Document:

<PAGE>

                                                                   EXHIBIT 10.13

                              REMARKETING AGREEMENT

                                      among

                               ANGIODYNAMICS, INC.

                                       and

                          MCDONALD INVESTMENTS INC., AS
                                REMARKETING AGENT

                                       and

         COUNTIES OF WARREN AND WASHINGTON INDUSTRIAL DEVELOPMENT AGENCY

                           --------------------------

                           Dated as of August 1, 2002

                           --------------------------

                                   $3,500,000
         Counties of Warren and Washington Industrial Development Agency
          Multi-Mode Variable Rate Industrial Development Revenue Bonds
      (Angiodynamics, Inc. Project - Letter of Credit Secured), Series 2002

<PAGE>

                              REMARKETING AGREEMENT
                              ---------------------

          This REMARKETING AGREEMENT, dated as of August 1, 2002 (the
"Agreement"), is made by and among Angiodynamics, Inc. (the "Company"), McDonald
Investments Inc., as remarketing agent (the "Remarketing Agent"), and Counties
of Warren and Washington Industrial Development Agency (the "Issuer"), and is
entered in connection with the issuance by the Issuer of its Multi-Mode Variable
Rate Industrial Development Revenue Bonds (Angiodynamics, Inc. Project - Letter
of Credit Secured), Series 2002 in the total aggregate principal amount of
$3,500,000 (the "Bonds").

                                    ARTICLE I
                                    ---------

                                   Definitions
                                   -----------

Section 1.01.  Capitalized Terms.
               -----------------

          Capitalized terms used in this Remarketing Agreement, unless otherwise
defined herein, shall have the meanings assigned to them in the Trust Indenture,
dated as of August 1, 2002 (the "Indenture"), between the Issuer and The
Huntington National Bank, as Trustee, with respect to the Bonds.

Section 1.02.  Rules of Interpretation.
               -----------------------

          (a)  This Remarketing Agreement shall be interpreted in accordance
     with and governed by the laws of the State of New York.

          (b)  The words "herein" and "hereof" and words of similar import,
     without reference to any particular Article, Section or subsection, refer
     to this Remarketing Agreement as a whole rather than to any particular
     Article, Section or subsection hereof.

          (c)  The headings of Articles and Sections herein are for convenience
     only and shall not affect the construction hereof.

                                   ARTICLE II
                                   ----------

                              Remarketing of Bonds
                              --------------------

Section 2.01.  Representations and Warranties of the Company.
               ---------------------------------------------

          The Company hereby represents and warrants, for the benefit of the
Remarketing Agent, that:

          (a)  The Company is a corporation, organized and existing and in good
     standing under the laws of the State of New York, and has full power and
     authority to enter into the Installment Sale Agreement, the Bond Purchase
     Agreement, this Remarketing Agreement and the Reimbursement Agreement and
     to carry out the provisions hereof and thereof.

                                        1

<PAGE>

          (b)  The Installment Sale Agreement, the Bond Purchase Agreement, the
     Reimbursement Agreement and this Remarketing Agreement have been duly
     authorized, executed and delivered by the Company and, assuming the due
     execution and delivery of such agreements by the other parties thereto, are
     valid obligations legally binding upon the Company and enforceable in
     accordance with their respective terms, except as enforceability may be
     limited by bankruptcy or other laws affecting the enforcement of creditors'
     rights generally or by general principles of equity and public policy. The
     Company has approved the use and distribution of the Offering Circular
     dated August 28, 2002 (the "Offering Circular") in connection with the
     limited offering and remarketing of the Bonds.

          (c)  Except for all consents, approvals or authorizations of, or
     declarations or filings under any federal or state securities or "blue sky"
     laws, no consent, approval or authorization of, or declaration or filing
     with, any governmental authority or any other third party is a condition to
     the execution and delivery by the Company of the Installment Sale
     Agreement, the Bond Purchase Agreement, this Remarketing Agreement or the
     Reimbursement Agreement, or is required in connection with the offer,
     issuance and delivery by the Company of the instruments contemplated
     hereby. Neither the execution and delivery of the Indenture, the
     Installment Sale Agreement, the Bond Purchase Agreement, the Reimbursement
     Agreement, this Remarketing Agreement or the Bonds nor consummation of the
     transaction contemplated hereby or thereby or by the Offering Circular,
     will violate any provision of law or any applicable regulation, order, writ
     or decree of any court or governmental authority or will conflict or will
     be inconsistent with, or will result in any breach of any of the terms of,
     or will constitute a default under, any indenture, mortgage, deed of trust,
     agreement or other instrument to which the Company is a party or by which
     it may be bound, or will violate any provision of the Company's certificate
     of incorporation or by-laws.

          (d)  There is no action, suit, proceeding, inquiry or investigation,
     at law or in equity, or before or by any court, public board or body,
     pending or, to the best knowledge of the Company, threatened which
     challenges the validity of or seeks to enjoin the execution and delivery by
     the Company of, or the performance by the Company of its obligations with
     respect to, the Indenture, the Installment Sale Agreement, the Bond
     Purchase Agreement, the Remarketing Agreement, the Reimbursement Agreement
     or the Bonds, and there is no action, suit, proceeding, inquiry or
     investigation, at law or in equity, or before or by any court, public board
     or body, pending or, to the best knowledge of the Company, threatened
     against or affecting the Company (and to the best knowledge of the Company
     there is no basis therefor) wherein there is a reasonable possibility of an
     unfavorable decision, ruling or finding which would materially adversely
     affect any of the transactions contemplated by the Offering Circular, or
     which might result in any material adverse change in the properties,
     condition (financial or otherwise) or operations of the Company.

          (e)  Subject to the proviso that the Offering Circular is a summary
     and does not contain detailed information about the Company or its intended
     use of proceeds from the sale of the Bonds, and that the Company makes no
     representation as to the financial

                                        2

<PAGE>

     condition of the Bank, or the information contained in the Offering
     Circular on the cover page and under the captions "THE ISSUER," "THE LETTER
     OF CREDIT BANK," "UNDERWRITING OF THE BONDS," APPENDIX A-1, APPENDIX A-2,
     APPENDIX B and APPENDIX C of the Offering Circular does not contain an
     untrue or misleading statement of a material fact or omit to state any
     material fact necessary in order to make the statements contained therein,
     in light of the circumstances under which they were made, not misleading.

Section 2.02.  Representations and Warranties of the Issuer.
               --------------------------------------------

          The Issuer hereby represents and warrants, for the benefit of the
Remarketing Agent, as remarketing agent, that:

          (a)  The Issuer is a public benefit corporation duly organized and
     existing under the laws of the State of New York and has full power and
     authority to enter into the Indenture, the Installment Sale Agreement, the
     Bond Purchase Agreement, this Remarketing Agreement and to issue the Bonds
     and to carry out the provisions hereof and thereof.

          (b)  The Indenture, the Installment Sale Agreement, the Bond Purchase
     Agreement, this Remarketing Agreement and the Bonds have been duly
     authorized, executed and delivered by the Issuer and, assuming the due
     execution and delivery of such agreements by the other parties thereto, are
     valid special obligations legally binding upon the Issuer and enforceable
     in accordance with their respective terms, except as enforceability may be
     limited by bankruptcy or other laws affecting the enforcement of creditors'
     rights generally or by general principles of equity and public policy.

          (c)  Except for all consents, approvals or authorizations of, or
     declarations or filings under any federal or state securities or "blue sky"
     laws, no consent, approval or authorization of, or declaration or filing
     with, any governmental authority or any other third party is a condition to
     the execution and delivery by the Issuer of the Indenture, the Installment
     Sale Agreement, the Bond Purchase Agreement or this Remarketing Agreement,
     or is required in connection with the execution, issuance and delivery by
     the Issuer of the instruments contemplated hereby. To the Issuer's
     knowledge, neither the execution and delivery of the Indenture, the
     Installment Sale Agreement, the Bond Purchase Agreement, this Remarketing
     Agreement or the Bonds nor consummation of the transaction contemplated
     hereby or thereby, will constitute on the part of the Issuer a violation of
     or will conflict or will be inconsistent with, or will result in any breach
     of any of the terms of, or will constitute a default under, any provision
     of law or any applicable regulation, order, unit or decree of any court or
     governmental authority or any indenture, mortgage, deed of trust, agreement
     or other instrument to which the Issuer is a party or by which it may be
     bound.

          (d)  To the Issuer's knowledge, there is no action, suit, proceeding,
     inquiry or investigation, at law or in equity, or before or by any court,
     public board or body, as to which the Issuer has been served or otherwise
     received official notice, is any such action, suit, proceeding, inquiry or
     investigation threatened, which challenges the validity of or

                                        3

<PAGE>

     seeks to enjoin the execution and delivery by the Issuer of, or the
     performance by the Issuer of its obligations with respect to, the
     Indenture, the Installment Sale Agreement, the Bond Purchase Agreement, the
     Remarketing Agreement or the Bonds.

Section 2.03   Representations and Warranties of the Remarketing Agent
               -------------------------------------------------------

          The Remarketing Agent represents and warrants as the basis for the
undertakings on the part of the Remarketing Agent herein contained and
throughout the term of this Remarketing Agreement, that (i) the Remarketing
Agent is a corporation organized and existing under the laws of the State of
Ohio that is registered as a broker-dealer with the Securities and Exchange
Commission; (ii) the Remarketing Agent has all requisite power to execute and
deliver this Remarketing Agreement, and has by proper action duly authorized the
execution and delivery of this Remarketing Agreement, and (iii) this Remarketing
Agreement constitutes the legal, valid and binding obligation of the Remarketing
Agent enforceable against the Remarketing Agent in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law or principles of equity relating
to or affect the enforcement of creditors' rights or contractual obligations
generally.

Section 2.04.  Remarketing Agent's Acceptance.
               ------------------------------

          McDonald Investments Inc. hereby accepts the appointment made by the
Issuer pursuant to the Indenture to serve as Remarketing Agent for the Bonds.
Acceptance of that appointment as Remarketing Agent under the Indenture is
expressly subject to the condition that the Remarketing Agent shall not
undertake to perform any duties or assume any obligations to the Issuer, the
Trustee, the Holders or the Company other than those expressly set forth herein
and in the Indenture.

Section 2.05.  Remarketing Agent's Obligations.
               -------------------------------

          McDonald Investments Inc. agrees to accept the duties and obligations
imposed upon it as Remarketing Agent under the Indenture, and agrees
particularly in accordance with Article 718 of the Indenture:

          (i)   to determine the interest rates on the Bonds in accordance with
     Section 209 of the Indenture;

          (ii)  to give notice, by wire, telex, telegraph or telecopier or other
     similar means of communication, of each interest rate on the Bonds on the
     determination date of said interest rates as provided in Section 209 of the
     Indenture to the Company and the Trustee;

          (iii) to keep such books and records as shall be consistent with
     prudent industry practice and to make such books and records available for
     inspection by the Issuer and the Trustee at all reasonable times;

                                        4

<PAGE>

          (iv)  to use its best efforts to remarket the Bonds in accordance with
     Section 305 of the Indenture; and

          (v)   to comply with all applicable laws in connection with its
efforts to remarket the Bonds.

                                   ARTICLE III
                                   -----------

                                   Disclosure
                                   ----------

Section 3.01.  Provision of Disclosure Materials.
               ---------------------------------

          If the Remarketing Agent determines that it is necessary or desirable
to use an amended or supplemented Offering Circular in connection with any
remarketing of Bonds, the Remarketing Agent will so notify the Company and the
Company agrees that it shall provide an amended or supplemented Offering
Circular satisfactory to the Remarketing Agent for use in connection with the
marketing of the Bonds. The Company agrees to supply to the Remarketing Agent
such number of copies of any Offering Circular and documents related thereto as
are reasonably requested from time to time by the Remarketing Agent and further
agrees to amend or supplement such Offering Circular (and/or any documents
incorporated by reference therein), in connection with any future remarketing,
so that at all times the Offering Circular and documents related thereto will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading. The Issuer has not
confirmed, and assumes no responsibility for, the accuracy, sufficiency or
fairness of any statements in the Offering Circular or any supplements thereto,
or in any reports, financial information, offering or disclosure documents or
other information in any way relating to the Project, the Company, the Bank or
the Original Purchaser.

Section 3.02.  Continuing Disclosures.
               ----------------------

          The Company and Issuer agree that the Bonds are exempt from the
requirement of Paragraph (b)(5)(i) of Securities and Exchange Commission Rule
15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule")
pursuant to Paragraph (d)(1) of the Rule. The Company hereby covenants and
agrees that if as a result of a conversion of Interest Rate Mode or as a result
of any amendment or supplement to the Indenture or the Installment Sale
Agreement, the Bonds cease to be exempt under the Rule, the Company will enter
into an agreement or contract, constituting an undertaking, to provide ongoing
disclosure as may be necessary to comply with the Rule as then in effect. The
covenant and agreement contained herein is for the benefit of the Bondholders
and Beneficial Owners as required by the Rule.

                                   ARTICLE IV
                                   ----------

                                     General
                                     -------

Section 4.01.  Indemnification.
               ---------------

                                        5

<PAGE>

          The Company agrees to indemnify the Remarketing Agent and the Issuer
for and to hold each harmless against all liabilities, claims, costs and
expenses incurred on the part of the Issuer or without negligence or bad faith
on the part of the Remarketing Agent on account of any action taken or omitted
to be taken by the Remarketing Agent or the Issuer, respectively, in accordance
with the terms of the Bonds, the Reimbursement Agreement, the Installment Sale
Agreement, the Bond Purchase Agreement, the Letter of Credit or the Indenture,
or in connection with the remarketing of the Bonds, including the use of the
Offering Circular, or any action taken at the request of or with the consent of
the Company, including the reasonable costs and expenses of the Remarketing
Agent or the Issuer in defending itself against any such claim, action or
proceeding brought in connection with the exercise or performance of any of its
powers or duties under the Bonds, the Indenture, the Installment Sale Agreement,
the Bond Purchase Agreement, the Reimbursement Agreement or the Letter of
Credit; except to the extent that any such claim, liability, cost or expense
arises in connection with (i) in respect of the Remarketing Agent, the failure
by the Remarketing Agent to deliver any amended or supplemented Offering
Circular or amendment or supplement to the Offering Circular, to any purchaser
of the Bonds if the Company has provided any amended or supplemented Offering
Circular or amendment or supplement to the Offering Circular (in accordance with
Section 3.01 hereof), as the case may be, to the Remarketing Agent for use in
connection with the remarketing of the Bonds, or (ii) in respect of the
Remarketing Agent, any untrue or misleading statement, or alleged untrue or
misleading statement, or omission or alleged omission in information relating to
the Remarketing Agent provided by the Remarketing Agent for inclusion in any
amended or supplemented Offering Circular or any amendment or supplement to the
Offering Circular.

          In case any claim, action or proceeding is brought against the
Remarketing Agent or the Issuer in respect of which indemnity may be sought
hereunder, the Remarketing Agent or the Issuer, as appropriate, promptly shall
give notice of that claim, action or proceeding to the Company, and the Company,
upon receipt of that notice, shall have the right, or, if requested by either
the Remarketing Agent or the Issuer, the obligation to assume the defense of the
claim, action or proceeding at the Company's expense. Such notice shall be given
in sufficient time to allow the Company to defend or participate in such claim,
action or proceeding; provided, that failure of the Remarketing Agent or the
Issuer, as appropriate to give that notice shall not relieve the Company from
any of its obligations under this Section. At their own expense, the Remarketing
Agent and the Issuer may employ separate counsel and participate in the defense.
The Company shall not be liable for any settlement made without its consent,
which consent shall not be unreasonably withheld.

          The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, officers and employees
of the Remarketing Agent and the Issuer. Such indemnification is intended to and
shall be enforceable by the Remarketing Agent and the Issuer to the full extent
permitted by law.

Section 4.02.  Remarketing Fees.
               ----------------

          The Company shall pay the Remarketing Agent, for its services as
Remarketing Agent, an annual fee equal to 10 basis points (1/10h of 1%) per
annum of the amount of Bonds outstanding, payable semi-annually in arrears, on
each February 1 and August 1, beginning with February 1, 2003. For any
semi-annual payment of the annual fee not paid within fifteen (15)

                                        6

<PAGE>

days after date of invoice corresponding to such payment due, the Company shall
pay a late charge of an amount equal to the greater of ten percent (10%) of the
amount of the payment or $100.

          The Company also shall pay (i) all expenses in connection with the
provision of information required for the preparation of any amendment or
supplement to the Offering Circular provided pursuant to Section 3.01 of this
Remarketing Agreement, (ii) all fees and expenses incurred with the prior
consent of the Company in connection with the registration of the Bonds under
any state securities laws or the procurement of an exemption therefrom, (iii)
all expenses and costs to effect the authorization, preparation, issuance,
registration under any federal securities laws or the procurement of an
exemption therefrom, delivery and sale of the Bonds, (iv) a fee equal to
$5,000.00, plus all expenses and costs (including, but not limited to, related
attorney's fees) in connection with every and any change of the Credit Facility
Issuer and (v) the reasonable cost of obtaining any rating on the Bonds.

Section 4.03.  Term.
               ----

          This Remarketing Agreement will terminate upon the effective date of
the resignation or removal of McDonald Investments Inc. as Remarketing Agent in
accordance with the provisions of this Remarketing Agreement and Section 718 of
the Indenture.

          Upon the termination of this Remarketing Agreement, the provisions of
Section 4.01 hereof will continue to remain in effect and any Bonds or moneys
then held by McDonald Investments Inc. as Remarketing Agent will be delivered to
the successor remarketing agent or, if there is no successor, to the Trustee.

Section 4.04   Suspension of Remarketing.
               -------------------------

     The Remarketing Agent may suspend its remarketing efforts immediately upon
the occurrence of any of the following events, but only after notice (a
"Discretionary Suspension Notice") to the Issuer, the Company, the Trustee, and
the Credit Facility Issuer, which suspension will continue only so long as the
event continues to exist if, in the Remarketing Agent's reasonable judgment, the
continuance of the event has a material adverse effect on its ability to
remarket the Bonds:

               (a)  a suspension or material limitation in trading in securities
          generally on the New York Stock Exchange;

               (b)  a general moratorium on commercial banking activities in New
          York or Ohio is declared by either federal or New York State or Ohio
          State authorities;

               (c)  the engagement by the United States in hostilities resulting
          in a declaration of war or national emergency, or the occurrence of
          any other outbreak of hostilities or national or international
          calamity or crisis, financial or otherwise;

                                        7

<PAGE>

               (d)  the enactment of a federal law, or the rendering of a
          decision by a court of the United States, or the issuance or making of
          a stop order, ruling, regulation or official statement by, or on
          behalf of, the United States Securities and Exchange Commission or
          other governmental agency having jurisdiction of the subject matter,
          in any such case to the effect that, the offering or sale of
          obligations of the general character of the Bonds, or the remarketing
          of the Bonds, as contemplated hereby, is or would be in violation of
          any provision of the Securities Act of 1933, as amended (the
          "Securities Act") and as then in effect, or the Securities Exchange
          Act of 1934, as amended (the "Exchange Act") and as then in effect, or
          the Trust Indenture Act of 1939, as amended (the "Trust Indenture
          Act") and as then in effect, or with the purpose or effect of
          otherwise prohibiting the offering or sale of obligations of the
          general character of the Bonds, or the Bonds, as contemplated hereby;

               (e)  any event shall occur or information shall become known,
          which, in the Remarketing Agent's reasonable judgment, makes untrue,
          incorrect or misleading in any material respect any statement or
          information contained in the then most current Offering Circular
          provided to the Remarketing Agent in connection with the performance
          of its duties hereunder, or causes such document to contain an untrue,
          incorrect or misleading statement of a material fact or to omit to
          state a material fact required to be stated therein or necessary to
          make the statements made therein, in light of the circumstances under
          which they were made, not misleading;

               (f)  any governmental authority shall impose, as to the Bonds, or
          obligations of the general character of the Bonds, any material
          restrictions not now in force, or increase materially those now in
          force;

               (g)  any of the material representations and warranties of the
          Company made hereunder shall not have been true and correct on the
          date made; or

               (h)  the Company fails to observe any of the material covenants
          or agreements made herein.

Section 4.05.  Remarketing Agent's Performance.
               -------------------------------

          The duties and obligations of the Remarketing Agent shall be
determined solely by the express provisions of this Remarketing Agreement and
the Indenture, and the Remarketing Agent shall not be responsible for the
performance of any duties and obligations other than as are specifically set
forth in this Remarketing Agreement and the Indenture, and no implied covenants
or obligations shall be read into this Remarketing Agreement or the Indenture
against the Remarketing Agent. The Remarketing Agent may conclusively rely upon
any notice or document given or furnished to it, and conforming to the
requirements of this Remarketing Agreement or the Indenture, and the Remarketing
Agent may rely and shall be protected in acting upon such notice or any document
reasonably believed by it to be genuine and to have been given, signed or
presented by the proper party or parties. The Remarketing Agent will

                                        8

<PAGE>

endeavor to comply with all applicable laws and regulations in the performance
of its duties hereunder and under the Indenture and the Installment Sale
Agreement.

Section 4.06   Remarketing Agent Not to Act as Underwriter.
               -------------------------------------------

     It is understood and agreed that the Remarketing Agent, in entering into
this Remarketing Agreement, is obligated to remarket the Bonds upon
consideration of prevailing financial market conditions pursuant to the
Indenture. The Remarketing Agent shall not, in fulfilling its obligations
hereunder, act as an underwriter for Bonds and is in no way obligated, directly
or indirectly, to advance its own funds to purchase Bonds delivered to it
pursuant to the Indenture; provided, however, that the Remarketing Agent, in its
individual capacity, may in good faith buy, sell, own, hold and deal in any of
the Bonds offered and sold by the Remarketing Agent pursuant to this Remarketing
Agreement, and may join in any action that any holder may be entitled to take
with like effect as if it did not act in any capacity hereunder.

Section 4.07.  Notices.
               -------

          Unless otherwise specified, any notices, requests or other
communications given or made hereunder or pursuant hereto shall be made in
writing and shall be deemed to have been validly given or made if either duly
mailed by certified or registered mail, return receipt requested, or hand
delivered, addressed as follows: if to the Company, 603 Queensbury Avenue,
Queensbury, NY 12804, Attention: Joseph G. Gerardi; if to the Issuer, Counties
of Warren and Washington Industrial Development Agency, 5 Warren Street, Glens
Falls, NY 12801, Attention: Chairman, and if to the Remarketing Agent, McDonald
Investments Inc., 800 Superior Avenue, 17th Floor, Municipal Department,
Cleveland, Ohio 44114. The Notice Address shall constitute, for the purposes set
forth in the Indenture, the principal office of McDonald Investments Inc. as
Remarketing Agent.

                                        9

<PAGE>

          IN WITNESS WHEREOF, the Issuer, the Company and the Remarketing Agent
have caused this Remarketing Agreement to be duly executed by their duly
authorized representatives, respectively, as of the date first above written.

                                        COUNTIES OF WARREN AND WASHINGTON
                                        INDUSTRIAL DEVELOPMENT AGENCY

                                        By:  /s/ Bruce A. Ferguson
                                            ------------------------------------
                                        Its: Chairman
                                            ------------------------------------

                                        ANGIODYNAMICS, INC.

                                        By:  /s/ Eamonn P. Hobbes
                                            ------------------------------------
                                        Its: President & CEO
                                            ------------------------------------

                                        MCDONALD INVESTMENTS INC.

                                        By:  /s/ [Illegible]
                                            ------------------------------------
                                        Its:     V.P.
                                            ------------------------------------

                                       10<PAGE>

                                                                   EXHIBIT 10.14

          UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
          LIMITED PURPOSE TRUST COMPANY ("DTC") TO THE ISSUER OR ITS
          AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
          AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
          OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OR DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
          OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
          HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
          WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
          CO., HAS AN INTEREST HEREIN.

COUNTIES OF WARREN AND WASHINGTON INDUSTRIAL DEVELOPMENT AGENCY MULTI-MODE
VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BOND (ANGIODYNAMICS, INC. PROJECT
-LETTER OF CREDIT SECURED), SERIES 2002

NO.: R- 1                               MATURITY DATE: AUGUST 1, 2022

INTEREST RATE: as described below       CUSIP No.: 934653DQ6

DATED DATE: AUGUST 29, 2002

REGISTERED OWNER: CEDE & COMPANY

PRINCIPAL AMOUNT: THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000)

     Counties of Warren and Washington Industrial Development Agency, a public
benefit corporation of the State of New York (the "Issuer"), for value received,
hereby promises to pay, solely from the sources hereinafter described, to CEDE &
CO. or registered assigns, on the Maturity Date identified above (subject to any
right of prior redemption hereinafter provided for), the Principal Sum set forth
above (subject to reduction as hereinafter provided) and interest thereon from
the Dated Date set forth above, or from the most recent Interest Payment Date
(as hereinafter defined) to which interest has been paid, to the Maturity Date
identified above (or such earlier date on which the principal hereof has been
paid or duly provided for), initially at the Weekly Rate (as defined below)
(subject to conversion to an alternate interest rate as described below), on the
following dates (each, an "Interest Payment Date"): (A) while this Bond bears
interest at the Weekly Rate, the first Thursday of each February, May, August
and November, commencing with the first Thursday of November, 2002; and (B)
while this Bond bears interest at

<PAGE>

the Semi-Annual Rate or the Long-Term Rate (as defined below), on February 1 and
August 1 of each year; provided, that in any case the final Interest Payment
Date shall be the Maturity Date.

     The principal of, premium, if any, on and interest on this Bond are payable
in coin or currency of the United States of America which, at the time of
payment, is legal tender for the payment of public and private debts. The
principal or redemption price of this Bond, and the interest due upon this Bond
at maturity, shall be paid upon presentation and surrender hereof at the
corporate trust office presently located at Corporate Trust Department, 7 Easton
Oval - EA4E63, Columbus, Ohio 43219 (the Office of the Trustee ") of The
Huntington National Bank, as trustee (together with its successors in trust, the
"Trustee") under the trust indenture dated as of August 1, 2002 (from time to
time, as amended or supplemented, the "Indenture") by and between the Issuer and
the Trustee, or at the duly designated office of any successor trustee under the
Indenture. Reference is made to the Indenture for a more complete description of
the Project, the provisions, among others, with respect to the nature and extent
of the security for the Bonds, the rights, duties and obligations of the Issuer,
the Trustee and the Bondholders, and the terms and conditions upon which the
Bonds are issued and secured. All terms used herein with initial capitalization
where the rules of grammar or context do not otherwise require shall have the
meanings as set forth in the Indenture. Each Bondholder assents, by its
acceptance hereof, to all of the provisions of the Indenture.

     Except when the Bonds are Book Entry Bonds, the installments of interest
due on this Bond prior to maturity shall, as provided in the Indenture, be paid
to the Person in whose name this Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Business Day next preceding any
Interest Payment Date (the "Regular Record Date"), and shall be paid by check or
draft of the Trustee mailed by the Trustee on such Interest Payment Date to such
registered owner at his address appearing on the registration books of the
Issuer, or at the option of any holder of Bonds in an aggregate principal amount
of $250,000 or greater be transmitted on such Interest Payment Date by wire
transfer in immediately available funds at such owner's written request to the
bank account number on file with the Trustee, provided such Holder has delivered
adequate instructions regarding same to the Trustee at least ten (10) Business
Days prior to such Bond Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the registered owner
on such Regular Record Date, and may be paid to the Person in whose name this
Bond (or one or more Predecessor Bonds) is registered at the close of business
on a date for the payment of such Defaulted Interest to be fixed by the Trustee
(the "Special Record Date"), notice whereof being mailed one time, first-class
postage prepaid to registered owners of the Bonds not less than ten (10) days
prior to such Special Record Date, or may be paid in any other lawful manner as
shall be determined by the Trustee. Notwithstanding anything herein to the
contrary, when this Bond is registered in the name of a Depository (as
hereinafter defined) or its nominee, the principal and redemption price of and
interest on this Bond shall be payable in next day or federal funds delivered or
transmitted to the Depository or its nominee.

     This Bond is one of a duly authorized issue of bonds of the Issuer
designated "Counties of Warren and Washington Industrial Development Agency
Industrial Development Revenue Bonds (Angiodynamics, Inc. Project - Letter of
Credit Secured), Series 2002" in the aggregate principal amount of $3,500,000
(the "Initial Bonds"). The Initial Bonds are issued for the

                                        2

<PAGE>

purpose of assisting in providing financing to the Issuer for a project (the
"Project") consisting of the following: (A)(i) the acquisition of an interest in
a certain parcel or parcels of land located at 603 Queensbury Avenue, Town of
Queensbury, County of Warren, State of New York (the "Land"), (ii) the
acquisition thereon of an approximately 32,000 square foot facility (the
"Existing Facility"), together with equipment therein (the "Existing
Equipment"), (iii) the making of certain renovations to the Existing Facility
(as so renovated, the "Facility") consistent with its present and authorized
use, (iv) the construction of approximately 32,000 square feet of additions(s)
to the Existing Facility, (v) the purchase of additional equipment (together
with the Existing Equipment, the "Equipment" and, together with the Land and the
Facility, the "Project Facility") and (B) the financing of a part of the cost of
the foregoing by issuing its tax-exempt Industrial Development Revenue Bonds
(the "Bonds") in an aggregate principal amount not to exceed $4,500,000.00, all
pursuant to Title 1 of Article 18-A of the General Municipal Law of the State of
New York (collectively, the "Act"), as amended, the proceeds of which may be
applied to the costs of issuance, and, as necessary and appropriate, the
provision of a debt service reserve fund, capitalized interest or other means of
providing credit enhancement for the Bonds; and (C) to lease (with the option to
purchase) and/or sell the Project Facility to the Company, all pursuant to the
Act;

     To provide for the payment of the Debt Service Payments on the Bonds, the
Issuer, in the Indenture, has (A) absolutely and irrevocably assigned to the
Trustee all of the Issuer's right, title and interest in and to (1) the
Installment Sale Agreement (except for the Issuer's Unassigned Rights), and (2)
the Credit Facility Account, Redemption Premium Account, Remarketing Proceeds
Account and the Defeasance Account of the Bond Fund and all moneys and
investments therein, including without limitation the proceeds of the Letter of
Credit (as hereinafter defined), and (B) granted a security interest in all
moneys and investments in the Project Fund and the Revenues (other than the
above-referenced accounts of the Bond Fund, all moneys and investments therein
and the proceeds of the Credit Facility).

     The Debt Service Payments on the Bonds are payable solely from moneys held
by the Trustee under the Indenture for such purpose, including moneys drawn by
the Trustee under the Letter of Credit referred to below or such other credit
facility, if any, as may then be held by the Trustee under the Indenture for the
benefit of the Bondholders (the Letter of Credit or any such other credit
facility is hereinafter referred to as the "Credit Facility").

     THE BONDS ARE SPECIAL OBLIGATIONS OF THE ISSUER AND DO NOT REPRESENT OR
CONSTITUTE A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF NEW YORK OR
THE COUNTIES OF WARREN AND WASHINGTON, NEW YORK OR ANY POLITICAL SUBDIVISION
THEREOF, AND WILL NOT BE SECURED BY AN OBLIGATION OR PLEDGE OF ANY MONEYS RAISED
BY TAXATION. THE DEBT SERVICE PAYMENTS ON THE BONDS WILL BE PAYABLE SOLELY FROM
THE REVENUES PLEDGED AND ASSIGNED BY THE ISSUER TO SECURE PAYMENT THEREOF BY THE
INDENTURE.

     As provided in the Indenture, additional series of Bonds (the "Additional
Bonds", and collectively with the Initial Bonds, the "Bonds") may be issued from
time to time pursuant to supplements to the Indenture on a parity with, and
secured and payable equally and ratably with,

                                        3

<PAGE>

all other series of Bonds issued under the Indenture, which Additional Bonds may
mature at different times, may bear interest at different rates, and may
otherwise vary as provided in the Indenture and the supplement thereto
authorizing any such series of Additional Bonds. The aggregate principal amount
of Bonds which may be issued under the Indenture is not limited, except as
otherwise provided in the Indenture.

     If an Event of Default as defined in the Indenture occurs, the principal of
all Bonds issued under the Indenture may become due and payable upon the
conditions and in the manner and with the effect provided in the Indenture.

     This Bond is not valid unless the Certificate of Authentication endorsed
hereon is duly executed.

                        (Determination of Interest Rates)

     The Initial Bonds initially shall bear interest at the Weekly Rate
(hereinafter described), which rate shall continue in effect until converted to
a different interest rate or rates determined for the "Interest Rate Mode" (as
described more fully in the Indenture) selected by the Company. The "Interest
Rate Modes" which may be selected are as follows: (A) a Weekly Rate, in which
the interest rate is determined on the 7th day preceding conversion to a Weekly
Rate and on each Tuesday thereafter or, if not a Business Day, on the next
succeeding Business Day; (B) a Semi-Annual Rate, in which the interest rate is
determined on the tenth Business Day preceding each Semi-Annual Rate Period; and
(C) a Long-Term Rate for a period of one year or more ending on an Interest
Payment Date selected by the Company, in which the interest rate is determined
not later than the 15th Business Day preceding the lst day of such Long-Term
Rate Period.

     On any Interest Payment Date upon which the Bonds are subject to optional
redemption, the Company may from time to time cause the conversion of the
Interest Rate Mode for the Bonds to another Interest Rate Mode (a "Conversion")
in accordance with the terms of the Indenture. To cause a Conversion, the
Company shall deliver, at least 4 Business Days prior to the 15th day (the 30th
day in the case of Conversion to or from the Long-Term Rate) prior to the
proposed effective date of such Conversion, written notice to the Trustee, the
Credit Facility Issuer, the Tender Agent and the Remarketing Agent of the
Company's election to cause a Conversion. Notice of the intended Conversion of
the interest rate on this Bond shall be given not more than 60 days nor less
than 30 days prior to the proposed effective date of such Conversion by the
Trustee one time by first class mail postage prepaid to the registered owner of
this Bond at the address of such owner shown on the Trustee's bond register. The
failure to give any such notice, or any defect therein, shall not affect the
validity of any proceeding for the Conversion of any Bond with respect to which
no such failure to give notice, or defect therein, has occurred. On the
Conversion Date, this Bond shall be subject to a Mandatory Tender for purchase
as provided in Section 304 of the Indenture. Notwithstanding anything to the
contrary contained in the Indenture or herein, such notice shall not be
effective unless the Bank shall have consented thereto in writing and such
notice is accompanied by:

     (A)  an opinion of Counsel stating that the Conversion is authorized by the
Indenture;

                                        4

<PAGE>

     (B)  if the stated amount of the Credit Facility, if any, to be held by the
Trustee after such Conversion is increased over that of the then current Credit
Facility, an opinion of reputable bankruptcy counsel stating that payments of
principal and interest on the Bonds from funds drawn on such Credit Facility
will not constitute avoidable preferences with respect to the bankruptcy of the
Company under the Bankruptcy Code;

     (C)  a resolution of the members of the Issuer authorizing and approving
the Conversion; and

     (D)  an opinion of Bond Counsel to the effect that the exercise of the
Conversion Option is lawful under the Act and permitted by the Indenture and
that the Conversion will not, in and of itself, adversely affect the exclusion
of interest on the Initial Bonds from gross income for federal income tax
purposes.

If the Trustee has given notice of a proposed Conversion as aforesaid and such
proposed Conversion shall thereafter be canceled or rescinded, the Trustee shall
promptly notify all Bondholders of such cancellation or recision.

     Interest on the Initial Bonds shall be computed on the basis of a year of
365 or 366 days, as appropriate, for the actual number of days elapsed, while
the Interest Rate Mode is the Weekly Rate, and on the basis of a 360-day year
consisting of twelve 30-day months for the actual number of days elapsed, while
the Interest Rate Mode is the Semi-Annual Rate or the Long-Term Rate. The
interest rate or rates for each Interest Rate Mode for the Initial Bonds shall
be determined by the Remarketing Agent on the dates and at such times as
specified in the Indenture. If the Remarketing Agent fails to determine the
interest rate on the Initial Bonds in accordance with the Indenture, the
interest rate on the Initial Bonds shall be the interest rate in effect for the
previous interest rate period. Each interest rate determined by the Remarketing
Agent shall be the minimum rate of interest necessary, in the judgment of the
Remarketing Agent, to enable the Remarketing Agent to sell the Initial Bonds at
a price equal to the principal amount thereof, plus accrued interest, if any.
Notwithstanding the foregoing, the interest rate bond by the Initial Bonds shall
not exceed the lesser of (A) 15 % per annum or (B) so long as the Initial Bonds
are entitled to the benefit of a Credit Facility, the maximum interest rate
specified in the Credit Facility.

                         (Mandatory Tender and Purchase)

     The Initial Bonds are subject to mandatory purchase in whole (A) on the
effective date of any Conversion of the Interest Rate Mode for the Initial Bonds
and (B) if the Initial Bonds are then bearing interest at the Weekly or
Semi-Annual Rate, on the Interest Payment Date immediately preceding (by at
least 15 calendar days) the date of the expiration of the then current Credit
Facility (whether by expiration according to its terms or upon delivery of an
Alternate Credit Facility), if any, unless the then current Credit Facility
Issuer has provided an Alternate Credit Facility in accordance with the
Indenture, at a purchase price equal to 100% of the principal amount hereof plus
accrued interest, if any.

                                        5

<PAGE>

     In addition, the Initial Bonds are subject to mandatory purchase in whole
if the Initial Bonds are then bearing interest at the Long-Term Rate and the
Initial Bonds are then subject to optional redemption by the Issuer upon the
direction of the Company pursuant to the Indenture, on the Interest Payment Date
immediately preceding (by at least 15 calendar days) the date of the expiration
of the then current Credit Facility (whether by expiration according to its
terms or upon delivery of an Alternate Credit Facility), if any, unless a
Qualifying Alternate Credit Facility has been provided in accordance with the
Indenture, at a purchase price equal to 100% of the principal amount hereof,
plus the optional redemption premium, if any, which would be payable under the
Indenture if the Initial Bonds were redeemed on such date, plus accrued
interest, if any. If the Initial Bonds are bearing interest at the Long-Term
Rate, but the Initial Bonds are not then subject to optional redemption by the
Company pursuant to the Indenture, upon expiration of the then current Credit
Facility, the Company must replace the Credit Facility with a Qualifying
Alternate Credit Facility.

     If the Interest Rate Mode on the Initial Bonds is the Weekly Rate, this
Bond shall be purchased at the option of the registered owner hereof upon demand
by such registered owner, on any Business Day at a purchase price equal to the
principal amount hereof, plus accrued interest, if any, to the Purchase Date,
upon written notice to the Tender Agent on or before 4:00 p.m. (New York time)
on a Business Day not later than the 7th calendar day prior to the Purchase
Date. If the Interest Rate Mode on the Initial Bonds is the Semi-Annual Rate,
this Bond shall be purchased on the demand of the registered owner hereof, on
any Interest Payment Date at a purchase price equal to the principal amount
hereof, upon written notice to the Tender Agent on a Business Day not later than
the 8th Business Day prior to such Purchase Date. If the Interest Rate Mode on
the Initial Bonds is the Long-Term Rate, this Bond shall be subject to mandatory
purchase only as set forth in the immediately preceding paragraphs.

     If the Interest Rate Mode on the Initial Bonds is the Weekly Rate or the
Semi-Annual Rate, this Bond is also subject to mandatory purchase, in whole,
upon any replacement, removal or other substitution of the then current Credit
Facility Issuer.

     Any notice in connection with a demand for purchase of this Bond as set
forth in the preceding paragraphs hereof shall be given at the address of the
Tender Agent designated to the Trustee and shall (A) state the number and
principal amount (or portion thereof in an authorized denomination) of this Bond
to be purchased, (B) state the Purchase Date on which this Bond shall be
purchased and (C) irrevocably request such purchase and agree to deliver this
Bond to the Tender Agent on the Purchase Date. ANY SUCH NOTICE SHALL BE
IRREVOCABLE WITH RESPECT TO THE PURCHASE FOR WHICH SUCH DIRECTION WAS DELIVERED
AND, UNTIL SURRENDERED TO THE TENDER AGENT, THIS BOND OR ANY PORTION HEREOF WITH
RESPECT TO WHICH SUCH DIRECTION WAS DELIVERED SHALL NOT BE TRANSFERABLE. This
Bond must be delivered (together with an appropriate instrument of transfer
executed in blank in form satisfactory to the Tender Agent) at the principal
office of the Tender Agent at or prior to 12:00 noon (New York time) on the date
specified in the aforesaid notice in order for the owner hereof to receive
payment in same day funds of the purchase price due on such Purchase Date. NO
REGISTERED OWNER SHALL BE ENTITLED TO PAYMENT OF THE PURCHASE PRICE DUE ON SUCH
PURCHASE DATE EXCEPT UPON SURRENDER OF THIS BOND AS SET FORTH

                                        6

<PAGE>

HEREIN. Notwithstanding the foregoing, this Bond shall not be purchased during
the existence of a Default under the Indenture relating to failure to pay
principal due on any Bond, or the redemption price or purchase price due with
respect to any Bond, or the interest due on any Bond. No purchase of Bonds
pursuant to the Indenture shall be deemed to be a payment or redemption of such
Bonds or any portion thereof within the meaning of the Indenture.

     BY ACCEPTANCE OF THIS BOND, THE REGISTERED OWNER HEREOF AGREES THAT THIS
BOND WILL BE PURCHASED, WHETHER OR NOT SURRENDERED, (A) ON THE APPLICABLE
PURCHASE DATE IN CONNECTION WITH THE CONVERSION OF THE INTEREST RATE MODE FOR
THE BONDS OR ANY EXPIRATION OF THE CREDIT FACILITY AS DESCRIBED ABOVE, OR ANY
REPLACEMENT OF THE THEN CURRENT CREDIT FACILITY ISSUER, IF THE BONDS ARE IN THE
WEEKLY RATE MODE OR THE SEMI-ANNUAL RATE MODE AS DESCRIBED ABOVE, OR (B) ON ANY
PURCHASE DATE SPECIFIED BY THE REGISTERED OWNER HEREOF IN THE EXERCISE OF THE
RIGHT TO DEMAND PURCHASE OF THIS BOND AS DESCRIBED ABOVE. IN SUCH EVENT, THE
REGISTERED OWNER OF THIS BOND SHALL NOT BE ENTITLED TO RECEIVE ANY FURTHER
INTEREST HEREON, SHALL HAVE NO FURTHER RIGHTS UNDER THIS BOND OR THE INDENTURE
EXCEPT TO PAYMENT OF THE PURCHASE PRICE HELD THEREFOR, AND SHALL THEREAFTER HOLD
THIS BOND AS AGENT FOR THE TENDER AGENT.

                          (Letter of Credit Provisions)

     Pursuant to the Reimbursement Agreement, the Company has caused a Letter of
Credit issued by KeyBank National Association (the "Bank") to be delivered to
the Trustee (the "Letter of Credit"). Under the Letter of Credit, the Bank is
obligated to pay to the Trustee, upon presentation of a sight draft and required
accompanying documentation, the amount necessary to pay the principal or
purchase price (but not the redemption premium) of the outstanding Initial Bonds
plus an amount equal to 98 days' accrued interest on the outstanding Initial
Bonds at a rate of eight percent (8%) per annum (other than Initial Bonds which
are Pledged Bonds or Bonds owned by the Company) then due and payable (whether
by mandatory redemption or by maturity due to acceleration or otherwise). On
each Bond Payment Date and immediately upon (A) a declaration that all the
Initial Bonds have become due and payable by acceleration, or (B) a mandatory
redemption of all the Initial Bonds Outstanding, the Trustee shall present to
the Bank a sight draft and required accompanying documentation and draw upon the
Letter of Credit for the principal amount, and accrued interest then due on the
Initial Bonds. The Letter of Credit provides that it shall expire on August 29,
2005 or earlier under certain circumstances. Subject to the provisions of the
Indenture, the Company may, but is not required to, provide another Credit
Facility upon the termination of the Letter of Credit or the then current Credit
Facility. While the Initial Bonds bear interest at the Weekly Rate or the
Semi-Annual Rate, the Initial Bonds shall be subject to mandatory tender for
purchase upon any change in the then current Credit Facility Issuer. While the
Initial Bonds bear interest at the Long-Term Rate, the Company may substitute
any Qualifying Credit Facility for the then current Letter or Credit or other
Credit Facility and the Trustee shall give written notice of such substitute to
the Registered Owners thereof.

                                        7

<PAGE>

                   (Extraordinary Redemption Without Premium)

     The Initial Bonds are subject to redemption prior to maturity (A) as a
whole, without premium, in the event of (1) a taking in Condemnation of, or
failure of title to, all or substantially all of the Project Facility, (2)
damage to or destruction of part or all of the Project Facility and election by
the Company or the Bank to redeem the Initial Bonds, or (3) a taking in
Condemnation of part of the Project Facility and election by the Company or the
Bank to redeem the Bonds, or (B) in part, without premium, in the event that (1)
to the extent excess moneys remain in the Insurance and Condemnation Fund
following damage or condemnation of a portion of the Project Facility and
completion of the repair, rebuilding or restoration of the Project Facility by
the Company and, pursuant to the Indenture, such excess moneys are not paid to
the Company, (2) excess moneys remain in the Project Fund after the Completion
Date or (3) excess proceeds of title insurance or recoveries from contractors
are applied to redeem Bonds pursuant to the Installment Sale Agreement. In any
such event, the Initial Bonds shall be redeemed, as a whole or in part, at such
time as the Trustee determines, at a redemption price equal to the principal
amount thereof, plus accrued interest to the redemption date, without premium.

         (Extraordinary Redemption Without Premium at Election of Bank)

     The Initial Bonds are also subject to redemption prior to maturity upon
receipt by the Trustee of a written notice from the Bank of the occurrence and
continuance of a default by the Company under the Reimbursement Agreement and
the Bank's election to compel redemption of the Bonds. In such event, the
Initial Bonds shall be redeemed, as a whole, in the manner provided in Article
III of the Indenture, on the earliest date for which the Trustee can give notice
of redemption pursuant to Section 303 of the Indenture, at a redemption price
equal to the principal amount thereof, plus accrued interest to the redemption
date, without premium.

          (Mandatory Redemption With Premium in an Event of Taxability)

     The Initial Bonds are also subject to redemption prior to maturity upon the
occurrence of a Determination of Taxability (as defined in the Indenture). In
such event, the Initial Bonds shall be subject to redemption, as a whole, as
soon as possible after the discovery of such Determination of Taxability, at a
redemption price equal to the principal amount thereof, plus accrued interest
thereon to the redemption date, without premium. If any Initial Bonds are paid
at maturity or purchased by the Trustee or redeemed subsequent to a Tax
Incidence Date without payment of an amount at least equal to the redemption
price that would have been received if such Bonds had been redeemed as a result
of a Determination of Taxability, the owners of such Bonds at the time of
maturity, purchase or redemption, upon establishing their then ownership
thereof, shall be entitled to receive, as an additional premium thereon, an
amount equal to the difference between the amounts actually received and the
amounts that would have been received if such Bonds had been redeemed as a
result of a Determination of Taxability.

            (Optional Redemption Without Premium at Company's Option
                   During Weekly or Semi-Annual Rate Periods)

                                        8

<PAGE>

     Whenever the Interest Rate Mode is the Weekly Rate or the Semi-Annual Rate,
the Initial Bond shall be subject to redemption, in whole on any date or in part
on any Interest Payment Date, at the option of the Issuer, upon the direction of
the Company, at a redemption price of 100% of the principal amount hereof, plus
accrued interest to the redemption date, without premium.

              (Optional Redemption With Premium at Company's Option
                          During Long-Term Rate Period)

     Whenever the Interest Rate Mode is the Long-Term Rate, the Initial Bonds
shall be subject to redemption at the option of the Issuer, upon the direction
of the Company, at any time prior to the end of the then current Long-Term Rate
Period at the redemption prices set forth below, plus interest accrued to the
redemption date (which redemption price and accrued interest shall be paid only
from Available Moneys):

Length of Current Long-    Commencement of         Redemption Price as
Term Rate Period (Years)   Redemption Period       Percentage of Principal

More than 9 years          5th anniversary of      102%, declining by 1% on each
                           commencement of Long-   succeeding anniversary of the
                           Term Rate Period        first day of the redemption
                                                   period until reaching 100%
                                                   and thereafter 100%

More than 7, but not       4th anniversary of      101%, declining by 1% on each
more than 9 years          commencement of Long-   succeeding anniversary of the
                           Term Rate Period        first day of the redemption
                                                   period until reaching 100%
                                                   and thereafter 100%

More than 5, but not       3rd anniversary of      101%, declining by 1% on each
more than 7 years          commencement of Long-   succeeding anniversary of the
                           Term Rate Period        first day of the redemption
                                                   period until reaching 100%
                                                   and thereafter 100%.

If, at the time of the Issuer's notice of Conversion of the Interest Rate Mode
for the Initial Bonds to the Long-Term Rate pursuant to the Indenture, the
Issuer provides a certification of the Remarketing Agent to the Trustee and the
Issuer that the foregoing schedule is not consistent with prevailing market
conditions, the foregoing redemption periods and redemption prices may be
revised, effective as of the Conversion Date, as determined by the Remarketing
Agent in its judgment, taking into account the then prevailing market
conditions, as stipulated in such certification, which shall be appended by the
Trustee to its counterpart of this Indenture.

                                        9

<PAGE>

                           (Procedures for Redemption)

     Notice of the intended redemption of each Bond subject to redemption shall
be given not more than 60 days nor less than 30 days prior to the redemption
date by the Trustee one time by first class mail postage prepaid to the
registered owner at the address of such owner shown on the Trustee's bond
register. The failure to give any such notice, or any defect therein, shall not
affect the validity of any proceeding for the redemption of any Bond with
respect to which no such failure to give notice, or defect therein, has
occurred. Notice of any redemption hereunder with respect to Bonds held under a
book entry system shall be given by the Registrar or the Trustee only to the
Depository, or its nominee, as the holder of such Bonds. Selection of book entry
interests in the Bonds called for redemption is the responsibility of the
Depository and any failure of any Direct Participant, Indirect Participant or
Beneficial Owner to receive such notice and its contents or effect will not
affect the validity of such notice or any proceedings for the redemption of such
Bonds.

     In the event of any partial redemption, the particular Bonds or portions
thereof to be redeemed shall be selected by the Trustee not more than sixty (60)
days prior to the redemption date in inverse order of maturity, and within each
maturity by lot or by such other such method as the Trustee shall deem fair and
appropriate; provided, however, that in connection with any redemption of Bonds
the Trustee shall first select for redemption any Bonds held by or pledged to
the Bank pursuant to the Indenture. The Trustee may provide for the redemption
of portions (equal to $100,000 or any integral multiple of $5,000 in excess
thereof) of Outstanding Bonds. In no event shall the principal amount of Bonds
subject to any partial redemption be other than $100,000 or any integral
multiple of $5,000 in excess thereof.

     Bonds (or portions thereof as aforesaid) for whose redemption and payment
provision is made in accordance with the Indenture shall thereupon cease to be
entitled to the Lien of the Indenture and shall cease to bear interest from and
after the date fixed for redemption.

                       (Additional Security for the Bonds)

     The Bonds are issued under and are equally and ratably secured by the
Indenture. The Indenture grants the Trustee a first security interest in the
Trust Revenues (as defined in the Indenture).

     As security for payment of the principal of, premium, if any, and interest
on the Bonds, the Issuer and the Company have granted a mortgage Lien on and a
security interest in the Project Facility to the Bank pursuant to a mortgage and
security agreement dated as of August 1, 2002 (the "Mortgage") from the Issuer
and the Company to the Bank. As additional security for the payment of principal
of, premium, if any, and interest on the Bonds, the Issuer has assigned to the
Trustee all of the Issuer's rights and remedies under the Installment Sale
Agreement (except the Unassigned Rights), including the right to receive
installment purchase payments and other amounts payable thereunder pursuant to a
pledge and assignment dated as of August 1, 2002 (the "Pledge and Assignment")
from the Issuer to the Trustee. Further security for the

                                       10

<PAGE>

repayment of the Bonds is provided by a guaranty dated as of August 1, 2002 (the
"Guaranty") from the Company to the Trustee.

     Reference is hereby made to the Indenture, the Installment Sale Agreement,
the Reimbursement Agreement, the Mortgage, the Pledge and Assignment, the
Guaranty and the Letter of Credit, and to all amendments and supplements
thereto, for a description of the nature and extent of the security for the
Bonds, the terms and conditions upon which the Bonds are issued and secured and
the rights, duties and obligations of the Issuer, the Trustee, the Company, the
Bank and the Bondholders. Copies of such documents are on file in the Office of
the Trustee.

                              (General Provisions)

     The initial Remarketing Agent under the Indenture is McDonald Investments
Inc., a Key Corp Company, and the initial Tender Agent under the Indenture is
The Huntington National Bank. The Remarketing Agent and the Tender Agent may be
changed at any time in accordance with the Indenture.

     The Initial Bonds are issuable only as fully registered bonds in the
denominations of $100,000 and in any integral multiple of $5,000 in excess
thereof and shall be originally issued only to a Depository to be held in a book
entry system and, while so held in book entry only form, (A) the Initial Bonds
shall be registered in the name of the Depository or its nominee, as Bondholder,
and immobilized in the custody of the Depository, (B) unless otherwise requested
by the Depository, there shall be a single Bond certificate for each maturity of
the Initial Bonds, and (C) the Initial Bonds shall not be transferable or
exchangeable, except for transfer to another Depository or another nominee of a
Depository, without further action by the Issuer. While the Initial Bonds are in
book entry only form, Bonds in the form of physical certificates shall only be
delivered to the Depository. If any Depository determines not to continue to act
as a Depository for the Initial Bonds for use in a book entry system, the Issuer
may attempt to have established a securities depository/book entry system
relationship with another qualified Depository under the Indenture. If the
Issuer does not or is unable to do so, the Issuer and the Trustee, after the
Trustee has made provision for notification to the Beneficial Owners of book
entry interests by the then Depository, shall permit withdrawal of the Bonds
from the Depository, and authenticate and deliver Bond certificates in fully
registered form (in denominations of $100,000 and in any integral multiple of
$5,000 in excess thereof) to the assignees of the Depository or its nominee.

     While a Depository is the sole holder of the Initial Bonds, delivery or
notation of partial redemption or tender for purchase of Bonds shall be effected
in accordance with the provisions of the Letter of Representations, as defined
in the Indenture.

     This Bond is transferable by the registered owner hereof or his duly
authorized attorney upon surrender of this Bond to the Trustee, as Bond
Registrar, at the Office of the Trustee, accompanied by a duly executed
instrument of transfer in form and with guaranty of signature satisfactory to
the Bond Registrar, subject to such reasonable regulations as the Company, the
Issuer or the Bond Registrar may prescribe, PROVIDED, THAT, IF MONEYS FOR THE
MANDATORY PURCHASE OF THIS BOND HAVE BEEN DEPOSITED WITH THE

                                       11

<PAGE>

TRUSTEE UNDER THE INDENTURE, THIS BOND SHALL NOT BE TRANSFERABLE TO ANYONE UNTIL
DELIVERED TO THE TENDER AGENT. Upon any such transfer, a new Bond or Bonds in
the same aggregate principal amount will be issued to the transferee. No service
charge shall be made for any transfer or exchange of Bonds, but the Issuer or
the Trustee may make a charge for transfer or exchange of Bonds sufficient to
reimburse them for any tax, fee or other governmental charge required to be paid
with respect to such transfer or exchange, and such charge shall be paid before
any new Bond shall be delivered.

     Except as set forth in this Bond and as otherwise provided in the
Indenture, the person in whose name this Bond is registered shall be deemed the
owner hereof for all purposes, and payment or on account of the principal of, or
premium if any interest on, this Bond shall be made only to or upon the order of
the registered owner thereof or his duly authorized legal representative, and
the Issuer, the Company, any Paying Agents, the Bond Registrar, the Tender
Agent, the Remarketing Agent and the Trustee shall not be affected by any notice
to the contrary. Such registration may be changed only as provided in this Bond
and in the Indenture, and no other notice to the Issuer or the Trustee shall
affect the rights or obligations with respect to the transference of a Bond or
be effective to transfer any Bond. All payments to the Person in whose name any
Bond shall be registered shall be valid and effectual to satisfy and discharge
the liability upon such Bond to the extent of the sum or sums to be paid.

     THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY FROM
PAYMENTS MADE BY THE BANK UNDER THE LETTER OF CREDIT AND BY THE COMPANY UNDER
THE INSTALLMENT SALE AGREEMENT, MONEYS AND SECURITIES HELD BY THE TRUSTEE UNDER
THE INDENTURE, AND THE SECURITY PROVIDED BY THE MORTGAGE, THE PLEDGE AND
ASSIGNMENT AND THE GUARANTY.

     The owner of this Bond shall have no right to enforce the provisions of the
Indenture or to institute action to enforce the covenants therein, or to take
any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.

     The Indenture permits certain amendments or supplements to the Installment
Sale Agreement, the Indenture and the other Financing Documents not prejudicial
to the Bondholders to be made without the consent of or notice to the
Bondholders, and other amendments or supplements thereto to be made with the
consent of the holders of not less than a majority in aggregate principal amount
of the Bonds then outstanding.

     The principal hereof may be declared or may become due on the conditions
and in the manner and at the time set forth in the Indenture upon the occurrence
of an Event of Default as provided in the Indenture.

     NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR REDEMPTION
PRICE OF OR THE INTEREST ON THIS BOND OR FOR ANY CLAIM BASED HEREON OR ON THE
INDENTURE, AGAINST ANY PAST, PRESENT OR FUTURE MEMBER, OFFICER, DIRECTOR,
EMPLOYEE OR AGENT (EXCEPT THE

                                       12

<PAGE>

COMPANY), AS SUCH, OF THE ISSUER OR OF ANY PREDECESSOR OR SUCCESSOR CORPORATION,
EITHER DIRECTLY OR THROUGH THE ISSUER OR OTHERWISE, WHETHER BY VIRTUE OF ANY
CONSTITUTION, STATUTE OR RULE OF LAW, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR
PENALTY, OR OTHERWISE, ALL SUCH LIABILITY BEING, BY THE ACCEPTANCE HEREOF,
EXPRESSLY WAIVED AND RELEASED.

     This Bond shall not be entitled to any benefit under the Indenture or
become valid or obligatory for any purpose until the certificate of
authentication of the Trustee shall be endorsed hereon.

     THE BONDS DO NOT CONSTITUTE AND SHALL NOT BE A DEBT OF THE STATE OF NEW
YORK OR THE COUNTIES OF WARREN AND WASHINGTON, NEW YORK AND NEITHER THE STATE OF
NEW YORK NOR THE COUNTIES OF WARREN AND WASHINGTON, NEW YORK SHALL BE LIABLE
THEREON. THE BONDS DO NOT GIVE RISE TO A PECUNIARY LIABILITY OR CHARGE AGAINST
THE GENERAL CREDIT OR TAXING POWERS OF THE STATE OF NEW YORK OR THE COUNTIES OF
WARREN AND WASHINGTON, NEW YORK.

     It is hereby certified, recited and declared that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture, and the issuance of this Bond, do
exist, have happened and have been performed in the time, form and manner as
required by law, and that the issuance of the Bonds does not violate any
constitutional or statutory limitation.

                                      12-A

<PAGE>

     IN WITNESS WHEREOF, Counties of Warren and Washington Industrial
Development Agency has caused this Bond to be duly executed in its name by the
manual or facsimile signature of its Chairman or Vice Chairman, and its
corporate seal to be impressed or reproduced hereon, attested by the manual or
facsimile signature of its Secretary or Assistant Secretary, all as of the Dated
Date identified above.

                                          COUNTIES OF WARREN AND WASHINGTON
                                          INDUSTRIAL DEVELOPMENT AGENCY

                                          BY:  /s/ Bruce A. Ferguson
                                             -----------------------------------
                                               Bruce A. Ferguson, Chairman

(SEAL)

ATTEST:

/s/ N. A. Caimano
--------------------------------------
Nicholas A. Caimano, Secretary

                                       13

<PAGE>

                     (Form of Certificate of Authentication)

This Bond is one of the Bonds of the issue described in the within-mentioned
Indenture.

                                          THE HUNTINGTON NATIONAL BANK,
                                          as Trustee

                                          BY:   /s/ Cheri Scott Geraci
                                             -----------------------------------
                                                Authorized Officer

   8/29/02
--------------------------------------
Date of Authentication

                                       14

<PAGE>

                        [Form of Assignment for Transfer]

     FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(please insert name, address and social security or tax identification number of
assignee): _______________________________________ the within Bond and does
hereby irrevocably constitute and appoint _____________________________ to
transfer the said Bond on the books kept for registration thereof, with full
power of substitution in the premises.

Dated:
       -------------------------------

                                          --------------------------------------
                                          NOTICE: The signatures) on this
                                          assignment must correspond with the
                                          name(s) as it (they)appear(s) on the
                                          face of the within Bond in every
                                          particular.

In the presence of:

--------------------------------------

                                       15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]