Document:

EXECUTION
VERSION

       

        
          

        

      

      
        

      

       

      LOAN
AGREEMENT

      

      between

      

      PINELLAS
COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

      

      And

      

      BOVIE
MEDICAL CORPORATION

      

      Dated
as of November 1, 2008

      

      Relating
to

      Pinellas
County Industrial Development Authority

      Industrial
Development Revenue Bonds

      (Bovie
Medical Corporation Project), Series 2008

      in
the aggregate principal amount of $4,000,000

      

      

        

        
 

      CERTAIN
RIGHTS OF THE ISSUER UNDER THIS AGREEMENT HAVE BEEN ASSIGNED TO, AND ARE SUBJECT
TO A SECURITY INTEREST IN FAVOR OF THE BANK OF NEW YORK MELLON TRUST COMPANY,
N.A. AS TRUSTEE UNDER AN INDENTURE OF TRUST, DATED AS OF THE DATE FIRST ABOVE
WRITTEN, AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME.  INFORMATION
CONCERNING SUCH SECURITY INTEREST MAY BE OBTAINED FROM THE TRUSTEE AT THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A., 10161 CENTURION PARKWAY, JACKSONVILLE,
FLORIDA  32256, ATTENTION:  CORPORATE TRUST
DEPARTMENT.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	
                                      Page

                                    
	
                                      ARTICLE
      I - DEFINITIONS AND RULES OF CONSTRUCTION

                                    	
                                      1

                                    
	 
      	 
      	 
      
	
                                      Section
      1.1

                                    	
                                      Definitions

                                    	
                                      1

                                    
	
                                      Section
      1.2

                                    	
                                      Rules
      of Construction

                                    	
                                      4

                                    
	 
      	 
      
	
                                      ARTICLE
      II - REPRESENTATIONS

                                    	
                                      4

                                    
	 
      	 
      	 
      
	
                                      Section
      2.1

                                    	
                                      Representations
      by the Issuer

                                    	
                                      4

                                    
	
                                      Section
      2.2

                                    	
                                      Representations
      by the Company

                                    	
                                      6

                                    
	 
      	 
      
	
                                      ARTICLE
      III – ACQUISITION OF THE PROJECT

                                    	
                                      7

                                    
	 
      	 
      	 
      
	
                                      Section
      3.1

                                    	
                                      Agreement
      to Undertake and Complete the Project

                                    	
                                      7

                                    
	
                                      Section
      3.2

                                    	
                                      Disbursements
      from the Project Fund

                                    	
                                      7

                                    
	
                                      Section
      3.3

                                    	
                                      Establishment
      of Completion Date and Certificate as to Completion

                                    	
                                      8

                                    
	
                                      Section
      3.4

                                    	
                                      Closeout
      of Project Fund; Disposition of Balance in Project Fund

                                    	
                                      9

                                    
	
                                      Section
      3.5

                                    	
                                      Company
      Required to Pay Costs in Event Project Fund Insufficient

                                    	
                                      9

                                    
	
                                      Section
      3.6

                                    	
                                      Company
      and Issuer Representatives and Successors

                                    	
                                      9

                                    
	
                                      Section
      3.7

                                    	
                                      Investment
      of Moneys in Funds

                                    	
                                      10

                                    
	
                                      Section
      3.8

                                    	
                                      Plans
      and Specifications

                                    	
                                      10

                                    
	 
      	 
      
	
                                      ARTICLE
      IV – ISSUANCE OF THE BONDS

                                    	
                                      11

                                    
	 
      	 
      	 
      
	
                                      Section
      4.1

                                    	
                                      Agreement
      to Issue the Bonds

                                    	
                                      11

                                    
	
                                      Section
      4.2

                                    	
                                      No
      Third Party Beneficiary

                                    	
                                      11

                                    
	 
      	 
      	 
      
	
                                      ARTICLE
      V – LOAN; PAYMENT PROVISIONS

                                    	
                                      11

                                    
	 
      	 
      	 
      
	
                                      Section
      5.1

                                    	
                                      Loan
      of Proceeds

                                    	
                                      11

                                    
	
                                      Section
      5.2

                                    	
                                      Amounts
      Payable

                                    	
                                      11

                                    
	
                                      Section
      5.3

                                    	
                                      Unconditional
      Obligations

                                    	
                                      12

                                    
	
                                      Section
      5.4

                                    	
                                      Prepayments

                                    	
                                      13

                                    
	
                                      Section
      5.5

                                    	
                                      Credits
      Against Payments

                                    	
                                      13

                                    
	
                                      Section
      5.6

                                    	
                                      Credit
      Facility and Alternate Credit Facility

                                    	
                                      13

                                    
	
                                      Section
      5.7

                                    	
                                      Interest
      Rate Determination Method

                                    	
                                      13

                                    
	 
      	 
      
	
                                      ARTICLE
      VI – MAINTENANCE AND TAXES

                                    	
                                      13

                                    
	 
      	 
      	 
      
	
                                      Section
      6.1

                                    	
                                      Company's
      Obligations to Maintain and Repair

                                    	
                                      13

                                    
	
                                      Section
      6.2

                                    	
                                      Taxes
      and Other Charges

                                    	
                                      13

                                    
	 
      	 
      
	
                                      ARTICLE
      VII – INSURANCE, EMINENT DOMAIN AND DAMAGE AND DESTRUCTION

                                    	
                                      14

                                    
	 
      	 
      	 
      
	
                                      Section
      7.1

                                    	
                                      Insurance

                                    	
                                      14

                                    
	
                                      Section
      7.2

                                    	
                                      Provisions
      Respecting Eminent Domain

                                    	
                                      14

                                    
	
                                      Section
      7.3

                                    	
                                      Damage
      and Destruction

                                    	
                                      14

                                    

                            

                          

                        

                      

                    

                  

                

              

            

             

            
              
                
                

              

              
                i

                
                  

                

              

              
                
                

              

               

            

            
              
                
                  
                    
                      
                        
                          
                            	
                                    ARTICLE
      VIII – SPECIAL COVENANTS

                                  	
                                    14

                                  
	 
      	 
      	 
      
	
                                    Section
      8.1

                                  	
                                    Access
      to the Property and Inspection

                                  	
                                    14

                                  
	
                                    Section
      8.2

                                  	
                                    Financial
      Statements

                                  	
                                    15

                                  
	
                                    Section
      8.3

                                  	
                                    Further
      Assurances and Corrective Instruments

                                  	
                                    15

                                  
	
                                    Section
      8.4

                                  	
                                    Recording
      and Filing; Other Instruments

                                  	
                                    15

                                  
	
                                    Section
      8.5

                                  	
                                    Exclusion
      from Gross Income for Federal Income Tax Purposes of Interest on the
      Bonds

                                  	
                                     
      15

                                  
	
                                    Section
      8.6

                                  	
                                    Indemnity
      Against Claims

                                  	
                                    16

                                  
	
                                    Section
      8.7

                                  	
                                    Release
      and Indemnification

                                  	
                                    16

                                  
	
                                    Section
      8.8

                                  	
                                    Compliance
      with Laws

                                  	
                                    19

                                  
	
                                    Section
      8.9

                                  	
                                    Non-Arbitrage
      Covenant

                                  	
                                    19

                                  
	
                                    Section
      8.10

                                  	
                                    Notice
      of Determination of Taxability

                                  	
                                    19

                                  
	
                                    Section
      8.11

                                  	
                                    No
      Purchase of Bonds by Company or Issuer

                                  	
                                    19

                                  
	
                                    Section
      8.12

                                  	
                                    Maintenance
      of Corporate Existence

                                  	
                                    20

                                  
	
                                    Section
      8.13

                                  	
                                    Company
      Approval of Indenture

                                  	
                                    21

                                  
	
                                    Section
      8.14

                                  	
                                    Duties
      and Obligations

                                  	
                                    21

                                  
	
                                    Section
      8.15

                                  	
                                    Notice
      of Certain Acquisitions of Control

                                  	
                                    21

                                  
	 
      	 
      
	
                                    ARTICLE
      IX – ASSIGNMENT, LEASE AND SALE

                                  	
                                    21

                                  
	 
      	 
      	 
      
	
                                    Section
      9.1

                                  	
                                    Restrictions
      on Transfer of Issuer's Rights

                                  	
                                    21

                                  
	
                                    Section
      9.2

                                  	
                                    Assignment
      by the Issuer

                                  	
                                    21

                                  
	
                                    Section
      9.3

                                  	
                                    Assignment
      of Agreement by the Company or Lease or Sale of Project

                                  	
                                    22

                                  
	
                                    Section
      9.4

                                  	
                                    Assumption
      of Agreement by Purchaser of Project Upon Foreclosure

                                  	
                                    22

                                  
	 
      	 
      
	
                                    ARTICLE
      X – EVENTS OF DEFAULT AND REMEDIES

                                  	
                                    22

                                  
	 
      	 
      	 
      
	
                                    Section
      10.1

                                  	
                                    Events
      of Default Defined

                                  	
                                    22

                                  
	
                                    Section
      10.2

                                  	
                                    Remedies
      on Default

                                  	
                                    23

                                  
	
                                    Section
      10.3

                                  	
                                    Application
      of Amounts Realized in Enforcement of Remedies

                                  	
                                    24

                                  
	
                                    Section
      10.4

                                  	
                                    No
      Remedy Exclusive

                                  	
                                    24

                                  
	
                                    Section
      10.5

                                  	
                                    Agreement
      to Pay Attorneys' Fees and Expenses

                                  	
                                    24

                                  
	
                                    Section
      10.6

                                  	
                                    Issuer
      and Company to Give Notice of Default

                                  	
                                    24

                                  
	 
      	 
      
	
                                    ARTICLE
      XI – PREPAYMENTS; PURCHASE OF BONDS

                                  	
                                    25

                                  
	 
      	 
      	 
      
	
                                    Section
      11.1

                                  	
                                    Optional
      Prepayments

                                  	
                                    25

                                  
	
                                    Section
      11.2

                                  	
                                    Mandatory
      Prepayment Upon a Determination of Taxability

                                  	
                                    25

                                  
	
                                    Section
      11.3

                                  	
                                    Optional
      Purchase of Bonds

                                  	
                                    26

                                  
	
                                    Section
      11.4

                                  	
                                    Relative
      Priorities

                                  	
                                    26

                                  
	
                                    Section
      11.5

                                  	
                                    Prepayment
      to Include Fees and Expenses

                                  	
                                    26

                                  
	
                                    Section
      11.6

                                  	
                                    Purchase
      of Bonds

                                  	
                                    26

                                  
	 
      	 
      
	
                                    ARTICLE
      XII - MISCELLANEOUS

                                  	
                                    27

                                  
	 
      	 
      	 
      
	
                                    Section
      12.1

                                  	
                                    Amounts
      Remaining in Funds

                                  	
                                    27

                                  

                          

                        

                      

                    

                  

                

              

            

             

            
              
                
                

              

              
                ii

                
                  

                

              

              
                
                

              

            

             

            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Section
      12.2

                                        	
                                          No
      Implied Waiver

                                        	
                                          27

                                        
	
                                          Section
      13.3

                                        	
                                          Issuer
      Representative

                                        	
                                          27

                                        
	
                                          Section
      12.4

                                        	
                                          Company
      Representative

                                        	
                                          27

                                        
	
                                          Section
      12.5

                                        	
                                          Notices

                                        	
                                          28

                                        
	
                                          Section
      12.6

                                        	
                                          Issuer,
      Governing Body, Members, Commissioners, Directors, Officers, Agents,
      Attorneys and Employees of Issuer and Governing Body Not
      Liable

                                        	
                                          28

                                        
	

                                          Section
      12.7 

                                        	

                                          No
      Liability of Issuer; No Charge Against Issuer's Credit

                                        	 28
	
                                          Section
      12.8

                                        	

                                          If
      Performance Date Not a Business Day

                                        	 29
	
                                          Section
      12.9

                                        	
                                          Binding
      Effect

                                        	
                                          29

                                        
	
                                          Section
      12.10

                                        	
                                          Severability

                                        	
                                          29

                                        
	
                                          Section
      12.11

                                        	
                                          Amendments,
      Changes and Modifications

                                        	
                                          29

                                        
	
                                          Section
      12.12

                                        	
                                          Execution
      in Counterparts

                                        	
                                          29

                                        
	
                                          Section
      12.13

                                        	
                                          Applicable
      Law

                                        	
                                          29

                                        
	 
      	 
      	 
      
	
                                          Exhibit
      A - Description of the Project

                                        	 
      
	
                                          Exhibit
      B - Form of Requisition and Certificate

                                        	 
      
	
                                          Exhibit
      C - Form of Promissory Note

                                        	 
      

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

      LOAN
AGREEMENT

      

      THIS LOAN AGREEMENT, dated as
of November 1, 2008, is made and entered into by and between PINELLAS COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY (doing business as the Pinellas County Economic
Development Authority) (the "Issuer"), a special district duly organized and
existing under the Constitution and laws of the State of Florida (the "State")
and BOVIE MEDICAL CORPORATION
(the “Company”), a Delaware for-profit corporation.

       

      WITNESSETH:

       

      1.           Pursuant
to Chapter 159, Parts II and III, Florida Statutes (the "Act"), and at the
request of the Company, the Issuer will issue $4,000,000 principal amount of
Industrial Development Revenue Bonds (Bovie Medical Corporation Project), Series
2008 (the "Bonds"), under an Indenture of Trust of even date herewith (the
"Indenture") between the Issuer and The Bank of New York Mellon Trust Company,
N.A., as Trustee (the "Trustee"), for the purpose of making a loan of the
proceeds thereof (the "Loan") to the Company under this Loan Agreement (a) to
finance the Project (as defined herein), and (b) pay costs related to the
issuance of the Bonds, in consideration of payments by the Company, which will
be sufficient to pay the principal of, redemption premium, if any, and the
interest on the Bonds.

       

      2.           The
Company has arranged for RBC Bank (USA) to issue and deliver to the Trustee its
irrevocable direct-pay letter of credit (the "Letter of Credit") providing for
payment when due of the principal of and interest on the Bonds, and payment of
the purchase price of Bonds tendered for purchase, under a Letter of Credit
Agreement of even date herewith (the "Reimbursement Agreement") between the
Company and RBC Bank (USA).

       

      3.           The
Issuer and the Company are entering into this Loan Agreement to provide for the
loan of the proceeds of the Bonds by the Issuer to the Company, and the
repayment of the Loan by the Company.

       

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, the parties hereto covenant, agree and bind themselves as
follows;

       

      ARTICLE
I

       

      DEFINITIONS
AND RULES OF CONSTRUCTION

       

      Section
1.1     Definitions  In
addition to the words and terms elsewhere defined in this Agreement, the
following words and terms as used herein shall have the following meanings
unless the context or use clearly indicates another or different meaning or
intent, and any other words and terms defined in the Indenture shall have the
same meanings when used herein as assigned in the Indenture unless the context
or use clearly indicates another or different meaning or
intent:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      "Acquisition"
means, when used with reference to the Project, acquisition, renovation and
equipping.

       

      "Agreement"
means this Loan Agreement between the Issuer and the Company and any
modifications, amendments and supplements hereto made in accordance with the
provisions hereof and of the Indenture.

       

      "Bond
Documents" means, collectively, the Bonds, this Agreement, the Note, the
Indenture, the Credit Facility, the Credit Agreement, the Purchase Agreement,
the Remarketing Agreement and the Official Statement.

       

      "Bond
Proceeds" means the principal of the Bonds and any investment earnings thereon
while on deposit in the Project Fund.

       

      "Company
Representative" means any one of the persons at the time designated to act on
behalf of the Company by written certificate furnished to the Issuer and the
Trustee containing the specimen signatures of such persons and signed on behalf
of the Company by the President or any Vice President of the
Company.

       

      "Completion
Date" means, with respect to the Project, the date on which the Company
Representative delivers a completion certificate to the Trustee pursuant to
Section 3.3.

       

      "Cost(s)
of the Project", "Cost" or "Costs" means all costs and allowances which the
Issuer or the Company may properly pay or accrue for the Project and which,
under generally accepted accounting principles, are chargeable to the capital
account of the Project or could be so charged either with a proper election to
capitalize such costs or, but for a proper election, to expense such costs,
including (without limitation) the following costs:

       

      (a)           fees
and expenses incurred in preparing the plans and specifications for the Project
(including any preliminary study or planning or any aspect thereof); any labor,
services, materials and supplies used or furnished in site improvement and
construction; any equipment for the Project; and any acquisition necessary to
provide utility services or other services, including trackage to provide the
Project with public transportation facilities, roadways, parking lots, water
supply, sewage and waste disposal facilities; and all real and tangible personal
property deemed necessary by the Company and acquired in connection with the
Project;

       

      (b)           fees
for architectural, engineering, supervisory and consulting
services;

       

      (c)           any
fees and expenses incurred in connection with perfecting and protecting title to
the Project and any fees and expenses incurred in connection with preparing,
recording or filing such documents, instruments or financing statements as
either the Company or the Issuer may deem desirable to perfect or protect the
rights of the Issuer or the Trustee under the Bond Documents;

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (d)           any
reasonable legal, accounting or financial advisory fees and expenses, including,
without limitation, fees and expenses of Bond Counsel and counsel to the Issuer,
the Company, the Credit Issuer, the Underwriter, the Remarketing Agent or the
Trustee, any fees and expenses of the Issuer, Trustee, Remarketing Agent,
Underwriter, Credit Issuer, Paying Agent or any rating agency, filing fees, and
printing and engraving costs, incurred in connection with the authorization,
issuance, sale and purchase of the Bonds, and the preparation of the Bond
Documents and all other documents in connection with the authorization, issuance
and sale of the Bonds;

       

      (e)           interest
to accrue on the Bonds during construction of the Project;

       

      (f)           any
administrative or other fees charged by the Issuer or reimbursement thereto of
expenses in connection with the Project until the Completion Date;
and

       

      (g)           any
other costs and expenses relating to the Project which could constitute costs or
expenses for which the Issuer may expend Bond Proceeds under the
Act.

       

      "Eminent
Domain" means the taking of title to, or the temporary use of, the Project or
any part thereof pursuant to eminent domain or condemnation proceedings, or by
any settlement or compromise of such proceedings, or any voluntary conveyance of
the Project or any part thereof during the pendency of, or as a result of a
threat of, such proceedings.

       

      "Event of
Default" shall have the meaning set forth in Section 10.1.

       

      "Governing
Body" means the board, commission, council or other body in which the general
powers of the Issuer are vested.

       

      "Issuer
Representative" means any one of the persons at the time designated to act on
behalf of the Issuer by written certificate furnished to the Company and the
Trustee containing the specimen signatures of such persons and signed on behalf
of the Issuer by its Chairman or Executive Director.

       

      "Net
Proceeds" means, when used with respect to any proceeds of insurance or proceeds
resulting from Eminent Domain, the gross proceeds therefrom less all expenses
(including attorneys' fees) incurred in the realization thereof.

       

      "Official
Statement" means the Official Statement prepared and used in connection with the
initial sale of the Bonds on the Issue Date.

       

      "Plans
and Specifications" means the plans and specifications used in the Acquisition
of the Project, as the same may be revised from time to time by the Company in
accordance with Section 3.8.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      "Project"
means, collectively, the property described in Exhibit A hereto, as the
same may at any time exist.

       

      "Remarketing
Agreement" means the Remarketing Agreement, dated as of October 1, 2008, between
the Company and the Remarketing Agent.

       

      "Tax
Certificate" means the Borrower's Tax Certificate, dated as of the Issue Date,
between the Issuer and the Company.

       

      Section
1.2          Rules of
Construction.  Unless
the context clearly indicates to the contrary, the following rules shall apply
to the construction of this Agreement:

       

      (a)           Capitalized
terms used but not defined in this Agreement shall have the meaning ascribed to
them in the Indenture.

       

      (b)           Words
importing the singular number shall include the plural number and vice
versa.

       

      (c)           The
table of contents, captions and headings herein are solely for convenience of
reference only and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.

       

      (d)           Words
of the masculine gender shall be deemed and construed to include correlative
words of the feminine and neuter genders, and words of the neuter gender shall
be deemed and construed to include correlative words of the masculine and
feminine genders.

       

      (e)           All
references in this Agreement to particular Articles or Sections are references
to Articles and Sections of this Agreement, unless otherwise
indicated.

       

      ARTICLE
II

       

      REPRESENTATIONS

       

      Section
2.1          Representations by the
Issuer.  The
Issuer represents and warrants as follows:

       

      (a)           The
Issuer is an industrial development authority within the meaning of the Act and
is authorized by the Act to execute and to enter into this Agreement and to
undertake the transactions contemplated herein and to carry out its obligations
hereunder.

       

      (b)           The
Issuer has all requisite power, authority and legal right to execute and deliver
the Bond Documents to which it is a party and all other instruments and
documents to be executed and delivered by the Issuer pursuant thereto, to
perform and observe the provisions thereof and to carry out the transactions
contemplated by the Bond Documents.  All corporate action on the part
of the Issuer which is required for the execution, delivery, performance and
observance by the Issuer of the Bond Documents has been duly authorized and
effectively taken, and such execution, delivery, performance and observation by
the Issuer do not contravene applicable law or any contractual restriction
binding on or affecting the Issuer.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      (c)           The
Issuer has duly approved the issuance of the Bonds and the loan of the proceeds
thereof to the Company for the Acquisition of the Project; no other
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required as a condition to the
performance by the Issuer of its obligations under any Bond
Documents.

       

      (d)           This
Agreement is, and each other Bond Document to which the Issuer is a party when
delivered will be, legal, valid and binding special obligations of the Issuer
enforceable against the Issuer in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

       

      (e)           There
is no default of the Issuer in the payment of the principal of or interest on
any of its indebtedness for borrowed money or under any instrument or
instruments or agreements under and subject to which any indebtedness for
borrowed money has been incurred which does or could affect the validity and
enforceability of the Bond Documents or the ability of the Issuer to perform its
obligations thereunder, and no event has occurred and is continuing under the
provisions of any such instrument or agreement which constitutes or, with the
lapse of time or the giving of notice, or both, would constitute such a
default.

       

      (f)           With
respect to the Bonds, there are no other obligations of the Issuer that have
been, are being or will be (i) sold at substantially the same time,
(ii) sold pursuant to the same plan of financing, and (iii) reasonably
expected to be paid from substantially the same source of funds.

       

      (g)           There
is no action, suit, proceeding, inquiry or investigation at law or in equity or
before or by any court, public board or body pending, or, to the best knowledge
of the Issuer, threatened against or affecting the Issuer wherein an unfavorable
decision, ruling or finding would adversely affect (i) the transactions
contemplated by, or the validity or enforceability of, the Bonds, the Indenture
or this Agreement or (ii) the tax-exempt status of interest on the
Bonds.

       

      (h)           In
connection with the authorization, issuance and sale of the Bonds, the Issuer
has complied with all provisions of the Constitution and laws of the State,
including the Act.

       

      (i)           The
Issuer has not assigned or pledged and will not assign or pledge its interest in
this Agreement for any purpose other than to secure the Bonds under the
Indenture.  The Bonds constitute the only bonds or other obligations
of the Issuer in any manner payable from the revenues to be derived from this
Agreement, and except for the Bonds, no bonds or other obligations have been
issued on the basis of this Agreement.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (j)           The
Issuer is not in breach under any of the provisions of the laws of the State,
where any such default would affect the issuance, validity or enforceability of
the Bonds or the transactions contemplated by this Agreement or the
Indenture.

       

      Section
2.2      Representations by the
Company.  The
Company represents and warrants as follows:

       

      (a)           The
Company is a for-profit corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, is in good standing under
the laws of the State, and has corporate and other legal power and authority to
enter into and to perform the agreements and covenants on its part contained in
the Bond Documents to which it is a party, and has duly authorized the
execution, delivery and performance of the Bond Documents to which it is a party
and has duly approved the Bond Documents.

       

      (b)           The
execution and delivery by the Company of the Bond Documents to which it is a
party and the performance by the Company of its obligations thereunder
(i) do not violate provisions of statutory laws or regulations applicable
to the Company, (ii) do not violate its articles of organization or
operating agreement, (iii) do not breach or result in a default under any
other agreement to which it is a party, and (iv) do not violate the terms
of any judicial or administrative judgment, order, decree or arbitral decision
that names the Company and is specifically directed to it or its
properties.

       

      (c)           There
is no action, suit, proceeding, inquiry or investigation at law or in equity or
before or by any court, public board or body pending, or, to the best knowledge
of the Company, threatened against or affecting the Company wherein an
unfavorable decision, ruling or finding would adversely affect (i) the
transactions contemplated by, or the validity or enforceability of, the Bond
Documents or (ii) the tax-exempt status of interest on the
Bonds.

       

      (d)           No
further authorizations, consents or approvals of governmental bodies or agencies
are required in connection with the execution and delivery by the Company of
this Agreement or the other Bond Documents to which the Company is a party or in
connection with the carrying out by the Company of its obligations under this
Agreement or the other Bond Documents to which the Company is a
party.

       

      (e)           The
financing of the Project as provided under this Agreement, and commitments
therefor made by the Issuer have induced the Company to expand or locate its
operations in the jurisdiction of the Issuer.

       

      (f)           The
Company anticipates that upon completion of the Acquisition of the Project, the
Company will operate the Project as a "project" within the meaning of the Act
until the Bonds have been paid in full.

       

      (g)           The
Project is of the type authorized and permitted by the Act, and the Project is
substantially the same in all material respects to that described in the notice
of public hearing published on September 23, 2008.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (h)           The
Project will be acquired, constructed and installed and will be operated by the
Company in such manner as to conform with all applicable zoning, planning,
building, environmental and other regulations of the governmental authorities
having jurisdiction over the Project.

       

      (i)           The
Company will cause all of the proceeds of the Bonds to be applied solely to the
payment of Costs of the Project.

       

      (j)           The
Company has taken no action, and has not omitted to take any action, which
action or omission to take action would in any way affect or impair the
excludability of interest on the Bonds from gross income of the Holders thereof
for federal income tax purposes.

       

      (k)           All
of the representations and warranties of the Company contained in the Tax
Certificate are hereby reaffirmed and incorporated herein by
reference.

       

      (l)           The
Company presently in good faith estimates the Cost of the Project to equal or
exceed the original principal amount of the Bonds.

       

      (m)           The
Project will be located wholly within Pinellas County, Florida.

       

      All of
the above representations and warranties shall survive the execution of the Loan
Agreement and the issuance of the Note.

       

      ARTICLE
III

       

      ACQUISITION
OF THE PROJECT

       

      Section
3.1        Agreement to Undertake and
Complete the Project.  The
Company covenants and agrees to undertake and complete the Acquisition of the
Project.  Upon written request of the Issuer or the Trustee (which is
not obligated to make such request), the Company agrees to make available to the
Issuer and the Trustee (for review and copying) all the then current Plans and
Specifications for the Project.

       

      The
Company agrees to cause the Project to be completed as soon as may be
practicable and to cause all proceeds of the Bonds, including investment
earnings, to be expended no later than three years from the Issue
Date.  For Costs of the Project incurred prior to receipt by the
Issuer of the proceeds of the Bonds, the Company agrees to advance all funds
necessary for such purpose.  Such advances may be reimbursed from the
Project Fund to the extent permitted by Section 3.2.

       

      The
Company shall obtain or cause to be obtained all necessary permits and approvals
for the Acquisition, operation and maintenance of the Project.

      
        
           

        

        
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      Section
3.2         Disbursements from the
Project Fund.  In
the Indenture, the Issuer has authorized and directed the Trustee to use the
moneys in the Project Fund for payment or reimbursement to the Company of the
Costs of the Project.

       

      Each
payment for a Cost of the Project shall be made only upon the receipt by the
Trustee and, upon written request therefor, the Issuer of a requisition and
certificate, substantially in the form attached hereto as Exhibit B and signed
by the Company Representative and approved by the Credit Issuer upon which the
Trustee may conclusively rely.

       

      The
Company agrees that it will not request any disbursement which, if paid, would
result in (i) less than substantially all (at least ninety-five percent
(95%)) of the proceeds of the Bonds being used to provide land or property
subject to the allowance for depreciation under Section 167 of the Code,
constituting the Project, (ii) less than all of the proceeds of the Bonds
being used to provide the Project under the Act, or (iii) the inclusion of
the interest on any of the Bonds in the gross income of any Holder for purposes
of federal income taxation (as long as such Holder is not a "related person" or
a "substantial user" of the Project as such terms are used in Section 144 of the
Code).

       

      Interest
on the Bonds and all legal, consulting and issuance expenses shall be set forth
separately in any requisition and certificate requesting payment
therefor.  Such requisitions and certificates shall be consecutively
numbered.  Upon request, the Company shall furnish the Issuer or the
Trustee with copies of invoices or other appropriate documentation supporting
payments or reimbursements requested pursuant to this Section
3.2.  The Issuer and the Trustee may rely conclusively upon any
statement made in any such requisition and certificate.

       

      Section
3.3         Establishment of Completion
Date and Certificate as to Completion.  The
Completion Date shall be the date on which the Company Representative signs and
delivers to the Trustee a certificate stating that, except for amounts retained
by the Trustee for Costs of the Project not then due and payable, or the
liability for which the Company is, in good faith, contesting or disputing,
(a) the Project has been completed to the satisfaction of the Company, and
all labor, services, materials and supplies used in such Acquisition have been
paid for, and (b) the Project is suitable and sufficient for the efficient
operation as a "project" (as defined in the Act).

       

      Notwithstanding
the foregoing, such certificate may state that it is given without prejudice to
any rights against third parties which exist at the date of such certificate or
which may subsequently come into being.

      
        
           

        

        
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      Section
3.4         Closeout of Project Fund;
Disposition of Balance in Project Fund.  All
moneys and any unliquidated investments remaining in the Project Fund on the
Completion Date and after payment in full of the Costs of the Project (except
for costs not then due and payable, or disputed amounts, for the payment of
which the Trustee shall have retained amounts as hereinafter provided) shall, as
soon as practicable after the Completion Date, and no later than ninety days
thereafter, at the direction of the Company, be transferred from the Project
Fund to the Surplus Fund.  The Trustee shall, at the direction of the
Company Representative, retain moneys in the Project Fund for payment of Costs
of the Project not then due and payable or which are disputed.  Any
balance of such retained funds remaining after full payment of such Costs of the
Project shall at the direction of the Company be transferred by the Trustee from
the Project Fund to the Surplus Fund to be applied to the redemption of Bonds in
accordance with the terms of the Indenture.

       

      Section
3.5         Company Required to Pay
Costs in Event Project Fund Insufficient.  If
the moneys in the Project Fund available for payment of the Costs of the Project
should not be sufficient to make such payments in full, the Company agrees to
pay directly (or to deposit moneys in the Project Fund for the payment of) such
costs of completing the Project as may be in excess of the moneys available
therefor in the Project Fund.  THE ISSUER DOES NOT MAKE ANY WARRANTY
OR REPRESENTATION (EITHER EXPRESS OR IMPLIED) THAT THE MONEYS DEPOSITED INTO THE
PROJECT FUND AND AVAILABLE FOR PAYMENT OF THE COSTS OF THE PROJECT, UNDER THE
PROVISIONS OF THIS AGREEMENT, WILL BE SUFFICIENT TO PAY ALL OF THE COSTS OF THE
PROJECT.  If, after exhausting the moneys in the Project Fund for any
reason (including, without limitation, losses on investments made by the Trustee
under the Indenture), the Company pays, or deposits moneys in the Project Fund
for the payment of, any portion of the Costs of the Project pursuant to the
provisions of this Section 3.5, the Company shall not be entitled to any
reimbursement therefor from the Issuer or from the Trustee, nor shall it be
entitled to any diminution of the amounts payable under Section
5.2.

       

      Section
3.6         Company and Issuer
Representatives and Successors.  At
or prior to the initial sale of the Bonds, the Company and the Issuer shall
appoint a Company Representative and an Issuer Representative, respectively, for
the purpose of taking all actions and delivering all certificates required to be
taken and delivered by the Company Representative and the Issuer Representative
under the provisions of this Agreement.  The Company and the Issuer,
respectively, may appoint alternate Company Representatives and alternate Issuer
Representatives to take any such action or make any such certificate if the same
is not taken or made by the Company Representative or the Issuer
Representative.  In the event any of such persons, or any successor
appointed pursuant to the provisions of this Section 3.6, should resign or
become unavailable or unable to take any action or deliver any certificate
provided for in this Agreement, another Company Representative or alternate
Company Representative, or another Issuer Representative or alternate Issuer
Representative, shall thereupon be appointed by the Company or the Issuer,
respectively.  If the Company or the Issuer fails to make such
designation within ten (10) days following the date when the then incumbent
Company Representative or Issuer Representative resigns or becomes unavailable
or unable to take any such actions, the President or any Vice President of the
Company, or the Chairman or the Executive Director of the Issuer, shall serve as
the Company Representative or the Issuer Representative,
respectively.

       

      Whenever
the provisions of this Agreement require the Company's approval or require the
Issuer or the Trustee to take some action at the request or direction of the
Company, the Company Representative shall make such approval or such request or
direction in writing unless otherwise specified in this
Agreement.  Any action so taken with the written approval of or at the
written direction of the Company Representative shall be binding upon the
Company.

      
        
           

        

        
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      Section
3.7         Investment of Moneys in
Funds.  The
Trustee may invest or reinvest any moneys held pursuant to the Indenture to the
extent permitted by Section 4.7 of the Indenture and by law (but subject to the
provisions of Section 8.9(a) hereof), in Permitted Investments, as defined in
the Indenture, as directed by a Company Representative.

       

      Any such
securities may be purchased at the offering or market price thereof at the time
of such purchase.

       

      The
Trustee may make any and all such investments through its own bond department or
trust investments department or that of its affiliates or subsidiaries, and may
charge the Company its ordinary and customary fees for such trades; including
cash sweep account fees.  Any interest accruing on or profit realized
from the investment of any moneys held as part of the Project Fund shall be
credited to the Project Fund, and any loss resulting from such investment shall
be charged to the Project Fund.  Any interest accruing on or profit
realized from the investment of any moneys held as a part of the Bond Fund shall
be credited to the Bond Fund, and any loss resulting from such investment shall
be charged to the Bond Fund.  Neither the Issuer nor the Trustee shall
be liable for any loss resulting from any such investments, provided the Trustee
has performed its respective obligations under Section 4.7 of the Indenture
in accordance with Section 7.1(e) of the Indenture.  For the purposes
of this Section 3.7, any interest-bearing deposits, including certificates of
deposit, issued by or on deposit with the Trustee shall be deemed to be
investments and not deposits.

       

      Section
3.8         Plans and
Specifications.  The
Company shall maintain a set of Plans and Specifications at the Project which
shall be available to the Issuer and the Trustee for inspection and examination
during the Company's regular business hours.  The Issuer, the Trustee
and the Company agree that the Company may supplement, amend and add to the
Plans and Specifications, and that the Company shall be authorized to omit or
make substitutions for components of the Project, without the approval of the
Issuer and the Trustee, provided that no such change shall be made which, after
giving effect to such change, would cause any of the representations and
warranties set forth in Section 2.2 hereof to be false or misleading in any
material respect, or would result in a violation of the covenant set forth in
Section 8.5.  If any such change would render materially incorrect or
inaccurate the description of the initial components of the Project as set forth
in Exhibit A to this Agreement, the Company shall deliver to the Issuer and the
Trustee an opinion of Bond Counsel to the effect that such change will not cause
the interest on the Bonds to be includable in the gross income of the owners
thereof for federal income tax purposes, and thereafter, the Company and the
Issuer shall amend such Exhibit A to reflect such change.  No
approvals of the Issuer and the Trustee shall be required for the Acquisition of
the Project or for the solicitation, negotiation, award or execution of
contracts relating thereto.

      
        
           

        

        
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      ARTICLE
IV

       

      ISSUANCE
OF THE BONDS

       

      Section
4.1         Agreement to Issue the
Bonds.  To
provide funds for the Acquisition of the Project, the Issuer agrees that it will
sell, issue and deliver the Bonds in the aggregate principal amount of
$4,000,000 to the initial purchasers thereof and will cause the proceeds of the
Bonds to be applied as provided in Section 4.5 of the
Indenture.

       

      Section
4.2        No Third-Party
Beneficiary.  It
is specifically agreed between the parties executing this Agreement that it is
not intended by any of the provisions of any part of this Agreement to establish
in favor of the public or any member thereof, other than as expressly provided
herein or as contemplated in the Indenture, the rights of a third-party
beneficiary hereunder, or to authorize anyone not a party to this Agreement to
maintain a suit for personal injuries or property damage pursuant to the terms
or provisions of this Agreement.  The duties, obligations and
responsibilities of the parties to this Agreement with respect to third parties
shall remain as imposed by law.

       

      ARTICLE
V

       

      LOAN;
PAYMENT PROVISIONS

       

      Section
5.1         Loan of
Proceeds.  The
Issuer agrees, upon the terms and conditions contained in this Agreement and the
Indenture, to lend to the Company the proceeds received by the Issuer from the
sale of the Bonds.  The loan shall be made by depositing the proceeds
from the initial sale of the Bonds into the Project Fund in accordance with
Section 4.5 of the Indenture.  Such proceeds shall be disbursed
to or on behalf of the Company as provided in Section 3.2.  The
Company's obligation to repay the loan shall be evidenced by a Promissory Note,
the form of which is attached hereto as Exhibit C, dated the Issue
Date.

       

      Section
5.2         Amounts
Payable.  The
Company hereby agrees to pay the Note and repay the loan made pursuant to this
Agreement by making the following payments:

       

      (a)           The
Company shall pay or cause to be paid to the Trustee in immediately available
funds for the account of the Issuer for deposit into the Bond Fund on or before
any Interest Payment Date for the Bonds or any other date that any payment of
interest, premium, if any, or principal is required to be made in respect of the
Bonds pursuant to the Indenture, until the principal of, premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, a sum which,
together with any Eligible Funds available for such payment in the Bond Fund,
will enable the Trustee to pay the amount payable on such date as principal of
(whether at maturity or upon redemption or acceleration or otherwise), premium,
if any, and interest on the Bonds as provided in the Indenture; provided,
however, that the obligation of the Company to make any payment hereunder shall
be deemed satisfied and discharged to the extent of the corresponding payment
made by the Credit Issuer under the Credit Facility.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      It is
understood and agreed that the Note and all payments payable by the Company
under this subsection are assigned by the Issuer to the Trustee for the benefit
of the Holders.  The Company assents to such
assignment.  The Issuer hereby directs the Company and the Company
hereby agrees to pay to the Trustee at the corporate trust office of the Trustee
all payments payable by the Company pursuant to the Note and this
subsection.

       

      (b)           The
Company will also pay the reasonable fees, costs and expenses of the Issuer, the
Trustee, the Paying Agent and the Registrar under the Indenture and all other
amounts which may be payable to the Trustee, Paying Agent or Registrar under
Section 7.2 of the Indenture, and the reasonable fees, costs and expenses
of the Remarketing Agent and all other amounts which may be payable to the
Remarketing Agent under the Remarketing Agreement, such fees and expenses to be
paid when due and payable by the Company directly to the
Issuer,  Trustee, Paying Agent, Registrar and Remarketing Agent,
respectively, for their own account.

       

      (c)           The
Company will also pay when due and payable the reasonable fees, costs and
expenses of the Issuer related to the issuance of the Bonds, including without
limitation, attorneys' fees, costs and expenses.  The Company further
agrees to pay all reasonable fees, costs and expenses incurred in connection
with any (i) preparation, execution, delivery, modification, waiver or amendment
of this Loan Agreement, the other Bond Documents and related documents, and (ii)
any audit or other such governmental inquiry concerning the Bonds, including the
fees and expenses of Bond Counsel to the Issuer and Counsel for the
Issuer.

       

      (d)           The
Company covenants, for the benefit of the Holders, to pay or cause to be paid,
to the Remarketing Agent, such amounts as shall be necessary to enable the
Remarketing Agent to pay the Purchase Price of Bonds delivered to it for
purchase, all as more particularly described in Section 2.6 of the
Indenture; provided, however, that the obligation of the Company to make any
such payment under this Section 5.2(d) shall be reduced by the amount of moneys
available for such payment described in Section 2.6(g)(i) of the Indenture; and
provided, further, that the obligation of the Company to make any payment under
this Section 5.2(d) shall be deemed to be satisfied and discharged to the extent
of the corresponding payment made by the Credit Issuer under the Credit
Facility.

       

      (e)           In
the event the Company shall fail to make any of the payments required in this
Section 5.2, the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid.

       

      Section
5.3        Unconditional
Obligations.  The
obligation of the Company to make the payments required by Section 5.2 shall be
absolute and unconditional.  The Company shall pay all such amounts
without abatement, diminution or deduction (whether for taxes or otherwise)
regardless of any cause or circumstance whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim that the Company
may have or assert against the Issuer, the Trustee or any other
Person.

      
        
           

        

        
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      Section
5.4        Prepayments.  The
Company may prepay all or any part of the amounts required to be paid by it
under Section 5.2, at the times and in the amounts provided in Article XI
for redemption of the Bonds, and in the case of mandatory redemptions of the
Bonds, the Company shall cause to be furnished to the Issuer such amounts on or
prior to the applicable redemption dates.  Prepayment of amounts due
hereunder pursuant to this Section 5.4 shall be deposited in the Bond
Fund.

       

      Section
5.5        Credits Against
Payments.  To
the extent that principal of, Purchase Price, premium, if any, or interest on
the Bonds shall be paid with moneys available under the Credit Facility, from
remarketing proceeds (with respect to Purchase Price) or other sources available
under the Indenture, the obligation of the Company to make payments required by
Section 5.2 shall be satisfied and discharged to the extent of the principal of,
Purchase Price, premium, if any, or interest on the Bonds so paid.  If
the principal of, premium, if any, and interest on the Bonds shall have been
paid sufficiently that payment of the Bonds shall have occurred in accordance
with Article V of the Indenture, then the obligations of the Company pursuant to
Section 5.2, ipso
facto, shall be deemed to have been paid in full, and the Company's
obligations under Section 5.2 and this Agreement shall be
discharged.

       

      Section
5.6        Credit Facility and
Alternate Credit Facility.  The
Company shall provide for the payment of amounts payable pursuant to Section
5.2(a) and (d) herein, by the delivery to the Trustee on the Issue Date of the
Original Credit Facility.  The Company shall be entitled to terminate
the Credit Facility under certain circumstances as provided therein and in the
Indenture and shall be entitled to provide an Alternate Credit Facility under
certain circumstances as provided in the Indenture.

       

      Section
5.7         Interest Rate Determination
Method.  The
Company is hereby granted the right to designate from time to time changes in
the Interest Rate Determination Method (as defined in the Indenture) in the
manner and to the extent set forth in Section 2.4 of the
Indenture.

       

      ARTICLE
VI

       

      MAINTENANCE
AND TAXES

       

      Section
6.1         Company's Obligations to
Maintain and Repair.  The
Company agrees that during the term of this Agreement it will keep and maintain
the Project in good condition, repair and working order, ordinary wear and tear
excepted, at its own cost, and will make or cause to be made from time to time
all repairs thereto (including external and structural repairs) and renewals and
replacements thereto necessary for the operation thereof.

       

      Section
6.2        Taxes and Other
Charges.  The
Company will promptly pay and discharge or cause to be
promptly paid and discharged, as the same become due, all taxes, assessments,
governmental charges or levies and all utility and other charges incurred in the
operation, maintenance, use, occupancy and upkeep of the Project imposed upon it
or in respect of the Project before the same shall become in default, as well as
all lawful claims which, if unpaid, might become a lien or charge upon such
property and assets or any part thereof, except such that are contested in good
faith by the Company for which the Company has maintained adequate reserves
satisfactory to the Credit Issuer, or in the absence of any Credit Issuer,
satisfactory to the Issuer and the Trustee.

      
        
           

        

        
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      ARTICLE
VII

       

      INSURANCE,
EMINENT DOMAIN AND DAMAGE AND DESTRUCTION

       

      Section
7.1          Insurance.  The
Company will during the term of this Agreement and at all times while any Bonds
are outstanding continuously insure the Project against such risks as are
customarily insured against by businesses of like size and type, paying as the
same become due all premiums in respect thereof.  In addition the
Company shall comply, or cause compliance, with applicable worker's compensation
laws of the State.

       

      Section
7.2          Provisions Respecting
Eminent Domain.  In
case of a taking or proposed taking of all or any part of the Project or any
right therein by Eminent Domain, the party hereto upon which notice of such
taking is served shall give prompt written notice to the other party and to the
Trustee.  Each such notice shall describe generally the nature and
extent of such damage, destruction, taking, loss, proceedings or
negotiations.

       

      Section
7.3          Damage and
Destruction.  If
at any time while any of the Bonds are Outstanding, the Project, or any portion
thereof, shall be damaged or destroyed by fire, flood, windstorm or other
casualty, or title to, or the temporary use of, the Project, or any portion
thereof, shall have been taken by the power of Eminent Domain, the Company
(unless it shall have exercised its option to prepay all of the Bonds) shall
cause the Net Proceeds from insurance or condemnation or an amount equal thereto
to be used for the repair, reconstruction, restoration or improvement of the
Project.  In case of any damage to or destruction of all or any part
of the Project exceeding fifty thousand dollars ($50,000), the Company shall
give prompt written notice thereof to the Issuer and the
Trustee.  Notwithstanding the above, so long as the Credit Facility is
outstanding, the Company shall comply with the terms of the Credit Agreement
related to the use of insurance or condemnation proceeds.

       

      ARTICLE
VIII

       

      SPECIAL
COVENANTS

       

      Section
8.1          Access to the Property and
Inspection.  The
Issuer and the Trustee, and their respective agents and employees, shall have
the right, at all reasonable times during normal business hours of the Company
upon the furnishing of reasonable notice to the Company under the circumstances,
to enter upon and examine and inspect the Project and to examine and copy the
books and records of the Company insofar as such books and records relate to the
Project or the Bond Documents.

      
        
           

        

        
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      Section
8.2          Financial
Statements.  The
Company shall, upon request, deliver to the Trustee as soon as practicable and
in any event within 120 days after the end of each fiscal year of the Company,
the financial reports of the Company for such fiscal year.  The
Trustee shall have no duty to review or analyze such financial statements and
shall hold such financial statements solely as a repository for the benefit of
the bondholders; the Trustee shall not be deemed to have notice of any
information contained therein or even of default which may be disclosed therein
in any manner.

       

      Section 8.3          Further
Assurances and Corrective Instruments.

       

      (a)           Subject
to the provisions of the Indenture, the Issuer and the Company agree that they
will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements and amendments hereto and
such further instruments as may reasonably be required for carrying out the
intention or facilitating the performance of this Agreement or the transactions
contemplated hereby.

       

      (b)           The
Company shall cause this Agreement and all necessary UCC financing statements
(including continuation statements), if any, to be recorded and filed in such
manner and in such places as may be required by law to fully preserve and
protect the security of the Holders and the rights of the Trustee and to perfect
the security interest created by the Indenture.

       

      Section 8.4          Recording
and Filing; Other Instruments.

       

      (a)           The
Company covenants that it will cause continuation statements to be filed if
required by law in order fully to preserve and to protect the rights of the
Trustee or the Issuer in the assignment of certain rights of the Issuer under
this Agreement and otherwise under the Indenture.

       

      (b)           The
Company and the Issuer shall execute and deliver all instruments and shall
furnish all information and evidence deemed necessary or advisable in order to
enable the Company to fulfill its obligations as provided in Section
8.4(a).  The Company shall file and re-file and record and re-record
or shall cause to be filed and re-filed and recorded and re-recorded all
instruments required to be filed and re-filed and recorded or re-recorded and
shall continue or cause to be continued the liens of such instruments for so
long as any of the Bonds shall be Outstanding.

       

      Section
8.5          Exclusion from Gross Income
for Federal Income Tax Purposes of Interest on the Bonds.  The
Company covenants and agrees that it has not taken and will not take or cause to
be taken, and has not omitted and will not omit or cause to be omitted, any
action which will result in interest paid on the Bonds being included in gross
income of the Holders of the Bonds for the purposes of federal income
taxation.

       

      The
Company covenants and agrees that it will take or cause to be taken all required
actions necessary to preserve the exclusion from gross income for federal income
tax purposes of interest on the Bonds; and the Issuer covenants and agrees that
it will take or cause to be taken all required actions to preserve the exclusion
from gross income for federal income tax purposes of interest on the
Bonds.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      Section
8.6          Indemnity Against
Claims.  The
Company will pay and discharge and will indemnify and hold harmless the Issuer
and the Trustee, and their respective directors, officers, employees, counsel
and agents, from any taxes, assessments, impositions and other charges in
respect of the Project.  If any such claim is asserted, or any such
lien or charge upon payments, or any such taxes, assessments, impositions or
other charges, are sought to be imposed, the Issuer or the Trustee, as the case
may be, will give prompt written notice to the Company; provided, however, that
the failure to provide such notice will not relieve the Company of the Company's
obligations and liability under this Section 8.6 and will not give rise to any
claim against or liability of the Issuer or the Trustee.  The Company
shall have the sole right and duty to assume, and shall assume, the defense
thereof, with counsel acceptable to the person on behalf of which the Company
undertakes a defense, with full power to litigate, compromise or settle the same
in its sole discretion.  This Section 8.6 shall survive the
termination of this Agreement and the earlier removal or resignation of the
Trustee.

       

      Section
8.7          Release and
Indemnification.  (a)           Trustee
Indemnification. The Company shall at all times protect, indemnify and
hold the Trustee, and its respective members, directors, officers, employees,
attorneys and agents, harmless against any and all liability, losses, damages,
costs, expenses, taxes, causes of action, suits, claims, demands and judgments
of any nature arising from or in connection with the Project or the financing of
the Project, including, without limitation, all claims or liability resulting
from, arising out of or in connection with the acceptance or administration of
the Bond Documents and any documents executed in connection therewith or the
trusts thereunder or the performance of duties under the Bond Documents or any
loss or damage to property or any injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Project or the use thereof,
including without limitation any lease thereof or assignment of its interest in
this Agreement, such indemnification to include the reasonable costs and
expenses of defending itself or investigating any claim of liability and other
reasonable expenses and attorneys' fees incurred by the Trustee, and its
respective members, directors, officers, employees, attorneys and agents, in
connection therewith, provided that the benefits of this Section 8.7 shall not
inure to any person other than the Trustee, its respective members, directors,
officers, employees, attorneys and agents, and provided further that such loss,
damage, death, injury, claims, demands or causes shall not have resulted from
the gross negligence or willful misconduct of, the Trustee or such members,
directors, officers, employees, attorneys and agents.  The obligations
of the Company under this Section 8.7 shall survive the termination of this
Agreement and the Indenture and the earlier removal or resignation of the
Trustee.  Notwithstanding any other provision of this Agreement or the
Indenture to the contrary, the Company agrees (i) not to assert any claim
or institute any action or suit against the Trustee or its employees arising
from or in connection with any investment of funds made by the Trustee in good
faith as directed by a Company Representative, and (ii) to indemnify and
hold the Trustee and its employees harmless against any liability, losses,
damages, costs, expenses, causes of action, suits, claims, demands and judgments
of any nature arising from or in connection with any such
investment.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      (b)           Issuer
Indemnification.  Company releases the Issuer and the members
thereof, and its officers, agents, officials, and employees, from, and covenants
and agrees to indemnify, hold harmless and defend Issuer and the members
thereof, and its officers, agents, officials, and employees, and each of them
(each an "Indemnified Party") from and against, any and all losses, claims,
damages, demands, liabilities and expenses (including but not limited to
attorneys' fees and expenses, whether or not suit is brought and whether
incurred in settlement negotiations, investigations of claims, at trial, on
appeal, in bankruptcy proceedings or otherwise), litigation and court costs,
taxes, amounts paid in settlement, amounts paid to discharge judgments, causes
of action, suits, claims, demands and judgments of any nature, joint or several,
by or on behalf of any person directly or indirectly resulting from, arising out
of or related to:

      

      (i)           the
transactions provided for in the Bond Documents or otherwise in connection with
the Project site, the Bonds, the loan made hereunder or the execution and
delivery or amendment of any other document entered into in connection with the
transactions provided for in the Bond Documents;

      

      (ii)          the
approval of the financing for the Project site or the making of the loan
hereunder;

      

      (iii)         the
issuance and sale of the Bonds or any certifications or representations made by
any person other than the party seeking indemnification;

      

      (iv)        any
and all claims arising in connection with the interpretation, performance,
enforcement, breach, default or amendment of the Indenture, the Bonds, and the
Bond Documents or any other documents relating to the Project site or the Bonds
or in connection with any federal or state tax audit or investigation, any
securities investigation or enforcement action or any questions or other matters
arising under such documents;

      

      (v)         the
carrying out by the Company of any of the transactions provided for in the Bond
Documents;

      

      (vi)        any
and all claims arising in connection with the issuance and sale of any Bonds or
any certifications or representations made by any person other than the
Indemnified Party seeking indemnification, including, without limitation, any
statement or information made by the Company with respect to the Company or the
Project site in any offering document or materials regarding the Bonds, the
Project site or the Company or any other certificate executed by the Company
which, at the time made, is misleading, untrue or incorrect in any material
respect and any untrue statement or alleged untrue statement of a material fact
relating to the Company or the Project site contained in any offering material
relating to the sale of the Bonds, as from time to time amended or supplemented,
or arising out of or based upon the omission or alleged omission to state in
such offering material a material fact relating to the Company or the Project
site necessary in order to make the statements in such offering material not
misleading, or failure to properly register or otherwise qualify the sale of the
Bonds or failure to comply with any licensing or other law or regulation which
would affect the manner in which or to whom the Bonds could be sold and the
carrying out by the Company of any of the transactions contemplated by the Bond
Documents;

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      

      (viii)       the
Company's failure to comply with any requirement of this Agreement;

      

      (ix)         any
act or omission of the Company or any of its agents, servants, employees or
licensees in connection with the loan made hereunder or the Project site,
including violation of any law, ordinance, court order or regulation affecting
the Project site or any part of it or the ownership, occupancy or use of
it;

      

      (x)          any
damage or injury, actual or claimed, of whatsoever kind, cause or character, to
property (including loss of use of property) or persons, occurring or allegedly
occurring in, on or about the Project site or arising out of any action or
inaction of the Company, whether or not related to the Project site, or
resulting from or in any way connected with specified events, including the
design, construction, installation, operation, use, occupancy, maintenance,
ownership or management of the Project site, the issuance of the Bonds or
otherwise in connection with transactions contemplated or otherwise in
connection with the Project site or the execution or amendment of any document
relating to the Project site or the Bonds;

      

      (xi)         any
violation of any environmental law, rule or regulation with respect to, or the
release of any toxic substance from, the Project site;

      

      (xii)        taxes,
charges, assessments, fees, excises and levies imposed upon Issuer by reason of
its interest in, or measured by amounts payable under, or the payment of which
is a condition to the enforceability of this Agreement or any other Bond
Document, and any and all stamp taxes and other taxes required to be paid hereon
or thereon; and

      

      (xiii)       any
and all claims arising in connection with the operation of the Project site, or
the conditions, environmental or otherwise, occupancy, use, possession, conduct
or management of work done in or about, or from the planning, design,
acquisition, construction or equipping of, the Project site or any part of it,
including, but not limited to, claims arising pursuant to the Americans with
Disabilities Act.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      
        (c)           Scope of
Indemnification.  This indemnification shall not be affected by
any investigation by or on behalf of Issuer or by any information Issuer may
have or obtain with respect thereof.  This indemnification shall
extend to and include, without limitation, all reasonable costs, counsel fees,
expenses or liabilities incurred in connection with any such claim or proceeding
brought with respect to such claim to the fullest extent permitted by
law.

         

      

      Section
8.8          Compliance with
Laws.  The
Company agrees to comply with all applicable zoning, planning, building,
environmental and other regulations of the governmental authorities having
jurisdiction over the Project during the Company's operation of the
Project.

       

      Section 8.9          Non-Arbitrage
Covenant.

       

      (a)           The
Company and the Issuer covenant that they will (i) not take, or fail to
take, any action or make any investment or use of the proceeds of the Bonds that
would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148
of the Code and (ii) comply with the requirements of Section 148 of the
Code.

       

      (b)           In
the event that all of the proceeds of the Bonds, including the investment
proceeds thereof, are not expended as set forth in the arbitrage exemptions in
the Tax Certificate, or if for any other reason a rebate is payable to the
United States pursuant to Section 148 of the Code, the Company shall calculate,
or cause to be calculated, the Rebate Amount.  The Company agrees to
pay the amount so calculated, together with supporting documentation, to the
Trustee so as to permit the Trustee to pay such rebate to the United States at
the times required by the Code.  The amount paid by the Company to the
Trustee shall be deposited into the Rebate Fund.  The Company shall
maintain or cause to be maintained records of the determinations of the rebate,
if any, pursuant to this Section 8.9(b) until six (6) years after the retirement
of the Bonds.  This Section 8.9(b) shall be construed in accordance
with Section 148(f) of the Code, including, without limitation, any applicable
tax regulations promulgated under the Code.  Nothing contained in this
Agreement or in the Indenture shall be interpreted or construed to require the
Issuer to pay any applicable rebate, such obligation being the sole
responsibility of the Company.  The Company shall pay all fees, costs
and expenses associated with calculation of the Rebate Amount and upon request
from the Issuer provide the Issuer with a copy of such calculation.

       

      Section
8.10       Notice of Determination of
Taxability.  Promptly
after the Company first becomes aware of any Determination of Taxability or an
event that could trigger a Determination of Taxability, the Company shall give
written notice thereof to the Issuer, the Remarketing Agent and the
Trustee.

       

      Section
8.11       No Purchase of Bonds by
Company or Issuer.  During
the time a Credit Facility is in effect none of the Company, the Issuer or any
affiliates of any of them shall purchase any of the Bonds from the Remarketing
Agent except under the circumstances under which the Remarketing Agent may
remarket Bonds to the Company or the Issuer as provided in Section 2.7(d)
of the Indenture.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      Section
8.12       Maintenance of Corporate
Existence.  So
long as a Credit Facility is in effect the Company agrees that it will maintain
its corporate existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another Person or permit one or more other Persons to consolidate with or merge
into it, except either with the consent of the Credit Issuer or as provided in
the Credit Agreement; if a Credit Facility is not in effect, the Company agrees
that it will continue to be a limited liability company either organized under
the laws of or duly qualified to do business as a foreign corporation in the
State, will maintain its corporate existence, will not dissolve or otherwise
dispose of all or substantially all of its assets and will not consolidate with
or merge into another Person or permit one or more Persons to consolidate with
or merge into it; provided, that the Company may, without violating the
foregoing, consolidate with or merge into another Person, or permit one or more
Persons to consolidate with or merge into it, or transfer all or substantially
all of its assets to another such Person (and thereafter dissolve or not
dissolve, as the Company may elect) if the Person surviving such merger or
resulting from such consolidation, or the Person to which all or substantially
all of the assets of the Company are transferred, as the case may
be:

       

      
        	
                 
      

              	
                (i)

              	
                is
      a corporation, limited liability company or other business entity
      organized under the laws of the United States of America, or any state,
      district or territory thereof, and qualified to do business in the
      State;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                shall
      expressly in writing assume all of the obligations of the Company
      contained in this Agreement;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                has
      a consolidated tangible net worth (after giving effect to such
      consolidation, merger or transfer) of not less than the consolidated
      tangible net worth of the Company and its consolidated subsidiaries
      immediately prior to such consolidation, merger or transfer;
      and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                provided
      that no Event of Default has occurred and is continuing
      hereunder.

              

      

       

      The term
"consolidated tangible net worth," as used in this Section, shall mean the
difference obtained by subtracting total consolidated liabilities (not including
as a liability any capital or surplus item) from total consolidated tangible
assets of the Company and all of its consolidated subsidiaries, computed in
accordance with generally accepted accounting principles.  Prior to
any such consolidation, merger or transfer the Trustee shall be furnished a
certificate from the chief financial officer of the Company or his/her deputy
stating that in the opinion of such officer none of the covenants in this
Agreement will be violated as a result of said consolidation, merger or
transfer.

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      Section
8.13       Company Approval of
Indenture. The
Company understands that the Issuer will, pursuant to the Indenture and as
security for the payment of the principal of, premium, if any, and the interest
on the Bonds, assign and pledge to the Trustee, and create a security interest
in favor of the Trustee in certain of its rights, title and interest in and to
this Agreement (including all payments other than Issuer fees hereunder)
reserving, however, the Reserved Rights; and the Company hereby agrees and
consents to such assignment and pledge.  The Company acknowledges that
it has received a copy of the Indenture for its examination and
review.  By its execution of this Agreement, the Company acknowledges
that it has approved, has agreed to and is bound by the provisions of the
Indenture.  The Company agrees that the Trustee shall be entitled to
enforce and to benefit from the terms and conditions of this Agreement that
relate to it notwithstanding the fact that it is not a signatory
hereto.

       

      Section
8.14       Duties and
Obligations.  The
Company covenants and agrees that it will fully and faithfully perform all the
duties and obligations that the Issuer has covenanted and agreed in the
Indenture to cause the Company to perform and any duties and obligations that
the Company is required in the Indenture to perform.  The foregoing
shall not apply to any duty or undertaking of the Issuer that by its nature
cannot be delegated or assigned.

       

      Section
8.15       Notice of Certain
Acquisitions of Control.  The
Company hereby covenants to provide or cause to be provided written notice to
the Trustee, the Remarketing Agent, and the Holders thirty (30) days prior,
where reasonable, and not more than thirty (30) days subsequent to the
consummation of any transaction that would result in the Company controlling or
being controlled by the Credit Issuer.  The Company acknowledges that
the foregoing sentence supersedes any exemptions from the continuing disclosure
requirement pursuant to Rule 15c2-12(b)(5) of the Securities Exchange Act of
1934.

       

      ARTICLE
IX

       

      ASSIGNMENT,
LEASE AND SALE

       

      Section
9.1         Restrictions on Transfer of
Issuer's Rights.  The
Issuer agrees that, except for the assignment of certain of its rights, title
and interests under this Agreement to the Trustee pursuant to the Indenture, it
will not during the term of this Agreement sell, assign, transfer or convey its
rights, title and interests in this Agreement except as provided in Section
9.2.

       

      Section
9.2         Assignment by the
Issuer.  It
is understood, agreed and acknowledged that the Issuer, as security for payment
of the principal of and premium, if any, and interest on the Bonds, will assign
to the Trustee pursuant to the Indenture, among other things, certain of its
rights, title and interests in and to this Agreement and the Note (reserving its
rights, however, pursuant to sections of this Agreement providing that notices,
reports, consent and approval rights, Issuer fees and other statements be given
to the Issuer and that consents be obtained from the Issuer and also reserving
its rights to reimbursement and payment of costs and expenses under Sections
5.2(b) and (c), its right of access under Section 8.1, and its rights to
indemnification and non-liability under Sections 8.6, 8.7, 12.6 and 12.7, all of
this Agreement).  The Company consents to such assignment and agrees
that the Trustee shall be entitled to enforce this Agreement directly against
the Company as a third party beneficiary hereof.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      Section
9.3          Assignment of Agreement by
the Company or Lease or Sale of Project.  With
the prior written consent of the Issuer, the Trustee and the Credit Issuer, if
any, (a) all or a portion of the rights, duties and obligations of the
Company under this Agreement may be assigned by the Company and (b) the
Project may be leased or sold as a whole or in part by the
Company.  Upon the assignment of all of the Company's rights, duties
and obligations under this Agreement or the lease or sale of the Project as a
whole, the Trustee may execute a release of the Company from its obligations
hereunder and under the Note and all references to the "Company" in this
Agreement, the Note, the Indenture and the Bonds shall mean the assignee, lessee
or purchaser if (i) such assignee, lessee or purchaser assumes the
Company's obligations hereunder and under the Note in writing, (ii) the
release of the Company from its obligations hereunder and under the Note will
not cause interest on the Bonds to be includable in the gross income of the
Holders thereof for purposes of federal income taxation, and (iii) the
Credit Issuer consents in writing to such release (or if no Credit Facility is
in effect at the time of such assignment, lease or sale, the Holders of a
majority in aggregate principal amount of the Bonds then Outstanding consent in
writing to such release).  Prior to any assignment, lease or sale
pursuant to this Section, the Company shall have caused to be delivered to the
Issuer, the Trustee and the Credit Issuer, if any, an opinion of Bond Counsel,
satisfactory in form and substance to each of them, to the effect that such
assignment, lease or sale (and release, if applicable) will not cause interest
on the Bonds to be includable in the gross income of the Holders thereof for
purposes of federal income taxation.

       

      Section
9.4         Assumption of Agreement by
Purchaser of Project Upon Foreclosure.  With
the prior written consent of the Issuer and the Trustee, any Person who
purchases the Project upon foreclosure by the Credit Issuer may assume the
Company's rights, duties and obligations hereunder and under the Note by
delivering to the Issuer and the Trustee, (a) a written assumption of such
rights, duties and obligations satisfactory in form and substance to the Issuer
and the Trustee, and (b) an opinion of Bond Counsel, satisfactory in form
and substance to the Issuer and the Trustee, to the effect that such assumption
will not cause interest on the Bonds to be includable in the gross income of the
Holders thereof for purposes of federal income taxation.  From and
after the date of such assumption, the Company shall be deemed to be released
from its rights, duties and obligations hereunder and under the Note and all
references to the "Company" in this Agreement, the Note, the Indenture and the
Bonds shall mean the Person who purchased the Project upon
foreclosure.

       

      ARTICLE
X

       

      EVENTS
OF DEFAULT AND REMEDIES

       

      Section
10.1        Events of Default
Defined.  The
term "Event of Default" shall mean any one or more of the following
events:

       

      (a)           Failure
by the Company to make any payments required to be paid pursuant to Section
5.2(a) or to pay the Purchase Price of Bonds as required pursuant to Section
5.2(d) herein;

       

      (b)           The
occurrence of an Event of Default under the Indenture;

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

      (c)           Any
representation by or on behalf of the Company contained in this Agreement or in
any instrument furnished in compliance with or in reference to this Agreement or
the Indenture proves false or misleading in any material respect as of the date
of the making or furnishing thereof;

       

      (d)           Failure
by the Company to observe or perform any of its other covenants, conditions,
payments or agreements under this Agreement for a period of 30 days after
written notice, specifying such failure and requesting that it be remedied, is
given to the Company by the Issuer or the Trustee;

       

      (e)           The
Company shall (i) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, assignee, sequestrator, trustee,
liquidator or similar official of the Company or of all or a substantial part of
its property, (ii) admit in writing its inability, or be generally unable,
to pay its debts as such debts become due, (iii) make a general assignment
for the benefit of its creditors, (iv) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (v) file a petition
seeking to take advantage of any other federal or state law relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up or composition
or adjustment of debts, (vi) fail to controvert in a timely or appropriate
manner, or acquiesce in writing to, any petition filed against the Company in an
involuntary case under the Bankruptcy Code, or (vii) take any corporate
action for the purpose of effecting any of the foregoing; or

       

      (f)           A
proceeding or case shall be commenced, without the application or consent of the
Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, arrangement, dissolution, winding-up or composition
or adjustment of debts of the Company, (ii) the appointment of a trustee,
receiver, custodian, assignee, sequestrator, liquidator or similar official of
the Company or of all or any substantial part of its assets, or
(iii) similar relief in respect of the Company under any law relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up or composition
or adjustment of debts and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 90 days from the
commencement of such proceeding or case or the date of such order, judgment or
decree, or an order for relief against the Company shall be entered in an
involuntary case under the Bankruptcy Code.

       

      Section
10.2       Remedies on
Default.  Upon
the occurrence of an Event of Default under this Agreement, the Trustee, as
assignee of the Issuer, but only if acceleration of the principal amount of the
Bonds has been declared pursuant to Section 6.2 of the Indenture, shall, subject
to the Trustee's rights and protections under the Indenture, take any one or
more of the following remedial steps:

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      
         

        (a)           By
written notice declare all payments hereunder and under the Note immediately due
and payable, whereupon the same shall become immediately due and payable without
presentment, demand, protest or any other notice whatsoever, all of which are
hereby expressly waived by the Company.

         

      

      (b)           Take
whatever other action at law or in equity may appear necessary or desirable to
collect the amounts payable pursuant hereto and under the Note then due and
thereafter to become due or to enforce the performance and observance of any
obligation, agreement or covenant of the Company under this Agreement, including
the making of any drawing under the Credit Facility.

       

      In the
enforcement of the remedies provided in this Section 10.2, the Issuer and the
Trustee may treat all reasonable expenses of enforcement, including, without
limitation, legal, accounting and advertising fees and expenses, as additional
amounts payable by the Company then due and owing.

       

      Section
10.3       Application of Amounts
Realized in Enforcement of Remedies.  Any
amounts collected pursuant to action taken under Section 10.2 shall be paid to
the Trustee and applied in accordance with Section 6.7 of the
Indenture.

       

      Section
10.4       No Remedy
Exclusive.  No
remedy herein conferred upon or reserved to the Issuer 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 now or hereafter existing at law or in equity or by
statute.  No delay or omission to exercise any right or power accruing
upon an Event of Default under this Agreement shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed
expedient.

       

      Section
10.5       Agreement to Pay Attorneys'
Fees and Expenses.  Upon
the occurrence of an Event of Default under this Agreement, if the Issuer or the
Trustee employs attorneys or incurs other expenses for the collection of amounts
payable hereunder or for the enforcement of the performance or observance of any
covenants or agreements on the part of the Company herein contained, whether or
not suit is commenced, the Company agrees that it will on demand therefor pay to
the Issuer or the Trustee or any combination thereof, as the case may be, the
reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Issuer or the Trustee.

       

      Section
10.6       Issuer and Company to Give
Notice of Default.  The
Issuer and the Company severally covenant that they will, at the expense of the
Company, promptly give to the Trustee, the Remarketing Agent, the Paying Agent
and the Credit Issuer, and  to each other, written notice of any Event
of Default under this Agreement of which they shall have actual knowledge or
written notice, but the Issuer shall not be liable for failing to give such
notice.

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

      ARTICLE
XI

       

      PREPAYMENTS;
PURCHASE OF BONDS

       

      Section 11.1       Optional
Prepayments.

       

      (a)           The
Company shall have, and is hereby granted, the option to prepay the unpaid
principal amount hereunder and under the Note in whole, together with interest
thereon to the date of redemption of the Bonds, at any time by taking, or
causing the Issuer to take, the actions required by the Indenture for the
redemption of all Bonds then outstanding, upon the occurrence of any of the
events set forth in Section 2.18(b) of the Indenture.

       

      (b)           The
Company shall have, and is hereby granted, the option to prepay all or any
portion of the unpaid balance hereunder and under the Note, together with
interest thereon to the date of redemption of the Bonds, at any time by taking,
or causing the Issuer to take, the actions required by the Indenture (i) to
discharge the lien thereof through the redemption, or provision for payment of
redemption of all Bonds then outstanding or (ii) to effect the redemption,
or provision for payment or redemption, of less than all Bonds then outstanding,
pursuant to Section 2.18(a) of the Indenture.

       

      (c)           To
make a prepayment pursuant to this Section 11.1, the Company shall give written
notice not less than 45 days from the date any Bonds are to be redeemed from
such prepayment to the Issuer, the Trustee and the Registrar, which shall
specify therein the principal amount to be prepaid and the date or dates on
which the prepayment is to occur.  All such prepayments shall be in
the amount of the unpaid amount hereunder and under the Note if made pursuant to
Section 11.1(a) or in the amount of an Authorized Denomination if made pursuant
to Section 11.1(b) and the Company shall furnish additional funds, if necessary,
to make such prepayments in such amounts.  In addition, the Company
shall make such additional payments as shall be necessary to pay any redemption
premium on the Bonds in connection with such redemption.

       

      Section
11.2       Mandatory Prepayment Upon a
Determination of Taxability.  In
the event of a Determination of Taxability, the Company shall forthwith, and in
any event within 45 days of any such Determination of Taxability, pay the entire
unpaid principal balance hereunder and under the Note plus accrued interest
thereon to the date of payment, provided, that, if the Company delivers to the
Trustee the opinion of Bond Counsel described in Section 2.18(c) of the
Indenture, which opinion states that interest on the Bonds will not be
includable in the gross income of the owners thereof if less than all of the
Bonds are redeemed, then the Company shall prepay the unpaid balance hereunder
and under the Note in the amount necessary to redeem the amount of Bonds stated
in such opinion.

       

      The
Company hereby agrees to give prompt written notice to the Issuer and the
Trustee of (a) the occurrence of an event that gives or may give rise to a
Determination of Taxability or (b) its receipt of any oral or written
advice from the Internal Revenue Service that an event giving rise to a
Determination of Taxability shall have occurred.

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      Section
11.3       Optional Purchase of
Bonds.  Subject
to the terms of the Indenture regarding the use of Eligible Funds, the Company
may at any time, and from time to time, furnish moneys to the Remarketing Agent
accompanied by a notice directing such moneys to be applied to the purchase of
Bonds delivered for purchase pursuant to the terms thereof, which Bonds shall be
delivered to the Trustee for cancellation or for registration of transfer to the
Company in accordance with Section 2.8 of the Indenture.  The Company
shall deliver to the Credit Issuer a copy of any such notice.

       

      Section
11.4       Relative
Priorities.  The
obligations of the Company under Section 11.2 shall be and remain superior to
the rights, obligations and options of the Company under Section
11.1.

       

      Section
11.5       Prepayment to Include Fees
Expenses and Costs.  Any
prepayment under this Article shall also include any expenses of prepayment, as
well as all fees, expenses and costs provided for herein.

       

      Section 11.6       Purchase
of Bonds.

       

      (a)           In
consideration of the issuance of the Bonds by the Issuer, but for the benefit of
the Holders, the Company has agreed, and does hereby covenant, to cause the
necessary arrangements to be made and to be thereafter continued whereby the
Holders from time to time may deliver, or may be required to deliver Bonds for
purchase and whereby such Bonds shall be so purchased.  In furtherance
of the foregoing covenant of the Company, the Issuer, at the request of the
Company, has set forth in the Bonds the terms and conditions relating to the
delivery of Bonds by the Holders thereof for purchase, has set forth in the
Indenture the duties and responsibilities of the Remarketing Agent with respect
to the purchase and remarketing of Bonds and has therein provided for the
appointment of the Remarketing Agent.  The Company hereby authorizes
and directs the Remarketing Agent to purchase, offer, sell and deliver Bonds in
accordance with the provisions of the Indenture.

       

      Without
limiting the generality of the foregoing covenant of the Company, and in
consideration of the Issuer's having set forth in the Bonds and the Indenture
the aforesaid provisions, the Company covenants, for the benefit of the Holders,
to provide for arrangements to pay, or cause to be paid, such amounts as shall
be necessary to effect the payment of the Purchase Price of Bonds delivered for
purchase, all as more particularly described in the Indenture.

       

      (b)           Notwithstanding
the provisions of Section 11.6(a), the obligations of the Company under Section
11.6(a) with respect to the purchase of Bonds shall be terminated on the date
the Bonds begin to bear interest at the Fixed Rate in accordance with the
Indenture.

       

      (c)           In
furtherance of the obligations of the Company under Section 11.6(a), the Company
shall provide for the payment of its obligations under such Section 11.6(a) by
the delivery of the Original Credit Facility simultaneously with the original
delivery of the Bonds.  In order to implement such undertaking of the
Company, the Issuer, at the direction of the Company, has set forth in the
Indenture the terms and conditions relating to drawings under the Credit
Facility to provide moneys for the purchase of Bonds.  The Company
hereby authorizes and directs the Trustee to draw moneys under the Credit
Facility in accordance with the provisions of the Indenture to the extent
necessary to provide moneys payable under Section 2.7 of the Indenture if and
when due.

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      (d)           The
Issuer shall have no obligation or responsibility, financial or otherwise, with
respect to the purchase of Bonds or the making or continuation of arrangements
therefor other than as expressly set forth in Section 11.6(a), except that the
Issuer shall generally cooperate with the Company and the Remarketing Agent as
contemplated in Section 2.7 of the Indenture.

       

      ARTICLE
XII

       

      MISCELLANEOUS

       

      Section
12.1       Amounts Remaining in
Funds.  Subject
to the provisions of Article V of the Indenture and as provided in Article IV of
the Indenture, it is agreed by the parties hereto that amounts remaining in the
Bond Fund, Project Fund or Bond Purchase Fund upon expiration or earlier
termination of this Agreement, as provided in this Agreement, after payment in
full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Indenture) and all other amounts owing
under the Indenture, shall be paid to the Credit Issuer (if a Credit Facility is
in effect and there is any amount then owing by the Company to the Credit
Issuer) and otherwise shall belong to and be paid to the Company by the
Trustee.

       

      Section
12.2       No Implied
Waiver.  In
the event any provision of this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
thereunder or hereunder.

       

      Section
12.3       Issuer
Representative.  Whenever
under the provisions of this Agreement the approval of the Issuer is required or
the Issuer is required to take some action at the request of the Company, such
approval shall be made or such action shall be taken by the Issuer
Representative; and the Company and the Trustee shall be authorized to rely on
any such approval or action.

       

      Section
12.4       Company
Representative.  Whenever
under the provisions of this Agreement the approval of the Company is required
or the Company is required to take some action at the request of the Issuer,
such approval shall be made or such action shall be taken by the Company
Representative; and the Issuer, the Remarketing Agent, the Paying Agent and the
Trustee shall be authorized to rely on any such approval or
action.

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      
         

        Section
12.5       Notices.  Notice
under this Agreement shall be given in accordance with Section 9.4 of the
Indenture.

         

      

      Section
12.6       Issuer, Governing Body,
Members, Commissioners, Directors, Officers, Agents, Attorneys and Employees of
Issuer and Governing Body Not Liable.  To
the extent permitted by law, no recourse shall be had for the enforcement of any
obligation, promise or agreement of the Issuer contained herein or in the other
Bond Documents to which the Issuer is a party or for any claim based hereon or
thereon or otherwise in respect hereof or thereof against the Issuer, the
Governing Body, any member, commissioner, director, officer, agent, attorney or
employee, as such, in his/her individual capacity, past, present or future, of
the Issuer, the Governing Body, or of any successor entity, either directly or
through the Issuer, the Governing Body or any successor entity, whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise.  No personal
liability whatsoever shall attach to, or be incurred by, any member,
commissioner, director, officer, agent, attorney or employee, as such, in
his/her individual capacity, past, present or future, of the Issuer, the
Governing Body, or of any successor entity, either directly or through the
Issuer, the Governing Body or any successor entity, under or by reason of any of
the obligations, promises or agreements entered into between the Issuer and the
Company, whether herein contained or to be implied herefrom as being
supplemental hereto; and all personal liability of that character against every
such member, commissioner, director, officer, agent, attorney or employee is, by
the execution of this Agreement and as a condition of, and as part of the
consideration for, the execution of this Agreement, expressly waived and
released.

       

      Notwithstanding
any other provision of this Agreement, the Issuer shall not be liable to the
Company or the Trustee or any other person for any failure of the Issuer to take
action under this Agreement unless the Issuer (a) is requested in writing
by an appropriate person to take such action, (b) is assured of payment of,
or reimbursement for, any reasonable expenses in such action, and (c) is
afforded, under the existing circumstances, a reasonable period to take such
action.  In acting under this Agreement, or in refraining from acting
under this Agreement, the Issuer may conclusively rely on the advice of its
counsel.

       

      Section
12.7       No Liability of Issuer; No
Charge Against Issuer's Credit.  Any
obligation of the Issuer created by, arising out of, or entered into in
contemplation of this Agreement, including the Bonds, shall not impose a debt or
pecuniary liability upon the Issuer, the State or any political subdivision
thereof or constitute a charge upon the general credit or taxing powers of any
of the foregoing.  Any such obligation shall be payable solely out of
the revenues and any other moneys derived hereunder and under the Indenture and
the Credit Facility, except (as provided in the Indenture and in this Agreement)
to the extent it shall be paid out of moneys attributable to the proceeds of the
Bonds or the income from the temporary investment thereof.

       

      The
principal of, premium, if any, and interest on the Bonds shall be payable solely
from the funds pledged for their payment in accordance with the Indenture and
from payments made pursuant to the Credit Facility.

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      
         

        Section
12.8       If Performance Date Not a
Business Day.  If
the last date for performance of any act or the exercising of any right, as
provided in this Agreement, shall not be a Business Day, such payment may be
made or act performed or right exercised on the next succeeding Business
Day.

         

      

      Section
12.9       Binding
Effect.  This
Agreement shall inure to the benefit of and shall be binding upon the Issuer,
the Company and their respective successors and assigns.  No
assignment of this Agreement by the Company shall relieve the Company of its
obligations hereunder, except in accordance with Sections 9.3 and
9.4.

       

      Section
12.10     Severability.  In
the event any provision of this Agreement shall be held invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof.

       

      Section
12.11     Amendments, Changes and
Modifications.  Subsequent
to the issuance of the Bonds and prior to payment of the Bonds, this Agreement
may not be effectively amended, changed, modified, altered or terminated except
in accordance with the Indenture.

       

      Section
12.12     Execution in
Counterparts.  This
Agreement may be executed in several counterparts, each of which, taken
together, shall be an original and all of which shall constitute but one and the
same instrument.

       

      Section
12.13     Applicable
Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State without regard to conflict of law principles.

       

      (Remainder
of this page intentionally left blank)

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the Issuer
and the Company have caused this Agreement to be executed in their respective
legal names and their respective corporate seals to be hereunto affixed, and the
signatures of duly authorized persons to be attested, all as of the date first
above written.

      

      
        
          
            	 
      	
                    PINELLAS
      COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

                  
	
                    (SEAL)

                  	 
      
	 
      	 
      
	 
      	
                    By:

                  	
                    
                      /s/
      Robert B. Stewart

                    

                  
	 
      	
                    Name:

                  	
                    Robert
      B. Stewart

                  
	 
      	
                    Title:

                  	
                    Chairman

                  

          

        

      

      ATTEST:

      

      
        
          	
                  By:

                	
                  
                    /s/
      Mike Meidel

                  

                
	
                  Name:

                	
                  Mike
      Meidel

                
	
                  Title:

                	
                  Executive
      Director

                

        

      

      

      
        
          
            
              	
                      BOVIE
      MEDICAL CORPORATION

                    
	 
      	 
      
	 
      	 
      
	
                      By:

                    	
                      
                        /s/
      Moshe Citronowicz

                      

                    
	
                      Name:

                    	
                      Moshe
      Citronowicz

                    
	
                      Title:

                    	
                      Chief
      Operations Officer & Vice
President

                    

            

          

        

      

      ATTEST:

      

      
        
          
            	
                    By:

                  	/s/
      Gary
      Pickett
	
                    Name:

                  	
                    Gary
      Pickett

                  
	
                    Title:

                  	
                    Chief
      Financial Officer

                  

          

        

      

       

      [Signature
Page to Loan Agreement]

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      EXHIBIT
A

       

      DESCRIPTION
OF THE PROJECT

       

      Finance the costs of acquiring,
renovating and equipping an approximate 60,000 square foot manufacturing
facility to be used in the manufacturing of medical devices and accessories,
located at 5115 Ulmerton Road, Largo.  The Project will be owned and
operated by the Company.

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

      EXHIBIT
B

      

      

      
        
          
            	
                    $__________________

                  	
                    Requisition
      No.  _____________

                  
	 
      	
                    Bond
      CUSIP
No.  ____________

                  

          

        

      

      

      REQUISITION
AND CERTIFICATE

      

      ______________,
2008

      

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

      Jacksonville,
Florida

      Attention:  Corporate
Trust Department

      

      Ladies
and Gentlemen:

       

      On behalf
of Bovie Medical Corporation (the "Company"), I hereby requisition from the
funds representing the proceeds of the sale of the Industrial Development
Revenue Bonds (Bovie Medical Corporation Project), Series 2008, issued by the
Pinellas County Industrial Development Authority (doing business as the Pinellas
County Economic Development Authority) (the "Issuer"), and dated November 13,
2008 (the "Bonds"), which funds are held by you in the Pinellas County
Industrial Development Authority Industrial Development Revenue Bonds (Bovie
Medical Corporation Project), Series 2008 Project Fund in accordance with the
Indenture of Trust, dated as of November 1, 2008 (the "Indenture"), from the
Issuer to you the sum of $___________ to be paid to the person or persons
indicated below:

       

      (1)           $__________________
for _____________________________________
_______________________________________________________________________________________
payable to _________________________________, and

       

      (2)           $__________________
for _____________________________________
____________________________________________________________________________________
payable to ______________________________________.

      
        
           

        

        
          B-1

          
            

          

        

        
           

        

      

      I hereby
certify that (a) the obligation to make such payment was incurred by the
Company in connection with the Acquisition (as defined in the Loan Agreement, of
even date with the Indenture, between the Issuer and the Company, hereinafter
referred to as the "Agreement") of the Project (referred to in the Agreement),
is a proper charge against the Costs of the Project (as defined in the
Agreement), and has not been the basis for any prior requisition which has been
paid; (b) neither the Company nor, to the best of the Company's knowledge,
the Issuer has received written notice of any lien, right to lien or attachment
upon, or claim affecting the right of such payee to receive payment of, any of
the money payable under this requisition to any of the persons, firms or
corporations named herein, or if any notice of any such lien, attachment or
claim has been received such lien, attachment or claim has been released or
discharged or will be released or discharged upon payment of this requisition;
(c) this requisition contains no items representing payment on account of
any retained percentages which the Issuer or the Company is entitled to retain
at this date; (d) the payment of this requisition will not result in less
than substantially all (95% or more) of the proceeds of the Bonds to be expended
under this requisition and under all prior requisitions having been used for the
acquisition and installation of real property or property of a character subject
to the allowance for depreciation under the Internal Revenue Code of 1986, as
amended; and (e) no "Event of Default" (as defined in the Agreement), or
event which after notice or lapse of time or both would constitute such an
"Event of Default" has occurred and not been waived.

       

      The
following paragraph is to be completed when any requisition and certificate
includes any item for payment for labor or to contractors, builders or
materialmen.

       

      I hereby
certify that insofar as the amount covered by the above requisition includes
payments to be made for labor or to contractors, builders or materialmen,
including materials or supplies, in connection with the Acquisition of the
Project, (i) all obligations to make such payment have been properly
incurred, (ii) any such labor was actually performed and any such materials
or supplies were actually furnished or installed in or about the Project and are
a proper charge against the Costs of the Project, and (iii) such materials
or supplies either are not subject to any lien or security interest or, if the
same are so subject, such lien or security interest will be released or
discharged upon payment of this requisition.

      

      
        
          
            	
                     

                  
	
                    Company
      Representative

                  

          

        

      

      

      Approved:

       

      RBC BANK
(USA), as Credit Issuer

      

      
        
          
            
              
                	
                        By:

                      	
                         

                      
	
                        Name:

                      	
                         

                      
	
                        Title:

                      	
                         

                      

              

            

          

        

      

      
        
           

        

        
          B-2

          
            

          

        

        
           

        

      

      EXHIBIT
C

      

      AFTER THE
ENDORSEMENT AS HEREON PROVIDED AND PLEDGE OF THIS NOTE, THIS NOTE MAY NOT BE
ASSIGNED, PLEDGED, ENDORSED OR OTHERWISE TRANSFERRED EXCEPT TO AN ASSIGNEE OR
SUCCESSOR OF THE TRUSTEE IN ACCORDANCE WITH THE INDENTURE, BOTH REFERRED TO
HEREIN.

       

      
        	
                $4,000,000

              	
                November
      13, 2008

              

      

      

      PROMISSORY
NOTE

      

      FOR VALUE
RECEIVED, BOVIE MEDICAL CORPORATION, a Delaware for-profit company duly formed
and existing under the laws of the State of Florida (the "Company"), by this
promissory note hereby promises to pay to the order of the Pinellas County
Industrial Development Authority (the "Issuer") the principal sum of Four
Million Dollars ($4,000,000), together with interest on the unpaid principal
amount hereof, from the Issue Date (as defined in the Indenture referenced
below) until paid in full, at a rate per annum equal to the rate of interest
borne by the Bonds (as hereinafter defined), premium, if any, on the Bonds and
Purchase Price (as defined in the Indenture).  All such payments of
principal, interest, premium and Purchase Price shall be made in funds which
shall be immediately available on the due date of such payments and in lawful
money of the United States of America at the principal corporate trust office of
The Bank of New York Mellon Trust Company, N.A., or its successor as trustee
under the Indenture.

       

      The
principal amount, interest, premium, if any, and Purchase Price shall be payable
on the dates and in the amount, that principal of, interest on the Bonds,
premium, if any, and Purchase Price are payable, subject to prepayment as
hereinafter provided.

       

      The
Company shall receive a credit for the amounts due and payable hereunder to the
extent that payments are made by the Credit Issuer (as defined in the Indenture)
pursuant to drawings under the Credit Facility (as defined in the Indenture)
and, with respect to Purchase Price, to the extent that remarketing proceeds are
available therefor as provided in the Indenture.

       

      This
promissory note is the "Note" referred to in the Loan Agreement, dated as of
October 1, 2008 (the "Agreement") between the Company and the Issuer, the terms,
conditions and provisions of which are hereby incorporated by
reference.

      
        
           

        

        
          C-1

          
            

          

        

        
           

        

      

      This Note
and the payments required to be made hereunder are irrevocably assigned, without
recourse, representation or warranty, and pledged to The Bank of New York Mellon
Trust Company, N.A. under the 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, and such payments will be made directly to the
Trustee for the account of the Issuer pursuant to such
assignment.  Such assignment is made as security for the payment of
$4,000,000 in aggregate principal amount of Industrial Development Revenue Bonds
(Bovie Medical Corporation Project), Series 2008 (the "Bonds"), issued by the
Issuer pursuant to the Indenture.  All the terms, conditions and
provisions of the Indenture and the Bonds are hereby incorporated as a part of
this Note.

       

      The
Company may at its option, and may under certain circumstances be required to,
prepay together with accrued interest, all or any part of the amount due on this
Note, as provided in the Agreement.

       

      Presentation,
demand, protest and notice of dishonor are hereby expressly waived by the
Company.

       

      The
Company hereby promises to pay reasonable costs of collection and reasonable
attorneys' fees in case of default on this Note.

       

      This Note
shall be governed by, and construed in accordance with, the laws of the State of
Florida without regard to conflict of law principles.

      

      
        
          
            	
                     

                  	
                    BOVIE
      MEDICAL CORPORATION  

                  
	
                    (SEAL)

                  	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                     
      

                  
	 
      	
                    Name:

                  	
                    Moshe
      Citronowicz

                  
	 
      	
                    Title:

                  	
                    Chief
      Operations Officer & Vice
President

                  

          

        

      

      

      ATTEST:

      

      
        
          
            
              	
                      By:

                    	 
      
	
                      Name:

                    	
                      Gary
      Pickett

                    
	
                      Title:

                    	
                      Chief
      Financial
Officer

                    

            

          

        

      

      
        
           

        

        
          C-2

          
            

          

        

        
           

        

      

      ENDORSEMENT

      

      Pay to
the order of The Bank of New York Mellon Trust Company, N.A., without recourse,
as Trustee under the Indenture referred to in the within mentioned Agreement, as
security for such Bonds issued under such Indenture.  This endorsement
is given without any warranty as to the authority or genuineness of the
signature of the maker of the Note.

      

      
        
          
            	
                    PINELLAS
      COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

                  
	 
      	 
      
	 
      	 
      
	
                    By:

                  	
                     

                  
	
                    Name:

                  	
                    Robert
      B. Stewart

                  
	
                    Title:

                  	
                    Chairman

                  

          

        

      

      

      Dated:  November
13, 2008

      
        
           

        

        
          C-3MEMORANDUM OF
AGREEMENT

    

    This
MEMORANDUM OF AGREEMENT, dated the 13th day of
November, 2008, between PINELLAS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, doing
business as the Pinellas County Economic Development Authority, a public body
corporate and politic created and existing under and by virtue of the laws of
the State of Florida (the "Issuer") and BOVIE MEDICAL CORPORATION, a for-profit
corporation duly organized and existing under the laws of the State of Delaware
(the "Company").

    

    SECTION
1.  The matters of mutual inducement and reliance which resulted in
the execution of this Memorandum of Agreement are as follows:

    

    (a)           The
Issuer is a local agency under the provisions of Chapter 159, Part II, Florida
Statutes and has been created pursuant to Chapter 159, Part III, Florida
Statutes, by the Board of County Commissioners of Pinellas County, Florida (the
"County") as amended (collectively, the "Act"), to provide for the issuance of
and to issue and sell its Industrial Development Revenue Bonds for the purpose
of paying all or any part of the cost of any "project" as defined in the
Act.

    

    (b)           In
order to improve the economic base of Pinellas County (the "County") and to
preserve employment in the State of Florida (the "State"), to promote the
economic growth of the County and the State, to increase purchasing power and
opportunities for gainful employment, and to advance and improve the economic
prosperity and the general welfare of the State and its people, it is desirable
that the Issuer issue and sell its Industrial Development Revenue Bonds (Bovie
Medical Corporation Project), Series 2008, in the aggregate principal amount of
not to exceed $4,500,000 (the "Bonds").

    

    (c)           The
Issuer intends to use the proceeds thereof, to the extent of such proceeds, as
follows: (i) to pay all or any part of the cost of issuance of the Bonds, (ii)
to finance the costs of acquiring, renovating and equipping an approximately
60,000 square foot manufacturing facility to be used in manufacturing of medical
devices and accessories (the "Project"), and (iii) to pay any other "cost" (as
defined in the Act) of the Project.  The Project will be owned and
operated by the Company.

    

    (d)           The
Issuer intends to finance the Project for the Company from proceeds of the sale
of its Bonds, such loan to be payable by the Company in installments sufficient
to pay the principal of, premium (if any), interest and costs due on the Bonds
when and as the same become due.

    

    (e)           The
Company has requested that the Issuer enter into this Memorandum of Agreement
for the purpose of declaring the Issuer's intention to provide financing to pay
a portion of the cost of the Project.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (f)           The
Issuer, by resolution duly passed and adopted, has made certain findings and
determinations and has approved and authorized the execution and delivery of
this Memorandum of Agreement.

    

    (g)           The
Company represents that Bond proceeds will not be used to finance any costs for
the Project incurred prior to sixty (60) days before the date of this Memorandum
of Agreement, except to the extent allowed by federal tax law.

    

    SECTION
2.  The Issuer will cooperate with the Company and its agents in the
Company's efforts to find one or more institutional purchasers for the Bonds,
and if purchase arrangements satisfactory to the Company can be made by the
Company and its agents, the Issuer will authorize the issuance and sale of the
Bonds, and will issue and sell the Bonds to such purchaser or purchasers of the
Bonds as may be designated by the Company all upon such terms and conditions as
shall be approved by the Company and authorized by law; provided, however, the
Issuer will approve the sale of the Bonds solely to institutional investors
which will at no time cause the Bonds to be offered for sale to the public,
unless the Company provides a letter of credit from the RBC Bank (USA) to secure
the Bonds.  The Bonds will be payable solely from the revenues and
proceeds derived by the Issuer from the operation of the Project, and will not
constitute a debt, liability or obligation of the County, the Issuer, or of the
State or of any other political subdivision thereof.  The Issuer shall
not be obligated to pay the same nor interest, premium (if any) or costs thereon
except from the revenues and proceeds pledged therefore, and neither the faith
and credit nor the taxing power of the County or of the State or of any other
political subdivision thereof will be pledged to the payment of the principal
of, premium (if any), interest or costs due pursuant to or under such
Bonds.

    

    From the
date hereof, until the sale of the Bonds, the Company will, within ten (10) days
after its occurrence, notify the Issuer of any material change, whether or not
adverse, in the business, operations or financial condition of the
Company.  In the event the Issuer shall, at any time prior to the sale
of the Bonds, determine in its sole discretion that there has been a material
adverse change in the business, operations or financial condition based upon
financial statements or notices provided by the Company in accordance herewith,
the obligation of the Issuer to issue and sell the Bonds shall, at the option of
the Issuer, be terminated.

    

    SECTION
3.  The Issuer will, at the proper time, and subject in all respects
to the prior advice, consent and approval of the Company, submit applications,
adopt such proceedings and authorize the execution of such documents as may be
necessary and advisable for the authorization, sale and issuance of the Bonds
and the acquisition, improving, constructing and equipping of the Project, all
as shall be authorized by law mutually satisfactory to the Issuer and the
Company.

    

    SECTION
4.  The Bonds issued shall be in such aggregate principal amount,
shall bear interest at such rate or rates, shall be payable at such times and
places, shall be in such forms and denominations, shall be sold in such manner
and at such time or times, shall have such provisions for redemption, shall be
executed, and shall be secured, all as shall be authorized by the Act and all on
terms mutually satisfactory to the Issuer and the Company.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    SECTION
5.  The Issuer will use and apply the proceeds of the issuance and
sale of the Bonds, or cause such proceeds to be used and applied, to the extent
of such proceeds, to pay the cost of the Project, and will loan such Bond
proceeds to the Company for the Project pursuant to a financing agreement
requiring the Company to make payment for the account of the Issuer in
installments sufficient to pay all of the interest, principal, redemption
premiums (if any) and other costs due under and pursuant to the Bonds when and
as the same become due and payable, to operate, repair and maintain the Project
at the Company's own expense, to pay all other costs incurred by the Issuer in
connection with the financing of the renovation, equipping and administration of
the Project which are not paid out of the Bond proceeds or otherwise for so long
as any of the Bonds remain outstanding, and for the conveyance to the Company of
all rights, title and interest of the Issuer in and to the Project when all of
the obligations of the Company under the financing agreement have been performed
and satisfied.

    

    SECTION
6.  The Company hereby agrees to acquire, renovate and equip the
Project, it being understood and agreed that the Company shall provide all
services incident to the equipping of the Project (including, without
limitation, the preparation of plans, specifications and contract documents, the
award of contracts, the inspection and supervision of work performed, the
employment of engineers, architects, building and other contractors) and that
the Company shall pay all costs of the Project, subject to reimbursement by the
Issuer upon the issuance and sale of the Bonds and the use and application of
the proceeds thereof as provided above, the Issuer shall have no responsibility
for the provision of the aforesaid services.  It is expected that the
cost of the Project will not exceed Four Million Five Hundred Thousand Dollars
($4,500,000), including interest during the period of expansion, and legal,
accounting and financing expenses.  The Company agrees that to the
extent that the proceeds derived from the sale of the Bonds are not sufficient
to complete the Project, the Company, as the owner of the Project, will be
responsible for supplying all additional funds which are necessary for the
completion of the Project.  So long as this Memorandum of Agreement is
in effect all risk of loss to the Project will be borne by the
Company.

    

    SECTION
7.  At or prior to the time of issuance and sale of the Bonds, the
Issuer will enter into a trust indenture or other such escrow arrangement to
secure the Bonds, whereby the Issuer's interest in the Project, the financing
agreement with the Company, and all fees, rents, charges, proceeds from the
operation of the Project, and other funds and revenues in respect of the
Project, will be pledged and assigned to a trustee or escrow agent, and held in
trust, for the benefit of the holders, from time to time, of the
Bonds.

    

    SECTION
8.  At or prior to the time of issuance and sale of the Bonds, the
following conditions precedent shall have been satisfied:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (a)           The
Company shall have satisfactorily completed all procedures established by the
Issuer for the review and approval of industrial development revenue bond
issues.

    

    (b)           The
Issuer shall have duly passed and adopted a resolution making all findings
required by law and authorizing the issuance and sale of the Bonds and the
execution and delivery of the financing agreement, the trust agreement and such
other agreements, instruments and documents as may be required to be
specifically authorized.  It is an express condition of this
Memorandum of Agreement that the Bonds be sold only in the manner and to a
purchaser or purchasers approved by the Issuer.

    

    (c)           The
Company shall have authorized the execution, delivery and performance of the
financing agreement, and approved the trust agreement and the issuance and sale
of the Bonds, and authorized or approved such other agreements, instruments and
documents for which specific authorization or approval may be
required.

    

    (d)           The
Company shall have provided a satisfactory opinion of its counsel with respect
to the due authorization, execution and delivery of the financing agreement, and
related agreements, instruments and documents, their legality, validity, binding
effect and enforceability in accordance with their respective terms, and the
absence of any violation of law, rule, regulation, judgment, decree or order of
any court or other agency of government and agreements, or other instruments to
which the Company is a party or by which it or any of its property, is or may be
bound and to such other matters as may be reasonably requested.

    

    (e)           The
Company and the Issuer shall have executed and delivered such non-arbitrage
certificates and representations, as may be required to comply with Section 148
of the Internal Revenue Code of 1986, as amended, or any similar successor
provisions and the regulations, rulings and interpretative court decisions
thereunder.

    

    (f)           Bryant
Miller Olive P.A., as bond counsel, shall have delivered its opinion with
respect to the validity of the Bonds, and to the income tax status of the
interest on the Bonds.

    

    (g)           The
Company shall have provided such other or additional representations,
warranties, covenants, agreements, certificates, financial statements, and other
proofs as may be required by the Issuer or by Bryant Miller Olive P.A., as bond
counsel.

    

    SECTION
9.  In the event that the Bonds are not issued and sold and the
transactions contemplated hereby are not closed within a timely basis for any
reason whatsoever and whether or not as a result of any failure to find one or
more purchasers for the Bonds, any default or failure of performance by the
Issuer, the inability of the Issuer to issue and sell the Bonds or the failure
or inability of the Issuer and the Company to agree to the terms and conditions
of the agreements, instruments and other documents provided for herein or
contemplated hereby, the Company agrees unless waived in the sole discretion of
the Issuer that:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (a)           The
Company will (i) pay all its costs and expenses, including any fees due any
attorneys, financial agents or others employed by the Company, (ii) pay the
reasonable fees and expenses of bond counsel, and (iii) reimburse the Issuer for
all reasonable out-of-pocket costs and expenses, including reasonable fees and
expenses of the Issuer's Counsel, which the Issuer may have incurred in
connection with this Memorandum of Agreement or the Bond issue.

    

    (b)           The
Company will indemnify and hold the Issuer, and the Issuer's members, officers,
employees and agents, harmless against any liabilities, allegations or claims of
loss or damage (including attorneys' fees and expenses) pertaining to the
Project, the Bonds, or any transaction contemplated hereunder, or arising out of
or predicated upon this Memorandum of Agreement, any action or non-action taken
or omitted in reliance upon this Memorandum of Agreement, or any default or
failure of performance hereunder.

    

    SECTION
10.  No covenant or agreement contained in this Memorandum of
Agreement or the  Bonds, the trust agreement, the financing agreement,
or in any other instrument relating to the Bonds or the Project, shall be deemed
to be a covenant or agreement or any member, officer, employee or agent of the
Issuer in an individual capacity, and neither the members of any other officer
of the Issuer executing the Bonds or any such agreements or instruments shall be
liable personally thereon or be subject to any personal liability or
accountability by reason thereof.

    

    (Remainder
of this page intentionally left blank)

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have executed this Memorandum of Agreement and affixed their respective
seals, as of the date first written above.

    

    
      
        
          
            	 
      	 
      	 
      	
                    PINELLAS
      COUNTY INDUSTRIAL

                  
	 
      	 
      	 
      	
                    DEVELOPMENT AUTHORITY,
      doing

                  
	 
      	 
      	 
      	
                    business
      as the Pinellas County

                  
	 
      	 
      	 
      	
                    Economic
      Development Authority

                  
	
                    (SEAL)

                  	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                    By:

                  	      
                    /s/
      Mike Meidel

                  
	 
      	 
      	 
      	
                    Name:

                  	
                    Mike
      Meidel

                  
	 
      	 
      	 
      	
                    Title:

                  	
                    Executive
      Director

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                    BOVIE
      MEDICAL CORPORATION

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                    By:

                  	      
                    /s/
      Moshe Citronowicz

                  
	 
      	 
      	 
      	
                    Name:

                  	
                    Moshe
      Citronowicz

                  
	 
      	 
      	 
      	
                    Title:

                  	
                    Chief
      Operations Officer &

                  
	 
      	 
      	 
      	 
      	
                    Vice
      President

                  

          

        

      

    

    

    [Signature
Page to Memorandum of Agreement]

    
      
         

      

      
        6

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