Document:

LETTER OF
CREDIT AGREEMENT

    

    Dated as
of November 13, 2008

    

    By and
Between

    

    ______________________________________

    

    BOVIE
MEDICAL CORPORATION

    

    and

    

    RBC BANK
(USA)

    

    relating
to

    

    ______________________________________

    

    $4,000,000

    PINELLAS
COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

    INDUSTRIAL
DEVELOPMENT REVENUE BONDS

    (BOVIE
MEDICAL CORPORATION PROJECT), SERIES 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  	 
      	 
      	
                                                                          Page

                                                                        
	 
      	 
      	 
      
	
                                                                          ARTICLE
      1

                                                                        	
                                                                          DEFINITIONS

                                                                        	
                                                                          1

                                                                        
	 	 	 
	
                                                                          Section
      1.1

                                                                        	
                                                                          Defined
      Terms

                                                                        	
                                                                          1

                                                                        
	 	 	 
	
                                                                          Section
      1.2

                                                                        	
                                                                          Accounting
      Terms

                                                                        	
                                                                          9

                                                                        
	 	 	 
	
                                                                          ARTICLE
      2

                                                                        	
                                                                          ISSUANCE
      OF LETTER OF CREDIT; FEES

                                                                        	
                                                                          9

                                                                        
	 	 	 
	
                                                                          Section
      2.1

                                                                        	
                                                                          Amount
      and Term of Letter of Credit

                                                                        	
                                                                          9

                                                                        
	 	 	 
	
                                                                          Section
      2.2

                                                                        	
                                                                          Letter
      of Credit Fee

                                                                        	
                                                                          9

                                                                        
	 	 	 
	
                                                                          Section
      2.3

                                                                        	
                                                                          Drawing
      Fees

                                                                        	
                                                                          10

                                                                        
	 	 	 
	
                                                                          Section
      2.4

                                                                        	
                                                                          Commitment
      Fee

                                                                        	
                                                                          10

                                                                        
	 	 	 
	
                                                                          Section
      2.5

                                                                        	
                                                                          Transfer
      Fees

                                                                        	
                                                                          10

                                                                        
	 	 	 
	
                                                                          Section
      2.6

                                                                        	
                                                                          Additional
      Payments

                                                                        	
                                                                          10

                                                                        
	 	 	 
	
                                                                          Section
      2.7

                                                                        	
                                                                          Capital
      Adequacy

                                                                        	
                                                                          10

                                                                        
	 	 	 
	
                                                                          Section
      2.8

                                                                        	
                                                                          Interest
      on Overdue Payments

                                                                        	
                                                                          11

                                                                        
	 	 	 
	
                                                                          ARTICLE
      3

                                                                        	
                                                                          AGREEMENT
      TO REPAY LETTER OF CREDIT DRAWINGS; PLEDGED BONDS

                                                                        	
                                                                          11

                                                                        
	 	 	 
	
                                                                          Section
      3.1

                                                                        	
                                                                          Reimbursement

                                                                        	
                                                                          11

                                                                        
	 	 	 
	
                                                                          Section
      3.2

                                                                        	
                                                                          Pledge
      of Bonds

                                                                        	
                                                                          12

                                                                        
	 	 	 
	
                                                                          Section
      3.3

                                                                        	
                                                                          Reinstatement
      of Letter of Credit

                                                                        	
                                                                          14

                                                                        
	 	 	 
	
                                                                          Section
      3.4

                                                                        	
                                                                          Credit
      for Amount Paid on Bonds

                                                                        	
                                                                          14

                                                                        
	 	 	 
	
                                                                          Section
      3.5

                                                                        	
                                                                          Computation
      of Interest; Place of Payment

                                                                        	
                                                                          14

                                                                        
	 	 	 
	
                                                                          ARTICLE
      4

                                                                        	
                                                                          CONDITIONS
      PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT

                                                                        	
                                                                          14

                                                                        
	 	 	 
	
                                                                          Section
      4.1

                                                                        	
                                                                          Delivery
      of the Bonds and Operative Documents

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.2

                                                                        	
                                                                          No
      Default

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.3

                                                                        	
                                                                          Representations
      and Warranties

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.4

                                                                        	
                                                                          Opinions
      of Counsel

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.5

                                                                        	
                                                                          Certificates
      of Compliance

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.6

                                                                        	
                                                                          Opinion
      of Bond Counsel

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.7

                                                                        	
                                                                          Governmental
      Approvals

                                                                        	
                                                                          15

                                                                        
	 	 	 
	
                                                                          Section
      4.8

                                                                        	
                                                                          Title
      Insurance Policy

                                                                        	
                                                                          16

                                                                        
	 	 	 
	
                                                                          Section
      4.9

                                                                        	
                                                                          Survey

                                                                        	
                                                                          16

                                                                        

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

    
       

      TABLE
OF CONTENTS

      
        (continued)

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	 	 	
                                                                                        Page

                                                                                      
	 	 	 
	
                                                                                        Section
      4.10

                                                                                      	
                                                                                        Environmental
      Audit

                                                                                      	
                                                                                        16

                                                                                      
	 	 	 
	
                                                                                        Section
      4.11

                                                                                      	
                                                                                        Proof
      of Insurance

                                                                                      	
                                                                                        16

                                                                                      
	 	 	 
	
                                                                                        Section
      4.12

                                                                                      	
                                                                                        Appraisal

                                                                                      	
                                                                                        16

                                                                                      
	 	 	 
	
                                                                                        Section
      4.13

                                                                                      	
                                                                                        Other
      Documents

                                                                                      	
                                                                                        16

                                                                                      
	 	 	 
	
                                                                                        Section
      4.14

                                                                                      	
                                                                                        Fees

                                                                                      	
                                                                                        16

                                                                                      
	 	 	 
	
                                                                                        Section
      4.15

                                                                                      	
                                                                                        Documentation
      and Proceedings

                                                                                      	
                                                                                        17

                                                                                      
	 	 	 
	
                                                                                        ARTICLE
      5

                                                                                      	
                                                                                        CHARACTER
      OF OBLIGATIONS HEREUNDER

                                                                                      	
                                                                                        17

                                                                                      
	 	 	 
	
                                                                                        ARTICLE
      6

                                                                                      	
                                                                                        REPRESENTATIONS
      AND WARRANTIES

                                                                                      	
                                                                                        17

                                                                                      
	 	 	 
	
                                                                                        Section
      6.1

                                                                                      	
                                                                                        Existence;
      Power

                                                                                      	
                                                                                        17

                                                                                      
	 	 	 
	
                                                                                        Section
      6.2

                                                                                      	
                                                                                        Organizational
      Power; Authorization

                                                                                      	
                                                                                        17

                                                                                      
	 	 	 
	
                                                                                        Section
      6.3

                                                                                      	
                                                                                        Governmental
      Approvals; No Conflicts

                                                                                      	
                                                                                        18

                                                                                      
	 	 	 
	
                                                                                        Section
      6.4

                                                                                      	
                                                                                        Financial
      Statements

                                                                                      	
                                                                                        18

                                                                                      
	 	 	 
	
                                                                                        Section
      6.5

                                                                                      	
                                                                                        Litigation
      and Environmental Matters

                                                                                      	
                                                                                        18

                                                                                      
	 	 	 
	
                                                                                        Section
      6.6

                                                                                      	
                                                                                        Compliance
      with Laws and Agreements

                                                                                      	
                                                                                        19

                                                                                      
	 	 	 
	
                                                                                        Section
      6.7

                                                                                      	
                                                                                        Investment
      Company Act, Etc

                                                                                      	
                                                                                        19

                                                                                      
	 	 	 
	
                                                                                        Section
      6.8

                                                                                      	
                                                                                        Taxes

                                                                                      	
                                                                                        19

                                                                                      
	 	 	 
	
                                                                                        Section
      6.9

                                                                                      	
                                                                                        Margin
      Regulations

                                                                                      	
                                                                                        19

                                                                                      
	 	 	 
	
                                                                                        Section
      6.10

                                                                                      	
                                                                                        ERISA

                                                                                      	
                                                                                        19

                                                                                      
	 	 	 
	
                                                                                        Section
      6.11

                                                                                      	
                                                                                        Ownership
      of Property

                                                                                      	
                                                                                        20

                                                                                      
	 	 	 
	
                                                                                        Section
      6.12

                                                                                      	
                                                                                        Disclosure

                                                                                      	
                                                                                        20

                                                                                      
	 	 	 
	
                                                                                        Section
      6.13

                                                                                      	
                                                                                        Labor
      Relations

                                                                                      	
                                                                                        20

                                                                                      
	 	 	 
	
                                                                                        Section
      6.14

                                                                                      	
                                                                                        Non-Controlled
      Person

                                                                                      	
                                                                                        20

                                                                                      
	 	 	 
	
                                                                                        Section
      6.15

                                                                                      	
                                                                                        Mortgage

                                                                                      	
                                                                                        21

                                                                                      
	 	 	 
	
                                                                                        ARTICLE
      7

                                                                                      	
                                                                                        AFFIRMATIVE
      COVENANTS

                                                                                      	
                                                                                        21

                                                                                      
	 	 	 
	
                                                                                        Section
      7.1

                                                                                      	
                                                                                        Financial
      Statements and Other Information

                                                                                      	
                                                                                        21

                                                                                      
	 	 	 
	
                                                                                        Section
      7.2

                                                                                      	
                                                                                        Notices
      of Material Events

                                                                                      	
                                                                                        22

                                                                                      
	 	 	 
	
                                                                                        Section
      7.3

                                                                                      	
                                                                                        Existence;
      Conduct of Business

                                                                                      	
                                                                                        23

                                                                                      
	 	 	 
	
                                                                                        Section
      7.4

                                                                                      	
                                                                                        Compliance
      with Laws, Etc

                                                                                      	
                                                                                        23

                                                                                      
	 	 	 
	
                                                                                        Section
      7.5

                                                                                      	
                                                                                        Payment
      of Obligations

                                                                                      	
                                                                                        23

                                                                                      
	 	 	 
	
                                                                                        Section
      7.6

                                                                                      	
                                                                                        Books
      and Records

                                                                                      	
                                                                                        23

                                                                                      

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      TABLE
OF CONTENTS

      (continued)

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              	 	 	
                                                                                      
                                                                                        Page

                                                                                      

                                                                                    
	 	 	 
	
                                                                                      Section
      7.7

                                                                                    	
                                                                                      Visitation,
      Inspection, Etc

                                                                                    	
                                                                                      23

                                                                                    
	 	 	 
	
                                                                                      Section
      7.8

                                                                                    	
                                                                                      Maintenance
      of Properties; Insurance

                                                                                    	
                                                                                      23

                                                                                    
	 	 	 
	
                                                                                      Section
      7.9

                                                                                    	
                                                                                      Use
      of Bond Proceeds

                                                                                    	
                                                                                      24

                                                                                    
	 	 	 
	
                                                                                      Section
      7.10

                                                                                    	
                                                                                      Non-Controlled
      Person

                                                                                    	
                                                                                      24

                                                                                    
	 	 	 
	
                                                                                      Section
      7.11

                                                                                    	
                                                                                      Sinking
      Fund; Optional Redemption of Bonds

                                                                                    	
                                                                                      24

                                                                                    
	 	 	 
	
                                                                                      Section
      7.12

                                                                                    	
                                                                                      ADA

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      Section
      7.13

                                                                                    	
                                                                                      Draws
      from Project Fund

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      Section
      7.14

                                                                                    	
                                                                                      Deposit
      Accounts

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      Section
      7.15

                                                                                    	
                                                                                      Auto-Debit

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      ARTICLE
      8

                                                                                    	
                                                                                      NEGATIVE
      COVENANTS

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      Section
      8.1

                                                                                    	
                                                                                      Indebtedness

                                                                                    	
                                                                                      25

                                                                                    
	 	 	 
	
                                                                                      Section
      8.2

                                                                                    	
                                                                                      Negative
      Pledge

                                                                                    	
                                                                                      26

                                                                                    
	 	 	 
	
                                                                                      Section
      8.3

                                                                                    	
                                                                                      Fundamental
      Changes

                                                                                    	
                                                                                      26

                                                                                    
	 	 	 
	
                                                                                      Section
      8.4

                                                                                    	
                                                                                      Transactions
      with Affiliates

                                                                                    	
                                                                                      26

                                                                                    
	 	 	 
	
                                                                                      Section
      8.5

                                                                                    	
                                                                                      Restrictive
      Agreements

                                                                                    	
                                                                                      26

                                                                                    
	 	 	 
	
                                                                                      Section
      8.6

                                                                                    	
                                                                                      Contingent
      Liabilities; Sale and Leaseback Transactions

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      Section
      8.7

                                                                                    	
                                                                                      Financial
      Contract

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      Section
      8.8

                                                                                    	
                                                                                      Amendment
      to Material Documents

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      Section
      8.9

                                                                                    	
                                                                                      Accounting
      Changes

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      Section
      8.10

                                                                                    	
                                                                                      Change
      in Ownership

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      Section
      8.11

                                                                                    	
                                                                                      Subordinated
      Debt

                                                                                    	
                                                                                      27

                                                                                    
	 	 	 
	
                                                                                      ARTICLE
      9

                                                                                    	
                                                                                      FINANCIAL
      AND OTHER COVENANTS

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      Section
      9.1

                                                                                    	
                                                                                      Debt
      Service Coverage Ratio

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      Section
      9.2

                                                                                    	
                                                                                      Total
      Liabilities to Tangible Net Worth

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      Section
      9.3

                                                                                    	
                                                                                      Funded
      Debt Ratio

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      ARTICLE
      10

                                                                                    	
                                                                                      EVENTS
      OF DEFAULT

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      Section
      10.1

                                                                                    	
                                                                                      Events
      of Default

                                                                                    	
                                                                                      28

                                                                                    
	 	 	 
	
                                                                                      ARTICLE
      11

                                                                                    	
                                                                                      NATURE
      OF BANK'S DUTIES

                                                                                    	
                                                                                      31

                                                                                    
	 	 	 
	
                                                                                      Section
      11.1

                                                                                    	
                                                                                      Bank
      Duties

                                                                                    	
                                                                                      31

                                                                                    

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

       

      TABLE
OF CONTENTS

      (continued)

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 	 	
                                                          Page

                                                        
	 	 	 
	
                                                          Section
      11.2

                                                        	
                                                          Indemnification

                                                        	
                                                          31

                                                        
	 	 	 
	
                                                          ARTICLE
      12

                                                        	
                                                          MISCELLANEOUS

                                                        	
                                                          32

                                                        
	 	 	 
	
                                                          Section
      12.1

                                                        	
                                                          Amendments

                                                        	
                                                          32

                                                        
	 	 	 
	
                                                          Section
      12.2

                                                        	
                                                          Survival
      of Representations and Warranties

                                                        	
                                                          32

                                                        
	 	 	 
	
                                                          Section
      12.3

                                                        	
                                                          Expenses

                                                        	
                                                          33

                                                        
	 	 	 
	
                                                          Section
      12.4

                                                        	
                                                          Set-off

                                                        	
                                                          33

                                                        
	 	 	 
	
                                                          Section
      12.5

                                                        	
                                                          Notices

                                                        	
                                                          33

                                                        
	 	 	 
	
                                                          Section
      12.6

                                                        	
                                                          Satisfaction
      Requirement

                                                        	
                                                          34

                                                        
	 	 	 
	
                                                          Section
      12.7

                                                        	
                                                          Binding
      Effect; Assignment

                                                        	
                                                          34

                                                        
	 	 	 
	
                                                          Section
      12.8

                                                        	
                                                          Relationship
      between Company and Bank

                                                        	
                                                          34

                                                        
	 	 	 
	
                                                          Section
      12.9

                                                        	
                                                          Governing
      Law

                                                        	
                                                          34

                                                        
	 	 	 
	
                                                          Section
      12.10

                                                        	
                                                          Counterparts

                                                        	
                                                          35

                                                        
	 	 	 
	
                                                          Section
      12.11

                                                        	
                                                          Incorporation
      of Preambles and Annexes

                                                        	
                                                          35

                                                        
	 	 	 
	
                                                          Section
      12.12

                                                        	
                                                          Jurisdiction;
      Venue; Waiver of Jury Trial

                                                        	
                                                          35

                                                        
	 	 	 
	
                                                          Section
      12.13

                                                        	
                                                          No
      Illegal Interest to be Charged

                                                        	
                                                          35

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

    LETTER
OF CREDIT AGREEMENT

     

    THIS LETTER OF CREDIT
AGREEMENT, dated as of November 13, 2008 (the "Agreement"), by and
between BOVIE MEDICAL CORPORATION, a Delaware corporation (the "Company") and
RBC BANK (USA), a North Carolina banking corporation (the "Bank");

     

    WITNESSETH:

     

    WHEREAS, the Company has
requested that the Pinellas County Industrial Development Authority (d/b/a
Pinellas County Economic Development Authority) (the "Issuer") issue $4,000,000
in aggregate principal amount of its Industrial Development Revenue Bonds (Bovie
Medical Corporation Project), Series 2008 (the "Bonds") pursuant to an Indenture
of Trust, dated as of November 1, 2008 (the "Indenture"), by and between the
Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the
"Trustee"), and that it lend the proceeds of the sale of the Bonds to the
Company in order to enable the Company to finance or refinance, in whole or in
part, the acquisition and renovation of certain real property and equipment and
the cost of equipping an approximately 60,000 square foot manufacturing facility
located at 5115 Ulmerton Road, Largo, Florida 34620, Pinellas County, Florida to
be used in the manufacturing of medical devices and accessories (the "Project");
and

     

    WHEREAS, as security for the
payment of the Bonds, the Company has requested the Bank to issue its
irrevocable letter of credit in the form of Annex I
attached hereto (the "Letter of Credit"); and

     

    WHEREAS, it is a condition of
the obligation of the Bank to execute and deliver the Letter of Credit that this
Agreement shall have been executed and delivered by the Company;

     

    NOW, THEREFORE, in
consideration of the mutual promises contained herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     

    ARTICLE
1

     

    DEFINITIONS

     

    Section 1.1 Defined Terms.  For
the purpose of this Agreement, in addition to terms defined elsewhere herein
(capitalized terms not otherwise defined below shall have the meanings provided
in the Indenture), the following terms shall have the following
meanings:

     

    "ADA" shall mean,
collectively, the Americans with Disabilities Act of 1990 and, as applicable,
the Florida Americans with Disabilities Accessibility Implementation
Act.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    "A Drawing" shall have the
meaning specified in the Letter of Credit which shall be a drawing in respect of
the payment of the portion of the purchase price of Bonds corresponding to
principal of such Bonds.

     

    "Affiliate" shall mean, as to
any Person, any other Person, directly or indirectly controlling (including all
directors, trustees, officers and employees of such Person), directly or
indirectly controlled by or under direct or indirect common control with such
Person.

     

    "Assignment of Leases" shall
mean the Assignment of Rents, Leases, Profits and Contracts dated as of the date
hereof, executed by the Company in favor of the Bank.

     

    "B Drawing" shall have the
meaning specified in the Letter of Credit which shall be a drawing in respect of
the payment of principal of the Bonds.

     

    "Base Rate" shall mean the per
annum rate which the Bank publicly announces from time to time to be its prime
lending rate, as in effect from time to time.  The Bank's prime
lending rate is a reference rate and does not necessarily represent the lowest
or best rate charged to customers.  The Bank may make commercial loans
or other loans at rates of interest at, above or below the Bank's prime lending
rate.  Each change in the Bank's prime lending rate shall be effective
from and including the date such change is publicly announced as being
effective.

     

    "Business Day" shall mean any
day other than (a) a Saturday or Sunday, (b) a day on which the Trustee or the
Credit Provider is required or permitted by law to close, and (c) a day on which
the New York Stock Exchange is closed.

     

    "C Drawing" shall have the
meaning specified in the Letter of Credit which shall be a drawing in respect of
the payment of interest, or the portion of the purchase price of Bonds
corresponding to interest, on the Bonds.

     

    "Capital Lease Obligations" of
any Person shall mean all obligations of such Person to pay rent or other
amounts under any lease (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required
to be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.

     

    "Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time, including, when appropriate,
the statutory predecessor of the Code, and all applicable regulations thereunder
whether proposed, temporary or final, including regulations issued and proposed
pursuant to the statutory predecessor of the Code, and, in addition, all
official rulings and judicial determinations applicable under the Code and under
the statutory predecessor of the Code and any successor provisions to the
relevant provisions of the Code or regulations.

     

    "Date of Issuance" shall mean
the date of issuance and delivery of the Letter of Credit.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Debt Service Coverage Ratio"
shall mean, as to any period, the ratio of (a) EBITDA to the total of (b)
interest expense plus scheduled principal payments in respect of Funded Debt
tested quarterly, which shall be no less than 1.50 times beginning December 31,
2008.

     

    "Default" shall mean any event
which with notice or lapse of time, or both, would become an Event of
Default.

     

    “EBITDA” shall mean the sum
(without duplication) of (a) net income (or net loss) from continuing
operations, plus (b) to the
extent deducted in determining net income (or net loss) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) extraordinary or unusual losses deducted in calculating net income
(or net loss) and (vi) any cost of sales arising from step-up inventory values
as a result of applying purchase or fresh start accounting, less (c) the sum of
(i) extraordinary or unusual gains added in calculating net income (or net
loss), (ii) all corporate distributions in each case determined in accordance
with GAAP and (iii) gains (or losses) on the disposal of assets added in
calculating net income (or net loss).

     

    "Environmental Indemnity"
shall mean the Hazardous Substance Indemnity Agreement dated as of
November 13, 2008, between the Company and the Bank.

     

    "Environmental Laws" shall
mean all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by or with any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.

     

    "Environmental Liability"
shall mean any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation,
costs of administrative oversight, fines, natural resource damages, penalties or
indemnities), of the Company or any Affiliate directly or indirectly resulting
from or based upon (a) any actual or alleged violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any actual or alleged exposure to any
Hazardous Materials, (d) the Release or threatened Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

     

    "ERISA" shall mean the
Employee Retirement Income Security Act of 1974, as the same may be amended from
time to time.

     

    "ERISA Affiliate" shall mean
each trade or business (whether or not incorporated) which, together with the
Company, is treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.

     

    
      
        
        

      

      
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    "ERISA Event"
shall  mean (a) any "reportable event," as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

     

    "Event of Default" shall have
the meaning specified in Article
10.

     

    "Financial Contract" shall
mean (i) an agreement (including terms and conditions incorporated by reference
therein) which is a rate swap agreement, basis swap, forward rate agreement,
commodity swap, commodity option, equity or equity index swap, bond option,
interest rate option, foreign exchange agreement, rate cap agreement, rate floor
agreement, rate collar agreement, currency swap agreement, cross-currency rate
swap agreement, currency option, any other similar agreement (including any
option to enter into any of the foregoing) designed to protect against
fluctuations in interest rates, currency values or commodity values; (ii) any
combination of the foregoing; or (iii) a master agreement for any of the
foregoing together with all supplements.

     

    “Funded Debt” shall mean all
obligations for borrowed money which bears interest or to which interest is
imputed, plus, without duplication, all obligations for the deferred payment of
the purchase of property, all capital lease obligations, all Indebtedness
secured by purchase money security interests, and the amount of any contingent
liabilities such as guarantees or other financial assistance provided in respect
of liabilities of a third party.

     

    "GAAP" shall mean generally
accepted accounting principles as defined by the Financial Accounting Standards
Board as from time to time in effect that are consistently applied and, when
used with respect to the Company, that are consistent with the accounting
practice of the Company, reflected in the financial statements for the Company,
with such changes as may be approved by an independent public accountant
satisfactory to the Bank.

     

    "Governmental Authority" shall
mean the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

     

    
      
        
        

      

      
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    "Guarantee" of or by any
Person (the "guarantor")
shall mean any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly and including any
obligation, direct or indirect, of the guarantor (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit issued in support of such Indebtedness or obligation; provided,
that the term "Guarantee" shall not include endorsements for collection or
deposits in the ordinary course of business. The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which Guarantee is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith. The term "Guarantee" used as a verb has a corresponding
meaning.

     

    "Hazardous Materials" means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law or defined as
"hazardous materials" by Hazardous Materials Laws.

     

    "Hazardous Materials Laws"
shall mean, collectively, all federal, state and local laws, ordinances or
regulations, now or hereafter in effect, relating to environmental conditions or
Hazardous Materials, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. § 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §
9601, et seq., the Clean Air Act, 42 U.S.C. § 7401, et seq., the Toxic
Substances Control Act, 15 U.S.C. §§ 2601 through 2929, and all similar federal,
state and local laws and ordinances, together with all regulations now or
hereafter adopted, published or promulgated pursuant thereto.

     

    "Improvements" shall mean all
buildings, structures, fixtures and personal property now or hereafter located
on or affixed to the Property together with all additions and accessions thereto
and replacements and proceeds thereof.

     

    
      
        
        

      

      
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    "Indebtedness" of any Person
shall mean, without duplication (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person in respect of
the deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business; provided, that for purposes of
Section
10.1(g), trade payables overdue by more than 120 days shall be included
in this definition except to the extent that any of such trade payables are
being disputed in good faith and by appropriate measures), (d) all obligations
of such Person under any conditional sale or other title retention agreement(s)
relating to property acquired by such Person, (e) all Capital Lease Obligations
of such Person, (f) all obligations, contingent or otherwise, of such Person in
respect of letters of credit, acceptances or similar extensions of credit, (g)
all Guarantees of such Person of the type of Indebtedness described in clauses
(a) through (f) above, (h) all Indebtedness of a third party secured by any Lien
on property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (i) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any common
stock of such Person, (j) Off-Balance Sheet Liabilities and (k) all obligations
under a Financial Contract. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor.

     

    "Indenture" shall mean the
Indenture of Trust dated as of November 1, 2008 between the Issuer and the
Trustee.

     

    "Lien" shall mean, as to any
asset, (a) any lien, charge, claim, mortgage, security interest, pledge or other
encumbrance of any kind with respect to such asset, (b) any interest of a vendor
or lessor under any conditional sale agreement, capitalized lease or other title
retention agreement relating to such asset, (c) any reservation, exception,
encroachment, easement, right of way, covenant, condition, restriction, lease or
other title exception affecting such asset, or (d) any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction).

     

    "Loan Agreement" shall mean
the Loan Agreement dated as of November 1, 2008 between the Issuer and the
Company.

     

    "Long-Term Debt" shall mean
Indebtedness the principal of which is payable more than one year after the date
of creation thereof.

     

    "Material Adverse Effect"
shall mean, with respect to any event, act, condition or occurrence of whatever
nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singularly or in conjunction
with any other event or events, act or acts, condition or conditions, occurrence
or occurrences whether or not related, a material adverse change in, or a
material adverse effect on, (a) the business, results of operations, financial
condition, assets, liabilities or prospects of the Company or of the Company and
its Affiliates taken as a whole, (b) the ability of the Company to perform any
of its obligations under the Operative Documents, (c) the rights and remedies of
the Bank under any of the Operative Documents or (d) the legality, validity or
enforceability of any of the Operative Documents.

     

    
      
        
        

      

      
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    "Mortgage" shall mean the
Mortgage and Security Agreement dated as of the date hereof, executed by the
Company, as mortgagor, in favor of the Bank, as mortgagee, encumbering the
Property.

     

    "Multiemployer Plan" shall
have the meaning set forth in Section 4001(a)(3) of ERISA.

     

    "Operative Documents" shall
have the meaning specified in Section
4.1 hereof.

     

    "PBGC" shall mean the Pension
Benefit Guaranties Corporation referred to and defined in ERISA, and any
successor entity performing similar functions.

     

    "Permitted Liens" shall
mean

     

    (a)           Liens
imposed by law for taxes not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;

     

    (b)           statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP;

     

    (c)           pledges
and deposits made in the ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social security laws or
regulations;

     

    (d)           deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business;

     

    (e)           judgment
and attachment liens not giving rise to an Event of Default or Liens created by
or existing from any litigation or legal proceeding that are currently being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP;

     

    (f)           easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct of business
of the Company and its Affiliates taken as a whole;

     

    
      
        
        

      

      
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    (g)           the
Mortgage, the Assignment of Leases  and any other Operative Documents
or other documents evidencing the Liens created by the Operative Documents;
and

     

    (h)           items
shown on Annex
IV.

     

    "Permitted Investments" shall
have the meaning ascribed thereto under Section 1.1 of the
Indenture.

     

    "Person" shall mean an
individual, corporation, partnership, joint venture, trust, unincorporated
organization or any other juridical entity, or a foreign state or any agency or
political subdivision thereof.

     

    "Plan" shall mean any employee
pension benefit plan (other than a Multiemployer Plan) subject to the provisions
of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Company or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

     

    “Pledge Agreement” shall mean
the Pledge Agreement of the Company in favor of the Bank, dated as of the date
hereof.

     

    “Pledge and Security
Agreement” shall mean the Pledge and Security Agreement of the Company in
favor of the Bank, dated as of the date hereof.

     

    "Pledged Bonds" shall have the
meaning specified in Section
3.2(a).

     

    "Pledged Bond Collateral"
shall have the meaning specified in Section
3.2(b).

     

    "Property" shall mean all of
the real property described in Exhibit "B" to the Mortgage, together with the
Improvements and all other property described in the Mortgage.

     

    "Release" means any release,
spill, emission, leaking, dumping, injection, pouring, deposit, disposal,
discharge, dispersal, leaching or migration into the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata) or
within any building, structure, facility or fixture.

     

    "Remarketing Agreement" shall
mean the Remarketing Agreement dated as of the date hereof between the Company
and the Remarketing Agent, as defined in the Indenture.

     

    "Responsible Officer" shall
mean any of the president, the chief executive officer, chairman of the board of
directors, the chief financial officer, executive director or the treasurer of
the Company or such other representative of the Company as may be designated in
writing by any one of the foregoing with the consent of the Bank; and, with
respect to the financial covenants only, the chief financial officer or the
treasurer of the Company.

     

    
      
        
        

      

      
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    "Stated Amount" shall have the
meaning specified in the Letter of Credit.

     

    "Tangible Net Worth" shall
mean the amount shareholder equity of the Company less (a) intangible assets,
(b) deferred charges, and (c) leasehold improvements.

     

    "Termination Date" shall mean
the date the Letter of Credit expires in accordance with its terms.

     

    "Title Policy" shall have the
meaning specified in Section
4.8.

     

    “Waiver of Jury Trial
Agreement” shall mean the Waiver of Jury Trial Agreement dated as of the
date hereof between the Company and the Bank.

     

    "Withdrawal Liability" shall
mean liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

     

    Section 1.2  Accounting
Terms.  All accounting terms not specifically defined in
Paragraph 1.1 shall have the meanings normally given them by GAAP, which
principles will be applied on a basis consistent with those applied to the
reporting requirements specified in Paragraph 7.1 of this
Agreement.

     

    ARTICLE
2

     

    ISSUANCE
OF LETTER OF CREDIT; FEES

     

    Section 2.1  Amount and Term of Letter of
Credit.  The Bank agrees, on the terms and subject to the
conditions hereinafter set forth, to issue the Letter of Credit to the Trustee
(a) in an amount not to exceed $4,000,000, plus an amount equal to the sum of 35
days' interest on the Bonds, computed at a rate of twelve percent (12%) per
annum notwithstanding the actual rate borne from time to time by the Bonds, and
(b) expiring on December 15, 2011 unless otherwise terminated or
extended.  On or before December 15, 2010 and each December 15th
thereafter (except after the Bank shall have given notice of its intention not
to extend the Letter of Credit), the Company may request in writing a one-year
extension of the term of the Letter of Credit and, within two hundred ten (210)
days after its receipt of such request, the Bank will inform the Trustee and the
Company in writing if the Bank, in its sole discretion, is willing to renew the
Letter of Credit for an additional term of one year.  Although the
remaining term of the letter of Credit shall never exceed three years from any
extension date, it is the intention of this provision that, if an extension is
requested by the Company, the Trustee and the Company shall receive
approximately five months notice of the Bank's intention not to extend the
Letter of Credit for an additional period of one year.  Nothing herein
shall be construed to limit the Bank's ability to exercise its discretion to
determine whether it shall grant an extension or its rights following the
occurrence of any Event of Default.

     

    
      
        
        

      

      
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    Section 2.2  Letter of Credit
Fee.  The Company hereby agrees to pay to the Bank a non
refundable annual letter of credit fee for the period from and including the
Date of Issuance until the Termination Date, calculated at the rate of one
percent (1.0%) of the Stated Amount of the Letter of Credit (as the same may be
reduced from time to time but including, in any event, the principal amount of
any Pledged Bonds) on the date of payment of such letter of credit
fee.  Amounts payable under this Section
2.2 shall be payable in advance annually, based on a 360 day year, actual
number of days elapsed, in immediately available funds, with the first such
installment due on the Date of Issuance, the second such installment due on
December 15, 2009, and such installments to be paid annually thereafter on the
15th
day of each December.

     

    Section 2.3  Drawing Fees.  The
Company hereby agrees to pay to the Bank upon each drawing by the Trustee under
the Letter of Credit, the sum of $100, such amount payable without demand on the
date of each such draw.

     

    Section 2.4  Commitment Fee. The Company
hereby agrees to pay the Bank on or prior to the Date of Issuance, in addition
to any fees described in Section
2.2 hereof,  a one time commitment fee in the amount equal to
one percent (1.0%) of the Stated Amount of the Letter of Credit.

     

    Section 2.5  Transfer Fees.  The
Company hereby agrees to pay to the Bank, upon each transfer of the Letter of
Credit to a new payee in accordance with its terms, the sum of
$1,000.

     

    Section 2.6  Additional
Payments.  If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof, or in generally accepted accounting
principles, shall either (a) impose, modify or deem applicable any reserve,
special deposit or similar requirement against letters of credit issued by the
Bank or (b) impose on the Bank any other condition relating, directly or
indirectly, to this Agreement or the Letter of Credit, and the result of any
event referred to in the preceding clause (a) or (b) shall be to increase the
cost to the Bank of issuing or maintaining the Letter of Credit, then, upon
demand by the Bank, the Company hereby agrees to pay promptly to the Bank, from
time to time as specified by the Bank, such additional amounts as shall be
sufficient to compensate the Bank for such increased cost.  A
certificate of the Bank claiming compensation under this subsection and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive absent manifest error.  In determining any such amount, the
Bank may use any reasonable averaging and attribution methods.

     

    Section 2.7  Capital
Adequacy.  If, after the date of this Agreement, the Bank shall
have determined that the adoption or implementation of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any 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 or would have the effect of
reducing the rate of return on the Bank's capital, on this credit facility or
otherwise, as a consequence of its obligations hereunder and under the Letter of
Credit to a level below that which the Bank could have achieved but for such
adoption, change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy) by an amount deemed by the Bank to be
material, then from time to time, promptly upon demand by the Bank, the Company
hereby agrees to pay the Bank such additional amount or amounts as will
compensate the Bank for such reduction.  A certificate of the Bank
claiming compensation under this subsection and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive absent manifest
error.  In determining any such amount, the Bank may use any
reasonable averaging and attribution methods.

     

    
      
        
        

      

      
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    Section 2.8  Interest on Overdue
Payments.  The Company hereby agrees to pay to the Bank
interest on any and all amounts required to be paid under this Agreement from
and after the due date thereof until payment in full, payable on demand, at the
Base Rate plus two percent (2%) per annum, but in no event in excess of the
maximum lawful rate.

     

    ARTICLE
3

     

    AGREEMENT
TO REPAY LETTER OF CREDIT DRAWINGS; PLEDGED BONDS

     

    Section 3.1  Reimbursement.  The
Company hereby agrees as follows:

     

    (a)           to
pay to the Bank (i) within one hundred twenty (120) days after payment is made
under the Letter of Credit pursuant to any "A Drawing" to pay the portion of the
Purchase Price of Bonds corresponding to principal, but in no event later than
the earlier of (A) the Termination Date, (B) the earlier termination of the
Letter of Credit, or (C) the date of remarketing of such Bonds, an amount equal
to the amount of such "A Drawing" under the Letter of Credit; and (ii) interest
on each such amount from the date of drawing of such amount under the Letter of
Credit at the Base Rate plus two percent (2%) per annum, but in no event in
excess of the maximum lawful rate, such interest being payable on the first day
of each month, commencing with the first month after the month in which such
drawing occurs, and on the date of payment (including prepayment) of such
amount;

     

    (b)           to
pay to the Bank immediately after any payment is made under the Letter of Credit
pursuant to any "B Drawing" or "C Drawing" to pay principal of or interest (or
the portion of the Purchase Price of Bonds corresponding to interest) on the
Bonds, an amount equal to such amount so paid under the Letter of Credit;
and

     

    (c)           to
pay to the Bank interest on any and all amounts required to be paid as provided
in this Section
3.1 from and after the due date thereof until payment in full, payable on
demand, at the Base Rate plus two percent (2%) per annum, but in no event in
excess of the maximum lawful rate.  If any payment under the Letter of
Credit with respect to an "A Drawing," a "B Drawing" or a "C Drawing" shall be
reimbursed to the Bank on the same date such payment is made by the Bank, no
interest shall be payable on the reimbursed amount.

     

    
      
        
        

      

      
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    Section 3.2  Pledge of Bonds.

     

    (a)           As
security for the payment of the obligations of the Company pursuant to Section
3.1(a) above and as more fully described below, the Company hereby
pledges to the Bank, and grants to the Bank a security interest in, its right,
title and interest in and to Bonds delivered to the Bank in connection with "A
Drawings" (herein called "Pledged Bonds").  Any amounts from time to
time owing to the Bank pursuant to Section
3.1 above may be paid (i) at any time by the Company on one Business
Day's notice stating the amount to be prepaid (which shall be $5,000 or an
integral multiple thereof) and (ii) at any time on behalf of the Company on one
Business Day's notice from the Company directing the Bank to deliver (or to
cause the Trustee to deliver) a specified principal amount of Pledged Bonds held
by or on behalf of the Bank for sale.  Upon payment to the Bank of the
amount to be prepaid pursuant to Section 3.1(a) or
(b) above, together with accrued interest as set forth in Section
3.1(a)(ii), to the date of such payment on the amount to be paid, the
outstanding obligations of the Company under Section
3.1(a) above shall be reduced by the amount of such prepayment, interest
shall cease to accrue on the amount prepaid and the Bank shall release (or shall
be deemed to have released) from the pledge and security interest created
hereunder a principal amount of Pledged Bonds equal to the amount of such
payment, provided that prior to such release from the pledge and security
interest created hereunder of Bonds delivered to or for the benefit of the Bank
in connection with an "A Drawing," the Company shall have paid to the Bank the
amount owing in respect of the "C Drawing," if any, made in conjunction with
such "A Drawing."  Such Bonds shall be delivered to the Company on
payment to the Bank as aforesaid or to the Trustee for sale pursuant to the
Indenture, as appropriate.  Notwithstanding the foregoing, no payment
of amounts owing to the Bank pursuant to Section
3.1(a) may be made, and no Pledged Bonds shall be released, during the
period commencing on the Record Date with respect to an Interest Payment Date
and ending at the close of business on such Interest Payment Date.

     

    (b)           The
Company hereby pledges, assigns, hypothecates, transfers, and delivers to the
Bank all its right, title and interest to, and hereby grants to the Bank a first
lien on, and security interest in, all right, title and interest of the Company
in and to (i) all Pledged Bonds; (ii) all income, earnings, profits, interest,
premium or other payments in whatever form in respect of the Pledged Bonds; and
(iii) all proceeds (cash and non cash) arising out of the sale, exchange,
collection, enforcement or other disposition of all or any portion of the
Pledged Bonds (collectively, the "Pledged Bond Collateral").  The
Pledged Bond Collateral shall serve as security for the payment and performance
when due of the obligations of the Company hereunder.  The Company
shall deliver, or cause to be delivered, the Pledged Bonds to the Bank or to an
agent designated by the Bank immediately upon receipt thereof or, in the case of
Pledged Bonds held under a book-entry system administered by The Depository
Trust Company ("DTC"), New York, New York (or any other clearing corporation),
the Company shall cause the Pledged Bonds to be reflected on the records of DTC
(or such other clearing corporation) as a position held by the Bank (or an agent
acceptable to the Bank) as a DTC participant (or a participant in such other
clearing corporation) and the Bank (or its agent) shall reflect on its records
that the Pledged Bonds are owned beneficially by the Company subject to the
pledge in favor of the Bank.

     

    
      
        
        

      

      
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    (c)           If
any Event of Default shall have occurred and be continuing, the Bank, without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
to or upon the Company or any other person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Pledged Bond Collateral, or
any part thereof, and/or may forthwith sell, assign, give option or options to
purchase, contract to sell or otherwise dispose of and deliver said Pledged Bond
Collateral, or any part thereof, in one or more parcels at public or private
sale or sales, at any exchange, broker's board or at any of the Bank's offices
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk, with the right to the Bank upon any such sale or
sales, public or private, to purchase the whole or any part of said Pledged Bond
Collateral so sold, free of any right or equity of redemption in the Company,
which right or equity is hereby expressly waived or released.  The
Bank shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care, safekeeping
or otherwise of any and all of the Pledged Bond Collateral or in any way
relating to the rights of the Bank hereunder, including reasonable attorneys'
fees and legal expenses, to the payment in whole or in part of the obligations
of the Company hereunder in such order as the Bank may elect, the Company
remaining liable for any deficiency remaining unpaid after such application, and
only after so applying such net proceeds and after the payment by the Bank of
any other amount required by any provision of law, including, without
limitation, Sections 679.608(1)(a) and 679.610, Florida Statutes, need the Bank
account for the surplus, if any, to the Company.  The Company agrees
that the Bank need not give more than ten days notice of the time and place of
any public sale or of the time after which a private sale or other intended
disposition is to take place and that such notice is reasonable notification of
such matters.  No notification need be given to the Company if it has
signed after Default a statement renouncing or modifying any right to
notification of sale or other intended disposition.  In addition to
the rights and remedies granted to the Bank in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any of the
obligations of the Company hereunder, the Bank shall have all the rights and
remedies of a secured party under the Uniform Commercial Code in effect in the
State of Florida at that time.

     

    (d)           The
Company covenants that the pledge, assignment and delivery of the Pledged Bond
Collateral hereunder will create a valid, perfected, first priority security
interest in all right, title or interest of the Company in or to such Pledged
Bond Collateral, and the proceeds thereof, subject to no prior pledge, lien,
mortgage, hypothecation, security interest, charge, option or encumbrance or to
any agreement purporting to grant to any third party a security interest in the
property or assets of the Company which would include the Pledged Bond
Collateral.  The Company covenants and agrees that it will defend the
Bank's right, title and security interest in and to the Pledged Bond Collateral
and the proceeds thereof against the claims and demands of all persons
whomsoever.

     

    
      
        
        

      

      
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    (e)           Pledged
Bonds shall, at the option of the Bank, continue to be held as book-entry only
bonds, and shall be released from the security interest created hereunder for
cancellation or remarketing upon satisfaction of the obligations of the Company
with respect to such Pledged Bonds as provided in this Article
3.

     

    (f)           The
Company recognizes that, if the Bonds are being held under a book-entry only
system, and if less than all of the Bonds are Pledged Bonds, the Trustee shall
withdraw all Pledged Bonds from the book-entry only system and shall, at the
expense of the Company, prepare and authenticate physical bonds representing
such Pledged Bonds until such time as such Bonds are remarketed.

     

    Section 3.3  Reinstatement of Letter of
Credit.  After any "C Drawing," the obligation of the Bank to
honor demands for payment under the Letter of Credit with respect to payment of
interest, or the portion of Purchase Price of Bonds corresponding to interest,
on the Bonds will automatically and immediately be reinstated up to the total
amount specified therein, upon the terms and conditions set forth in the Letter
of Credit.  Upon release by or on behalf of the Bank pursuant to Section
3.2 hereof of any Pledged Bonds, the obligation of the Bank to honor
demands for payment under the Letter of Credit with respect to payment of the
principal, or the portion of Purchase Price of Bonds corresponding to principal,
of the Bonds will be automatically reinstated up to the total amount specified
therein upon the terms and conditions set forth in the Letter of
Credit.

     

    Section 3.4  Credit for Amount Paid on
Bonds.  The Company shall (a) receive a credit against the
obligation to pay interest pursuant to Section
3.1(a)(ii) above to the extent of any amounts actually paid by the Issuer
from funds of the Company to the Bank in respect of the interest due on any
Pledged Bonds and (b) receive a credit against its reimbursement obligation
pursuant to Section
3.1(a)(i) above to the extent of any amounts actually paid by the Issuer
from funds of the Company to the Bank in respect of the principal due on any
Pledged Bonds.

     

    Section 3.5  Computation of Interest; Place of
Payment.  Interest payable hereunder shall be computed on the
basis of a 360 day year, actual number of days elapsed.  All payments
by the Company to the Bank hereunder shall be made in lawful currency of the
United States and in immediately available funds at the Bank's office at 4221
West Boy Scout Boulevard, Suite 100, Tampa, Florida 33607. In the event the date
specified for any payment hereunder is not a Business Day, such payment shall be
made on the next following Business Day and interest shall be paid at the rate
provided for herein on any such payment to the Business Day on which such
payment is made.

     

    ARTICLE
4

     

    CONDITIONS
PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT

     

    This
Agreement shall become effective, and the Bank will issue the Letter of Credit,
on the date the Bonds are issued and sold to the purchaser(s) thereof, provided
that all of the following conditions are met:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section 4.1  Delivery of the Bonds and Operative
Documents.  This Agreement, the Loan Agreement, the Indenture,
the Remarketing Agreement, the Environmental Indemnity, the Mortgage, the Pledge
Agreement, the Pledge and Security Agreement, the UCC-1 Financing Statement, the
Assignment of Leases, and the Waiver of Jury Trial Agreement (collectively, the
"Operative Documents") and the Bonds shall have been executed and delivered by
the parties thereto, each in form and substance satisfactory to the
Bank.  The Bank shall have received an executed or conformed copy of
each of the Operative Documents.

     

    Section
4.2   No
Default.  On the Date of Issuance and after giving effect to
the issuance of the Letter of Credit, there shall exist no Default or Event of
Default.

     

    Section 4.3  Representations and
Warranties.  On the Date of Issuance and after giving effect to
the issuance of the Letter of Credit, all representations and warranties of the
Company contained herein, in the other Operative Documents or otherwise made in
writing in connection herewith shall be true and correct with the same force and
effect as though such representations and warranties had been made on and as of
such date.

     

    Section 4.4  Opinions of
Counsel.  There shall have been delivered to the Bank an
opinion of Fowler White Boggs Banker P.A., in its capacity as counsel to the
Company, dated the Date of Issuance, which opinion shall be in form and
substance satisfactory to the Bank and shall cover such matters as the Bank may
reasonably request.

     

    Section 4.5  Certificates of
Compliance.  There shall have been delivered to the Bank
certificates of duly authorized officers of the Company, dated the Date of
Issuance, to the effect that all of the conditions specified in Sections 4.1 and
4.2 have been satisfied as of such date and covering such additional
matters as the Bank may reasonably request.

     

    Section 4.6  Opinion of Bond
Counsel.  There shall have been delivered to the Bank an
opinion (or a signed copy of such opinion together with a satisfactory reliance
letter) of Bryant Miller Olive, P.A., Bond Counsel, dated the Date of Issuance
and in form and substance satisfactory to the Bank, to the effect that the Bonds
are legal, valid and binding obligations of the Issuer and that as of the Date
of Issuance interest on the Bonds is not includable in gross income for federal
income tax purposes under existing statutes, regulations and rulings, and
covering such other matters as the Bank may reasonably request.

     

    Section 4.7  Governmental
Approvals.  The Company shall furnish to the Bank copies or
other evidence satisfactory to the Bank of all permits, licenses and approvals
currently available required in connection with the Property and Improvements
thereon including, without limitation, evidence of compliance with applicable
zoning requirements, grading permits, building permits, curb cut permits, sewer
tap permits, permits for discharge or storm water, and permits for the
development of areas classified as "wetlands," if applicable.

     

    
      
        
        

      

      
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    Section 4.8  Title Insurance
Policy.  There shall have been delivered to the Bank a
mortgagee's title insurance policy, in form and content satisfactory to the
Bank, in an amount equal to the Stated Amount of the Letter of Credit to be
obtained at the Company's expense insuring that the Mortgage constitutes a valid
first lien on the Property, free and clear of all defects and encumbrances
except such as the Bank shall approve, and naming the Bank as insured, with no
exceptions or exclusions other than as may be approved by the Bank.

     

    Section 4.9  Survey.  There shall
have been delivered to the Bank a current survey or surveys of the Property
prepared in compliance with standards established by the Bank and certified to
the benefit of the Bank and the provider of the Title Policy, by a duly
registered land surveyor or engineer, acceptable to the Bank, which survey shall
show all courses and distances, dimensions, the area in square feet, street and
setback lines, existing improvements (if any) and other details reasonably
required by the Bank or which may be necessary to show that there are no
encroachments, easements, rights-of-ways, building code or zoning violations or
that the Property does not lie within a flood hazard area or other defects
affecting marketability or insurability.

     

    Section 4.10  Environmental
Audit.  There shall have been delivered to the Bank a Phase I
environmental audit or audits or environmental questionnaires related to the
Property in form and substance satisfactory to the Bank.  The Bank may
require additional audits, reports, or assessments at the expense of the Company
in accordance with the terms of the Environmental Indemnity.

     

    Section 4.11  Proof of
Insurance.  There shall have been delivered to the Bank a proof
of insurance or copies of the insurance policies meeting the requirements hereof
and of the Mortgage.

     

    Section 4.12  Appraisal.  There
shall have been delivered to the Bank an MAI appraisal or appraisals on the
Property, satisfactory to the Bank and prepared by an MAI appraiser satisfactory
to the Bank, showing that the original stated amount of the Letter of Credit
does not exceed 80% of the appraised market value of the Property.

     

    Section 4.13  Other
Documents.  There shall have been delivered to the Bank such
other information, documents, instruments, approvals (and if requested by the
Bank, certified duplicates of executed copies thereof) or opinions as the Bank
or its counsel may reasonably request, including, without limitation, a
certificate of good standing for the Company from the Secretary of State of the
State of Florida, evidence of action by the Company to authorize the Loan
Agreement and the other Operative Documents and all documents related to the
Bonds and this Agreement, and three year projections for sales and profitability
of the Company.

     

    Section
4.14   Fees.  There shall
have been paid to the Bank all amounts required under Sections 2.2 and
2.4 of this Agreement to be due and payable on the Date of Issuance of
the Letter of Credit.

     

    
      
        
        

      

      
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    Section
4.15   Documentation and
Proceedings.  All corporate and legal proceedings and all
instruments in connection with the transactions contemplated by this Agreement
and the other Operative Documents shall be satisfactory in form and substance to
the Bank and its counsel and the Bank shall have received all information and
copies of all documents, including records of corporate proceedings,
governmental approvals and incumbency certificates which it may have reasonably
requested in connection with the transactions contemplated by this Agreement and
the other Operative Documents, such documents where appropriate to be certified
by proper officers.

     

    ARTICLE
5

     

    CHARACTER
OF OBLIGATIONS HEREUNDER

     

    The
obligations of the Company under this Agreement are primary, absolute,
independent, irrevocable and unconditional.  The Company understands
and agrees that no payment by it under any other agreement (whether voluntary or
involuntary or pursuant to court order or otherwise) shall constitute a defense
to the several obligations hereunder except to the extent that the Bank has been
indefeasibly paid in full.

     

    ARTICLE
6

     

    REPRESENTATIONS
AND WARRANTIES

     

    The
Company represents and warrants as follows:

     

    Section 6.1  Existence;
Power.   The Company (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to carry on its business
as now conducted, and (c) is duly qualified to do business, and is in good
standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.

     

    Section 6.2  Organizational Power;
Authorization.  The execution, delivery and performance by the
Company of the Operative Documents to which it is a party are within the
Company's organizational powers and have been duly authorized by all necessary
organizational, and if required, member or partner action.  This
Agreement has been duly executed and delivered by the Company, and constitutes,
and each other Operative Document to which the Company is a party, when executed
and delivered by the Company, will constitute, the valid and binding obligation
of the Company, enforceable against it in accordance with their respective
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.

     

    
      
        
        

      

      
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    Section 6.3  Governmental Approvals; No
Conflicts.  The execution, delivery and performance by the
Company of this Agreement and of the other Operative Documents to which it is a
party (a) do not require any consent or approval of, registration or filing
with, or any action by, any Governmental Authority, except those as have been
obtained or made and are in full force and effect or where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (b) will not violate any applicable law, rule or
regulation or the charter, by-laws or other organizational documents of the
Company or any of its Affiliates or any judgment, order or ruling of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, material agreement or other material instrument binding on the
Company or any of its Affiliates or any of its assets or give rise to a right
thereunder to require any payment to be made by the Company or any of its
Affiliates and (d) will not result in the creation or imposition of any Lien on
any asset of the Company or any of its Affiliates, except Liens (if any) created
under the Operative Documents.

     

    Section 6.4  Financial
Statements.  The Company has furnished to the Bank the
internally prepared balance sheet of the Company as of June 30, 2008, and the
related statements of income and cash flows for the fiscal quarter and
year-to-date period then ending.  Such financial statements fairly
present the financial condition of the Company as of such date and the results
of operations for such period in conformity with GAAP consistently applied,
subject to year end adjustments.  Since June 30, 2008, there have been
no changes with respect to the Company which have had or could reasonably be
expected to have, singly or in the aggregate, a Material Adverse
Effect.

     

    Section
6.5   Litigation and Environmental
Matters.

     

    (a)           No
litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Affiliates (i) as to
which there is a reasonable possibility of an adverse determination that could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, or (ii) which in any manner draws into question the
validity or enforceability of this Agreement or any other Operative Document or
(iii) which is not described on Annex II
hereto.

     

    (b)           Except
for the matters described in the Existing Environmental Reports (as defined in
the Environmental Indemnity), neither the Company nor any of its Affiliates (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

     

    (c)           Except
as described in the Existing Environmental Reports (as defined in the
Environmental Indemnity), the Property has not, to the knowledge of the Company,
in the past been used and the Property is not presently being used for the
handling, storage, transportation or disposal of Hazardous Materials or toxic
materials in contravention of applicable state, federal or local law or
regulation nor, to the knowledge of the Company, have such materials ever been
present on the Property in contravention of applicable state, federal or local
law or regulation.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Section 6.6  Compliance with Laws and
Agreements.  The Company and each of its Affiliates is in
compliance with (a) all applicable laws, rules, regulations, judgments and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

     

    Section 6.7  Investment Company Act,
Etc.  Neither the Company nor any of its Affiliates is (a) an
"investment company" or is "controlled" by an "investment company," as such
terms are defined in, or subject to regulation under, the Investment Company Act
of 1940, as amended, (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended or
(c) otherwise subject to any other regulatory scheme limiting its ability to
incur debt.

     

    Section 6.8  Taxes.  The Company
and its Affiliates and each other Person for whose taxes the Company or any
Affiliate could become liable have timely filed or caused to be filed all
Federal income tax returns and all other material tax returns that are required
to be filed by them, and have paid all taxes shown to be due and payable on such
returns or on any assessments made against it or its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority, except (a) to the extent the failure to do so would not
have a Material Adverse Effect or (b) where the same are currently being
contested in good faith by appropriate proceedings and for which the Company or
such Affiliate, as the case may be, has set aside on its books adequate reserves
in accordance with GAAP.  As of the Date of Issuance, the charges,
accruals and reserves on the books of the Company and its Affiliates in respect
of such taxes are adequate, and no tax liabilities that could be materially in
excess of the amount so provided are anticipated.

     

    Section 6.9  Margin
Regulations.  None of the proceeds of any of the Bonds or of
any drawing under the Letter of Credit will be used for "purchasing" or
"carrying" any "margin stock" with the respective meanings of each of such terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the applicable Margin
Regulations.

     

    Section 6.10  ERISA.  No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability  is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect.  The present value of  all
accumulated  benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $10,000 the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000 the fair market
value of the assets of all such underfunded Plans.  All Plans of the
Company are described on Annex III
hereto.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    Section 6.11  Ownership of
Property.

     

    (a)           The
Company and its Affiliates has good title to, or valid leasehold interests in,
all of its real and personal property material to the operation of its business,
free and clear of any Liens except Permitted Liens.

     

    (b)           The
Company and its Affiliates owns, or is licensed, or otherwise has the right to
use, all patents, trademarks, service marks, tradenames, copyrights, franchises,
licenses, and other intellectual property material to its business, and the use
thereof by the Company and its Affiliates does not infringe on the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, would not have a Material Adverse Effect.

     

    Section 6.12  Disclosure.  The
Company has disclosed to the Bank all agreements, instruments, and corporate or
other restrictions to which the Company or any of its Affiliates is subject, and
all other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect.  None of the reports (including without limitation all reports
that the Company is required to file with the Securities and Exchange
Commission), financial statements, certificates or other information furnished
by or on behalf of the Company to the Bank in connection with the negotiation or
syndication of this Agreement or any other Operative Document or delivered
hereunder or thereunder (as modified or supplemented by any other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in
light of the circumstances under which they were made, not misleading; provided,
that with respect to projected financial information, if any, the Company
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

     

    Section 6.13  Labor
Relations.  There are no strikes, lockouts or other material
labor disputes or grievances against the Company or any of its Affiliates or, to
the Company's knowledge, threatened against or affecting the Company or any of
its Affiliates, and no significant unfair labor practice, charges or grievances
are pending against the Company or any of its Affiliates, or to the Company's
knowledge, threatened against any of them before any Governmental
Authority.  All payments due from the Company or any of its Affiliates
pursuant to the provisions of any collective bargaining agreement have been paid
or accrued as a liability on the books of the Company or any such Affiliate,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

     

    Section 6.14  Non-Controlled
Person.  The Company does not "control" the Bank, either
directly or indirectly through one or more controlled companies, within the
meaning of Section 2(a)(9) of the Investment Company Act of 1940.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    Section 6.15  Mortgage.  The
Mortgage creates as security for the Company's reimbursement obligations to the
Bank hereunder, a valid and enforceable first priority lien on the Property,
whether fee title or leasehold, noted therein, and on the personal property and
fixtures described therein, subject to no other liens other than the liens
disclosed on Annex IV
attached hereto.

     

    ARTICLE
7

     

    AFFIRMATIVE
COVENANTS

     

    The
Company covenants and agrees that so long as the Letter of Credit remains
outstanding:

     

    Section 7.1  Financial Statements and Other
Information.  The Company will deliver to the
Bank:

     

    (a)           as
soon as available and in any event within 90 days after the end of each fiscal
year of the Company, commencing with the fiscal year ending December 31, 2008, a
copy of the annual report for such fiscal year for the Company, containing an
annual budget, consolidated and consolidating balance sheets, statements of
income and retained earnings, statement of changes in the financial position of
the Company as of the end of such fiscal year and the related statements of
activities, net assets and cash flows of the Company for such fiscal year, all
in reasonable detail and reviewed by an independent public accountants
acceptable to Bank and a certificate of a Responsible Officer of the Company to
the effect that such financial statements present fairly in all material
respects the financial condition and the results of operations of the Company
for such fiscal year on a basis in accordance with GAAP;

     

    (b)           as
soon as available and in any event within 45 days after the end of each calendar
quarter, commencing December 31, 2008, an internally prepared statement of
changes in the financial position of the Company as of the end of such quarter,
including a balance sheet, statement of income and retained earnings, accounts
receivable with aging and inventory report for each such quarter, setting forth
in each case in comparative form the figures for the corresponding portion of
the previous fiscal year, all internally-prepared and certified by a Responsible
Officer of the Company as presenting fairly in all material respects the
financial condition and results of operations of the Company in accordance with
GAAP, subject to normal year-end audit adjustments;

     

    (c)           as
soon as available and in any event within 20 days after the end of each calendar
month, commencing November 30, 2008, an internally prepared listing of accounts
receivable through the last calendar day of the previous month showing the
accounts receivable that are insured through a credit insurance policy
acceptable to the Bank;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (d)           concurrently
with the delivery of the financial statements referred to in clauses (a), (b)
and (c) above, a certificate of a Responsible Officer, (i) certifying as to
whether there exists a Default or Event of Default on the date of such
certificate, and if a Default or an Event of Default then exists, specifying the
details thereof and the action which the Company has taken or proposes to take
with respect thereto, (ii) setting forth in reasonable detail calculations
demonstrating compliance with Article 9
and (iii) stating whether any change in GAAP or the application thereof has
occurred since the date of the Company's financial statements referred to in
Section
6.4 and, if any change has occurred, specifying the effect  of
such change on the financial statements accompanying such
certificate;

     

    (e)           within
120 days of the end of each calendar year, and in all events with 10 days after
filing, copies of all state and federal tax returns of the Company, certified by
an officer of the Company;

     

    (f)           promptly
following any request therefor (and no later than 45 days after any such
request), such other information regarding the results of operations, business
affairs and financial condition of the Company as the Bank may reasonably
request; and

     

    Section
7.2   Notices of Material
Events.  The Company will furnish to the Bank prompt written
notice of the following:

     

    (a)           the
occurrence of any Default or Event of Default;

     

    (b)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or, to the knowledge of the
Company, affecting the Company or any Affiliate which, if adversely determined,
could reasonably be expected to result in a Material Adverse
Effect;

     

    (c)           the
occurrence of any event or any other development by which the Company or any of
its Affiliates (i) fails to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other
approval  required under any Environmental Law, (ii) becomes subject
to any Environmental Liability, (iii) receives notice of any claim with respect
to any Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;

     

    (d)           the
occurrence of any ERISA Event that alone, or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Company and its Affiliates in an aggregate amount exceeding
$100,000;

     

    (e)           any
other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect; and

     

    (f)           Each
notice delivered under this Section shall be accompanied by a written statement
of a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Section 7.3  Existence; Conduct of
Business.  The Company will do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its legal
existence and its respective rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business and will continue to engage in the same business as presently conducted
or such other businesses that are reasonably related thereto; provided, that
nothing in this Section shall prohibit any merger, consolidation, liquidation or
dissolution permitted under Section
8.3.

     

    Section 7.4  Compliance with Laws,
Etc.  The Company will comply with all laws, rules, regulations
and requirements of any Governmental Authority applicable to its business and
properties, including without limitation, all Environmental Laws, ERISA and
OSHA, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     

    Section 7.5  Payment of
Obligations.  The Company will pay and discharge at or before
maturity, all of its obligations and liabilities (including without limitation
all tax liabilities and claims that could result in a statutory Lien) before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Company has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse
Effect.

     

    Section 7.6  Books and
Records.  The Company will keep proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities to the extent
necessary to prepare the consolidated financial statements of Company in
conformity with GAAP.

     

    Section 7.7  Visitation, Inspection,
Etc.  The Company will permit any representative of the Bank,
to visit and inspect its properties, to examine its books and records and to
make copies and take extracts therefrom, and to discuss its affairs, finances
and accounts with any of its officers and with its independent certified public
accountants, all at such reasonable times and as often as the Bank may
reasonably request after reasonable prior notice to the Company; provided,
however, if an Event of Default has occurred and is continuing, no prior notice
shall be required.

     

    Section 7.8  Maintenance of Properties;
Insurance.  The Company will (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear except where the failure to do so, either individually or
it the aggregate, could not reasonably be expected to result in a Material
Adverse Effect and (b) maintain with financially sound and reputable insurance
companies, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against and in amounts customarily
insured for by companies in the same or similar businesses operating in the same
or similar locations.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    Section
7.9      Use of Bond
Proceeds.  The Company will use the proceeds of the Bonds for
the purposes set forth in the Operative Documents.  No part of the
proceeds of the Bonds will be used, whether directly or indirectly, for any
purpose that would violate any rule or regulation of the Board of Governors of
the Federal Reserve System, including Regulations T, U or X.

     

    Section
7.10    Non-Controlled
Person.  The Company will provide written notice to the Trustee
and the Remarketing Agent thirty days prior to the consummation of any
transaction that would result in the Company controlling or being controlled by
the Bank within the meaning of Section 2(a)(9) of the Investment Company Act of
1940.

     

    Section
7.11   Sinking Fund; Optional Redemption of
Bonds.  Commencing on December 1, 2008, and continuing on the
1st
day of each calendar month thereafter during the term of this agreement, the
Company will deposit in an interest bearing money market account at the Bank
(the (“Sinking Fund Account”), 1/12th of the principal amount required to
optionally redeemed the Bonds at the next Annual Redemption Date set forth
below. Funds in the Sinking Fund Account shall be withdrawn annually to pay the
Annual Optional Redemption Amount set for the table below and shall be used for
no other purpose.  The final Annual Optional Redemption Date shall be
December 1, 2028.

     

    
      
        
          
            
              
                
                  	
                          Year of Annual Optional

                        	 	 	 
	
                          Redemption Date

                        	 	
                          Annual Optional

                        	 
	
                          (first Business Day of December)

                        	 	
                          Redemption Amount

                        	 
	 
      	 	 	 
	
                          2009

                        	 	$	125,000	 
	
                          2010

                        	 	$	135,000	 
	
                          2011

                        	 	$	140,000	 
	
                          2012

                        	 	$	145,000	 
	
                          2013

                        	 	$	155,000	 
	
                          2014

                        	 	$	160,000	 
	
                          2015

                        	 	$	165,000	 
	
                          2016

                        	 	$	175,000	 
	
                          2017

                        	 	$	185,000	 
	
                          2018

                        	 	$	190,000	 
	
                          2019

                        	 	$	195,000	 
	
                          2020

                        	 	$	205,000	 
	
                          2021

                        	 	$	215,000	 
	
                          2022

                        	 	$	225,000	 
	
                          2023

                        	 	$	235,000	 
	
                          2024

                        	 	$	250,000	 
	
                          2025

                        	 	$	255,000	 
	
                          2026

                        	 	$	270,000	 
	
                          2027

                        	 	$	280,000	 
	
                          December 1, 2028

                        	 	$	295,000	 

                

              

            

          

        

      

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    The
Company hereby agrees to satisfy the reimbursement obligations of the Company
set forth in Section
3.1(b) hereof relating to any "B Drawing" to pay principal of the Bonds
in connection with any optional redemption thereof required pursuant to this
Section
7.11.

     

    Section
7.12    ADA.  The Company
will comply with the ADA and any and all regulations and guidelines issued
thereunder to the extent that such compliance with the ADA is required
thereunder.  The Company agrees to indemnify, defend, and hold the
Bank harmless from and against any loss to the Bank, including without
limitation, attorneys' fees incurred by the Bank as a result of the Company's
noncompliance with the requirements of ADA or the failure of the Improvements to
comply therewith.  .

     

    Section
7.13    Draws from Project
Fund.  Approval by the Bank shall be required with respect to
each requisition from the Project Fund created under the Indenture. The Company
may submit a requisition for a draw from the Project Fund to the Bank for
approval no more often than once each month.

     

    Section
7.14    Deposit
Accounts.  The Company shall maintain its primary deposit
accounts with the Bank.

     

    Section
7.15    Auto-Debit.  The
Company hereby agrees that all payments due and payable pursuant to Section
7.11 hereof, shall be automatically withdrawn by the Bank in the amounts
and on the dates owed, from the deposit accounts held with the Bank as required
by Section
7.14 hereof.

     

    ARTICLE
8

     

    NEGATIVE
COVENANTS

     

    The
Company covenants and agrees that so long as the Letter of Credit remains
outstanding:

     

    Section
8.1      Indebtedness.  The
Company will not create, incur, assume or suffer to exist any Indebtedness
without the advance written consent of the Bank, except, so long as no Event of
Default has occurred and is continuing hereunder:

     

    (a)           Indebtedness
created pursuant to the Operative Documents;

     

    (b)           Indebtedness
not intended to be paid with proceeds of the Bonds and existing on the date
hereof and extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof (immediately prior to
giving effect to such extension, renewal or replacement) or shorten the maturity
or the weighted average life thereof;

     

    (c)           Indebtedness
in respect of obligations under any Financial Contract permitted by Section
8.7; and

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (d)           other
Indebtedness in any year in an aggregate principal amount not to exceed $100,000
during the term of the Letter of Credit.

     

    Section
8.2      Negative
Pledge.  The Company will not create, incur, assume or suffer
to exist any Lien on any of the Property, or any Improvement thereon or any
other property encumbered by the Mortgage, except:

     

    (a)           Liens
created in favor of the Bank pursuant to the Operative Documents;

     

    (b)           Permitted
Liens;

     

    (c)           any
Liens on any property or asset of the Company existing on the Date of Issuance
set forth on Annex
IV;

     

    (d)           extensions,
renewals, or replacements of any Lien referred to in paragraphs (a) or (b) of
this Section; provided, that the principal amount of the
Indebtedness  secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets originally encumbered
thereby, or

     

    (e)           Liens
expressly approved in writing by the Bank.

     

    Section
8.3      Fundamental
Changes.

     

    (a)           The
Company will not merge into or consolidate into any other Person, or permit any
other Person to merge into or consolidate with it, or sell, lease, transfer or
otherwise dispose of (in a single transaction or a series of transactions) all
or substantially all of its assets (in each case, whether now owned or hereafter
acquired) or liquidate or dissolve; provided, that if at the time thereof and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing, the Company may merge with a Person if the
Company is the surviving Person.

     

    (b)           The
Company will not engage in any business other than businesses of the type
conducted by the Company on the date hereof and businesses reasonably related
thereto.

     

    Section
8.4      Transactions with
Affiliates.  The Company will not sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company than could be obtained on
an arm's-length basis from unrelated third parties.

     

    Section
8.5      Restrictive
Agreements.  The Company will not, directly or indirectly,
enter into, incur or permit to exist any agreement that prohibits, restricts or
imposes any condition upon the ability of the Company to create, incur or permit
any Lien upon any of its assets or properties, whether now owned or hereafter
acquired; provided, that (i) the foregoing shall not apply to restrictions or
conditions imposed by law or by this Agreement or any other Operative Document,
(ii) clause (a) shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions and conditions apply only to the property or assets securing such
Indebtedness and (iii) clause (a) shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    Section
8.6      Contingent Liabilities; Sale and
Leaseback Transactions.  The Company shall not enter into any
arrangements that would, directly or indirectly, create a contingent liability
of the Company without the prior written consent of the Bank.  The
Company will not enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereinafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred.

     

    Section
8.7      Financial
Contract.  The Company will not enter into any Financial
Contract, other than a Financial Contract entered into in the ordinary course of
business to hedge or mitigate risks to which the Company is exposed in the
conduct of its business or the management of its liabilities.  Solely
for the avoidance of doubt, the Company acknowledges that a Financial Contract
entered into for speculative purposes or of a speculative nature (which shall be
deemed to include any Financial Contract under which the Company is or may
become obliged to make any payment (i) in connection with the purchase by any
third party of any common stock or any Indebtedness or (ii) as a result of
changes in the market value of any common stock or any Indebtedness) is not a
Financial Contract entered into in the ordinary course of business to hedge or
mitigate risks.

     

    Section
8.8      Amendment to Material
Documents.  The Company will not amend, modify or waive any of
its rights in a manner materially adverse to the Bank under its certificate of
incorporation, bylaws or other organizational documents.

     

    Section
8.9     Accounting
Changes.  The Company will not make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of the Company.

     

    Section
8.10    Change in
Ownership.  No change shall occur in the ownership of the
ownership interests in the Company without the Bank's prior written consent,
which consent shall not be unreasonably withheld; provided, however, that an
individual owner may sell, transfer or otherwise convey his ownership interest
in the Company to another member of his immediate family.

     

    Section
8.11   Subordinated
Debt.   The Company shall not make any payment in respect
of any subordinated debt, or permit any of its Affiliates to make any such
payment except in compliance with the terms of such subordinated debt, nor shall
the Company amend and provision contained in any documentation relating to
subordinated debt without the Bank’s prior written consent.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    ARTICLE
9

     

    FINANCIAL
AND OTHER COVENANTS

     

    Section
9.1      Debt Service Coverage
Ratio.  The Company covenants and agrees that so long as the
Letter of Credit remains outstanding, the Company will have, as of the end of
each calendar quarter, for the previous calendar quarter then ending, commencing
December 31, 2008, a Debt Service Coverage Ratio of not less than
1.50:1.00.

     

    Section
9.2      Total Liabilities to Tangible Net
Worth.  The Company covenants and agrees that so long as the
Letter of Credit remains outstanding, the Company shall maintain as of the last
day of each calendar quarter, commencing with December 31, 2008, a ratio of
Total Liabilities (total liabilities of the Company less any subordinated debt)
to Tangible Net Worth of no more than 2.00:1.00.

     

    Section
9.3      Funded Debt
Ratio.  The Company covenants and agrees that so long as the
Letter of Credit remains outstanding, the Company shall maintain as of the last
day of each calendar quarter, commencing with December 31, 2008, a ratio of
Funded Debt to EBITDA of no more than 3.25 to 1.0.

     

    ARTICLE
10

     

    EVENTS
OF DEFAULT

     

    Section
10.1    Events of
Default.  Upon the occurrence of any of the following events
(herein referred to as an "Event of Default"), unless waived by the
Bank:

     

    (a)           the
occurrence of a default, a "Default" or an "Event of Default" as described and
defined in any of the Operative Documents;

     

    (b)           failure
of the Company to pay any amount when due under the terms of this
Agreement;

     

    (c)           failure
on the part of the Company to perform or observe any other term, covenant or
agreement contained in this Agreement or in any of the Operative Documents to
which it is a party on its part to be performed or observed and (i) with respect
to any such term, covenant or agreement contained herein, any such failure
remains unremedied for 30 days after the earlier of its discovery by the Company
or written notice thereof to the Company by the Bank; and (ii) with respect to
any such term, covenant or agreement contained in any of the other Operative
Documents to which the Company is a party, any such failure remains unremedied
after any applicable grace period specified in such Operative Documents;
provided, however, if the failure stated in the notice cannot be corrected
within the applicable period, the Bank will not unreasonably withhold its
consent to an extension of such time if it is possible to correct such failure
and corrective action is instituted by the Company within the applicable period
and diligently pursued until the failure is corrected; or in the case of any
such failure which can be cured with due diligence but not within the 30 day
period, the Company's failure to proceed promptly to cure such default and
thereafter prosecute the curing of such default with due
diligence;

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    (d)           a
default or event of default shall occur under any loan agreement, line of
credit, Financial Contract or other loan document or contract and the Company
shall not cure the same within any cure period provided therein;

     

    (e)           any
default shall occur under any other agreement involving the material borrowing
of money or the material extension of credit under which the Company may be
obligated as borrower or guarantor, if such default consists of the failure to
pay any indebtedness when due or if such default causes the acceleration of any
Indebtedness or the termination of any commitment to lend, or if such default
permits, or would permit with notice and/or the passage of time, the holder of
any such obligation to accelerate any indebtedness or to terminate any
commitment to lend;

     

    (f)           any
warranty, representation or other written statement made by or on behalf of the
Company contained herein, in any of the other Operative Documents to which it is
a party or in any instrument furnished in compliance with or in reference to
this Agreement is false or misleading in any material respect on the date as of
which made;

     

    (g)           the
Company shall fail to pay its debts or Indebtedness generally as the same come
due, or shall file any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for the
relief of, or relating to, debtors; or

     

    (h)           the
Company or any Affiliate shall (i) commence a voluntary case or other proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect  or seeking the appointment of a custodian,
trustee, receiver, liquidator or other similar official of it or any substantial
part of its property, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or petition described in clause
(i) of this Section, (iii) apply for or consent to the appointment of a
custodian, trustee, receiver, liquidator or other similar official for the
Company or any such Affiliate or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors,
or (vi) take any action for the purpose of effecting  any of the
foregoing; or

     

    (i)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Company or any Affiliate or its debts, or any substantial part of its
assets,  under any federal, state or foreign bankruptcy, insolvency or
other similar law now or hereafter in effect or (ii) the appointment of a
custodian, trustee, receiver, liquidator or other similar official for the
Company or any Affiliate or for a substantial part of its assets, and in any
such case, such  proceeding or petition shall remain undismissed for a
period of 60 days or an order or decree approving or  ordering any of
the foregoing shall be entered; or

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    (j)           the
Company or any Affiliate shall become unable to pay, shall admit in writing its
inability to pay, or shall fail to pay, its debts as they become due;
or

     

    (k)           an
ERISA Event shall have occurred that, in the opinion of the Bank, when taken
together with other ERISA Events that have occurred, could reasonably be
expected to result in liability to the Company in an aggregate amount exceeding
$10,000; or

     

    (l)           any
judgment or order for the payment of money in excess of $50,000 in the aggregate
shall be rendered against the Company or any Affiliate, and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment  or order or (ii) there shall be a period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or

     

    (m)           any
non-monetary judgment or order shall be rendered against the Company or any
Affiliate that could reasonably be expected to have a Material Adverse Effect,
and  there shall be a period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

     

    (n)           any
event which could reasonably be expected to result in a Material Adverse Effect
shall occur and be continuing;

     

    then, and
in any such event, the Bank may, in its sole discretion, but shall not be
obligated to, (i) by notice to the Company, declare all amounts payable by the
Company hereunder (including, without limitation, amounts payable pursuant to
Section
3.1 hereof) to be forthwith due and payable, and the same shall thereupon
become due and payable without demand, presentment, protest or further notice of
any kind, all of which are hereby expressly waived, and/or (ii) exercise all of
its rights and remedies under the Operative Documents and/or (iii) by notice to
the Trustee, require the Trustee to accelerate payment of all Bonds and interest
accrued thereon as provided in Sections 6.01 and 6.02 of the
Indenture.

     

    No remedy
herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Agreement or any other
Operative Document or now or hereafter existing at law or in equity or by
statute.  No delay or omission to exercise any right or power accruing
upon any default, omission or failure of performance hereunder shall impair any
such right or power or shall be construed to be a waiver thereof, but any such
right or power may be exercised from time to time and as often as may be deemed
expedient.  In order to exercise any remedy reserved to the Bank in
this Agreement, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required.  In the event any
provision contained in this Agreement should be breached by any party and
thereafter duly waived by the other party so empowered to act, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive
any other breach hereunder.  No waiver, amendment, release or
modification of this Agreement shall be established by conduct, custom or course
of dealing, but solely by an instrument in writing duly executed by the parties
thereunto duly authorized by this Agreement.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    ARTICLE
11

     

    NATURE
OF BANK'S DUTIES

     

    Section
11.1   Bank Duties.  As
between the Company and the Bank, the Company shall assume all risks of the
acts, omissions or misuse of the Letter of Credit by the Trustee.  The
Bank shall not be responsible:  (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of the Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign the Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (c) for failure of the Trustee to comply fully with
conditions required in order to draw upon the Letter of Credit; (d) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, or otherwise, whether or not they be in
cipher; (e) for errors in interpretation of technical terms; (f) for any loss or
delay in the transmission or otherwise of any document or draft required in
order to make a draw under the Letter of Credit or of proceeds thereof; and (g)
for any consequences arising from causes beyond the control of the
Bank.  None of the above shall affect, impair, or prevent the vesting
of any of the Bank's rights or powers hereunder.

     

    In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Bank, under or in
connection with the Letter of Credit or the related drafts or document(s), if
taken or omitted in good faith, shall be binding upon the Company and shall not
put the Bank under any resulting liability to the Company.

     

    Section
11.2    Indemnification.  The
Company hereby agrees at all times to protect, indemnify and save harmless the
Bank from and against any and all claims, actions, suits and other legal
proceedings, and from and against any and all losses, claims, demands,
liabilities, damages, costs, charges, counsel fees and other expenses which the
Bank may, at any time, sustain or incur by reason of or in consequence of or
arising out of (a) the issuance of the Letter of Credit, (b) any breach by any
party (other than the Bank) of any warranty, covenant, term or condition in, or
the occurrence of any default under, this Agreement, any other Operative
Document or the Bonds, together with all reasonable expenses resulting from the
compromise or defense of any claims or liabilities arising as a result of any
such breach or default, and (c) defense against any legal action commenced to
challenge the validity of any of the above referred to instruments; it being the
intention of the parties that this Agreement shall be construed and applied to
protect and indemnify the Bank against any and all risks involved in the
issuance of the Letter of Credit, all of which risks are hereby assumed by the
Company, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future de jure or de facto government
or governmental authority (all such acts and omissions, herein called
"Government Acts").  The Bank shall not, in any way, be liable for any
failure by the Bank or anyone else to pay any draft under the Letter of Credit
as a result of any Government Acts or any other cause beyond the control of the
Bank.  The obligations of the Company under this Article 11
shall survive the payment of the Bonds and the termination of this
Agreement.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    Notwithstanding
anything to the contrary contained in this Article
11, the Company shall not have any obligation to indemnify the Bank in
respect of any liability incurred by the Bank arising solely out of the gross
negligence or willful misconduct of the Bank or out of the wrongful dishonor by
the Bank of a proper demand for payment made under the Letter of
Credit.

     

    The
Company further agrees to indemnify, protect and hold harmless the Bank and all
successors and assigns of the Bank (whether following the foreclosure of the
Mortgages, or either of them, or otherwise) from and against any and all
damages, losses, cleanup costs, liabilities, disabilities, fines, penalties,
costs or expenses (including reasonable attorneys' and paralegals' fees and
expenses) incurred or to be incurred, whether absolute, fixed or contingent,
civil or criminal, and whether arising under federal, state or local law,
incurred or to be incurred (i) in connection with the handling, storage,
transportation or disposal by anyone (other than the Bank or its successors or
assigns) of (A) "hazardous waste," as defined in the Resource Conservation and
Recovery Act or Section 403.703(21, Florida Statutes, (B) "hazardous substance,"
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act, and/or (C) petroleum products or by-products or natural gas, or
(ii) otherwise on account of any violation by the Company of the Hazardous
Materials Laws.

     

    ARTICLE
12

     

    MISCELLANEOUS

     

    Section
12.1    Amendments.  This
Agreement may be amended, and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, if the Company
shall obtain the written consent of the Bank.  No course of dealing
between the Company and the Bank, nor any delay in exercising any rights
hereunder shall operate as a waiver of any rights of the Bank
hereunder.

     

    Section
12.2    Survival of Representations and
Warranties.  All representations and warranties contained
herein or made in writing by the Company in connection herewith shall survive
the execution and delivery of this Agreement, regardless of any investigation
made by the Bank or on its behalf.

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    Section
12.3   Expenses.  The
Company hereby agrees to pay promptly all reasonable costs and expenses in
connection with the preparation, negotiation, issuance, delivery, filing,
recording and administration of the Letter of Credit, this Agreement, the other
Operative Documents, the Bonds and any other documents which may be delivered in
connection with this Agreement, including, without limitation, the fees and
expenses of Broad and Cassel, counsel for the Bank, and all costs and expenses
(including reasonable counsel fees and expenses) in connection with (a) the
transfer, drawing upon, change in terms, maintenance, renewal or cancellation of
the Letter of Credit, (b) any and all amounts which the Bank has paid relative
to the Bank's curing of any Event of Default resulting from the acts or
omissions of the Company under this Agreement, any other Operative Document or
the Bonds, (c) the enforcement of this Agreement or any other Operative
Document, or (d) any action or proceeding relating to a court order, injunction
or other process or decree restraining or seeking to restrain the Bank from
paying any amount under the Letter of Credit.  In addition, the
Company hereby agrees to pay any and all stamp and other taxes and fees payable
or determined to be payable in connection with the execution, delivery, filing
and recording of the Letter of Credit, this Agreement, any other Operative
Document or the Bonds, or any other documents which may be delivered in
connection with this Agreement, and agrees to save the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.  Notwithstanding the
foregoing, no payment shall be required under this Section
12.3 in respect of any cost or expense the Bank has incurred because of
its gross negligence or willful misconduct.

     

    Section
12.4    Set-off.  In
addition to any rights now or hereafter granted under applicable law and not by
way of limitation of any such rights, during the continuance of any Event of
Default hereunder the Bank is hereby authorized at any time and from time to
time, without notice to the Company or to any other person or entity, any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by the Bank to or for the credit or the account of the Company
against and on account of the obligations and liabilities of the Company to the
Bank under this Agreement, irrespective of whether or not the Bank shall have
made any demand hereunder and although said obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.

     

    Section
12.5   Notices.  Except as
otherwise specified herein, all notices hereunder shall be given by United
States certified or registered mail or by telecommunication device capable of
creating written record of such notice and its receipt.  Notices
hereunder shall be effective when received and shall be addressed as
follows:

     

    
      
        	
                If
      to the Bank:

              	
                RBC
      Bank (USA)

              
	 
      	
                200
      Providence Road, 3rd Floor

              
	 
      	
                Charlotte,
      N.C. 28207

              
	 
      	
                Attn:  Direct
      Pay Letters of Credit

              

      

    

    
 

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  With
      a copy to:

                	
                  RBC
      Bank (USA)

                
	 
      	
                  4221
      West Boy Scout Blvd. Ste. 100

                
	 
      	
                  Tampa,
      Florida 33607

                
	 
      	
                  Attn:  Commercial
      Banking

                
	 
      	 
      
	
                  If
      to the Company, to:

                	
                  Bovie
      Medical Corporation

                
	 
      	
                  7130
      30th
      Avenue North

                
	 
      	
                  St.
      Petersburg, Florida 33710

                
	 
      	
                  Attn:
      President

                
	 
      	 
      
	
                  Together
      with a copy to:

                	
                  Fowler
      White Boggs Banker P.A.

                
	 
      	
                  501
      East Kennedy Blvd.

                
	 
      	
                  Suite
      1700

                
	 
      	
                  Tampa,
      Florida 33602

                
	 
      	
                  Attn:
      B. Herbert Boatner, Jr.

                

        

      

    

     

    Section
12.6   Satisfaction
Requirement.  If any agreement, certificate or other writing,
or any action taken or to be taken, is by the terms of this Agreement required
to be satisfactory to the Bank, the determination of such satisfaction shall be
made by the Bank in its sole and exclusive judgment exercised in good
faith.

     

    Section
12.7    Binding Effect;
Assignment.  This Agreement is a continuing obligation and
shall (a) be binding upon the Company and its successors, transferees and
assigns and (b) inure to the benefit of and be enforceable by the Bank and its
successors, transferees and assigns; provided, however, that the Company may not
assign all or any part of this Agreement without the prior written consent of
the Bank.  The Bank may assign, negotiate, pledge or otherwise
hypothecate all or any portion of this Agreement, or grant participations
herein, in the Letter of Credit or in any of its rights or security hereunder,
including, without limitation, the instruments securing the Company's
obligations hereunder.  No such assignment or participation by the
Bank, however, will relieve the Bank of its obligation under the Letter of
Credit.  In connection with any assignment or participation, the Bank
may disclose to the proposed assignee or participant any information that the
Company is required to deliver to the Bank pursuant to this
Agreement.

     

    Section
12.8   Relationship between Company and
Bank.  The Bank represents and warrants that the Bank does not
"control" the Company, either directly or indirectly through one or more
controlled companies, within the meaning of Section 2(a)(9) of the Investment
Company Act of 1940.  The Bank covenants and agrees to provide written
notice to the Trustee and the Remarketing Agent thirty days prior to the
consummation of any transaction that would result in the Company controlling or
being controlled by the Bank within the meaning of Section 2(a)(9) of the
Investment Company Act of 1940.

     

    Section
12.9   Governing Law.  This
Agreement is being delivered and is intended to be performed in the State of
Florida, and shall be construed and enforced in accordance with, and the rights
of the parties shall be governed by, the laws of such State.

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    Section
12.10           Counterparts.  This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such
counterpart.

     

    Section
12.11         
  Incorporation of
Preambles and Annexes.  The preambles appearing at the
beginning of this Agreement and all annexes to this Agreement are hereby
incorporated into this Agreement by reference.

     

    Section
12.12           Jurisdiction; Venue; Waiver of Jury
Trial.  In the event that any action, suit or other proceeding
is brought in connection with this Agreement, the parties hereto hereby (i)
irrevocably consent to the exercise of jurisdiction over them and, to the extent
permitted by applicable laws, their property, by the United States District
Court for the Middle District of Florida or the Circuit Court of Pinellas
County, Florida, and (ii) irrevocably waive any objection they or any of them
might now or hereafter have or assert to the venue of any such proceeding in any
court described in clause (i) above.

     

    THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER
PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO ENTER
INTO THIS AGREEMENT.

     

    Section
12.13           No Illegal Interest to be
Charged.  All agreements between the Company and the Bank under
this Agreement are expressly limited so that in no contingency or event
whatsoever shall the amount paid or agreed to be paid to the Bank or its
successors or assigns for the use, forbearance or detention of the money to be
advanced to the Company exceed the highest rate permissible under law applicable
thereto by a court of competent jurisdiction. If, from any circumstances
whatever, fulfillment of any provisions of this Agreement or of any other
agreement existing between the Company and the Bank, at the time performance of
such provision shall be due, shall involve payment of interest at a rate which
exceeds the highest lawful rate as so determined, then ipso facto the obligation
to be fulfilled shall be reduced to such highest lawful rate.  If from
any circumstances whatsoever, the Bank or its successors or assigns shall ever
receive interest, the amount of which would exceed such highest lawful rate, the
portion thereof which would be excessive interest shall be reimbursed to the
Company by the party receiving such excess, and, if required by law, together
with interest on such excess at the highest lawful rate of interest (or 25% if
there is then no maximum lawful rate).  Provided, however, that
nothing contained herein shall be deemed to create a defense, contractual or
otherwise, to any sums due or to become due or coming due under this Agreement
secured hereby or under any other agreement existing among the Company and the
Bank, where no such defense exists at law, as for example, where corporations
are barred from asserting the defense of usury or in a case wherein no limit
exists upon the rate of interest which may be charged.

    

    [Signature
Page Follows]

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and year first above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            BOVIE
      MEDICAL CORPORATION,

                                          	 
	
                                            a
      Delaware corporation

                                          	 
	 
      	 
      	 
	
                                            By:

                                          	
                                            /s/ Moshe
      Citronowicz

                                          	 
	
                                            Name:

                                          	
                                            

                                              Moshe
      Citronowicz

                                            

                                          	 
	
                                            Title:

                                          	
                                            

                                              Vice President

                                            

                                          	 
	 
      	 
      	 
	
                                            RBC
      BANK (USA)

                                          	 
	 
      	 
      	 
	
                                            By:

                                          	
                                            /s/ Dianne DiPalermo

                                          	 
	
                                            Name:

                                          	
                                            Dianne DiPalermo

                                          	 
	
                                            Title:

                                          	
                                            Vice President

                                          	 

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    (Signature
Page – Letter of Credit Agreement)

     

    
      
        
        

      

      
        S

        
          

        

      

      
        
        

      

    

     

    ANNEX
I

    

    IRREVOCABLE
LETTER OF CREDIT

    

    RBC BANK
(USA)

    

    November
13, 2008

    

    IRREVOCABLE
LETTER OF CREDIT NO. SB004744

    

    The Bank
of New York Mellon Trust Company, N.A., as Trustee

    10161
Centurion Parkway

    Jacksonville,
Florida 32256

     

    At the
request and on the instructions of our customer, Bovie Medical Corporation, a
Delaware corporation (the "Company") we hereby establish in your favor, as
Trustee under the Indenture of Trust, dated as of November 1, 2008 (the
"Indenture") between the Pinellas County Industrial Development Authority (the
"Issuer") and you, and for the benefit of the Bond holders, pursuant to which
$4,000,000 in aggregate principal amount of the Issuer's Industrial Development
Revenue Bonds (Bovie Medical Corporation Project), Series 2008 (the "Bonds") are
being issued, this Irrevocable Letter of Credit in the initial amount of
$4,046,027 (hereinafter, as reduced from time to time in accordance with the
provisions hereof, the "Stated Amount") of which (i) an amount not exceeding
$4,000,000 (as reduced from time to time in accordance with the terms hereof,
the "Principal Component"), may be drawn upon with respect to payment of the
unpaid principal amount or the portion of Purchase Price corresponding to
principal of the Bonds, and (ii) an amount not exceeding $46,027 (as reduced
from time to time in accordance with the terms hereof, the "Interest Component")
may be drawn upon with respect to payment of interest accrued or the portion of
the Purchase Price corresponding to interest accrued on the Bonds on or prior to
their stated maturity date, effective immediately and expiring on December 15,
2011 unless terminated earlier in accordance with the provisions hereof or
unless otherwise renewed or extended.  All drawings under this Letter
of Credit will be paid with our own funds.

     

    Funds
under this Letter of Credit will be made available to you against receipt by us
of the following items at the time required below:  (a) if the drawing
is being made with respect to the payment of the portion of the Purchase Price
of Bonds delivered to the Trustee (as defined in the Indenture) pursuant to
Section 2.6 of the Indenture corresponding to the principal thereof (an "A
Drawing"), receipt by us of your written certificate in the form of Exhibit A
attached hereto appropriately completed and signed by an Authorized Officer; (b)
if the drawing is being made with respect to the payment of principal of the
Bonds (a "B Drawing"), receipt by us of your written certificate in the form of
Exhibit B attached hereto appropriately completed and signed by an Authorized
Officer; and (c) if the drawing is being made with respect to the payment of
interest, or the portion of Purchase Price corresponding to interest, on the
Bonds (a "C Drawing"), receipt by us of your written certificate in the form of
Exhibit C attached hereto appropriately completed and signed by an Authorized
Officer.  Presentation of such certificate(s) shall be made at our
office located at RBC Bank (USA), 200 Providence Road, Charlotte, North Carolina
28207, Attention:  International Services – Direct Pay Letters of
Credit, or at any other office which may be designated by us by written notice
delivered to you.

    
      
         

      

      
        I-1

        
          

        

      

      
         

      

    

     

    If a
drawing is made by you hereunder at or prior to 11:00 A.M., New York City time,
on a Business Day, and provided that the requirements set forth above have been
strictly satisfied and that such drawing and the documents presented in
connection therewith conform to the terms and conditions hereof, payment shall
be made to you, or to your designee, of the amount specified in immediately
available funds, not later than 2:30 P.M., New York City time, on the same
Business Day or not later than 2:30 P.M., New York City time, on such later
Business Day as you may specify.  If requested by you, payment under
this Letter of Credit will be made by deposit of immediately available funds
into a designated account that you maintain with us.  If a demand for
payment made by you hereunder does not, in any instance, conform to the terms
and conditions of this Letter of Credit, we shall give you prompt notice that
the demand for payment was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons therefor and that we
will upon your instructions hold any documents at your disposal or return the
same to you.  Upon being notified that the demand for payment was not
effected in conformity with this Letter of Credit, you may attempt to correct
any such non conforming demand for payment to the extent that you are entitled
to do so.

     

    Demands
for payment hereunder honored by us shall not, in the aggregate, exceed the
Stated Amount, as the Stated Amount may have been reinstated by us as provided
in the next paragraph.  Subject to the preceding sentence, each "A
Drawing" and each "B Drawing" honored by the Bank hereunder shall pro tanto reduce the
Principal Component, and each "C Drawing" honored by the Bank hereunder shall
pro tanto
reduce the Interest Component; any such reduction shall result in a
corresponding reduction in the Stated Amount, it being understood that after the
effectiveness of any such reduction you shall no longer have any right to make a
drawing hereunder in respect of the amount of such principal and/or interest on
the Bonds or the payment of Purchase Price corresponding thereto.

     

    Upon
receipt of reimbursement, we will release, or cause to be released any "Pledged
Bonds" (as defined in the Indenture), and the Principal Component shall be
reinstated automatically by the principal amount of such Pledged
Bonds.  In addition, (a) the Interest Component shall be reinstated
automatically by the amount of such "C Drawing" and (b) upon receipt of
reimbursement, we will release or cause to be released any Pledged Bonds, and
the Interest Component shall be reinstated automatically by the amount of the "C
Drawing" made to pay the portion of the Purchase Price corresponding to interest
on such Pledged Bonds (unless the Interest Component previously has been
reinstated with respect to such "C Drawing"); provided, however, that in no
event shall the Interest Component be reinstated to an amount in excess of 35
days' interest (such amount computed as set forth in the second succeeding
paragraph) on the sum of the then applicable Principal Component plus the
aggregate principal amount of any Pledged Bonds.

    
      
         

      

      
        I-2

        
          

        

      

      
         

      

    

     

    Only you
or your successor as Trustee may make a drawing under this Letter of
Credit.  Upon the payment to you, to your designee or to your account
of the amount demanded hereunder, we shall be fully discharged on our obligation
under this Letter of Credit with respect to such demand for payment and we shall
not thereafter be obligated to make any further payments under this Letter of
Credit in respect of such demand for payment to you or any other person who may
have made to you or makes to you a demand for payment of principal of, Purchase
Price of, or interest on, any Bond.  By paying to you an amount
demanded in accordance herewith, we make no representation as to the correctness
of the amount demanded.

     

    This
Letter of Credit applies only to the payment of principal or the portion of
Purchase Price of the Bonds corresponding to principal, and up to 35 days'
interest accruing on the Bonds (computed at a rate of 12% per annum), from the
Date of Issuance through the Termination Date (computed on the basis of (a)
actual days elapsed in a 365 or 366 day year, as the case may be, during any
Short-Term Rate Period and (b) a 360 day year comprised of twelve 30 day months
during any Long-Term Rate Period and does not apply to any interest that may
accrue thereon or any principal, premium or other amounts which may be payable
with respect to the Bonds subsequent to the expiration of this Letter of
Credit.

     

    Upon the
earliest of (a) the honoring by us of the final drawing available to be made
hereunder, (b) receipt of a certificate signed by an Authorized Officer and a
duly authorized officer of the Company stating that the conditions precedent to
the acceptance of a Substitute Credit Facility (as defined in the Indenture)
have been satisfied and that the Trustee has accepted the Substitute Credit
Facility, and setting forth the effective date of said Substitute Credit
Facility, (c) receipt of a certificate signed by an Authorized Officer stating
that no Bonds remain Outstanding (as defined in the Indenture), and (d) the
stated expiration date hereof, this Letter of Credit shall automatically
terminate and be delivered to us for cancellation; provided, however, that in
connection with the termination event described in clause (b), above, this
Letter of Credit shall automatically terminate, and shall be delivered to us for
cancellation, on the second Business Day following the effective date of the
Substitute Credit Facility and the honoring by us of the related drawing
hereunder pertaining to the payment of the Purchase Price of the Bonds tendered
for purchase on the Mandatory Tender Date corresponding to the delivery of the
Substitute Credit Facility.

     

    Communications
with respect to this Letter of Credit shall be in writing and shall be addressed
to us at RBC Bank (USA), 200 Providence Road, Charlotte, North Carolina 28207,
Attention:  International Services – Direct Pay Letters of Credit,
specifically referring thereon to this Letter of Credit by number.

     

    
      
         

      

      
        I-3

        
          

        

      

      
         

      

    

     

    We agree
to issue a substitute letter of credit to any successor trustee (and to
successively replace any such substitute letter of credit) upon the return to us
for cancellation of the original of the letter of credit to be replaced,
accompanied by a request relating to such letter of credit, which (a) shall be
substantially in the form of Exhibit D attached hereto with the blanks
appropriately completed, (b) shall be signed by an Authorized Officer, (c) shall
specify where indicated therein the same letter of credit number as the number
of the letter of credit to be replaced and (d) shall state the name and address
of the successor trustee.  Each substitute letter of credit will be in
substantially the form of this Letter of Credit except for the date and letter
of credit number.

     

    As used
herein (a) "Authorized Officer" shall mean any person signing as one of your
Vice Presidents, Assistant Vice Presidents, Trust Officers or Assistant Trust
Officers; and (b) all other capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to such terms in the
above-mentioned Indenture.

     

    This
Letter of Credit sets forth in full our undertaking, and such undertaking shall
not in any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Bonds), except only the certifi cate(s) referred to herein; and
any such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for such certificate(s).

     

    This
credit is subject to the Uniform Customs and Practice for Documentary Credits
(2006 Revision), International Chamber of Commerce, Publication No. 600 (the
"Uniform Customs").  This Letter of Credit shall be deemed to be a
contract made under the laws of the State of Florida and shall, as to matters
not governed by the Uniform Customs, be governed by and construed in accordance
with the laws of such State.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Very
      truly yours,

                              	 
	 	 
	
                                RBC
      BANK (USA)

                              	 
	 
      	 
	
                                By:

                              	
                                  
      

                              	 
	
                                Title:

                              	
                                  
      

                              	 

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        I-4

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    CERTIFICATE
FOR "A DRAWING"

    

    [Date]

    

    RBC Bank
(USA)

    200
Providence Road,

    Charlotte,
North Carolina 28207

    Attention:  International
Services – Direct Pay Letters of Credit

    

    Re:           Irrevocable
Letter of Credit No. SB004744

     

    The
undersigned, a duly authorized officer of The Bank of New York Mellon Trust
Company, N.A. (in such capacity, the "Trustee"), hereby certifies to RBC Bank
(USA) (in such capacity, the "Bank") that:

     

    (a)           The
undersigned is the Trustee under the Indenture for the holders of the
Bonds.

     

    (b)           The
undersigned, in its capacity as Trustee, is making a drawing under the
above-referenced Letter of Credit in the amount of $___________ with respect to
payment of the portion of the purchase price of Bonds corresponding to the
principal amount thereof, which Bonds are to be purchased pursuant to Section
2.6 of the Indenture.

     

    (c)           The
amount demanded hereby does not exceed the amount available on the date hereof
to be drawn under the above-referenced Letter of Credit in respect of the
portion of the Purchase Price of Bonds corresponding to the principal amount
thereof.

     

    (d)           The
amount demanded hereby does not include any amount in respect of the purchase of
any Pledged Bonds.

     

    (e)           Upon
receipt by the undersigned of the amount demanded hereby, (i) the undersigned
will apply the same directly to the payment when due of the principal amount
owing on account of the purchase of Bonds pursuant to the Indenture and, upon
receipt of written request by the Bank, will cause the Trustee to deliver
promptly to the Bank Pledged Bonds in an aggregate principal amount equal to the
amount demanded hereby (together with any and all due bills for interest due on
the next succeeding interest payment date delivered pursuant to Section 2.8(b)
of the Indenture in respect of such Pledged Bonds), (ii) no portion of said
amount shall be applied by the undersigned for any other purpose and (iii) no
portion of said amount shall be commingled with other funds held by the
undersigned.

     

    Any
capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to such terms in the Indenture of Trust, dated as
of November 1, 2008 between the Pinellas County Industrial Development Authority
and the undersigned, as Trustee.

     

    
      
         

      

      
        I-5

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of
the ____ day of ___________, ______.

     

    
      
        
          
            	
                    THE
      BANK OF NEW YORK MELLON TRUST

                    COMPANY,
      N.A., AS TRUSTEE

                  
	 
      
	
                    By:

                  	
                      

                  
	
                    Title:

                  	
                      

                  

          

        

      

    

    
      
         

      

      
        I-6

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    CERTIFICATE
FOR "B DRAWING"

    

    [Date]

    

    RBC Bank
(USA)

    200
Providence Road,

    Charlotte,
North Carolina 28207

    Attention:  International
Services – Direct Pay Letters of Credit

    

    Re:        Irrevocable
Letter of Credit No. SB004744

     

    The
undersigned, a duly authorized officer of The Bank of New York Mellon Trust
Company (in such capacity, the "Trustee"), hereby certifies to RBC Bank (USA)
(in such capacity, the "Bank") that:

     

    (f)           The
undersigned is the Trustee under the Indenture for the holders of the
Bonds.

     

    (g)           The
undersigned, in its capacity as Trustee, is making a drawing under the
above-referenced Letter of Credit in the amount of $____________ with respect to
the payment of principal of the Bonds, which amount has, or will, on the
Business Day immediately following the date hereof, become due and payable
pursuant to the Indenture, upon maturity or as a result of acceleration or
redemption of the Bonds.

     

    (h)           The
amount demanded hereby does not include any amount in respect of the principal
amount of any Pledged Bonds.

     

    (i)           The
amount demanded hereby, together with the aggregate of all prior payments made
pursuant to "B Drawings" under the above-referenced Letter of Credit, does not
exceed $__________.

     

    (j)           The
amount demanded hereby does not exceed the amount available on the date hereof
to be drawn under the above-referenced Letter of Credit in respect of the
principal of the Bonds.

     

    (k)           Upon
receipt by the undersigned of the amount demanded hereby, (i) the undersigned
will apply the same directly to the payment when due of the principal amount
owing on account of the Bonds pursuant to the Indenture, (ii) no portion of said
amount shall be applied by the undersigned for any other purpose and (iii) no
portion of said amount shall be commingled with other funds held by the
undersigned.

     

    Any
capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to such terms in the Indenture of Trust, dated as
of November 1, 2008 between the Pinellas County Industrial Development Authority
and the undersigned, as Trustee.

     

    
      
         

      

      
        I-7

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of
the ______ day of _________, ____.

     

    
      
        
          	
                  THE
      BANK OF NEW YORK MELLON TRUST

                  COMPANY,
      N.A., AS TRUSTEE

                
	 
      
	
                  By:

                	
                    

                
	
                  Title:

                	
                    

                

        

      

    

    
      
         

      

      
        I-8

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    CERTIFICATE
FOR "C DRAWING"

    

    [Date]

    

    RBC Bank
(USA)

    200
Providence Road,

    Charlotte,
North Carolina 28207

    Attention:  International
Services – Direct Pay Letters of Credit

    

    Re:        Irrevocable
Letter of Credit No. SB004744

     

    The
undersigned, a duly authorized officer of The Bank of New York Mellon Trust
Company (in such capacity, the "Trustee"), hereby certifies to RBC Bank (USA)
(in such capacity, the "Bank") that:

     

    (a)           The
undersigned is the Trustee under the Indenture for the holders of the
Bonds.

     

    (b)           The
undersigned, in its capacity as Trustee, is making a drawing under the
above-referenced Letter of Credit in the amount of $___________ with respect to
payment of [the portion of the purchase price of $___________ in principal
amount of the Bonds corresponding to the accrued interest thereon, which Bonds
are to be purchased pursuant to Section 4.02 of the Indenture] [interest on the
Bonds, which amount has accrued and become due and payable pursuant to the
Indenture, upon a stated interest payment date or as a result of acceleration or
redemption of the Bonds].

     

    (c)           The
amount demanded hereby does not exceed the amount available on the date hereof
to be drawn under the above-referenced Letter of Credit in respect of interest
on the Bonds.

     

    (d)           The
amount demanded hereby does not include any amount in respect of the interest on
any Pledged Bonds.

     

    (e)           Upon
receipt by the undersigned of the amount demanded hereby, (i) the undersigned
will apply the same directly to the payment when due of the [interest owing on
account of the Bonds pursuant to the Indenture] [portion of the Purchase Price
of Bonds pursuant to Section 2.6 of the Indenture corresponding to accrued
interest thereon], (ii) no portion of said amount shall be applied by the
undersigned for any other purpose and (iii) no portion of said amount shall be
commingled with other funds held by the undersigned.

     

    Any
capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to such terms in the Indenture of Trust, dated as
of November 1, 2008 between the Pinellas County Industrial Development Authority
and the undersigned, as Trustee.

    
      
         

      

      
        I-9

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of
the ______ day of ____________, ____.

     

    
      
        
          	
                  THE
      BANK OF NEW YORK MELLON TRUST

                  COMPANY,
      N.A., AS TRUSTEE

                
	 
      
	
                  By:

                	
                     

                
	
                  Title:

                	
                    

                

        

      

    

    
      
         

      

      
        I-10

        
          

        

      

      
         

      

    

    EXHIBIT
D

    

    INSTRUCTION TO ISSUE
SUBSTITUTE LETTER OF CREDIT

    

    [Date]

    

    RBC Bank
(USA)

    200
Providence Road,

    Charlotte,
North Carolina 28207

    Attention:  International
Services – Direct Pay Letters of Credit

     

    Re:         Irrevocable
Letter of Credit No. SB004744

     

    Gentlemen:

     

    Reference
is made to (a) the above-referenced letter of credit (the "Old Letter of
Credit") and (b) the Indenture of Trust dated as of November 1, 2008 (the
"Indenture") between the Pinellas County Industrial Development Authority and
us.

     

    [Name and
address of successor trustee] (the "Successor Trustee") has been appointed
successor trustee under the Indenture.  You are hereby requested to
issue, in accordance with the terms of the Old Letter of Credit, a new letter of
credit to the Successor Trustee having the same terms and providing for the same
Stated Amount as the Old Letter of Credit.

     

    We submit
herewith for cancellation the original of the Old Letter of Credit.

     

    The
individual signing below on our behalf hereby represents that he or she is duly
authorized to so sign on our behalf.

     

    
      
        
          
            
              	 Very
      truly yours, 
	 
	
                      THE
      BANK OF NEW YORK MELLON TRUST

                      COMPANY,
      N.A., AS TRUSTEE

                    
	 
      
	
                      By:

                    	
                         

                    
	
                      Title:

                    	
                        

                    

            

          

        

      

    

    
      
         

      

      
        I-11

        
          

        

      

      
         

      

    

    ANNEX
II

    

    PENDING
LITIGATION

    

    There is
no pending litigation.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ANNEX
III

    

    INFORMATION REGARDING ERISA
PLANS

    

    None

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ANNEX
IV

    

    PERMITTED
LIENS

    

    NoneEXHIBIT
10.1

    

    CONFIDENTIAL
INFORMATION (IDENTIFIED BY **) HAS BEEN OMITTED BASED 

    UPON
A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF 

    THE
SECURITIES EXCHANGE ACT OF 1934
AND HAS BEEN SEPARATELY FILED

    WITH
THE SECURITIES AND EXCHANGE COMMISSION

     

    February
28, 2009

     

    Matthew
Free

    Simmons
Prepared Foods Inc.

    601 N.
Hico Street

    Siloam
Springs, AR 72761

    

    Dear
Matthew:

    

    As
discussed and agreed, Simmons will supply to the El Pollo Loco system the
following chicken products:

    

    ** pounds
annually of whole birds, EPL specification **.

    The price
for March 01, 2009 thru May 31, 2009 is ** per pound delivered MBM-Rancho
Cucamonga, CA.  Future quarterly pricing will be updated quarterly
based off the below quarterly pricing model(s):

    

    ** with
Pricing Range Brackets for Split WOGS and Hind-Saddles:

    
      	
               
      

            	
              ·

            	
              Bracket
      A = ** and below ** quoted average range, will be priced ** Del
      Rancho

            

    

    
      	
               
      

            	
              ·

            	
              Bracket
      B = ** to ** quoted average range, will be priced ** Del
      Rancho

            

    

    
      	
               
      

            	
              ·

            	
              Bracket
      C = ** to ** quoted average range, will be priced ** Del
      Rancho

            

    

    
      	
               
      

            	
              ·

            	
              Bracket
      D = ** to ** quoted average range, will be priced ** Del
      Rancho

            

    

    
      	
               
      

            	
              ·

            	
              Bracket
      E = ** and up ** quoted average range, will be priced ** Del
      Rancho

            

    

     

    ** pounds
sized saddle cuts EPL specification **.

    The price
for March 01, 2009 thru May 31, 2009 is ** per pound delivered MBM-Rancho
Cucamonga, CA.   Future quarterly pricing will be the cost of the
Whole Birds utilizing the method mentioned, less ** per pound.

     

    Up to ** pounds of EPL
boneless skinless breast meat, un-marinated or marinated.

    The price
for March 01, 2009 thru May 31, 2009 is ** per pound delivered MBM-Rancho
Cucamonga, CA.  Future quarterly pricing will be updated quarterly
based on ** delivered Rancho Cucamonga, CA off the below model:

    

    **
Boneless Skinless Breast Tender Out for Boneless Skinless Breast &
**:

    
      	
               
      

            	
              ·

            	
              Pricing
      for March – May priced off November 16 – February 15
  **.

            

    

    
      	
               
      

            	
              ·

            	
              Pricing
      for June – August priced off February 16 – May 15
  **.

            

    

    
      	
               
      

            	
              ·

            	
              Pricing
      for September – November priced off May 16 – August 15
  **.

            

    

    
      	
               
      

            	
              ·

            	
              Pricing
      for December – February priced off August 16 – November 15
    **.

            

    

    

    Freight:  All
pricing delivered Rancho Cucamonga, CA Based off 37,500 lbs/load, fresh product
only.  Frozen will be an additional ** per pound delivered in **
minimums to Rancho Cucamonga only.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Freezing
Cost:   ** per pound to be added for frozen breast.

     

    As part
of this Purchase Agreement, Supplier warrants that the items identified herein
will not be sold to other EPL Franchisee’s, affiliates of EPL Franchisee’s or
suppliers to EPL Franchisees distribution centers without the express written
permission of the EPL Corporate Purchasing department.  In essence,
Simmons Prepared Foods Inc. will not sell the items identified herein to anyone
except EPL approved parties as outlined in our supplier purchase
agreement.

    

    El Pollo
Loco’s decision to enter into this Purchase Agreement is independent of any
support your firm may or may not choose to provide to the El Pollo Loco
system.

    

    This
Purchase Agreement is subject to and incorporates the General Terms and
Conditions of Supply (“T/C”) executed by the parties hereto and currently on
file with El Pollo Loco, Inc. The Purchase

    

    Agreement
and the T/C collectively constitute the entire agreement between the parties and
supersede all prior or contemporaneous oral or written agreements.

    

    Terms:  Net
10 Days

    Pricing
contract period 03/01/09 through 2/28/11

    

    Please
sign and return both copies of this letter.  After I have received the
signed copy, I will sign and return a copy for your files.  Signing
this letter acknowledges acceptance of the terms and conditions as presented
above.

    

    Matthew,
thank you for your help and support on this matter and please contact me with
any questions.

     

    
      	
              /S/
      CHIP MILLER

            	
              /S/
      GARY CAMPANARO

            
	
              Chip
      Miller

            	
              Gary
      Campanaro

            
	
              Simmons
      Prepared Foods, Inc.

            	
              El
      Pollo Loco, Inc.

            

    

     

    cc:  Jennifer
Benus, Yvette Johnson/MBM

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