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                                                                   Exhibit 10.27

            AMSOUTH SECURITY AGREEMENT FOR TANGIBLE PERSONAL PROPERTY

     THIS SECURITY AGREEMENT thereinafter, with all amendments hereto being
referred to as this "Agreement") dated May 31, 2000 is executed by SURGICAL
LASER TECHNOLOGIES, INC. (the "Borrower") whether one or more, in favor of
AMSOUTH BANK NA, a national banking association (the "Lender").

RECITAL
     The Borrower and the Lender have agreed that the Borrower shall grant a
security interest and other rights in and to the Collateral (as hereinafter
defined) to the Lender in order to secure the Obligations described herein.

AGREEMENT
     For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Borrower and the Lender hereby agree as follows.

Article 1. Defined Terms.

     Section 1.01 General Provisions About Definitions. The terms defined in
this Article include the plural as well as the singular, and vice versa. All
accounting terms not otherwise defined herein have the meanings assigned to
them, and all computations herein provided for shall be made in accordance with
generally accepted accounting principles. All references in this instrument to
designated "Articles," "Sections" and other subdivisions are to the designated
Articles, Sections, and subdivisions of this instrument as originally executed.
The terms "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section,
or other subdivision.

     Section 1.02 Defined Terms. For the purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
used in this Agreement that are defined in this Section have the meanings
assigned to them in this Section.

(a)  "Business Day" means any day other than a Saturday or Sunday or a public or
     bank holiday or the equivalent for banks generally under the laws of the
     State of Alabama and the United States.

(b)  "Governmental Authority" means any court or any federal, state, municipal,
     or other governmental department, commission, board, bureau, agency, or
     instrumentality, domestic or foreign.

(c)  "Lien" means and includes any mortgage, deed of trust, security deed,
     pledge, lien, security interest, hypothecation, claim, assignment, deposit
     arrangement, easement, restriction, charge or encumbrance, and any other
     security device or preferential arrangement of any nature whatsoever.

(d)  "Loan Documents" means this Agreement and any note, other security
     agreement, guaranty agreement or other document or instrument now or
     hereafter evidencing, securing, guaranteeing, or executed in connection
     with any of the Obligations.

(e)  "Obligations" has the meaning assigned to that term in Section 2.01.

(f)  "Obligor" means and includes the Borrower and any other maker, endorser,
     surety, guarantor, or other person liable for the payment or performance of
     the Obligations, or any part thereof.

(g)  "Permitted Encumbrances" means the matters, if any, set forth on Exhibit A
     attached hereto and made a part hereof. (If there is no Exhibit A, there
     are no Permitted Encumbrances).

(h)  "Person" shall mean any natural person, corporation, partnership, joint
     venture, or other entity.

(i)  "Collateral" has the meaning assigned to that term in Section 2.02.

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Article 2. Security Agreement.

     Section 2.01 Obligations Secured. This Agreement is given to secure and
     shall secure the prompt payment of the following (collectively called the
     "Obligations"):

(a)  The principal of and interest on all indebtedness, obligations (including
     obligations of performance) and liabilities of the Borrower to the Lender
     of every kind and description whatsoever, direct or indirect, absolute or
     contingent, due or to become due, now existing or hereafter incurred,
     contracted, or arising, or acquired by the Lender from any source, joint or
     several, liquidated or unliquidated, regardless of how they arise or by
     what agreement or instrument they may be evidenced or whether they are
     evidenced by agreement or instrument, and whether incurred as maker,
     endorser, surety, guarantor or otherwise, and any and all extensions or
     renewals of any of the same, including without limitation any reimbursement
     obligations incurred in connection with the issuance of a letter of credit;
     and

(b)  The compliance with and performance of each and every obligation, covenant,
     duty, condition, and agreement on the part of the Borrower under this
     Agreement and any of the other Loan Documents.

Section 2.02 Granting Clause and Collateral. As security for the Obligations,
the Borrower does hereby transfer, sell, assign, and convey to the Lender, and
grant to the Lender a security interest in, all of its right, title, and
interest in, to and under the following Collateral of the Borrower, whether now
owned or hereafter acquired by the Borrower, and wherever located (collectively,
the "Collateral"):

(a)  SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF AS IF SET OUT FULLY
     AT THIS POINT.

(b) Any and all accessions and additions now or hereafter made or added to any
of the Collateral described in subparagraph (a) above, any repair parts,
substitutions, and replacements therefor, and all attachments and improvements
now or hereafter placed upon or used in connection therewith, or any part
thereof; and

(c)  All proceeds and products of any of the foregoing.

No submission by the Borrower to the Lender on a schedule or other particular
identification of Collateral shall be necessary to vest in the Lender security
title to and a security interest in each and every item of Collateral now
existing or hereafter created and acquired, but rather such title and security
interest shall vest in the Lender immediately upon the creation or acquisition
of any item of Collateral hereafter created or acquired, without the necessity
for any other or further action by the Borrower or by the Lender.

Section 2.03 General Representations and Warranties. The Borrower represents and
warrants as follows:

(a)  The Borrower is the lawful and absolute owner of the Collateral and has a
     good right to transfer, sell, assign, convey and grant a security interest
     in the same under this Agreement; the Collateral is free and clear of all
     Liens other than Permitted Encumbrances, except for such vestigial Liens
     which Borrower shall promptly cause to be lifted, and the Borrower does
     hereby warrant and will forever defend the title to the Collateral unto the
     Lender, its successors and assigns, against the claims of all persons
     whomsoever, whether lawful or unlawful.

(b)  No financing statement covering any of the Collateral is on file at any
     public office except as identified in paragraph (a) above.

(c)  The Borrower's principal place of business and chief executive office are
     located at the following address(es): 147 Keystone Drive, Montgomeryville,
     PA 18936.

(d)  If the Collateral is or is to become a fixture, the legal description of
     the real estate on which the Collateral is or will become affixed and the
     name of the record owner of that real estate is as follows: Legal
     Description: N/A; Name or record owner: N/A.

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Section 2.04 General Covenants and Agreements. The Borrower covenants and agrees
with the Lender as follows:

(a)  The Collateral shall be kept (or in the case of a motor vehicle,
     principally garaged) at the following locations: VARIOUS LOCATIONS, and
     said locations, and the locations of the Borrower's principal place of
     business and chief executive office shall not be changed without the prior
     written consent of the Lender.

(b)  The Borrower shall immediately advise the Lender in writing of any change
     in the location of its principal place of business, the location of its
     chief executive office, or the places where the Collateral is kept.

(c)  The Borrower is and shall remain the owner of all real estate on which any
     of the locations on which any of the Collateral is kept are located; or if
     not, the Borrower shall promptly upon Lender's request obtain from each
     owner of said real estate (and such owner's mortgagee, if applicable) a
     written waiver or subordination in form and substance satisfactory to the
     Lender) of any landlord's Lien, other Lien, or other interest said owner
     (or such mortgagee) might have with respect to the Collateral.

(d)  Unless Section 2.03(d) is completed, the Borrower will not allow any of the
     Collateral to become attached to any real estate in such manner as to
     become a fixture or a part thereof without the written consent of the
     Lender. However, if at any time any of the Collateral should be affixed to
     any real estate, the security interest of the Lender under this Agreement
     shall nevertheless continue in that Collateral. The Borrower shall promptly
     furnish to the Lender a description of such real estate and the names of
     the record owners thereof, execute such additional financing statements and
     other documents as the Lender may require, obtain from the owners of such
     real estate and the holders of any Liens thereon such subordination
     agreements and other documents as the Lender may request, and take such
     other actions as the Lender may deem necessary or desirable in order to
     preserve and perfect the Lender's security interest therein as a first
     priority perfected security interest.

(e)  The Borrower will not, without the prior consent of the Lender, grant any
     security interest in any of the Collateral to any Person other than the
     Lender, or permit any Lien to attach to any of the Collateral or any levy
     to be made thereon or any financing statement (other than those of the
     Lender) to be on file with respect thereto.

(f)  At the request of the Lender, the Borrower will join with the Lender in
     executing one or more financing statements pursuant to the Uniform
     Commercial Code in form satisfactory to the Lender covering the Collateral
     and will pay the costs of filing the same in all public offices wherever
     filing is deemed necessary or prudent by the Lender. In the event that the
     Borrower fails or refuses to execute any such financing statement, the
     Lender may file an executed copy or photocopy of an executed copy of this
     Agreement as a financing statement in any such offices to the extent
     permitted by applicable law.

(g)  The Lender may correct any and all patent errors in this Agreement or any
     financing statements or other documents executed in connection herewith.

(h)  The Borrower shall inform the Lender in writing of any material adverse
     change in any of the representations and warranties of the Borrower under
     this Agreement, promptly after the Borrower shall learn of such change.

(i)  The Borrower shall furnish to the Lender from time to time statements and
     schedules further identifying and describing the Collateral and such other
     reports in connection with the Collateral as the Lender may reasonably
     request, all in reasonable detail.

(j)  The Borrower will keep and maintain at its own cost and expense
     satisfactory and complete records of the Collateral. For the further
     security of the Lender, the Borrower agrees that the Lender shall have a
     security interest in all of the Borrower's books and records pertaining to
     the Collateral. Upon request of the Lender such books and records will be
     segregated and marked by the Borrower with the Lender's name in a manner
     satisfactory to the Lender. After the occurrence of an Event of Default the
     Borrower shall deliver and turn

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     over to the Lender any such books and records at any time on demand of the
     Lender, where Borrower shall keep copy of same.

(k)  The Borrower shall promptly upon Lender's request deliver to the Lender the
     certificates of title for any motor vehicles now or hereafter included in
     the Collateral that are subject to the Alabama Uniform Certificate of Title
     and Anti-theft Act or the title laws of any other jurisdiction and shall
     join with the Lender in executing any applications and other documents and
     taking any other actions necessary or desirable in the Lender's opinion to
     perfect its security interest under this Agreement in such vehicles. The
     Lender may retain possession of such certificates of title until this
     Agreement is terminated asset forth in Section 4.08.

     Section 2.05 Taxes and Assessments. The Borrower shall pay all taxes,
rents, assessments, and charges levied against any of the Collateral, or any
part thereof, and all other clams that are or may become Liens against the
Collateral. or any part thereof, and should default be made in the payment of
same, the Lender, at its option, may (without waiving the resulting Event of
Default) pay them.

     Section  2.06 Insurance. The Borrower shall keep all Collateral insured
against loss by fire, theft, and, in the case of any vehicle, collision, in such
manner, in such amounts and with such companies as are satisfactory to the
Lender, the loss payable clause of which policies shall be in favor of the
Lender, as its interests may appear. As further security for the Obligations,
the Borrower hereby assigns and pledges to the Lender for its benefit, each and
every policy of insurance covering the Collateral, or any part thereof,
including all proceeds and returned premiums. The Borrower agrees that all
insurance policies required by this Agreement or by other documents executed in
connection herewith shall be delivered to and held by Lender and shall provide
for at least 30 days' written notice to Lender prior to cancellation. If the
Borrower fails to keep the Collateral, or any portion thereof, insured as above
specified, then (without waiving the resulting Event of Default) the Lender may,
at its option, immediately insure the Collateral, or any portion thereof for its
own benefit. The loss, injury or description of the Collateral, or any part
thereof, shall not abate, satisfy, or release any of the Obligations; and the
proceeds of such insurance, if collected, less the cost of collecting the same,
shall be credited on the Obligations in such order as the Lender shall elect,
or, at the election of the Lender, may be used in repairing or replacing the
Collateral.

     Section  2.07 Care of Collateral; Notice of Loss, etc. The Borrower shall:
(a) take good care of the Collateral; (b) not commit or permit any waste
thereon; (c) keep all Collateral in good repair; (d) at all times with maintain
the same in as good condition as it is now in, reasonable wear and tear alone
excepted; (e) not use, or permit the Collateral to be used, in violation of any
statute, law or ordinance; and (f) notify the Lender immediately in writing of
any event causing material loss or depreciation in value of any of the
Collateral, and of the amount of such loss or depreciation (other than
depreciation in the Collateral resulting from ordinary wear and tear).

     Section  2.08 Access to Collateral and Records. The Lender or its agents
shall have the right to call at any of the Borrower's places of business (or any
other place where any other Collateral is located) to inspect and examine the
Collateral and to inspect, audit, check and make abstracts from the books,
records, journals, orders, receipts, correspondence, and other data relating to
the Collateral or to any other transactions between the Borrower and the Lender.

     Section  2.09 Filing Fees and Taxes. The Borrower agrees, to the extent it
may lawfully do so, to pay all recording and filing fees, revenue stamps, taxes
or other expenses and charges payable in connection with the execution and
delivery to the Lender of this Agreement, or on the recording, filing,
satisfaction, continuation, or release of any financing statements or other
instruments filed or recorded in connection herewith.

     Section  2.10 Use of Collateral. The Borrower agrees (a) to perform or
comply with the terms of any lease covering the premises wherein the Collateral
is located and all orders, ordinances, or laws of any Governmental Authority
concerning such premises r the conduct of business therein; (b) not to conceal
or abandon the Collateral; and (c) not to lease or hire any of the Collateral to
any Person or permit the same to be leased or used for hire otherwise than
pursuant to any Permitted Encumbrances, except in the ordinary course of its
business.

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Article 3. Events of Default and Remedies.

     Section 3.01 Events of Default. Upon the occurrence of any Event of Default
under this Agreement or at any time hereafter, all of the Obligations, with
interest thereon, shall at once become due and payable at the option of the
Lender. As used in this Agreement, the term "Event of Default" shall mean the
occurrence or happening of any one or more of the following events,
circumstances, or conditions:

(a)  any representation or warranty made herein or in any of the other Loan
     Documents shall prove to be false or misleading in any material respect; or

(b)  any report, certificate, financial statement, schedule, or other instrument
     furnished in connection with this Agreement or any of the other Loan
     Documents or the Obligations shall prove to be false or misleading in any
     material respect; or

(c)  any default shall be made in the payment of the principal of or interest on
     the Obligations, or any portion of them, as and when due and payable; or

(d)  the occurrence of any event which will or could result in the acceleration
     of the maturity of any indebtedness of the Borrower other than the
     Obligations or any such indebtedness shall not be paid when due; or

(e)  any uninsured material portion of the Collateral shall be lost, stolen,
     damaged, sold, destroyed, or encumbered, or any levy, seizure, or
     attachment shall be issued or made thereof or thereon; or

(f)  any failure by the Borrower to observe or perform any covenant, condition,
     or agreement contained in this Agreement other than those described in
     paragraphs (a) through (e) next above and such failure shall continue
     unremedied for 30 days after written notice thereof shall have been given
     by the Lender to the Borrower; or

(g)  any failure by any guarantor to observe or perform any covenant, condition
     or agreement contained in a guaranty agreement pertaining to any of the
     Obligations, or the occurrence of any other event of default under any such
     guaranty agreement (after giving effect to any applicable notice, grace, or
     cure period provided for therein), or the termination by any guarantor of
     the obligations of such guarantor under any continuing guaranty agreement
     pertaining to any of the Obligations; or

(h)  the insolvency, dissolution, liquidation, suspension of business, or death
     of any Obligor, or of any of any Obligor's principal officers (if a
     corporation) or of any of the Borrower's general partners (if a
     partnership); or

(i)  the failure of any Obligor to pay his or its debts generally as they become
     due, the admission in writing by an Obligor of his or its inability to pay
     his or its debts generally as they come due, or the making by any Obligor
     of a general assignment for the benefit of creditors; or

(j)  the filing of a petition or any other commencement of a proceeding by or
     against any Obligor or involving any property or assets of any Obligor
     under any provision of any bankruptcy, insolvency. liquidation,
     reorganization, or similar law or other law providing for the relief of
     debtors or if corporate or partnership action should be taken by the
     Borrower or any other Obligor for the purpose of effecting any of the
     foregoing; or

(k)  the application for, consent to, or appointment of a receiver, trustee,
     liquidator, conservator, or other custodian of any Obligor or any property
     or assets (including the Collateral) of any Obligor; or

(l)  final judgment or judgments for the payment of money in excess of an
     aggregate of $10,000 (or it the following blank is filled in, the amount
     filled in shall be substituted for $10,000: $200,000) shall be rendered
     against any Obligor and the same shall remain undischarged for a period of
     30 days during which execution shall not be effectively stayed; or

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(m)  any default or event of default shall occur under any of the other Loan
     Documents (after giving effect to any applicable notice, grace, or cure
     period provided for therein); or

(n)  any writ of execution, attachment, or garnishment shall be issued against
     any Obligor; or

(o)  the Lender shall deem itself insecure for any reason whatsoever.

     Section 3.02 Other Rights and Remedies Upon Default. Upon the occurrence of
an Event of Default, or at any time thereafter, the whole or any part of the
Obligations secured hereby shall become immediately due and payable at the
option of the Lender, and the Lender shall have all the rights and remedies of a
Lender upon default under any applicable law and under the terms of this
Agreement, all of which shall be cumulative. Without limiting the generality of
the foregoing rights and remedies, the Lender may exercise any or all of the
following rights, remedies, and powers after default:

(a)  The Lender may require the Borrower to assemble the Collateral, or any part
     thereof, and to make it available to the Lender at any convenient place
     designated by the Lender;

(b)  The Lender may send any written notice to the Borrower required by law or
     this Agreement in the manner set forth in Section 4.09 of this Agreement;
     and any notice sent by the Lender in such manner at least 10 calendar days
     (counting the day of sending) prior to the date of a proposed disposition
     of the Collateral shall be deemed to be reasonable notice thereof; and

(c)  The Lender, without demand of performance or other demand, advertisement,
     or notice of any kind (except the notice specified in subsection (b) above
     of a proposed disposition of the Collateral to or upon the Borrower or any
     other Person (all and each of which demands, advertisements and notices are
     hereby expressly waived, to the extent permitted by applicable law), may
     forthwith collect, receive, appropriate, repossess, and realize upon the
     Collateral, or any part thereof, and may forthwith sell, lease, assign,
     give option, or options to purchase, or sell or otherwise dispose of and
     deliver the Collateral (or contract to do so), or any part thereof, in one
     or more parcels at public or private sale or sales, at any exchange
     broker's board or at any of the Lender's offices or elsewhere at such
     prices as the Lender may deem best, for cash or on credit or for future
     delivery without assumption of any credit risk. The Lender shall have the
     right upon any such public sale or sales, and to the extent permitted by
     law, upon any such private sale or sales, to purchase the whole or any part
     of the Collateral so sold, free of any right or equity of redemption, which
     equity of redemption the Borrower hereby releases. To the extent permitted
     by applicable law, the Borrower waives all claims, damages, and demands
     against the Lender arising out of the repossession, retention, or sale of
     the Collateral.

     Section  3.03 Repossession of the Collateral; Care and Custody of the
Collateral; etc. The Borrower agrees to give the Lender notice in any manner set
forth in Section 4.09 below within 24 hours of the date of repossession of the
Collateral, or any part thereof, by the Lender as to any other property of the
Borrower alleged to have been left on, upon, or in the repossessed Collateral at
the time of repossession; and such notice shall be an express condition
precedent to any action or suit for loss or damages in connection therewith. The
Borrower further agrees that the Lender may hold any such Collateral of the
Borrower without liability for a reasonable time after any such notice is
received, and that the Lender will have a reasonable time to notify the Borrower
as to where the Borrower can collect such Collateral. The Borrower agrees that
if the Lender shall repossess the Collateral, or any part thereof, at a time
when no Event of Default shall have occurred hereunder, and the repossessed
Collateral is thereafter returned to the Borrower, the damages therefor, if any,
shall not exceed the fair rental value of the repossessed Collateral for the
time it was in the Lender's possession. The Borrower hereby expressly and
irrevocably consents to, and to the extent that the Borrower may lawfully do so,
invites the Lender and its agents to come upon any premises on which the
Collateral, or any part thereof, is now and hereafter located for any and all
purposes related to the Collateral including without limitation repossession of
the Collateral, or any part thereof. To the extent that the Borrower may
lawfully do so, the Borrower further covenants and warrants that (a) any entry
by the Lender and its agents upon such premises for the purpose of repossessing
the Collateral, or any part thereof, shall not be a trespass upon such

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premises and (b) any such repossession shall not constitute conversion of the
Collateral, or any part thereof. The Borrower further agrees to indemnify and
hold the Lender harmless against, and hereby releases the Lender from any
actions, costs, liabilities, or expenses arising directly, indirectly, or
remotely from any attempt to enter such premises and repossess the Collateral,
or any part thereof. The Lender shall be deemed to have exercised reasonable
care in the custody and preservation of the collateral in its possession if it
takes such reasonable actions for that purpose as the Borrower shall request in
writing, but the Lender shall have sole power to determine whether such actions
are reasonable. An omission to do any act not requested by the Borrower shall
not be deemed a failure to exercise reasonable care, and no omission to comply
with any request of the Borrower shall of itself be deemed a failure to exercise
reasonable care. The Borrower shall at all times be responsible for the
preservation of the Collateral and shall be liable for any failure to realize
upon, or to exercise any right or power with respect to, the Collateral, or for
any delay in so doing, whether or not the Collateral is in the Borrower's
possession.

Article 4. Miscellaneous

     Section 4.01 Lender May Perform. If the Borrower fails to pay or perform
any obligation contained herein, the Lender may itself pay or perform, or cause
to be paid or performed, such obligation. All amounts expended by the lender to
pay or perform (or cause to be paid or performed) any such obligation shall
become a debt due and payable at once, without demand upon or notice to any
Person, of the Borrower to the Lender, additional to the Obligations hereby
specially secured, and shall be secured hereby, and such amounts shall bear
interest until paid at two (2) percentage points (200 basis points) in excess of
the Lender's prime rate of interest in effect from time to lime as announced by
the Lender, or the highest rate permitted by law, whichever shall be less.

     Section 4.02. Costs. The Borrower shall promptly reimburse the Lender for
any and all costs and expenses, including but not limited to the reasonable fees
and disbursements of counsel to the Lender, which the Lender may incur in
connection with (a) the enforcement of the rights of the Lender in connection
with the Obligations, (b) the protection or perfection of the Lender's rights
and interests hereunder, (c) the exercise by or for the Lender of any of the
rights or powers herein conferred upon the Lender, and (d) the prosecution or
defense of any action or proceeding by or against the Lender, the Borrower or
any Obligor, or any of them, concerning any matter arising out of, connected
with or related to this Agreement, or any of the Collateral, or any of the
Obligations; provided, however, that if this Agreement is subject to Section
5-19-10, Code of Alabama 1975, such attorneys' fees shall not exceed 15% of the
unpaid debt after default and referral to an attorney not a salaried employee of
the Lender, and no attorney's tees shall be payable if the original amount
financed does not exceed $300.

     Section 4.03 Application of Proceeds. The net cash proceeds resulting from
the exercise of any of the rights and remedies of the Lender under this
Agreement, after deducting all charges, expenses, costs and attorneys' fees
(subject to the limitations set forth above) relating thereto, including any and
all costs and expenses incurred in securing the possession of Collateral,
moving, storing, repairing or finishing the manufacture of Collateral, and
preparing the same for sale, shall be applied by the Lender to the Payment of
the Obligations, whether due or to become due, in such order and in such
proportions as the Lender may elect.

     Section 4.04 Further Assurances. The Borrower, at Borrower's expense, shall
execute and deliver all such instruments and take all such action as the Lender
may reasonably request from time to time and in order to carry out the intention
of this Agreement or to facilitate the performance of the terms hereof.

     Section 4.05 Severability, etc. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable in any
respect, the validity, legality, and enforceability of the remaining provisions
contained herein shall not be affected or impaired thereby, and if any one or
more of such provisions shall be invalid, illegal, or unenforceable in any
respect in any one jurisdiction, then, to the full extent permitted by
applicable law, the validity, legality, and enforceability of such provisions
and of any remaining provisions shall not be affected or impaired thereby in
other jurisdictions.

     Section 4.06 Remedies Cumulative. The rights and remedies of the Lender
under this Agreement are cumulative and not exclusive of any other rights or
remedies now or hereafter existing at law or in equity.

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     Section 4.07 Non-Waiver. No delay in exercising any right or option given
or granted hereto to the Lender shall be construed as a waiver thereof; nor
shall a single or partial exercise thereof preclude any other or further
exercise or the exercise of any other right, power, or privilege The Lender may
permit the Borrower to remedy any default without waiving the default so
remedied, and the Lender may waive any default without waiving any other
subsequent or prior default by the Borrower.

     Section 4.08 Termination. This Agreement shall remain in full force and
effect until (a) written termination statements executed by a duly authorized
officer of the Lender shall be filed for record in the office or offices in
which financing statement(s) should be filed in order to perfect a security
interest in the Collateral, and (b) all actions have been completed to release
the Lender's security interest with respect to any vehicles for which a
certificate of title is required. The Borrower agrees that this Agreement shall
secure all Obligations, whether now existing or hereafter incurred, contracted
for or arising. Payment in full of the Obligations outstanding at any one time
shall not, in the absence of the execution and recordation of written
instruments of termination and release of security interests as aforesaid,
terminate this Agreement.

     Section 4.09 Notices. Any notice shall be conclusively deemed to have been
received by a party hereto and be effective on the day on which delivered by
hand or on which sent by telecopy or facsimile transmission to such party at the
address set forth below (or at such other address or telecopy or facsimile
number as such party shall specify to the other parties in writing), or if sent
by overnight courier, on the next Business Day after the day on which sent, or
if sent by registered or certified mail, on the third Business Day after the day
on which mailed, addressed to such party at said address:

(a)  if to the Lender, at

     Mailing Address: P.O. Box 11007.
     Birmingham, AL 35288,
     Attention:

     Street Address: 1900 Fifth Avenue North,
     Birmingham. Alabama 35203

     Telecopy or facsimile number:

(b)  if to the Borrower, at

     Mailing address: 147 Keystone Drive
     Montgomeryville, PA 18936

     Street address:

     Telecopy or Facsimile number: 215/619-3209.

     Section 4.10 Plural and Singular Words. Singular terms shall include the
plural as well as the singular and vice versa.

     Section 4.11 Survival of Covenants and Successors and Assigns. All
covenants and agreements herein made by the Borrower shall survive the execution
and delivery of this Agreement and the other Loan Documents, and shall bind the
heirs, personal representatives, executors, administrators, successors, and
assigns of the undersigned, and every option, right, and privilege herein
reserved or secured to the Lender shall inure to the benefit of, and may be
exercised by, its successors and assigns.

     Section 4.12 Waivers, etc. The Borrower hereby waives presentment, demand,
protest or any notice (to the extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral. No modification, amendment or
waiver of any provision of this Agreement or any of the other Loan Documents or
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by

<PAGE>

the Lender, and such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in the same, similar, or other circumstances.

     Section 4.13 Captions. The headings and captions in this Agreement are for
convenience of reference only and shall in no way restrict or modify any of the
terms hereof.

     Section 4.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument. Each of undersigned
hereby acknowledges receipt of a duplicate copy of this Agreement.

     Section 4.15 Governing Law. This Agreement shall be governed by the laws of
the State of Alabama.

     In witness whereof, the undersigned has executed this agreement under seal
on the day and year first above written.

Surgical Laser Technologies, Inc. (seal)
By: /s/ Michael R. Stewart
Its: President & CEO

By: /s/ Davis Woodward (seal)
Its: VP, Finance, CFO

<PAGE>

                                   EXHIBIT "A"

All now owned or hereafter acquired contract rights, accounts, notes, bills,
acceptances, chattel paper, tax refunds, money on deposit, inventory, goods,
wares, parts, merchandise, supplies, materials, equipment, machinery, furniture,
furnishings, shelving, office equipment, office supplies, general intangibles of
Debtor of every description and proceeds thereof. All books and records
pertaining thereto.