Document:

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                                                                    Exhibit 10.9

                      AMENDED AND RESTATED PROMISSORY NOTE
                           (Revolving Line of Credit)

$3,000,000.00                                            As of December 29, 2003
                                                                Albany, New York

FOR VALUE RECEIVED, the undersigned, ANGIODYNAMICS, INC., a Delaware
corporation, with its principal place of business at 603 Queensbury Avenue,
Queensbury, New York 12804 (herein called the "Borrower"), hereby promises to
pay to the order of KEYBANK NATIONAL ASSOCIATION, a national banking
association, its successors and assigns (herein called the "Payee" or the
"Bank"), at such Payee's main office at 66 South Pearl Street, Albany, New York
12207, or such other location as the Payee shall designate in writing from time
to time, the unpaid amount of all sums that have been advanced to or for the
benefit of the Borrower in accordance with the terms hereof in an amount not to
exceed the principal sum of THREE MILLION AND NO/100 Dollars ($3,000,000.00),
together with interest on the disbursed, unpaid principal, or, if less, the
aggregate unpaid principal amount due hereunder as shown on records of Payee,
together with interest at the applicable rate per annum set forth herein until
paid in full. The records of the Payee maintained in the ordinary course of
business shall be prima facie evidence of the existence and amounts of the
Borrower's obligations recorded therein. All computations of interest under this
Note shall be made on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.

DEFINITIONS. As used herein, the following terms shall have the following
meanings:

     "Adjusted LIBOR Rate" - Means for any LIBOR Rate Interest Period, an
interest rate per annum equal to the sum of (A) the rate obtained by dividing
(x) the LIBOR Rate for such LIBOR Rate Interest Period by (y) a percentage equal
to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate
Interest Period and (B) the LIBOR Rate Margin.

     "Adjusted Prime Rate" - A rate per annum equal to the sum of (a) the Prime
Rate Margin and (b) the greater of (i) the Prime Rate or (ii) one percent (1%)
in excess of the Federal Funds Effective Rate. Any change in the Adjusted Prime
Rate shall be effective immediately from and after such change in the Adjusted
Prime Rate.

     "Breakage Costs" - The cost to the Bank of re-employing funds bearing
interest at an Adjusted LIBOR Rate, incurred (or expected to be incurred) in
connection with (i) any payment of any portion of the Loan bearing interest at
an Adjusted LIBOR Rate prior to the termination of any applicable LIBOR Rate
Interest Period, (ii) the conversion of an Adjusted LIBOR Rate to any other
applicable interest rate on a date other than the last day of the relevant
interest period, or (iii) the failure of Borrower to draw down, on the first day
of the applicable LIBOR Rate Interest Period, a Loan Portion.

     "Business Day" - A day on which commercial banks settle payment in New
York.

     "Default Rate" - A per annum rate to four percent (4%) above the rate of
interest otherwise applicable to the Note.

     "Event Of Default" - Any of those events defined as an Event of Default
under this Note or any other instrument or documents executed in connection
herewith.

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     "Federal Funds Effective Rate" - Shall mean, for any day, the rate per
annum (rounded upward to the nearest on one-hundredth of one percent (1/100 of
1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank in substantially the same manner as such Federal
Reserve Bank computes and announces the weighted average it refers to as the
"Federal Funds Effective Rate."

     "LIBOR Business Day" - A Business Day on which dealings in U.S. dollars are
carried on in the London Interbank Market.

     "LIBOR Rate" - For any LIBOR Rate Interest Period, the average rate
(rounded upwards to the nearest 1/16th) as shown in Dow Jones Markets (formerly
Telerate) (Page 3750) at which deposits in U.S. dollars are offered by first
class banks in the London Interbank Market at approximately 11:00 a.m. (London
time) on the day that is two (2) LIBOR Business Days prior to the first day of
such LIBOR Rate Interest Period with a maturity approximately equal to such
LIBOR Rate Interest Period and in an amount approximately equal to the amount to
which such LIBOR Rate Interest Period relates, adjusted for reserves and taxes
if required by future regulations. If Dow Jones Markets no longer reports such
rate or Bank determines in good faith that the rate so reported no longer
accurately reflects the rate available to Bank in the London Interbank Market,
Bank may select a replacement index.

     "LIBOR Rate Interest Period" - With respect to each amount bearing interest
at a LIBOR based rate, a period of one month, to the extent deposits with such
maturities are available to Bank, commencing on a LIBOR Business Day, as
selected by Borrower provided, however, that (i) any LIBOR Rate Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall
continue to and end on the next succeeding LIBOR Business Day, unless the result
would be that such LIBOR Rate Interest Period would be extended to the next
succeeding calendar month, in which case such LIBOR Rate Interest Period shall
end on the next preceding LIBOR Business Day and (ii) any LIBOR Rate Interest
Period which begins on a day for which there is no numerically corresponding
date in the calendar month in which such LIBOR Rate Interest Period would
otherwise end shall instead end on the last LIBOR Business Day of such calendar
month.

     "LIBOR Rate Margin" - Two and eighty five one hundredths percent (2.85 %)
per annum.

     "Loan" - The Loan of up to $3,000,000.00 by the Bank to the Borrower that
is the subject of this Note.

     "Loan Portion" - Each advance of Loan proceeds by the Bank to the Borrower.

     "Maturity Date" - November 30, 2004.

     "Prime Rate" - That interest rate established from time to time by the Bank
as the Bank's Prime Rate, whether or not such rate is publicly announced; the
Prime Rate may not be the lowest interest rate charged by the Bank for
commercial or other extensions of credit;

     "Prime Rate Margin" - one half of one percent (.50%) per annum.

     "Security Agreement" - Means the loan and security agreement dated August
28, 2002 from the Borrower in favor of the Bank, as amended by a first amendment
thereto of even date herewith, as such loan and security agreement may be
further amended or supplemented from time to time.

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ADVANCES; INTEREST RATE. (A). Advances under this Note shall be reflected on the
records of the Payee. In absence of default by the Borrower, as the Borrower
makes repayments of principal, it shall be permitted to re-borrow hereunder
until the Maturity Date.

     (B)  Except as set forth below and subject, however, to the provisions of
the paragraph hereof entitled "Default", interest on the outstanding principal
balance hereof shall accrue at the Adjusted LIBOR Rate. If Bank determines
(which determination shall be conclusive and binding upon Borrower, absent
manifest error) (i) that Dollar deposits in an amount approximately equal to a
Loan Portion are not generally available at such time in the London interbank
market for deposits in Dollars, (ii) that the rate at which such deposits are
being offered will not adequately and fairly reflect the cost to Bank of
maintaining a LIBOR Rate on such Loan Portion due to circumstances affecting the
London interbank market generally, (iii) that reasonable means do not exist for
ascertaining a LIBOR Rate, or (iv) that an Adjusted LIBOR Rate would be in
excess of the maximum interest rate which Borrower may by law pay, then, in any
such event, Bank shall so notify Borrower and all Loan Portions bearing interest
at an Adjusted LIBOR Rate that are so affected shall, as of the date of such
notification with respect to an event described in clause (ii) or (iv) above, or
as of the expiration of the applicable LIBOR Rate Interest Period with respect
to an event described in clause (i) or (iii) above, bear interest at the
Adjusted Prime Rate until such time as the situations described above are no
longer in effect

     (C)  If the introduction of or any change in any law, regulation or treaty,
or in the interpretation thereof by any Governmental Authority (as described in
the Security Agreement) charged with the administration or interpretation
thereof, shall make it unlawful for Bank to maintain the interest rate
applicable to a Loan Portion at an Adjusted LIBOR Rate with respect to the Loan
Portion, or to fund a Loan Portion in Dollars in the London interbank market,
then (1) Bank shall notify Borrower that Bank is no longer able to maintain the
interest rate applicable to such Loan Portion at an Adjusted LIBOR Rate, (2) the
applicable interest rate for any such Loan Portion shall automatically be
converted to the Adjusted Prime Rate, and (3) Borrower shall pay to Bank the
amount of Breakage Costs (if any) incurred in connection with such conversion.

PAYMENTS. In the event the entire amount of any payment due hereunder is not
paid within five (5) days after the same is due a late fee equal to five percent
(5%) of the required payment will be charged by the Payee.

     Accrued interest shall be payable on the first day of the month immediately
succeeding the date of this Note, and on the first day of each succeeding month
thereafter during the term of this note and all disbursed unpaid principal
together with accrued interest will be paid in full no later than the Maturity
Date. All payments shall be applied first to the payment of all fees, expenses
and other amounts due to the Payee (excluding principal and interest), then to
accrued interest, and the balance on account of outstanding principal; provided,
however that after the occurrence of an Event of Default, payments will be
applied to the obligations of the Borrower to the Payee as the Payee determines
in its sole discretion. All payments shall be in lawful money of the United
States in immediately available funds, without counterclaim or set off and free
and clear of and without any deduction or withholding for, any taxes or other
payments.

     Notwithstanding anything to the contrary contained herein, the Borrower
shall be required to pay off in full the outstanding principal balance hereof
and maintain a zero outstanding balance hereunder for at least thirty (30)
consecutive days during the term hereof.

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PREPAYMENT. The Borrower shall have the right to make prepayments of the Loan,
in whole or in part, without prepayment penalty, upon not less than three (3)
days' prior written notice to the Bank. No prepayment of all or part of the Loan
shall be permitted unless same is made together with the payment of all interest
accrued on the Loan through the date of prepayment and an amount equal to all
Breakage Costs and attorneys' fees and disbursements incurred by the Bank as a
result of the prepayment.

FEES. (A) On the date of execution and delivery of this Note and on each
one-year anniversary thereof, the Borrower shall remit to the Bank a fee in the
amount of $7,500.00.

          (B) The Borrower recognizes that the cost to the Bank of maintaining
the Loan or any Loan Portion may fluctuate and, the Borrower agrees to pay the
Bank additional amounts to compensate the Bank for any increase in its actual
costs incurred in maintaining the Loan or any Loan Portion outstanding or for
the reduction of any amounts received or receivable from the Borrower as a
result of:

          (i) any change after the date hereof in any applicable law, regulation
          or treaty, or in the interpretation or administration thereof, or by
          any domestic or foreign court, (A) changing the basis of taxation of
          payments under this Note to the Bank (other than taxes imposed on all
          or any portion of the overall net income or receipts of the Bank), or
          (B) imposing, modifying or applying any reserve, special deposit or
          similar requirement against assets of, deposits with or for the
          account of, credit extended by, or any other acquisition of funds for
          loans by the Bank (which includes the Loan or any Loan Portion)
          (provided, however, that the Borrower shall not be charged again the
          Reserve Percentage already accounted for in the definition of the
          Adjusted LIBOR Rate), or (C) imposing on the Bank, or the London
          interbank market generally, any other condition affecting the Loan,
          provided that the result of the foregoing is to increase the cost to
          the Bank of maintaining the Loan or any Loan Portion or to reduce the
          amount of any sum received or receivable from the Borrower by the Bank
          hereunder or under the other Financing Documents (as defined in the
          Security Agreement; or

          (ii) the maintenance by Bank of reserves in accordance with reserve
          requirements promulgated by the Board of Governors of the Federal
          Reserve System of the United States with respect to "Eurocurrency
          Liabilities" of a similar term to that of the applicable Loan Portion
          (without duplication for reserves already accounted for in the
          calculation of a LIBOR Rate pursuant to the terms hereof).

          (C) If the application of any law, rule, regulation or guideline
adopted or arising out of the July, 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or the adoption after
the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy, or any change after the date hereof in any of the foregoing,
or in the interpretation or administration thereof by any domestic or foreign
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank, with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has the effect
of reducing the rate of return on the Bank's capital to a level below that which
the Bank would have achieved but for such

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application, adoption, change or compliance (taking into consideration the
policies of Bank with respect to capital adequacy), then, from time to time the
Borrower shall pay to the Bank such additional amounts as will compensate the
Bank for such reduction with respect to any Loan Portion outstanding.

     Any amount payable by the Borrower under subsection (B) or subsection (C)
of this Section shall be paid within five (5) days of receipt by the Borrower of
a certificate signed by an authorized officer of the Bank setting forth the
amount due and the basis for the determination of such amount, which statement
shall be conclusive and binding upon the Borrower, absent manifest error.
Failure on the part of the Bank to demand payment from the Borrower for any such
amount attributable to any particular period shall not constitute a waiver of
the Bank's right to demand payment of such amount for any subsequent or prior
period. The Bank shall use reasonable efforts to deliver to the Borrower prompt
notice of any event described in subsection (A) or (B) above, of the amount of
the reserve and capital adequacy payments resulting therefrom and the reasons
therefor and of the basis of calculation of such amount; provided, however, that
any failure by the Bank to so notify the Borrower shall not affect the
Borrower's obligation to pay the reserve and capital adequacy payment resulting
therefrom.

DEFAULT. Upon the occurrence of one or more Events of Default, the entire
principal and interest on this Note shall become immediately due and payable
without presentment or protest or other notice of demand, all of which are
expressly waived by the Borrower. If the Bank, in its sole and absolute
discretion, elects not to demand payment by the Borrower, notwithstanding said
failure to demand, the Bank shall be under no obligation to make advances
pursuant to the terms of this Note unless and until the Event of Default is
cured to the satisfaction of the Bank. Anyone or more of the following shall
constitute an Event of Default:

          (A) Upon the failure of the Borrower to pay any part of the principal
of this Note on the Maturity Date or interest on this Note when due and payable;
or

          (B) The occurrence of an event of default under the Security Agreement

     If an Event of Default should occur and be continuing or after the Maturity
Date or after judgment has been rendered on this Note, all Loan Portions shall
bear interest at the Default Rate until the earlier of (i) the Event of Default
is cured, or (ii) all Loan Portions are paid in full.

     The powers and remedies given hereby shall not be exclusive of any other
powers and remedies available to the Payee. No course of dealings between the
Borrower and the Payee and no delay on the part of the Payee in exercising any
rights with respect to any default shall operate as a waiver of any rights of
the Payee. Failure upon the part of the Payee to exercise any rights with
respect to any default shall not operate as a waiver of any rights with respect
to any other default.

PARTIAL INVALIDITY. If any provision of this Note or the application of it to
any person or circumstance, shall be invalid or unenforceable, the remainder of
this Note or the application of that provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected and every other provision of this Note shall be valid and fully
enforceable.

WAIVER, CHANGE, MODIFICATION OR DISCHARGE. This Note may not be waived, changed,
modified or discharged orally, but only by agreement in writing signed by the
party against whom any enforcement of any waiver, change, modification or
discharge is sought.

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COVENANT AGAINST USURY. All agreements between the Borrower and the Bank are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to the Bank for the use or
the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided, however that in the
event there is a change in the law which results in a higher permissible rate of
interest, then this Note shall be governed by such law as of its effective date.
In this regard, it is expressly agreed that it is the intent of the Borrower and
the Bank in the execution, delivery and acceptance of this Note to contract in
strict compliance with the laws of the State of New York from time to time in
effect. If, under or from any circumstances whatsoever, fulfillment of any
provision hereof at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances whatsoever the Bank
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements
between the Borrower and the Bank.

WAIVER OF DILIGENCE, PRESENTMENT, DEMAND, ETC. The Borrower hereby waives with
respect to this Note: diligence, presentment, demand for payment, filing of
claims with a court in the event of bankruptcy of the Borrower or any other
person or entity liable in respect to this Note, any right to require a
proceeding first against the Borrower or any other such person; protest, notice
of dishonor or nonpayment of any such liabilities and any other notice and all
demands whatsoever except as specifically set forth in this Note.

TRANSFER AND ASSIGNMENT OF NOTE; PLEDGE OF RIGHTS: PARTICIPATION. (A) The Bank
shall have the right in its discretion to transfer ownership of this Note and
the security therefor or to assign, as collateral or otherwise, its rights
hereunder, including the right to receive payments of principal and interest, in
all instances without prior notice to or the consent of the Borrower.
Additionally, the Bank may at any time pledge all or any portion of its rights
under this Note to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
enforcement thereof shall release the Bank from its obligations hereunder.

          (B) The Bank shall have the unrestricted right at any time and from
time to time, and without the consent of or notice to the Borrower, to grant to
one or more banks or other financial institutions (each, a "Participant")
participating interests in the Bank's obligation to lend hereunder and/or any or
all of the loans held by the Bank hereunder. In the event of any such grant by
the Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower, the Bank shall remain responsible for the performance of
its obligations hereunder and the Borrower shall continue to deal solely and
directly with the Bank in connection with the Bank's rights and obligations
hereunder.

     The Bank may furnish any information concerning the Borrower in its
possession from time to time to prospective Assignees and Participants, provided
that the Bank shall require any such

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prospective Assignee or Participant to agree in writing to maintain the
confidentiality of such information.

JURY TRIAL WAIVER. THE BORROWER AND THE BANK (BY ACCEPTANCE OF THIS NOTE)
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE BANK RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF
THIS NOTE, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
EXCEPT AS PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS NOTE AND MAKE THE
LOAN.

RIGHT OF SET OFF. The Borrower hereby grants to the Bank, a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to the Bank, whether now existing or hereafter arising, upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of the Bank or any entity under the
control of KeyCorp and its successors and assigns or in transit to any of them.
At any time, without demand or notice (any such notice being expressly waived by
the Borrower), the Bank may set off the same or any part thereof and apply the
same to any liability or obligation of the Borrower even though unmatured and
regardless of the adequacy of any other collateral securing this Note. ANY AND
ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THIS NOTE, PRIOR TO EXERCISING ITS RIGHT
OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

EXPENSES INCURRED IN CONNECTION WITH ENFORCEMENT. The Borrower shall pay on
demand all expenses of the Payee in connection with the preparation,
administration, default, collection, waiver or amendment of loan terms, or in
connection with the Payee's exercise, preservation or enforcement of any of its
rights, remedies or options hereunder, including, without limitation, fees of
outside legal counsel or the allocated costs of in-house legal counsel,
accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the loan
or any collateral therefor, and the amount of all such expenses shall, until
paid, bear interest at the rate applicable to principal hereunder (including any
default rate) and be an obligation secured by any collateral.

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CHOICE OF LAW. This Note and the rights and obligations of the parties hereunder
shall be construed and interpreted in accordance with the laws of the State of
New York (the "Governing State") (excluding the laws applicable to conflicts or
choice of law).

     THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE
BROUGHT IN THE COURTS OF THE GOVERNING STATE OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SET FORTH HEREIN. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.

MERGER. This Note is intended by the parties as the final, complete and
exclusive statement of the transactions evidenced by this Note. All prior
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this Note. This Note
may not be amended or modified except by a written instrument describing such
amendment or modification executed by the Borrower and the Bank.

USE OR PROCEEDS. No portion of the proceeds of this Note shall be used, in whole
or in part, for the purpose of purchasing or carrying any "margin stock" as such
term is described in Regulation U of the Board of Governors of the Federal
Reserve System.

LOST OR DAMAGED NOTE. Upon receipt of an affidavit of an officer of the Holder
as to the loss, theft, destruction or mutilation of this Note or any other
security document which is not of public record, and, in the case of any such
loss, theft, destruction or mutilation, upon surrender and cancellation of such
Note or other security document, the Holder will issue, in lieu thereof, a
replacement Note or other security document in the same principal amount thereof
and otherwise of like tenor.

AMENDMENT AND RESTATEMENT. This Amended and Restated Note amends and restates
that certain promissory note dated August 28, 2002 in the principal amount of
$800,000.00 from the Borrower in favor of the Holder.

ANGIODYNAMICS, INC.

By: /s/ Joseph G. Gerardi
   -------------------------------------
        Joseph G. Gerardi, Vice President
        and Controller<PAGE>

                                                                   EXHIBIT 10.10

                             BUILDING LOAN AGREEMENT
                             -----------------------

THIS BUILDING LOAN AGREEMENT dated as of August 1, 2002 (the "Building Loan
Agreement") by and between ANGIODYNAMICS, INC., a corporation organized and
existing under the laws of the State of Delaware, having a place of business at
603 Queensbury Avenue, Queensbury, New York 12804 (the "Company"), and KEYBANK
NATIONAL ASSOCIATION, a national banking association having an office for the
transaction of business at 66 South Pearl Street, Albany, New York 12207 (the
"Bank").

                              W I T N E S S E T H:

     WHEREAS, the Company has requested the COUNTIES OF WARREN AND WASHINGTON
INDUSTRIAL DEVELOPMENT AGENCY, a public benefit corporation of the State of New
York (the "State") having an office for the transaction of business located at 5
Warren Street, Glens Falls, New York 12801 (the "Issuer"), to undertake a
project consisting of (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 "Improvements")
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") 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 to
the Company, all pursuant to the Act; and

     WHEREAS, the Issuer proposes to finance a portion of the costs of the
Project by the issuance of its Tax-Exempt Multi-Mode Variable Rate Industrial
Development Revenue Bonds (Angiodynamics, Inc. Project), Series 2002, in the
aggregate principal amount of $3,500,000 (the "Bonds"), which are to be issued
under and secured by an Indenture of Trust dated as of August 1, 2002 (the
"Indenture") by and between the Issuer and The Huntington National Bank,
Cleveland, Ohio as trustee (the "Trustee"); and

     WHEREAS, to secure the Bonds, the Company (sometimes referred to as the
"Applicant") and the Bank have entered into a reimbursement agreement dated as
of August 1, 2002 (the "Reimbursement Agreement") pursuant to which the Bank is
to issue in favor of the Trustee its irrevocable transferable letter of credit
(the "Letter of Credit"), and the Applicant agrees to reimburse the Bank for any
amount drawn on the Letter of Credit; and

     WHEREAS, the Issuer and the Company, as security for the performance of the
Company's obligations under the Reimbursement Agreement will execute and deliver
to the Bank a mortgage, dated as of August 1, 2002, on, and security interest in
the Project (the "Mortgage"); and

     WHEREAS, all things necessary to constitute the Mortgage as a valid lien on
and pledge of the Mortgaged Property (as defined in the Mortgage) in accordance
with the terms thereof have been or are to

<PAGE>

be done and performed, and the creation, execution and delivery of the Mortgage,
as security for the Company's obligations under the Reimbursement Agreement have
in all respects been duly authorized;

     WHEREAS, pursuant to the Indenture, the proceeds of the sale of the Bonds
(the "Bond Proceeds") will be deposited into various trust funds held by the
Trustee under the Indenture and will be disbursed by the Trustee from time to
tome to pay the costs of the Project, but only upon satisfaction of the
requirements for making such disbursements set forth in the Indenture, in the
Installment Sale Agreement, in the Reimbursement Agreement and the Building Loan
Agreement.

     NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
COVENANTS HEREINAFTER CONTAINED, THE PARTIES HERETO HEREBY FORMALLY COVENANT,
AGREE AND BIND THEMSELVES AS FOLLOWS TO WIT:

                                    ARTICLE 1
                                    ---------

                              TERMS AND DEFINITIONS
                              ---------------------

     In addition to the other terms hereinafter defined, the following terms
shall have the meanings set forth in this Article. References to documents and
other materials shall include those documents and materials as they may be
revised, amended and modified, from time to time, with the prior written
approval of Bank.

     1.1   Advance. "Advance" means any disbursement of the proceeds of the Loan
by Bank pursuant to the terms of this Agreement.

     1.2   Approval. "Approval", "Approved", "approval" or "approved" means, as
the context so determines, an approval in writing given to the party seeking
approval after full and fair disclosure to the party giving approval of all
material facts necessary in order to determine whether approval should be
granted.

     1.3   Architect. "Architect" means any architect who provides labor or
services in connection with the construction of the Improvements pursuant to an
Architect Contract.

     1.4   Architect Contract. "Architect Contract(s)" means any contract
entered into by Company and any Architect.

     1.5   Building Loan Budget. "Building Loan Budget" means that portion of
the Construction Budget being advanced pursuant to this Agreement.

     1.6   Completion Date. "Completion Date" shall have the meaning assigned to
such term in the Indenture.

     1.7   Commitment. "Commitment" means the commitment letter dated May 6,
2002 from the Bank to the Company for issuance of the Letter of Credit.

     1.8   Construction Budget. "Construction Budget" means the budget for total
estimated Project Costs, submitted by Company, approved by Bank, as amended from
time to time with the approval of Bank, which includes: (a) a line item cost
breakdown for construction of the Improvements by trades, jobs and
subcontractors (the "Direct Cost Breakdown"); (b) a line item cost breakdown for

                                        2

<PAGE>

Indirect Costs (the "Indirect Cost Breakdown"); and (c) a schedule of the
sources of funds to pay Project Costs, indicating by item the portion of Project
Costs to be funded through the Loan and Required Equity Funds (the "Source of
Funds Schedule"), and which shall indicate which items are a part of the
Building Loan Budget and which items are a part of the Project Loan Budget.

     1.9   Construction Contract(s). "Construction Contract(s)" means any
contract entered into by Company and any Contractor providing for the
performance of work or the supplying of materials in connection with the
construction of the Improvements.

     1.10  Construction Inspector. "Construction Inspector" means at Bank's
option, either an officer or employee of Bank or other consulting architects,
engineers or inspectors appointed by Bank.

     1.11  Construction Schedule. "Construction Schedule" means the schedule,
broken down by trade, of the estimated dates of commencement and completion of
the Improvements, submitted by Company and approved by Bank.

     1.12  Intentionally Omitted.

     1.13  Contractor. "Contractor" means any contractor who provides labor or
materials in connection with the construction of the Improvements pursuant to a
Construction Contract.

     1.14  Costs of Improvement. "Costs of Improvement" means those items
defined as such under Section 2(5) of Article 1 of the Lien Law, as such term
applies to the portion of the Project being financed with that portion of the
Loan being advanced hereunder.

     1.15  Credit Documents. "Credit Documents" shall have the meaning set forth
in the Reimbursement Agreement.

     1.16  Disbursement Schedule. "Disbursement Schedule" means the schedule of
the amounts of Advances anticipated to be requisitioned by Company each month
during the term of construction of the Improvements (including an itemization of
direct costs and Indirect Costs to be included in each such requisition),
approved by Bank.

     1.17  Draw Request. "Draw Request" means, with respect to each Advance,
Company's request for such Advance, and documents required by this Agreement to
be furnished to Bank as a condition to such Advance.

     1.18  Event of Default. "Event of Default" means any condition or event
described herein as such.

     1.19  Governmental Approvals. "Governmental Approvals" means all approvals,
consents, waivers, orders, acknowledgments, authorizations, permits and licenses
required under applicable Requirements to be obtained from any Governmental
Authority for the construction of the Improvements and the use, occupancy and
operation of the Project following completion of construction of the
Improvements.

     1.20  Governmental Authority. "Governmental Authority" means the United
States of America, the state(s) in which the Land is located and Company and
Guarantor are located or organized, any political subdivision thereof,
municipalities in which the Land is located, and any agency, authority,
department, commission, board, bureau, or instrumentality of any of them.

                                        3

<PAGE>

     1.21  Intentionally Omitted.

     1.22  Intentionally Omitted. Guaranty means the guaranty by Guarantor of
Company's obligations under the Credit Documents.

     1.23  Improvements. "Improvements" shall have the meaning set forth in the
first WHEREAS paragraph above, in accordance with the Plans and Specifications.

     1.24  Indirect Costs. "Indirect Costs" mean and include title insurance
premiums, survey charges, engineering fees, architectural fees, real estate
taxes during the period of construction, commitment fees and interest payable to
Bank under the Loan, premiums for insurance, legal fees and all other expenses
which are, in accordance with sound accounting practices, capital expenditures
relating to the Project.

     1.25  Land. "Land" means the real property described in Exhibit A attached
hereto.

     1.26  Lien Law. "Lien Law" means the Lien Law of the State of New York.

     1.27  Loan. "Loan" means the Bond issuance which is the subject of this
Agreement.

     1.28  Loan Amount. "Loan Amount" means $3,500,000.00 which is the amount of
the Bonds.

     1.29  Intentionally Omitted.

     1.30  Payment and Performance Bonds. "Payment and Performance Bonds" mean
dual-obligee payment and performance bonds relating to the Contractor and/or
such major subcontractors, as Bank may require from time to time, issued by a
surety company or companies acceptable to Bank, in each case in an amount not
less than the full contract price.

     1.31  Personal Property. "Personal Property" means materials, furnishings,
fixtures, machinery, equipment including the Equipment and all items of tangible
and intangible personal property now or hereafter owned by Company, wherever
located, and either (i) to be incorporated into the Improvements, (ii) used in
connection with the construction of the Improvements or (iii) to be used in
connection with the operation of the Land or Improvements or both.

     1.32  Phase I: "Phase I" means any environmental assessment report of the
Land submitted by Company to Bank in connection with the issuance of the Letter
of Credit.

     1.33  Plans and Specifications. "Plans and Specifications" means the plans
and specifications for the Improvements prepared by Architect and previously
submitted to Bank.

     1.34  Project. "Project" means the collective reference to (i) the Land;
(ii) the Improvements; (iii) all of the Company's developmental rights and other
rights, privileges, easements, hereditaments and appurtenances relating or
appertaining thereto, and (iv) the Personal Property.

     1.35  Project Costs. "Project Costs" means the costs of undertaking the
construction and installation of the Project.

                                        4

<PAGE>

     1.36  Project Loan Budget. "Project Loan Budget" means that portion of the
Construction Budget being advanced to acquire the Land and for other
non-allowable Costs of Improvements under the Lien Law.

     1.37  Property. "Property" means the collective reference to the (i) Land;
(ii) the Improvements; and (iii) the "Personal Property".

     1.38  Required Equity Funds. "Required Equity Funds" means the sums, if
any, required of Company by Bank, to be available to pay the difference between
Project Costs and the amount of the Loan.

     1.39  Requirements. "Requirements" means any law, ordinance, order, rule or
regulation of any Governmental Authority relating in any way to the Project,
Company or Guarantor.

     1.40  Taking. "Taking" shall mean any condemnation for public use of, or
damage by reason of, the action of any Governmental Authority, or any transfer
by private sale in lieu thereof, either temporarily or permanently.

     1.41  Termination Date. "Termination Date" means the earlier of August 29,
2005, or such other date as may be set forth herein which fixes the termination
of Bank's obligations to make Advances.

                                    ARTICLE 2
                                    ---------

                              Intentionally deleted

                                    ARTICLE 3
                                    ---------

                    REPRESENTATIONS AND WARRANTIES OF COMPANY
                    -----------------------------------------

     Company hereby represents and warrants to Bank as follows:

     3.1   Validity of Credit Documents. That the Credit Documents are in all
respects valid and legally binding obligations, enforceable in accordance with
their respective terms, subject to those exceptions in the legal opinions issued
to Bank, and grant to Bank a direct, valid and enforceable first mortgage lien
on and security interest in and to the Project, including any and all Personal
Property acquired by Company after the date of this Agreement.

     3.2   Title to Project. That based upon a review of the title insurance
policy issued to Bank, Issuer has good clear record and marketable fee simple
absolute title to the Land, subject to no liens, security interests, charges or
encumbrances in favor of any person other than Bank other than those listed as
exceptions in the Title Insurance Policy, as defined herein.

     3.3   Absence of Conflicts. That the execution and delivery of the Credit
Documents by Company and any Guarantor do not, and the performance and
observance by Company and any Guarantor of their obligations thereunder will
not, contravene or result in a breach of their corporate documents.

                                        5

<PAGE>

     3.4   Pending Litigation. That there are no actions, suits, investigations
or proceedings pending, or, to the knowledge of Company, threatened against or
affecting Company, or involving the validity or enforceability of any of the
Credit Documents or the priority of the lien thereof, or which will affect
Company's ability to repay the Loan, at law or in equity or before or by any
Governmental Authority.

     3.5   Violations of Requirements. That Company has no knowledge of any
violations or notices of violations of any Requirements.

     3.6   Compliance with Requirements. That the Plans and Specifications and
construction of the Improvements pursuant thereto and the use of the Project
contemplated thereby will comply with all Requirements.

     3.7   Organization, Status and Authority.

           The Company (i) is duly organized, validly existing and in good
     standing under the laws of the State of Delaware, (ii) it is duly qualified
     to do business and is in good standing in the State of New York, (iii) it
     has the requisite power, authority and legal right to own and operate its
     properties and assets, carry on the business now being conducted and
     subject to the issuance of additional licenses, permits and other approvals
     which Company reasonably believes will be granted in due course, proposed
     to be conducted by it, and to engage in the transactions contemplated by
     the Credit Documents, and (iv) the execution and delivery of the Credit
     Documents to which it is a party and the performance and observance of the
     provisions thereof have been duly authorized by all necessary company
     actions.

     3.8   Availability of Utilities. That all utility services necessary and
sufficient for the construction, development and operation of the Project for
its intended purposes are presently available to the boundaries of the Land
through dedicated public rights of way or through perpetual private easements,
approved by Bank, with respect to which the Mortgage creates a valid, binding
and enforceable first lien, including, but not limited to, water supply, storm
and sanitary sewer, gas, electric and telephone facilities, and drainage.

     3.9   Condition of Project. That neither the Project nor any portion
thereof is now damaged or injured as result of any fire, explosion, accident,
flood or other casualty or has been the subject of any Taking, and to the
knowledge of Company, no Taking is pending or contemplated.

     3.10  Brokerage Commissions. That any brokerage commissions due in
connection with the transactions contemplated hereby have been paid in full and
that any such commissions coming due in the future will be promptly paid by
Company. Company agrees to and shall indemnify Bank from any liability, claims
or losses arising by reason of any such brokerage commissions. This provision
shall survive the repayment of the Loan and shall continue in full force and
effect so long as the possibility of such liability, claims or losses exists.

     3.11  Financial Statements. That the financial statements of Company
previously delivered to Bank are true and correct in all respects, have been
prepared in accordance with generally accepted accounting principles
consistently applied, and fairly present the respective financial conditions of
Company as of the respective dates thereof and the results of their operations
for the periods covered thereby; that no adverse change has occurred in the
assets, liabilities, or financial conditions reflected therein since the
respective dates thereof.

                                        6

<PAGE>

     3.12  Taxes. That all federal, state and other tax returns of Company
required by law to be filed have been filed or alternatively the Company has
received a valid extension with respect to the filings thereof, that all
federal, state and other taxes, assessments and other governmental charges upon
Company and any Guarantor or their respective properties which are due and
payable have been paid or extended as allowable by law, and that Company have
set aside on their books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods for which such returns have been
filed.

     3.13  Other Contracts. That Company has made no contract or arrangement of
any kind or type whatsoever (whether oral or written, formal or informal) other
than title exceptions of record and permitted encumbrances, the performance of
which by the other party thereto could give rise to a lien or encumbrance on the
Project, except for contracts (all of which have been disclosed in writing to
Bank) made by Company with parties who have executed and delivered lien waivers
to Company, and which, in the opinion of Bank's counsel, will not create rights
in existing or future lien claimants which may be superior to the lien of the
Mortgage.

     3.14  Construction Contract. That (i) all Construction Contract(s) are in
full force and effect; (ii) both Company and Contractor are in full compliance
with their respective obligations under any Construction Contract; (iii) the
work to be performed by Contractor under the Construction Contract is the work
called for by the Plans and Specifications and all work required to complete the
Improvements in accordance with the Plans and Specifications is provided for
under the Construction Contract(s); and (iv) all work on the Improvements shall
be completed in accordance with the Plans and Specifications in a good and
workmanlike manner and shall be free of any defects.

     3.15  Access. That the rights of way for all roads necessary for the full
utilization of the Improvements for their intended purposes have either been
acquired by the Company, the appropriate Governmental Authority or have been
dedicated to public use and accepted by such Governmental Authority, and all
such roads shall have been completed, or all necessary steps shall have been
taken by Company and such Governmental Authority to assure the complete
construction and installation thereof prior to the date upon which access to the
Property via such roads will be necessary. All curb cuts, driveway permits and
traffic signals shown on the Plans and Specifications or otherwise necessary for
access to the Property are existing or have been fully approved by the
appropriate Governmental Authority.

     3.16  No Default. That no Event of Default exists and no event which but
for the passage of time, the giving of notice or both would constitute an Event
of Default has occurred.

     3.17  Architect's Contract. That (i) the Architect's Contract(s) are in
full force and effect; and (ii) both Company and Architect are in full
compliance with their respective obligations under the Architect's Contract(s).
Company shall from time to time, upon request by Bank, cause Architect to
provide Bank with reports in regard to the status of construction of the
Improvements, in such form and detail as reasonably requested by Bank.

     3.18  Plans and Specifications. That Company has furnished Bank true and
complete sets of the Plans and Specifications which comply with all
Requirements, all Governmental Approvals, and all restrictions, covenants and
easements affecting the Project, and which have been approved by the Contractor,
Architect, and such Governmental Authority as is required for construction of
the Improvements.

                                        7

<PAGE>

     3.19  Governmental Approvals. That Company has obtained all Governmental
Approvals from, and has given all such notices to, and has taken all such other
actions with respect to such Governmental Authority as may be required under
applicable Requirements for the construction of the Improvements.

     3.20  Building Loan Budget. That the Building Loan Budget accurately
reflects those portions of the Construction Budget which are to be advanced
pursuant to this Agreement.

     3.21  Construction Budget. That the Construction Budget accurately reflects
all Project Costs.

     3.22  Feasibility. That each of the Construction Schedule and the
Disbursement Schedule is realistic and feasible, and is accurate to date.

     3.23  Effect of Draw Request. That each Draw Request submitted to Bank as
provided in Article 6 hereof shall constitute an affirmation that the
representations and warranties contained in Article 3 of this Agreement and in
the other Credit Documents remain true and correct as of the date thereof; and
unless Bank is notified to the contrary, in writing, prior to the disbursement
of the requested Advance or any portion thereof, shall constitute an affirmation
that the same remain true and correct on the date of such disbursement.

                                    ARTICLE 4
                                    ---------

                              COVENANTS OF COMPANY
                              --------------------

     Company hereby covenants and agrees with Bank as follows:

     4.1   Commitment. To permit no default under the terms of the Commitment.

     4.2   Construction Contract. (i) to enter into no Construction Contract
that is not a fixed-price contract or a guaranteed maximum cost contract; (ii)
to permit no default under the terms of any Construction Contract; (iii) to
waive none of the material obligations of Contractor thereunder, (iv) to do no
act which would relieve Contractor from its obligations to construct the
Improvements according to the Plans and Specifications;(v) to make no material
amendments to or change orders under any Construction Contract without the prior
approval of Bank; provided, however, that the prior approval of Bank shall not
be required for individual change orders of less than $15,000.00 so long as such
change order, together with change orders previously made does not cause the
aggregate amount of change orders under all Construction Contracts to exceed
$15,000.00 and so long as such change order does not materially affect the
quality of materials or work.

     4.3   Architect's Contract. (i) To permit no default under the terms of any
Architect's Contract, (ii) to waive none of the obligations of Architect
thereunder, (iii) to do no act which would relieve Architect from its
obligations under any Architect's Contract, and (iv) to make no amendments to
any Architect's Contract without the prior approval of Bank.

     4.4   Insurance. To obtain insurance or evidence of insurance as Bank may
reasonably require, including, but not limited to, the following:

           (a)  Title Insurance. A mortgagee title insurance policy (the "Title
     Insurance Policy") in an amount, and issued by a title insurance company
     (the "Title Insurer") and through a

                                        8

<PAGE>

     title agent as shall be approved by Bank, insuring a valid first lien upon
     and security interest in and to the Land and Improvements by virtue of the
     Mortgage, with such reinsurance or co-insurance agreements as may be
     required by Bank. The Title Insurance Policy shall contain no exceptions
     other than those specifically approved in writing by Bank, contain a
     pending disbursements clause or endorsement and such other endorsements as
     Bank may reasonably require, and such affirmative insurance as Bank may
     reasonably require. The Title Insurance Policy, together with evidence of
     payment of premiums thereon, shall be delivered to Bank on or before the
     date of this Agreement.

           (b)  Insurance Required by Mortgage. Such insurance as may be
     required by the Mortgage. If any hazard insurance required by the Mortgage
     is obtained as to all or part of the Project before completion of
     construction then such policy shall contain an endorsement recognizing that
     construction is in progress and agreeing that such shall not adversely
     affect the coverage or be asserted as a defense on any claim under such
     policy.

           (c)  Professional Liability Insurance. Evidence or certificates from
     insurance companies indicating that the Architect, the Contractor and all
     other architects, engineers, contractors and subcontractors responsible for
     the design or construction of the Improvements are covered by professional
     liability insurance to the satisfaction of Bank; such evidence or
     certificates to be delivered to Bank on or before the date of this
     Agreement.

     4.5   Application of Bond Proceeds. To use the proceeds of the Bonds solely
for the purpose of paying Project Costs in accordance with the terms of the
Indenture, this Agreement and the Construction Budget.

     4.6   Project Costs and Expenses. To pay all Project Costs, regardless of
the amount, and to pay all costs and expenses of Bank with respect to the
financing, acquisition and construction of the Project, including but not
limited to, appraisal fees, inspection fees, surveying costs, legal
fees(including legal fees incurred by Bank subsequent to the closing of the Loan
in connection with the disbursement, administration, collection or transfer of
the Loan), advances, recording expenses, surveys, intangible taxes, expenses of
foreclosure (including attorney's fees) and similar items.

     4.7   Commencement and Completion of Construction. To diligently pursue
construction, which has commenced, to completion prior to the Completion Date in
accordance with the Plans and Specifications, in full compliance with all
restrictions, covenants and easements affecting the Land, all Requirements, and
all Governmental Approvals, and with all terms and conditions of the Credit
Documents without deviation from the Plans and Specifications unless with the
prior approval of Bank to pay all sums and to perform such duties as may be
necessary to complete such construction of the Improvements in accordance with
the Plans and Specifications and in full compliance with all restrictions,
covenants and easements affecting the Land, all Requirements and all
Governmental Approvals, and with all terms and conditions of the Credit
Documents, all of which shall be accomplished on or before the Completion Date,
free from any liens, claims or assessments (actual or contingent) asserted
against the Project for any material, labor or other items furnished in
connection therewith. Evidence of satisfactory compliance with the foregoing
shall be furnished by Company to Bank on or before the Completion Date.

     4.8   Right of Bank to Inspect Project. Upon reasonable notice and at
reasonable times (except where an Event of Default has occurred and is
continuing, when no notice or time restriction will apply), to permit Bank and
its representatives and agents to enter upon the Project and to inspect the
Improvements and all materials to be used in the construction thereof and to
cooperate and cause Contractor to cooperate with Bank and its representatives
and agents during such inspections (including

                                        9

<PAGE>

making available to Bank working copies of the Plans and Specifications together
with all related supplementary materials); provided, however, that this
provision shall not be deemed to impose upon Bank any obligation to undertake
such inspections.

     4.9   Correction of Defects. Unless Company demonstrates to Bank that such
corrective work is inappropriate or inconsistent with the Plans and
Specifications, to promptly correct all defects in the Improvements or any
departure from the Plans and Specifications not previously approved by Bank.
Company agrees that the advance of any proceeds of the Loan whether before or
after such defects or departures from the Plans and Specifications are
discovered by, or brought to the attention, of Bank, shall not constitute a
waiver of Bank's right to require compliance with this covenant.

     4.10  (Intentionally Deleted)

     4.11  Approval of Change Orders. To permit no deviations from the Plans and
Specifications during construction without the prior approval of the Bank
(except for change within the constraints of Section 4.2 above) and the surety
company or companies issuing any Payment and Performance Bonds.

     4.12  Notice of Occupancy. To notify Bank on the date of occupancy of each
tenant of any portion of the Project, such notice upon occupancy to include the
name of the tenant and the date of occupancy.

     4.13  Books and Records. To keep and maintain complete proper and accurate
books, records and accounts reflecting all items of income and expense of
Company in connection with the Project and the construction of the Improvements
and the results of the operation thereof; and, upon the request of Bank, to make
such books, records and accounts immediately available to Bank for inspection or
independent audit at reasonable times and upon reasonable notice.

     4.14  Financial Statements and Other Information. To furnish to Bank such
financial statements and information as Company has agreed to provide elsewhere
in the Credit Documents.

     4.15  Construction Inspector. To permit Bank to retain the Construction
Inspector at the cost of Company to perform the following services on behalf of
Bank:

           (a)  To review and advise Bank whether, in the opinion of the
     Construction Inspector, the Plans and Specifications are satisfactory;

           (b)  To review Draw Requests and change orders;

           (c)  To make periodic inspections (approximately at the date of each
     Draw Request) for the purpose of assuring that construction of the
     Improvements to date is in accordance with the Plans and Specifications and
     to approve Company's then current Draw Request as being consistent with
     Company's obligations under this Agreement, including inter alia, an
     opinion as to Company's continued compliance with the provisions of Section
     6.1 (g) (4) hereof.

     The fees of the Construction Inspector shall be paid by Company forthwith
upon billing therefor and expenses incurred by Bank on account thereof shall be
reimbursed to Bank forthwith upon request therefor, but neither Bank nor the
Construction Inspector shall have any liability to Company on account of (i) the
services performed by the Construction Inspector, (ii) any neglect or failure on
the part of the Construction Inspector to properly perform its services, or
(iii) any approval by the Construction Inspector of construction of the
Improvements. Neither Bank nor the Construction Inspector assumes any

                                       10

<PAGE>

obligation to Company or any other person concerning the quality of construction
of the Improvements or the absence therefrom of defects.

     4.16  (Intentionally Deleted)

     4.17  Insufficiency of Loan Proceeds. If at any time or from time to time
during the terms of this Agreement, in Bank's judgment and opinion, the
remaining undisbursed portion of the Loan, together with the undisbursed
balances of other sums previously deposited by Company with Bank in connection
with the Loan, is or will be insufficient to fully complete the Improvements in
accordance with the Plans and Specifications, to operate and carry the Project
after completion of the Improvements until payment in full of the Loan by
Company, to pay all other Project Costs, to pay all interest accrued or to
accrue on the Loan during the term of the Loan from and after the date hereof,
and to pay all other sums due or to become due under the Credit Documents,
regardless of how such condition may be caused, Company shall, within ten (10)
Business Days after written notice thereof from Bank, provide Bank with evidence
of availability of such sums of money in an amount sufficient to remedy such
condition, and sufficient to pay any liens for services and materials alleged to
be due and payable at that time in connection with the Improvements, and, at
Bank's option, no further Advances of the Loan shall be made by Bank until the
provisions of this Paragraph have been fully complied with.

     4.18  Additional Documents. To perform hereunder as follows:

           (a)  Regarding Construction. To furnish to Bank all instruments,
     documents, boundary surveys, footing or foundation surveys, certificates,
     plans and specifications, appraisals, title and other insurance, reports
     and agreements and each and every other document and instrument required to
     be furnished by, the terms of the Commitment or this Agreement or the other
     Credit Documents, all at Company's expense.

           (b)  Regarding Preservation of Security. To execute and deliver to
     Bank such documents, instrument, assignments and other writings, and to do
     such other acts necessary or desirable, to preserve and protect the
     collateral at any time securing or intended to secure the Loan, as Bank may
     require.

           (c)  Regarding this Agreement. To do and execute all and such further
     lawful and reasonable acts, conveyances and assurances in the law for the
     better and more effective carrying out of the intents and purposes of this
     Agreement as Bank shall require from time to time.

     4.19  Financing Publicity. To permit Bank to obtain publicity in connection
with the construction of the Improvements through press releases and
participation in such events as ground breaking and opening ceremonies; and to
give Bank ample advance notice of such events and to give Bank as much
assistance as possible in connection with obtaining such publicity as Bank may
request.

     4.20  Easements and Restrictions. To submit to Bank for Bank's approval
prior to the execution thereof by Company all proposed easements, restrictions,
covenants, permits, licenses, and other instruments which would or might affect
the title to the Land, accompanied by a survey showing the exact proposed
location thereof and such other information as Bank shall reasonably require.
Company shall not subject the Project or any part thereof to any easement (other
than utility and like easements granted in the ordinary cause of Company's
business), restriction or covenant (including any restriction or exclusive use
provision in any lease or other occupancy agreement) without the prior approval
of Bank, which approval shall not be unreasonably withheld or delayed.

                                       11

<PAGE>

     4.21  Compliance with Requirements. To comply promptly with all
requirements and Governmental Approvals and to furnish Bank, on demand, with
independent evidence of such compliance.

     4.22  Leases. To enter into no leases or occupancy agreements affecting the
Project without the prior approval of Bank. Company shall deliver to Bank
executed counterparts of all leases and occupancy agreements affecting the
Project whether executed before or after the date of this Agreement, and shall
not amend any provision thereof or waive any obligations of tenants under any
leases or occupancy agreements affecting the Project without the prior approval
of Bank, which approval shall not be unreasonably withheld. In the event Bank
fails to respond to Company's request for approval within five (5) Business Days
such approval shall be deemed given.

     4.23  Compliance With Restrictions, Covenants and Easements. To comply with
all restrictions, covenants and easements affecting the Project.

     4.24  Laborers, Subcontractors and Materialmen. In addition, Company will
notify Bank immediately, and in writing, if Company receives any notice, written
or oral, from any laborer, subcontractor or materialmen to the effect that said
laborer, subcontractor or materialmen has not been paid when due for any labor
or materials furnished in connection with the construction of the Improvements.
Company will also furnish to Bank, at any time and from time to time upon demand
by Bank, lien waivers bearing a then current date from Contractor and such
subcontractors or materialmen as Bank may designate.

     4.25  Further Assurance of Title. To further assure title as follows: If at
any time Bank or Bank's counsel has reason to believe that any Advance is not
secured or will or may not be secured by the Mortgage as a first lien or
security interest on the Project, then Company shall, within ten (10) days after
written notice from Bank, do all things and matters necessary, to assure to the
satisfaction of Bank and Bank's counsel that any Advance previously made
hereunder or to be made hereunder is secured or will be secured by the Mortgage
as a first lien or first security interest on the Project, and Bank, at its
option, may decline to make further Advances hereunder until Bank has received
such assurance.

     4.26  No Transfers or Encumbrances. To cause or permit no sale, conveyance,
transfer, assignment or encumbering of the Project or any interest therein
without the prior approval of Bank.

     4.27  Compliance With Phase I. To comply with all of the recommendations
set forth in the Phase I immediately and if compliance with those
recommendations results in the need for further testing or environmental
remediation, that said testing and remediation will be completed immediately in
conformance with all applicable environmental laws, rules and regulations,
unless such testing or remediation is the responsibility of the United States
Government under its agreement with the Company and/or Guarantor, in which case
Company will keep Bank fully informed of all such testing and remediation and
will provide Bank with copies of all correspondence to and from the United
States Government in connection therewith.

                                       12

<PAGE>

                                    ARTICLE 5
                                    ---------

                                AGREEMENT TO LEND
                                -----------------

     Subject to the terms and conditions set forth in this Agreement, Bank
agrees to approve Advances of the Loan to Company from time to time during the
period from the date hereof to the Termination Date in an aggregate principal
amount of up to and including the amount reflected in the Building Loan Budget
to pay Project Costs actually incurred in connection with the acquisition of the
Land and construction of the Improvements (including Indirect Costs) if and to
the extent such Project Costs are reflected in the Construction Budget as being
funded by Bank.

     5.1   Bonds. The obligation of Company to pay the principal amount of all
Advances approved by Bank to Company under this Agreement, plus all interest
accrued thereon at the rate or rates set forth in the Bonds, shall be evidenced
by the Bonds.

     5.2   Advances. The Construction Budget reflects, by category and line
items, the purposes and the amounts for which Advances under this Agreement are
to be used. Bank shall not be required to disburse for any category or line item
more than the amount specified therefor in the Construction Budget as the same
may be amended from time to time with Bank's written approval.

     5.3   Cost Overruns. If Company becomes aware of any change in Project
Costs which will increase or decrease a category or line item of Project Costs
reflected on the Construction Budget (as the Construction Budget is revised from
time to time and approved by Bank), Company shall immediately notify Bank in
writing and, if the change exceeds the thresholds set forth in Section 4.2
above, will promptly submit to Bank for its approval a revised Construction
Budget. No further Advances need be directed by Bank unless and until the
revised Construction Budget so submitted by Company is approved by Bank, and
Bank reserves the right to approve or disapprove any revised Construction Budget
in its sole and reasonable discretion. If Bank approves the revised Construction
Budget, and such revised Construction Budget reflects Project Costs to be funded
by Bank in excess of the Loan Amount, the amount of such excess shall be added
to the Loan Amount, and Company's obligation to repay the same, together with
interest thereon at the rate or rates provided in the Note, shall be deemed to
be evidenced by the Bonds and secured by the Credit Documents. Any actual
savings realized on a line item (as confirmed by Bank after consultation with
the Construction Inspector) in the Construction Budget may be reallocated by
Company to other line items in the Construction Budget.

     5.4   Contingency Reserve. Any amount allocated as Contingency Reserve is
not intended to be disbursed and will only be directed by Bank to be disbursed
upon the prior approval of Bank, which approval will not be unreasonably
withheld. The disbursement of a portion of the Contingency Reserve shall in no
way prejudice Bank from withholding disbursement of any further portion of the
Contingency Reserve.

     5.5   Stored Materials. Bank shall not be required to direct a disbursement
of any funds for any materials, furnishings, fixtures, machinery or equipment
not yet incorporated into Land or Improvements (the "Stored Materials"). Any
disbursement for the cost of Stored Materials shall be contingent upon Bank
receiving satisfactory evidence that:

           (a)  The Stored Materials are components in a form ready for
     incorporation into the Improvements;

                                       13

<PAGE>

           (b)  The Stored Materials are stored at the Land, in a bonded
     warehouse, at a site controlled by Company, or at such other site as Bank
     shall approve, and are protected against theft and damage;

           (c)  The Stored Materials have been paid for in full or will be paid
     for with the funds to be disbursed and all lien rights or claims of the
     supplier have been released or will be released upon payment with disbursed
     funds;

           (d)  Bank has or will have upon payment with disbursed funds a
     perfected, first priority security interest in the Stored Materials; and

           (e)  The Stored Materials are insured for an amount equal to their
     replacement costs.

     5.6   Amount of Advances. In no event shall any Advance exceed the full
amount of Indirect Costs approved by Bank and theretofore paid or to be paid
with the proceeds of such Advance plus ninety percent (90%) of all costs for
construction of Improvements approved by Bank and incurred by Company through
the date of the Draw Request for such Advance less the aggregate amount of any
Advances previously made by Bank. It is further understood that the retainage of
ten percent (10%) described above (the "Retainage") is intended to provide a
contingency fund protecting Bank against failure of Company to fulfill any
obligations under the Credit Documents, and that Bank may charge amounts against
such retainage in the event Bank is required or elects to expend its own funds
to cure any default or Event of Default. No Retainage will be required for
Advances for purchases of equipment used in connection with the Improvements and
designated as such in the Construction Budget.

     5.7   Quality of Work. No Advance shall be due unless all work done at the
date the Draw Request for such Advance is submitted is done in a good and
workmanlike manner and without defects, as confirmed by the report of the
Construction Inspector, but Bank may disburse all or part of any Advance before
the sum shall become due if Bank believes it advisable to do so, and all such
Advances or parts thereof shall be deemed to have been made pursuant to this
Agreement.

     5.8   Release of Retainage. It is further understood that the Retainage
will be released for the relevant trades upon expiration of the requisite lien
period or the receipt of evidence as may be reasonably required by Bank that no
claim may thereafter arise with respect to any work performed or labor or
material supplied.

     5.9   Developer Fees and Leasing Commissions. Notwithstanding anything
herein to the contrary, all Developer Fees and Real Estate or Leasing
Commissions set forth in the Construction Budget will be funded only when
construction of the Improvements is complete, the Tenant under any Required
Leases are in occupancy and paying rent.

                                    ARTICLE 6
                                    ---------

                             CONDITIONS PRECEDENT TO
                          DISBURSEMENT OF LOAN PROCEEDS
                          -----------------------------

     6.1   Conditions of Initial Advance. The obligation of Bank to direct
Trustee to make the initial Advance of the proceeds of the Bonds shall be
subject to the following conditions precedent:

                                       14

<PAGE>

           (a)  Commitment. All items required by the Commitment regarding the
     Loan shall have been delivered to the proper parties as required therein,
     and all conditions set forth in the Commitment or such letter of
     instructions shall have been satisfied.

           (b)  Credit Documents. The Credit Documents, in form and substance
     satisfactory to Bank, shall have been duly executed and delivered by the
     parties thereto and shall be in full force and effect, there shall be no
     Event of Default thereunder and Bank shall have received the original or a
     fully executed counterpart thereof. All Credit Documents to be filed or
     recorded in the public records shall have been so filed or recorded in the
     appropriate public records.

           (c)  Construction Documents. The Architect's Contract, if any, and
     Construction Contract, in form and substance satisfactory to Bank, shall
     have been duly executed and delivered by the parties thereto, shall be in
     full force and effect, and Bank shall have received a certified or a fully
     executed counterpart thereof. The Architect, if any, and the Contractor
     shall have duly executed and delivered to Bank a consent to the assignment
     of the Architect's Contract, if any and Construction Contract, in form and
     substance satisfactory to Bank, and Bank shall have received the original
     or a fully executed counterpart thereof.

           (d)  Subcontracts. Bank shall have received a list of all
     subcontractors and materialmen who have been or, to the extent identified
     by Company, will be supplying labor or materials for the Project, and, if
     provided to Company, a copy of the standard form of subcontract to be used
     by the Contractor, and correct and complete photocopies of all executed
     subcontracts and contracts.

           (e)  Other Contracts. Company shall have delivered to Bank correct
     and complete photocopies of all other executed contracts with contractors,
     engineers or consultants for the Project, and of all development,
     management, brokerage, sales or leasing agreements for the Project.

           (f)  Deliveries. The following items or documents shall have been
     delivered to Bank:

                (1)  Plans and Specifications. Two complete sets of the Plans
           and Specifications and approval thereof by any necessary Governmental
           Authority, with a certification from Architect that the Improvements
           to be constructed comply with all Requirements and Governmental
           Approvals and that the Construction Contract satisfactorily provides
           for the construction of the Improvements.

                (2)  Title Insurance Policy. A paid title insurance policy or
           report (the "Title Insurance Policy") in all respects satisfactory to
           Bank and its counsel.

                (3)  Other Insurance. Policies (or, if permitted, certificates
           or other evidence of) all insurance required by this Agreement or any
           other Loan Document.

                (4)  Evidence of Sufficiency of Funds. Evidence satisfactory to
           Bank that the proceeds of the Loan, together with Required Equity
           Funds, will be sufficient to cover all Project Costs reasonably
           anticipated to be incurred, and to satisfy the obligations of Company
           to Bank under this Agreement.

                                       15

<PAGE>

                (5)  Evidence of Access, Availability of Utilities, Governmental
           Approvals. Evidence satisfactory to Bank as to:
                     (A) the methods of access to and egress from the Project,
                and nearby or adjoining public ways, meeting the reasonable
                requirements of Project of the type contemplated to be completed
                under this Agreement and the status of completion of any
                required improvements to such access;

                     (B) the availability of storm and sanitary sewer facilities
                meeting the reasonable requirements of the Project;

                     (C) the availability of all other required utilities, in
                location and capacity sufficient to meet the reasonable needs of
                the Project; and

                     (D) the securing of all Governmental Approvals from the
                applicable Governmental Authority which are required under
                applicable Requirements for the construction of the
                Improvements, together with copies of all such Governmental
                Approvals.

                (6)  Environmental Report. An environmental assessment report or
           reports of one or more qualified environmental engineering or similar
           inspection firms approved by Bank in form, scope and substance
           satisfactory to Bank, which report or reports shall indicate a
           condition of the Land in all respects satisfactory to Bank in its
           sole discretion and upon which report or reports Bank is expressly
           entitled to rely. Bank will not require updates of the initial
           environmental assessment report unless it has reason to believe that
           there has been a change in the environmental condition of the Land
           since the initial report.

                (7)  Survey. A survey prepared in accordance with Bank's survey
           requirements, certified by a land surveyor registered as such in the
           state in which the Land is located, which survey shall be in form and
           substance satisfactory to Bank.

                (8)  Draw Request. A Draw Request complying with the provisions
           of this Agreement.

           (h)  Legal Opinions. Bank shall have received opinions in form and
     substance satisfactory to Bank and Bank's counsel from counsel satisfactory
     to Bank as to such matters as Bank shall reasonably request.

           (i)  Certification Regarding Chattels. Bank shall have received a
     certification from the Title Insurer or counsel satisfactory to Bank (which
     shall be updated from time to time at Company's expense upon request by
     Bank) that a search of the public records disclosed no conditional sales
     contracts, chattel mortgages, leases of personalty, financing statements or
     title retention agreements which affect the Project.

           (j)  Notices. All notices required by any Governmental Authority or
     by any applicable Requirement to be filed prior to commencement of
     construction of the Improvements shall have been filed.

           (k)  Appraisal. Any appraisal requirements set forth in the
     Commitment shall have been satisfied.

                                       16

<PAGE>

           (l)  Performance; No Default. Company shall have performed and
     complied with all terms and conditions herein required to be performed or
     complied with by it at or prior to the date of the initial Advance, and on
     the date of the initial Advance, there shall exist no default or Event of
     Default.

           (m)  Representations and Warranties. The representations and
     warranties made by Company in the Credit Documents or otherwise made by or
     on behalf of Company or any Guarantor in connection therewith or after the
     date thereof shall have been true and correct in all respects on the date
     on which made and shall also be true and correct in all respects on the
     date of the initial Advance.

           (n)  Other Documents. Such other documents, opinions and certificates
     as Bank or its counsel may reasonably require.

           (o)  Proceedings and Documents. All proceedings in connection with
     the transactions contemplated by this Agreement and the other Credit
     Documents shall be satisfactory to Bank and Bank's counsel in form and
     substance, and Bank shall have received all information and such
     counterpart originals on certified copies of such documents and such other
     certificates, opinions or documents as Bank and Bank's counsel may
     reasonably require.

     6.2   Conditions of Subsequent Advances. The obligation of Bank to make any
Advance after the initial Advance shall be subject to the following conditions
precedent:

           (a)  Prior Conditions Satisfied. All conditions precedent to the
     initial Advance and any prior Advance shall continue to be satisfied as of
     the date of such subsequent Advance.

           (b)  Performance; No Default. Company shall have performed and
     complied with all terms and conditions herein required to be performed or
     complied with by it at or prior to the date of such advance, and on the
     date of such Advance there shall exist no Default or Event of Default.

           (c)  Representations and Warranties. The representations and
     warranties made by Company in the Credit Documents or otherwise made by or
     on behalf of Company or any Guarantor in connection therewith after the
     date thereof shall have been true and correct in all respects on the date
     on which made and shall also be true and correct in all respects on the
     date of such Advance.

           (d)  No Damage. The Improvements shall not have been injured or
     damaged by fire, explosion, accident, flood or other casualty, unless Bank
     shall have received insurance proceeds sufficient in the judgment of Bank
     to effect the satisfactory restoration of the Improvements and to permit
     the completion thereof prior to the Completion Date.

           (e)  Receipt by Bank. Bank shall have received:

                (1)  Draw Request. A Draw Request complying with the
     requirements hereof;

                (2)  Endorsement to Title Insurance Policy. A "run down"
     endorsement to the Title Insurance Policy or report indicating no change in
     the state of title and containing no

                                       17

<PAGE>

     survey exceptions not approved by Bank, which endorsement shall, expressly
     or by virtue of a proper "pending disbursements" clause or endorsement in
     the policy, increase the coverage of the policy to the aggregate amount of
     all proceeds of the Loan advanced on or before the effective date of such
     endorsement;

                (3)  Current Survey. An updated survey if required by the Bank;

                (4)  Certificates. Certificates from Company, Architect and the
     Construction Inspector to the effect that in their opinion, based upon
     on-site observations and submissions by the Contractor, the construction of
     the Improvements to the date thereof was performed in a good and
     workmanlike manner and in accordance with the Plans and Specifications,
     stating the estimated total cost of construction of the Improvements,
     stating the percentage of the in-place construction of the Improvements and
     stating that the remaining non-disbursed portion of the Loan allocated for
     such purpose is adequate, together with such Required Equity Funds as are
     held by Bank, to complete the construction of the Improvements;

                (5)  Contracts. Evidence that one hundred percent (100%) of the
     cost of the remaining construction work is covered by firm contracts or
     subcontracts, or orders for the supplying of materials, with contractors,
     subcontractors, materialmen or suppliers satisfactory to Bank, except for
     work in the Construction Budget to be performed by the company and
     identified as such.

           (f)  Other Documents. Such other documents, opinions and certificates
     as Bank or its counsel may reasonably require.

     6.3   Conditions of Final Advance. In addition to the conditions set forth
in Paragraph 6.2 above, Bank's obligation to approve the payments of funds
advance sums retained by the Trustee pursuant to this Agreement shall be subject
to receipt by Bank of the following:

           (a)  Approval of Improvements. Evidence of the approval by all
     appropriate Governmental Authority of the Improvements in their entirety
     for permanent occupancy to the extent any such approval is or will be a
     condition of lawful use and occupancy of the Improvements, and evidence of
     approval by all appropriate Governmental Authority of the contemplated uses
     thereof.

           (b)  Approval by Construction Inspector. Notification from the
     Construction Inspector to the effect that the Improvements have been
     completed in a good and workmanlike manner in accordance with the Plans and
     Specifications.

           (c)  Final Survey. A copy of the survey required under Section 6.1
     above which is marked up by Company to show which buildings on the Land
     have been or will be demolished as contemplated by the Plans and
     Specifications.

           (d)  Certificate of Architect. Certificate of Architect that the
     Improvements have been completed in accordance with the Plans and
     Specifications and that the Improvements comply with all applicable
     Requirements and Governmental Approvals and are in all respects (except for
     work to be performed by tenants) ready for occupancy.

           (e)  Payment of Costs. Evidence satisfactory to Bank that all sums
     due in connection with the construction of the Improvements have been paid
     in full (or will be paid out

                                       18

<PAGE>

     of the funds requested to be advanced) and that no party claims or has a
     right to claim any statutory or common law lien arising out of the
     construction of the Improvements or the supplying of labor, material,
     and/or services in connection therewith.

                                    ARTICLE 7
                                    ---------

                     METHOD OF DISBURSEMENT OF LOAN PROCEEDS
                     ---------------------------------------

     Bank agrees to direct Trustee to make Advances in accordance with the
Construction Budget and subject to the following procedures.

     7.1   Draw Request to be Submitted to Bank. At such time as Company shall
desire to obtain an Advance, Company shall complete, execute and deliver to Bank
a Company's Requisition in the form attached as Exhibit C to the Indenture
(hereinafter referred to as "Company's Requisition"). Each Company's Requisition
shall be accompanied by:

           (a)  if Company's Requisition includes amounts to be paid to the
     Contractor under the Construction Contract, it shall be accompanied by a
     completed and itemized Application and Certificate for Payment (AIA
     Document No. G702) or similar form approved by Bank, containing the
     certification of Contractor and Architect and the Construction Inspector as
     to the accuracy of same, together with invoices relating to all items of
     direct cost covered thereby. All such applications for payment shall show
     all subcontractors by name and trade, and the amount to be paid from the
     proceeds of the Advance to each subcontractor;

           (b)  if Company's Requisition includes payments for Indirect Costs,
     it shall be accompanied by a completed and itemized Indirect Cost statement
     executed by Company, together with invoices for all items of Indirect Costs
     covered thereby;

           (c)  written lien waivers from the Contractor and such laborers,
     subcontractors and materialmen for work done and materials supplied by them
     which were paid for pursuant to any prior Draw Request;

           (d)  a written request of Company for any necessary changes in the
     Plans and Specifications, the Construction Budget, the Building Loan
     Budget, the Disbursement Schedule or the Construction Schedule;

           (e)  copies of all change orders and subcontracts, and, to the extent
     requested by Bank, of all inspection or test reports and other documents
     relating to the construction of the Improvements, not previously delivered
     to Bank; and

           (f)  such other information, documentation and certification as Bank
     shall reasonably request.

     7.2   Notice and Frequency of Advances. Each Draw Request shall be
submitted to Bank at least seven (7) business days prior to the date of the
requested Advance, and no more frequently than monthly.

     7.3   Deposit of Funds Advanced. Company shall open and maintain a
non-interest bearing loan checking account with Bank into which Bank shall
deposit the proceeds of each Advance. Bank is

                                       19

<PAGE>

hereby irrevocably authorized to make an Advance to and/or charge any account of
Company with Bank, including such loan checking account, without the further
approval of Company, for (i) any installment of interest due under the Note,
(ii) any expenses incurred by Bank (including without limiting the generality of
the foregoing, reasonable attorneys' fees and other fees incurred by Bank), or
(iii) any other sums due to Bank under the Note, this Agreement or any of the
other Credit Documents, all to the extent that the same are not paid by the
respective due dates thereof out of Advances of the Loan proceeds. Company shall
at all times maintain and keep collected balances in such loan checking account
sufficient to satisfy the foregoing obligations on the due date thereof.

     7.4   Advances to Contractor. Upon five (5) Business Days prior written
notice to Company and after an Event of Default, at its option, Bank may direct
Trustee to make any or all Advances for construction expenses directly to
Contractor for deposit in an appropriately designated special bank account, and
the execution of this Agreement by Company shall, and hereby does, constitute an
irrevocable authorization so to advance the proceeds of the Loan. No further
authorization from Company shall be necessary to warrant such direct Advances to
Contractor and all such Advances shall satisfy pro tanto the obligations of Bank
hereunder and shall be secured by the Mortgage and the other Credit Documents as
fully as if made directly to Company.

     7.5   Advances to Title Insurer or to Others. Upon five (5) Business Days
prior written notice to Company and after an Event of Default, at its option,
Bank may direct Trustee to make any or all Advances through the Title Insurer
and any portion of the Loan so disbursed by Bank shall be deemed disbursed as of
the date on which such Title Insurer receives such disbursement. At its option,
Bank may authorize Advances of portions of the proceeds of the Loan to any
person to whom Bank in good faith determines payment is due and any portion of
the Loan so disbursed by Bank shall be deemed disbursed as of the date on which
the person to whom payment is made receives the same. The execution of this
Agreement by Company shall, and hereby does, constitute an irrevocable
authorization to Advance the proceeds of the Loan. No further authorization from
Company shall be necessary to warrant such direct Advances and all such Advances
shall satisfy pro tanto the obligations of Bank hereunder and shall be secured
by the Mortgage and the other Credit Documents as fully as if made directly to
Company.

     7.6   Advances Do Not Constitute a Waiver. No Advance shall constitute a
waiver of any of the conditions of Bank's obligation to authorize further
Advances nor, in the event Company is unable to satisfy any such condition,
shall any Advance have the effect of precluding Bank from thereafter declaring
such inability to be an Event of Default hereunder.

     7.7   Trust Fund Provisions. All proceeds advanced hereunder shall be
subject to the trust fund provisions of Section 13 of the Lien Law. The
affidavit attached hereto as Exhibit B is made pursuant to and in compliance
with Section 22 of the Lien Law, and, if so indicated in said affidavit, Loan
proceeds will be used, in part, for reimbursement for payments made by the
Company prior to the initial Advance hereunder but subsequent to the
commencement of the construction and equipping of the Improvements for items
constituting Costs of Improvement.

     7.8   Termination Date. Bank may, but shall not be obligated to make any
Advance hereunder after the Termination Date.

                                       20

<PAGE>

                                    ARTICLE 8
                                    ---------

                               EVENTS OF DEFAULTS
                               ------------------

     The occurrence of any one or more of the following conditions or events
(each an "Event of Default") shall constitute a default under and breach of this
Agreement:

           (a)  any failure by Company to pay as and when due and payable any
     interest on or principal of or other sum payable under the Reimbursement
     Agreement; or

           (b)  any failure by Company to deposit with Bank any funds required
     by this Agreement to be deposited with Bank and continuation of such
     failure for a period of five (5) Business Days after written notice thereof
     from Bank;

           (c)  any failure by Company to pay as and when due and payable any
     other sums to be paid by Company to Bank under this Agreement and
     continuance of such failure for a period of five (5) days after written
     notice thereof from Bank; or

           (d)  title to the Project is or becomes unsatisfactory to Bank by
     reason of any lien, charge, encumbrance, title condition or exception
     (including without limitation, any mechanic's, materialman's or similar
     statutory or common law lien or notice thereof), and such matter causing
     title to be or become unsatisfactory is not cured or removed (including by
     bonding) within twenty (20) days after notice thereof from Bank to Company;
     or

           (e)  any refusal by the Title Insurer to insure any Advance as being
     secured by the Mortgage as a valid first lien on the Land and Improvements
     and continuance of such refusal for a period of twenty (20) days after
     notice thereof by Bank to Company; or

           (f)  subject to force majeure, the Improvements are not completed by
     the Completion Date or, in the reasonable estimation of Bank, construction
     of the Improvements will not be completed by the Completion Date; or

           (g)  the Project or any portion thereof is injured by fire,
     explosion, accident, flood or other casualty, unless Bank shall have
     received insurance proceeds sufficient in the reasonable estimation of Bank
     to effect the satisfactory restoration of the Project and to permit the
     completion of the Improvements prior to the Completion Date; or

           (h)  the Project is subject to any Taking, or the Project or any
     portion thereof is subject to any Taking which will prevent, in the
     reasonable estimation of Bank, the completion of the Improvements prior to
     the Completion Date; or

           (i)  any voucher or invoice is submitted at any time which Company
     knows has not been earned by the payee for services performed or for
     materials used in or furnished for the Project; or

           (j)  [intentionally omitted]

           (k)  Company confesses inability to continue or complete construction
     of the Improvements in accordance with this Agreement; or

                                       21

<PAGE>

           (l)  [intentionally omitted]

           (m)  any material representation or warranty made or deemed to be
     made by or on behalf of Company in this Agreement or in any other Credit
     Document, or in any report, certificate, financial statement, Draw Request
     or other instrument furnished in connection with this Agreement, any
     Advance or any other Loan Document, shall prove to have been false or
     incorrect in any material respect as at the date of which made or deemed to
     be made; or

           (n)  any dissolution, termination, partial or complete liquidation,
     merger or consolidation of Company, , or any sale, transfer or other
     disposition of all or substantially all of the assets of Company, , other
     than with the prior approval of Bank; or

           (o)  any suit or proceeding shall be filed against Company, or the
     Project which, if adversely determined, would have a materially adverse
     affect on the ability of Company to perform each and every one of its
     obligations under and by virtue of the Credit Documents; or

           (p)  any failure by Company to obtain any Governmental Approvals, or
     the revocation or other invalidation of any Governmental Approvals
     previously issued; or

           (q)  any change in the legal or beneficial ownership of Company,
     other than with the prior approval of Bank; or

           (r)  any one or more of the obligations of Company under the Credit
     Documents shall at any time and for any reason cease to be in full force
     and effect; or

           (s)  Company, any affiliate of Company shall be involved in financial
     difficulties as evidenced by: (1) its commencement of a voluntary case
     under Title 11 of the United States Code as from time to time in effect, or
     its authorizing, by appropriate proceedings of partners, directors or other
     governing body, the commencement of such a voluntary case; (2) its filing
     an answer or other pleading admitting or failing to deny the material
     allegations of a petition filed against it commencing an involuntary case
     under said Title 11, or seeking, consenting to or acquiescing in the relief
     therein provided, or by its failing to controvert timely the material
     allegations of any such petition; (3) the entry of an order for relief in
     any involuntary case commenced under said Title 11; (4) its seeking relief
     as a debtor under any applicable law, other than said Title 11, of any
     jurisdiction relating to the liquidation or reorganization of debtors or to
     the modification or alteration of the rights of creditors, or by its
     consenting to or acquiescing in such relief; (5) the entry of an order by a
     court of competent jurisdiction which is not withdrawn, reversed or
     rescinded within sixty (60) days after its entry (i) finding it to be
     bankrupt or insolvent, (ii) ordering or approving its liquidation,
     reorganization or any modification or alteration of the rights of its
     creditors, or (ii) assuming custody of, or appointing a receiver or other
     custodian for, all or a substantial part of its property; (6) by its making
     an assignment for the benefit of, or entering into a composition with, its
     creditors, or appointing or consenting to the appointment of a receiver or
     other custodian for all or a substantial part of its property; or (7)
     generally, its failure to pay its debts as such debts become due; or

           (t)  any failure by Company to duly observe or perform any other
     term, covenant, condition or agreement under this Agreement and continuance
     of such failure for a period of thirty (30) days after written notice
     thereof from Bank; provided, however, that if such failure is not
     susceptible of cure during such thirty (30) day period (but is susceptible
     of cure) and Company promptly commences and diligently pursues cure of such
     failure during such thirty (30)

                                       22

<PAGE>

     day period, then such thirty (30) day period shall be extended for an
     additional consecutive period of thirty (30) days before an Event of
     Default is deemed to have occurred; or

           (u)  any "default" or "Event of Default" shall occur under any of the
     other Credit Documents.

                                    ARTICLE 9
                                    ---------

                           RIGHTS AND REMEDIES OF BANK
                           ---------------------------

     9.1   Remedies. Upon the occurrence of any Event of Default, and so long as
the Letter of Credit is in effect, the Bank may at any time thereafter refuse to
consent to further Advances and at its option, and upon written notice to the
Trustee, exercise any or all of the following rights and remedies:

     (a)   The Bank may, in its sole discretion, deliver to the Trustee, with a
copy to the Issuer and the Company, notice of such occurrence and direct the
Trustee to accelerate the Bonds; and

     (b)   The Bank may, in its sole discretion, by notice to the Trustee, the
Issuer and the Company, declare all unpaid principal of and accrued interest due
in accordance with the Reimbursement Agreement, together with all other sums
payable under the Credit Documents, to be immediately due and payable, whereupon
same shall become and be immediately due and payable, anything in the
Reimbursement Agreement or other Credit Documents to the contrary
notwithstanding, and without presentation, protest or further demand or notice
of any kind, all of which are expressly hereby waived by the Company; provided,
however, that the Bank may consent to Advance by the Trustee thereafter without
thereby waving the right to demand payment of the sums owing under the
Reimbursement Agreement, without being obligated to consent to-any other or
further Advances, and without affecting the validity of or enforceability of the
Reimbursement Agreement or other Credit Documents. Notwithstanding and without
limiting the generality of the foregoing, upon the occurrence of an Event of
Default under paragraph (u) of Article 8 of the Building Loan Agreement, or if
any event has occurred which but for the passage of time, the giving of notice
or both would constitute an Event of Default, at the sole option of the Bank,
all obligations of the Trustee to make further Advances shall terminate, and all
unpaid principal of and accrued interest on the Bonds, together with all sums
payable under the Reimbursement Agreement, automatically shall become and be
immediately so due and payable, without any declaration or other act; and

     (c)   At the discretion of the Bank and on behalf of the Trustee (but in
its own behalf the event that the Trustee has drawn upon the Letter of Credit in
accordance with Section 2.06 of the Indenture), the Bank may cause the Facility
to be completed and may enter upon the Land and construct, equip and complete
the Facility in accordance with the Plans and Specifications, with such changes
therein as the Bank may, from time to time, and in its sole discretion, deem
appropriate.

     In connection with any construction of the Facility undertaken by the Bank
pursuant to the provisions of this subparagraph, the Bank may:

           (1)  use any funds of the Company, including any balance which may be
           held by the Bank as security or in escrow, and any funds remaining
           unadvanced under the loan;

                                       23

<PAGE>

           (2)  employ existing contractors, subcontractors, agents, architects,
           engineers, and the like, or terminate the same and employ others;

           (3)  employ security watchmen to protect the Facility;

           (4)  make such additions, changes and corrections in the Plans and
           Specifications as shall, in the judgment of the Bank, be necessary or
           desirable;

           (5)  take over and use any and all Equipment contracted for or
           purchased by the Company, if appropriate, or dispose of the same as
           the Bank sees fit;

           (6)  execute all applications and certificates on behalf of the
           Company which may be required by the Governmental Authority or
           Requirement or contract documents or agreements;

           (7)  pay, settle or compromise all existing or future bills and
           claims which are or may be liens against the Facility, or may be
           necessary for the completion of the Facility or the clearance of
           title to the Facility;

           (8)  complete the marketing and leasing of leasable space in the
           Facility, enter into new leases and occupancy agreements, and modify
           or amend existing leases and occupancy agreements, all as the Bank
           shall deem to be necessary or desirable;

           (9)  prosecute and defend all actions and proceedings in connection
           with the construction of the Facility or in any other way affecting
           the Land or the Facility and take such action and require such
           performance as the Bank deems necessary under any payment and
           performance bonds; and

           (10) take such action hereunder, or refrain from acting hereunder, as
           the Bank may, in its sole and absolute discretion, from time to time
           determine, and without any limitation whatsoever, to carry out the
           intent of this subparagraph. The Company shall be liable to the Bank
           for all costs paid or incurred for the construction, completion and
           equipping of the Facility, whether the same shall be paid or incurred
           pursuant to the provisions of this subparagraph or otherwise, and all
           payments made or liabilities incurred by the Bank hereunder of any
           kind whatsoever shall be deemed advances made to the Company under
           the Building Loan Agreement and shall be secured by the Mortgage or
           the Indenture, and other Credit Documents.

     To the extent that any costs so paid or incurred by the Bank, together with
all other Advances made by the Bank hereunder, exceed the Loan, such excess
costs shall be paid by the Company to the Bank on demand, with interest thereon
at the Default Interest Rate, if any, set forth in the Reimbursement Agreement
or the Bonds or, in the absence of a Default Interest Rate, at the interest rate
set forth in the Reimbursement Agreement, until paid; and the Company shall
execute such notes or amendments to the Reimbursement Agreement as may be
requested by the Bank to evidence the Company's obligation to pay such excess
costs and until such notes or amendments are so executed by the Company, the
Company's obligation to pay such excess costs shall be deemed to be evidenced by
the Building Loan Agreement. In the event the Bank takes possession of the
Facility and assumes control of such construction as aforesaid, it shall not be
obligated to continue such construction longer than it shall see fit and may
thereafter, at any time, change any course of action undertaken by it or abandon
such construction and decline to make further payments for the account of the
Company whether or not the Facility shall have been completed.

                                       24

<PAGE>

For the purpose of this subparagraph, the construction, equipping and completion
of the Facility shall be deemed to include any action necessary to cure any
Event of Default by the Company under any of the terms and provisions of any of
the Credit Documents.

     (d)   the Bank may to the extent permitted by applicable law, at any time
and from time to time, without notice (any such notice being expressly waived),
without regard to the adequacy of any collateral, set off and apply any and all
deposits (general or specific time or demand, provisional or final, regardless
of currency, maturity, or the branch of the Bank where the deposits are held) at
any time held or other sums credited by or due from the Bank to the Company
against any and all liabilities, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising of the Company to the Bank.

     (e)   the Bank may exercise any or all of the rights and remedies set forth
in the Reimbursement Agreement or the Mortgage, or other Documents, as
appropriate.

     9.2   Power of Attorney. Upon notice to the Company for the purposes of
carrying out the provisions and exercising the rights, powers and privileges
granted by or referred to in this Agreement, Company hereby irrevocably
constitutes and appoints Bank its true and lawful attorney-in-fact, with full
power of substitution, to execute, acknowledge and deliver any instruments and
do and perform any acts which are referred to in this Agreement, in the name and
on behalf of Company. Bank shall provide copies of any instrument executed by
such power within a reasonable period of time. The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an interest and
irrevocable.

     9.3   Remedies Cumulative. Upon the occurrence of any Event of Default, the
rights, powers and privileges provided in this Article 9 and all other remedies
available to Bank under this Agreement or under any of the other Credit
Documents or at law or in equity may be exercised by Bank at any time and from
time to time and shall not constitute a waiver of any of Bank's other rights or
remedies thereunder, whether or not the Loan shall be due and payable, and
whether or not Bank shall have instituted any foreclosure proceedings or other
action for the enforcement of its rights under the Credit Documents.

     9.4   Annulment of Defaults. An Event of Default shall not be deemed to be
in existence for any purpose of this Agreement or any Loan Document if Bank
shall have waived such Event of Default in writing or stated that the same has
been cured to its reasonable satisfaction, but no such waiver shall extend to or
affect any subsequent Event of Default or impair any of the rights of Bank upon
the occurrence thereof.

     9.5   Waivers. Company hereby waives to the extent not prohibited by
applicable law (a) all presentments, demands for payment or performance, notices
of nonperformance (except to the extent required by the provisions hereof or of
any other Credit Documents), protests and notices of dishonor, (b) any
requirement of diligence or promptness on Bank's part in the enforcement of its
rights (but not fulfillment of its obligations) under the provisions of this
Agreement or any other Loan Document, and (c) any and all notices of every kind
and description which may be required to be given by any statute or rule of law
and any defense of any kind which Company may now or hereafter have with respect
to its liability under this Agreement or under any other Loan Document.

     9.6   Course of Dealing, Etc. No course of dealing between Company and Bank
shall operate as a waiver of any of Bank's rights under this Agreement or any
Loan Document. No delay or omission on Bank's part in exercising any right under
this Agreement or any Loan Document shall operate as a waiver of such right or
any other right hereunder. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion No waiver or
consent shall be binding

                                       25

<PAGE>

upon Bank unless it is in writing and signed by Bank. The making of an Advance
hereunder during the existence of an Event of Default shall not constitute a
waiver thereof.

                                   ARTICLE 10
                                   ----------

                               GENERAL CONDITIONS
                               ------------------

     The following conditions shall be applicable throughout the term of this
Agreement:

     10.1  Rights of Third Parties. All conditions of the obligations of Bank
hereunder, including the obligation to authorize Advances, are imposed solely
and exclusively for the benefit of Bank and its successors and assigns and no
other person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Bank will make
Advances in the absence of strict compliance with any or all thereof and no
other person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any and all of which may be freely waived in whole or in part
by Bank at any time if in its sole discretion it deems it desirable to do so. In
particular, Bank makes no representations and assumes no obligations as to third
parties concerning the quality of the construction by Company of the
Improvements or the absence therefrom of defects. In this connection Company
agrees to and shall indemnify Bank from any liability, claims or losses
resulting from the disbursement of the Loan proceeds or from the condition of
the Project whether related to the quality of construction or otherwise and
whether arising during or after the term of the Letter of Credit made by Bank to
Company in connection herewith. This provision shall survive the repayment of
the Loan and shall continue in full force and effect so long as the possibility
of such liability, claims or losses exists.

     10.2  Relationship. The relationship between Bank and Company is solely
that of a Bank and Company, and nothing contained herein or in any of the other
Credit Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than Bank and Company.

     10.3  Evidence of Satisfaction of Conditions. Any condition of this
Agreement which requires the submission of evidence of the existence or
non-existence of a specified fact or facts implies as a condition the existence
or non-existence, as the case may be, of such fact of facts and Bank shall, at
all times, be free independently to establish to its satisfaction and in its
absolute discretion such existence or non-existence.

     10.4  Notices. Any notices required or permitted to be given hereunder
shall be: (i) personally delivered or (ii) given by registered or certified
mail, postage prepaid, return receipt requested, or (iii) forwarded by overnight
courier service, in each instance addressed to the addresses set forth in the
Reimbursement Agreement, or such other addresses as the parties may for
themselves designate in writing as provided herein for the purpose of receiving
notices hereunder. All notices shall be in writing and shall be deemed given, in
the case of notice by personal delivery, upon actual delivery, and in the case
of appropriate mail or courier service, upon deposit with the U.S. Postal
Service or delivery to the courier service.

     10.5  Assignment. Company may not assign this Agreement or any of its
rights or obligations hereunder without the prior approval of Bank.

     10.6  Successors and Assigns Included in Parties. Whenever in this
Agreement one of the parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such

                                       26

<PAGE>

parties shall be included and all covenants and agreements contained in this
Agreement by or on behalf of Company or by or on behalf of Bank shall bind and
inure to the benefit of their respective heirs, legal representatives,
successors and assigns, whether so expressed or not.

     10.7  Headings. The headings of the Articles, Paragraphs and subparagraphs
of this Agreement are for the convenience of reference only, are not to be
considered a part hereof and shall not limit or otherwise affect any of the
terms hereof.

     10.8  Invalid Provisions to Affect No Others. If fulfillment of any
provision hereof or any transaction related hereto at the time performance of
such provisions shall be due, shall involve transcending the limit of validity
presently prescribed by law, with regard to obligations of like character and
amount, then ipso facto, the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision herein contained operates
or would prospectively operate to invalidate this Agreement in whole or in part,
then such clause or provision only shall be held for naught, as though not
herein contained, and the remainder of this Agreement shall remain operative and
in full force and effect.

     10.9  Number and Gender. Whenever the singular or plural number, or the
masculine, feminine or neuter gender is used herein, it shall equally include
the other.

     10.10 Governing Law. This Agreement shall be governed by and construed in
accordance with laws of the State of New York.

     10.11 Consent to Jurisdiction. Company hereby irrevocably and
unconditionally (a) submits to personal jurisdiction in the State of New York
over any suit, action or proceeding arising out of or relating to this
Agreement, and (b) waives any and all personal rights under the laws of any
state (i) to the right, if any, to trial by jury, or (ii) to object to
jurisdiction within the State of New York or venue in any particular forum
within the State of New York. Nothing contained herein, however, shall prevent
Bank from bringing any suit, action or proceeding or exercising any rights
against any security and against Company, and against any property of Company,
in any other state. Initiating such suit, action or proceeding or taking such
action in any state shall in no event constitute a waiver of the agreement
contained herein that the laws of the State of New York shall govern the rights
and obligations of Company and Bank hereunder or the submission herein by
Company to personal jurisdiction within the State of New York.

     10.12 Amendments. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.

                                       27

<PAGE>

     IN WITNESS WHEREOF, Company and Bank have executed this Agreement under
seal on the date first above written.

                                        ANGIODYNAMICS, INC.

                                        By:   /s/ Eamonn P. Hobbes
                                            ------------------------------------
                                              Eamonn P. Hobbs,
                                              President and Chief Executive
                                              Officer

                                        KEYBANK NATIONAL ASSOCIATION

                                        By:   /s/ Bryant J. Cassella, V.P.
                                            ------------------------------------
                                              Bryant J. Cassella, Vice President

STATE OF NEW YORK       )
                        ) ss.
COUNTY OF Albany             )

     On the 28 day of August in the year 2002 before me, the undersigned, a
notary public in and for said state, personally appeared Eamonn P. Hobbs,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.

                                                /s/ Carolyn A. Wildman
                                        ----------------------------------------
                                                     Notary Public

STATE OF NEW YORK       )
                        ) ss.
COUNTY OF Albany             )

     On the 28 day of August in the year 2002 before me, the undersigned, a
notary public in and for said state, personally appeared Bryant J. Cassella,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.

                                                /s/ Carolyn A. Wildman
                                        ----------------------------------------
                                                     Notary Public

[Notary Stamp]

                                       28

<PAGE>

                                   SCHEDULE A

     All that certain piece or parcel of land situate, lying and being in the
Town of Queensbury, County of Warren and the State of New York, being lots 51,
52, 53 and 71 as shown on a map of Warren and Washington Counties Industrial
Development Agency dated June 2, 1978, filed in the Warren County Clerk's Office
on September 19, 1978, more particularly bounded and described as follows:
BEGINNING at a point in the southerly bounds of Hicks Road at the northwest
---------
corner of said Lot 71 as shown on said map; thence running easterly along the
southerly bounds of said Hicks Road, the following four courses and distances:
(1) South 87 degrees, 16 minutes and 29 seconds East, a distance of 194.21 feet;
(2) South 78 degrees, 21 minutes and 59 seconds East, a distance of 84.37 feet;
(3) South 66 degrees, 51 minutes and 46 seconds East, a distance of 242.77 feet;
(4) South 62 degrees, 21 minutes and 01 seconds East, a distance of 127.87 feet
to the intersection with County Line Road at the northeast corner of Lot 51 as
shown on said map; thence running South 05 degrees, 35 minutes and 54 seconds
West, along the westerly bounds of said County Line Road and the easterly bounds
of Lots 51, 52 & 53, a distance of 740.97 feet to the southeast corner of said
Lot 53; thence running North 84 degrees, 24 minutes and 06 seconds West, along
the southerly bounds of said Lot 53 and the southerly bounds of Lot 71 as shown
on said map, a total distance of 726.66 feet to the southwest corner of said Lot
71; thence running North 12 degrees, 08 minutes and 30 seconds East, along the
westerly bounds of said Lot 71 a distance of 866.92 feet to the point and place
of beginning, containing 12.97 acres of land to be the same more or less.

     Bearings given in the above description refer to magnetic North.

     SUBJECT to easements of record.

                                       A-1

<PAGE>

                                    Exhibit B
                         LIEN LAW, SECTION 22 AFFIDAVIT

STATE OF NEW YORK       ) ss.:
COUNTY OF ______ )

     Eamonn P. Hobbs, being duly sworn, deposes and says:

     1.   He is the President and Chief Executive Officer of Angiodynamics, Inc.
described as the Company in the Building Loan Agreement to which this Affidavit
is annexed.

     2.   The Company and the Bank have entered into a certain Building Loan
Agreement relating to the construction and equipping of Improvements on Land
which are more particularly described in Schedule A. The Building Loan Agreement
is intended to be filed in the Onondaga County Clerk's Office in accordance with
Section 22 of the Lien Law. All capitalized terms used herein and not otherwise
defined shall have the same meanings assigned thereto in the Building Loan
Agreement.

     3.   $3,500,000.00 of the proceeds of the Loan will be advanced in
accordance with the terms of the Building Loan Agreement.

     4.   The consideration, if any, paid, or to be paid, for the Loan is set
forth in item 5(a) below.

     5.   All other expenses paid or to be paid in connection with the Loan are
as follows:

     (a)  Fair and reasonable sums paid for obtaining the Loan and subsequent
          financing:

          (i)    Origination or commitment fee for Loan

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

          (ii)   Private Placement Fee

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

          (iii)  First Year Letter of Credit Fee

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

          (iv)   Trustee Fee

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

          (v)    Appraisal fees

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

          (vi)   Construction supervisor fees

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

          (vii)  Fees and disbursements of Bank's counsel

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

                                       B-2

<PAGE>

          (viii) Costs of title examination and UCC searches, title insurance
                 premiums and title continuation charges

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

          (ix)   Survey costs

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

          (x)    Recording and filing fees

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

          (xi)   Mortgage tax

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

     Subtotal:
               ----------------

     (b)  Architectural and engineering fees

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

     (c)  Construction period interest

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

     (d)  Insurance premiums during construction of Improvements,

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

     (e)  Paid to Bank to repay sums previously loaned to pay costs of
          construction,

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

     (f)  Payment and Performance Bond premiums

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

     (g)  Sums paid to take by assignment prior existing mortgages

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

     (h)  Sums paid to discharge or reduce the indebtedness under prior existing
          mortgages

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

     (i)  Taxes, assessments and other municipal charges existing prior to the
          commencement of construction of the Improvements

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

     (j)  Taxes, assessments and other municipal charges accruing during
          construction of the Improvements

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

          Total
                -----------------------

     Certain of the foregoing amounts are based upon good faith estimates of
costs or expenses not yet incurred and certain items listed above may cost more
or less than such estimates. The Company reserves the right to use unexpended
amounts from any of said items to defray increases incurred in any other item

                                       B-3

<PAGE>

or items listed above so long as the total amount expended on such items does
not exceed the amount of the Loan.

     6.   That after payment of all the above fees and expenses, the amount of
money which will be available to pay for the cost of making the improvements
referred to in the Building Loan Agreement will be the sum of $______________
less all monies needed to pay insurance premiums, interest, taxes, assessments,
water and sewer costs and rent becoming due while the improvements are being
made.

     7.   All monies advanced by the Bank to the Company under the Agreement
shall be subject to the Trust Fund provisions of Section 13 of the Lien Law. If
an Event of Default occurs during construction of the Improvements, the Bank may
refuse to advance additional funds and such unadvanced sums would not be
available to the Company to pay the cost of constructing the Improvements.

     8.   This affidavit is made pursuant to and in compliance with Section 22
of the Lien Law by the Company, as the "Company" for the purposes of said
Section.

     9.   The facts herein stated are true to the best of deponent's knowledge.

                                        ----------------------------------------
                                        Eamonn P. Hobbs

Sworn to before me this
_____ day of _____, 2002.

-------------------------------
NOTARY PUBLIC-STATE OF NEW YORK

                                       B-4

<PAGE>

                                    Exhibit C
                    REQUISITION FOR PAYMENT AND DISBURSEMENT

To:  KeyBank National Association
     66 South Pearl Street
     Albany, New York 12207

Re:  Counties of Warren and Washington Industrial Development Agency
     Tax-Exempt Multi-Mode Variable Rate Demand
     Industrial Development Revenue Bonds
     (Angiodynamics, Inc. Project-Letter of Credit Secured), Series 2002

     Requisition Number: 1
     Date: ______________

Gentlemen:

     Pursuant to Section 4.02 of the Indenture of Trust, dated as of August 1,
2002 (the "Indenture"), by and between the Counties of Warren and Washington
Industrial Development Agency (the "Issuer") and The Huntington National Bank,
Cleveland, Ohio, as trustee (the "Trustee"), the undersigned Authorized
Representative of the Company hereby requests and authorizes the trustee (the
"Trustee"), as depository of the Project Fund created by the Indenture to pay to
the Company or to the person(s) listed in items (i) and (ii) below, out of the
money deposited in the Project Fund the aggregate sum of $_________ to pay such
person(s) or to reimburse the Company in full, as indicated in items (i) and
(ii) below, for the advance, payments and expenditures made by it in connection
with the following:.

     (i)  Name(s) and address(es) of the person(s) to whom payment is to be
made, and the amount to be paid to each:

Payee                                   Amount
-----                                   ------

     (ii) General classification of the expenditure pursuant to Section 4.3 of
the Installment Sale Agreement by and between the Issuer and the Company, dated
as of August 1, 2002 (the "Installment Sale Agreement"):

                                       C-1

<PAGE>

                   Cost of Preparing Plans and Specifications

     1.   Architect's, Engineer's and similar fees:            $
                                                                 ---------------

     2.   Broker's fees and costs of constructing the
           Facility:                                           $
                                                                 ---------------

          a. Broker's Fees:                                    $
                                                                 ---------------
          b. Sitework Construction:                            $
                                                                 ---------------
          c. Miscellaneous Construction:                       $
                                                                 ---------------

     3.   Fees and other expenses for recording and filing:    $
                                                                 ---------------

     4.   Fees or expenses relating to actions to protect
           the Bank's security interest in the Facility:       $
                                                                 ---------------

     5.   Insurance premiums:                                  $
                                                                 ---------------

     6.   Construction period interest:                        $
                                                                 ---------------

     7.   Legal, accounting, investment banking, etc. fees:    $
                                                                 ---------------

          a. Borrower's Counsel:                               $
                                                                 ---------------
          b. Letter of Credit Bank's Counsel:                  $
                                                                 ---------------
          c. IDA Counsel:                                      $
                                                                 ---------------
          d. Bond Counsel:                                     $
                                                                 ---------------
          e. Commitment Fee:                                   $
                                                                 ---------------
          f. Placement Agent's Counsel                         $
                                                                 ---------------

     9.   Administrative fee of the Issuer:                    $
                                                                 ---------------

     10.  Taxes paid during installation:                      $
                                                                 ---------------

     11.  Title insurance and surveying fees:                  $
                                                                 ---------------

     12.  Reimbursement for payment by the Company of items
           in 1-11 above:                                      $
                                                                 ===============

     With respect to the obligation(s) referred to above, the undersigned, an
Authorized Representative of the Company, hereby certifies that:

     (A)  each item for which disbursement is requested hereunder is properly
payable out of the Project Fund in accordance with the terms and conditions of
the Indenture and Lease Agreement and none of those items has formed the basis
for any disbursement heretofore made from said Project Fund;

                                       C-2

<PAGE>

     (B)  each such item is or was necessary in connection with the
construction, furnishing, equipment or improvement of the Project, as defined in
the Indenture;

     (C)  with respect to items covered in this requisition, the undersigned has
no knowledge of any vendors', mechanics' or other liens, bailment leases,
conditional sale contracts, security interests or laborers' claims which should
be satisfied or discharged before the payments as requisitioned are made or
which will not be discharged by such payment;

     (D)  that such requested disbursement is consistent in all material aspects
with the Tax Compliance Agreement;

     (E)  none of the items for which this requisition is made has been the
basis for any prior disbursement of Bond Proceeds;

     (F)  this document shall be conclusive evidence of the facts and statements
set forth herein and shall constitute full warrant, protection and authority to
the Trustee for its actions taken pursuant hereto;

     (G)  the undisbursed Bond Proceeds are sufficient to complete the
acquisition, construction, reconstruction and equipping of the Facility in
accordance with the Plans and Specifications;

     (H)  the amount hereby requested has been paid or is to be paid or shall be
paid from the moneys requested and that insofar as the payment if for work,
materials, supplies, or equipment, the work has been performed and the
materials, supplies or equipment have been installed in the Facility or have
been delivered either at the Facility or at a proper place for fabrication and
are covered by adequate insurance;

     (I)  there exists no Event of Default under any of the Bond Documents;

     (J)  this document constitutes the approval of the Company of each
disbursement hereby requested and authorized;

     The capitalized terms herein, unless otherwise defined, will have the
meaning provided in the Indenture.
     IN WITNESS WHEREOF, the party hereto has caused this document to be duly
executed by its respective authorized officer as of the Closing Date.

                                        ANGIODYNAMICS, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

Approved by:

KEYBANK NATIONAL ASSOCIATION, as Issuer
of the Credit Facility

By:
    -----------------------------------
Name:

                                       C-3

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