**Exhibit 10.31****BOND PURCHASE AGREEMENT**     THIS BOND PURCHASE AGREEMENT, dated as of September 1, 2002, by and among THE INDUSTRIALDEVELOPMENT AUTHORITY OF ST. CHARLES COUNTY, MISSOURI, a public corporation organized under thelaws of the State of Missouri (the “Issuer”), UNION PLANTERS BANK, N.A., St. Louis, Missouri, anational banking association (the “Purchaser”) and SYNERGETICS DEVELOPMENT COMPANY, L.L.C., alimited liability company organized under the laws of the State of Missouri (the “Obligor”).W I T N E S S E T H:**ARTICLE I****COVENANTS**     The Issuer covenants that:     ***SECTION 1.1. Authority.***To its knowledge, the covenants of the Issuer contained in the LoanAgreement (the “Agreement”) dated as of even date herewith between the Issuer and the Obligor aretrue and correct. The execution and delivery of this Bond Purchase Agreement, the Indenture ofTrust, dated as of even date herewith (“Indenture”), by and between the Issuer and UMB Bank, N.A.,as Trustee (“Trustee”), the aggregate principal amount of $2,645,000 Private Activity RevenueBonds, Series 2002 (Synergetics Development Company Project) issued pursuant to the Indenture (the“Bonds”), the Assignment, dated as of even date herewith, by and between the Issuer and the Trustee(the “Assignment”), the Tax Compliance Agreement dated as of even date herewith among the Issuer,the Obligor and the Trustee (the “Tax Compliance Agreement”) and the Agreement and the acceptanceof the Future Advance Deed of Trust and the Security Agreement, dated as of even date herewith,executed by the Obligor as Grantor to the mortgage trustee named therein for the benefit of theIssuer (the “Deed of Trust”), the Assignment of Leases (the “Assignment of Leases”) executed by theObligor, the Guaranty Agreement, dated as of even date herewith, executed by William L. Bates,Gregg D. Scheller, Kurt W. Gampp and Synergetics, Inc. (collectively, the “Guarantor”) for thebenefit of the Issuer (the “Guaranty”), the Security Agreement (Equipment) (the “SecurityAgreement”) executed by Synergetics, Inc. (the “Security Agreement”), the Guaranty of UnassignedIssuer’s Rights, dated as of even date herewith executed by the Guarantor and the Obligor for thebenefit of the Issuer (the “Guaranty of Unassigned Issuer’s Rights” and hereinafter, together withthe Deed of Trust, the Assignment of Leases, the Guaranty and the Security Agreement, the“Collateral Documents”) are within its authority and have been duly authorized by properproceedings and, to its knowledge, will not contravene its articles of incorporation or by-laws orany judgment, action, decree, agreement or instrument to which it is a party. Execution of theIndenture, the Bonds, the Agreement, the Assignment. the Tax Compliance Agreement and this BondPurchase Agreement has been authorized by the Issuer.     ***SECTION 1.2. Use of Proceeds.***The proceeds of the sale of the Bonds will be deposited in theProject Fund created by the Indenture (the “Project Fund”) and used as provided in the Agreementand the Indenture. The proceeds of the sale of the Bonds to be issued pursuant to the Indenturewill not be used for any purpose other than as provided in the Agreement and the Indenture.     ***SECTION 1.3. Litigation and Governmental Authorization.***To its knowledge, there is no actionor proceeding pending or threatened by or against the Issuer before any court or administrativeagency which might adversely affect the authority or ability of the Issuer to perform itsobligations under the Agreement, the Indenture, the Collateral Documents, this Bond PurchaseAgreement or the Bonds, or any related documents. To its knowledge, all authorizations, consentsand approvals of governmental bodies or agencies applicable to Issuer required by the Act inconnection with the execution and delivery
 

 
by the Issuer of the Agreement, the Indenture, the Collateral Documents, this Bond PurchaseAgreement and the Bonds or in connection with the carrying out by Issuer of its obligations underthe Agreement, the Indenture, the Collateral Documents, this Bond Purchase Agreement or the Bondshave been obtained.**ARTICLE II****OBLIGOR’S REPRESENTATIONS AND WARRANTIES**     The Obligor represents and warrants that:     ***SECTION 2.1. Existence.***The Obligor has been duly organized and is validly existing as alimited liability company under the laws of the State of Missouri with full power and authority toown its properties and conduct its business as contemplated by the Agreement and is conducting itsbusiness in substantial compliance with all applicable and valid laws, rules and regulations ofeach jurisdiction where it owns or leases substantial property or where it transacts materialintrastate business.     ***SECTION 2.2. Authority.***The Obligor has full corporate power and authority to execute anddeliver the Agreement, the Promissory Note dated as of even date herewith pursuant to the Agreement(the “Note”), the Collateral Documents to which it is a party and this Bond Purchase Agreement andto carry out the terms thereof on its part to be performed. This Bond Purchase Agreement, theAgreement, the Collateral Documents to which it is a party and the Note, when executed anddelivered by the Obligor, will be in full force and effect and will be valid and bindingobligations of the Obligor, enforceable in accordance with their terms. The consummation of thetransactions herein described and the carrying out of the terms thereof will not result in aviolation of any provision of, or a default under, the Articles of Association or OperatingAgreement of the Obligor or any indenture, mortgage, deed of trust, indebtedness or agreement,judgment or decree to which the Obligor is now a party or by which the Obligor or its property isnow bound.     ***SECTION 2.3. Authorization and Absence of Defaults.***All consents, approvals, authorizationsand other requirements prescribed by any law, governmental rule or regulation applicable to theObligor which must be obtained or satisfied by the Obligor in connection with the transactionsdescribed herein have been obtained and satisfied. The Obligor is not in violation of anyprovision of its Articles of Association or Operating Agreement and the Obligor is not in violationof any provision of, or in default under, any indenture, mortgage, deed of trust, indebtedness,agreement, instrument, judgment, decree, order, statute, rule or regulation to which it is a partyor by which it or its property is bound. There is no action, suit, proceeding, inquiry orinvestigation at law or in equity before or by any judicial or administrative court or agencypending or, to the best knowledge of the Obligor, threatened, against the Obligor, to which theObligor is or may become a party or to which any of its property is or may become subject whereinan unfavorable decision, ruling or finding would adversely affect the validity or enforceability ofthe Indenture, the Agreement, the Note, the Collateral Documents to which it is a party, this BondPurchase Agreement or the transactions described herein or therein, or the validity of the Bonds,or that should have a material adverse effect on the financial condition or operations of theObligor. The obligations of the Obligor under the Agreement, the Collateral Documents to which itis a party and the Note are not subordinate to the rights of those claiming by, under or throughany indentures, loan agreements or other instruments to which the Obligor is a party or by whichthe Obligor is or may be bound pursuant to the terms thereof, except as identified in saiddocuments.     ***SECTION 2.4. Tax-Exempt Status.***The information supplied by the Obligor in writing withrespect to the tax-free status of the Bonds for use by Bond Counsel including all certificatesexecuted in connection with the issuance of the Bonds and so identified therein is correct andcomplete in all material respects.
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**ARTICLE III****THE BONDS**     ***SECTION 3.1. Issuance of Bonds.***The Purchaser agrees, upon the terms and subject to theconditions contained in this Bond Purchase Agreement, to purchase from the Issuer, and the Issueragrees to issue and sell to the Purchaser, the Bonds in the principal amount of $2,645,000 at apurchase price equal to the principal amount of the Bonds, which purchase price shall be paid inimmediately available funds. The purchase price shall be paid by the Purchaser to the Trusteeunder the Indenture who shall credit such amount to the Project Fund and such payment shall beevidenced to the Issuer by a written receipt of the Purchaser. The Bonds sold hereunder shall bedesignated “Private Activity Revenue Bonds, Series 2002 (Synergetics Development Company Project)”and shall be dated their date of issuance and shall be substantially in the form set forth in, andsubject to the terms and provisions of, the Indenture.     ***SECTION 3.2. Closing.***The purchase of the Bonds shall occur on September 26, 2002, at 10:00a.m. at the offices of Gilmore & Bell, P.C., One Metropolitan Square, Suite 2350, 211 N. Broadway,St. Louis, Missouri, or at such other place, at such time, and on such date as the Issuer and thePurchaser shall mutually agree (the “Closing”).     ***SECTION 3.3. Conditions of Purchase of the Bonds.***The obligation of the Purchaser topurchase the Bonds hereunder is conditioned upon:     (1) receipt by the Purchaser of three business days’ notice from the Issuer of the proposeddate and time of purchase if different than as set forth above;     (2) at the conclusion of such sale and after the application of any proceeds therefrom noevent of default specified in the Agreement, the Collateral Documents or the Indenture and no eventwhich, with the giving of notice or lapse of time or both, would become such an event of defaultshall have occurred and be continuing;     (3) (i) the covenants of the Issuer contained or referred to in Section 1 hereof; (ii)the representations and warranties of the Obligor in the Agreement and the Collateral Documents towhich it is a party; and (iii) the representations and warranties of the Guarantor in the Guarantybeing true and correct;     (4) receipt by the Purchaser of the Bonds;     (5) receipt by the Purchaser of fully executed copies of this Bond Purchase Agreement, theAgreement, the Collateral Documents, the Note, duly endorsed to the Trustee and the other closingdocuments;     (6) receipt by the Purchaser of an opinion of Gilmore & Bell, P.C., as Bond Counsel, in formand substance satisfactory to the Issuer and the Purchaser;     (7) receipt by the Purchaser of an opinion of counsel for the Issuer, an opinion of counselfor Obligor, each dated the date of Closing in form and substance satisfactory to the Issuer, thePurchaser and to Gilmore & Bell, P.C., Bond Counsel;     (8) receipt by the Purchaser of the Tax Compliance Agreement in form and substancesatisfactory to the Issuer, the Purchaser and to Gilmore & Bell, P.C., Bond Counsel;     (9) receipt by the Purchaser of evidence that title to the real property encumbered by theDeed of Trust located in the County of St. Charles, Missouri and more particularly described in the
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Deed of Trust is vested in the Obligor, and specifically, receipt of a title commitment for ALTALoan Policy (Form 1970) in the amount of $2,645,000; at Closing, the title insurance company mustissue the required policy with all standard exceptions deleted, no other exceptions not previouslyapproved by Purchaser and with such affirmative coverages as Purchaser shall require, including,without limitation, zoning endorsement (ALTA Form 3.0), comprehensive endorsement (CLTA Form 100),future advances and survey endorsements, and satisfactory mechanic’s lien coverage including, at aminimum, monthly endorsements insuring against mechanic’s liens arising from nonpayment of billsfor labor performed or materials furnished prior to the date of the most recent sworn contractor’sstatement;     (10) receipt by the Purchaser of evidence of the existence and good standing in the State ofMissouri of the Issuer and the Obligor;     (11) organizational documents and authorizing resolutions of the Obligor and the CorporateGuarantor, including articles of association, operating agreement, member resolutions, articles ofincorporation, by-laws and board resolutions, together any fictitious name registration; theObligor shall furnish or cause to be furnished to the Purchaser such certificates, resolutions, andother documents necessary to evidence the authority of the person or persons signing the Agreement,the Note and the Collateral Documents on behalf of the Obligor and the Corporate Guarantor toexecute such documents and consummate the transactions herein contemplated;     (12) policies or certificates for the insurance required by Section 5.5 of the Agreement;     (13) survey satisfying title insurer, showing the improvements thereon as of a date not morethan three months prior to the date of issuance of the Bonds made by a registered civil engineer orsurveyor licensed in Missouri, in accordance with the standard detail requirements for land titlesurveys adopted by ATA and ACSM, as revised and in effect on the date of the survey, which surveyshall be certified to as being accurate by the surveyor, said certification running to the Obligor,the Trustee, title company and the Purchaser, and it shall show no encroachments on such land byadjoining structures and no encroachments upon adjoining premises by the buildings and improvementserected and installed upon said land, showing ingress and egress to and from public rights-of-wayto the land, showing all easements, showing the location of the Project and showing a legaldescription of the land and the location of adjacent streets or otherwise in form and substancesatisfactory to Purchaser;     (14) flood plain certification by a surveyor or engineer; if any portion of the Project is ina flood plain, satisfactory flood insurance coverage shall be required naming the Trustee asinsured;     (15) an appraisal of the Project prepared by an independent, qualified appraiser acceptable toPurchaser;     (16) receipt by the Purchaser of Uniform Commercial Code search requests, as of a date notmore than one month prior to Closing, with respect to the Obligor in all jurisdictions as thePurchaser may request, which shall show no filings with respect to the Obligor except thoseacceptable to the Purchaser;     (17) receipt by the Purchaser of the final plans and specifications for the Project.     (18) such additional items as the Purchaser or its counsel may reasonably require;     (19) the Obligor shall pay, without limitation, all costs and expenses incurred by thePurchaser in connection with the purchase of the Bonds and the disbursement of the proceedsthereof, including but not limited to legal expenses, title insurance premiums, the fees of thePurchaser’s disbursing
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agent and/or disbursement advisor, survey, recording and filing fees, mortgage registration tax,and any other type of mortgage tax, if any; and     (20) a requisition duly executed by the Authorized Obligor Representative requesting paymentof the issuance fee and counsel fees charged by the Issuer shall have been delivered to theTrustee.The receipt by or on behalf of the Issuer of payment by the Purchaser of the purchase price of theBonds under Section 3.1 shall be deemed to be a covenant by the Issuer as of the date ofsuch receipt as to the facts specified in (2) and (3) above.**ARTICLE IV****COVENANTS**     ***SECTION 4.1. Reaffirmation.***The Issuer reaffirms to the Purchaser its covenants andagreements contained in the Agreement as being true and correct as of the Closing.     ***SECTION 4.2. Purchaser Representations.***The Purchaser acknowledges that in purchasing theBonds it is not relying on any representations of the Issuer with respect to the financial qualityof the Bonds. The Purchaser is relying solely on statements and representations of the Obligor,and on its own knowledge and investigation of the facts and circumstances relating to the purchaseof the Bonds.     ***SECTION 4.3. No Registration.***The Purchaser understands that the Bonds have not beenregistered under the Securities Act of 1933, as amended, and that such registration is not legallyrequired. The Purchaser is purchasing the Bonds for its own account for investment and has nopresent intention of distributing or selling such Bonds or any portion thereof or any interesttherein, but expressly reserves the right to sell the Bonds or sell participations in the Bonds.     ***SECTION 4.4. Sophisticated Investor.***The Purchaser acknowledges that its business is that ofa commercial bank having substantial assets. In connection with its business, the Purchaser holdsan extensive portfolio of investments and other securities. The Purchaser has knowledge andexperience in financial and business matters and is capable of evaluating the merits and risks ofpurchasing the Bonds and is not relying on any information supplied or representations orwarranties made by the Issuer with respect to the Obligor or the Project.     ***SECTION 4.5. Access to Information.***The Purchaser covenants that it is familiar with thebusiness and properties of the Obligor. The Purchaser has had access to the same kind ofinformation that is specified in Schedule A of the Securities Act of 1933, relative to the businessof the Obligor to the extent that the Obligor possesses such information or can acquire it withoutunreasonable effort or expense. The Issuer and the Obligor have made available, during the courseof the transaction and prior to the purchase of the Bonds, to the Purchaser, the opportunity to askquestions and receive answers from such parties concerning the terms and conditions of the Bondoffering and to obtain any additional information relative to the financial data and business ofsuch parties and the property to be mortgaged to the extent that such parties possess suchinformation or can acquire it without unreasonable effort or expense.     ***SECTION 4.6. Documents.***The Agreement, the Collateral Documents, the Note, the Indenture,and this Bond Purchase Agreement, as finally executed, contain terms and are in form acceptable tothe Purchaser.
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     ***SECTION 4.7. Reliance.***The Issuer and the Purchaser agree that the Obligor is entitled torely on their respective covenants and representations contained in this Bond Purchase Agreement.**ARTICLE V****MISCELLANEOUS**     ***SECTION 5.1. Limitation.***Anything in this Bond Purchase Agreement to the contrarynotwithstanding, no director or officer of the Issuer shall be personally liable on this BondPurchase Agreement or any contract or obligation executed pursuant hereto.     ***SECTION 5.2. Notices.***All notices, demands or other communications hereunder shall be inwriting and shall be deemed to have been given when the same are (i) deposited in the United Statesmail and sent by first class mail, postage prepaid, or (ii) delivered, in each case, to the partiesat the addresses set forth below or at such other address as a party may designate by notice to theother parties: (a) if to the Issuer, at 5988 Mid Rivers Mall Drive, St. Charles, Missouri 63304,Attention: President; and (b) if to the Purchaser, at 8182 Maryland Avenue, Suite 200, St. Louis,Missouri 63105, Attention: Anne Silvestri. A copy of all such notices, demands or othercommunications hereunder shall be mailed to the Obligor at 88 Hubble Drive, O’Fallon, Missouri63304, Attention: Kurt W. Gampp, Jr.     ***SECTION 5.3. Term of Agreement.***The term of this Agreement shall be until the termination ofthe Purchaser’s obligation to purchase the Bonds hereunder or until the payment in full of theBonds and any other amounts due to the Purchaser under the Note, the Collateral Documents and theAgreement, whichever is later.     ***SECTION 5.4. Copies of Certificates, Etc.***Whenever the Issuer is required to delivernotices, certificates, opinions, statements or other information hereunder to the Purchaser, itshall do so in such number of copies as the Purchaser shall reasonably specify.     ***SECTION 5.5. No Waivers.***No failure or delay by the Purchaser in exercising any right, poweror privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercisethereof preclude any other or further exercise thereof or the exercise of any other right, power orprivilege.     ***SECTION 5.6. Governing Law.***This Bond Purchase Agreement and the Bonds shall be deemed to bea contract made under and shall be construed in accordance with and governed by the laws of theState of Missouri.     ***SECTION 5.7. Changes, Waivers, Etc.***Neither this Bond Purchase Agreement nor any provisionhereof may be changed, waived, discharged or terminated orally, except by a statement in writingsigned by each party against which enforcement of this change, waiver, discharge or termination issought.     ***SECTION 5.8. Counterparts.***This Bond Purchase Agreement may be signed in any number ofcounterparts with the same effect as if the signatures thereto and hereto were upon the sameinstrument. Complete sets of counterparts shall be lodged with the Issuer and the Purchaser.     ***SECTION 5.9. Other Terms.***Terms defined in the Indenture and not otherwise defined hereinshall have the meanings herein as prescribed for them in the Indenture.
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      THE INDUSTRIAL DEVELOPMENT AUTHORITY OF ST. CHARLES COUNTY, MISSOURI