Prepared by MERRILL CORPORATION









EXHIBIT 10.49




AMENDED

AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT




AMENDED AND

RESTATED SUBSIDIARY GUARANTEE AGREEMENT dated as of October 12, 2001 (as

the same may be amended, supplemented or otherwise modified from time to time,

this “Guarantee”), made by each of the undersigned corporations (each, a

“Guarantor” and collectively, the “Guarantors”) in favor of the Beneficiaries

(as hereinafter defined).  Certain

capitalized terms used herein are defined in Section 1 of this Guarantee.




W I T N E S S E T H:




WHEREAS, pursuant

to an Amended and Restated Credit Agreement, dated as of June 25, 1998 among

BMC INDUSTRIES, INC., a Minnesota corporation (“Borrower”), the

financial institutions party thereto (the “Lenders”), Bankers Trust

Company, as Administrative Agent for the Lenders thereunder and a Lender (the “Agent")

and NBD Bank, as documentation agent and a Lender, the Lenders have severally

agreed to make Extensions of Credit to or for the benefit of the Borrower upon

the terms and subject to the conditions set forth therein (as used herein, the

term “Credit Agreement” means the Amended and Restated Credit Agreement

described above in this paragraph, as in effect on the date hereof and as

amended by that certain Second Amendment and Restatement Agreement dated as of

the date hereof, as the same may be amended, modified, extended, renewed,

replaced, restated or supplemented from time to time, and including any

agreement extending the maturity of or restructuring of all or any portion of

the Indebtedness under such agreement or any successor agreements);




WHEREAS,

each Guarantor is a Domestic Subsidiary of the Borrower;




WHEREAS, it is a

condition precedent to the obligation of the Lenders to make Extensions of

Credit that the Guarantors shall have executed and delivered this Guarantee to

the Agent, for the benefit of the Beneficiaries;




WHEREAS, the

proceeds of Extensions of Credit will be used in part to enable the Borrower to

make Valuable Transfers to each of the Guarantors in connection with the

operation of their business; and




WHEREAS, Borrower

and the Guarantors are engaged in related businesses, and each Guarantor will

derive substantial direct and indirect benefit from the making of the

Extensions of Credit;




NOW, THEREFORE, in

consideration of the premises and to induce the Agent and the Lenders to enter

into the Credit Agreement and to induce the Lenders to make their respective

Loans and other Extensions of Credit, each Guarantor hereby agrees with the

Agent, for the benefit of the holders of the Guaranteed Obligations, as

follows:




Section 1.  Definitions.   As used in this Guarantee, capitalized

terms not otherwise defined herein shall have the respective meanings provided

for such terms in the Credit Agreement and the following terms have the

meanings indicated, all such definitions to be equally applicable to the

singular and plural forms of the terms defined:











“Adjusted

Net Worth” of any Guarantor shall mean, as of any date of determination

thereof, the excess of (i) the amount of the “present fair saleable value” of

the assets of such Guarantor as of the date of such determination, over (ii)

the amount of all “liabilities of such Guarantor, contingent or otherwise” as

of the date of such determination, as such quoted terms are determined in

accordance with applicable federal and state laws governing determinations of

the insolvency of debtors.  In

determining the Adjusted Net Worth of such Guarantor for purposes of

calculating the Limit of Liability for such Guarantor in respect of any of the

Guaranteed Obligations, the liabilities of such Guarantor to be used in such

determination pursuant to clause (ii) of the preceding sentence shall exclude

the liabilities of such Guarantor hereunder in respect of the Guaranteed

Obligations and any other guarantees of the obligations of the Borrower

incurred after the date hereof.




“Beneficiaries”

means each of (i) the Lenders and the Agent under the Credit Agreement

hereinafter referred to (such Lenders and the Agent are hereinafter called the

“Bank Creditors”), (ii) if one or more Lenders (or any Affiliate

thereof) enter into one or more (A) interest rate protection agreements

(including, without limitation, interest rate swaps, caps, floors, collars and

similar agreements), (B) foreign exchange contracts, currency swap agreements

or other similar agreements or arrangements designed to protect against the

fluctuations in currency values and/or (C) other types of hedging

agreements from time to time (collectively, the “Interest Rate Protection or

Other Hedging Agreements”) with, or guaranteed by, Borrower, any such

Lender or Lenders or any Affiliate of such Lender or Lenders (even if the

respective Lender subsequently ceases to be a Lender under the Credit Agreement

for any reason) so long as any such Lender or Affiliate participates in the

extension of such Interest Rate Protection or Other Hedging Agreements and

their subsequent assigns, if any (collectively, the “Other Creditors”)

and (iii) US Bank as lender under the US Bank Letter of Credit Facility (as

defined below), collectively, and “Beneficiary” means any one of such

Beneficiaries, individually.




“Determination

Date” shall mean, with respect to any Guarantor, the earlier of (a) the

date of commencement of a case under Title 11 of the United States Code in

which such Guarantor is a debtor and (b) the date enforcement hereunder is

sought with respect to such Guarantor.




“Extension

of Credit” shall mean (i) all loans or advances made to the Borrower under

any Loan Document, (ii) all other extensions of credit to or for the benefit of

the Borrower under any Loan Document and (iii) to the extent not otherwise

included in the foregoing, all Guaranteed Obligations.




“Guaranteed

Obligations” has the meaning assigned to such term in Section 2(a).




“Limit

of Liability” for any Guarantor shall mean, as of the Determination Date

for such Guarantor, the sum of:




(i)            an amount equal to the sum of each

Extension of Credit (or portion thereof) the proceeds of which are used to make

a Valuable Transfer to such Guarantor plus interest on such amount at the

rate specified in the Credit Agreement plus







(ii)           the greater of:




(A)          ninety-five percent (95%) of the

Adjusted Net Worth of such Guarantor at the date of the execution of this

Guarantee before giving effect to any Extensions of Credit made on such date

and




(B)           ninety-five percent (95%) of the

Adjusted Net Worth of such Guarantor at the Determination Date for such

Guarantor.




There shall be deducted

in determining the Limit of Liability for any Guarantor (a) amounts, if any,

collected from such Guarantor in respect of the Guaranteed Obligations by or on

behalf of any holder of the Guaranteed Obligations pursuant to any Loan

Document (other than this Guarantee), plus (b) the amounts, if any,

collected in respect of the Guaranteed Obligations by or on behalf of any

holder of the Guaranteed Obligations from any Subsidiary of such Guarantor

pursuant to any Loan Document (including this Guarantee).




“Subordinate

Claims” has the meaning assigned to that term in Section 8.




"US

Bank Letter of Credit Facility" means that certain revolving letter of

credit facility in effect on the date hereof pursuant to that certain

Continuing Reimbursement Agreement for Commercial Letters of Credit, dated as

of July 14, 2000 by and among the LC Creditor and the Borrower providing for

commercial letters of credit; provided, however, that at no time

shall there be more than a maximum amount of $2,000,000 under the US Bank

Letter of Credit Facility secured by the Security Documents.




“Valuable

Transfer” means, as to any Guarantor, (i) all loans, advances or capital

contributions made to such Guarantor with proceeds of Guaranteed Obligations,

(ii) all debt securities or other obligations of such Guarantor acquired from

such Guarantor or retired by such Guarantor with proceeds of Guaranteed

Obligations, (iii) the fair market value of all property acquired with proceeds

of Guaranteed Obligations and transferred, absolutely and not as collateral, to

such Guarantor and (iv) the value of any quantifiable economic benefits not

included in clauses (i) through (iii) above, but included in accordance with

applicable federal and state laws governing determinations of the insolvency of

debtors, accruing to such Guarantor as a result of the incurrence of Guaranteed

Obligations.











Section 2.  Guarantee

of Obligations.  (a) Each Guarantor

hereby, jointly and severally, unconditionally and irrevocably guarantees to

each of the Beneficiaries, as the primary obligation and debt of such Guarantor

and not as a surety, the due and punctual payment of, without duplication, (i)

the full and prompt payment when due (whether at the stated maturity, by

acceleration or otherwise) of all obligations (including, without limitation,

all “Obligations” as such term is defined in the Credit Agreement and all obligations

which, but for the automatic stay under Section 362(a) of the Bankruptcy

Code, would become due) and liabilities of Borrower and each Guarantor now

existing or hereafter incurred under, arising out of or in connection with the

Credit Agreement or any other Loan Document to which Borrower or any Guarantor

is a Party and the due performance and compliance by Borrower and each

Guarantor with all of the terms, conditions and agreements contained in each

such Loan Document (all such obligations and liabilities being herein

collectively called the “Credit Agreement Obligations”); (ii) the full

and prompt payment when due (whether at the stated maturity, by acceleration or

otherwise) of all obligations (including obligations which, but for the

automatic stay under Section 362(a) of the Bankruptcy Code, would become

due) and liabilities of Borrower now existing or hereafter incurred under,

arising out of or in connection with (x) any Interest Rate Protection or Other

Hedging Agreement, whether such Interest Rate Protection or Other Hedging

Agreement is now in existence or hereafter arising and the due performance and

compliance by Borrower with all of the terms, conditions and agreements

contained therein and (y) the US Bank Letter of Credit Facility up to a maximum

amount of $2,000,000 (provided that at no time shall there be more than

$2,000,000 under the US Bank Letter of Credit Facility secured by the Security

Documents) (all of the foregoing, collectively, the “Guaranteed Obligations”).  In case of the failure of Borrower or any

Guarantor to duly, punctually and indefeasibly make any such payment in full as

and when due and payable, each Guarantor hereby agrees to duly, punctually and

indefeasibly make such payment as and when the same shall become due and payable,

whether on the due date therefor, upon stated maturity, by acceleration, upon

demand or otherwise, in accordance with the terms of this Guarantee, the Credit

Agreement and the other Loan Documents.




(b)           Notwithstanding anything to the

contrary contained in this Guarantee, the obligations and liabilities of each

of the Guarantors pursuant to this Guarantee shall at all times be subject to

each such Guarantor’s Limit of Liability.




(c)           No payment or payments made by

Borrower, any Guarantor, any other guarantor or any other Person or received or

collected by the Agent or any Beneficiary from Borrower, the Guarantor, any

other guarantor or any other Person by virtue of any action or proceeding or

any set–off or appropriation or application at any time or from time to

time in reduction of or in payment of the Guaranteed Obligations shall be

deemed to modify, reduce, release or otherwise affect the liability of any

Guarantor hereunder which shall, notwithstanding any such payment or payments

other than payments made by or received or collected from such Guarantor in

respect of the Guaranteed Obligations, remain liable for the Guaranteed

Obligations up to its Limit of Liability.











Section 3.  Right of

Set-off.  During any period in which

an Event of Default shall have occurred and is continuing, the Agent and each

other Beneficiary are hereby irrevocably authorized by each Guarantor at any

time and from time to time without notice to such Guarantor, any such notice

being hereby waived by such Guarantor, to set off and appropriate and apply any

and all deposits (general or special, time or demand, provisional or final), in

any currency, and any other credits, indebtedness or claims, in any currency,

in each case whether direct or indirect, absolute or contingent, matured or

unmatured, at any time held or owing by the Agent or such other Beneficiary to

or for the credit or the account of such Guarantor, or any part thereof in such

amounts as the Agent or such other Beneficiary may elect on account of the

obligations or liabilities of such Guarantor hereunder and claims of every

nature and description of the Agent or such other Beneficiary against such

Guarantor, in any currency, whether arising hereunder, under the Credit

Agreement or any other Loan Document, whether or not the Agent or such other

Beneficiary has made any demand for payment and although such obligations,

liabilities and claims may be contingent or unmatured.  Each Beneficiary shall notify such Guarantor

and the Agent promptly of any such set–off made by it and the application

made by it of the proceeds thereof; provided, however, that the

failure to give such notice shall not affect the validity of such set–off

and application.  The rights of the

Agent and any other Beneficiary under this paragraph are in addition to other

rights and remedies (including, without limitation, other rights of set–off)

which such party may have.




Section 4. Amendments, etc. with respect to the Guaranteed

Obligations.  Each Guarantor shall

remain obligated hereunder notwithstanding that, without any reservation of

rights against such Guarantor or any other Guarantor, and without notice to or

further assent by such Guarantor, any demand for payment of any of the

Guaranteed Obligations made by the Agent or any other Beneficiary may be

rescinded by the Agent or such other Beneficiary, and any of the Guaranteed

Obligations continued, and the Guaranteed Obligations, or the liability of any

other Person upon or for any part thereof, or any collateral security or

guarantee therefor or right of offset with respect thereto, may, from time to

time, in whole or in part, be renewed, extended, amended, modified,

accelerated, compromised, waived, surrendered or released by the Agent or any

other Beneficiary, and the Credit Agreement, any other Loan Document, any other

document relating to Guaranteed Obligations and any other documents executed

and delivered in connection therewith may be amended, modified, supplemented or

terminated, in whole or in part, as the relevant holders of the Guaranteed Obligations

may deem advisable from time to time and otherwise in accordance with the

Credit Agreement, and any collateral security, guarantee or right of offset at

any time held by the Agent or any other Beneficiary for the payment of the

Guaranteed Obligations may be sold, exchanged, waived, surrendered or

released.  Neither the Agent nor any

other Beneficiary shall have any obligation to protect, secure, perfect or

insure any Lien at any time held by it as security for the Guaranteed

Obligations or for this Guarantee or any property subject thereto.




Section 5. Guarantee Absolute and Unconditional.  Each Guarantor waives any and all notice of

the creation, renewal, extension or accrual of any of the Guaranteed

Obligations and notice of or proof of reliance by the Agent or any other

Beneficiary upon this Guarantee or any other Loan Document to which such

Guarantor is a party or acceptance of this Guarantee or any such other Loan

Document; and all dealings between the Borrower or any Guarantor and the Agent

or any other Beneficiary shall likewise be conclusively presumed to have been

had or consummated in reliance upon this Guarantee and the other Loan

Documents.  Each Guarantor waives

diligence, presentment, protest, demand for payment and notice of default or

nonpayment to or upon the Borrower or any Guarantor with respect to the

Guaranteed Obligations.  This Guarantee

shall be construed as a continuing, absolute and unconditional guarantee of

payment without regard to:




(i) the validity or

enforceability of the Credit Agreement, any other Loan Document, any of the

Guaranteed Obligations or any collateral security therefor or guarantee or

right of offset with respect thereto at any time or from time to time held by

the Agent or any other Beneficiary,




(ii) any defense

(including, without limitation, any statute of limitations), set–off or

counterclaim (other than a defense of payment or performance) which may at any

time be available to or be asserted by the Borrower against the Agent or any

other Beneficiary (each Guarantor hereby agrees not to assert any such defense,

set-off or counterclaim),





(iii) any change in the

time, manner or place of any application of collateral security, or proceeds

thereof, to or of all or any of the Guaranteed Obligations, or any manner of

sale or other disposition of any collateral security for all or any of the

Guaranteed Obligations or any other assets of the Borrower or any of its

Subsidiaries,




(iv) any change,

restructuring or termination of the corporate or partnership structure or

existence of the Borrower or any of its Subsidiaries, or




(v) any other

circumstance whatsoever (with or without notice to or knowledge of the Borrower

or any Guarantor) which constitutes, or might be construed to constitute, an

equitable or legal discharge of the Borrower for the Guaranteed Obligations, or

of any Guarantor under this Guarantee, in bankruptcy or in any other instance

and each Guarantor hereby covenants that this Guarantee will not be discharged

except by final, complete, indefeasible and irrevocable payment and performance

of the obligations contained in the agreements, instruments and documents

evidencing or securing the Guaranteed Obligations and this Guarantee.




When the Agent or any

other Beneficiary is pursuing its rights and remedies hereunder against any

Guarantor, the Agent or any other Beneficiary may, but shall be under no

obligation to, pursue such rights and remedies as it may have against the

Borrower or any other Person or against any collateral security or guarantee

for the Guaranteed Obligations or any right of offset with respect thereto, and

any failure by the Agent or any other Beneficiary to pursue such other rights

or remedies or to collect any payments from the Borrower or any such other

Person or to realize upon any such collateral security or guarantee or to

exercise any such right of offset, or any release of the Borrower or any such

other Person or of any such collateral security, guarantee or right of offset,

shall not relieve any Guarantor of any liability hereunder, and shall not

impair or affect the rights and remedies, whether express, implied or available

as a matter of law, of the Agent and any other Beneficiary against such

Guarantor.




Section 6.  Reinstatement.  Each Guarantor further agrees that if at any

time all or any part of any payment theretofore applied by any Beneficiary to

any of the Guaranteed Obligations is, or must be, rescinded or returned by such

Beneficiary for any reason whatsoever, including, without limitation, the

insolvency, bankruptcy or reorganization of Borrower, any other Guarantor or

any other Subsidiary of Borrower or any other guarantor of all or any portion

of the Guaranteed Obligations, such Guaranteed Obligations or applicable

portion thereof, for purposes of this Guarantee, to the extent that such

payment is or must be rescinded or returned, shall be deemed to have continued

in existence notwithstanding such application, and this Guarantee shall

continue to be effective or be reinstated, as the case may be, as to such

Guaranteed Obligations or applicable portion thereof as though such application

had not been made, irrespective of whether any note or other evidence of

indebtedness has been surrendered or cancelled.











Section 7. Subrogation. No Guarantor will exercise any

rights that it may now or hereafter acquire against the Borrower or any other

Guarantor that arise from the existence, payment, performance or enforcement of

such Guarantor’s obligations under this Guarantee, the Credit Agreement or any

other Loan Document, including, without limitation, any right of subrogation,

reimbursement, exoneration, contribution or indemnification and any right to

participate in any claim or remedy of any Beneficiary against the Borrower or

any other Guarantor or any collateral security, regardless of whether such

claim, remedy or right arises in equity or under contract, statute or common

law, including, without limitation, the right to take or receive from the

Borrower or any other Guarantor, directly or indirectly, in cash or other

property or by set-off or in any other manner, payment or security on account

of such claim, remedy or right, unless and until all of the Guaranteed

Obligations have been paid in full and the Commitments have expired or

terminated.  If any amount is paid to

any Guarantor in violation of the preceding sentence at any time prior to the

later of the payment in full of the Guaranteed Obligations and the Termination

Date, such amount shall be held in trust for the benefit of the Agent to be

credited and applied to the Guaranteed Obligations, whether matured or

unmatured, in accordance with the terms of the Credit Agreement and the other

Loan Documents, or to be held as collateral security for any Guaranteed

Obligations thereafter arising.  If (i)

any Guarantor makes payment to the Agent or any other Beneficiary of all or any

part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations have

been paid in full and (iii) the Termination Date has occurred, the Agent and

the other Beneficiaries will, at any Guarantor’s request and expense, execute

and deliver to such Guarantor the appropriate documents, without recourse and

without representation or warranty, necessary to evidence the transfer by

subrogation to each Guarantor of an interest in the Guaranteed Obligations

resulting from such payment to such Guarantor.




Section 8.  Subordination.  So long as any of the Guaranteed Obligations

shall be outstanding, all claims of any kind or character of any Guarantor or

any of its successors and assigns against Borrower (all such claims of any kind

or character of such Guarantor or any of its successors and assigns being

hereinafter referred to as “Subordinate Claims”), shall be subordinated

in right of payment to the prior indefeasible payment in full of such

Guaranteed Obligations and any Subordinate Claims collected or received by such

Guarantor after an Event of Default has occurred and is continuing, upon notice

by Agent to such Guarantor, shall be held in trust for the Agent for the

benefit of the Beneficiaries and, at the direction of the Agent to such

Guarantor, shall forthwith be paid over to the Agent for the benefit of the

Beneficiaries to be credited and applied against the Guaranteed Obligations but

without affecting, impairing or limiting in any manner the liability of such

Guarantor under any other provision of this Guarantee.




Section 9.  Representations,

Warranties and Covenants.  Each

Guarantor represents and warrants to the Agent and each Beneficiary that:




(a)           such Guarantor is a corporation duly

organized, validly existing and in good standing under the laws of the

jurisdiction of its organization and has the corporate power and authority and

the legal right to own and operate its property, to lease the property it

operates as lessee and to conduct the business in which it is currently

engaged;




(b)           such Guarantor has the corporate

power and authority and the legal right to execute and deliver, and to perform

its obligations under, this Guarantee, and has taken all necessary corporate

action to authorize its execution, delivery and performance of this Guarantee;





(c)           this Guarantee constitutes a legal,

valid and binding obligation of such Guarantor enforceable in accordance with

its terms, except as enforceability may be limited by bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement of

creditors’ rights generally and by general equitable principles;




(d)           the execution, delivery and

performance of this Guarantee by such Guarantor (i) are within such Guarantor’s

corporate power, (ii) have been duly authorized by all necessary corporate,

shareholder and other action on the part of each Person whose authorization is

required, (iii) do not violate any Requirement of Law or any material

Contractual Obligation applicable to such Guarantor, (iv) will not result in or

require the creation or imposition of any Lien of any nature upon or with

respect to any of the properties now owned or hereafter acquired by such Person

and (v) will not require any authorization or approval or other action by, or

notice to or filing or registration with, any Governmental Authority (other

than those which have been obtained and are in force and effect);




(e)           there are no actions, suits,

proceedings or investigations pending or, to the knowledge of such Guarantor,

threatened against or affecting such Guarantor or any of its Subsidiaries or

any of its or their respective properties or assets before any arbitrator or

Governmental Authority or against any of its or their respective properties or

revenues (a) with respect to this Guarantee or any of the actions contemplated

hereby, or (b) which would reasonably be expected to have a Material Adverse

Effect;




(f)            such Guarantor has good and

marketable title in fee simple to, or a valid leasehold interest in all its

material real property, and good title to, or a valid leasehold interest in all

its other material property, and none of such property is subject to any Lien

except for Permitted Liens.




Each Guarantor

agrees that the foregoing representations and warranties shall be deemed to

have been made by such Guarantor on the date of each Extension of Credit under

the Credit Agreement on and as of date of Extension of Credit as though made

hereunder on and as of such date.  Each

Guarantor hereby acknowledges and agrees that it has received a copy of the

Credit Agreement and hereby (i) reaffirms all representations and warranties

contained therein to the extent applicable to it and (ii) agrees to comply with

all covenants and agreements contained therein to the extent applicable to it

and as the same may be amended or modified from time to time in accordance with

the terms of the Credit Agreement.




Section 10.  Events of

Default.  If an Event of Default

arises and is continuing, then in any such event and at any time thereafter (so

long as such failure shall not have been cured or waived in accordance with

Section 14 hereof), the Agent may, and at the direction of the Majority Lenders

shall, declare the obligations of Borrower under the Credit Agreement (whether

or not then due under the Credit Agreement) immediately due and payable

pursuant to this Guarantee as to the Guarantors, and the Agent shall be

entitled to enforce the joint and several obligations of the Guarantors

hereunder.





Section 11. Application of Proceeds.  Subject to any applicable agreements in

effect from time to time relating to the sharing and priority of payment of

proceeds of collateral the net proceeds of any collection, recovery, receipt,

appropriation or realization, after deducting all costs and expenses of every

kind incurred in connection with the foregoing, including reasonable attorneys’

fees and legal expenses, shall be applied to the payment in whole or in part of

the Guaranteed Obligations, in such order as is specified in Section 4.4

of the Subsidiary Guarantor Security Agreement.




Section 12.  Construction.  THIS GUARANTEE SHALL BE DEEMED TO BE A

CONTRACT MADE UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND FOR ALL

PURPOSES BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS

OF SAID STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.




Section 13. Enforceability.  Any provision of this Guarantee that is prohibited or

unenforceable in any jurisdiction shall, as to such jurisdiction, be

ineffective to the extent of such prohibition or unenforceability without

invalidating the remaining provisions hereof or affecting the validity or

enforceability of such provision in any other jurisdiction.  If this Guarantee would be held or

determined by a court of competent jurisdiction in a judicial proceeding to be

void, voidable, invalid or unenforceable on account of the amount of the

aggregate liability of any Guarantor under this Guarantee or by reason of any

inconsistent contractual provision binding on any Guarantor and in effect on or

prior to the Closing Date, then, notwithstanding any other provision of this

Guarantee to the contrary, the aggregate amount of the liability of each

Guarantor under this Guarantee shall, without any further action by any

Guarantor, the Beneficiaries or any other Person, be automatically limited and

reduced to the maximum amount which is valid and enforceable.











Section 14. Remedies Not Exclusive.  No failure or delay on the part of any

Beneficiary in exercising any right, power or remedy under this Guarantee shall

operate as a waiver thereof, nor shall any single or partial exercise of any

such right, power or remedy preclude any other or further exercise thereof or

the exercise of any other right, power or remedy.  The remedies provided for in this Guarantee are cumulative and

are not exclusive of any remedies that may be available to any Beneficiary at

law or in equity or otherwise.  No

amendment, modification, supplement, termination or waiver of or to any

provision of this Guarantee, nor consent to any departure by any Guarantor

therefrom, shall be effective unless the same shall be consented to in writing

by all of the Lenders or the Majority Lenders, as the case may be, pursuant to

subsection 9.1 of the Credit Agreement, as such terms are defined in the Credit

Agreement.  Any amendment, modification

or supplement of or to any provision of this Guarantee, any waiver of any

provision of this Guarantee, and any consent to any departure by any Guarantor

from the terms of any provision of this Guarantee, shall be effective only in

the specific instance and for the specific purpose for which made or

given.  Except where notice is

specifically required by this Guarantee, no notice to or demand on any Guarantor

in any case shall entitle such Guarantor or any other Guarantor to any other or

further notice or demand in similar or other circumstances.




Section 15.  Consent to

Certain Transactions.  Each

Guarantor acknowledges receipt of a copy of the Credit Agreement and the other

Loan Documents in the form in which each was executed and delivered by the

parties thereto, as amended, supplemented or otherwise modified as of the

Closing Date, and agrees that such copies constitute adequate notice of all

matters contained therein and consents to the execution and delivery of such

agreements and the performance of all transactions provided for or contemplated

therein; provided, however, that none of the Beneficiaries shall

be obligated to furnish to any Guarantor any copies of any amendments,

modifications or supplements or waivers with respect to the Credit Agreement or

any of the other Loan Documents.





Section 16.  Notices.  Except where telephonic instructions or

notices are authorized herein to be given, all notices, demands, instructions

and other communications required or permitted to be given to or made upon any

party hereto shall be in writing and shall be personally delivered or sent by

registered or certified mail, postage prepaid, return receipt requested, or by

a reputable courier delivery service, or by prepaid telex, TWX or telegram

(with messenger delivery specified in the case of a telegram), or by

telecopier, and shall be deemed to have been given to each Guarantor for

purposes of this Guarantee on the day that such writing is delivered or sent to

the intended recipient thereof in accordance with the provisions of this

subsection.  Unless otherwise specified

in a notice sent or delivered in accordance with the foregoing provisions of

this subsection, notices, demands, instructions and other communications in

writing shall be given to or made upon the respective parties hereto at their

respective addresses (or to their respective telex, TWX or telecopier numbers)

indicated in the Credit Agreement, and, in the case of telephonic instructions

or notices, by calling the telephone number or numbers indicated for such party

in the Credit Agreement.




Section 17.  Successors

and Assigns.  This Guarantee shall

be binding upon each Guarantor and its successors and assigns and shall inure

to the benefit of, and shall be enforceable by, each of the Beneficiaries and

their respective successors and assigns (including any permitted assignee of

any Lender in accordance with subsection 11.9 of the Credit Agreement); provided,

however, that no Guarantor may assign or transfer any of its obligations

under this Guarantee without the prior written consent of the Majority Lenders.




Section 18.  Release.  Notwithstanding Section 17, the Agent is

authorized to release any Guarantor from its guarantee and other obligations hereunder

in accordance with the provisions of subsection 11.1 of the Credit Agreement.




Section 19.  Further

Assurances.  Each Guarantor, jointly

and severally, agrees to do such further acts and things and to execute and

deliver such additional agreements, powers and instruments, as any Beneficiary

may reasonably require or reasonably deem advisable to carry into effect the

purposes of this Guarantee or to better assure and confirm unto the

Beneficiaries their rights, powers and remedies under this Guarantee, the

Credit Agreement or any other Loan Document.




Section 20.  Submission

to Jurisdiction.  Each Guarantor,

jointly and severally, hereby irrevocably and unconditionally consents and

submits to the nonexclusive jurisdiction of any United States Federal or New

York State court sitting in New York County in any action or proceeding arising

out of or relating to this Guarantee, and each Guarantor, jointly and

severally, hereby irrevocably and unconditionally agrees that all claims in

respect of such action or proceeding brought against any of the Beneficiaries

in respect of this Guarantee shall be brought in such United States Federal or

New York State court.  Each Guarantor,

jointly and severally, irrevocably consents to the service of any and all

process in any such action or proceeding brought in any court in or of the

State of New York by the delivery of copies of such process to such Guarantor

at its address specified in Section 16 or by certified or registered mail

directed to such address.  Nothing herein

shall affect the right of any of the Beneficiaries to serve process in any

other manner permitted by law or to commence legal proceedings or otherwise

proceed against any Guarantor in any other jurisdiction.





Section 21. Waiver of Trial by Jury.  THE PARTIES HERETO HEREBY IRREVOCABLY AND

UNCONDITIONALLY WAIVE TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING

UNDER OR COUNTERCLAIM RELATING TO THIS GUARANTEE, THE CREDIT AGREEMENT OR ANY

OTHER LOAN DOCUMENT, AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY

WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE

LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,

OR THAT IT OR ITS ASSETS IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION,

WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OR MAINTAINING OF ANY SUCH

ACTION OR PROCEEDING IN THE JURISDICTIONS REFERRED TO IN SECTION 20.  EACH BENEFICIARY, BY ITS ACCEPTANCE OF THE

BENEFITS OF THIS GUARANTEE, SHALL BE DEEMED TO HAVE WAIVED ITS RIGHT TO TRIAL

BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING IN WHICH THE GUARANTORS

HAVE WAIVED THEIR RIGHT TO TRIAL BY JURY.




Section 22.  Fees and

Expenses.  Each Guarantor, jointly

and severally, agrees to pay promptly, to the extent not previously finally and

indefeasibly paid in full by Borrower, (i) all reasonable costs and expenses of

any Beneficiary in connection with (A) any and all amounts which any

Beneficiary has paid relative to the curing of any default resulting from the

acts or omissions of any Guarantor under this Guarantee and (B) the enforcement

of this Guarantee and the preservation of the Beneficiaries’ rights hereunder.




Section 23.  Taxes.  Each of the agreements set forth in

subsection 4.6 of the Credit Agreement is hereby incorporated by reference mutatis

mutandis with the same effect as if such agreements had been set

forth herein (it being understood that the intent of the parties under this

Section 23 is to provide that, subject to the limitations of subsection 4.6 of

the Credit Agreement, each Beneficiary receive and retain the same amount net

of all taxes and Non-Excluded Taxes that such Beneficiary would have received

had payment been made by the Borrower under the Credit Agreement).  All references in such incorporated

provisions to “the Borrower” shall be deemed references to each Guarantor and

all references in such incorporated provisions to “this Agreement” shall be

deemed references to this Guarantee. 

Each Guarantor further agrees to pay any and all stamp, transfer and

other taxes or fees payable or determined to be payable in connection with the

execution, delivery, filing and recording of any instrument or document that

may be delivered in connection with this Guarantee, and agrees to save Agent

and each other Beneficiary harmless from and against any and all liabilities

with respect to or resulting from any delay in paying, or omission to pay, such

taxes, fees and expenses.




Section 24.  Counterparts.  This Guarantee may be executed in any number

of counterparts and by the different parties hereto on separate counterparts,

each of which counterparts, when so executed and delivered, shall be deemed to

be an original and all of which counterparts, taken together, shall constitute

but one and the same Guarantee.





Section 25.  Headings.  Section and other headings used in this

Guarantee are for convenience only and shall not affect the construction of

this Guarantee.




                                Section

26.             US Bank.  (a) US Bank as LC Creditor under the US Bank

Letter of Credit Facility and in its capacity as a Beneficiary hereunder hereby

irrevocably designates and appoints Bankers Trust Company as Agent under this

Guarantee and irrevocably authorizes Bankers Trust Company to act as its Agent

and to take such action on its behalf under the provisions of this Guarantee

and to exercise such powers and perform such duties as are expressly delegated

to the Agent under this Guarantee and the Loan Documents, together with such

other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary in this Guarantee,

the Agent shall not have any duties or responsibilities with respect to US Bank

in its capacity as LC Creditor under the US Bank Letter of Credit Facility or

any fiduciary relationship with US Bank, and no implied covenants, functions,

responsibilities, duties, obligations or liabilities shall be read into this

Guarantee or otherwise to exist against the Agent.




 




                (b)           For avoidance of doubt, US Bank

expressly acknowledges that all rights and remedies of the Agent hereunder

shall be exercised by the Agent in accordance with the applicable provisions of

the Credit Agreement, and no consent of, or notice to, US Bank shall be

required with respect thereto and US Bank shall not undertake any separate

action with respect to the Collateral. 

The sole right of US Bank hereunder shall be to receive its

proportionate share of any proceeds received by the Agent hereunder in

accordance with the terms hereof.




 




                                Section

27.             Additional Guarantors.  It is understood and agreed that any

Subsidiary of Borrower that is required to become a party to this Guarantee

after the Restatement Date pursuant to Section 7.12 of the Credit

Agreement shall automatically become a party hereunder upon the execution and

delivery by such Subsidiary of an instrument in the form of Annex A

hereto and the delivery of same to the Agent, with the same force and effect as

if originally named as a party herein. 

The execution and delivery of any instrument adding an additional party

to this Guarantee shall not require the consent of any party hereunder or of

any Beneficiary.  The rights and

obligations of each party hereunder shall remain in full force and effect

notwithstanding the addition of any new party hereto.




 




 




 




 




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BLANK]











IN

WITNESS WHEREOF, each of the Guarantors has caused this Subsidiary Guarantee

Agreement to be duly executed and delivered by its proper and duly authorized

officer as of the day and year first above written.




	

   


  	

  VISION-EASE LENS, INC.


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Bradley D. Carlson


  
	

   


  	

   


  	

   


  
	

   


  	

  Name:


  	

  Bradley D. Carlson


  
	

   


  	

   


  	

   


  
	

   


  	

  Title:


  	

  Treasurer


  
	

   


  	

   


  	

   


  
	

   


  	

  VISION-EASE LENS AZUSA,

  INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Bradley D. Carlson


  
	

   


  	

   


  	

   


  
	

   


  	

  Name:


  	

  Bradley D. Carlson


  
	

   


  	

   


  	

   


  
	

   


  	

  Title:   


  	

   Treasurer


  





 











 




ACKNOWLEDGED AND AGREED TO




AS A BENEFICIARY THIS 12TH DAY




OF OCTOBER, 2001:




 




U.S. BANK NATIONAL ASSOCIATION




 




	

  By:


  	

  /s/ William J. Umscheid


  
	

  Name:


  	

  William J. Umscheid


  
	

  Title:


  	

  Vice President


  





 




















ANNEX A




to




Amended and Restated

Subsidiary Guarantee Agreement




ADDITION

OF NEW GUARANTOR




TO AMENDED AND RESTATED

SUBSIDIARY GUARANTEE AGREEMENT




 




ADDITION OF NEW GUARANTOR

TO AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT (this "Instrument"),

dated as of ___________ __, ______, amending that certain Amended and Restated

Subsidiary Guarantor Security Agreement dated as of October __, 2001 (as the

same may be amended, restated, supplemented or otherwise modified from time to

time, the "Agreement") by and among the Guarantors (the "Guarantors")

party thereto and Bankers Trust Company, as Agent (the "Agent")

for the Secured Creditors.




Reference is made

to the Amended and Restated Credit Agreement, dated as of June 25, 1998,  by and among BMC Industries, Inc. (the

"Borrower"), the financial institutions (the “Lenders”)

from time to time party thereto and Bankers Trust Company, as Agent (together

with any successor agent, the “Agent”) providing for the making of Loans

and the issuance of, and participation in, Letters of Credit as contemplated

therein (as used herein, the term “Credit Agreement” means the Credit

Agreement described above in this paragraph, as in effect on October __, 2001

and as amended by that certain Second Amendment and Restatement Agreement dated

as of the October _, 2001, as the same may be amended, modified, extended,

renewed, replaced, restated or supplemented from time to time, and including

any agreement extending the maturity of or restructuring of all or any portion

of the Indebtedness under such agreement or any successor agreements).




Capitalized terms

used herein and not otherwise defined herein shall have the meanings assigned

to such terms in the Agreement and the Credit Agreement.




The Guarantors

have entered into the Agreement in order to induce the Lenders to extend credit

pursuant to the Credit Agreement and to induce the Other Creditors to extend

Interest Rate Protection or other Hedging Agreements.  Pursuant to Sections 7.12 of the Credit Agreement, the

undersigned is required to enter into the Agreement.  Section 27 of the Agreement provides that additional

parties may become a party under the Agreement by execution and delivery of an

instrument in the form of this Instrument. 

The undersigned (the "New Party") is executing this

Instrument in accordance with the requirements of the Credit Agreement to

become a party under the Agreement in order to induce the Lenders to extend and

continue the extension of credit pursuant to the Credit Agreement.




Accordingly,

the New Party agrees as follows:




SECTION 1.           In accordance with the Agreement, the

New Party by its signature below becomes a party to the Agreement with the same

force and effect as if originally named therein as a party and the New Party

hereby (a) agrees to all the terms and warrants that the representations and

warranties made by it as a party thereunder are true and correct in all

material respects on and as of the date hereof.  Each reference to an "Guarantor" in the Agreement shall

be deemed to include the New Party.  The

Agreement is hereby incorporated herein by reference.





SECTION 2.           The New Party represents and warrants

to the Agent and the Beneficiaries that this Instrument has been duly

authorized, executed and delivered by it and constitutes its legal, valid and

binding obligation, enforceable against it in accordance with its terms, except

to the extent that the enforceability thereof may be limited by applicable bankruptcy,

insolvency, reorganization, moratorium or similar laws generally affecting

creditors' rights and by equitable principles (regardless of whether

enforcement is sought in equity or at law).




SECTION 3.           This Instrument may be executed in

counterparts, each of which shall constitute an original, but all of which when

taken together shall constitute a single contract.  This Instrument shall become effective when the Agent shall have

received a counterpart of this Instrument that bears the signatures of the New

Party.




SECTION 4.           Except as expressly supplemented

hereby, the Agreement shall remain in full force and effect.




SECTION 5.         THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER

THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD

TO PRINCIPLES OF CONFLICTS OF LAW.




SECTION 6.           All communications and notices

hereunder shall be in writing and given as provided in the Agreement.  All communications and notices hereunder to

the New Party shall be given to it at the address set forth under its signature

below.




IN WITNESS

WHEREOF, the New Party has duly executed this Addition of New Guarantor to

Amended and Restated Subsidiary Guarantee Agreement as of the day and year

first above written.




	

   


  	

  [NAME OF NEW PARTY],


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  	

  Address: