LIMITED CONSENT
SECTION 2.01.
LIMITED CONSENT.
NOTWITHSTANDING
ANYTHING CONTRARY IN THE CREDIT AGREEMENT OR ANY OTHER PROVISION SET FORTH IN
THE LOAN DOCUMENTS, AND SUBJECT TO THE TERMS, CONDITIONS, AND OTHER RESTRICTIONS
SET FORTH HEREIN, THE LENDER HEREBY CONSENTS TO THE MEADE EUROPE TRANSACTION.
THIS CONSENT IS LIMITED TO THE MEADE EUROPE TRANSACTION AND IS NOT A CONSENT TO
ANY OTHER TRANSACTION, WHETHER OR NOT SIMILAR TO THE FOREGOING.
THE CONSENT TO
THE MEADE EUROPE TRANSACTION IS CONDITIONED UPON SATISFACTION OF EACH OF THE
FOLLOWING CONDITIONS PRECEDENT THERETO, AS WELL AS THE CONDITIONS PRECEDENT SET
FORTH IN ARTICLE IV BELOW:
(I)
THE BORROWERS SHALL HAVE DELIVERED TO
THE LENDER AN EXECUTED COPY OF THE PURCHASE AGREEMENT TOGETHER WITH TRUE AND
CORRECT COPIES OF ALL EXHIBITS AND SCHEDULES THERETO AND ALL AGREEMENTS EXECUTED
OR DELIVERED IN CONNECTION THEREWITH, ALL OF WHICH MUST BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE LENDER IN ITS SOLE DISCRETION;
(II)
EXCEPT FOR THE EXISTING DEFAULT, NO
DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR RESULT FROM
THE CONSUMMATION OF THE MEADE EUROPE TRANSACTION; AND
(III)
100% OF THE CASH PROCEEDS OF THE MEADE
EUROPE TRANSACTION TO BE RECEIVED BY MIEC SHALL BE PAID DIRECTLY TO MEADE'S
ACCOUNT NO. 1458927067 MAINTAINED WITH THE LENDER TO BE APPLIED FIRST TO THE
OBLIGATIONS IN ACCORDANCE WITH THE CREDIT AGREEMENT, SECOND AS PAYMENT TO THE
LENDER IN THE AMOUNT OF $750,000 TO BE HELD AS CASH COLLATERAL (AS MORE
PARTICULARLY DESCRIBED BELOW), AND THIRD TO BE DISBURSED TO THE BORROWERS FOR
ORDINARY WORKING CAPITAL PURPOSES.
UPON SATISFACTION OF THE FOREGOING CONDITIONS WITH RESPECT TO THE MEADE EUROPE
TRANSACTION (OR CONCURRENTLY THEREWITH), AND UPON THE BORROWERS' REQUEST, THE
LENDER WILL EXECUTE AND DELIVER SUCH LIEN RELEASES (INCLUDING UCC-3 FINANCING
STATEMENT AMENDMENTS) AS MAY BE NECESSARY TO EFFECTIVELY TERMINATE ANY AND ALL
OF THE LENDER'S LIENS ON THE PROPERTY TO BE SOLD PURSUANT TO THE MEADE EUROPE
TRANSACTION, ALL AT THE BORROWERS' SOLE COST AND EXPENSE.
ARTICLE III
IC LETTER OF CREDIT
SECTION 3.01.
IC LETTER OF CREDIT.
THE BORROWERS
HAVE REQUESTED THAT THE LENDER ISSUE A LETTER OF CREDIT IN THE FACE AMOUNT OF
$700,000 FOR THE BENEFIT OF THE IRVINE COMPANY (THE "IC LETTER OF CREDIT").
THE
BORROWERS HAVE BEEN INFORMED BY THE LENDER AND HEREBY ACKNOWLEDGE THAT THE FACE
AMOUNT OF THE REQUESTED IC LETTER OF CREDIT WOULD EXCEED AVAILABILITY.
NOTWITHSTANDING THE LACK OF AVAILABILITY, BUT SUBJECT TO ALL OTHER TERMS AND
CONDITIONS SET FORTH IN THE CREDIT AGREEMENT WITH RESPECT TO THE ISSUANCE OF
LETTERS OF CREDIT, THE LENDER HEREBY AGREES TO ISSUE THE IC LETTER OF CREDIT
FOLLOWING RECEIPT OF THE CASH COLLATERAL (AS DEFINED BELOW).
SECTION 3.02.
CASH COLLATERAL.
AS SECURITY FOR THE
BORROWERS' OBLIGATIONS RELATING TO THE IC LETTER OF CREDIT, THE BORROWERS HEREBY
PLEDGE AND ASSIGN, AND GRANT TO THE LENDER A CONTINUING SECURITY INTEREST IN
CASH COLLATERAL IN THE AMOUNT OF $750,000 (INCLUDING ALL INVESTMENTS, EARNINGS,
INCREASES AND PROCEEDS THEREOF, THE "CASH COLLATERAL") TO BE RECEIVED BY THE