EXECUTION COPY

 

FIFTH AMENDED AGREEMENT

AND TEMPORARY WAIVER AND DEFERRAL

THIS FIFTH AMENDED AGREEMENT AND TEMPORARY WAIVER AND DEFERRAL (this
"Agreement"), dated as of January 20, 2004, is by and among BMC Industries,
Inc., a Minnesota corporation ("Borrower"), the several banks and other
financial institutions set forth on the signature pages hereto in their
capacities as lenders under the Credit Agreement (as defined below), DEUTSCHE
BANK TRUST COMPANY AMERICAS (formerly named Bankers Trust Company), as Agent for
the Lenders (in such capacity, the "Agent") and as a Lender, and Bank One, NA,
as Documentation Agent and a Lender.

W I T N E S S E T H :

WHEREAS, Borrower, Lenders and Agent are parties to that certain Third Amended
and Restated Credit Agreement dated as of September 27, 2002 (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Credit Agreement"), pursuant to which Lenders have provided to Borrower
credit facilities and other financial accommodations;

WHEREAS, Borrower, Lenders and Agent executed an Agreement and Temporary Waiver
dated as of June 30, 2003 as amended by that certain First Amended Agreement and
Temporary Waiver dated as of July 15, 2003, as further amended by that certain
Second Amended Agreement and Temporary Waiver dated as of September 15, 2003,
that certain Third Amended Agreement and Temporary Waiver dated as of November
19, 2003 and that certain Fourth Amended Agreement effective as of November 19,
2003 (the "Original Waiver Agreement");

WHEREAS, Borrower, Lenders and Agent executed a Temporary Deferral Agreement
dated as of July 30, 2003 (the "July Deferral Agreement");

WHEREAS, Borrower, Lenders and Agent executed another Temporary Deferral
Agreement dated as of August 28, 2003 (the "August Deferral Agreement" and
together with the July Deferral Agreement, the "Deferral Agreements");

WHEREAS, Borrower has requested that Agent and Lenders (i) amend the Original
Waiver Agreement and temporarily waive for an additional time period certain
Unmatured Events of Default and Events of Default that exist under the Credit
Agreement as set forth herein; (ii) continue to defer certain payments of
interest coming due or already due and unpaid under the Credit Agreement; and
(iii) make certain amendments to the Credit Agreement, in each case as set forth
herein, and Lenders and Agent are agreeable to the same, subject to the terms
and conditions hereof.

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

1.               Defined Terms.  Terms capitalized herein and not otherwise
defined herein are used with the meanings ascribed to such terms in the Credit
Agreement. 

2.               Amendment of Credit Agreement. The Credit Agreement is hereby
amended, effective as of the Effective Date, as follows:

            (a)             Section 1.1 of the Credit Agreement is hereby
amended by adding the following new definitions in appropriate alphabetical
order therein:

                        "Fifth Amended Agreement" means that certain Fifth
Amended Agreement and Temporary Waiver dated as of January 20, 2004 among the
Borrower, the Agent and the Lenders.

            (b)            Section 1.1 of the Credit Agreement is hereby further
amended by replacing the definition of "BMG Harvesting Payment Schedule" with
the following new definition:

                        "BMG Harvesting Payment Schedule" means the payment
schedule attached as Annex B to the Third Amended Agreement as amended by Annex
B attached to the Fifth Amended Agreement.

            (c)             Subsection 2.1(c)(i) of the Credit Agreement is
hereby amended by deleting the "$10,000,000" figure therein and replacing it
with "$0" it being agreed that there is no longer any commitment on the part of
the Swing Line Lender to make Swing Line Loans.

            (d)            Section 7.17(b) of the Credit Agreement shall be
replaced with the following new Section 7.17(b):

                        "(b)      The Borrower shall, on or before January 15,
2004, deliver to Agent and Lenders, in form and substance satisfactory to the
Agent, monthly projections of the accounts receivable, inventory and fixed
assets for the BMG Business for the period January 15, 2004 through June 30,
2004;"

3.               Temporary Waiver and Deferral.  (a)  Subject to the conditions
set forth in Section 5 hereof, Agent and Lenders hereby (i) temporarily waive
during the Waiver and Deferral Period (as defined below) any Event of Default or
Unmatured Event of Default under Section 9.1 of the Credit Agreement arising out
of the Borrower's failure (A) to make the Scheduled Term A Repayments and
Scheduled Term B Repayments due June 30, 2003,  September 30, 2003 and December
31, 2003, (B) to make the payment required by Section 3.2(d) of the Credit
Agreement on July 1, 2003, (C) to comply with Sections 8.1(a), (b) and (c) of
the Credit Agreement for the fiscal quarters of Borrower ended June 30, 2003,
September 30, 2003 and December 31, 2003, (D) to comply with Sections 7.4, 7.5,
8.4, 8.6 and 8.7 of the Credit Agreement solely with respect to Vision-Ease
France SAS, Buckbee-Mears Hungary Kft., Buckbee-Mears Deutschland Holding GmbH &
Co. KG and its wholly-owned subsidiaries, Buckbee-Mears Europe GmbH and
Vision-Ease Deutschland GmbH, (E) to comply with Section 4.3(a); and (F) to
comply with the timely delivery of  financial and other reports and certificates
for the months ended July 31, 2003, August 31, 2003, September 30, 2003, October
31, 2003, November 30, 2003 and December 31, 2003 as required by Sections
7.1(c), 7.2(b) and 7.2(h) of the Credit Agreement (each of the matters in
clauses (A), (B) (C), (D), (E) and (F) being, the "Disclosed Defaults") and
(ii) temporarily waive during the Waiver and Deferral Period the application of
the Default Rate with respect to the Disclosed Defaults. 
                                                                                                  
 

            (b)      Subject to the conditions set forth in Section 5 hereof,
Agent and Lenders hereby temporarily defer during the Waiver and Deferral Period
(as defined below) the interest payments due and owing by the Borrower on each
of the dates set forth on Annex A to this Agreement (the "Temporary Interest
Deferral") provided that all such interest payments shall be immediately due and
owing in full upon the last day of the Waiver and Deferral Period. 
                                                                     

            For purposes of this Agreement, "Waiver and Deferral Period" means
the period commencing on the Effective Date and terminating on the earliest of
(a) March 15, 2004; and (b) the occurrence of an Additional Default (as defined
below) under the Loan Documents. 

            (c)       Nothing herein shall limit or restrict in any way the
rights and remedies of Agent or any Lender with respect to any Unmatured Event
of Default or Event of Default other than the Events of Default which would
exist absent this Agreement (collectively, the "Additional Defaults" and,
individually, each an "Additional Default").

            Upon the termination of the Waiver and Deferral Period as provided
above, Agent and Lenders shall be fully entitled to exercise any rights or
remedies they may have under the Credit Agreement, the Loan Documents or
applicable law.  Nothing herein shall limit or restrict in any way the rights
and remedies of Agent or any Lender with respect to any Unmatured Event of
Default or Event of Default other than a Disclosed Default (collectively, the
"Additional Defaults" and, individually, each an "Additional Default").

            (d)       Notwithstanding the waiver of the Disclosed Defaults
pursuant to this Agreement or anything else in this Agreement or in the Credit
Agreement to the contrary, the Borrower hereby acknowledges and agrees that
during the Waiver and Deferral Period no Revolving Lender shall be obligated to
make Revolving Loans pursuant to the terms and conditions of the Credit
Agreement.

            (e)       BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE
WAIVERS AND DEFERRALS SET FORTH IN THIS SECTION 3 ARE EFFECTIVE ONLY DURING THE
WAIVER AND DEFERRAL PERIOD AND THAT, AFTER THE TERMINATION OF THE WAIVER AND
DEFERRAL PERIOD, THE CREDIT AGREEMENT WILL BE IN MATERIAL DEFAULT AND AGENT AND
LENDERS WILL BE FULLY ENTITLED IMMEDIATELY TO EXERCISE THEIR RIGHTS AND REMEDIES
UNDER THE CREDIT AGREEMENT, THE LOAN DOCUMENTS OR APPLICABLE LAW WITHOUT REGARD
TO ANY MATTERS TRANSPIRING DURING THE WAIVER AND DEFERRAL PERIOD OR THE
FINANCIAL CONDITION OR PROSPECTS OF  BORROWER AND ITS SUBSIDIARIES.  BORROWER
UNDERSTANDS THAT AGENT AND LENDERS ARE EXPRESSLY RELYING ON THE TERMS OF THIS
SECTION 3(e) AND WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR BORROWER'S
ACKNOWLEDGMENT AND AGREEMENT IN THIS SECTION 3(e).

4.               Representations and Warranties.  In order to induce Agent and
Lenders to enter into this Agreement, Borrower hereby represents and warrants to
Agent and Lenders, in each case after giving effect to this Agreement, as
follows:

            (a)             Borrower has the right, power and capacity and has
been duly authorized and empowered by all requisite corporate and shareholder
action to enter into, execute, deliver and perform this Agreement and all
agreements, documents and instruments executed and delivered pursuant to this
Agreement.

            (b)            This Agreement constitutes Borrower's legal, valid
and binding obligation, enforceable against it, except as enforcement thereof
may be subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law or otherwise).

            (c)             The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and correct in all
material respects at and as of the Effective Date as though made on and as of
the Effective Date (except to the extent specifically made with regard to a
particular date, in which case such representation and warranty is true and
correct in all material respects as of such earlier date).

            (d)            Borrower's execution, delivery and performance of
this Agreement do not and will not violate its Articles or Certificate of
Incorporation or By-laws, any law, rule, regulation, order, writ, judgment,
decree or award applicable to it or any contractual provision (except as
otherwise expressly waived hereby) to which it is a party or to which it or any
of its property is subject.

            (e)             No authorization or approval or other action by, and
no notice to or filing or registration with, any governmental authority or
regulatory body (other than those which have been obtained and are in force and
effect) is required in connection with the execution, delivery and performance
by Borrower or any other Credit Party of this Agreement and all agreements,
documents and instruments executed and delivered pursuant to this Agreement.

            (f)              Other than the Disclosed Defaults, no Event of
Default or Unmatured Event of Default exists under the Credit Agreement.  

5.               Conditions to Effectiveness of Agreement. This Agreement shall
become effective on the date (the "Effective Date") each of the following
conditions precedent is satisfied:

            (a)             Execution and Delivery of Agreement. Borrower, Agent
and each Lender shall have executed and delivered this Agreement to the Agent.

            (b)            Execution and Delivery of Loan Documents.  Agent
shall have received each of the following documents, all of which shall be
satisfactory in form and substance to Agent and its counsel:

                    (1)            A certificate of a Responsible Officer of
Borrower in the form of Exhibit A attached hereto;

                    (2)            A Reaffirmation of Guaranty executed by a
Responsible Officer of each Subsidiary Guarantor in the form of Exhibit B
attached hereto. 

            (c)             Representations and Warranties.  The representations
and warranties of the Borrower and the other Credit Parties contained in this
Agreement, the Credit Agreement and the other Loan Documents shall be true and
correct in all material respects as of the Effective Date, with the same effect
as though made on such date, except to the extent that any such representation
or warranty relates to an earlier date, in which case such representation or
warranty shall be true and correct in all material respects as of such earlier
date.

            (d)            No Defaults. Other than the Disclosed Defaults, no
Unmatured Event of Default or Event of Default under the Credit Agreement shall
have occurred and be continuing.

6.               Miscellaneous. The parties hereto hereby further agree as
follows:

            (a)             Costs, Expenses and Taxes.  Borrower hereby agrees
to pay all reasonable fees, costs and expenses of Agent incurred in connection
with the negotiation, preparation and execution of this Agreement and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and expenses of Winston & Strawn, counsel to Agent.

            (b)            Counterparts.  This Agreement may be executed in one
or more counterparts any of which may be a facsimile, each of which, when
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same document
with the same force and effect as if the signatures of all of the parties were
on a single counterpart, and it shall not be necessary in making proof of this
Agreement to produce more than one (1) such counterpart.

            (c)             Headings.  Headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.

            (d)            Integration.  This Agreement and the Credit Agreement
(as modified hereby) constitute the entire agreement among the parties hereto
with respect to the subject matter hereof.

            (e)             Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS
OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES).

            (f)              Binding Effect.  This Agreement shall be binding
upon and inure to the benefit of and be enforceable by Borrower, Agent and
Lenders and their  respective successors and assigns.  Except as expressly set
forth to the contrary herein, this Agreement shall not be construed so as to
confer any right or benefit upon any Person other than Borrower, Agent and the
Lenders and their respective successors and permitted assigns.

            (g)             Agreement.  The parties hereto agree and acknowledge
that nothing contained in this Agreement in any manner or respect limits or
terminates any of the provisions of the Credit Agreement or any of the other
Loan Documents other than as expressly set forth herein and further agree and
acknowledge that the Credit Agreement and each of the other Loan Documents
remain and continue in full force and effect and are hereby ratified and
confirmed.  Except to the extent expressly set forth herein, the execution,
delivery and effectiveness of this Agreement shall not operate as a waiver of
any rights, power or remedy of Lenders or Agent under the Credit Agreement or
any other Loan Document, nor constitute a waiver of any provision of the Credit
Agreement or any other Loan Document.  No delay on the part of any Lender or
Agent in exercising any of their respective rights, remedies, powers and
privileges under the Credit Agreement or any of the Loan Documents or partial or
single exercise thereof, shall constitute a waiver thereof.  Borrower
acknowledges and agrees that this Agreement constitutes a "Loan Document" for
purposes of the Credit Agreement, including, without limitation, Sections 9.1
and 11.1 of the Credit Agreement.  None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner, whatsoever,
except in accordance with Section 11.1 of the Credit Agreement.

            (h)       Release of Claims.  Borrower hereby represents and
warrants that there are no liabilities, claims, suits, debts, losses, causes of
action, demands, rights, damages or costs, or expenses of any kind, character or
nature whatsoever, known or unknown, fixed or contingent (collectively, the
"Claims"), which Borrower may have or claim to have against Agent or any Lender,
or any of their respective affiliates, agents, employees, officers, directors,
representatives, attorneys, successors, or assigns (collectively, the "Lender
Released Parties"), which might arise out of or be connected with any act of
commission or omission of the Lender Released Parties existing or occurring on
or prior to the date of this Agreement, including without limitation any Claims
arising with respect to the Credit Agreement or any Loan Documents.  Borrower
hereby releases, acquits, and forever discharges the Lender Released Parties
from any and all Claims that Borrower may have or claim to have, relating to or
arising out of or in connection with the Credit Agreement or any Loan Documents
or any other agreement or transaction contemplated thereby or any action taken
in connection therewith from the beginning of time up to and including the date
of the execution and delivery of this Agreement.  Borrower further agrees
forever to refrain from commencing, instituting, or prosecuting any lawsuit,
action, or other proceeding against any Lender Released Parties with respect to
any and all Claims.

 

[Signature Page Follows]

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

BMC INDUSTRIES, INC.

By:  /s/C. E. Petersen

Name:  C. E. Petersen          

Title: Senior Vice President and Chief Financial Officer

 

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DEUTSCHE BANK TRUST COMPANY AMERICAS, in its individual capacity and as Agent

 

By:  /s/Clark G. Petersen

Name:  Clark G. Petersen

Title:  Vice President

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BANK ONE, NA (Main Office Chicago)

 

individually as a Lender and as documentation agent

 

By:  /s/Henry W. Howe

Name:  Henry W. Howe

Title:  Assistant Vice President

 

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WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION (f/k/a Norwest Bank Minnesota,
National Association)

By:  /s/Scott J.  Manookin

Name:  Scott J. Manookin

Title:  Vice President

 

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HARRIS TRUST AND SAVINGS BANK

By:  /s/Lawrence A. Mizera

Name: Lawrence A. Mizera

Title:  Vice President

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CREDIT AGRICOLE INDOSUEZ

By:  /s/Kathleen M. Sweeney

Name:  Kathleen M. Sweeney

Title:  Vice President

 

By:  /s/Frederik W. Anse

Name:  Frederik W. Anse

Title:  Vice President

 

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WACHOVIA BANK, N.A.

By:  /s/Melissa McDonald 

Name:  Melissa McDonald

Title:  Vice President

 

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UNION BANK OF CALIFORNIA, N.A.

By:  /s/Joel Steiner

Name:  Joel Steiner

Title:  Vice President

 

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U.S. BANK NATIONAL ASSOCIATION

By:  /s/Erik K. Hayes 

Name:  Erik K. Hayes

Title:  Officer

 

 

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EXHIBIT A

CERTIFICATE OF OFFICER

 

        I, the undersigned, Chief Financial Officer and Secretary of BMC
Industries, Inc., a Minnesota corporation (the "Borrower"), in accordance with
Section 5(b) of that certain Fifth Amended Agreement and Temporary Waiver and
Deferral dated as of January 20, 2004 (the "Agreement") among  the Borrower,
Deutsche Bank Trust Company Americas, as Agent and the financial institutions
party to the Credit Agreement (as defined in the Agreement), do hereby certify
on behalf of Borrower, the following:

1.         The representations and warranties set forth in Section 4 of the
Agreement are true and correct in all material respects as of the date hereof
except to the extent such representations and warranties are expressly made as
of a specified date in which event such representations and warranties were true
and correct in all material respects as of such specified date;

2.         Other than the Disclosed Defaults, no Event of Default or Unmatured
Event of Default has occurred and is continuing; and

3.         The conditions of Section 5 of the Agreement have been fully
satisfied.

Unless otherwise defined herein, capitalized terms used herein shall have the
meanings set forth in the Agreement.

[signature page follows]

IN WITNESS WHEREOF, the undersigned has duly executed and delivered on behalf of
Borrower this Certificate of Officer on this 20st day of January, 2004.

 

BMC INDUSTRIES, INC.

 

By:  /s/C. E. Petersen

Name:  C. E. Petersen

Title: Senior Vice President and Chief Financial Officer

 

   

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EXHIBIT B

REAFFIRMATION OF GUARANTY

    Each of the undersigned acknowledges receipt of a copy of the Fifth Amended
Agreement and Temporary Waiver and Deferral (the "Agreement").  Capitalized
terms used herein shall, unless otherwise defined herein, have the meanings
provided in the Credit Agreement, as such term is defined in the Agreement. 
Each of the undersigned hereby consents to such Agreement and each of the
transactions referenced in the Agreement and hereby reaffirms its obligations
under the Subsidiary Guarantee Agreement.

Dated as of January 20, 2004.

VISION-EASE LENS, INC.,

as Guarantor

 

 

 

By:  /s/C. E. Petersen

Name:  C. E. Petersen

Title:  Senior Vice President and Chief Financial Officer

 

 

VISION-EASE LENS AZUSA, LLC,

as Guarantor

 

 

 

By:  /s/C. E. Petersen

Name:  C. E. Petersen

Title:  Senior Vice President and Chief Financial Officer

 

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ANNEX A

INTEREST PAYMENTS

BMC Industries

 

Interest Payment Date  *                     
Facility*                                  Interest Due*

 

September 30, 2003

Term Loan B

$138,066.35

 

October 8, 2003

Revolver

$45,260.42

 

October 16, 2003

Revolver 

$41,145.83

 

October 31, 2003

Revolver    

$21,258.68

 

October 31, 2003

Term Loan A  

$287,570.17

 

October 31, 2003

Term Loan B

$216,882.84

 

November 10, 2003

Revolver

$49,786.46

 

November 17, 2003

Revolver

$43,888.89

 

November 28, 2003

Revolver

$19,201.39

 

November 28, 2003

Term Loan A

$259,740.80

 

November 28, 2003

Term Loan B

$195,894.18

 

December 10, 2003

Revolver

$45,260.42

 

December 17, 2003

Revolver  

$41,145.83

 

December 31, 2003

Term Loan A 

$306,123.08

 

December 31, 2003

Term Loan B

$230,875.28

 

December 31, 2003

Revolver 

$66,086.33

 

January 12, 2004

Revolver 

$50,416.67

 

January 20, 2004

Revolver 

$46,631.94

 

January 30, 2004

Term Loan A

$275,135.28

 

January 30, 2004

Term Loan B

$207,504.56

 

January 30, 2004

Revolver

$20,572.92

 

February 12, 2004

Revolver 

$46,769.10

 

*Interest payments due on Interest Payment Dates arising during the period from
February 12, 2004 through the end of the Waiver and Deferral Period shall also
be deferred and this Annex A will be deemed updated as information with respect
to such payments becomes available.

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ANNEX B

BMG HARVESTING PAYMENT SCHEDULE

 

For the time period from the Effective Date of the Fifth Amendment through
1/30/2004, 85% of cash generated from the collection of accounts receivable
shall be retained by the Lenders and applied to the Loans on a weekly basis in
the manner set forth in Section 4.4 of the Credit Agreement.

For the period 1/31/04 - 3/15/04, the percentage of collected accounts
receivable retained by the Lenders and applied to the Loans on a weekly basis
will be revised at the request of the Agent (with such percentage agreed upon by
the Agent and the Borrower) based on the weekly cash flow forecast delivered by
the Borrower and on the monthly projections of accounts receivable, inventory
and fixed assets as required under Section 7.17(b) of the Credit Agreement;
provided, however, that the percentage of accounts receivable applied to the
Loans shall not be reduced below 65% without the consent of the Required
Lenders.  It is understood that the percentage of accounts receivable will be
revised on each of 1/30/2004 and 2/27/04 and at such other times as the Agent
requires. 

100% of the Net Sale Proceeds from any sale of fixed assets or other personal
property of the BMG Business shall be applied to the Loans in the manner set
forth in Section 4.4 of the Credit Agreement.

In the event that the sum of cash and cash equivalents held by the Borrower and
its Subsidiaries exceed $5,000,000 for any period of three consecutive Business
Days, the Borrower shall, on the Business Day immediately following such period,
prepay the Loans in an amount equal to any amounts in excess of $5,000,000 in
the manner set forth in Section 4.4 of the Credit Agreement.