**Distribution and Service Center Agreement between Bovie and
Symbol**
 
 Bovie
Medical Corporation (hereinafter referred to as “Bovie”) is the manufacturer and
provider of Bovie’s electrosurgical RF generators (the “Products”); and wishes
to set up its distribution and service center named Bovie Medical Limited
(hereinafter referred to as the “Bovie-HK”) to provide distribution which
includes marketing, support and servicing of the Products for sale in the
Markets (see Appendix 1).
 
 WHEREAS,
Bovie wishes to appoint and authorize Symbol Medical Limited (hereinafter
referred to as “Symbol”) and Symbol wishes to accept such appointment, to set up
Bovie-HK in Hong Kong on the terms and conditions set forth herein.
 
 NOW,
THEREFORE, Bovie and Symbol agree as follows:
 
 **Section
      1**
    **Operations
      of Bovie-HK**
 
 1.1.1
    Symbol
      agrees to set-up Bovie-HK upon the effective day of this agreement.
      Bovie-HK will be operated and managed by Symbol independently in this
      phase. In this phase, the Products will be assembled at Bovie and sold to
      Bovie-HK. Bovie-HK will function as a distribution and service center of
      the Products in Markets.
 
 1.1.2
    Subsequent
      to the commencement of this agreement, Bovie and Symbol will further
      negotiate with the intent to form a Joint Venture transforming Bovie-HK,
      from independent ownership by Symbol to a possible co-ownership by both
      parties.
 
 1.1.3
    The
      parties agree that prior to the commencement of business pursuant to this
      agreement non-disclosure / confidentiality agreements, agreeable to Bovie,
      shall be executed by Modern Medical Equipment Manufacturing LTD, Symbol
      Medical Limited, PSC Corporation and their affiliates, if
    any.
 
 **Section
      2**
    **Appointment
      of Distribution Center**
 
 **2.1**
    **Distribution
      Center for Existing Customers**
 
 2.1.1
    Grant
      of Distribution Right - Bovie hereby appoints Bovie-HK as the distributor
      to solicit and collect orders and service for the products use within the
      Markets. Bovie-HK shall serve as a distribution center and be responsible
      for re-distribution and inquiries of the Products and carry out marketing
      of the Products in the Markets.
 
 Bovie
agrees that within thirty (30) days of the signing of this agreement it will
notify existing distributors of the agreement’s execution. Under no
circumstances shall Symbol or any of its affiliates provide such notification
without Bovie’s consent.
 
 Bovie-HK
agrees that Bovie can continue to carry on relationships between Bovie and its
Far East Distributors as described in Appendix B. All distribution relationships
between Bovie and its existing distributors shall not be changed during the
effectiveness of their agreements. Bovie agrees to provide the cooperation time
of each of the current distributors to Bovie-HK as reference.
 
 Bovie and
Symbol agree that any change in business relationships between Bovie and its
existing creditors must be mutually agreed upon.
 
 Bovie
shall have the right to ship the Products directly to its existing distributors
in the Markets or through Bovie-HK for final inspection, as it chooses. Bovie-HK
will receive minimum 5% handling charge from Bovie for all shipments executed
and delivered by Bovie or Bovie-HK to existing customers after effectiveness of
this agreement.
 
 2.1.2
    Management
      of Loaner Units
 
 Bovie
will provide Bovie-HK, at its expense, reasonable quantities of Product to be
used as loaner units for customers during any repair period. Bovie-HK shall
provide equivalent loaner units to customers for temporary operation or
replacement of defective Products, depends on individual case and customer’s
need. Such defective Products which are superseded by replacement loaner units
shall be exchanged by Bovie-HK at additional charge, if functional or physical
condition of the replacement unit is superior to the defective Product. Bovie-HK
will execute a Product Traceability System for documentation of serial number,
lot number and relevant information supporting the instant replacement
service.
 
 Bovie-HK
shall furnish to Bovie a business plan for determination of service fee and
handling charge paid to and received by Bovie-HK., for the management of its
loaner unit service of the Products.
 
 2.1.3
    Purchase
      Orders
 
 During
the first year of execution of this Agreement, all Purchase Orders from existing
customers for the Products in the Markets are to be addressed to Bovie. After
the first year of execution, Bovie will ship Bovie-HK several sets of Product as
inventory depends on the sales quantity of the first year and the forecast of
coming annual. Bovie will notify Bovie-HK if any Product to be shipped via
Bovie-HK for final inspection and Bovie-HK will be responsible to arrange
shipment of such products to customers after its final inspection.
 
 **2.2**
    **Distribution
      Centre for Marketing of New
Customers**
 
 2.2.1
    Marketing
      of Products
 
 Bovie-HK
shall sign distribution agreements, only if mutually agreed upon by Bovie, to
sell the Products to new customers in the Markets. Bovie-HK shall prepare,
adopt, and implement a business, marketing and sales plan of reasonable scope
and detail, and shall dedicate sufficient personnel and resources for the
advancement and accomplishment of such plan.
 
 2.2.2
    Products
      and Services, Promotional Materials
 
 Bovie
will supply Bovie-HK with a reasonable quantity of promotional materials, such
as literature, catalogues, leaflets, and other advertising material relating to
the Products. Bovie-HK shall have the right to incorporate Bovie’s literature.
Bovie agrees to grant Bovie-HK a license to use “Bovie” and “Bovie-Asia” on
Bovie-HK’s literature during the effective period of this agreement. Bovie shall
be responsible to review in advance and comment on the combined promotional
Product in the interest of assuring accuracy and completeness of the information
therein. Any change, other than strict translation of promotional materials
shall be submitted to Bovie for final approval. The cost of establishing
promotion materials and translations will be at Bovie-HK’s expense or their
assigned distributor’s expense. Under no circumstances shall Bovie be
responsible for these costs.
 
 Copyrights,
patent rights, trademark rights, trade name rights or other similar rights under
Chinese law shall inure to the sole benefit of Bovie, and Symbol and Bovie-HK,
or its affiliates, will not contest Bovie’s right title and interest to any of
the above anywhere in the world.
 
 2.2.3
    Bovie’s
      pricing to Bovie-HK
 The Price
of the Products paid by Bovie-HK to Bovie shall be determined by suggested list
prices as described in Appendix C.
 
 The
suggested list prices shall generally apply and discount terms to Bovie-HK shall
be reviewed and considered for adjustment.
 
 2.2.4
    Bovie-HK’s
      pricing to Customers in the Markets
 
 Prices
charged new customers for the Products distributed by Bovie-HK in the Markets
shall be mutually agreed upon between Bovie and Bovie-HK. Price quotations shall
include, in addition to prices for the Products, prices for supporting services
provided by Bovie-HK.
 
 **2.2.5**
    Purchase
      Orders from new customers for the Products in the Markets are to be
      addressed to Bovie-HK. Bovie-HK shall in turn place a purchase order of
      Bovie-HK to Bovie with the suggested list price between Bovie and
      Bovie-HK.
 
 **2.3**
    **PSC
      Corporation**
 
 2.3.1
    Registration
      and applying documents
 
 Bovie
approves Symbol’s designation of its affiliate PSC Corporation, a corporation
organized and existing under the Laws of the People’s Republic of China with its
principal place of business at Room 2004-05, 20/F, Huaxin Building East, Shuiyin
Road No. 2, DongShan District, Guangzhou (hereinafter referred to as “PSC”) for
the registration of sales and distributions, repairing and assembling of the
Products in China. The cost of registration will be at Symbol’s own
expense.
 
 Bovie
will issue a warrant of attorney to appoint PSC as its exclusive representative
of distribution, repairing and assembling of the Products in China. PSC will use
its best efforts to apply and obtain licenses necessary for distribution,
repairing and assembly of the Products within nine (9) months after receipt of
Authorization Notification and all others relevant documents from
Bovie.
 
 Upon
incorporation, PSC will serve as the exclusive distribution and service center
of Bovie in China to establish distribution channel and support the Markets for
Products and accessories.
 
 2.3.2
    Accessories
      Pricing
 
 Bovie
shall offer Bovie-HK Prefer Pricing Schedule for all accessories. Bovie-HK shall
offer Bovie’s existing customers all accessories at its existing pricing.
Neither the existing customers nor new customers shall pay Bovie-HK a pricing
higher than the Listed-Price provided by Bovie.
 
 **2.4**
    Other
      Obligations
 
 2.4.1
    Warranties
 
 Symbol
and Bovie-HK will hold itself out to customers as a distribution and service
center of Bovie. Symbol and Bovie-HK shall make no warranties with respect to
the Products which exceed the Warranties made by Bovie.
 
 2.4.2
    Modification
      in Pricing
 
 If Bovie
changes list prices, Bovie shall give Sixty (60) days written notice to
Bovie-HK. However, outstanding customer quotations based upon the price list in
effect prior to a price change shall be honored for up to Ninety (90) days from
the date of notice of the price change.
 
 2.4.3
    Payment
      Collection
 
 Bovie-HK
shall collect full payment for all orders received from new customers and keep
accounting records of costs and sales. Bovie-HK shall pay Bovie within 30 days
upon receipt of payment from customers. Any payment term offered by Bovie-HK to
new customers beyond net 30 days shall be mutually agreed upon by Bovie and
Bovie-HK.
 
 Bovie
shall pay Bovie-HK within 30 days after shipment of inspected goods or for
providing management and/or repairing services.
 
 2.4.4
    Product
      Shipment
 
 Bovie
shall ship the Products to fulfill orders of customers in the Markets to
Bovie-HK or according to Bovie-HK instructions pursuant to the purchase order
submitted to Bovie by Bovie-HK.
 
 2.4.5
    Export
      Control Regulation
 
 Bovie
will use its best efforts to assist Bovie-HK to facilitate any import processing
by Bovie-HK with regard to all required documents and information. In the event
that the Products and the Components parts and materials thereof are the object
of export regulations of the Markets, Bovie-HK will use its best effort to apply
or and obtain the license necessary for Bovie-HK’s export of such Products to
the Markets (with Bovie’s authorization). Bovie agrees to comply with all
applicable export control laws and regulations relating to the Products. Bovie
will also use its best efforts to provide information necessary for Bovie-HK to
comply with all applicable export control laws and regulations relating to the
Products.
 
 Bovie
represents and warrants that the Products supplies hereunder are produced and
delivered in accordance with all applicable laws, rules and regulations,
including but not limited to those laws, rules and regulations governing Product
Safety.
 
 **Section
      3**
    **Appointment
      of Repairing Services Center**
 
 3.1
    During
      the terms of Agreement, Bovie-HK will provide the following service to the
      Products for the Markets:
 a.
    repair
      service;
 
 b.
    technical
      support relating to the use, operation and general knowledge of the
      Products;
 
 c.
    insuring
      the repaired Products can meet quality
standards.
 
 3.2
    Cost
      and Expenses of Repairing
 
 The
warranty period of Products extends for 24 months after the purchase
date.
 
 The
replacement of PC Boards or components shall be provided by Bovie-HK free of
charge upon evidence of acknowledgement by a user within the warranty period.
The replacement of any parts or components shall be provided by Bovie at
customer’s own expense beyond the warranty period.
 
 Any
expense of examination or inspection provided within warranty period of the
Products shall be paid by Bovie to Bovie-HK. The expense of repairing services
provided within the warranty period of the Products shall be paid by Bovie to
Bovie-HK in accordance with the actual repair work provided by Bovie-HK. The
actual costs of inspection tests and components may be requested for such
products repaired and shall be listed specifically, case by case, in Hong Kong
Dollars and United States Currency, and provided to Bovie on a quarterly basis.
Any expense of repair services provided beyond the warranty period of the
Products shall be at the customer’s expense ( The suggested repair prices as
described in Appendix D.)
 
 3.3
    Maintenance
      of Quality and Safety standards
 
 3.3.1
    Quality
      Standard
 
 Bovie
will provide Bovie-HK, at its expense, the specification, detail requirements,
technical standard drawings of all parts, components and equipment used for
assuring the various kinds of technological specifications of the Products after
repair and all tools that are required to use in the repair work.
 
 Bovie-HK
hereby agrees to strictly comply with quality standards of the Products for
repair work of the Products hereunder. At the request of Bovie-HK, Bovie agrees
to submit to Bovie-HK its quality control and inspection data for Bovie-HK’S
inspection. Bovie shall give Bovie-HK pertinent advice or instruction for
Bovie-HK’s reference and compliance.
 
 In the
event problems arise out of the Procedure of Acceptance of the Products, Bovie
shall assist Bovie-HK to solve the problems and complete the procedure or
Acceptance.
 
 3.3.2
    Repair
      and Product Warranty
 
 Bovie
warrants that the Products manufactured meets Bovie’s requirements for
production at its manufacturing facilities with final checking in Bovie-HK’s
facilities.
 
 Bovie
shall assist Bovie-HK to repair or fix any breakdown in Products, and provide
the PC Board for repair at its expense and at a fixed price beyond the warranty
period.
 
 3.3.3
    Technical
      Information
 
 Bovie
shall use its best efforts to provide Bovie-HK with copy of specification and
instruction manuals for each Product.
 
 Bovie may
make any modification of specifications and keep Bovie-HK informed of the
modifications with reasons for such changes.
 
 3.3.4
    Technical
      Support and Training
 
 For the
purpose of improving the repair technique of technicians in Bovie-HK, Bovie
shall provide training for repair work by Bovie-HK as Bovie-HK requires. In
addition, Bovie shall send its staff to guide Bovie-HK technicians in their
repair work and to furnish them with the latest technological know-how necessary
to properly train them. Bovie shall certify Bovie-HK’s repair service quality
and capabilities when they meet Bovie’s standards.
 
 3.3.5
    Indemnity
 
 Assembly,
sale, use or other disposition of the Products as well as quality guarantee to
customers, responsibility for product liability, advertising and servicing of
the Products, obtaining approval(s) for the Products pursuant to any standard,
legal or otherwise applicable to the Product, shall be made by Bovie at its
expense. Symbol and Bovie-HK and its subsidiaries and/or affiliates shall not be
responsible therefore to Bovie or any third party. Bovie shall indemnify
Bovie-HK for and hold Symbol and Bovie-HK (or all of the above subsidiaries and
affiliates) harmless from any liabilities, damages and costs and expenses
arising out of or in connection with its operations.
 
 In
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
 
 
 Agreed
and Accepted By:       Agreed
and Accepted By:
 
 
 ___________________       ____________________
 
 Moshe
Citronowicz       Alex
Fung
 Vice
President/COO       Shareholder
and Director
 Bovie
Medical Corporation      Symbol
Medical Limited
 
 
  
  Appendix
B
 
 Existing
distributors of Bovie assigned in the Markets
 
 The
Markets covered by this Agreement and the existing Exclusive Asia Distributors
in each of those Markets are as follows:
 
 Country
    Tier
    Models
    Distributor
    Contract
      UntilThailand
    One
    ALL
    AFTA
      Service & Supply Company
    Dec
      2005Japan
    One
    IDS
    Air
      Water Inc.
    Dec
      2005Philippines
    Two
    ALL
    Biomedica
      Health care
    To
      be advisedKorea
    Two
    ALL
      excepts IDS
    Hyup-Jin
      Trading Co Ltd
    Dec
      2005Taiwan
    One
    ALL
    Kingjing
      International
    Dec
      2005Malaysia
    One
    ALL
    Labo-medica
      Pte, Ltd
    Dec
      2005Singapore
    One
    ALL
    Labo-medica
      Pte, Ltd
    Dec
      2005Indonesia
    One
    ALL
    Labo-medica
      Pte, Ltd
    Dec
      2005Japan
    One
    ALL
      excepts IDS
    Medical
      U & A Inc.
    Dec
      2005Vietnam
    Two
    ALL
    VIMEC
    Dec
      2005Hong
      Kong
    One
    ALL
    VITA
    Dec
      2005India
    To
      be Advised
    IDS
    Edifice
    To
      be advised
 
  
  Appendix
C
 Suggested
Purchasing Price
 
 The
Suggested Price of the Products purchasing from Bovie-HK to Bovie and suggested
price from Bovie-HK to new customers:
 
 Model
    DescriptionsAaron
      A900
    Aaron
      900 High Frequency DesiccatorAaron
      A950
    Aaron
      950 High Frequency Electrosurgical GeneratorAaron
      A1250
    Aaron
      1250 High Frequency Electrosurgical GeneratorBovie
      IDS-200
    Electrosurgical
      GeneratorBovie
      IDS-300
    High
      Frequency Electrosurgical GeneratorModel
    The
      Highest Unit Price from Bovie-HK to customer
      (FOB
      HK)
    Discount
      offered
      By
      Bovie to
      Bovie-HK
    Depot
      Price from
      Bovie
      to
      Bovie-HK
      (Door
      to Door)A900
    USD666.75
    Minimum
      5%
    USD633.41A950
    USD1286.25
    Minimum
      5%
    USD1221.94A1250
    USD1758.75
    Minimum
      5%
    USD1670.81IDS-200
    USD3144.75
    Minimum
      5%
    USD2987.51IDS-300
    USD3984.75
    Minimum
      5%
    USD3785.51
 
 The final
pricing and discount offered for any shipment by Bovie to Bovie-HK will be
further determined by both parties.
  
  Appendix
D
 Suggested
Price of Repairing Services
 
 The
suggested price for repairing services from Bovie-HK to customers equal
to:
 
 [The
material cost of replacement parts] *multiplier* two (2)
or three (3) plus [Labor cost of repairing in Bovie-HK] *plus* [Overhead cost of Bovie-HK] *plus* [Transportation cost from Bovie-HK to customer].
 
  
  Appendix
1
 The
Markets
 
 The
“Markets” referenced in the agreement are as follows:
 
 Far East
 
 Australia
 
 New
Zealand