Document:

Exhibit 10.28

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AmSouth
SECURITY AGREEMENT (Accounts, Inventory and General Intangibles)

     THIS AGREEMENT is executed on May 31, 2000 by Surgical Laser Technologies,
Inc., a corporation, as debtor (the "Borrower"), in favor of AmSouth Bank, as
secured party (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 Liabilities described herein.

AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower and the Lender hereby agree as hollows:

I. DEFINITIONS

     As used in this Agreement the following terms shall have the respective
meanings assigned to them as follows: (a) "Accounts" shall mean all Accounts
Receivable, Contract Rights, Chattel Paper, Instruments and Documents. "Chattel
Paper", "Instruments" and "Documents" shall have the meanings attributed to
those terms under the Alabama Uniform Commercial Code. (b) "Account Receivable"
shall mean a right to payment for goods sold or leased or for services rendered
by the Borrower, whether or not evidenced by an Instrument or Chattel Paper, and
shall include a right to payment which has been earned under a Contract Right.
(c) "Contract Right" shall mean any right to payment under a contract not yet
earned by performance, whether or not evidenced by an Instrument or Chattel
Paper. (d) "General lntangibles" shall mean all general intangibles as defined
in the Alabama Uniform Commercial Code and all choses in action, causes of
action and other intangible personal property of the Borrower of every kind and
nature (other than Accounts) including, without limitation, corporate or other
business records, inventions, designs, patents, patent applications, trademarks,
trade names, trade secrets, good will, copyrights, registrations, licenses,
franchises, tax refund claims and any security now or hereafter held by or
granted to tmre Borrower to secure payment of any of the Accounts. (e)
"Inventory" shall mean goods, merchandise and other personal property now or
hereafter held by the Borrower for, sale or lease or furnished or to be
furnished under contracts of service or otherwise, raw materials, parts,
finished goods, work-in-process and supplies and materials used or consumed, or
to be used or consumed, in the Borrower's present or any future business, and
all such property the sale, lease or other disposition of which has given rise
to Accounts and which has been returned to or repossessed or stopped in transit
by the Borrower. (g) "Liability" or "Liabilities' shall include 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 any agreement or instrument, and whether incurred as maker,
endorser, surety, guarantor or otherwise, including without limitation
obligations incurred in connection with the issuance of a letter of credit, and
any and all extensions and renewals of any of the same. (g) "Purchaser" shall
include any buyer or lessee of Inventory from the Borrower, any customer for
whom services have been rendered or materials furnished by the Borrower and any
other person or organization that is now or may become obligated to the Borrower
on an Account.

II. Security Agreement

     SECTION 2.01. Granting Clause. To secure all of the Liabilities and the
compliance by the Borrower with the Borrower's obligations under this agreement,
the Borrower hereby grants to the Lender security title to and a continuing
security interest in, and assigns, transfers, conveys, pledges and sets over to
the Lender all of the Borrower's right, title and interest in and to the
following (hereinafter collectively called the "Collateral"): (1) all of the
Accounts, Inventory and General Intangibles of the Borrower, now existing and
acquired, created or arising from time to time hereafter, whether in transit or
in the constructive, actual or exclusive possession of the Borrower or of the
Lender or held by the Borrower or others for the Lender's account and wherever
the same may be located,

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including, without limiting the generality of the foregoing, all Inventory which
may be located on the premises of the Borrower or upon the premises of any
carriers, forwarding agents, warehousemen, vendors, selling agents, processors
or other third parties; (2) all goods represented by Accounts, Inventory and
General Intangibles: (3) all such goods that may be reclaimed or repossessed
from or returned by Purchasers; (4) all of the Borrower's rights as an unpaid
vendor or lienor, including stoppage in transit, replevin, detinue and
reclamation; (5) any other property of the Borrower now or hereafter held by the
Lender or by others for the Lender's account: (6) all proceeds and products of,
and additions and accessions to, any of the items described in (1) through (5)
of this Section 2.01; and (7) all books, documents and records related to any of
the items described in (1) through (6) of this Section 2.01. No submission by
the Borrower to the Lender of 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 of the Borrower 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 the Lender.

     SECTION 2.02. Collection of Accounts; Segregation of Proceeds; etc. The
Borrower covenants and agrees that until the occurrence of an Event of Default
hereunder, or until such earlier time as the Lender shall exercise any of its
rights to the contrary under this Section 2.02 or Section 2.03 hereof, the
Borrower will, at the Borrower's sole expense, collect from the Purchaser on
each Account all amounts due thereon as and when the same shall become due, and
in the event of any default by any Purchaser justifying such action, the
Borrower shall have the authority, at the Borrower's sole expense, to repossess
any merchandise covered by any such Account in accordance with the terms thereof
and any applicable law and to take such other action with respect to any such
Account or the merchandise covered thereby as the Borrower, in the absence of
instructions from the Lender, may deem advisable. Upon demand by the Lender, all
checks and other forms of remittance received by the Borrower as proceeds of
Collateral shall be (a) held in trust for the Lender separate and apart from and
not commingled with any property of the Borrower, (b) kept capable of
identification as the property of the Lender, and if delivered not less often
than daily (or at such other intervals as may be mutually agreed upon in
writing) to the Lender in the identical form received, with appropriate
endorsements, and accompanied by a report prepared by the Borrower in such form
as the Lender shall require. Promptly upon the Lender's demand. the Borrower
shall do any or all of the following: (a) give written notice of the Lender's
security interest in the Accounts to the Purchasers in such form and at such
times as the Lender may require: (b) open and maintain at the Borrower's expense
a lock box with the Lender for the receipt of all remittances with respect to
Collateral and execute an agreement with the Lender in form and substance
satisfactory to the Lender governing such lock box: and/or (c) notify the
Purchasers to make payments on the Accounts directly to the Lender or to said
lock box. All such items received by the Lender shall be, at the option of the
Lender, credited to the Liabilities in such order and in such proportions as the
Lender may deem advisable or deposited and held until finally collected in a
collateral reserve account established with the Lender. Funds in the collateral
reserve account shall not be subject to withdrawal by the Borrower, but at all
times shall be subject to the control of the Lender, and may be applied against
the Liabilities from time to time at the sole discretion of the Lender.

     SECTION 2.03. Attorney-In-Fact. The Borrower hereby constitutes and
appoints the Lender, or any other person whom the Lender may designate, as the
Borrower's attorney-in-fact, at the Borrower's sole cost and expense, to
exercise (1) at any time (without notice to the Borrower and irrespective of
whether any Event of Default shall have occurred hereunder) all or any of the
following powers, and (2) at any time after the occurrence of an Event of
Default hereunder, all of the powers set forth in Section 5.03, all of which
powers, being coupled with an interest, shall be irrevocable until the Lender's
security interest shall have been terminated in writing as set forth in Section
6.07 of this Agreement: (a) to receive, take, endorse, assign and deliver in the
Lender's name or in the name of the Borrower any and all checks, notes, drafts
and other instruments relating to Accounts, (b) to receive, open and dispose of
all mail addressed to the Borrower and to notify postal authorities to change
the address for the delivery thereof to such address as the Lender may
designate; (c) to transmit to Purchasers notice of the Lender's interest in the
Accounts and to demand and receive from such Purchasers at any time, in the name
of the Lender or of the Borrower or of the designee of the Lender, information
concerning the Accounts and the amounts owing thereon; (d) to notify Purchasers
to make payments on the Accounts directly to the Lender or to a lock box
designated by Lender; and (e) to take or to bring, in the name of the Lender or
in the name of the Borrower, all steps, action, suits or proceedings deemed by
the Lender necessary or desirable to effect collection of the Accounts. All acts
of such attorney-in-fact or designee taken pursuant to this Section or Section
5.03 are hereby ratified and approved by the

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Borrower, and said attorney or designee shall not be liable for any acts or
omissions nor for any error of judgment or mistake of fact or law.

     SECTION 2.04. Collection Methods. It is distinctly understood and agreed
that no court action or other legal proceedings for garnishment, attachment,
repossession of property, detinue or any attempt to repossess any merchandise
covered by any Account otherwise than through legal proceedings, shall be done
or attempted to be done by the Borrower except by or under the direction of
competent legal counsel. The Borrower agrees to indemnify and hold the Lender
harmless from any loss or liability of any kind or character which may be
asserted or sought to be asserted against the Lender by virtue of any suit
filed, process issued or any repossession or attempted repossession done or
attempted by the Borrower or at the Borrower's direction or any endeavors which
the Borrower may make to collect or enforce any Accounts or repossess any goods
covered by any Account.

     SECTION 2.05. Borrower's General Covenants and Agreements Pertaining to the
Collateral. The Borrower covenants and agrees that: (a) The Borrower has good,
indefeasible and merchantable title to the Collateral, free and clear of all
liens, claims, security interests and encumbrances; and until all the
Liabilities are paid in full or otherwise discharged, the Borrower will not
assign, transfer, pledge or grant to others a security interest in any
Collateral (except that Inventory may be sold, leased or otherwise disposed of
on normal terms and at normal prices in the ordinary course of the Borrower's
business), nor permit any lien, encumbrance or security interest (except that of
the Lender) to attach to any Collateral, or any levy to be made thereon or
financing statement (except that of the Lender) to be on file in any public
office with respect to any Collateral. (b)The Borrower will hold in the
Borrower's principal place of business, or other location approved by the
Lender, and make available to the Lender as requested, all of the Borrower's
records containing any entries as to Collateral. Upon request of the Lender such
records will be segregated and marked by the Borrower with the Lender's name in
a manner satisfactory to the Lender. (c) The addresses of the Borrower's
principal place of business (or chief executive office if more than one), the
office where the Borrower keeps and will keep the Borrower's records concerning
all of the Borrower's Accounts and the place or places at which all of the
Borrower's Inventory is and will be located are correctly set forth below
Borrower's signature at the end of this Agreement; and the Borrower shall
immediately advise the Lender in writing of any change in any of said addresses.
The Borrower is the owner of all of the real estate on which said addresses are
located; or, if not, the Borrower shall promptly on Lender's request obtain from
each owner of said real estate a written waiver in form and substance acceptable
to the Lender of any landlord's or other lien that said owner might have with
respect to any of the Collateral. (d) The Borrower shall keep the inventory
insured for the benefit of the Lender (to whom loss shall be payable and to whom
30 days notice of termination of the policy shall be given) in such amounts,
with such companies and against such risks as may be satisfactory to the Lender,
pay the cost of all such insurance and deliver certificates evidencing such
insurance to the Lender. The Borrower hereby assigns to the Lender all rights to
receive the proceeds and returned premiums of such insurance. (e) The Borrower
shall pay when due all taxes, assessments and other charges levied or assessed
upon the Collateral. If such taxes or other assessments shall not be paid when
due, or if any lien shall be claimed which in the opinion of the Lender might
possibly have priority over the Lender's rights in the Collateral, the Lender
may (but shall not be required to), without notice to the Borrower, pay such
taxes, assessments, charges or claims, and the amounts thereof shall be added to
the Liabilities hereby secured and shall bear interest at a rate of interest
equal to the highest rate of interest which any of the Liabilities then bear.
(f) The Borrower shall diligently perform all of the Borrower's obligations
under each and every contract or purchase order in connection with which
Accounts are created or exist strictly in accordance with the terms thereof and
will not commit or permit any breach on the Borrower's part in connection with
any such contract or purchase order. (g) Promptly after the Borrower's learning
thereof, the Borrower shall inform Lender in writing of any material adverse
change in any of the Borrower's representations and warranties under his
Agreement.

     SECTION 2.06. Account Representations and Warranties. The Borrower makes
the following warranties and representations to the Lender as to each and every
Account, whether now existing or acquired, created or arising from time to time
hereafter, unless otherwise disclosed in writing by the Borrower to the Lender:
(a) the Account is an original, genuine, bona tide and legally binding
obligation, enforceable in accordance with its terms, (b) the Account is not
subject to any material, unreserved claim of reduction, counterclaim, set-off,
recoupment, or any claim for credits, allowances or adjustments by the Purchaser
because of returned, inferior or damaged goods and services, or for any other
reason, and the same has not been disputed or dishonored by the Purchaser;
(c) the aggregate amount shown as the balance due on the Account on the
Borrower's books and in any Schedule of

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Accounts (as hereinafter defined), invoices or other documents delivered to the
Lender with respect to the Account is validly and legally owing under the
Account and is not contingent for any reason, and, to the best of the Borrower's
knowledge, there are no facts, events or occurrences which in any way impair the
validity or collectibility thereof; (d) all statements made in any Schedule of
Accounts or other documents executed or delivered to the Lender in connection
with the Account are true and correct, and all laws and regulations applicable
to the transaction giving rise to the Account have been fully complied with; (e)
the Account does not arise out of a contract with, or order from, a Purchaser
that by its terms forbids the assignment of that Account to the Lender or makes
such assignment void or unenforceable; (f) the Account arose in the ordinary
course of the Borrower's business from a bona fide outright sale of goods, or
from the performance of services, by the Borrower under an enforceable contract
and if representing a sale, the goods have been shipped or delivered (or the
contract has otherwise been consummated) in accordance with the contract of
sale, and if representing services, the services have been performed for the
Purchaser in accordance with the contract for services; (g) any merchandise sold
or services rendered giving rise to the Account are as represented to the
Purchaser thereof, and no warranties have been made with respect to any
merchandise or services covered by the Account except such as appear on any
written document executed and delivered in connection with said Account; (h) no
notice as to any material, unreserved claim (or potential claim) has been
received with respect to any Purchaser of anything which reflects adversely on
the general creditworthiness and financial condition of the Purchaser; (i) the
Account is not evidenced by a judgment and is not evidenced or secured by an
Instrument, Document or Chattel Paper unless the original thereof (or each of
them if more than one) has been endorsed and/or assigned and delivered to the
Lender to the Lender's reasonable satisfaction.

     SECTION 2.07. Inventory Representations and Warranties. The Borrower makes
the following warranties and representation to the Lender as to each and every
item of Inventory, whether now existing or hereafter created or acquired, unless
otherwise disclosed in writing by the Borrower to the Lender: (a) all statements
or representations made by the Borrower in any Schedule of Inventory (as
hereinafter defined) or other documents furnished to the Lender by the Borrower
with respect to such Inventory are true and correct; (b) all Inventory is
located on premises referred to in Section 2.05(c) of the Agreement or is
Inventory which is in transit and is so identified on the relevant Schedule of
Inventory; and (c) no Inventory is now, nor at any time hereafter shall be,
stored with a bailee, warehouseman or similar party without the Lender's prior
written consent.

     SECTION 2.08. Records, Schedules and Assignments of Accounts. The Borrower
shall keep accurate and complete records of the Borrower's Accounts and shall
promptly deliver to the Lender on demand (a) a detailed aged trial balance, in
form and substance acceptable to the Lender, of all then-existing Accounts
("Schedule of Accounts"), (b) the original copy of all Documents evidencing or
relating to the Accounts so scheduled, (c) such other information relating to
the then-existing Accounts as the Lender shall reasonably request, and (d)
formal assignments or schedules specifically describing the Accounts and
confirming the Lender's security interest therein.

     SECTION 2.09. Records and Schedules of Inventory. The Borrower shall keep
accurate and complete records of the Inventory, and shall promptly furnish on
demand (a) a current Schedule of Inventory ("Schedule of Inventory"), in form
and substance satisfactory to the Lender, based upon such inventory accounting
practices as are satisfactory to the Lender, and (b) the original copy of all
Documents related to such Inventory.

III. GENERAL COVENANTS

     SECTION 3.01. Visitation. The Borrower shall permit representatives of the
Lender from time to time to visit and inspect the Collateral, all records
related thereto, the premises upon which any of the Collateral is located, and
any of the other offices and properties of the Borrower; to examine the assets
and books of account of the Borrower; to discuss the affairs, finances and
accounts of the Borrower with and be advised as to the same by the officers
thereof, if a corporation, or if not by other responsible persons; and to verify
the amount, quantity, value and condition of, or any other matter relating to,
the Collateral, all at such reasonable times and intervals as the Lender may
desire.

     SECTION 3.02. Further Assurances. At the Borrower's cost and expense, upon
request of the Lender, the Borrower shall duly execute and deliver, or cause to
be duly executed and delivered, to the Lender such further

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instruments and do and cause to be done such further acts as may be reasonably
necessary or proper in the opinion of the Lender or its counsel to carry out
more effectively the provisions and purposes of this Agreement.

IV. EVENTS OF DEFAULT

     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) violation of, or default in the observance or
performance of, any term, agreement, covenant, condition or stipulation
contained or referred to in this Agreement or in any document executed in
connection with this Agreement or in any note, endorsement, guaranty or other
document evidencing or securing any of the Liabilities; or (b) default in the
due payment of the principal of or interest on any of the Liabilities, or any
part thereof, as and when due and payable; or (c) any warranty, representation,
financial statement, report, schedule, certificate, statement or other document
heretofore, now or hereafter made or furnished to the Lender by or on behalf of
the Borrower shall prove to be false or misleading in any material respect; 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 Liabilities
or any such indebtedness shall not be paid when due; or (e) the loss, theft,
damage, sale, destruction or encumbrance of any uninsured material portion of
the Collateral, or the sale or encumbrance or the issuance of any execution or
the making of any levy, seizure or attachment thereof or thereon; or (f) the
insolvency, dissolution, liquidation, suspension of business or death of the
Borrower or of any endorser, surety or guarantor of any of the Liabilities
(severally, an "Obligor"), or of any of the Borrower's or such Obligor's
principal officers if a corporation, or of any of the Borrower's general
partners if a partnership; or (g) the Borrower or any Obligor shall (i) fail or
admit in writing the inability of the Borrower or any Obligor to pay the
Borrower's or such Obligor's debts generally as they become due, (ii) make a
general assignment for the benefit of creditors or have an order for relief
entered against the Borrower or any Obligor in any proceeding under the Federal
bankruptcy code, or (iii) file a voluntary petition in bankruptcy, or a petition
or an answer seeking reorganization or an arrangement with creditors or take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against the Borrower or such Obligor in any
proceeding under any such law, or if corporate or partnership action should be
taken by the Borrower or any Obligor for the purpose of effecting any of the
foregoing; or (h) the appointment of a receiver, trustee, liquidator or
custodian of the Borrower or any Obligor or of any of their respective
properties or assets; or (i) the filing of a petition without the application,
approval or consent of the Borrower or any Obligor in any court of competent
jurisdiction, seeking the bankruptcy or reorganization of the Borrower or of any
Obligor or of all or a substantial part of their respective properties or
assets, or seeking an arrangement with the creditors of either of them, and such
petition shall not be dismissed within 30 days after the filing thereof; or (j)
the issuance of a writ of execution, attachment or garnishment against the
Borrower or any Obligor; or (k) final judgment or judgments for the payment of
money in excess of an aggregate of $200,000 shall be rendered against the
Borrower or any Obligor and the same shall remain undischarged for a period of
30 days during which execution shall not be effectively stayed; or (l) any
guarantor shall terminate the obligations of such guarantor under any guaranty
agreement pertaining to any of the Liabilities; or (m) the Lender shall deem
itself insecure for any reason whatsoever.

IV. REMEDIES

     SECTION 5.01 Acceleration of Liabilities. Upon the occurrence of an Event
of Default, the Lender shall have the right without further notice to the
Borrower to declare the entire unpaid balance of the Liabilities, with accrued
interest thereon, immediately due and payable.

     SECTION 5.02. Secured Party's Rights After Default. Upon the occurrence of
an Event of Default under this Agreement, the Lender shall have, in addition to
any other rights under this Agreement or under applicable law, the right without
notice to the Borrower (or with notice to the Borrower if notice is required and
cannot be waived under applicable law) to take any or all of the following
actions at the same or different times: (a) to collect all Accounts in the
Lender's or the Borrower's name and take control of any cash or non-cash
proceeds of Collateral; (b) to enforce payment of any Accounts, to prosecute any
action or proceeding with respect to Accounts, to extend the time of payment of
any and all Accounts, to make allowances and adjustments with respect thereto
and to issue credits in the name of the Lender or the Borrower; (c) to settle,
compromise, extend, renew, release, terminate or discharge, in whole or in part,
any Account or deal with the same as the Lender may deem advisable; (d) to
require

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the Borrower to open all mail only in the presence of a representative of the
Lender, who may take therefrom any remittance on Collateral; (e) to enter upon
the premises of Borrower or any other place or places where the Collateral is
located and kept, and through self-help and without judicial process, without
first obtaining a final judgment or giving the Borrower notice and opportunity
for a hearing on the validity of the Lender's claim, without any pre-seizure
hearing as a condition to repossession through court action and without any
obligation to pay rent to the Borrower, to remove the Collateral therefrom to
the premises of the Lender or of any agent of the Lender, for such time as the
Lender may desire, in order effectively to collect or liquidate the Collateral;
(f) to require the Borrower, upon demand of the Lender, to assemble the
Inventory and any other property included in the Collateral and make it
available to the Lender at places which the Lender shall select, whether at the
Borrower's premises or elsewhere, and to make available to the Lender all of the
Borrower's premises and facilities for the purpose of the Lender's taking
possession of, removing or putting the inventory and such other goods in salable
form; (g) without notice or advertisement, to sell, assign and deliver the
Collateral or any other property held by the Lender or by the Borrower for the
account of the Lender, at public or private sale, for cash, upon credit or
otherwise, at the sole option and discretion of the Lender and to bid or become
purchaser at any such sale; (h) to use, and to permit any purchaser of any of
the Collateral from the Lender to use, without charge, the Borrower's labels,
General Intangibles and advertising matter or any property of a similar nature,
as it pertains to, or is included in, any of the Collateral, in advertising for
sale, preparing for sale and selling any Collateral, and finishing the
manufacture, processing, fabrication, packaging and delivery of the Inventory,
and the Borrower's rights under all licenses and all franchise agreements shall
inure to the Lender's benefit; and (i) to exercise, in addition to all other
rights which it has under this Agreement or other applicable law, all of the
rights and remedies of a secured party upon default under the Uniform Commercial
Code. The net cash proceeds resulting from the exercise of any of the foregoing
rights, after deducting all charges, expenses, costs and attorneys' fees
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 Liabilities, whether due or to become due, in
such order and in such proportions as the Lender may elect; and the Borrower
shall remain liable to the Lender for any deficiency; provided, however, that
such attorneys' tees shall be limited to 15% of the unpaid balance of the
Liabilities after default and referral to an attorney who is not a salaried
employee of the Lender, if this transaction is subject to Section 5-19-10 of the
Code of Alabama 1975, and no such attorneys' fees shall be collectible if the
original principal amount financed is $300 or less.

     SECTION 5.03. Attorney-in-Fact After Default. At any time after the
occurrence of an Event of Default, the Lender or any other person serving as the
Borrower's attorney-in-fact under Section 2.03 of this agreement, shall have all
or any of the following powers: (a) to exercise all of the Borrower's rights and
remedies with respect to the collection of the Accounts; (b) to settle, adjust,
compromise, extend, renew, discharge, terminate or release the Accounts in whole
or in part; (c) to sell or assign the Accounts upon such terms, for such amounts
and at such time or times as the Lender deems advisable; (d) to take control, in
any manner, of any item of payment on, or proceeds of, Collateral; (e) to use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Collateral to which the Borrower
has access; (f) to enter into contracts or agreements for the processing,
fabrication, packaging and delivery of Inventory as said attorney-in-fact,
attorney-in-fact designee, or the Lender may from lime to time deem appropriate
and charge the Borrower's account for any reasonable costs thereby incurred; and
(g) to do all acts and things necessary, in the Lender's sole judgment. to carry
out the purposes of this agreement.

VI. MISCELLANEOUS

     SECTION 6.01. Notice. Any requests, demands or notices provided in this
agreement to be given by either party hereto to the other shall be conclusively
deemed to have been given when the same shall have been deposited in the United
States mail, certified postage prepaid, addressed to the party to whom such
request, demand or notice is directed at the following address: (a) if to the
Borrower, at the address set forth for the Borrower's principal place of
business or chief executive office following the Borrower's signature below; and
(b) if to the Bank, at P. 0. Box 11007, Birmingham, Alabama 35288, Attention:
President. Five days written notice mailed to the Borrower at the Borrower's
address set out below shall constitute reasonable notification to the Borrower
where notification is required by law.

     SECTION 6.02. Heirs, Successors and Assigns. Whenever in this agreement any
party hereto is referred to, such

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reference shall be deemed to include the heirs, successors and assigns of such
party, except that the Borrower may not assign or transfer this agreement
without the prior written consent of the Lender, such consent not to be
unreasonably withheld or delayed, and all covenants, promises and agreements by
or on behalf or the Borrower which are contained in this agreement shall bind
the Borrower's heirs, successors and assigns and shall inure to the benefit of
the successors and assigns of the Lender.

     SECTION 6.03. 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 Liabilities, (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 or the Borrower,
and Obligor, Purchaser, 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 Liabilities; provided, however, that attorneys' fees shall be subject to the
limitations set forth in Section 5.02 hereof if this agreement is subject to ss.
5-19-10 of the Code of Alabama 1975.

     SECTION 6.04 Governing Law. This agreement shall be construed in accordance
with and governed by the laws of the State of Alabama.

     SECTION 6.05. Non-Waiver; Modification; etc. Neither any failure nor any
delay on the part of the Lender in exercising any right, power or privilege
under this agreement shall operate 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. No modification, amendment or waiver of
any provision of this agreement, and no consent to any departure by the Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Lender, and then 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 6.06. Severability. Any provision of this agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

     SECTION 6.07. Termination of Security Interest. The Lender's security
interest under this agreement in the Collateral will not be terminated until one
of the Lender's officers signs a written termination agreement. Even if the
Borrower should pay all of the Liabilities owing to the Lender at any one time,
the Lender's security interest will continue to secure any sum the Borrower
should later owe the Lender until the written termination agreement referred to
above has been executed by the Lender.

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     IN WITNESS WHEREOF, the undersigned has executed this agreement on the day
and year first above written.

CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN
IT.

Attest:                             Surgical Laser Technologies, Inc. (Borrower)
/s/ Davis Woodward                  By: /s/ Michael R. Stewart
Its: Secretary                      Its: President & CEO

Addresses of Borrower:
(a) Principal place of business (chief executive office if more than one):
147 Keystone Drive, Montgomeryville, PA 18936

(b) Place where records are kept concerning Accounts (if different from above):

(c) Place where Inventory is kept (if different from above):

                                       55Exhibit 10.29

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            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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<PAGE>

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

                                       59

<PAGE>

     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

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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

                                       65

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                                   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.

                                       66

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