  statements;  and

     WHEREAS,  for  purposes of determining KSM's beneficial ownership of CyPost
common  stock  during  the  period  September 20, 1999 (the date on which CyPost
became  fully  reporting  under  the  Exchange  Act)  through June 15, 2001 (the
"Recovery  Period"),  KSM  is  deemed  to  be the beneficial owner of all CyPost
shares owned by (i) KSM, (ii) KSM's wife, and (iii) PGCC, a corporation owned by
KSM;  and

     WHEREAS,  at  all  times during the Recovery Period, KSM was the beneficial
owner,  directly  or  indirectly, of more than 10% of CyPost's common stock; and

     WHEREAS,  during the Recovery Period, KSM and those persons whose ownership
of  CyPost  common stock is attributable to KSM for purposes of Section 16(b) of
the  Exchange Act, made numerous purchases and sales of CyPost common stock; and

     WHEREAS,  CyPost  determined  that numerous violations of Section 16(b) had
taken  place and, unable to resolve the matter in a timely fashion, CyPost filed
a  Summons and Complaint against KSM in the United States District Court for the
Southern  District  of  New  York  seeking recovery of KSM's short swing profits
during the Recovery Period (Cypost Corporation v. Kelly Shane Montalban, 01 Civ.
(5447)(the  "Litigation");  and

     WHEREAS,  CyPost  and KSM have subsequently agreed that the amount of short
swing  profits  realized by KSM, including persons whose beneficial ownership of
CyPost  common  stock  is attributable to KSM for Section 16(b) purposes, during
the  Recovery  Period  is  $2,498,449.46  (the  "Recoverable  Amount");  and

     WHEREAS,  KSM  has  made  no  purchases  or  sales  of CyPost common stock,
directly  or  indirectly,  subsequent  to  the  Recovery  Period,  and

<PAGE>
     WHEREAS,  KSM, as the assignee of Monet Management Group Ltd., is the payee
on  an  8%  demand  note  dated  June 19, 2001 issued by CyPost in the principal
amount  of  $1,302,496.30  plus  interest accrued until September 20,2001 in the
amount  of  $26,476.97  (the  "KSM  Note");  and
     WHEREAS,  KSM  has agreed to cancel the KSM Note in partial satisfaction of
his  Section  16(b)  liability  to  CyPost;  and

     WHEREAS,  various  individuals (the "Noteholders") are the payees on demand
notes  dated June 19, 2001 issued by CyPost in the aggregate principal amount of
$1,017,291.94  together  with  $15,906.63  in  interest accrued on the principal
amount  from  June  19,2001 until September 20,2001(the "Noteholder Notes"); and

     WHEREAS,  the  Noteholders  have assigned their rights under the Noteholder
Notes  to  KSM,  who  has  agreed  to  cancel  the  Noteholder  Notes in partial
satisfaction  of  his  Section  16(b)  liability  to  CyPost;  and

     WHEREAS,  PGCC  is  the  payee on 8% demand notes dated August 25, 2000 and
September  11,  2000,  respectively, issued by CyPost in the aggregate principal
amount of $25,000 plus accrued interest until September 20,2001 in the amount of
$2,066.67(the  "PGCC  Notes");  and

     WHEREAS,  PGCC  has agreed to cancel the PGCC Notes in partial satisfaction
of  KSM's  Section  16(b)  liability  to  CyPost;  and

     WHEREAS,  KSM  has  agreed  to pay the balance of the Recoverable Amount by
issuing  to  CyPost, KSM's $109,210.95, 5 year, 5% note and CyPost has agreed to
accept  same  in  accordance  with  the  terms  of  this  Agreement.

     NOW,  THEREFORE,  for  good  and  valuable  consideration,  the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  parties hereto agree as
follows:

     1.     CANCELLATION  OF  KSM  NOTE.

     KSM  hereby  returns the KSM Note for cancellation and authorizes CyPost to
apply  the  $1,328,973.27  due  thereunder  to the satisfaction of KSM's Section
16(b)  liability  to  CyPost.

     2.     CANCELLATION  OF  NOTEHOLDER  NOTES.

     KSM  hereby  returns  the  Noteholder Notes for cancellation and authorizes
CyPost  to  apply  the $1,033,198.57 due thereunder to the satisfaction of KSM's
Section  16(b)  liability  to  CyPost.

     3.     CANCELLATION  OF  PGCC  NOTE.

     PGCC  hereby  returns the PGCC Notes for cancellation and authorizes CyPost
to  apply  the  $27,066.67  due  thereunder to the satisfaction of KSM's Section
16(b)  liability  to  CyPost.

<PAGE>
     4.     ISSUANCE  OF  NOTE  TO  CYPOST.

     To  satisfy  the  $109,210.95  balance  of KSM's Section 16(b) liability to
CyPost,  KSM  hereby  issues  his  $109,210.95,  5  year 5% promissory note (the
"Balance  Note")  to  CyPost  in  the  form  attached  hereto  as  Exhibit  A.

     5.     WITHDRAWAL  OF  LAWSUIT.

     In consideration of the Cancellation of the KSM Note, the Noteholder Notes,
and the PGCC Note and KSM's delivery to CyPost of the Balance Note, and upon due
execution  and  delivery  to  Cypost of all documents called for by paragraphs 1
through  4  above,  CyPost will promptly file a Notice of Voluntary Dismissal of
the  Litigation,  without prejudice, pursuant to Rule 41(a) of the Federal Rules
of  Civil  Procedure.  In  the event of KSM's default under the Balance Note, in
addition  to  its  rights  and  remedies thereunder, Cypost shall be entitled to
reinstate or refile the Litigation and pursue such additional remedies as may be
available  to  it  therein.  It  is  agreed  that  the  statute  of  limitations
applicable  to the claim(s) asserted by Cypost in the Litigation shall be tolled
pending  payment  in  full  of  the  Balance  Note.

     6.     RELEASE.

     Effective  upon  KSM's payment in full of the Balance Note, CyPost releases
and  discharges  KSM, his administrators, heirs, successors and assigns from all
actions,  causes  of  action,  suits,  debts  due,  sums  of  money,  accounts,
reckonings,  bonds,  bills,  specialties,  covenants,  contracts, controversies,
agreements,  promises, variances, damages, judgements, claims and demands in law
or  in  equity, which against KSM, CyPost or its successors or assigns ever had,
now  has,  or  hereafter can, shall or may have for, upon, or by reason of KSM's
liability  to  CyPost pursuant to Section 16(b) of the Exchange Act, directly or
through  PGCC  or KSM's wife, in any way from the beginning of the world through
June  15,  2001.

     7.     ADVICE  OF  COUNSEL.

     CyPost  has  had  the benefit of the advice of counsel of its own choice in
the  negotiating,  drafting  and  execution  of this Settlement Agreement.  Said
counsel,  Kaplan  Gottbetter  &  Levenson,  LLP  ,  represented solely CyPost in
connection herewith.  KSM and PGCC have acted for themselves without the benefit
of  advice of counsel.  KSM and PGCC have been advised by CyPost and its counsel
that  they are entitled to obtain, and that their best interests would be served
by,  advice  and representation by their own, independent, counsel and have been
urged  by  CyPost  and its counsel to retain their own counsel for this purpose,
and  KSM and PGCC had full opportunity to do so.  Notwithstanding the foregoing,
KSM  and  PGCC  have  elected  not  to  retain  their own counsel, but rather to
represent  themselves  in  connection  with  this Agreement.  Such election, and
KSM's and PGCC's execution of this Settlement Agreement, were made knowingly and
voluntarily.  This  Agreement  is the result of arms-length negotiations between
the  parties.  Accordingly,  neither  the  entire  Agreement  nor  any provision
contained  herein  shall be deemed to have been proposed or drafted by any party
or  construed  against  any party.  This Agreement shall be construed as a whole
according  to  its  plain  meaning.

<PAGE>
     8.     FURTHER  ACTIONS.

     CyPost,  KSM,  and  PGCC  hereby  agree  to execute and deliver any and all
documents  and  to take any and all actions necessary to effect the transactions
contemplated  hereby.

     9.     SEVERABILITY.

     If one or more of the provisions of this Agreement shall be determined by a
court  of  competent jurisdiction to be invalid, illegal or unenforceable in any
respect, the portion of such provision not so held, and the remaining provisions
of  this  Agreement  shall  be  construed  as  if  such  invalid,  illegal  or
unenforceable  provision  were  not  included  in  them.

     10.     AMENDMENTS,  MODIFICATIONS  AND  WAIVERS.

     No provision of this Agreement may be waived, modified or amended except in
a  written instrument signed by the party against whom such waiver, modification
or  amendment is sought to be enforced.  No waiver of any provision hereto shall
be deemed to be a waiver of any other provision or to imply any future waiver of
the  same  provision.

     11.     SUCCESSORS  AND  ASSIGNS.

     The  provisions hereof shall be binding upon and shall inure to the benefit
of  the  parties  and  their  respective  successors  and  assigns.

     12.     GOVERNING  LAW.

     This  Agreement  shall  be  governed, and construed in accordance with, the
laws  of  the  Province  of  British  Columbia.  The parties agree to submit any
dispute  under this Agreement to the exclusive jurisdiction of the courts of the
Province  of  British  Columbia.

     13.     COUNTERPARTS.

     This  Agreement  may  be  executed  in one or more counterparts which, when
taken  together,  shall  comprise  one  and  the  same  document.

<PAGE>
     IN  WITNESS  WHEREOF, the undersigned have set their respective hands as of
the  date  first  above  written.

CYPOST  CORPORATION

By:  /s/ Robert  Sendoh
     -------------------
         Name:  Robert  Sendoh
         Title: Chairman  of  the  Board

/s/  Kelly  Shane  Montalban
----------------------------
     Kelly  Shane  Montalban

PACIFIC  GATE  CAPITAL  CORPORATION

By:  /s/ Kelly  Shane  Montalban
     ---------------------------
         Name:  Kelly  Shane  Montalban
         Title:

<PAGE>
                                    EXHIBIT A
                                    ---------

                                 PROMISSORY NOTE

                                             Vancouver,  British  Columbia
                US$109,210.95
                September  20,2001

     FOR  VALUE RECEIVED, the undersigned, Kelly Shane Montalban,  an individual
with  an  address  at  P.O. Box 700, Lions Bay, British Columbia, Canada VON 2E0
(the  "Obligor"),  hereby  promises to pay to the order of CyPost Corporation, a
Delaware  Corporation  with  offices  at  1281  West  Georgia Street, Suite 900,
Vancouver, British Columbia, Canada V6E 3J7 (the "Holder"), the principal sum of
one  hundred  nine  thousand,  two  hundred  ten  dollars  and ninety five cents
(US$109,210.95) payable as set forth below.  The Obligor also promises to pay to
the  order  of  the Holder interest on the principal amount hereof at a rate per
annum  equal  to five percent (5%), which interest shall be payable at such time
as the principal is due hereunder.  Interest shall be calculated on the basis of
the  year  of 365 days and for the number of days actually elapsed.  Any amounts
of  interest  and principal not paid when due shall bear interest at the maximum
rate  of  interest  allowed  by  applicable  law.  The payments of principal and
interest  hereunder  shall  be  made in coin or currency of the United States of
America  which  at  the  time  of  payment shall be legal tender therein for the
payment  of  public  and  private  debts.

     This  Note  shall  be  subject  to  the  following  additional  terms  and
conditions:

     1.   PAYMENTS.

          Subject  to Section 2 hereof, all principal and interest due hereunder
shall  be  paid  in  one  (1)  installment  on September 19, 2006 (the "Maturity
Date").  In  the  event that any payment to be made hereunder shall be or become
due on Saturday, Sunday or any other day which is a legal bank holiday under the
laws  of  British  Columbia,  such  payment  shall  be or become due on the next
succeeding  business  day.

     2.   PREPAYMENT.

          The  Obligor  and  the  Holder understand and agree that the principal
amount  of  this  Note  plus  accrued interest may be prepaid by the Obligor ,in
whole  or  in  part,  at  any  time  prior to the Maturity Date without penalty.

     3.   PAYMENT  IN  STOCK.

          Obligor,  subject  to  agreement by the Holder, may pay all or part of
the  principal  and  interest  due  hereunder, by transferring and delivering to

<PAGE>
Holder, shares of Holder's common stock owned by Obligor. Such common stock will
be  valued  at  the  closing bid price for Holder's common stock on the business
date  immediately  preceding  the  date  of  delivery  of  such  shares.

     4    NO  WAIVER.

          No  failure  or  delay by the Holder in exercising any right, power or
privilege  under the Note shall operate as a waiver thereof nor shall any single
or  partial  exercise  thereof preclude any other or further exercise thereof or
the  exercise  of  any  other right, power or privilege. The rights and remedies
herein  provided shall be cumulative and not exclusive of any rights or remedies
provided  by law.  No course of dealing between the Obligor and the Holder shall
operate  as  a  waiver  of  any  rights  by  the  Holder.

     5.   WAIVER  OF  PRESENTMENT  AND  NOTICE  OF  DISHONOR.

          The Obligor hereby waives presentment, notice of dishonor, protest and
all  other  demands  and  notices  in  connection with the delivery, acceptance,
performance  or  enforcement  of  this  Note.

     6.   PLACE  OF  PAYMENT.

          All  payments  of  principal  of this Note and the interest due hereon
shall  be  made  at  such place as the Holder may from time to time designate in
writing.

     7.   EVENTS  OF  DEFAULT.

          The  entire  unpaid principal amount of this Note and the interest due
hereon  shall,  at  the  option of the Holder exercised by written notice to the
Obligor  forthwith,  become and be due and payable, without presentment, demand,
protest  or  other notice of any kind, all of which are hereby expressly waived,
if  any  one or more of the following events (herein called "Events of Default")
shall  have occurred (for any reason whatsoever and whether such happening shall
be  voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgement, decree or order of any court or
any  order,  rule or regulation of any administrative or governmental body ) and
be  continuing  at  the  time  of  such  notice,  that  is  to  say:

          (a)     if  default  shall  be made in the due and punctual payment of
the  principal  of  this  Note and the interest due thereon when and as the same
shall  become  due  and  payable,  whether  at  maturity,  or by acceleration or
otherwise,  and  such  default  have  continued  for  a period of five (5) days;

          (b)  if  the  Obligor  shall:

               (i)  admit in writing its inability to pay its debts generally as
                    they  become  due;

               (ii) file  a petition in bankruptcy or petition to take advantage
                    of  any  insolvency  act;  or

<PAGE>
               (iii)  make  assignment  for  the  benefit  of  creditors;  or

                    (c)     if,  under  the  provisions of any other law for the
relief  or  aid  of  debtors,  any  court or competent jurisdiction shall assume
custody  or  control  of the whole or any substantial part of Obligor's property
and  such  custody or control shall not be terminated or stayed within (90) days
from  the  date  of  assumption  of  such  custody  or  control.

     8.    REMEDIES.

           In case any one or more of the Events of Default specified in Section
6  hereof  shall  have  occurred  and  be  continuing, the Holder may proceed to
protect  and  enforce  its  rights,  whether for the specific performance of any
covenant  or  agreement  contained in this Note or in aid of the exercise of any
power  granted in this Note, or the Holder may proceed to enforce the payment of
all  sums due upon the Note or enforce any other legal or equitable right of the
Holder.

     9.    SEVERABILITY.

           In  the  event  that one or more of the provisions of this Note shall
for  any  reason  be held invalid, illegal or unenforceable in any respect, such
invalidity,  illegality or unenforceability shall not affect any other provision
of  this  Note,  but this Note shall be construed as if such invalid, illegal or
unenforceable  provision  had  never  been  contained  herein.

     10.   GOVERNING  LAW.

           This Note and the right and obligations of the Obligor and the Holder
shall  be  governed by and construed in accordance with the laws of the Province
of  British  Columbia.

     IN  WITNESS  WHEREOF, the OBLIGOR has signed and sealed this Note as of the
___  day  of  September,  2001.

<PAGE>Ex.  10.20

                             [CardioTech Letterhead}

                                                  October 10, 2001

Implant Sciences Corporation
107 Audubon Road
Wakefield, Massachusetts 01880-1246

Ladies and Gentlemen:

          We  are pleased to confirm that we are extending to you ("Borrower") a
line  of  credit  of  up to an aggregate amount of $500,000 (the "Credit Line"),
subject to the terms and provisions, and on the conditions, set forth herein and
in  the  other  documents  entered  into  in  connection  with  the Credit Line.

          1.     The  Credit  Line
                 -----------------

          Borrowings  under  this  Credit Line shall be evidenced by a grid note
(the  "Note"),  a  copy  of  which  is attached hereto as Exhibit A.  Under this
Credit  Line,  borrowings may be made from time to time in the minimum amount of
$25,000  and  shall  be  repayable  in  full  on October 12, 2002 (the "Maturity
Date"), but may be prepaid at any time in whole or in part with accrued interest
to  the  date  of  prepayment.  You  may  request  borrowings  hereunder only in
compliance  with  all  the  terms and conditions hereof and you may not make any
borrowings hereunder after the Maturity Date.  The aggregate amount that you may
borrow under the Credit Line is $500,000.  Any amounts borrowed and repaid prior
to  the Maturity Date may not be reborrowed.  Any amounts outstanding shall bear
interest,  payable  monthly in arrears, at a variable rate per annum equal to 2%
above the Prime Rate set forth in the Wall Street Journal from time to time, all
as  more  fully  set  forth  in  the  Note.

<PAGE>
          The  Credit  Line  shall  be  secured  by  a second priority lien (the
"Credit  Line  Lien")  on  all  of  the  personal  property  and fixtures of the
Borrower,  whether  tangible  or  intangible, including, without limitation, all
accounts  receivable,  goods, equipment, inventory, intellectual property, trade
secrets,  formulae,  processes,  software and general intangibles (including tax
refunds),  all  as more fully set forth in the security agreement (the "Security
Agreement")  attached  hereto as Exhibit B.  The Credit Line Lien will be second
in  priority  only  to  Citizens Bank (the "Existing Lender") and only to secure
debt  no  greater  than  the  principal  amount  of  $367,650.00.   All  of your
obligations  under  this  Credit  Line  shall be guaranteed by Anthony J. Armini
("Guarantor")  pursuant  to  the  guarantee  (the "Guarantee" attached hereto as
Exhibit C.  In addition, the holders of other debt of the Borrower identified on
Schedule  D-1  will  execute  and  deliver  to us a subordination agreement (the
"Subordination  Agreement"  and  together  with  this Line of Credit Letter, the
Note,  the  Security  Agreement  and the Guarantee, sometimes referred to herein
collectively  as  the  "Loan  Documents" and each a "Loan Document") in the form
attached  hereto  as  Exhibit  D.

          2.     Conditions,  Representations  and  Warranties,  and  Covenants
                 --------------------------------------------------------------

          The  Line  of  Credit  may be utilized by you for a period of one year
ending  on  October  12, 2002; provided, however, THE CONTINUING AVAILABILITY OF
                               ------------------
THIS  LINE  OF CREDIT IS AT ALL TIMES SUBJECT TO YOUR COMPLIANCE WITH THE TERMS,
PROVISIONS  AND CONDITOINS OF EACH LOAN DOCUMENT.  WE HAVE NO OBLIGATION TO MAKE
ANY  ADVANCE  TO YOU UPON THE OCCURRENCE OF ANY DEFAULT UNDER ANY LOAN DOCUMENT.
In  addition,  the continuing availability of the Credit Line is subject to your
furnishing  us with such financial statements as you provide the Existing Lender
at  the  time  you  provide such financial statements to the Existing Lender and
such  other information, including interim financial statements, concerning your
business,  affairs  or  financial condition as we may from time to time request.

          All payments of principal, interest and fees payable by you under this
Credit  Line  shall  be made in immediately available funds at our office at78-E
Olympia  Avenue,  Woburn,  MA  01801.

          (a)     Representations  and  Warranties.

               To  induce  us  to make the advances described herein, you hereby
represent  and  warrant  to  us  as  follows:

               (i)  Borrower  (A)  is  a  corporation  duly  organ-ized, validly
existing  and  in  good  standing  under  the  laws  of  the  Commonwealth  of
Massachusetts,  (B)  has  all requisite corporate power and authority to execute
and  deliver  the  Loan  Documents  to  which it is a party and to carry out the
transactions  and  perform  its  obligations contemplated thereby and to own its

                                        2
<PAGE>
properties  and  carry  out  its  business  as  presently conducted, (C) 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, and (D) has all necessary
licenses,  authorizations,  registrations,  permits  and  approvals  to  own its
properties  and  carry  on  its  business  as  presently  conducted;

               (ii)  The  execution and delivery by Borrower of each of the Loan
Documents  to  which it is a party and the performance by Borrower of all of its
obligations  thereunder (i) have been duly authorized by all necessary corporate
action  on  the  part  of the Borrower,  (ii) will not violate or be in conflict
with (a) any provisions of any applicable law, statute, code, regulation or rule
(including  without  limitation,  any  applicable usury or similar law), (b) any
order, rule or regulation of any court or other agency of government, or (c) any
provision  of  the Articles of Incorporation or By-Laws of Borrower,  (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 Borrower is a
party  or  by  which  Borrower  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  Borrower's  properties  or  assets.;

               (iii)     There is no pending or threatened, action or proceeding
(whether  before  any  court,  governmental  agency, tribunal or arbitration, or
otherwise)  affecting Borrower or Guarantor that may materially adversely affect
the  condition  (financial or otherwise) of any of such parties or that purports
to  affect the legality, validity or enforceability of any of the Loan Documents
except  as  set  forth  in  Schedule  E  hereto;  and

               (iv)     The  audited  income statement for the 12 months ending,
and  the  balance  sheet  dated  as of,  June 30, 2000, and the unaudited income
statement  for  the  nine months ended, and the balance sheet dated as of, March
31,  2001  (together  the  "Financial  Statements"),  have  been  prepared  in
compliance  with  generally  accepted  accounting  principals,  applied  on  a
consistent basis, are true and correct as of such dates and for such periods, do
not fail to disclose any material liabilities of the Borrower, and there has not
occurred  any  material adverse effect upon the business or condition (financial
or  otherwise)  of  the  Borrower  since  March  31,  2001.

               (v)     The  Borrower  and  the  Guarantor have duly executed and
delivered each of the Loan Documents to it or he is a party, as the case may be.
Each  of  the  Loan Documents constitutes a legal, valid and binding instrument,
enforceable  against  Borrower  and Guarantor (if a party to the applicable Loan
Document)  in  accordance  with  its  terms.

                                        3
<PAGE>
               (vi)     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 Borrower or Guarantor
of  the  Loan  Documents  to  which it or he is a party, as the case may be, the
performance  of  each  of  their  respective  obligations  thereunder, or to the
legality,  validity, binding effect, performance or enforceability of any of the
respective  terms,  provisions  or  conditions  thereof.

               (vii)     The  Borrower  has  not  created,  incurred, assumed or
caused  to exist any lien on any of its assets, except for to the existing liens
in  favor  of  the  Existing Lender securing the indebtedness of Borrower to the
Existing  Lender  under  a  certain term loan facility in the original principal
amount  of $750,000 of which $367,650 is outstanding as of the date hereof (such
loan in the principal amount not to exceed $367,650). Borrower shall not without
our prior written approval directly or indirectly make, create, incur, assume or
permit  to  exist  any  assignment, lien, pledge, mortgage, security interest or
other  lien  or  encumbrance  of any nature in, to or own or acquire or agree to
acquire  any  property of any character to be included in the collateral subject
to  any  of  the  foregoing  encumbrances,  except  for the lien in favor of the
Existing  Lender  described  above, and the Borrower will not, without obtaining
our  prior  written approval, sign, file or authorize the signing or filing of a
financing statement under the Uniform Commercial Code of any jurisdiction within
the  United  States.

          (b)     Covenants.

               Until the Maturity Date, the Borrower hereby covenants and agrees
with us as  follows:

               (i)     To  maintain  its  existence  as  a  validly  existing
corporation  under  the  law  of  the  Commonwealth  of  Massachusetts;

               (ii)     To  comply  with  all  terms,  provisions  and covenants
of  its  agreements  with  the  Existing  Lender  and  not to permit any default
thereunder;

               (iii)     Not to incur any additional indebtedness  for  borrowed
money  other  than  that  which  exists  as  of  June  30,  2001;

               (iv)     Unless  contested  in  good  faith  and  by  appropriate
proceeding,  promptly pay when due all lawful claims and taxes which, if unpaid,
might  become  a  lien  or  charge  on  its  or  his  property  or  assets;

                                        4
<PAGE>
               (v)     Not  to  incur,  create,  assume  or  suffer to exist any
mortgage,  pledge,  lien,  security interest, charge or other encumbrance of any
nature  whatsoever  on the Collateral other than in our favor or in favor of the
Existing  Lender;  and

               (vi)     To  comply  with  all terms, provisions and covenants of
each  Loan  Document.

          (c)     Conditions  Precedent.

          You hereby agree to pay, upon the execution of this Credit Line Letter
and thereafter on demand, all of our attorneys' fees we incur in connection with
the  Credit  Line, each and every borrowing hereunder, and any administration or
enforcement  of  any  Loan  Document  or  our  rights  or remedies thereunder or
hereunder.  Further, you will pay to us a fee (the "Line Fee") equal to $15,000,
which  Line  Fee is payable on the earlier to occur of (a) April 10, 2002 or (b)
your  first  borrowing  under  the Credit Line.  The foregoing payments that you
hereby  agree  to  pay  us  are  both your covenant to us and a condition to our
advancing any funds to you under the Credit Line.  In addition, our agreement to
extend  to  you  this  Credit  Line,  on  the terms set forth herein, is further
subject  to  and  conditioned  upon,  your delivering to us, at or prior to your
first  borrowing  (and  where  indicated,  to be given to us at the time of each
borrowing),  the  following:

          (i)  the  Note,  executed  and  delivered  by an authorized officer of
your company;

          (ii)  a certificate, in the form attached as Exhibit F hereto,  signed
by  an  authorized   officer   of  your   company,  (A)  restating  all  of  the
representations  and  warranties set forth herein as if each such representation
and  warranty  were  made  as of the date of each such borrowing, (B) certifying
that  all  such  representations and warranties are true as of such date and (C)
certifying  that  the  Borrower has complied with all obligations under all Loan
Documents,  and  there  does  not exist any default hereunder or under any other
Loan  Document,  Existing  Lender  Document,  or any other agreement between the
Borrower  (or  any  of  its  affiliates) and us (or any of our affiliates), such
agreement  being  sometimes  referred  to  herein  as  a  "Borrower  Agreement";

          (iii) the Security Agreement executed and  delivered  by an authorized
officer,  together  with  copies  of  such  UCC  financing  statements as we may
require, and any amendments thereto which may, in the opinion of our counsel, be
desirable  or  necessary in order to fully perfect the security interests in the
collateral  granted  therein  (including,  without  limitation,  any  and  all
intellectual property) with any and all governmental offices (including, without
limitation,  the  U.S.  Patent  and  Trademark  Office);

                                        5
<PAGE>
          (iv)  the  Guarantee  signed  by  the  Guarantor;

          (v)  a legal opinion, delivered by legal counsel reasonably acceptable
to  us,  in  the  form  attached  hereto  as  Exhibit  F;

          (vi)  our receipt in form satisfactory to  us  of  a certified copy of
resolutions  of your Board of Directors authorizing your execution, delivery and
performance  of  this  agreement  and  the Loan Documents to be executed by your
company  and  a certified copy of the articles of incorporation of your company,
certified  by the Secretary of State of the jurisdiction of its incorporation as
of  a  date  no  less  than  three days prior to the date of the first borrowing
hereunder,  and  a  Certificate  of  Good  Standing  of  Borrower  issued by the
Secretary of State of the jurisdiction of organization as of a date no less than
three  days  prior  to  the  date  of  the  first  borrowing  hereunder;

          (vii)  our  receipt of any and all documents,  instruments  and  other
filings duly executed by Borrower and Guarantor which may, in the opinion of our
counsel,  be  desirable  or  necessary  to  fully perfect the security interests
granted  by  Borrower  to  secure  the  indebtedness  hereunder.

          Further, without limiting the generality of anything contained herein,
it  is  a condition precedent to our making any advances to you under the Credit
Line  that on the date of each advance which the Borrower requests, that (x) all
of  the  Borrower's  representations  and warranties made herein or in any other
Loan  Document,  and in any agreement or instrument between the Borrower and the
Existing Lender (an "Existing Lender Agreement"), be true and correct as of such
date,  (y) that the Borrower has complied with all of its covenants made herein,
in any other Loan Document and any Existing Lender Agreement and (z) there shall
not  have  occurred  any  default  hereunder, in any other Loan Document, in any
Existing  Lender  Agreement  or  under  any  Borrower  Agreement.

          3.     Borrowing  Requests.
                 -------------------

          In  the  event  that  the  Borrower  desires  to  request  a borrowing
hereunder, the Borrower will submit its request, in writing, at least 10 days in
advance  of  the  date on which the borrowing is requested, to us at the address
set forth above (or such other address as we designate in writing to Borrower at
its address above), to the attention of Michael Szycher. Such request will state
the  amount  of such request, the date that the advance is requested to be made,
the  account in a commercial bank located in the United States that the Borrower
requests  that  we  wire  transfer  the  funds  (together  with  complete wiring
instructions),  together with all items required pursuant hereto. By making such

                                        6
<PAGE>
request,  the Borrower is authorizing us to (a) deduct from any such advance any
and  all  amounts  owed by the Borrower to us, hereunder or otherwise and (b) to
make  an  appropriate  entry  on  the  Note  of  such  borrowing.

          NO  AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS LINE OF
CREDIT  LETTER NOR CONSENT TO ANY DEPARTURE BY US FROM THE TERMS HEREOF SHALL BE
EFFECTIVE,  IRRESPECTIVE  OF  ANY COURSE OF DEALING, UNLESS THE SAME SHALL BE IN
WRITING AND SIGNED BY US AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY
IN  THE  SPECIFIC  INSTANCE  AND  FOR  THE  SPECIFIC  PURPOSE  FOR  WHICH GIVEN.

          This  agreement  shall be governed by and construed in accordance with
the  laws  of the Commonwealth of Massachusetts.  Please note that to the extent
any of the terms or provisions of this Line of Credit Letter conflict with those
contained  in the Note or any of the Loan Documents, the terms and provisions of
the  Note  and  of  such  other  Loan  Documents  shall  govern.

          This  agreement  and  the  other Loan Documents to which Borrower is a
party  embody  the  entire  agreement  between  Borrower  and us relating to the
subject  matter  thereof and supersede all prior agreements, representations and
understandings,  if  any,  relating  to  the  subject  matter  thereof.

          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  us:

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

                                        7
<PAGE>
               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 Borrower:

               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

          WE  EACH  AGREE  THAT  ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR
ARISING  OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENTS RELATING TO
THISCREDIT LINE, MAY BE INITIATED AND PROSECUTED IN THE STATE OR FEDERAL COURTS,
AS  THE  CASE MAY BE, LOCATED IN OR CLOSEST IN GEOGRAPHIC PROXIMITY TO MIDDLESEX
COUNTY,  MASSACHUSETTS.

          EACH  OF  US  HEREBY  WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM  BROUGHT BY OR AGAINST IT ON ANY MATTERS WHATSOEVER, IN CONTRACT OR
IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE OR
ANY OTHER LOAN DOCUMENTS RELATING TO THISCREDIT LINE.  YOU ALSO HEREBY WAIVE THE
RIGHT  TO  INTERPOSE  ANY  DEFENSE  BASED UPON ANY CLAIM OF LACHES OR SET-OFF OR
COUNTERCLAIM  OF  ANY  NATURE  OR  DESCRIPTION, ANY OBJECTION BASED ON FORUM NON
CONVENIENS  OR  VENUE,  AND  ANY  CLAIM  FOR  CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES.

                                        8
<PAGE>
          If this agreement is acceptable to you, please sign and return to us a
copy  of  this  letter no later than October 15, 2001, at which time this Credit
Line Letter shall be null and void and of no force or effect if it is not signed
by  you  and  returned  to  us.

                              Very  truly  yours,

                              Cardiotech  International,  Inc.

                              By:  /s/  Michael  Szycher
                                 -----------------------
                                 Michael  Szycher
                                 President

Agreed  to  and  accepted:

Implant  Sciences  Corporation

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

                                        9
<PAGE>

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