Prepared by MERRILL CORPORATION









EXHIBIT

10.50




 




SECOND

AMENDED AND RESTATED AGREEMENT




THIS SECOND AMENDED AND

RESTATED PLEDGE AGREEMENT (as amended, restated, supplemented or otherwise

modified from time to time, this “Agreement”), dated as of

October 12, 2001, is made by BMC INDUSTRIES, INC., a Minnesota corporation

(the “Pledgor”), to BANKERS TRUST COMPANY, as Collateral Agent (the “Pledgee”)

for the benefit 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 of a

Lender enters 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, the Pledgor, any such Lender

or Lenders or Affiliate or Affiliates (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) U.S.

Bank National Association ("US Bank") as lender under that

certain Continuing Reimbursement Agreement for Commercial Letters of Credit,

dated as of July 14, 2000 the "US Bank Letter of Credit Facility")

among the Borrower and US Bank (the "LC Creditor" and,

together with the Bank Creditors and the Other Creditors, are hereinafter

called the “Secured Creditors”). 

Except as otherwise defined herein, terms used herein and defined in the

Credit Agreement shall be used herein as so defined.




 




 




W I T N E S S E T H:




WHEREAS, the Pledgor, the

financial institutions from time to time party thereto, and Bankers Trust

Company, as Agent (together with any successor agent, the “Agent”), have

entered into an Amended and Restated Credit Agreement, dated as of June 25,

1998, 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 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, the Pledgor may

at any time and from time to time enter into, or guarantee obligations of its

Subsidiaries under, one or more Interest Rate Protection or Other Hedging Agreements

with one or more Other Creditors;




WHEREAS, it is a

condition to each of the above–described extensions of credit that the

Pledgor shall have executed and delivered this Agreement;











WHEREAS, the Pledgor

desires to enter into this Agreement in order to satisfy the condition

described in the preceding paragraph;




NOW, THEREFORE, in

consideration of the benefits accruing to the Pledgor, the receipt and

sufficiency of which are hereby acknowledged, the Pledgor hereby makes the

following representations and warranties to the Pledgee for the benefit of the

Secured Creditors and hereby covenants and agrees with the Pledgee for the

benefit of the Secured Creditors as follows:




1.             SECURITY FOR OBLIGATIONS.  This Agreement is made by the Pledgor for the benefit of the

Secured Creditors to secure:




(i)            the

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

acceleration or otherwise) of all obligations and indebtedness (including,

without limitation, indemnities, Fees and interest thereon) of the Pledgor to

the Bank Creditors, whether now existing or hereafter incurred under, arising

out of, or in connection with the Credit Agreement and the other Loan Documents

and the due performance and compliance by the Pledgor with all of the terms,

conditions and agreements contained in the Credit Agreement and the other Loan

Documents (all such principal, interest, obligations and liabilities described

in this clause (i) 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 and liabilities owing by the

Pledgor to the Other Creditors under, or with respect to, (x) any Interest Rate

Protection or Other Hedging Agreement, including all obligations of the Pledgor

in respect of Interest Rate Protection or Other Hedging Agreement, whether such

Interest Rate Protections or Other Hedging Agreements are now in existence or

hereafter arising, and the due performance and compliance by the Pledgor 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 such obligations and

liabilities described in this clause (ii) being herein collectively called the

“Other Obligations”);




(iii)          any

and all sums advanced by the Pledgee in accordance with the Loan Documents in

order to preserve the Collateral (as hereinafter defined) or preserve its

security interest in the Collateral;




(iv)          in

the event of any proceeding for the collection or enforcement of any

indebtedness, obligations, or liabilities referred to in clauses (i) , (ii) and

(iii) above, after an Event of Default (as such term is defined in the Credit

Agreement) shall have occurred and be continuing, the reasonable expenses of

retaking, holding, preparing for sale or lease, selling or otherwise disposing

of or realizing on the Collateral, or of any exercise by the Pledgee of its

rights hereunder, together with reasonable attorneys’ fees and court costs; and











(v)           all

amounts paid by any Secured Creditor as to which such Secured Creditor has the

right to reimbursement under Section 11 of this Agreement;




all such obligations,

liabilities, sums and expenses set forth in clauses (i) through (v) of this Section

1 being herein collectively called the “Obligations,” it being

acknowledged and agreed that the “Obligations” shall include extensions of

credit of the types described above, whether outstanding on the date of this

Agreement or extended from time to time after the date of this Agreement.




2.             DEFINITION OF STOCK, NOTES, SECURITIES, ETC.  As used herein, the term “Stock”

shall mean (x) all of the issued and outstanding shares of capital stock at any

time owned by the Pledgor of any Material Subsidiary which is a Domestic

Subsidiary and (y) 65% of the issued and outstanding shares of capital stock at

any time owned by the Pledgor of any first tier Foreign Subsidiary which is a

Material Subsidiary, (ii) the term “Notes” shall mean Note B and all

promissory notes issued in lieu thereof, and (iii) the term “Securities”

shall mean all of the Stock and the Notes. 

The Pledgor represents and warrants, as to the stock of Material

Subsidiaries owned by the Pledgor and the Notes, that on the date hereof (a)

the Stock consists of the number and type of shares of the stock of the

corporations as described in Part I of Annex A hereto; (b) such Stock

constitutes that percentage of the issued and outstanding capital stock of the

issuing corporation as is set forth in Part I of Annex A hereto; (c) the

Notes consist of the promissory notes described in Part II of Annex A

hereto; and (d) the Pledgor is the holder of record and sole beneficial owner

of the Stock, and there exist no options or preemptive rights in respect of any

of such Stock.  If and to the extent

that the Pledgee receives or holds stock certificates representing more than

65% of the total combined voting power of all classes of capital stock of any

first tier Foreign Subsidiary that is a Material Subsidiary entitled to vote,

the Pledgee agrees to act as bailee (and not as a pledgee, the Pledgee hereby

disclaiming any security interest in such portion except as otherwise provided

in the last sentence of this Section 2) and custodian for the benefit of

the Pledgor with respect to any portion of such capital stock representing more

than 65% of the total combined voting power of all classes of capital stock of

any such Foreign Subsidiary entitled to vote except as otherwise provided in

the last sentence of this Section 2. 

If following a change in the relevant sections of the Code or the

regulations, rules, rulings, notices or other official pronouncements issued or

promulgated thereunder which would permit a pledge of 66% or more (or would be

adjusted to permit a pledge of less than 66%) of the total combined voting

power of all classes of capital stock of such Foreign Subsidiary entitled to

vote without causing the undistributed earnings of such Foreign Subsidiary as

determined for Federal income taxes to be treated as a deemed dividend to the

Pledgor for Federal income tax purposes, then the 65% limitation set forth in

clause (y) of the first sentence of this Section 2 shall no longer be

applicable (or shall be adjusted as appropriate) and the Pledgor shall duly

pledge and deliver to the Pledgee such of the Stock not theretofore required to

be pledged hereunder or the Pledgee shall return such Stock as applicable.




3.             PLEDGE OF SECURITIES, STOCK, ETC.




3.1           Pledge.  To secure the Obligations, and for the

purposes set forth in Section 1 hereof, the Pledgor hereby (i) grants to

the Pledgee a security interest in all of the Collateral (as hereinafter

defined), (ii) pledges and deposits with the Pledgee the Securities owned by

the Pledgor on the date hereof, and acknowledging that it previously delivered

to the Pledgee certificates or instruments therefor, duly endorsed in blank in

the case of Notes, and accompanied by undated stock powers duly executed in

blank by the Pledgor (and accompanied by any transfer tax stamps required in

connection with the pledge of such Securities), or such other instruments of

transfer as are acceptable to the Pledgee and (iii) assigns, transfers,

hypothecates, mortgages, charges and sets over to the Pledgee all of the

Pledgor’s right, title and interest in and to such Securities (and in and to

all certificates or instruments evidencing such Securities), to be held by the

Pledgee as collateral security for the Obligations, upon the terms and

conditions set forth in this Agreement.





3.2           Subsequently Acquired Securities.  If the Pledgor shall acquire (by purchase,

stock dividend or otherwise) any additional Securities at any time or from time

to time after the date hereof, the Pledgor will immediately pledge and deposit

such Securities (or certificates or instruments representing such Securities)

as security with the Pledgee and deliver to the Pledgee certificates or

instruments therefor, duly endorsed in blank in the case of Notes, and

accompanied by undated stock powers duly executed in blank by the Pledgor (and

accompanied by any transfer tax stamps required in connection with the pledge

of such Securities) in the case of Stock, or such other instruments of transfer

as are reasonably acceptable to the Pledgee, and any other foreign security

documentation reasonably requested by Pledgee, and will promptly thereafter

deliver to the Pledgee a certificate executed by a Responsible Officer of the

Pledgor describing such Securities and certifying that the same have been duly

pledged with the Pledgee hereunder.  If

any Domestic Subsidiary of Pledgor shall hereafter own capital stock of any

Material Subsidiary, then Pledgor shall cause such Domestic Subsidiary to enter

into a pledge agreement in substantially the form hereof, and shall deliver any

other security documentation reasonably requested by Pledgee, in order to cause

the stock of such Material Subsidiary to be pledged to the Pledgee for the

benefit of the Lenders.  Subject to the

last sentence of Section 2, the Pledgor shall not be required at any time to

pledge hereunder more than 65% of the total combined voting power of all

classes of capital stock of any Foreign Subsidiary entitled to vote.




3.3           Uncertificated Securities.  Notwithstanding anything to the contrary

contained in Sections 3.1 and 3.2 hereof, if any Securities (whether now

owned or hereafter acquired) are uncertificated securities, the Pledgor shall promptly

notify the Pledgee thereof, and shall promptly take all actions required to

perfect the security interest of the Pledgee under applicable law (including,

in any event, under Sections 8-313 and 8-321 of the New York Uniform Commercial

Code if applicable).  The Pledgor

further agrees to take such actions as the Pledgee deems necessary or desirable

to effect the foregoing and to permit the Pledgee to exercise any of its rights

and remedies hereunder, and agrees to provide an opinion of counsel reasonably

satisfactory to the Pledgee with respect to any such pledge of uncertificated

Stock promptly upon the reasonable request of the Pledgee.  Subject to the last sentence of Section 2,

the Pledgor shall not be required, at any time, to pledge hereunder more than

65% of the total combined voting power of all classes of capital stock of any

Foreign Subsidiary entitled to vote.




3.4           Definitions of Pledged Stock;

Pledged Notes; Pledged Securities and Collateral.  All Stock at any time pledged or required to be pledged hereunder

is hereinafter called the “Pledged Stock;” and all Notes at any time

pledged or required to be pledged hereunder are hereinafter called the “Pledged

Notes;” all Pledged Stock and Pledged Notes together are called the “Pledged

Securities;” and the Pledged Securities, together with all proceeds

thereof, including any securities and moneys received and at the time held by

the Pledgee hereunder, are hereinafter called the “Collateral.”





4.             APPOINTMENT OF SUB–AGENTS; ENDORSEMENTS, ETC.  The Pledgee shall have the right to appoint

one or more sub–agents for the purpose of retaining physical possession

of the Pledged Securities, which may be held (in the discretion of the Pledgee)

in the name of the Pledgor, endorsed or assigned in blank or in favor of the

Pledgee or any nominee or nominees of the Pledgee or a sub–agent

appointed by the Pledgee.




5.             VOTING, ETC., WHILE NO EVENT OF DEFAULT.  Unless and until an Event of Default shall

have occurred and be continuing, the Pledgor shall be entitled to exercise any

and all voting and other consensual rights pertaining to the Pledged Securities

owned by it, and to give consents, waivers or ratifications in respect thereof,

provided that no vote shall be cast or any consent, waiver or

ratification given or any action taken which would violate or result in breach

of any covenant contained in this Agreement, the Credit Agreement, any other

Loan Document or any Interest Rate Protection or Other Hedging Agreement

(collectively, the “Secured Debt Agreements”), or which could reasonably

be expected to have the effect of impairing the value of the Collateral or any

part thereof or the position or interests of the Pledgee or any Secured

Creditor.  All such rights of the

Pledgor to vote and to give consents, waivers and ratifications shall cease in

case an Event of Default shall occur and be continuing, and Section 7

hereof shall become applicable.




6.             DIVIDENDS AND OTHER DISTRIBUTIONS.  Unless an Event of Default shall have

occurred and be continuing, all cash dividends and distributions payable in

respect of the Pledged Stock and all payments in respect of the Pledged Notes

shall be paid to the Pledgor which owns such Pledged Stock or Pledged Notes; provided,

that all cash dividends payable in respect of the Pledged Stock which are

reasonably determined by the Pledgee to represent in whole or in part an

extraordinary, liquidating or other distribution in return of capital shall be

paid, to the extent so determined to represent an extraordinary, liquidating or

other distribution in return of capital, to the Pledgee and retained by it as

part of the Collateral.  The Pledgee

also shall be entitled to receive directly, and to retain as part of the

Collateral:




(a)           all other or additional stock or

other securities or property (other than cash) paid or distributed by way of

dividend or otherwise in respect of the Pledged Stock;




(b)           all other or additional stock or

other securities or property (including cash) paid or distributed in respect of

the Pledged Stock by way of stock–split, spin-off, split-up,

reclassification, combination of shares or similar rearrangement; and




(c)           all other or additional stock or

other securities or property (including cash) which may be paid in respect of

the Collateral by reason of any consolidation, merger, exchange of stock,

conveyance of assets, liquidation or similar corporate reorganization.




Subject to the last sentence of Section 2, the Pledgor shall not

be required at any time to pledge hereunder more than 65% of the total combined

voting power of all classes of capital stock of any Foreign Subsidiary entitled

to vote.  Nothing contained in this Section

6 shall limit or restrict in any way the Pledgee’s right to receive

proceeds of the Collateral in any form in accordance with Section 3 of

this Agreement.  All dividends,

distributions or other payments which are received by the Pledgor contrary to

the provisions of this Section 6 and Section 7 shall be received

in trust for the benefit of the Pledgee, shall be segregated from other

property or funds of the Pledgor and shall be forthwith paid over to the

Pledgee as Collateral in the same form as so received (with any necessary

endorsement).





7.             REMEDIES IN CASE OF EVENTS OF DEFAULT.  In case an Event of Default shall have

occurred and be continuing, then and in every such case, the Pledgee shall be

entitled to exercise all of the rights, powers and remedies (whether vested in

it by this Agreement, any other Secured Debt Agreement or by law) for the

protection and enforcement of its rights in respect of the Collateral, and the

Pledgee shall be entitled to exercise all the rights and remedies of a secured

party under the Uniform Commercial Code and also shall be entitled, without

limitation, to exercise the following rights, which the Pledgor hereby agrees

to be commercially reasonable:




(a)           to receive all amounts payable in

respect of the Collateral otherwise payable to the Pledgor under Section 6

hereof;




(b)           to transfer all or any part of the

Collateral into the Pledgee’s name or the name of its nominee or nominees;




(c)           to accelerate any

Pledged Note which may be accelerated in accordance with its terms, and take

any other lawful action to collect upon any Pledged Note (including, without

limitation, to make any demand for payment thereon);




(d)           to vote all or any

part of the Pledged Stock (whether or not transferred into the name of the

Pledgee) and give all consents, waivers and ratifications in respect of the

Collateral and otherwise act with respect thereto as though it were the

outright owner thereof (the Pledgor hereby irrevocably constituting and

appointing the Pledgee the proxy and attorney–in–fact of the

Pledgor, with full power of substitution to do so); and




(e)           to sell, assign and

deliver, or grant options to purchase, all or any part of the Collateral, or

any interest therein, at any public or private sale, without demand of

performance, advertisement or notice of intention to sell or of the time or

place of sale or adjournment thereof or to redeem or otherwise (all of which

are hereby waived by the Pledgor), for cash, on credit or for other property,

for immediate or future delivery without any assumption of credit risk, and for

such price or prices and on such terms as the Pledgee in its absolute

discretion may determine, provided that at least 15 business days’

written notice of the time and place of any such sale shall be given to the

Pledgor.  Pledgee shall not be obligated

to make any such sale of Collateral regardless of whether any such notice of

sale has theretofore been given.  The

Pledgor hereby waives and releases to the fullest extent permitted by law any

right or equity of redemption with respect to the Collateral, whether before or

after sale hereunder, and all rights, if any, of marshalling the Collateral and

any other security for the Obligations or otherwise.  At any such sale, unless prohibited by applicable law, the

Pledgee on behalf of the Secured Creditors may bid for and purchase all or any

part of the Collateral so sold free from any such right or equity of

redemption.  Neither the Pledgee nor any

Secured Creditor shall be liable for failure to collect or realize upon any or

all of the Collateral or for any delay in so doing nor shall any of them be

under any obligation to take any action whatsoever with regard thereto.





8.             REMEDIES, ETC., CUMULATIVE.  Each and every right, power and remedy of the Pledgee provided

for in this Agreement or any Secured Debt Agreement, or now or hereafter

existing at law or in equity or by statute shall be cumulative and concurrent

and shall be in addition to every other such right, power or remedy.  The exercise or beginning of the exercise by

the Pledgee or any other Secured Creditor of any one or more of the rights,

powers or remedies provided for in this Agreement, or any other Secured Debt

Agreement or now or hereafter existing at law or in equity or by statute or

otherwise shall not preclude the simultaneous or later exercise by the Pledgee

or any Secured Creditor of all such other rights, powers or remedies, and no

failure or delay on the part of the Pledgee or any Secured Creditor to exercise

any such right, power or remedy shall operate as a waiver thereof.  Unless otherwise required by the Loan

Documents, no notice to or demand on the Pledgor in any case shall entitle it

to any other or further notice or demand in similar or other circumstances or

constitute a waiver of any of the rights of the Pledgee or any Secured Creditor

to any other or further action in any circumstances without notice or demand.




9.             APPLICATION OF PROCEEDS.




(a)           The cash proceeds

actually received from the sale or other disposition or collection of

Collateral, and any other amounts received in respect of the Collateral, the

application of which is not otherwise provided for herein, shall be applied

(after payment of any amounts payable to the Pledgee or the Agent pursuant to

this Agreement or the Credit Agreement) in whole or in part by the

Pledgee against all or any part of the Obligations in the following

order:  (i) first, to any fees, costs or

other expenses due under the Loan Documents; (ii) next, to any interest due

under the Loan Documents; (iii) next, to any principal due under the Loan

Documents and amount due under Interest Rate Protection and Other Hedging

Agreements; and (iv) last, to any other Obligations.  Any surplus thereof which exists after payment and performance in

full of the Obligations shall be promptly paid over to the Pledgor or otherwise

disposed of in accordance with the UCC or other applicable law.




(b)           It is understood and

agreed that the Pledgor shall remain liable to the extent of any deficiency

between the amount of the proceeds of the Collateral hereunder and the

aggregate amount of the Obligations.




10.           PURCHASERS OF COLLATERAL.  Upon any sale of the Collateral by the

Pledgee hereunder (whether by virtue of the power of sale herein granted,

pursuant to judicial process or otherwise), the receipt of the Pledgee or the

officer making the sale shall be a sufficient discharge to the purchaser or

purchasers of the Collateral so sold, and such purchaser or purchasers shall

not be obligated to see to the application of any part of the purchase money

paid over to the Pledgee or such officer or be answerable in any way for the

misapplication or nonapplication thereof.





11.           INDEMNITY.  The Pledgor agrees to indemnify and hold harmless the Pledgee and

each Secured Creditor and their respective successors, assigns, employees,

agents and servants (individually an “Indemnitee,” and collectively the

“Indemnitees”) from and against any and all claims, demands, losses,

judgments and liabilities (including liabilities for penalties) of whatsoever

kind or nature, and to reimburse each Indemnitee for all costs and expenses,

including reasonable attorneys’ fees, growing out of or resulting from this

Agreement or the exercise by any Indemnitee of any right or remedy granted to

it hereunder or under any other Secured Debt Agreement (but excluding any

claims, demands, losses, judgments and liabilities or expenses to the extent

incurred by reason of gross negligence or willful misconduct of such

Indemnitee).  If and to the extent that

the obligations of the Pledgor under this Section 11 are unenforceable

for any reason, the Pledgor hereby agrees to make the maximum contribution to

the payment and satisfaction of such obligations which is permissible under

applicable law.




12.           FURTHER ASSURANCES; POWER–OF–ATTORNEY.




(a)           The Pledgor agrees

that it will join with the Pledgee in executing and, at the Pledgor’s own

expense, file and refile under the Uniform Commercial Code or other applicable

law such financing statements, continuation statements and other documents in

such offices as the Pledgee may reasonably deem necessary and wherever required

by law in order to perfect and preserve the Pledgee’s security interest in the

Collateral and hereby authorizes the Pledgee to file financing statements and

amendments thereto relative to all or any part of the Collateral without the

signature of the Pledgor where permitted by law, and agrees to do such further

acts and things and to execute and deliver to the Pledgee such additional

conveyances, assignments, agreements and instruments as the Pledgee may

reasonably require or deem necessary to carry into effect the purposes of this

Agreement or to further assure and confirm unto the Pledgee its rights, powers

and remedies hereunder.




(b)           The Pledgor hereby

appoints the Pledgee as the Pledgor’s attorney-in-fact, with full authority in

the place and stead of the Pledgor and in the name of the Pledgor or otherwise,

from time to time after the occurrence and during the continuance of an Event

of Default, in the Pledgee’s reasonable discretion to take any action and to

execute any instrument required by paragraph (a) if Pledgor has failed to do so

after demand by Pledgee.




13.           THE PLEDGEE AS AGENT.  The Pledgee will hold in accordance with

this Agreement all items of the Collateral at any time received under this

Agreement.  It is expressly understood

and agreed by the parties hereto and each Secured Creditor, by accepting the

benefits of this Agreement that each acknowledges and agrees that the

obligations of the Pledgee as holder of the Collateral and interests therein

and with respect to the disposition thereof, and otherwise under this

Agreement, are only those expressly set forth in this Agreement.  The Pledgee shall act hereunder on the terms

and conditions set forth herein and in Article X of the Credit

Agreement.




14.           TRANSFER BY PLEDGOR.  The Pledgor will not sell or otherwise

dispose of, grant any option with respect to, or mortgage, pledge or otherwise

encumber any of the Collateral or any interest therein (except as may be

permitted in accordance with the terms of the Credit Agreement).











15.           REPRESENTATIONS, WARRANTIES AND

COVENANTS OF THE PLEDGOR.  The Pledgor

represents and warrants and covenants that (a) it is, or at the time when

pledged hereunder will be, the legal, record and beneficial owner of, and has

(or will have) good title to, all Securities pledged by it hereunder, subject

to no Lien (except the Lien created by this Agreement); (b) it has full

corporate power, authority and legal right to pledge all the Securities pledged

by it pursuant to this Agreement; (c) this Agreement has been duly authorized,

executed and delivered by the Pledgor and constitutes a legal, valid and

binding obligation of the Pledgor enforceable in accordance with its terms,

except to the extent that the enforceability hereof may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or other similar

laws generally affecting creditors’ rights and by equitable principles

(regardless of whether enforcement is sought in equity or at law); (d) except

to the extent already obtained or made, no consent of any other party

(including, without limitation, any stockholder or creditor of the Pledgor or any

of its Subsidiaries) and no consent, license, permit, approval or authorization

of, exemption by, notice or report to, or registration, filing or declaration

with, any governmental authority is required to be obtained by the Pledgor in

connection with (i) the execution, delivery or performance of this Agreement,

(ii) the validity or enforceability of this Agreement, (iii) the perfection or

enforceability of the Pledgee’s security interest in the Collateral or (iv)

except for compliance with or as may be required by applicable securities laws

and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the exercise by

the Pledgee of any of its rights or remedies provided herein; (e) the

execution, delivery and performance of this Agreement by the Pledgor does not

violate any provision of any applicable law or regulation or of any order,

judgment, writ, award or decree of any court, arbitrator or governmental

authority, domestic or foreign or of the certificate of incorporation or by–laws

of the Pledgor, or of any securities issued by the Pledgor or any of its

Subsidiaries, or of any material mortgage, indenture, lease, deed of trust,

loan agreement, credit agreement or other contract, agreement or instrument or

undertaking to which the Pledgor or any of its Subsidiaries is a party or which

purports to be binding upon the Pledgor or any of its Subsidiaries or upon any

of their respective assets and will not result in the creation or imposition of

(or the obligation to create or impose) any lien or encumbrance on any of the

assets of the Pledgor or any of its Subsidiaries except as contemplated by this

Agreement; (f) all the shares of the Stock have been duly and validly issued,

are fully paid and nonassessable and are subject to no options to purchase or

similar rights; (g) each of the Pledged Notes to the extent issued by the

Pledgor or any of its Subsidiaries constitutes, or when executed by the obligor

thereof will constitute, the legal, valid and binding obligation of such

obligor, enforceable in accordance with its terms, except to the extent that

the enforceability thereof may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or other similar laws generally affecting creditors’

rights and by equitable principles (regardless of whether enforcement is sought

in equity or at law); and (h) the pledge, collateral assignment and delivery to

the Pledgee of the Securities (other than uncertificated securities) pursuant

to this Agreement creates a valid and perfected first priority Lien in the

Securities, and the proceeds thereof, subject to no other Lien or to any

agreement purporting to grant to any third party a Lien on the property or

assets of the Pledgor which would include the Stock.  The Pledgor covenants and agrees that it will defend the

Pledgee’s right, title and security interest in and to the Securities and the

proceeds thereof against the claims and demands of all persons whomsoever; and

the Pledgor covenants and agrees that it will have like title to and right to

pledge any other property at any time hereafter pledged to the Pledgee as

Collateral hereunder and will likewise defend the right thereto and security

interest therein of the Pledgee and the Secured Creditors.











16.           PLEDGOR’S OBLIGATIONS ABSOLUTE,

ETC.  The obligations of the Pledgor

under this Agreement shall be absolute and unconditional and (except as

provided in Section 18 hereof) shall remain in full force and effect

without regard to, and shall not be released, suspended, discharged, terminated

or otherwise affected by, any circumstance or occurrence whatsoever, including,

without limitation: (a) any renewal, extension, amendment or modification of or

addition or supplement to or deletion from any Secured Debt Agreement or any

other instrument or agreement referred to therein, or any assignment or

transfer of any thereof; (b) any waiver, consent, extension, indulgence or

other action or inaction under or in respect of any such agreement or

instrument including, without limitation, this Agreement; (c) any furnishing of

any additional security to the Pledgee or its assignee or any acceptance

thereof or any release of any security by the Pledgee or its assignee; (d) any

limitation on any party’s liability or obligations under any such instrument or

agreement or any invalidity or unenforceability, in whole or in part, of any

such instrument or agreement or any term thereof; or (e) any bankruptcy,

insolvency, reorganization, composition, adjustment, dissolution, liquidation

or other like proceeding relating to the Pledgor or any Subsidiary of the

Pledgor, or any action taken with respect to this Agreement by any trustee or

receiver, or by any court, in any such proceeding, whether or not the Pledgor

shall have notice or knowledge of any of the foregoing.




17.           REGISTRATION, ETC.




(a)           If there shall have occurred and be

continuing an Event of Default and acceleration of the Notes then, and in every

such case, upon receipt by the Pledgor from the Pledgee of a written request or

requests that the Pledgor cause any registration, qualification or compliance

under any Federal or state securities law or laws to be effected with respect

to all or any part of the Pledged Stock, the Pledgor as soon as practicable and

at its expense will use its commercially reasonable efforts to cause such registration

to be effected (and be kept effective) and will use its commercially reasonable

efforts to cause such qualification and compliance to be declared effected (and

be kept effective) as may be so requested and as would permit or facilitate the

sale and distribution of such Pledged Stock, including, without limitation,

registration under the Securities Act of 1933, as then in effect (or any

similar statute then in effect), appropriate qualifications under applicable

blue sky or other state securities laws and appropriate compliance with any

other government requirements, provided that the Pledgee shall furnish

to the Pledgor such information regarding the Pledgee as the Pledgor may

request in writing and as shall be required in connection with any such

registration, qualification or compliance. 

The Pledgor will cause the Pledgee to be kept advised in writing as to

the progress of each such registration, qualification or compliance and as to

the completion thereof, will furnish to the Pledgee such number of

prospectuses, offering circulars or other documents incident thereto as the

Pledgee from time to time may reasonably request, and will indemnify the

Pledgee, each Secured Creditor and all others participating in the distribution

of such Pledged Stock against all claims, losses, damages and liabilities

caused by any untrue statement (or alleged untrue statement) of a material fact

contained therein (or in any related registration statement, notification or

the like) or by any omission (or alleged omission) to state therein (or in any

related registration statement, notification or the like) a material fact

required to be stated therein or necessary to make the statements therein not

misleading, except insofar as the same may have been caused by an untrue

statement or omission based upon information furnished in writing to the

Pledgor by the Pledgee or such other Secured Creditor expressly for use

therein.











(b)           If at any time when the Pledgee shall

determine to exercise its right to sell all or any part of the Pledged

Securities pursuant to Section 7 hereof, and such Pledged Securities or

the part thereof to be sold shall not, for any reason whatsoever, be

effectively registered under the Securities Act of 1933, as then in effect, the

Pledgee may, in its sole and absolute discretion, sell such Pledged Securities

or part thereof by private sale in such manner and under such circumstances as

the Pledgee may deem reasonably necessary or advisable in order that such sale

may legally be effected without such registration.  Without limiting the generality of the foregoing, in any such

event the Pledgee, in its sole and absolute discretion (i) may proceed to make

such private sale notwithstanding that a registration statement for the purpose

of registering such Pledged Securities or part thereof shall have been filed

under such Securities Act, (ii) may approach and negotiate with a single

possible purchaser to effect such sale, and (iii) may restrict such sale to a

purchaser who will represent and agree that such purchaser is purchasing for

its own account, for investment, and not with a view to the distribution or

sale of such Pledged Securities or part thereof.  In the event of any such sale, the Pledgee shall incur no responsibility

or liability for selling all or any part of the Pledged Securities at a price

which the Pledgee, in its sole and absolute discretion, in good faith deems

reasonable under the circumstances, notwithstanding the possibility that a

substantially higher price might be realized if the sale were deferred until

after registration as aforesaid.




18.           TERMINATION; RELEASE.




(a)           After the

Termination Date (as defined below), this Agreement and the security interest

created hereby shall terminate (provided that all indemnities set forth in Section

11 hereof shall survive any such termination), and the Pledgee, at the

request and expense of the Pledgor, will execute and deliver to the Pledgor all

such proper instruments as Pledgor may reasonably request acknowledging the

satisfaction and termination of this Agreement, and will duly assign, transfer

and deliver to the Pledgor (without recourse and without any representation or

warranty) such of the Collateral as has not theretofore been sold or otherwise

applied or released pursuant to this Agreement, together with any monies at the

time held by the Pledgee or any of its sub-agents hereunder.  As used in this Agreement, “Termination

Date” shall mean the date upon which the Total Revolving Loan Commitment

and all Interest Rate Agreement or Other Hedging Agreements have been

terminated, no Note under the Credit Agreement is outstanding (and all Loans

have been repaid in full), all Letters of Credit have been terminated and all

Obligations (as defined in the Credit Agreement) then owing have been paid in

full.




(b)           Notwithstanding

anything to the contrary contained above, upon the presentment of satisfactory

evidence to the Pledgee in its sole discretion that all obligations evidenced

by any Pledged Note have been repaid in full, and that any payments received by

the Pledgor were permitted to be received by the Pledgor pursuant to Section

6 hereof, the Pledgee shall, upon the request and at the expense of the

Pledgor, duly assign, transfer and deliver to the Pledgor (without recourse and

without any representation or warranty) such Pledged Note if same has not

theretofore been sold or otherwise applied or released pursuant to this

Agreement.











(c)           In the event that

any part of the Collateral is sold in connection with a sale permitted by Section

8.4 of the Credit Agreement or otherwise released at the direction of the

Majority Lenders (or all Lenders if required by Section 11.1 of the

Credit Agreement) and the proceeds of such sale or sales or from such release

are applied in accordance with the provisions of Section 4.4 of the

Credit Agreement, to the extent required to be so applied, the Pledgee, at the

request and expense of the Pledgor, will duly assign, transfer and deliver to

the Pledgor (without recourse and without any representation or warranty) such

of the Collateral as is then being (or has been) so sold or released and has

not theretofore been released pursuant to this Agreement.




(d)           At any time that the

Pledgor desires that Collateral be released as provided in the foregoing

sub-section (a), (b) or (c), as the case may be, it shall deliver to the

Pledgee a certificate signed by a Responsible Officer stating that the release

of the respective Collateral is permitted pursuant to such subsection (a), (b)

or (c), as the case may be.




(e)           The Pledgee shall

have no liability whatsoever to any Secured Creditor as the result of any

release of Collateral by it in accordance with this Section 18.




19.           NOTICES ETC.  All such notices and communications

hereunder shall be personally delivered, 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

be given for purposes of this Agreement on the date received if deposited in

registered or certified mail, postage prepaid, and otherwise on the day that

such writing is delivered or sent to the intended recipient thereof, or in the

case of notice delivered by telecopy, upon completion of transmission with a

copy of such notice also being delivered under any of the methods provided

above.  All notices and other

communications shall be in writing and addressed as follows:




(a)           if to the Pledgor:




BMC Industries, Inc.




One Meridian Crossings




Suite 850




Minneapolis, Minnesota

55423




Attn:  Kathleen Pepski, Chief Financial Officer




Telephone: (952) 851-6030




Telecopy:   (952) 851-6050




(b)           if to the Pledgee, at:




Bankers Trust Company




One Bankers Trust Plaza




130 Liberty Street




14th Floor




New York, New York 10006




Attn:  Douglas Dibella




Telephone: (212) 250-3301




Telecopy:  

(212) 250-7351





with copies to:




Bankers

Trust Company




233

South Wacker Drive




Suite

8400




Chicago,

Illinois 60606




Attn:  John Anos




Telephone:  (312) 993-8141




Telecopy:    (312) 993-8162




Winston & Strawn




35 West Wacker Drive




Chicago, Illinois 60601




Attn:  Charles B. Boehrer, Esq.




Telephone:  (312) 558-5600




Telecopy:    (312) 558-5700




(c)           if  to any Bank Creditor, either (x) to the

Agent, at the address of the Agent specified in the Credit Agreement or (y) at

such address as such Bank Creditor shall have specified in the Credit

Agreement;




(d)           if to any Other

Creditor at such address as such Other Creditor shall have specified in writing

to the Pledgor and the Pledgee;




or at such other address as shall have been furnished in writing by any

Person described above to the party required to give notice hereunder.




20.           WAIVER; AMENDMENT.  None of the terms and conditions of this

Agreement may be changed, waived, modified or varied in any manner whatsoever

unless in writing duly signed by the Pledgor and the Pledgee (with the written

consent of the Majority Lenders or, to the extent required by Section 11.1

of the Credit Agreement with the consent of each of the Lenders); provided,

however, that any change, waiver, modification or variance affecting the

rights and benefits of a single Class (as defined below) of Secured Creditors

(and not all Secured Creditors in a like or similar manner) shall require the

written consent of the Requisite Creditors (as defined below) of such affected

Class (or in the case of the LC Creditor, the LC Creditor).  For the purpose of this Agreement, the term

“Class” shall mean each class of Secured Creditors, i.e., whether

(i) the Bank Creditors as holders of the Credit Agreement Obligations, (ii) the

Other Creditors as the holders of the Other Obligations; or (iii) the LC

Creditor.  For the purpose of this

Agreement, the term “Requisite Creditors” of any Class shall mean each

of (A) with respect to the Credit Agreement Obligations, the Majority Lenders

and (B) with respect to the Other Obligations, the holders of 51% of all

obligations outstanding from time to time under the Interest Rate Protection

Agreements or Other Hedging Agreements.











21.           MISCELLANEOUS.  This Agreement shall be binding upon the

parties hereto and their respective successors and assigns and shall inure to

the benefit of and be enforceable by each of the parties hereto and its

successors and assigns.  THIS AGREEMENT

SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF

THE STATE OF NEW YORK.  The headings in

this Agreement are for purposes of reference only and shall not limit or define

the meaning hereof.  This Agreement may

be executed in any number of counterparts, each of which shall be an original,

but all of which shall constitute one instrument.  In the event that any provision of this Agreement shall prove to

be invalid or unenforceable, such provision shall be deemed to be severable

from the other provisions of this Agreement which shall remain binding on all

parties hereto.




22.           RECOURSE.  This Agreement is made with full recourse to the Pledgor and

pursuant to and upon all the representations, warranties, covenants and

agreements on the part of the Pledgor contained herein, in the other Loan

Documents, in the Interest Rate Protection or Other Hedging Agreements and

otherwise in writing in connection herewith or therewith.




[signature page follows]











IN WITNESS WHEREOF, the

Pledgor and the Pledgee have caused this Agreement to be executed by their duly

elected officers duly authorized as of the date first above written.




 




	

   


  	

  BMC INDUSTRIES, INC.,

  as Pledgor


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:   


  	

  /s/ Kathleen P. Pepski


  
	

   


  	

  Name: 


  	

  Kathleen P. Pepski


  
	

   


  	

  Title:    


  	

  Senior Vice President

  and Chief


  
	

   


  	

   


  	

  Financial Officer


  
	

   


  	

   


  	

   


  
	

   


  	

  BANKERS TRUST COMPANY,

  as Pledgee


  
	

   


  	

   


  	

   


  
	

   


  	

  By:  


  	

  /s/ Robert Telesca


  
	

   


  	

  Name: 


  	

  Robert Telesca


  
	

   


  	

  Title:    


  	

  Vice President


  
	

   


  	

   


  	

   


  
	

   


  	

  ACKNOWLEDGED AND

  ACCEPTED IN ITS


  
	

   


  	

  CAPACITY AS A SECURED

  CREDITOR:


  
	

   


  	

   


  	

   


  
	

   


  	

  U.S. BANK NATIONAL

  ASSOCIATION


  
	

   


  	

   


  	

   


  
	

   


  	

  By:   


  	

  /s/ William J. Umscheid


  
	

   


  	

  Name: 


  	

  William J. Umscheid


  
	

   


  	

  Title:    


  	

  Vice President


  





















Annex A




to




Pledge Agreement




 




Part I.      Pledged Stock




 




	

  Name of Pledgor


  	

   


  	

  Name of Issuing Corporation


  	

   


  	

  Type of Shares


  	

   


  	

  Number  of Shares Authorized


  	

   


  	

  Number of Shares Outstanding


  	

   


  	

  Share Certificate Number


  	

   


  	

  Percentage of Outstanding Shares of

  Capital Stock


  
	

  BMC Industries, Inc.


  	

   


  	

  Vision-Ease Lens, Inc.

  (US)


  	

   


  	

  common


  	

   


  	

  1,000


  	

   


  	

  100


  	

   


  	

  1


  	

   


  	

  100%


  
	

  BMC Industries, Inc.


  	

   


  	

  Buckbee-Mears Holding

  Company B.V.


  	

   


  	

  common


  	

   


  	

  100,000


  	

   


  	

  20,000


  	

   


  	

  1


  	

   


  	

  65%


  





 




Part II.    Pledged Note




 




1.             Note in a stated face amount of EURO 77,000,000 made by

Buckbee-Mears Holding Company B.V. in favor of BMC Industries, Inc.