EXHIBIT 10.5
 
SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the "Agreement") is made and entered into this 20th day
of March, 2014, by and between Bovie Medical Corporation, a Delaware
corporation, having an address of 5115 Ulmerton Road, Clearwater, Florida 33760
("Debtor") and The Bank of Tampa, a Florida banking corporation, having an
address of Post Office Box One, Tampa, Florida 33601 ("Secured Party").

W I T N E S S E T H:

WHEREAS, as provided in and pursuant to the terms of that certain Loan Agreement
(as the same may be amended, modified, restated or supplemented at any time or
from time to time, the “Loan Agreement”) dated on or about the date hereof
between Secured Party and Debtor, Debtor is indebted to Secured Party in the
principal amount of $3,592,000.00, as evidenced by Debtor’s Promissory Note (as
the same may be amended, modified, restated, renewed or increased at any time or
from time to time, the “Note”), in said sum payable to the order of Secured
Party and dated as of the same date as this Agreement, which Note is secured,
inter alia, by that certain Mortgage, Security Agreement, Financing Statement
and Assignment of Rents (as the same may be amended, modified, restated, or
supplemented at any time or from time to time, the “Mortgage”), dated as of the
same date as this Agreement, which Mortgage constitutes a lien and encumbrance
against the real property described therein, together with various other Loan
Documents (as such term is defined in the Mortgage); and,

WHEREAS, in order to secure the Obligations (as herein defined), Secured Party
is requiring that Debtor execute and deliver this Agreement granting a security
interest in and to the collateral described herein upon the terms and conditions
herein contained;

NOW, THEREFORE, for and in consideration of the foregoing recitals, the sum of
$10.00, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto covenant and agree as follows:

1. Recitals. The foregoing recitals are true and correct and are hereby
incorporated by reference for all purposes as if fully set forth herein.
 
2. Definitions. For the purposes of this Agreement, the following terms shall
have the following meanings:
 
"Collateral" shall mean all of the following personal property of Debtor,
wherever located, and now owned or hereafter acquired by the Debtor:
 
(a) Accounts, including without limitation health-care-insurance receivables;
 
(b) Chattel Paper, to the extent that the same constitute proceeds of the
Accounts;
 
(c) Documents, to the extent that the same constitute proceeds of the Accounts;
 
(d) Instruments, including without limitation Promissory Notes, to the extent
that the same constitute proceeds of the Accounts;
 
(e) Letter-of Credit Rights, to the extent that the same constitute proceeds of
the Accounts or to the extent that the same secure payment or performance of any
Account;
 
(f) Payment Intangibles, to the extent that the same constitute proceeds of the
Accounts;
 
(g) Supporting Obligations, to the extent that the same secure payment or
performance of any Account;
 
 
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(h) All books and records relating to the conduct of Debtor's business or
relating to any of the foregoing;
 
(i) To the extent not separately described above as original collateral, all
proceeds and products of any of the foregoing.
 
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

"Debtor State" shall have the meaning ascribed to said term in subparagraph 5(e)
hereof.

"Debtor's Chief Executive Office State" shall have the meaning ascribed to said
term in subparagraph 5(e) hereof.

"Event of Default" shall have the meaning ascribed to said term in paragraph 8
hereof.

“Excluded Swap Obligation” shall mean, with respect to any guarantor of a Swap
Obligation, and including the grant of a security interest to secure the
guaranty of such Swap Obligation, any Swap Obligation if, and to the extent
that, such Swap Obligation is or becomes illegal under the Commodity Exchange
Act or any rule, regulation or order of the Commodity Futures Trading Commission
(or the application or official interpretation of any thereof) by virtue of such
guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the guaranty or grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such Swap Obligation or security interest is or becomes illegal.

"Interest Rate Protection Agreement" shall mean any agreement between Debtor and
Secured Party or any affiliate of Secured Party now existing or hereafter
entered into, which provides for an interest rate, currency, equity, credit or
commodity swap, cap, floor or collar, spot or forward foreign exchange
transaction, cross currency rate swap, currency option, any combination of, or
option with respect to, any of the foregoing or any similar transactions, for
the purpose of hedging Debtor's exposure to fluctuations in interest rates,
exchange rates, currency, stock, portfolio or loan valuations or commodity
prices (including any such or similar agreement or transaction entered into by
Secured Party or any affiliate thereof in connection with any other agreement or
transaction between Debtor and Secured Party or any affiliate thereof ).

"Lien Reports" shall have the meaning ascribed to said term in subparagraph
4(b)hereof.

"Obligations" shall mean (i) all of Debtor's indebtedness, liabilities, or
obligations under the Loan Agreement, the Note, the Mortgage, this Agreement,
and any of the other Loan Documents; (ii) any indebtedness, liability or
obligation of Debtor to Secured Party under any later or future advances or
loans made by Secured Party to Debtor, any and all extensions or renewals
thereof in whole or in part, and any and all future additional indebtednesses,
liabilities or obligations of Debtor to Secured Party whatsoever and howsoever
arising and in any event, whether existing as of the date hereof or hereafter
arising, whether arising under a loan, lease, credit card arrangement, line of
credit, letter of credit, any Interest Rate Protection Agreement (but
specifically excluding any Excluded Swap Obligation, which Excluded Swap
Obligations shall not be nor deemed to be included within the definition of
Obligations or otherwise secured by this Agreement in any event), or other type
of financing and whether direct, indirect, absolute or contingent, as maker,
endorser, guarantor, surety or otherwise, and whether evidenced by, arising out
of, or relating to, a promissory note, bill of exchange, check, draft, bond,
letter of credit, guaranty agreement, bankers' acceptance, foreign exchange
contract, commitment fee, service charge or otherwise; (iii) the repayment of
(a) any amounts that Secured Party may advance or spend for the maintenance or
preservation of the Collateral and (b) any other expenditures the Secured Party
may make under the provisions of this Agreement or for the benefit of the
Debtor; (iv) all amounts owed under any modifications, renewals or extensions of
any of the foregoing obligations; (v) all other amounts now or in the future
owed by the Debtor to Secured Party; and (vi) any of the foregoing that arises
after the filing of a petition by or against Debtor under the Federal Bankruptcy
Code, even if the obligations cease to accrue as a result of the automatic stay
under § 362 of the Federal Bankruptcy Code or otherwise.
 
 
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"Permitted Liens" shall have the meaning ascribed to said term in subparagraph
5(d) hereof.

"Person" shall mean any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other form of entity.

“Swap Obligation” shall mean any obligation under or in connection with an
Interest Rate Protection Agreement that constitutes a “swap” within the meaning
of section 1a(47) of the Commodity Exchange Act, as amended from time to time.
 
"UCC" shall mean the Uniform Commercial Code as in effect in the state
designated in paragraph 19hereof, as the state whose laws shall govern this
Agreement, or in any other state whose laws are held to govern this Agreement or
any portion hereof.
 
Any term not defined in this Agreement, but which is defined under the UCC,
shall have the meaning given to said term in the UCC.
 
3. Grant of Security Interest. The Debtor does hereby grant to the Secured Party
a continuing security interest and lien of first priority in the Collateral for
the purposes of securing the payment and performance in full of all Obligations.
 
4. Perfection of Security Interests.
 
(a) Debtor hereby authorizes Secured Party to file in each and every
jurisdiction as Secured Party shall determine one or more financing statements
(or a photocopy of this Agreement in substitution for a financing statement),
continuation statements or amendments thereto as Secured Party shall at any time
or from time to time determine, describing the Collateral as all assets of
Debtor or words of similar effect, and otherwise containing such information as
is required or is permissible to be contained in a financing statement filed
pursuant to Article 9 of the UCC.
 
(b) Secured Party shall receive, at Debtor's sole cost and expense, and prior to
advancing any funds on the Obligations, an official report of each Filing Office
of the Debtor State (collectively, the "Lien Reports"), indicating that Secured
Party's interest is prior to all other security interests or other interests
reflected in the Lien Reports, other than the Permitted Liens.
 
(c) Debtor shall have possession of the Collateral, except to the extent
otherwise expressly provided in this Agreement or where Secured Party elects, in
its sole and absolute discretion, to perfect its security interest by possession
in addition to or instead of filing of a financing statement. To the extent that
any Collateral is in the possession of a third party, Debtor agrees that it
shall join with Secured Party, and take such other steps as Secured Party shall
require, in notifying, but also hereby authorizes Secured Party to directly
notify without Debtor's joinder, the third party of Secured Party's security
interest and obtaining an acknowledgment in such form as Secured Party shall
require from the third party that it is holding the Collateral or such portion
as is held by the third party for the benefit of the Secured Party and subject
to the security interest granted herein and the operation of this Agreement.
 
 
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(d) Debtor agrees that it shall join with Secured Party, and take such other
steps as Secured Party shall require, in obtaining "control" of any
Letter-of-Credit Rights or Electronic Chattel Paper, with any agreements
establishing control to be in form and substance satisfactory to Secured Party.
 
(e) Debtor will not create any Chattel Paper without placing a legend on the
Chattel Paper in such form as is acceptable to Secured Party indicating that
Secured Party has a security interest in the Chattel Paper.
 
5. Debtor's Representations and Warranties. The Debtor represents and warrants
to Secured Party, the following:
 
(a) The Debtor has full right, power and authority to execute and deliver this
Agreement and to grant the security interest in the Collateral as provided
herein.
 
(b) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action appropriate to Debtor's type of entity.
 
(c) This Agreement has been duly executed and delivered by the Debtor and
constitutes the legal, valid and binding obligation of the Debtor enforceable
against the Debtor in accordance with its terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium, or other similar laws from
time to time in effect affecting creditor's rights generally and by principles
governing the availability of equitable remedies, and the grant of the security
interest in the Collateral existing on the date hereof constitutes, and, as to
subsequently acquired Collateral, will constitute, a valid and perfected first
and prior security interest, superior to the rights of any other Person, in and
to the Collateral, except as otherwise expressly provided herein.
 
(d) Debtor owns, and will own, or has rights in or the power to transfer, the
Collateral free from any setoff, claim, restriction, lien, security interest or
encumbrance, except liens for taxes not yet due, the security interest granted
pursuant to the terms hereof, and any liens set forth on Schedule 5(d)attached
hereto (the "Permitted Liens").
 
(e) Debtor's (i) chief executive office is located in the state identified in
Schedule 5(e) ("Debtor's Chief Executive Office State"), (ii) state of
incorporation is the state identified in Schedule 5(e) ("Debtor State"), and
(iii) exact legal name is as set forth in the preamble to this Agreement.
 
(f) None of the Collateral constitutes, or is proceeds of, "farm products" as
defined in the UCC.
 
(g) Except as disclosed on Schedule 5(g) attached hereto, none of the account
debtors in respect of any Accounts, Chattel Paper or Payment Intangibles and
none of the obligors in respect of any Instruments included in the Collateral is
or shall be a governmental entity subject to the Federal Assignment of Claims
Act.
 
(h) To the best of Debtor's knowledge, none of the account debtors under the
Accounts, Chattel Paper or Payment Intangibles and none of the obligors under
the Instruments have any right of setoff, counterclaim, or adjustment, or
defense in connection with or relating to any such Account, Chattel Paper,
Payment Intangible, or Instrument, and the enforcement thereof.
 
(i) Each Account represents an amount owed to the Debtor as a result of a right
to payment of a monetary obligation, whether or not earned by performance, for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of; for services rendered or to be rendered; for a policy of
insurance issued or to be issued; for a secondary obligation incurred or to be
incurred; for energy provided or to be provided; for the use or hire of a vessel
under a charter or other contract; arising out of the use of a credit or charge
card or information contained on or for use with the card; or 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.
 
 
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(j) Except as otherwise disclosed by Debtor to Secured Party in writing, Debtor
has no knowledge of any fact, claim, or dispute, by any account debtor, or any
third party, which may impair the validity of any Account, Chattel Paper, or
Payment Intangible or by any obligor, or any third party, which may impair the
validity of any Instrument or Supporting Obligation or make any part of any
Account, Chattel Paper, Payment Intangible, Instrument or Supporting Obligation,
uncollectible in accordance with its terms and face amount, to include, but not
limited to, any dispute or claim as to price, terms, quality, quantity or delay
in shipment. Should Debtor become aware of any fact, claim or dispute which may
impair the validity of an Account, any Chattel Paper, any Payment Intangible,
any Instrument, or any Supporting Obligation, or make any part of it
uncollectible, Debtor will notify Secured Party immediately of this knowledge.
 
6. Debtor's Covenants. Debtor covenants and agrees with Secured Party as
follows:
 
(a) Debtor will preserve its existence as the type of Person set forth in the
preamble to this Agreement and not, in one or more transactions or in a series
of related transactions, merge into or consolidate with any other Person, or
sell all or substantially all of its assets.
 
(b) Debtor will not change the state where it is located.
 
(c) Debtor will not change its name without providing Secured Party with thirty
(30) days' prior written notice.
 
(d) Except for liens for taxes not yet due, the security interest granted
pursuant to the terms hereof, and the Permitted Liens, Debtor shall keep the
Collateral free from, and shall not otherwise pledge, mortgage, encumber or
create, or suffer to exist, a security interest in the Collateral in favor of
any Person other than Secured Party. Debtor shall defend title to the Collateral
against all claims and demands of all persons at any time claiming the same or
any interests therein adverse to Secured Party, except for the Permitted Liens.
 
(e) The Collateral shall remain personal property at all times.
 
(f) Debtor shall keep and maintain, at Debtor's sole cost and expense, complete
books and records with respect to all of the Collateral. All of Debtor's books,
accounts, correspondence, papers, and records pertaining to the Collateral are
and shall be prepared and maintained in an accurate and timely fashion, and are
and shall remain located at Debtor's Chief Executive Office.
 
(g) At the request of Secured Party, at any time and from time to time, at
Debtor's sole expense, Debtor shall execute and deliver or cause to be executed
and delivered to Secured Party, such agreements, documents and instruments,
including releases, terminations, waivers, consents and subordination agreements
from mortgagees or other holders of security interests or liens, landlords,
bailees, securities intermediaries, parties controlling any portion of the
Collateral, or other third parties, and do or cause to be done such further acts
as Secured Party, in its reasonable discretion, deems necessary to create,
preserve, perfect or validate the security interest of Secured Party or the
priority thereof in the Collateral and otherwise to effectuate the provisions
and purposes of this Agreement.
 
(h) The Secured Party may examine and inspect the books and records relating to
or constituting a portion of the Collateral at any reasonable time, wherever
located.
 
(i) The Debtor will pay promptly when due all taxes and assessments upon the
Collateral or upon this Agreement or other writing evidencing the Obligations,
or any of them.
 
 
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(j) Debtor will notify Secured Party of any insolvency with respect to any
account debtor under any of the Accounts, Chattel Paper or Payment Intangibles
or any obligor on any Instrument as promptly as practical after the Debtor
becomes aware of such insolvency. For purposes hereof, insolvency shall be
deemed to have occurred when: (i) a general meeting of unsecured creditors shall
be called by, or on behalf of, the account debtor or obligor; (ii) a voluntary
or involuntary proceeding shall have been instituted in the United States
Bankruptcy Court under any Chapter of the Federal Bankruptcy Code against the
account debtor or obligor; (iii) a receiver is appointed for the whole or any
part of the property of an account debtor or obligor; (iv) an account debtor or
obligor, or a third party on behalf of the account debtor or obligor, shall have
made a general offer of compromise, in writing, to such Person's creditors for
less than such Person's indebtedness; (v) possession shall have been taken of an
account debtor's or obligors assets under an assignment, deed of trust, or
chattel mortgage for the benefit of such Person's creditors; (vi) a creditors'
committee shall have been formed for the sole purpose of liquidation of an
account debtor or obligor or such Person's assets; (vii) a sale in bulk is made
of an account debtor's or obligor's property; (viii) an account debtor's or
obligor's assets shall have been sold under a writ of execution or attachment,
or a writ of execution shall have been returned unsatisfied against such Person;
(ix) an account debtor or obligor shall have absconded; (x) an account debtor's
or obligor's assets shall have been sold under a distraint or levy by any taxing
authority, or by a landlord; or (xi) any act of bankruptcy or insolvency under
the laws of any other jurisdiction shall be taken by or against any account
debtor or obligor.
 
(k) Debtor will at any time and from time to time upon the Secured Party's
request deliver to the Secured Party any original Instruments, Chattel Paper,
Payment Intangible, or Documents in the Debtor's possession relating to any of
the Accounts, Chattel Paper, Instruments, Payment Intangibles, or other
Collateral held or owned by the Debtor.
 
(l) Secured Party shall have the right at any time or from time to time to
enforce Debtor's rights against the account debtors and obligors.
 
(m) Secured Party shall have the right at any time or from time to time, prior
to and after the occurrence of an Event of Default, to require that Debtor enter
into a "lockbox" or "blocked account" arrangement whereby Debtor shall notify
any or all of the account debtors on the Accounts, Chattel Paper or Payment
Intangibles of Debtor, or obligors on any instruments of which Debtor is
obligee, all as Secured Party shall determine, to make payments directly to a
post office box or address maintained by a collection agent designated by
Secured Party, which collection agent may be Secured Party, all at Debtor's sole
cost and expense, all pursuant to a "blocked account agreement" in form and
substance as required by Secured Party, in its sole and absolute discretion.
 
(n) Debtor will not sell, lease, exchange, assign, transfer, license, convey or
otherwise dispose of, or grant any other security interest or lien in, any of
the Collateral.
 
(o) Debtor has the entire risk of loss of the Collateral.
 
(p) Secured Party shall have no duty to collect any income accruing on the
Collateral or to preserve any rights relating to the Collateral.
 
7. Collateral Protection Expenses; Preservation of Collateral.
 
(a) In its discretion, Secured Party may discharge taxes and other encumbrances
at any time levied or placed on any of the Collateral (to the extent the
validity or the amount thereof is not being contested in good faith by
appropriate proceedings which stay the issuance of any attachment or levy with
respect to the Collateral, provided that Debtor has made adequate reserves
therefor), and pay any necessary filing fees. Debtor agrees to reimburse Secured
Party on demand for any and all expenditures so made. Secured Party shall have
no obligation to Debtor to make any such expenditures, nor shall the making
thereof relieve Debtor of any Event of Default.
 
 
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(b) Anything herein to the contrary notwithstanding, Debtor shall remain liable
under each contract or agreement comprised in the Collateral to be observed or
performed by Debtor thereunder. Secured Party shall not have any obligation or
liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by Secured Party of any payment relating to any of
the Collateral, nor shall Secured Party be obligated in any manner to perform
any of the obligations of Debtor under or pursuant to any such contract or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by Secured Party in respect of the Collateral or as to the sufficiency
of any performance by any party under any such contract or agreement, to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to the Secured Party or
to which the Secured Party may be entitled at any time or times.
 
8. Events Of Default. The occurrence of any events or conditions described
hereinbelow shall constitute an "Event of Default" hereunder, provided that any
requirement for the giving of notice or the lapse of time, or both, has been
satisfied; time is of the essence herein:
 
(a) Debtor shall fail to make any payment of principal and/or interest due on
the Note when due (after the running of any applicable grace period).
 
(b) Debtor shall fail to make any payments of principal and/or interest on any
of the Obligations when due (after the running of any applicable grace period).
 
(c) Debtor shall make any representation or warranty in this Agreement, the Loan
Agreement, the Mortgage or in any of the other Loan Documents or in any
certificate or statement furnished at any time hereunder or in connection with
any of the Loan Documents which proves to have been untrue or misleading in any
material respect when made or furnished.
 
(d) Debtor shall default in the observance or performance of any covenant or
agreement contained in this Agreement, the Loan Agreement, the Mortgage, or in
any of the other Loan Documents and the same shall not be cured within any
applicable curative period.
 
(e) Debtor shall default in connection with any agreement for borrowed money or
other credit with any creditor other than Secured Party which entitles said
creditor to accelerate the maturity thereof.
 
(f) Debtor shall file a voluntary petition in bankruptcy or a voluntary petition
or answer seeking liquidation, reorganization, arrangement, readjustment of its
debts, or for any other relief under the Federal Bankruptcy Code, or under any
other act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign, now or hereafter existing; Debtor shall enter into any
agreement indicating such Person's consent to, approval of, or acquiescence in,
any such petition or proceeding; Debtor shall apply for or permit the
appointment by consent or acquiescence of a receiver, custodian or trustee of
Debtor or a substantial part of Debtor's property; Debtor shall make an
assignment for the benefit of creditors; or Debtor shall be unable or shall fail
to pay its debts generally as such debts become due; or Debtor shall admit, in
writing, its inability or failure to pay its debts generally as such debts
become due.
 
(g) There shall have been filed against Debtor an involuntary petition in
bankruptcy or seeking liquidation, reorganization, arrangement, readjustment of
its debts, or for any other relief under the Federal Bankruptcy Code, or under
any other act or law pertaining to insolvency or debtor relief, whether state,
Federal or foreign, now or hereafter existing; Debtor shall suffer or permit the
involuntary appointment of a receiver, custodian or trustee of Debtorfor all or
a substantial part of Debtor’s property; Debtor shall suffer or permit the
issuance of a warrant of attachment, execution or similar process against all or
any substantial part of the property of Debtor; and in the case of an
involuntary proceeding only, such involuntary proceeding is not dismissed within
ninety (90) days from the date of the filing thereof.
 
(h) Debtor shall have concealed, removed, or permitted to be concealed or
removed, any of Debtor's assets, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any of Debtor's
assets which may be fraudulent under any bankruptcy, fraudulent conveyance or
similar law, or shall have suffered or permitted, while insolvent, any creditor
to obtain a lien upon any of Debtor's assets through legal proceedings or
otherwise.
 
 
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(i) The entry of a judgment against Debtor which Secured Party deems to be of a
material nature, in Secured Party’s sole discretion, which is not released or
satisfied within thirty (30) days of the entry thereof.
 
(j) Debtor shall transfer or otherwise dispose of any of the Collateral, except
to the extent expressly permitted herein.
 
(k) Any attachment, execution or levy shall occur on or with respect to any of
the Collateral.
 
(l) Debtor shall fail to comply with, or become subject to any administrative or
judicial proceeding under any federal, state or local (i) law, ordinance, rule
or regulation relating to the environment or the generation, use, transport or
storage of hazardous waste, (ii) asset forfeiture or similar law which can
result in the forfeiture of property, or (iii) other law, noncompliance with
which shall have any significant effect on all or any portion of the Collateral.
 
(m) Secured Party shall receive at any time following the date hereof a Lien
Report indicating that Secured Party's security interest is not prior to all
other security interests or other interests reflected in said Lien Report, other
than the Permitted Liens.
 
9. Remedies. Upon the occurrence of any Event of Default, or at any time
thereafter, without prejudice to the rights of Secured Party to enforce its
claims against Debtor for damages for failure by Debtor to fulfill any of its
obligations hereunder, subject only to prior receipt by Secured Party of payment
in full of all Obligations then outstanding and in form acceptable to Secured
Party, Secured Party in addition to all rights and remedies which it may have
under the Loan Agreement, the Note, the Mortgage, the other Loan Documents, at
law or in equity, shall have the following rights and remedies:
 
(a) Secured Party, at its option, may declare all of the Obligations (including
but not limited to the indebtedness evidenced by the Note) to be immediately due
and payable, whereupon the same shall become immediately due and payable without
presentment, demand, protest, notice of non-payment or any other notice required
by law relative thereto, all of which are hereby expressly waived by Debtor,
anything contained herein to the contrary notwithstanding. Thereafter, Secured
Party, at its option, may but shall not be obligated to, accept less than the
entire amount of Obligations due, if tendered, provided, however, that unless
then agreed to in writing by Secured Party, no such acceptance shall or shall be
deemed to constitute a waiver of any Event of Default or a reinstatement of any
commitments of Secured Party hereunder.
 
(b) Secured Party may, without demand or notice, appropriate any deposit
account, money or other assets of Debtor in the possession of, or under control
by, Secured Party and set off against and apply the same to the Obligations.
 
(c) Secured Party shall have the rights and remedies of a secured party under
the UCC in effect on the date thereof (regardless of whether the same has been
enacted in the jurisdiction where the rights or remedies are asserted),
including without limitation, the right to take possession of any personal
property or the proceeds thereof, to sell or otherwise dispose the same, to
apply the proceeds therefrom to any of the Obligations in such order as Secured
Party, in its sole discretion, may elect and otherwise in accordance with the
terms hereof. Secured Party shall give Debtor written notice of the time and
place of any public sale of the Collateral or the time there after which any
other intended disposition thereof is to be made. The requirement of sending
reasonable notice shall be met if such notice is given to Debtor pursuant to the
terms hereof at least ten (10) days before such disposition. Expenses of
retaking, holding, insuring, preserving, protecting, preparing for sale or
selling or the like with respect to the Collateral shall include, in any event,
reasonable attorneys' fees and other legally recoverable collection expenses,
all of which shall constitute Obligations.
 
 
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(d) Secured Party may take the Collateral or any portion thereof into its
possession, by such means (without breach of the peace) and through agents or
otherwise as it may elect (and, in connection therewith, demand that Debtor
assemble the Collateral at a place or places and in such manner as Secured Party
shall prescribe), and, without taking possession, sell, lease or otherwise
dispose of the Collateral or any portion thereof in its then condition or
following any commercially reasonable preparation or processing, provided,
however, that Secured Party shall have no obligation to prepare or otherwise
clean-up the Collateral for disposition, which disposition may be by public or
private proceedings, by one or more contracts, as a unit or in parcels, at any
time and place and on any terms, in accordance with the terms of the UCC.
 
(e) Secured Party shall be entitled to require Debtor to notify, any and all
account debtors on the Accounts, Chattel Paper and/or Payment Intangibles of
Debtor and obligors on any Instruments for which Debtor is an obligee of the
security interest of Secured Party in any of the Accounts, any Chattel Paper,
any Payment Intangible and/or any Instrument and that payment thereof is to be
made directly to Secured Party or any agent or nominee of Secured Party, and
Secured Party may itself, without notice or demand upon Debtor, so notify
account debtors and obligors as herein contemplated. After the making of any
request upon Debtor to so notify account debtors and obligors as herein
provided, Debtor shall hold any proceeds of collection of any Accounts, Chattel
Paper, Payment Intangibles and Instruments received by Debtor as trustee for
Secured Party without commingling the same with other funds of Debtor and shall
turn the same over to Secured Party in the identical form received, together
with any necessary endorsements or assignments. Secured Party shall apply
proceeds of collection of any Accounts, Chattel Paper, Payment Intangibles and
Instruments received by Secured Party to the Obligations, such payments to be
entered after final payment in cash or solvent credits of the items giving rise
to them.
 
(f) Unless and except to the extent expressly provided for to the contrary
herein, the rights of Secured Party specified herein shall be in addition to,
and not in limitation of, Secured Party's rights at law or in equity, under the
UCC, or under any other provision of any of the Mortgage or the other Loan
Documents or under the provisions of any other document, instrument or other
writing executed by Debtor or any third party in favor of Secured Party, all of
which may be exercised successively or concurrently.
 
10. Further Assurances. Debtor, at its own expense, shall do, make, execute and
deliver all such additional and further acts, things, deeds, assurances and
instruments as Secured Party may require more completely to vest in and assure
to Secured Party its rights hereunder or in any of the Collateral, including,
without limitation, (i) executing, delivering and, where appropriate, filing
financing statements and continuation statements under the UCC, (ii) using its
best efforts to obtain governmental and other third party consents and
approvals, (iii) using its best efforts to obtain waivers from mortgagees and
landlords, (iv) obtaining acknowledgments of Secured Party's security interest
with respect to any Collateral which is in the possession or control of third
parties, or (v) obtaining control with respect to any portion of the Collateral
which is Letter-of-Credit Rights or Electronic Chattel Paper.
 
11. No Waiver, etc. Debtor waives demand, notice, protest, notice of acceptance
of this Agreement, notice of leases entered into, loans made, credit extended,
Collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect to both the
Obligations and the Collateral, Debtor assents to any extension or postponement
of the time of payment or any other indulgence, to any substitution, exchange or
release of or failure to perfect any security interest in any Collateral, to the
addition or release of any party or Person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Secured Party may deem advisable. Secured Party shall have no duty as to the
collection or protection of the Collateral or any income thereon, nor as to the
preservation of rights against other Persons, nor as to the preservation of any
rights pertaining thereto beyond the safe custody thereof as set forth in
subparagraph 7(b)hereof. Secured Party shall not be deemed to have waived any of
its rights upon or under the Obligations or the Collateral unless such waiver
shall be in writing and signed by Secured Party. No delay or omission on the
part of Secured Party in exercising any right shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall not be construed as
a bar to or waiver of any right on any future occasion. All rights and remedies
of the Secured Party with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as Secured Party deems expedient.
 
 
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12. No Marshaling. Secured Party shall not be required to marshal any present or
future collateral security (including but not limited to this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of the rights of Secured Party hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that it lawfully may, Debtor hereby agrees that it will not invoke
any law relating to the marshalling of collateral which might cause delay in or
impede the enforcement of the Secured Party's rights under this Agreement or
under any other instrument creating or evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, Secured Party hereby irrevocably waives the
benefits of all such laws.
 
13. No Obligation to Pursue Others. Secured Party shall have no obligation to
attempt to satisfy the Obligations by collecting them from any other Person
liable thereon and Secured Party may release, modify or waive any collateral
provided by any other Person to secure any of the Obligations, all without
affecting Secured Party's rights against Debtor. Debtor hereby waives any right
it may have to require Secured Party to pursue any third person, including
without limitation any Guarantor, for any of the Obligations.
 
14. Compliance with Other Laws. Secured Party shall be entitled to comply with
any applicable state or federal law or requirements in connection with any
disposition of the Collateral and compliance therewith will not be considered
adversely to affect the commercial reasonableness of any sale of all or any
portion of the Collateral.
 
15. Warranties. Secured Party may sell or otherwise dispose of all or any
portion of the Collateral without warranty and Secured Party may specifically
disclaim any and all warranties of title or like warranties. Any such sale made
without warranty, including without limitation any warranty or title or like
warranty, shall not be considered adversely to affect the commercial
reasonableness of any sale of all or any portion of the Collateral.
 
16. Sales on Credit. In the event that Secured Party sells or otherwise disposes
of all or any portion of the Collateral upon credit, Debtor will be credited
only to the extent of payments actually made by the purchaser or other acquirer
of such Collateral, received by Secured Party and applied to the Obligations. In
the event that such purchaser or other acquirer fails to pay for the Collateral
sold upon credit in full, the Secured Party may resell or otherwise dispose of
the Collateral and Debtor shall be credited with the proceeds of such sale to
the extent hereinabove provided.
 
17. Purchases by Secured Party. In the event that Secured Party purchases any
portion of the Collateral at any sale or other disposition made pursuant to the
terms hereof, Secured Party shall be entitled to credit some or all of the
Obligations to said purchase, as it shall deem appropriate.
 
18. Proceeds of Dispositions; Expenses. Debtor shall pay to Secured Party on
demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by Secured Party in protecting, preserving or
enforcing Secured Party's rights under or in respect of any of the Obligations
or any of the Collateral. After deducting all of said expenses, the residue of
any proceeds of collection or sale of the Obligations or Collateral shall, to
the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as Secured Party shall determine, proper
allowance and provision being made for any Obligations not then due. Upon the
final payment and satisfaction in full in cash of all of the Obligations and
after making any payments required by the UCC, any excess shall be returned to
Debtor, and Debtor shall remain liable for any deficiency in the payment of the
Obligations.
 
 
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19. Governing Law; Consent to Jurisdiction. This Agreement shall be governed,
interpreted and construed by, through and under the laws of the State of
Florida, except, however, its laws or principles regarding conflicts of laws or
choice of laws, and except to the extent that the UCC provides for the
application of the law of the Debtor States. Each party hereto irrevocably
submits to the jurisdiction of any state or federal court sitting in Pinellas
County, Florida, for any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, and each party irrevocably
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such state or federal court.
 
20. Notices. Any notice or demand under or pursuant to this Agreement shall be
made to the parties at the addresses set forth below and shall be deemed
delivered when a record has been (a) deposited in any United States postal
receptacle, postage prepaid, properly addressed to the intended recipient, (b)
shipped by private express carrier of national reputation, shipment charges
prepaid, and properly addressed to the intended recipient, (c) received by
telecopy, (d) received via electronic transmission via the Internet, or (e)
personally delivered. Notwithstanding the foregoing, all requests under Florida
Statutes §679.210 (i) shall be made in a writing signed by An officer of Debtor,
(ii) shall be personally delivered, sent by registered or certified U.S. mail,
return receipt requested, or by private express carrier of national reputation,
(iii) shall be deemed to be sent when received by the Secured Partyand (iv)
shall otherwise comply with the requirements of Florida Statutes § 679.210.
Notices shall be sent to the following addresses:
 

If to Secured Party: The Bank of Tampa
Post Office Box One
Tampa, Florida 33601
 
Attention: David E. Brown, Senior Vice President

Phone: (813) 998-2702
Telecopy: (813) 998-2668
Internet e-mail: dbrown@bankoftampa.com
    With a copy to:  Shumaker, Loop & Kendrick, LLP
101 East Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
 
Attention: W. Kent Ihrig, Esq.

Phone: (813) 229-7600
Telecopy: (813) 229-1660
Internet e-mail: kihrig@slk-law.com
    If to Debtor: Bovie Medical Corporation
5115 Ulmerton Road
Clearwater, Florida 33760
 
Attention: Robert L. Gershon, Chief Executive Officer

Phone: (___) ___-____
Telecopy: (___) ___-____
Internet e-mail: __________________

 
21. Rights and Remedies Cumulative. The rights, powers and remedies of the
Secured Party herein provided are cumulative and not exclusive of any rights,
powers or remedies which the Secured Party would otherwise have.
 
 
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22. Indemnity. The Debtor shall indemnify the Secured Party and save harmless
the Secured Party from and against any liability, cost (including reasonable
attorneys' fees) or damage which it may incur as a result of Debtor's acts or
omissions in connection with this Agreement and the security interest granted
hereby, including, without limitation, any such liability, cost or damage it may
incur in connection with the exercise, performance or preservation of any of its
rights, powers and remedies set forth herein or otherwise available under law
(except for any liability, cost or damage arising from the Secured Party's gross
negligence or willful misconduct) as a result of Debtor's acts or omissions.
 
23. Binding Effect. This Agreement shall be binding upon the Debtor and its
successors and assigns and shall inure to the benefit of the Secured Party and
its successors and assigns, provided, however, the Debtor may not, without the
prior written consent of the Secured Party, assign any of its rights or
obligations hereunder to any Person. All agreements, representations and
warranties made herein by the Debtor shall survive the execution and delivery of
this Agreement.
 
24. Continuing Nature. This Agreement is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.
 
25. Paragraph Headings. The paragraph headings used herein are for convenience
of reference only and are not to be used in the construction or interpretation
hereof.
 
26. Singular/Plural; Gender. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and vice versa and words of any
gender shall include each other gender where appropriate.
 
27. Integration. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof, and all prior
negotiations, understandings and agreements are superseded by this Agreement.
 
28. Severability. If and to the extent that any provision of this Agreement is
held to unenforceable or invalid, the remaining terms and provisions of this
Agreement shall be enforced without reference to said unenforceable or invalid
provision, it being the intent of the parties that the provisions hereof are and
shall be severable.
 
29. Modifications. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing, signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
 
30. Time of Essence. Time is of the essence of this Agreement and of each
provision hereof.
 
31. Counterparts. This Agreement may be executed in one or more counterparts,
each of which when executed and delivered shall be deemed an original, but all
of which taken together shall constitute one and the same instrument. Any party
may execute this Agreement by executing any of such counterparts.
 
32. Exhibits; Schedules. All exhibits or schedules attached to this Agreement
are an integral part hereof and are hereby incorporated herein by this
reference.
 
[Remainder of Page Intentionally Blank]
 
 
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IN WITNESS WHEREOF, the parties, intending to be legally bound hereby, have
executed and delivered this Agreement as of the day and year first above
written.
 
 

    "Debtor" Witnesses:        
BOVIE MEDICAL CORPORATION,
    a Delaware corporation ______________________________    
______________________________     (Printed Name of Witness)   By:
______________________________________       Robert L. Gershon, Chief Executive
Officer       ______________________________     ______________________________
    (Printed Name of Witness)    

 
[Remainder of Page Intentionally Blank]
 
 
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    "Secured Party" Witnesses:        
THE BANK OF TAMPA,
    a Florida banking corporation ______________________________    
______________________________     (Printed Name of Witness)   By:
______________________________________      
David E. Brown, Senior Vice President
      ______________________________     ______________________________    
(Printed Name of Witness)    

 
 
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Schedule 5(d) --Permitted Liens
 
 
 
 
 
 
 

 
 
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Schedule 5(e)—Debtor Chief Executive Office and Debtor State

Debtor's Chief Executive Office:
 

 
5115 Ulmerton Road
Clearwater, Florida 33760
    Debtor State: Delaware

 
 
 
 
 
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Schedule 5(g)—Account Debtors or Obligors
Subject to Federal Assignment of Claims Act

 
 
 
 
 
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