Third Amended Agreement and Temporary Waiver BMC





EXECUTION COPY


 


THIRD AMENDED AGREEMENT  


AND TEMPORARY WAIVER AND DEFERRAL


THIS THIRD
AMENDED AGREEMENT AND TEMPORARY WAIVER AND DEFERRAL (this "Agreement"),
dated as of November 19, 2003, 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.




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
and as further amended by that certain Second Amended Agreement and Temporary
Waiver dated as of September 15, 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 1.1of the Credit Agreement is hereby amended by
deleting the definition of "Asset Disposition" and replacing it with
the following new definition thereof:





        "Asset
Disposition": any sale, lease, transfer or other disposition (or
series of related sales, leases, transfers or dispositions) of shares of
Capital Stock of a Subsidiary of Borrower (other than directors' qualifying
shares), property or other assets (each referred to for the purposes of this
definition as a "disposition") by Borrower or any of its Subsidiaries
the fair market value of which, as determined in good faith by the board of
directors of Borrower or such Subsidiary, as the case may be, exceeds $250,000
(other than a disposition by a Subsidiary to Borrower or by Borrower or a
Subsidiary to a Wholly-Owned Subsidiary); provided, however, to
the extent that the fair market value of any such shares, property or other
assets exceeds $250,000, 100% of the Net Sale Proceeds (including amounts below
$250,000) of the sale of such shares, property or other assets shall be applied
to the Loans in the manner set forth in Section 4.3(c); provided,
further, (i) any sale of real estate located in Azusa, California by
Vision-Ease Lens, Inc. or any of its Subsidiaries shall be considered an Asset
Disposition with 100% of the Net Sale Proceeds thereof applied to the Loans in
the manner set forth in Section 4.3(c); and (ii) any sale or disposition
pursuant to the BMG Harvesting Plan shall be considered an Asset Disposition
with 100% of the Net Sale Proceeds applied in the manner contemplated by the
BMG Harvesting Payment Schedule.  The
foregoing notwithstanding, Borrower shall not be required to prepay any
proceeds from the September Optical Lens Equipment Sale.








           

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

                        "BMG
Business" means the business conducted by the Borrower and its
Subsidiaries consisting of the Buckbee-Mears group and the related facilities.


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


                        "BMG
Harvesting Plan": means the liquidation of the BMG Business by the
Borrower and its Subsidiaries in the manner described in the Plan delivered to
the Agent and Lenders on October 22, 2003.


                        "Third
Amended Agreement" means that certain Third Amended Agreement and Temporary
Waiver dated as of November 19, 2003 among the Borrower, the Agent and the
Lenders.


            (c)            
Subsection 4.3(c) of the Credit Agreement is hereby
amended by adding the following new language immediately at the end thereof:


                        "Notwithstanding
anything else in this subsection 4.3(c) to the contrary, the Net Sale Proceeds
of the BMG Harvesting Plan shall be applied in the manner set forth in the BMG
Harvesting Payment Schedule with any amounts which are to be applied to the
Loans pursuant thereto to be applied as a mandatory prepayment as provided in Section
4.4."  


           

(d)           
Section 4.4 of the Credit Agreement is hereby amended
by (i) adding the language "(with a permanent reduction in the Revolving
Commitment)" immediately following the phrase "Revolving Loans"
where it first appears therein and (ii) adding the following language
immediately at the end thereof:

                        "Notwithstanding
anything else herein to the contrary, to the extent any mandatory prepayment is
required pursuant to the terms hereof at a time during which any interest on
the Loans remains due and unpaid, the amount of such mandatory prepayment shall
be applied first to such unpaid interest on a pro rata basis to all of the
Facilities and thereafter in the manner specified by this Section 4.4."


           

(e)            
A new Section 7.17 shall hereby be added to the Credit
Agreement to read as follows:

                        "7.17   BMG Harvesting Plan.  (a)     The
Borrower agrees to liquidate inventory and accounts receivable in the manner
contemplated by the BMG Harvesting Plan and agrees that the Lenders may retain
that percentage of the cash from such liquidations as set forth in the BMG
Harvesting Payment Schedule and Borrower further agrees to deliver to the Agent
and Lenders by no later than Tuesday of each week payment for the liquidations
as of such prior week along with a certificate signed by a Responsible Officer
of Borrower (x) demonstrating (i) the current BMG accounts receivable
rollforward calculation; and (ii) the current BMG inventory rollforward
calculation and (y) explaining any differences between actual BMG accounts
receivable and inventory as of such date and the BMG Harvesting Plan
projections for such date, in each case in form and substance satisfactory to
the Agent;


                        (b)       The Borrower shall, on or before December
15, 2003, deliver to Agent and Lenders, in form and substance satisfactory to
the Agent and Lenders, weekly projections of the accounts receivable, inventory
and fixed assets for the BMG Business for the month of January, 2004;


                        (c)       The outstanding inventory balance for the
BMG Business as of any date following the effectiveness of the Third Amended
Agreement until December 30, 2003 shall not exceed $9,000,000 and thereafter
shall be less than $8,500,000. "


             (f)             
A new Section 7.18 shall hereby be added to the Credit
Agreement to read as follows:


                        "7.18   Restructuring Advisor Agreements.  The Borrower hereby agrees that (i) it shall
not amend or modify in any manner any of its agreements with Realization
Services, Inc. or Chanin Capital Partners (or in each case with any Affiliate
thereof) without the prior written consent of the Agent; and (ii) it shall not
enter into any agreement with any investment bank or other similar advisor with
respect to the restructuring of the Borrower and its Subsidiaries without the
prior written consent of the Agent."


           

(g)            
Section 8.7 of the Credit Agreement is hereby deleted
in its entirety and replaced with the following new Section 8.7:

                        "8.7     Sales of Assets and Subsidiary Stock.
Convey, sell, lease or otherwise dispose of all or any part of the property or
assets of Borrower or any Subsidiary of Borrower except for (i) sales or
dispositions of assets for fair market value (as determined by the board of
directors of Borrower), provided that the net cash proceeds of such sales or
dispositions, when aggregated with all other such sales or dispositions
occurring on or after November 19, 2003 do not exceed $250,000; (ii) sales or
dispositions of assets contemplated by the BMG Harvesting Plan provided that
the Net Sale Proceeds thereof are paid directly by the purchasers thereof to
the Agent; and (iii) the sale for fair market value (as determined by the board
of directors of Borrower) of the owned real property located in Azusa,
California provided that the Net Sale Proceeds thereof are paid directly by the
purchaser to the Agent; provided, however, that the Net Sale
Proceeds of any sale or disposition permitted under clauses (i) or (iii)
above are applied in the manner required by Section 4.3(c) and any sale
or disposition permitted by clause (ii) above is applied in the manner
required by the BMG Harvesting Payment Schedule."


            (h)       On the "Effective Date" of the
Third Amended Agreement (as defined in Section 5 thereof), the Total Revolving
Commitment shall be reduced to $31,000,000 and the Revolving Commitments of
each Lender will be proportionately reduced to the amounts specified on the new
Schedule 2.1(b) attached as Annex C to the Third Amended
Agreement.


       

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) the failure
to timely deliver financial and other reports and certificates for the months
ended July 31, 2003, August 31, 2003 and September 30, 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) January
13, 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


                


 


 


 







                

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


                

                

By:  /s/Clark G. Peterson


Name: Clark G. Peterson


Title: Vice President


                


 







                

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

                

              






                

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











HARRIS
TRUST AND SAVINGS BANK


By:  /s/Lawrence A. Mizera


Name:  Lawrence A. Mizera


Title:  Vice President


                

              







                

CREDIT
AGRICOLE INDOSUEZ


By:  /s/Leo von Reissig


Name:  Leo von Reissig


Title:  Vice President


 


By:  /s/Kathleen M. Sweeney


Name:  Kathleen M. Sweeney


Title:  Vice President











WACHOVIA
BANK, N.A.


By:  /s/Melissa McDonald


Name:  Melissa McDonald


Title:  Vice President











UNION
BANK OF CALIFORNIA, N.A.


By:  /s/Jeffrey Mumm


Name:  Jeffrey Mumm


Title:  Vice President











U.S.
BANK NATIONAL ASSOCIATION


By:  /s/David Kopolow


Name:  David Kopolow


Title:  Senior Vice President


                


 


 











 


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 Third Amended Agreement
and Temporary Waiver and Deferral dated as of November 19, 2003 (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 19th day of November, 2003.


	
   

  	
  BMC INDUSTRIES, INC.

   

   

  By:  /s/C. E. Petersen

  Name:
  C. E. Petersen

  Title: Senior
  Vice President and

            Chief Financial Officer

   

   

   

  
	
   

  	
   

  














 












EXHIBIT B



REAFFIRMATION OF GUARANTY


    Each of the undersigned acknowledges receipt
of a copy of the Third 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 November 19, 2003.


                                                                                VISION-EASE
LENS, INC.,


                                                                                as
Guarantor


 




                                                                        By:
/s/C. E. Petersen


                                                                        Name:
C. E. Petersen


                                                                        Title:
SVP, CFO





 


 


                                                                                VISION-EASE
LENS AZUSA, LLC,


                                                                                as
Guarantor


 




                                                                        By:  /s/C.
E. Petersen


                                                                        Name:
 C. E. Petersen


                                                                        Title:
SVP, CFO





 


 





ANNEX A


INTEREST PAYMENTS


BMC Industries


 


Interest Payment Date  *                      Facility*                      Interest Due*


 


	

October 16, 2003


    	

Revolver


    	

$41,145.83


    
	

 


    
	

October 31, 2003


    	

Revolver


    	

$21,258.68


    
	

 


    
	

October 31, 2003


    	

Term A


    	

$287,570.17


    
	

 


    
	

October 31, 2003


    	

Term 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 A


    	

$259,740.80


    
	

 


    
	

November 28, 2003


    	

Term B


    	

$195,894.18


    
	

 


    
	

December 10, 2003 


    	

Revolver


    	

$45,260.42


    
	

 


    
	

December 17, 2003


    	

Revolver


    	

$41,145.83


    



 


 


*Interest payments due on
Interest Payment Dates arising during the period from December 18, 2003 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.





ANNEX B


BMG HARVESTING
PAYMENT SCHEDULE


 


 


For
the time period 11/15 -12/31/03, 65% 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 1/01/04 - 1/15/04, the percentage of collected accounts receivable
retained by the Lenders and applied to the Loans on a weekly basis will be
revised based on the weekly projections of accounts receivable, inventory and
fixed assets as required under section 2(e)(b) of this waiver.  The
revised percentage will be agreed upon by Agent and Borrower no later than
12/19/03.


 


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.










 


ANNEX C


 


Schedule 2.1(b)


 


REVOLVING
COMMITMENTS


 


 


	
  Name
  of Lender

  	
   

  	
  Revolving
  Commitment

  
	
  Deutsche
  Bank Trust Company of Americas

  	
   

  	
   $  
  6,136,363.64

  
	
  Bank One,
  NA

  	
   

  	
   $  
  6,136,363.64

  
	
  U.S. Bank
  National Association

  	
   

  	
   $  
  5,840,909.09

  
	
  Wells
  Fargo Bank Minnesota,

  National Association

  	
   

  	
   $  
  3,727,272.73

  
	
  Harris
  Trust and Savings Bank

  	
   

  	
   $  
  2,613,636.36

  
	
  Credit
  Agricole Indosuez

  	
   

  	
   $  
  2,477,272.73

  
	
  Wachovia
  Bank, N.A.

  	
   

  	
   $  
  2,227,272.73

  
	
  Union
  Bank of California, N.A.

  	
   

  	
   $  
  1,840,909.09

  
	
    Total

  	
   

  	
   $ 31,000,000.000