Document:

EXHIBIT 10.39

                          Cornell Capital Partners, LP
                          101 Hudson Street, Suite 3700
                              Jersey City, NJ 07302

                                September 8, 2006

Power2Ship, Inc.
903 Clint Moore Road
Boca Raton, Florida 33487
Attention: David Brooks

Re:      Power2Ship, Inc. (the "Company") 14.25% Secured Convertible Debenture
         due December 2006 (the "December Debenture") held by Cornell Capital
         Partners, LP ("Cornell"); 5% Secured Convertible Debenture due June
         2006 (the "June Debenture") held by Montgomery Equity Partners, Ltd.
         ("Montgomery"); and 5% Secured Convertible Debenture due September 2006
         (the "September Debenture" and together with the December Debenture and
         June Debenture, the "Debentures") held by Montgomery.

Dear Mr. Brooks:

         This will confirm our understanding regarding the amendment of the
Debentures.

1.                The Company shall make a payment of $100,000 to Cornell, via
                  wire transfer, on the date of this letter, to be allocated by
                  Cornell and Montgomery to the balance due on the June
                  Debenture, September Debenture, and December Debenture at the
                  sold discretion of Cornell and Montgomery. This payment shall
                  be applied to interest and/or principal in accordance with the
                  terms of the Debenture to which the payment is applied.

2.                In the event that the Company makes the full payment set forth
                  in paragraph 1, Cornell and Montgomery agree not to exercise
                  their rights of conversion under the Debentures until November
                  1, 2006.

3.                The Company shall make a payment of $100,000 to Cornell, via
                  wire transfer, on November 1, 2006, to be allocated by Cornell
                  and Montgomery to the balance due on the June Debenture,
                  September Debenture, and December Debenture at the sole
                  discretion of Cornell and Montgomery. This payment shall be
                  applied to interest and/or principal in accordance with the
                  terms of the Debenture to which the payment is applied.

4.                In the event that the Company makes the full payment set forth
                  in paragraph 3, Cornell and Montgomery agree not to exercise
                  their rights of conversion under the Debentures until January
                  1, 2007.

5.                The terms of conversion provided to Cornell pursuant to the
                  December Debenture shall be amended as of the date of this
                  agreement, to be identical with those set forth in Section
                  1.02 of the June Debenture. Accordingly, principal amounts due

<PAGE>
Power2Ship, Inc.
September 8, 2006
Page 2 of 2

                  under the December Debenture shall be convertible into Company
                  common stock of (a) one hundred twenty percent (120%) of the
                  closing bid price on June 28, 2004, or (b) 100% of the average
                  of the three lowest closing bid prices, as quoted by Bloomberg
                  for the thirty (30) trading days immediately preceding the
                  Conversion Date (as defined in the June Debenture), as more
                  fully specified and described in the June Debenture.

6.                If the payments set forth in paragraphs 1 and 3 are not made
                  on the specified dates, Cornell and Montgomery shall have the
                  right to make conversions pursuant to the terms of the
                  Debentures, as modified by paragraph 5.

7.                As modified herein, the Debentures shall remain in full force
                  and effect, and all sums owed thereunder shall remain due and
                  payable.

         If the foregoing accurately reflects our understanding regarding this
matter, please indicate your agreement and acceptance by signing in the space
provided below and returning an executed copy of this letter to us.

Sincerely,
                                                AGREED AND ACCEPTED:
CORNELL CAPITAL PARTNERS, LP
By:  Yorkville Advisors, LLC                    POWER2SHIP, INC.
Its  General Partner

                                                By: /s/ David Brooks
                                                   -----------------
By:/s/ Mark A. Angelo                              David Brooks
   ---------------------------------               Authorized Person
   Mark A. Angelo
   Portfolio Manager

MONTGOMERY EQUITY PARTNERS, LTD.
By:  Yorkville Advisors, LLC
Its: General Partner

By:/s/ Mark A. Angelo
   ---------------------------------
   Mark A. Angelo
   Portfolio ManagerExhibit
10.5

LOAN AND SECURITY AGREEMENT

ORIX FINANCE CORP.

(AS A LENDER AND AS
AGENT)

WITH

INSIGHT EQUITY A.P. X, LP
(AS BORROWER)

AND

INSIGHT EQUITY A.P. X ASIA, LLC,

PT. VISION-EASE ASIA,

INSIGHT EQUITY A.P. X CANADA, LLC,

INSIGHT EQUITY A.P. X CANADA PARTNERS, LP,

VISION EASE LENS EUROPE, LIMITED,

VISION-EASE LENS LIMITED

AND

VISION-EASE CANADA CO.
(AS SUBSIDIARIES)

AND

INSIGHT EQUITY A.P. X COMPANY, LLC

(AS GENERAL PARTNER)

December 1, 2005

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Accounting Terms

  	
  1

  
	
  Section 1.2

  	
  General Terms

  	
  1

  
	
  Section 1.3

  	
  UCC Terms

  	
  25

  
	
  Section 1.4

  	
  Certain Matters of Construction

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  ADVANCES, PAYMENTS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Term Loans

  	
  25

  
	
  Section 2.2

  	
  Eurodollar Rate

  	
  26

  
	
  Section 2.3

  	
  Repayment of Term Loans

  	
  26

  
	
  Section 2.4

  	
  Additional Payments

  	
  27

  
	
  Section 2.5

  	
  Statement of Account

  	
  27

  
	
  Section 2.6

  	
  Manner of Borrowing and Payment

  	
  27

  
	
  Section 2.7

  	
  Optional Prepayments

  	
  28

  
	
  Section 2.8

  	
  Mandatory Prepayments

  	
  29

  
	
  Section 2.9

  	
  Use of Proceeds

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  INTEREST AND FEES

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Interest

  	
  30

  
	
  Section 3.2

  	
  Default Rate

  	
  30

  
	
  Section 3.3

  	
  Certain Fees

  	
  30

  
	
  Section 3.4

  	
  [Intentionally Omitted.]

  	
  31

  
	
  Section 3.5

  	
  Computation of Interest and Fees

  	
  31

  
	
  Section 3.6

  	
  Maximum Charges

  	
  31

  
	
  Section 3.7

  	
  Increased Costs

  	
  32

  
	
  Section 3.8

  	
  [Intentionally Omitted.]

  	
  33

  
	
  Section 3.9

  	
  Capital Adequacy

  	
  33

  
	
  Section 3.10

  	
  Gross Up for Taxes

  	
  33

  
	
  Section 3.11

  	
  Tax Withholding Clause

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  COLLATERAL AND GUARANTIES; GENERAL TERMS

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Security Interests and Liens in and to the
  Collateral

  	
  35

  
	
  Section 4.2

  	
  Perfection of Security Interest

  	
  36

  
	
  Section 4.3

  	
  Disposition of Collateral

  	
  37

  
	
  Section 4.4

  	
  Preservation of Collateral

  	
  37

  
	
  Section 4.5

  	
  Ownership of Collateral

  	
  37

  
	
  Section 4.6

  	
  Defense of Agent’s and Lenders’ Interests

  	
  38

  
	
  Section 4.7

  	
  Books and Records

  	
  38

  
	
  Section 4.8

  	
  Financial Disclosure

  	
  39

  
	
  Section 4.9

  	
  Compliance with Laws

  	
  39

  

 

 i
 

 

 

	
  Section 4.10

  	
  Examinations, Inspection of Premises and Appraisals

  	
  39

  
	
  Section 4.11

  	
  Insurance

  	
  39

  
	
  Section 4.12

  	
  Failure to Pay Insurance

  	
  40

  
	
  Section 4.13

  	
  Payment of Taxes

  	
  40

  
	
  Section 4.14

  	
  Payment of Leasehold Obligations

  	
  41

  
	
  Section 4.15

  	
  Receivables

  	
  41

  
	
  Section 4.16

  	
  Inventory

  	
  44

  
	
  Section 4.17

  	
  Maintenance of Equipment

  	
  44

  
	
  Section 4.18

  	
  Exculpation of Liability

  	
  44

  
	
  Section 4.19

  	
  Environmental Matters

  	
  44

  
	
  Section 4.20

  	
  Financing Statements

  	
  46

  
	
  Section 4.21

  	
  Guaranties and Security Agreements of Subsidiaries

  	
  47

  
	
  Section 4.22

  	
  Pledge Agreements of Limited Partners and General
  Partner

  	
  47

  
	
  Section 4.23

  	
  “Opt In” to Article 8

  	
  48

  
	
  Section 4.24

  	
  Investment Property

  	
  48

  
	
  Section 4.25

  	
  Real Property

  	
  48

  
	
  Section 4.26

  	
  No Unlawful Financial Assistance

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  REPRESENTATIONS AND WARRANTIES

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Authority

  	
  48

  
	
  Section 5.2

  	
  Formation and Qualification

  	
  49

  
	
  Section 5.3

  	
  Survival of Representations and Warranties

  	
  49

  
	
  Section 5.4

  	
  Tax Returns

  	
  49

  
	
  Section 5.5

  	
  Financial Statements

  	
  49

  
	
  Section 5.6

  	
  Entity Name

  	
  50

  
	
  Section 5.7

  	
  O.S.H.A. and Environmental Compliance

  	
  50

  
	
  Section 5.8

  	
  Solvency; No Litigation, Violation, Indebtedness or
  Default

  	
  51

  
	
  Section 5.9

  	
  Patents, Trademarks, Copyrights and Licenses

  	
  53

  
	
  Section 5.10

  	
  Licenses and Permits

  	
  53

  
	
  Section 5.11

  	
  Default of Indebtedness

  	
  53

  
	
  Section 5.12

  	
  No Default

  	
  54

  
	
  Section 5.13

  	
  No Burdensome Restrictions

  	
  54

  
	
  Section 5.14

  	
  No Labor Disputes

  	
  54

  
	
  Section 5.15

  	
  Margin Regulations

  	
  54

  
	
  Section 5.16

  	
  Investment Company Act

  	
  54

  
	
  Section 5.17

  	
  Disclosure

  	
  54

  
	
  Section 5.18

  	
  Swaps

  	
  54

  
	
  Section 5.19

  	
  Conflicting Agreements

  	
  54

  
	
  Section 5.20

  	
  Application of Certain Laws and Regulations

  	
  55

  
	
  Section 5.21

  	
  Business and Property of Loan Parties

  	
  55

  
	
  Section 5.22

  	
  Delivery of Certain Documents

  	
  55

  
	
  Section 5.23

  	
  Material Contracts

  	
  55

  
	
  Section 5.24

  	
  Anti-Terrorism Laws

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  AFFIRMATIVE COVENANTS

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Payment of Fees

  	
  57

  

 

 ii
 

 

 

	
  Section 6.2

  	
  Conduct of Business and Maintenance of Existence and
  Assets

  	
  57

  
	
  Section 6.3

  	
  Violations

  	
  57

  
	
  Section 6.4

  	
  Government Receivables

  	
  57

  
	
  Section 6.5

  	
  Fixed Charge Coverage Ratio

  	
  58

  
	
  Section 6.6

  	
  Tangible Net Worth

  	
  58

  
	
  Section 6.7

  	
  Execution of Supplemental Instruments

  	
  58

  
	
  Section 6.8

  	
  Payment of Indebtedness, etc

  	
  58

  
	
  Section 6.9

  	
  Standards of Financial Statements

  	
  58

  
	
  Section 6.10

  	
  Exercise of Rights

  	
  58

  
	
  Section 6.11

  	
  Subsidiaries

  	
  58

  
	
  Section 6.12

  	
  Total Leverage Ratio

  	
  59

  
	
  Section 6.13

  	
  Unadjusted EBITDA

  	
  59

  
	
  Section 6.14

  	
  Post Closing IP Covenant

  	
  59

  
	
  Section 6.15

  	
  Post Closing Deliverables

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  NEGATIVE COVENANTS

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Merger, Consolidation, Acquisition and Sale of
  Assets

  	
  60

  
	
  Section 7.2

  	
  Creation of Liens

  	
  60

  
	
  Section 7.3

  	
  Guarantees

  	
  61

  
	
  Section 7.4

  	
  Investments

  	
  61

  
	
  Section 7.5

  	
  Loans

  	
  61

  
	
  Section 7.6

  	
  Capital Expenditures

  	
  61

  
	
  Section 7.7

  	
  Management Fees; Dividends; Distributions

  	
  61

  
	
  Section 7.8

  	
  Indebtedness

  	
  63

  
	
  Section 7.9

  	
  Nature of Business

  	
  64

  
	
  Section 7.10

  	
  Transactions with Affiliates

  	
  64

  
	
  Section 7.11

  	
  Leases

  	
  64

  
	
  Section 7.12

  	
  Subsidiaries

  	
  64

  
	
  Section 7.13

  	
  Fiscal Year and Accounting Changes

  	
  65

  
	
  Section 7.14

  	
  Pledge of Credit

  	
  65

  
	
  Section 7.15

  	
  Amendment of Organizational Documents

  	
  65

  
	
  Section 7.16

  	
  Compliance with ERISA

  	
  65

  
	
  Section 7.17

  	
  Prepayment of Indebtedness

  	
  66

  
	
  Section 7.18

  	
  Subordinated Loans

  	
  66

  
	
  Section 7.19

  	
  Transfer of Funds

  	
  66

  
	
  Section 7.20

  	
  Compensation

  	
  67

  
	
  Section 7.21

  	
  Anti-Terrorism Laws

  	
  67

  
	
  Section 7.22

  	
  Other Senior Debt

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  CONDITIONS PRECEDENT

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Conditions to Initial Advances

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  INFORMATION AS TO LOAN PARTIES

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Disclosure of Material Matters

  	
  72

  

 

 iii
 

 

 

	
  Section 9.2

  	
  Schedules

  	
  73

  
	
  Section 9.3

  	
  Environmental Reports

  	
  73

  
	
  Section 9.4

  	
  Litigation

  	
  73

  
	
  Section 9.5

  	
  Material Occurrences

  	
  73

  
	
  Section 9.6

  	
  Government Receivables

  	
  74

  
	
  Section 9.7

  	
  Annual Financial Statements

  	
  74

  
	
  Section 9.8

  	
  Monthly Financial Statements

  	
  74

  
	
  Section 9.9

  	
  Other Collateral Reporting

  	
  75

  
	
  Section 9.10

  	
  Additional Information

  	
  75

  
	
  Section 9.11

  	
  Projected Operating Budget

  	
  75

  
	
  Section 9.12

  	
  [Intentionally omitted.]

  	
  75

  
	
  Section 9.13

  	
  Notice of Suits, Adverse Events

  	
  75

  
	
  Section 9.14

  	
  ERISA Notices and Requests

  	
  76

  
	
  Section 9.15

  	
  [Intentionally Omitted.]

  	
  77

  
	
  Section 9.16

  	
  Documentation Information Questionnaire

  	
  77

  
	
  Section 9.17

  	
  Additional Documents

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  EVENTS OF DEFAULT

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  RIGHTS AND REMEDIES AFTER DEFAULT

  	
  80

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Rights and Remedies

  	
  80

  
	
  Section 11.2

  	
  Agent’s Discretion

  	
  81

  
	
  Section 11.3

  	
  Setoff

  	
  81

  
	
  Section 11.4

  	
  Rights and Remedies not Exclusive

  	
  81

  
	
  Section 11.5

  	
  Allocation of Payments After Event of Default

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  WAIVERS AND JUDICIAL PROCEEDINGS

  	
  82

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Waiver of Notice

  	
  82

  
	
  Section 12.2

  	
  Delay

  	
  82

  
	
  Section 12.3

  	
  Jury Waiver

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  EFFECTIVE DATE AND TERMINATION

  	
  83

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Term

  	
  83

  
	
  Section 13.2

  	
  Termination

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  REGARDING AGENT

  	
  83

  
	
   

  	
   

  	
   

  
	
  Section 14.1

  	
  Appointment

  	
  83

  
	
  Section 14.2

  	
  Nature of Duties

  	
  84

  
	
  Section 14.3

  	
  Lack of Reliance on Agent and Resignation

  	
  84

  
	
  Section 14.4

  	
  Certain Rights of Agent

  	
  85

  
	
  Section 14.5

  	
  Reliance

  	
  85

  
	
  Section 14.6

  	
  Notice of Default

  	
  85

  
	
  Section 14.7

  	
  Indemnification

  	
  86

  
	
  Section 14.8

  	
  Agent in its Individual Capacity

  	
  86

  

 

 iv
 

 

 

	
  Section 14.9

  	
  Delivery of Documents

  	
  86

  
	
  Section 14.10

  	
  Borrower’s Undertaking to Agent

  	
  86

  
	
  Section 14.11

  	
  No Reliance on Agent’s Customer Identification
  Program

  	
  86

  
	
  Section 14.12

  	
  Certifications from Banks and Participants regarding
  USA Patriot Act

  	
  86

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  MISCELLANEOUS

  	
  87

  
	
   

  	
   

  	
   

  
	
  Section 15.1

  	
  Governing Law

  	
  87

  
	
  Section 15.2

  	
  Entire Understanding

  	
  87

  
	
  Section 15.3

  	
  Successors and Assigns; Participations; New Lenders

  	
  89

  
	
  Section 15.4

  	
  Application of Payments

  	
  90

  
	
  Section 15.5

  	
  Indemnity

  	
  91

  
	
  Section 15.6

  	
  Notice

  	
  91

  
	
  Section 15.7

  	
  Survival

  	
  93

  
	
  Section 15.8

  	
  Severability

  	
  93

  
	
  Section 15.9

  	
  Expenses

  	
  93

  
	
  Section 15.10

  	
  Injunctive Relief

  	
  94

  
	
  Section 15.11

  	
  Consequential Damages

  	
  94

  
	
  Section 15.12

  	
  Captions

  	
  94

  
	
  Section 15.13

  	
  Counterparts; Facsimile Signatures

  	
  94

  
	
  Section 15.14

  	
  Construction

  	
  94

  
	
  Section 15.15

  	
  Confidentiality; Sharing Information

  	
  94

  
	
  Section 15.16

  	
  Publicity

  	
  95

  
	
  Section 15.17

  	
  Subordination Agreement and Intercreditor Agreement

  	
  95

  

 

 v

LOAN
AND SECURITY AGREEMENT

Loan and Security Agreement (this “Agreement”) dated
as of December 1, 2005 among INSIGHT EQUITY A.P. X, LP, a Texas
limited partnership (“Borrower”), INSIGHT EQUITY A.P. X ASIA, LLC, a
Delaware limited liability company (“Asia LLC”), PT. VISION-EASE ASIA, an
investment company organized under the laws of the Republic of Indonesia (“Vision-Ease
Asia”), INSIGHT EQUITY A.P. X CANADA, LLC, a Delaware limited liability
company (“Canada LLC”), INSIGHT EQUITY A.P. X CANADA PARTNERS, LP, a Texas
limited partnership (“Canada LP”), VISION-EASE CANADA CO., an unlimited company
organized under the laws of the Province of Nova Scotia, Canada and successor
in interest by amalgamation to Vision-Ease Canada, Ltd. (“Vision-Ease Canada”),
Vision Ease Lens Europe Limited, a company limited by shares registered in
England and Wales (“Vision-Ease Europe”), Vision-Ease Lens Limited, a company limited by shares registered in England and Wales
(“Vision-Ease Lens”), INSIGHT EQUITY A.P. X COMPANY, LLC, a Texas limited
liability company and the general partner of Borrower (“General Partner”), the
financial institutions which are now or which hereafter become a party hereto
(collectively, “Lenders” and individually a “Lender”) and ORIX FINANCE COW., a
Delaware corporation (“ORES’), as agent for Lenders (ORIX and its successors
and assigns in such capacity, “Agent”).

IN CONSIDERATION of the mutual covenants and
undertakings herein contained, Borrower,

Asia, LLC, Vision-Ease
Asia, Canada LLC, Canada LP, Vision-Ease Canada, Vision-Ease Europe and
Vision-Ease Lens, General Partner, Lenders and Agent hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1             Accounting
Terms.  As used in this Agreement,
the Other Documents or any certificate, report or other document made or
delivered pursuant to this Agreement, accounting terms not defined in Section
1.2 or elsewhere in this Agreement, and accounting terms partly defined in Section
1.2 to the extent not defined, shall have the respective meanings given to
them under GAAP; provided, however, whenever such accounting
terms are used for the purposes of determining compliance with financial
covenants in this Agreement, such accounting terms shall be defined in
accordance with GAAP based upon financial statements, financial attributes and
related information (as applicable) of Borrower and its Subsidiaries, if any,
on a consolidated basis.

Section 1.2             General
Terms.  For purposes of this
Agreement, the following terms shall have the following meanings:

“Accountants” shall have the meaning set forth
in Section 9.7 hereof.

“Acquisition Agreement” shall mean that certain
Asset Purchase Agreement, including all exhibits and schedules thereto, dated
as of June 22, 2004, by and between Seller, BMC Industries, Inc. and
Borrower, as amended by that certain Amendment No. 1 to Asset Purchase
Agreement dated as of November 1, 2004.

 

“Acquisition Documents” means the Acquisition
Agreement, the Bankruptcy Order, the deeds, bills of sale, assignments of
leases, assignments of contracts and all other agreements, documents and
instruments executed and/or delivered in connection with the Acquisition
Agreement, including, without limitation, the “Bill of Sale”, the “Assignment
and Assumption Agreement”, the special warranty deeds for each parcel of owned “Real Property”,
the “Required Approvals”, the certificates referred to in Section 3.2(c)(v) and
(vi) of the Acquisition Agreement, the further instruments (if any) of sale,
transfer, conveyance, assignment or delivery of the “Transferred Assets”
referred to in Section 3.2(c)(vii) of the Acquisition Agreement and the other
agreements, documents, instruments or certificates delivered pursuant to the
Acquisition Agreement (including, without limitation, Section 2.6 thereof
relating to post-closing purchase price adjustments), as such terms are defined
or used in the Acquisition Agreement.

“Advances” shall mean and include the Term
Loans.

“Affiliate” of any Person shall mean
(a) any Person which, directly or indirectly, is in control of, is controlled
by, or is under common control with such Person, or (b) any Person who is
a director or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect, (x) to vote five percent (5%) or more
of the securities having ordinary voting power for the election of directors,
or (as to a Person which is not a corporation) for the election of individuals
having power of authority similar to that of a director of a corporation, of
such Person, or (y) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

“Agent” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and assigns.

“Anti-Terrorism Laws” shall mean any laws,
rules or regulations relating to terrorism or money laundering, including,
without limitation, Executive Order No. 13224, the USA Patriot Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws administered by
the United States Treasury Department’s Office of Foreign Asset Control (as any
of the foregoing laws may from time to time be amended, renewed, extended or
replaced).

“Applicable Law” shall mean all laws, rules and
regulations applicable to the Person, conduct, transaction, covenant, Other
Document or contract in question, including all applicable common law and equitable principles, all
provisions of all applicable state, federal and foreign constitutions,
statutes, rules, regulations and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.

“Asia LLC” shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors and
assigns of such Person.

“Attributable Indebtedness Amount” shall mean,
on any date, (a) in respect of any Capitalized Lease Obligation of any
Person, the capitalized amount thereof that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease 

 2
 

 

payments under the relevant lease that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.

“Authority” shall have the meaning set forth in
Section 4.19(a).

“Bankruptcy Order”
shall mean that certain Order Pursuant to 11 U.S.C. §§ 105(a), 363 and 365
and Fed. R. Bankr. P. 2002, 6004 and 6006 (I) Approving Sale of All
or Substantially All Assets of Debtor Vision-Ease Lens, Inc. to Insight Equity
A.P. X, LP, Free and Clear of all Liens; and (II) Authorizing
Assumption and Assignment of Executory Contracts and Unexpired Leases, dated
August 26, 2004, issued by the United States Bankruptcy Court for the
District of Minnesota in In re:  BMC
Industries, Inc., et al., as debtors, Case Nos. 04-435 15,04-43516 and
04-43517.

“Base Rate” means, for any day, a rate of
interest equal to the greater of (a) the rate of interest which is
identified as the “Prime Rate” and normally published in the Money Rates
section of The Wall Street Journal (or, if such rate ceases to be so
published, as quoted from such other generally available and recognizable
source as Agent may select) and (b) the sum of the Federal Funds Rate plus
one half of one percent (0.5%).  Any
change in the Base Rate due to a change in the “Prime Rate” or the Federal
Funds Rate shall be effective on the effective date of such change in the “Prime
Rate” or the Federal Funds Rate.

“Blocked Accounts” shall have the meaning set
forth in Section 4.15(h).

“Blocked Person” shall have the meaning
assigned to such term in Section 5.24(b).

“Borrower” shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors and
assigns of such Person.

“Borrower’s Account” shall have the meaning set
forth in Section 2.5.

“Borrowing Base Certificate” shall mean a
certificate executed by an officer of Borrower and delivered from time to time
to Senior Agent pursuant to the terms of the Other Senior Credit Agreement.

“Borrower Partnership Interests” shall mean any
and all Capital Stock issued by, of or in Borrower.

“Business Day” shall mean any day other than
Saturday or Sunday or a legal holiday on which national banks are authorized or
required by law to be closed for business in the State of Texas.

“Canada LLC” shall have the meaning set forth
in the preamble to this Agreement and shall extend to all permitted successors
and assigns of such Person.

“Canada LP” shall have the meaning set forth in
the preamble to this Agreement and shall extend to all permitted successors and
assigns of such Person.

 3
 

 

“Capital Expenditures” shall all mean
expenditures made or liabilities incurred for the acquisition of any equipment,
fixed assets or improvements, replacements, substitutions or additions thereto
which have a useful life of more than one year, including the total principal
portion of Capitalized Lease Obligations, which, in accordance with GAAP, would
be classified as capital expenditures.

“Capitalized Lease Obligation” shall mean any
Indebtedness of Borrower or any of its Subsidiaries represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

“Capital Stock” shall mean, as of any date of
determination, any and all capital stock, shares, partnership interests
(general, limited or otherwise), membership interests or other equity or
ownership interests issued by, of or in any entity, and any and all warrants,
options or other rights (in any form) to purchase or acquire any of the
foregoing.

“CERCLA” shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. §§ 9601 et seq.

“Change of Control” shall mean (a) the
occurrence of any event (whether in one or more transactions) which results in
a transfer of control of General Partner or control of Borrower to a Person who
is not an Original Owner, (b) any merger or consolidation of Borrower or
any of its Subsidiaries into another Person in which Borrower (in the case of
any such merger or consolidation involving Borrower) or any of its Subsidiaries
(in the case of any such merger or consolidation not involving Borrower) is not
the surviving entity or any sale of all or substantially all of the property or
assets of Borrower or any of its Subsidiaries (other than a merger of any
Subsidiary of Borrower with and into Borrower or a wholly-owned Subsidiary of
Borrower or a sale of assets to Borrower (in the case of any such sale
involving Borrower) or any of its Subsidiaries (in the case of any such sale
not involving Borrower) which is permitted by this Agreement) or (c) the occurrence
of any event (whether in one or more transactions) which results in Borrower,
either directly or indirectly through another wholly-owned Subsidiary or
Subsidiaries of Borrower, failing to own (either of record or beneficially) all
of the issued and outstanding Capital Stock of each of its Subsidiaries or
which results in a transfer of any voting control of any such Capital Stock to
any Person other than Borrower or a wholly-owned Subsidiary of Borrower.  For purposes of this definition, “control of
General Partner” and “control of Borrower” shall mean the power, direct or
indirect (i) to vote fifty percent (50%) or more of the securities having
ordinary voting power for the election of directors, or (as to a Person which
is not a corporation) for the election of individuals having power of authority
similar to that of a director of a corporation, of General Partner or Borrower
(as applicable) or (ii) to direct or cause, pursuant to direct or indirect
control of any voting securities of General Partner or Borrower (as
applicable), the direction of the management and policies of General Partner or
Borrower (as applicable) by contract or otherwise.  For purposes of this definition, “Subsidiaries”
shall include entities that, as a result of such transaction(s), become a
Subsidiary.

“Change of Ownership” shall mean (a) fifty
percent (50%) or more of the issued and outstanding Capital Stock of Borrower
or General Partner is no longer owned or controlled by a Person who is an
Original Owner or (b) any
merger, consolidation or sale of substantially all of the property or assets of
Borrower or General Partner; provided that the sale by General Partner 

 4
 

 

of any Borrower Partnership Interests shall be deemed
a sale of substantially all of General Partner’s assets.

“Charges” shall mean all taxes, charges, fees,
imposts, levies or other assessments, including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation and property taxes, custom duties, fees, assessments, liens, claims
and charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts, imposed by any taxing or other
authority, domestic or foreign (including, without limitation, the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon
the Collateral, Borrower or any of its Affiliates.

“Chattel Payer” shall mean as such term is
defined in the UCC.

“Closing Date” shall mean December 1, 2005
or such other date as may be agreed to by the parties hereto.

“Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time and the
regulations promulgated thereunder.

“Collateral” shall mean and include
(i) with respect to each Loan Party, all rights, titles and interests of
such Person in and to the following property or assets, and (ii) with
respect to each Limited Partner, all rights, titles and interests of such
Limited Partner in and to the property or assets referred to in clause (o)
below only and all proceeds and products of such property or assets referred to
in such clause (o) only, in
each case whether now owned or existing or hereafter acquired or existing:

(a)           all cash and money;

(b)           all Chattel Paper;

(c)           all Commercial Tort Claims;

(d)           all Deposit Accounts;

(e)           all Documents;

(f)            all Equipment;

(g)           all General Intangibles;

(h)           all Instruments;

(i)            all Intellectual Property;

(j)            all Inventory;

(k)           all Investment Property;

 5
 

 

(l)            all Letter-of-Credit Rights and
letters of credit;

(m)          all Receivables;

(n)           all Real Property (including all
Leasehold Interests);

(o)           (i) all
Borrower Partnership Interests, (ii) all General Partner Membership
Interests owned by any Limited Partner and (iii) all Subsidiary Capital
Stock;

(p)           all of such Person’s right, title and
interest in and to (i) its respective goods and other property, including,
but not limited to, all merchandise returned or rejected by Customers, relating
to or securing any of the Receivables; (ii) all of such Person’s rights as
a consignor, a consignee, an unpaid vendor, mechanic, artisan or other lienor,
including stoppage in transit, setoff, detinue, replevin, reclamation and
repurchase; (iii) all additional amounts due to such Person from any
Customer relating to the Receivables; (iv) all other property, including
warranty claims, relating to any goods securing this Agreement; (v) all of
such Person’s contract rights, rights of payment which have been earned under a
contract right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts, deposit
accounts, letters of credit, letter of credit rights and money; (vi) all
commercial tort claims (whether now existing or hereafter arising);
(vii) if and when obtained by such Person, all real and personal property
of third parties in which such Person has been granted a lien or security interest
as security for the payment or enforcement of Receivables; and (viii) any
other goods, personal property or real property now owned or hereafter acquired
in which such Person has expressly granted a Lien or may in the future grant a
Lien to Agent hereunder, or in any amendment or supplement hereto or thereto,
or under any other agreement executed by such Person;

(q)           all of such Person’s ledger sheets,
ledger cards, files, correspondence, records, books of account, business
papers, computers, computer software (owned by any Loan Party or in which it
has an interest), computer programs, tapes, disks and documents relating to any
of the Collateral referred to in clauses (a) through (i) of this definition; and

(r)            all proceeds and products of any of
the Collateral referred to in clauses (a) through (q) of this definition in whatever form,
including, but not limited to:  cash,
deposit accounts (whether or not comprised solely of proceeds), certificates of
deposit, insurance proceeds (including hazard, flood and credit insurance),
negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements, documents, eminent domain proceeds, condemnation
proceeds and tort claim proceeds.

“Commercial Tort Claims” shall mean as such
term is defined in the UCC.

“Commitment Percentage” of any Lender shall
mean the percentage set forth below such Lender’s name on its signature page
hereof as the same may be adjusted upon any assignment by a Lender pursuant to Section
15.3(c) hereof or, if a Lender’s name does not appear on a signature page
hereto, the percentage specified in the most recent Commitment Transfer
Supplement executed by such Lender.

 6
 

 

“Commitment Transfer Supplement” shall mean a
document in the form of Exhibit 15.3 hereto, properly completed and
otherwise in form and substance satisfactory to Agent, pursuant to which the
Purchasing Lender purchases all or a portion of the Advances held by a Lender
and/or assumes all or a portion of the obligations of a Lender to make Advances
under this Agreement.

“Consents” shall mean all filings and all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Bodies and other third parties, domestic or foreign,
necessary to carry on Borrower’s business, including, without limitation, any
Consents required under all applicable federal, state or other Applicable Law.

“Consulting Agreement” means that certain
Management Agreement dated October 31, 2004 by and between Borrower,
General Partner and Insight Equity Vision Management, LLC, as in effect as of
the date hereof.

“Controlled Group” shall mean all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower, are treated
as a single employer under Section 414 of the Code.

“Customer” shall mean and include, with respect
to any Person, the account debtor with respect to any Receivable and/or the
prospective purchaser of goods, services or both with respect to any contract
or contract right, and/or any party who enters into or proposes to enter into
any contract or other arrangement with such Person, pursuant to which such
Person is to deliver any property or perform any services.

“Default” shall mean an Event of Default or an
event which, with the giving of notice or passage of time or both, would
constitute an Event of Default.

“Default Rate” shall have the meaning set forth
in Section 3.1 hereof.

“Deposit Account” shall mean any demand, time,
savings, passbook or similar account maintained with a bank or other financial
institution.

“Dollar” and the sign “$” shall mean lawful money of
the U.S.

“Documentation Information Questionnaire” shall
mean a certificate in form and substance satisfactory to Agent in its sole
discretion providing information pertinent and/or relevant to the Loan Parties
and the Limited Partners, the personal and real property of each such Person
(including, without limitation, the Collateral) and the perfection and priority
of Agent’s Lien against the Collateral for the benefit of Agent and Lenders.

“Documents” shall mean as such term is defined
in the UCC.

“Domestic Subsidiary” shall mean any Subsidiary
that is organized under the laws of any political subdivision of the U.S.,
including, without limitation, Asia LLC, Canada LLC and Canada LP.

 7
 

 

“Earnings Before Interest and Taxes” shall
mean, for any period and without duplication, the sum of (a) net income
(or loss) of Borrower and its consolidated Subsidiaries for such period
(excluding extraordinary gains and losses) (b) all interest expense of
Borrower and its consolidated Subsidiaries for such period, plus
(c) all charges against income of Borrower and its consolidated
Subsidiaries for such period for federal, state and local taxes.

“EBITDA” shall mean, for any period and without
duplication, the sum of (a) Earnings Before Interest and Taxes for such
period & (b) depreciation
expenses of Borrower and its consolidated Subsidiaries for such period, plus (c) amortization expenses of Borrower and its consolidated
Subsidiaries for such period, plus (d) management fee expenses of
Borrower, to the extent permitted under Section 7.7 hereof, for such
period plus (e) if and to the extent not already included in clause (c)
above, fees, commissions and charges payable on the Closing Date under this
Agreement, the Fee Letter or the Other Senior Credit Agreement and fees
previously amortized that are required to be expensed due to the amending and
restating of that certain Revolving Credit, Term Loan and Security Agreement,
dated as of October 31, 2004 among Senior Agent, the other financial
institutions party thereto from time to time, Borrower and certain other Loan Parties party thereto pursuant to the
Other Senior Credit Agreement; provided, however, that, EBITDA
for each of the months of November 2004 through and including October 2005
shall be the amounts for such month set forth on Schedule 1.2(c) hereto.

“Employment Agreement” means that certain
Employment Agreement by and between Douglas C. Hepper and Borrower, dated
as of November 1, 2004, as amended, modified or supplemented £tom time to
time, and any and all other employment, non-competition and/or consulting
agreements hereafter entered into from time to time by and between Borrower and
any other officer of Borrower, together with all renewals, modifications,
amendments or supplements thereto.

“Environmental Complaint” shall have the
meaning set forth in Section 4.19(d) hereof.

“Environmental Laws” shall mean all federal,
state and local environmental, land use, zoning, health, chemical use, safety
and sanitation laws, statutes, ordinances and codes relating to the protection
of the environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local Governmental Bodies with respect
thereto.

“Equipment” shall mean and include, with
respect to any Person, all of such Person’s equipment (as defined in the UCC) and other goods
(other than Inventory) whether now owned or hereafter acquired and wherever
located, including, without limitation, all equipment, machinery, apparatus,
motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories
and all replacements and substitutions therefor or accessions thereto.

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to time and the rules and regulations
promulgated thereunder.

“Eurodollar Rate” means, for each Interest
Period, the offered rate per annum for deposits of Dollars for three (3) months
that appears on Telerate Page 3750 as of 11:00 A.M. (London, 

 8
 

 

England time) two (2) Business Days prior to the first
day in such Interest Period.  If no such
offered rate exists, such rate will be the rate of interest per annum, as
determined by Agent (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits of Dollars in immediately available funds are offered at
11:00 A.M. (London, England time) two (2) Business Days prior to the first day
in such Interest Period by major financial institutions reasonably satisfactory
to Agent in the London interbank market for such Interest Period for the
applicable principal amount on such date of determination; provided, further,
that if prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the applicable Notes shall bear interest at the Base
Rate changing, without notice or demand of any kind, when and as such Base Rate
changes.

“Event” shall include any event, occurrence,
circumstance, condition, or state of facts.

“Event of Default” shall have the meaning set
forth in Article 10 hereof.

“Excess Cash Flow” shall mean, for any fiscal
period and without duplication, the EBITDA of Borrower and its consolidated
Subsidiaries for such fiscal period minus (a) Capital Expenditures
actually paid in cash (and not financed) by Borrower and its consolidated
Subsidiaries during such fiscal period minus (b) interest expense
actually paid in cash by Borrower and its consolidated Subsidiaries during such
fiscal period minus (c) all taxes actually paid in cash by Borrower
and its consolidated Subsidiaries during such fiscal period minus
(d) all scheduled principal payments of outstanding Indebtedness of
Borrower and its consolidated Subsidiaries for borrowed money actually paid by
Borrower and its consolidated Subsidiaries during such fiscal period.

“Executive Order No. 13224” shall mean the
Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, as the same has been, or shall hereafter be, renewed, extended, amended
or replaced.

“Federal Funds Rate” means, for any day, the
rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to Agent on such day on such transactions as determined by Agent in a
commercially reasonable manner.

“Fee Letter” shall
mean that certain letter agreement dated as of December 1, 2005, between
Borrower and Agent relating to certain fees payable by Borrower.

“Financial Officer” of any Person shall mean
the chief financial officer, chief restructuring officer, principal accounting
officer, treasurer or controller of such Person.

“Fixed Charge Coverage
Ratio” shall mean and include, with respect to any fiscal period, the ratio
of (a) (i) EBITDA minus (ii) Capital Expenditures
actually paid in cash (and not financed) by Borrower and its consolidated
Subsidiaries during such fiscal period minus (iii) all 

 9
 

 

cash taxes paid or payable
by Borrower and its consolidated Subsidiaries during such fiscal period, minus
(iv) all dividends and/or distributions (but excluding (A) management
fees to the extent they have already been taken into account in the calculation
of EBITDA and (B) the payment,
on or before the Closing Date of accrued dividends on the issued and
outstanding Class A-1 Preferred Partnership Rights of Borrower in an aggregate
amount not to exceed $600,821.92 and accrued dividends on, and the redemption
price of, the issued and outstanding Class A-2 Preferred Partnership Rights of
Borrower in an aggregate amount not to exceed $2,000,000.00 and $12,500,000.00,
respectively) paid pursuant to Section 7.7(c) hereof or otherwise to (b) all Senior Debt Payments, other than
mandatory prepayments of principal based upon Excess Cash Flow required
pursuant to Section 2.14(b) plus all Subordinated Debt Payments of the
Other Senior Credit Agreement paid or payable during such fiscal period.

“Foreign Plan” shall mean any Plan (without
regard to whether it is exempted from coverage under ERISA) maintained outside
of, or governed by the laws of a jurisdiction other than, the U.S. primarily
for the benefit of individuals substantially all of whom are nonresident
aliens.

“Foreign Subsidiary”
shall mean any Subsidiary that is not a Domestic Subsidiary, including, without
limitation, Vision-Ease Asia, Vision-Ease Canada, Vision-Ease Europe and
Vision-Ease Lens.

“GAAP” shall
mean generally accepted accounting principles in the U.S. in effect from time
to time.

“General Intangibles” shall mean and include,
with respect to any Person, all of such Person’s general intangibles (as
defined in the UCC), whether now owned or hereafter acquired and shall also
mean and include (whether or not such items are included in the term “general
intangibles” as defined in the UCC), without limitation, (a) all, payment
intangibles, choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trademarks,
trade names, trademark applications, service marks, trade secrets, goodwill,
copyrights, design rights, software, computer information, source codes, codes,
records and dates, registrations, licenses, franchises, customer lists, tax
refunds, tax refund claims, computer programs, claims under guaranties,
security interests or other security held by or granted to such Person to
secure payment of any of the Receivables by a Customer (other than to the
extent covered by Receivables), rights of indemnification and (b) all
other intangible property of every kind and nature (other than Receivables).

“General Partner” shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Person.

“General Partner Membership Interests” shall
mean any and all Capital Stock issued by, of or in General Partner.

“Governmental Authorization” means any consent,
approval, license, registration or permit issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant
to any law, rule or regulation of any Governmental Body.

 10
 

 

“Governmental Body” shall mean any nation or
government, any state or other political subdivision thereof or any entity
exercising the executive, legislative, judicial, regulatory or administrative
functions of or pertaining to a government and any corporation or other entity
owned or controlled, through stock or capital ownership, by any of the
foregoing.

“Guarantee” by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without limiting the
generality of the foregoing, any indebtedness, liability or obligation, direct
or indirect, contingent or otherwise, of such Person (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (b) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness or other obligation as to the payment
thereof or to protect the obligee against loss in respect thereof (in whole or
in part), provided that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb has a
corresponding meaning.  The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum anticipated liability in respect
thereof (assuming such Person is required to perform thereunder).

“Guarantor” shall mean General Partner, each
Subsidiary of Borrower (other than a Foreign Subsidiary which is not obligated
to guarantee payment or performance of the Obligations in accordance with Section
4.21) and any other Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations, and “Guarantors” means
collectively all such Persons.

“Guarantor Security Agreement” shall mean any
security agreement, pledge agreement, collateral assignment or other similar
agreement, document or instrument creating a Lien executed by any Guarantor in
favor of Agent which secures the Guaranty of such Guarantor and/or the
Obligations, including, without limitation, the security agreement contained in
Section 4.1 hereof.

“Guaranty” shall
mean any guaranty of the whole or any part of the Obligations executed by a
Guarantor in favor of Agent for its benefit and for the ratable benefit of
Lenders.

“Hazardous Discharge” shall have the meaning set
forth in Section 4.19(d) hereof.

“Hazardous Substance” shall mean, without
limitation, any flammable explosives, radon, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous
or Toxic Substances as defined in CERCLA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. §§1801, et
seq.), RCRA or any other applicable Environmental Law and in the
regulations adopted pursuant thereto.

 11
 

 

“Hazardous Wastes” shall mean all waste
materials subject to regulation under CERCLA, RCRA or applicable state law, and
any other applicable Federal and state laws now in force or hereafter enacted
relating to hazardous waste disposal.

“Hedge Amendment”
shall mean any and all transactions, agreements or documents, now existing or
hereafter entered into, which provide for an interest rate, credit, commodity
or equity swap, cap, floor, collar, forward foreign exchange transaction,
currency swap, cross currency rate swap, currency option or any combination of,
or option with respect to, these or similar transactions, for the purpose of
hedging Borrower’s or any of its Subsidiary’s exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.

“Hedge Termination Value” shall mean, in
respect of any Hedge Agreement, after taking into account the effect of any
legally enforceable netting agreement relating to such Hedge Agreement,
(a) for any date on or after the date such Hedge Agreement has been closed
out and the termination value determined in accordance therewith, such
termination value, and (b) for any date prior to the date such Hedge
Agreement has been closed out and the termination value determined, the amount
determined as the mark-to-market value for such Hedge Agreement as determined
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Hedge Agreement (which may include a
Lender or any Affiliate of a Lender).

“IEVP” shall mean Insight Equity Vision
Partners, LP, a Texas limited partnership.

“Indebtedness” of a Person at a particular date
shall mean all indebtedness, liabilities and obligations of such Person which
in accordance with GAAP would be classified upon a balance sheet as liabilities
(except capital stock and surplus earned or otherwise) and in any event,
without limitation by reason of enumeration, shall include all indebtedness,
debt and other similar monetary obligations of such Person whether direct or
guaranteed, and all premiums, if any, due at the required prepayment dates of
such indebtedness, and all indebtedness secured by a Lien on assets owned by
such Person, whether or not such indebtedness actually shall have been created,
assumed or incurred by such Person.  Any
indebtedness of such Person resulting from the acquisition by such Person of
any assets subject to any Lien shall be deemed, for the purposes hereof, to be
the equivalent of the creation, assumption and incurring of the indebtedness
secured thereby, whether or not actually so created, assumed or incurred.  In addition to and without limiting the
generality of the foregoing, “Indebtedness” of a Person at a particular date
shall also mean and include all of the following indebtedness, liabilities and
obligations of such Person whether or not included as liabilities of such
Person in accordance with GAAP:

(a)           all indebtedness, liabilities and
obligations of such Person for borrowed money and all indebtedness, liabilities
and obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

(b)           all direct or contingent obligations
of such Person arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;

 12
 

 

(c)           all net obligations of such Person
under any Hedge Agreement;

(d)           all obligations of such Person to pay
the deferred purchase price of property or services (excluding, for the
purposes of this definition, trade accounts payable and accrued expenses
arising in the ordinary course of business);

(e)           indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;

(f)            Capitalized Lease Obligations and Synthetic
Lease Obligations; and

(g)           all Guarantees of such Person in
respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any
Hedge Agreement on any date shall be deemed to be the Hedge Termination Value
thereof as of such date.  The amount of
any Capitalized Lease Obligation or Synthetic Lease Obligation as of any date
shall be deemed to be the amount of Attributable Indebtedness Amount in respect
thereof as of such date.

“Initial Subordinated Notes” means that certain
(a) Senior Subordinate Promissory Note dated October 31, 2004, in the
original principal amount of $6,400,000 made by Borrower payable to the order
of PNC Venture Corp, (b) Senior Subordinate Promissory Note dated
October 31, 2004, in the original principal amount of $9,600,000 made by
Borrower payable to the order of PNC Equity Partners, L.P., and (c) Senior
Subordinate Promissory Note dated October 31, 2004, in the original
principal amount of $2,000,000 made by Borrower payable to the order of Erie
Indemnity Company, which promissory notes and the indebtedness evidenced
thereby are issued pursuant to the Subordinated Credit Agreement as the same
may have been transferred prior to the date hereof.

“Instruments” shall mean as such term is
defined in the UCC.

“Intellectual Property” shall mean any U.S. or
foreign patents, patent applications, trademarks, trade names, service marks,
brand names, logos and other trade designations (including, without limitation,
unregistered names and marks), trademark and service mark registrations and
applications, copyrights and copyright registrations and applications,
inventions, invention disclosures, protected formulae, formulations, processes,
methods, trade secrets, computer ‘software, computer programs and source codes,
manufacturing research and similar technical information, engineering know-how,
customer and supplier information, assembly and test data drawings or royalty
rights.

“Intercreditor Agreement” shall mean that
certain Intercreditor Agreement dated as of December 1, 2005, among Agent,
Senior Agent, Borrower, General Partner and the Subsidiaries of Borrower which
are Guarantors, as the same may be amended or modified from time to time.

 13
 

 

“Interest Period” means (a) with respect
to the first interest payment date as set forth in Section 3.1, the
period from and including the Closing Date to and including December 31,
2005 and (b) thereafter,
each period commencing on the first day of the next calendar month immediately
following the preceding Interest Period and ending three months thereafter.

“Inventory” shall mean and include, with
respect to any Person, all of such Person’s now owned or hereafter acquired
goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for
sale or lease, all raw materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are or might be used or
consumed in such Person’s business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.

“Investment Property” shall mean and include,
with respect to such Person, all of such Person’s now owned or hereafter
investment property (as defined in the UCC) and other acquired securities (whether certificated or uncertificated),
securities entitlements, securities accounts, commodities contracts and
commodities accounts.

“Knowledge” shall mean the actual knowledge of
the specific Person(s) referred to in the context in which such term is used
or, if no such specific Person is referred to, the following Persons:  (a) Theodore W. Beneski, (b) Ross Gatlin,
(c) Victor L. Vescovo, (d) Douglas Hepper, (e) Comer
Searcy, (f) Richard Faber, and
(g) each member of the management of any Loan Party who, after the Closing
Date, may assume any of the duties of the Persons identified in clauses (a)
through (f) preceding or becomes
a member of the executive management of any Loan Party other than a Foreign
Subsidiary.  Without limiting the
generality of the foregoing, any reference to the Knowledge of any Loan Party
shall mean and refer to the actual knowledge of the Persons specified in clauses
(a), (b), (c), (d), (e), (f) and (g) preceding.

“Leasehold Interests” shall mean all of
Borrower’s right, title and interest in and to the premises identified as “Leasehold
Properties” on Schedule 1.2(b).

“Lender” and “Lenders” shall have the
meaning ascribed to such term in the preamble to this Agreement and shall
include each Person which becomes a transferee, successor or assign of any
Lender.

“Letter of Credit” shall mean as such term is
defined in the UCC.

“Letter-of-Credit Rights” shall mean as such
term is defined in the UCC.

“Lien” shall mean any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien (whether statutory
or otherwise), Charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any property or asset of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any lease
having substantially the same economic effect as any of the foregoing and the
filing of, or agreement to give, any financing statement under the UCC or
comparable law of any jurisdiction.

 14
 

 

“Limited Partner” shall mean Rosewood, IEVP or
any other owner or holder of any limited partnership interest in Borrower, and “Limited
Partners” means collectively all of such Persons.

“Loan Party” shall mean Borrower, each
Subsidiary of Borrower and General Partner, and Parties” means collectively all
of such Persons.

“Loans” shall mean the Term Loans.

“Management Fee Subordination Agreement” shall
mean that certain Management Fee Subordination Agreement dated as of the date
hereof among General Partner, Insight Equity Vision Management, LLC and Agent.

“Material Adverse Effect” shall mean a material
adverse effect on (a) the financial condition, operations, properties,
assets, businesses or prospects of Borrower or Borrower and its Subsidiaries
taken as a whole, (b) Borrower’s
ability to pay the Obligations in accordance with the terms thereof,
(c) the value of the Collateral, or Agent’s Liens on the Collateral or the
priority of any such Lien or (d) the practical realization of the benefits
of Agent’s and each Lender’s rights and remedies under this Agreement and the
Other Documents.

“Material Contracts” means (a) the
contracts which are material to the business or operations of Borrower or any
of its Subsidiaries and (b) as to Borrower or any of its Subsidiaries,
each supply, purchase, service, employment, tax, indemnity or other agreement
or contract (other than this Agreement and the Other Documents) (i) for
which the aggregate amount or value of services performed or to be performed
for or by, or funds of other Property transferred or to be transferred to or
by, Borrower or any of its Subsidiaries as a party to such agreement or
contract, or by which Borrower or any of its Subsidiaries or any of its
Properties is otherwise bound, during any calendar year exceeds $2,500,000 (or
the equivalent amount in any currency) and any and all amendments, restatements
or other modifications thereof or (ii) which, if terminated, could
reasonably be expected to have a Material Adverse Effect with respect to
Borrower or any of its Subsidiaries.

“Maturity Date” shall mean the last day of the
Term.

“Maximum Rate” shall mean, at any time and with
respect to any Lender, the maximum rate of nonusurious interest under
Applicable Law that such Lender may charge Borrower.  The Maximum Rate shall be calculated in a
manner that takes into account any and all fees, payments and other charges
contracted for, charged or received in connection with this Agreement and the
Other Documents that constitute interest under Applicable Law.  Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to Borrower or any other Loan Party at the
time of such change in the Maximum Rate. 
To the extent that Agent and/or Lenders are relying on Chapter 303 of
the Texas Finance Code to determine the Maximum Rate payable on the Loans
and/or other Obligations, Agent and Lenders will utilize the weekly ceiling
from time to time in effect as provided in such Chapter 303, as amended.  To the extent U.S. federal law permits Agent
and/or Lenders to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law, Agent and Lenders will rely on U.S.
federal law instead of such Chapter 303

 15
 

 

for the purpose of determining the Maximum Rate.  Additionally, to the extent permitted by
Applicable Law now or hereafter in effect, Agent and/or Lenders may, at their
option and from time to time, utilize any other method of establishing the
Maximum Rate under such Chapter 303 or under other Applicable Law by giving
notice, if required, to Borrower as provided by Applicable Law now or hereafter
in effect.

“Mortgages” shall mean the mortgages and deeds
of trust on the Real Property securing the Obligations, together with all
extensions, renewals, amendments, supplements, modifications, substitutions and
replacements thereto and thereof.

“Multiemployer Plan”
shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3)
of ERISA.

“Note” shall mean
any Term Note, and “Notes” means, collectively, the Term Notes.

“Obligations” shall mean and include any and
all loans, advances, debts, liabilities, obligations, covenants and duties
owing by Borrower and the other Loan Parties and Limited Partner (or any one or
more of them) to Lenders and Agent (or any one or more of them) or to any other
direct or indirect subsidiary or affiliate of Agent or any Lender of any kind
or nature, present or future (including, without limitation, any interest
accruing thereon or other payment or charge required to be paid by or in
respect of Borrower under Article 3 hereof or any other term or
provision of this Agreement or the Other Documents, whether before or after
maturity, or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding relating to
Borrower or any other Loan Party or any Limited Partner, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding),
whether or not evidenced by any note, guaranty or other instrument, whether
arising under any agreement, instrument or document (including, without
limitation, this Agreement and the Other Documents), whether or not for the payment of money, whether
arising by reason of an extension of credit, opening of a letter of credit,
loan, equipment lease or guarantee, under any interest or currency swap,
future, option or other similar agreement, or in any other manner, whether
arising out of overdrafts or deposit or other accounts or electronic funds
transfers (whether through automated clearing houses or otherwise) or out of
Agent’s or any Lenders non-receipt of or inability to collect funds or
otherwise not being made whole in connection with depository transfer check or
other similar arrangements, whether direct or indirect (including those
acquired by assignment or participation), absolute or contingent, joint or
several, due or to become due, now existing or hereafter arising, contractual
or tortious, liquidated or unliquidated, regardless of how such indebtedness or
liabilities arise or by what agreement or instrument they may be evidenced or
whether evidenced by any agreement or instrument, including, but not limited
to, any and all of Borrower’s or any other Loan Party’s or any Limited Partner’s
Indebtedness, liabilities and/or obligations under this Agreement, the Other
Documents or under any other agreement between Agent or Lenders and Borrower or
any other Loan Party or any Limited Partner and any amendments, extensions,
renewals or increases and all costs and expenses of Agent and any Lender incurred
in the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not limited to
reasonable attorneys’ fees and expenses and all obligations of Borrower or any
other Loan Party or any Limited Partner to Agent or Lenders to perform acts or
refrain from taking any action.

 16
 

 

“Organizational Documents” means, as to any
Loan Party or Limited Partner, all of such Person’s certificate or articles of
incorporation and bylaws, certificate of limited partnership and partnership
agreement, certificate of organization or formation and operating agreement or
regulations and/or other similar agreements, documents and/or instruments
relating to the formation or organization of such entity or the conduct of its
business or affairs (as applicable).

“Original Owners” shall mean General Partner,
Rosewood and IEVP

“Other Documents” shall mean the Mortgages, the
Notes, the Other Senior Credit Documents, any Guaranty, any Guarantor Security
Agreement, the Intercreditor Agreement, the Subordination Agreement, the
Management Fee Subordination Agreement, the Pledge Agreements, any other
Security Documents, the Fee Letter, each Questionnaire, agreements relating to
the Blocked Accounts, control agreements relating to any Investment Property or
Deposit Accounts, financing statements, and any and all other agreements,
instruments and documents, including, without limitation, guaranties, pledges,
powers of attorney, consents, interest or currency swap agreements or other
similar agreements and all other writings heretofore, now or hereafter executed
by Borrower or any other Loan Party or any Limited Partner and/or delivered to
Agent or any Lender in respect of the transactions contemplated by this
Agreement (and shall include, without limitation, any amendment, restatement,
renewal, supplement, ratification, confirmation, reaffirmation or other
modification to any of the foregoing in accordance with the terms of this
Agreement and the Intercreditor Agreement, as applicable).

“Other Senior Credit Agreement” means that
certain Amended and Restated Revolving, Credit, Term Loan and Security Agreement, dated as
of December 1, 2005, by and among Borrower, Senior Agent and the other
lenders party thereto from time to time, as amended, restated or modified from
time to time, and all documents and instruments delivered pursuant thereto in
connection with the loans and advances made thereunder.

“Other Senior Credit Documents” means the Other
Senior Credit Agreement and the agreements, documents and instruments executed
in connection therewith or contemplated thereby, and all amendments thereto.

“Other Senior Debt” means, at any given time,
the Indebtedness (whether now outstanding or hereafter incurred) of Borrower or
any of the Loan Parties in respect of the Other Senior Credit Agreement, in a
total amount not to exceed Forty-three Million Seven Hundred Twenty-five
Thousand Four Hundred Twenty-four and No/100 Dollars ($43,725,424.00)
(including up to Thirty Million and No/100 Dollars ($30,000,000.00) in
revolving loans and Thirteen Million Seven Hundred Twenty-five Thousand Four
Hundred Twenty-four and No/100 ($13,725,424.00 Dollars)] in term loans) less,
with respect to the total limit and the limit of the term loans, the aggregate
amount of principal payments made by Borrower to the Senior Lender under such
term loans, plus interest, and otherwise subject to the limitations and
reductions set forth in the Intercreditor Agreement.

“Parent” of any Person shall mean a corporation
or other entity owning, directly or indirectly, at least fifty percent (50%) of
the Capital Stock having ordinary voting power to elect 

 17
 

 

a majority of the directors of the Person or other
Persons performing similar functions for such Person.

“Participant” shall mean each Person who shall
be granted the right by any Lender to participate in any of the Advances and
who shall have entered into a participation agreement in form and substance
satisfactory to such Lender.

“Payment Office” shall mean initially 1717 Main
Street, Suite 900, Dallas, Texas 75201; thereafter, such other office of Agent,
if any, which it may designate by notice to Borrower and to each Lender to be
the Payment Office.

“PBGC” shall mean the Pension Benefit Guaranty
Corporation or any Governmental Body succeeding to the functions thereof.

“Permitted
Encumbrances” shall mean:

(a)           Liens in favor of Agent for the
benefit of Agent and Lenders;

(b)           Liens in favor of Senior Agent
pursuant to the Other Senior Credit Documents securing the Other Senior Debt;

(c)           Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by the owner of the property or asset affected thereby, provided that the
Lien shall have no effect on the priority of the Liens in favor of Agent or the
value of the assets in which Agent has such a Lien and a stay of enforcement of
any such Lien shall be in effect;

(d)           deposits or pledges to secure
obligations under worker’s compensation, social security or similar laws, or
under unemployment insurance;

(e)           deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of Borrower’s business;

(f)            judgment Liens that have been stayed
or bonded arising in the ordinary course of Borrower’s business with respect to
obligations which are not due or which are being contested in good faith by
Borrower;

(g)           purchase money Liens placed upon
equipment or fixed assets hereafter acquired to secure all or a portion of the
purchase price thereof, provided that (i) any such Lien shall not encumber
any property of any Loan Party other than the equipment or fixed assets so
acquired and (ii) the aggregate amount of Indebtedness secured by such
Liens at any time outstanding shall not exceed the amount thereof permitted by clause (e)
of Section 7.8;

(h)           other Liens incidental to the conduct
of Borrower’s business or the ownership of its property and assets which were
not incurred in connection with the 

 18
 

 

borrowing of
money or the obtaining of advances or credit, which do not in the aggregate
detract from or impair Agent’s or Lenders’ rights in and to the Collateral or
the value of property or assets of Borrower or its Subsidiaries or the intended
use thereof in the operation of the business of Borrower or its Subsidiaries
and which do not have priority over the Liens of Agent in or to the Collateral;

(i)            encumbrances on real property
consisting of easements, rights of way, zoning restrictions, restrictions on
the use of real property and defects, deficiencies and irregularities in the title
thereto which do not in the aggregate detract from or impair the value or
intended use of the property or assets affected thereby to any material extent;

(j)            Liens incurred in connection with
the extension, renewal or refinancing of the Indebtedness secured by the Liens
described in clause (g) above or clause (k) below,
provided that any extension, renewal or replacement Lien (i) is limited to
the property covered by the existing Lien and (ii) secures Indebtedness
which is no greater in amount and has material terms no less favorable to any
Loan Party, Agent or Lenders than the terms of the Indebtedness secured by the
existing Lien;

(k)           Liens of mechanics, materialmen,
warehousemen, carriers, landlords or other similar statutory Liens created in
the ordinary course of business securing obligations that are not overdue or
are being contested in good faith by appropriate proceedings diligently pursued
and for which adequate reserves have been established in accordance with GAAP;

(l)            Liens disclosed on Schedule
1.2(a); and

(m)          Liens in favor of a trade creditor of Borrower
attaching to Inventory owned by such trade creditor which is in the possession
of Borrower and which is delivered by such trade creditor to Borrower pursuant
to a consignment arrangement.

“Person” shall mean any individual, sole
proprietorship, partnership, corporation, business trust, joint stock company,
trust, unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or government
(whether federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).

“PIK Subordinated Notes” means any promissory
notes issued after the Closing Date pursuant to, and in accordance with the
terms and provisions of, the Initial Subordinated Notes in effect as of the
Closing Date, which (a) promissory notes (if and when issued) represent
deferred interest on the Initial Subordinated Notes that has been paid in kind
and (b) promissory notes and the indebtedness evidenced thereby are fully
subordinated to the payment and performance in full of the Obligations pursuant
to the terms of the Subordination Agreement.

“Plan” shall
mean any employee benefit plan within the meaning of Section 3(3) of ERISA,
(a) maintained or sponsored by Borrower, any of its Subsidiaries or any
member of the Controlled Group; (b) to which any such entity has any
obligation or liability; or (c) any such Plan to which Borrower, any of
its Subsidiaries or any member of the Controlled Group makes contributions or
is required to contribute on behalf of any of its employees.

 19
 

 

“Pledge Agreement” shall mean (a) for
Borrower or any Subsidiary of Borrower, a pledge agreement, security agreement,
collateral assignment or other similar agreement, document or instrument
executed by Borrower or a Subsidiary (as applicable) to and in favor of Agent in form and substance satisfactory to
Agent pursuant to which Borrower or such Subsidiary grants to Agent, as security
for the payment and performance of the Obligations, all Subsidiary Capital
Stock owned by Borrower or such Subsidiary, (b) for each Limited Partner,
a pledge agreement, security agreement, collateral assignment or other similar
agreement, document or instrument executed by such Limited Partner to and in
favor of Agent in form and substance satisfactory to Agent pursuant to which
such Limited Partner grants to Agent, as security for the payment and
performance of the Obligations, all of his or its Borrower Partnership
Interests and General Partner Membership Interests, and (c) for General
Partner, a pledge agreement, security agreement, collateral assignment or other
similar agreement, document or instrument executed by General Partner to and in
favor of Agent in form and substance satisfactory to Agent pursuant to which
General Partner grants to Agent, as security for the payment and performance of
the Obligations, all of General Partner’s Borrower Partnership Interests.

“PNC” shall
mean PNC Bank, National Association.

“Pro Forma Balance Sheet” shall have the
meaning set forth in Section 5.5(a) hereof.

“Pro Forma Financial Statements” shall have the
meaning set forth in Section 5.5(b) hereof.

“Projections” shall have the meaning set forth
in Section 5.5(b) hereof.

“Property” means, for any Person, property or
assets of all kinds, real, personal or mixed, tangible or intangible
(including, without limitation, all rights relating thereto), whether owned or
acquired on or after the Closing Date.

“Public Offering” means an offering of
securities pursuant to a registration statement declared effective by the
United States Securities and Exchange Commission.

“Purchasing Lender” shall have the meaning set
forth in Section 15.3(c) hereof.

“Put Subordinated Notes” means any promissory
notes issued pursuant to, and in accordance with the terms and provisions of,
the Subordinated Credit Agreement upon a “put” of one or more of the Warrants
or of the securities acquirable upon exercise of the Warrants, which promissory
notes and the indebtedness evidenced thereby are fully subordinated to the
payment and performance in full of the Obligations pursuant to the terms of the
Subordination Agreement and shall, in each case, be in form and substance and
on terms reasonably satisfactory to Agent.

“Questionnaire” shall mean the Documentation
Information Questionnaire and the responses thereto provided by Borrower and
delivered to Agent.

“RCRA” shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901,
et seq., as same may be amended from time to time.

 20
 

 

“Real Property” shall mean all of Borrower’s or
any Subsidiary’s right, title and interest in and to (a) each of the owned
and leased premises identified on Schedule 4.25 hereto and (b) any other
real property or interest therein now owned or hereafter acquired by Borrower
or any of its Subsidiaries.

“Receivables” shall mean and include, as to any
Person, all of such Person’s accounts, contract rights, instruments (including
those evidencing indebtedness owed to such Person by its Affiliates),
documents, chattel paper (including electronic chattel paper), general
intangibles relating to accounts, drafts and acceptances, credit card
receivables and all other forms of obligations owing to such Person arising out
of or in connection with the sale or lease of Inventory or the rendition of
services, all supporting obligations, guarantees and other security therefor,
whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to Agent hereunder.

“Release” shall have the meaning set forth in Section
5.7(c) hereof.

“Reportable Event” shall mean a reportable
event described in Section 4043(b) of ERISA or the regulations promulgated
thereunder.

“Required Consents” means those consents or
approvals required from any Person, including parties to the Material Contracts
or Governmental Authorizations required from any Governmental Body that are
necessary or required in order to give effect to the transactions contemplated
by this Agreement or the Other Documents (including, without limitation, to
permit the grant of a security interest therein or the exercise of any right or
remedy of Agent in connection therewith).

“Required Lenders” shall mean Lenders holding
at least sixty-six percent (66%) of the Commitment Percentages but in no event
shall be less than two (2) Lenders so long as more than one (1) Lender is a
party hereto, provided that, for purposes of this definition, any Lender,
together with its Affiliates, shall be deemed to be one (1) Lender.

“Rosewood” means Rosewood Vision Corporation, a
Delaware corporation.

“Security Documents” means this Agreement, each
Pledge Agreement and Mortgage and/or any other agreement or security agreements
executed by any of the Loan Parties (including, without limitation and in the
case of Borrower, a patent security agreement, a trademark security agreement,
a blocked account agreement and a deposit account control agreement)
(collectively, and inclusive of any such agreements which may be executed at
any time and from time to time and which secure the Obligations or any portion
thereof).

“Seller” shall mean Vision-Ease Lens, Inc., a
Minnesota corporation.

“Senior Agent” means PNC Bank, National
Association, as agent for the lenders party to the Other Senior Credit
Agreement from time to time and its successors and assigns.

“Senior Debt Payments” shall mean, for any
period and without duplication, the sum of (a) all interest accrued with
respect to any Indebtedness for borrowed money (including, without limitation,
the Loans and Other Senior Debt) of Borrower and its Subsidiaries during such 

 21
 

 

period, other than interest accrued under the
Subordinated Notes, plus (b) all
scheduled principal payments and mandatory prepayments (but excluding optional
prepayments) on any Indebtedness for borrowed money (including, without
limitation, the Loans and Other Senior Debt) of Borrower and its Subsidiaries
during such period, other than any such principal payments under the
Subordinated Notes, plus (c) payments for all fees, commissions and
charges set forth herein and with respect to any Advances during such period
(other than the fees, commissions and
charges payable on the Closing Date under this Agreement, the Fee Letter, the
Other Senior Credit Agreement and other than fees previously amortized that are
required to be expensed due to the amending and restating of that certain
Revolving Credit, Term Loan and Security Agreement, dated as of
October 31, 2004 among Senior Agent, the other financial institutions
party thereto from time to time, Borrower and certain other Loan Parties party
thereto pursuant to the Other Senior Credit Agreement), plus (d) all payments made with respect to
Capitalized Lease Obligations during such period.

“Subordinated Credit Agreement” shall mean that
certain Securities Purchase Agreement dated as of October 31, 2004, by and
among Borrower, General Partner, the Subsidiaries of Borrower which are
Guarantors, PNC Venture Corp, PNC Equity Partners, L.P. and Erie Indemnity
Company, as the same may be amended or modified from time to time in accordance
with (but only in accordance with) this Agreement and the Subordination
Agreement.

“Subordinated Credit Documents” shall mean the
Subordinated Credit Agreement, the Subordinated Notes, the Warrants, the “Warrant
Securities” as defined in the Subordinated Credit Agreement and any and all
other agreements, documents and instruments executed and/or delivered in
connection with any of the foregoing, in each case as the same may be amended or
modified from time to time in accordance with (but only in accordance with)
this Agreement and the Subordination Agreement.

“Subordinated Debt Payments” shall mean and
include all cash actually expended to make payments of principal or interest on
the Subordinated Notes.

“Subordinated Loans” shall mean the loans or
indebtedness evidenced by the Subordinated Notes.

“Subordinated Notes” shall mean, collectively,
the Initial Subordinated Notes, the PIK Subordinated Notes and the Put
Subordinated Notes.

“Subordination Agreement” shall mean that
certain Amended and Restated Intercreditor Agreement dated as of
December 1, 2005, among Agent, Senior Agent, PNC Venture Corp, PNC Equity
Partners, L.P., Erie Indemnity Company, Connecticut General Life Insurance
Company, Connecticut General Life Insurance Company in Respect of a Separate
Account, Life Insurance Company of North America, Borrower, General Partner,
the Subsidiaries of Borrower which are Guarantors and any other parties
thereto, as the same may be amended or modified from time to time.

“Subsidiary” shall mean, as to Borrower or, if
otherwise specified, such other Person specified, a corporation or other entity
of whose Capital Stock having ordinary voting power (other than Capital Stock
having such power only by reason of the happening of a contingency) 

 22
 

 

to elect a majority of the directors of such
corporation, or other Persons performing similar actions for such entity, are
owned, directly or indirectly, by Borrower or such other Person (as
applicable).

“Subsidiary Capital Stock” shall mean, with
respect to any Person, all issued and outstanding (at any time and from time to
time) Capital Stock issued by, of or in any Subsidiary of such Person.

“Synthetic Lease Obligation” shall mean the
monetary obligation of a Person under any (a) synthetic, off-balance sheet
or tax retention lease, or (b) agreement for the use or possession of
property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).

“Tangible Net Worth” shall mean, at a
particular date and without duplication, (a) the aggregate amount of all
assets of Borrower and its consolidated Subsidiaries as may be properly
classified as such in accordance with GAAP consistently applied excluding,
subject to the proviso below, such other assets as are properly classified as
intangible assets under GAAP (which assets so excluded include, without
limitation, all Receivables of Borrower and its consolidated Subsidiaries,
whether owed by an Affiliate or employee of Borrower and/or any of its
consolidated Subsidiaries, any third-party or otherwise) less (b) the aggregate amount of
all liabilities of Borrower and its consolidated Subsidiaries as may be
properly classified as such in accordance with GAAP; provided, however,
that intangible assets acquired on or after December 1, 2005, shall not be
so excluded from the calculation of Tangible Net Worth.

“Term” shall have the meaning set forth in Section
13.1 hereof.

“Term Loans” shall mean the Advances made
pursuant to Section 2.1 hereof.

“Term Loans Amount” shall have the meaning set
forth in Section 2.1 hereof, as determined on the Closing Date.

“Term Loans Rate” shall have the meaning set
forth in Section 3.1 hereof.

“Term Notes” shall have the meaning set forth
in Section 2.1 hereof.

“Termination Event” shall mean (a) a
Reportable Event with respect to any Plan or Multiemployer Plan; (b) the withdrawal of Borrower or
any member of the Controlled Group from a Plan or Multiemployer Plan during a
plan year in which such entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) the providing of
notice of intent to terminate a Plan, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the termination,
insolvency or reorganization of a Multiemployer Plan; (d) the institution
by the PBGC of proceedings to terminate a Plan; (e) any event or condition
(i) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or
(ii) that may result in termination of a Multiemployer Plan pursuant to
Section 4041A of ERISA; (f) the partial or complete withdrawal within the
meaning of Sections 4203 and 4205 of ERISA of Borrower or any 

 23
 

 

member of the Controlled Group from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization or
insolvent; and (g) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any member of the Controlled Group.  For
purposes of this definition, the term “Plan” shall be limited to Plans which
are subject to Title IV of
ERISA.

“Total Leverage Ratio”
shall mean, as of any date of determination (the “calculation date”), the ratio
of (a) Total Debt to (b) EBITDA. 
For purposes of this definition:

(i)            the “Total Debt” shall mean, as of
any calculation date, the sum of all Indebtedness of Borrower and its
Subsidiaries as of such calculation date and consolidated in accordance with
GAAP; and

(ii)           the “EBITDA” shall mean EBITDA for
the twelve month period ending on the date of such determination.

“Toxic Substance” shall mean and include any
material present on the Real Property or the Leasehold Interests which has been
shown to have significant adverse effect on human health or which is subject to regulation under the Toxic
Substances Control Act (TSCA), 15 U.S.C. §§ 2601, et seq., applicable state law, or any
other applicable Federal or state laws now in force or hereafter enacted
relating to toxic substances.  “Toxic
Substance” includes but is not limited to asbestos, polychlorinated biphenyls
(PCBs) and lead-based paints.

“Transactions”
means (a) the actions or transactions which are required to be taken or
consummated to satisfy the conditions precedent set forth in Section 8.1,
(b) the Advances made by Lenders to Borrower under this Agreement, and
(c) the use of the proceeds of such Advances in accordance with Section
2.9.

“Transferee” shall have the meaning set forth
in Section 15.3(b) hereof.

“UCC” shall mean the Uniform Commercial Code as
in effect from time to time in the State of Texas and/or any other
jurisdiction, the laws of which are applicable to or in connection with the
creation, perfection or priority of any Lien or any Property created pursuant
to this Agreement or any Other Document.

“Unadjusted EBITDA” shall mean, for any period
and without duplication, the sum of (a) Earnings Before Interest and Taxes
for such period, plus (b) depreciation expenses of Borrower and its consolidated
Subsidiaries for such period, plus (c) amortization expenses of Borrower
and its consolidated Subsidiaries for such period, plus (d) management fee
expenses of Borrower, to the extent permitted under Section 7.7 hereof,
for such period, plus (e) if and to the extent not already included in clause (c)
above, fees, commissions and charges payable on the Closing Date under this
Agreement, the Fee Letter or the Other Senior Credit Agreement and fees
previously amortized that are required to be expensed due to the amending and
restating of that certain Revolving Credit, Term Loan and Security Agreement,
dated as of October 31, 2004 among Senior Agent, the other financial
institutions party thereto from time to time, Borrower and certain other Loan Parties
party thereto pursuant to the Other Senior Credit Agreement.

“U.S.” shall mean the United States of America.

 24
 

 

“USA Patriot Act” shall mean the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

“Vision-Ease Asia”
shall have the meaning set forth in the preamble to this Agreement and shall
extend to all permitted successors and assigns of such Person.

“Vision-Ease Canada” shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Person.

“Vision-Ease Europe” shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Person.

“Vision-Ease Lens” shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Person.

“Warrants” means any of the warrants issued or
issuable under the Subordinated Credit Agreement, including any replacements or
substitutions thereof permitted under this Agreement and the Subordination
Agreement.

“Week” shall mean the time period commencing
with-the opening of business on a Wednesday and ending on the close of business
the following Tuesday.

Section 1.3             UCC
Terms.  All terms used herein and
defined in the UCC as adopted in the State of Texas from time to time shall
have the meanings given therein unless otherwise defined herein.  To the extent the definition of any category or type of Collateral is
expanded by any amendment, modification or revision to the UCC, such expanded
definition will apply automatically as of the date of such amendment,
modification or revision.

Section 1.4             Certain
Matters of Construction.  The terms “herein”,
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision.  Any pronoun used shall be
deemed to cover all
genders.  Wherever appropriate in
the context, terms used herein in the singular also include the plural and vice
versa.  All references to statutes and
related regulations shall include any amendments of same and any successor statutes
and regulations.  Unless otherwise
provided or not permitted herein, all references to any agreement, documents or
instruments to which Agent is a party, including, without limitation,
references to any of the Other Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.

ARTICLE 2

ADVANCES, PAYMENTS

Section 2.1             Term
Loans.  Subject to the terms and
conditions of this Agreement, each Lender, severally and not jointly, will make
a term loan (collectively, the “Term Loans”) to Borrower in the sum
equal to such Lender’s Commitment Percentage of the aggregate principal amount
of $31,500,000 (hereinafter called the “Term Loans Amount”).  The Term Loans shall be advanced by Lenders
on the Closing Date and shall be, with respect to unpaid principal, payable 

 25
 

 

in one balloon installment on the Maturity Date, subject, however, to
acceleration upon the occurrence of an Event of Default under this Agreement,
earlier prepayment (voluntary or mandatory) as herein provided, or early
termination of this Agreement for any reason; provided, however,
that notwithstanding anything to the contrary herein, including any provisions
of Sections 2.7 or 2.8, the unpaid balance of all of the Term
Loans shall be due and payable in full (together with any applicable Prepayment Premium as
provided herein) at the earlier of Borrower’s refinancing of any part of the
Loans advanced under this Agreement or the end of the Term.  The Term Loans shall be evidenced by one or
more secured promissory notes (collectively,
the “Term Notes”) in substantially the form attached hereto as Exhibit 2.1
and shall be issued in such Lender’s name or the name of its nominee and shall
be in an amount equal to Lender’s Commitment Percentage of the Term Loans.

Section 2.2             Eurodollar
Rate.

(a)           All of the outstanding Term Loans
shall accrue interest at the applicable Eurodollar Rate for each Interest
Period.

(b)           Borrower
shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and
against any and all losses or expenses that Agent and Lenders may sustain or
incur as a consequence of any prepayment of or any default by Borrower in the
payment of the principal of or interest on any Term Loan, including, but not
limited to, any interest payable by Agent or Lenders to lenders of funds
obtained by it in order to make or maintain its Term Loans hereunder. 
A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Agent or any Lender to Borrower shall be deemed
conclusive absent manifest error.

Section 2.3             Repayment
of Term Loans.

(a)           The Term Loans shall be due and
payable as provided in Section 2.1 hereof and in the Term Notes, subject
to mandatory prepayments as herein provided.

(b)           Borrower
recognizes that the amounts evidenced by checks, notes, drafts or any other
items of payment relating to, and proceeds of, Collateral may not be
collectible by Agent on the date received. 
In consideration of Agent’s agreement to conditionally credit Borrower’s
Account as of the Business Day on which Agent receives those items of payment,
Borrower agrees that, in computing the interest and other charges under this
Agreement, all items of payment shall be deemed applied by Agent on account of
the Obligations one (1) Business Day after (i) the Business Day on which
Agent receives such payments via wire transfer or electronic depository check;
(ii) in the case of any payment made by depository check, the Business Day
on which Agent receives such payment in a Blocked Account established pursuant
to Section 4.15(h); or (iii) in the case of payments
received by Agent in any other form or upon any other terms, the Business Day
such payment constitutes good funds in Agent’s account.  Agent is not, however, required to credit
Borrower’s Account for the amount of any item of payment which is not made in
the form required pursuant to this Section 2.3(b) and which is unsatisfactory to Agent and
Agent may charge Borrower’s Account for the amount of any such item of payment
which is returned to Agent unpaid.

 26
 

 

(c)           All payments of principal, interest
and other amounts payable hereunder or under any of the Other Documents shall
be made to Agent at the Payment Office not later than 1:00 p.m. (New York City time) on the
due date therefor in lawful money of the U.S. in federal funds or other funds
immediately available to Agent.  Agent
shall have the right to effectuate payment on any and all Obligations due and
owing hereunder by charging Borrower’s Account.

(d)           Borrower shall pay principal,
interest and all other amounts payable hereunder, or under any related
agreement, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.

Section 2.4             Additional
Payments.  Any sums expended by Agent
or any Lender due to Borrower’s failure to perform or comply with its
obligations under this Agreement or any Other Document including, without
limitation, Borrower’s obligations under Sections 4.2, 4.4, 4.12,
4.13, 4.14 and 6.1 hereof,
may be charged to Borrower’s Account and added to the Obligations.

Section 2.5             Statement
of Account.  Each Lender shall
maintain, in accordance with its usual practice, electronic or written records
evidencing the indebtedness and obligations to such Lender resulting from the
Term Loan made by such Lender, including without limitation, the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.  Agent shall maintain an
electronic or written record, in accordance with its customary procedures, of a
loan account (“Borrower’s Account”) in the name of Borrower evidencing the
indebtedness and obligations resulting from the Term Loans made by Lenders,
including without limitation, (i) the amount of each Term Loan held by any
Lender hereunder and any applicable interest rate periods, (ii) the amount
of any principal and/or interest due and payable and/or to become due and
payable from the Borrower to each Lender hereunder, and (iii) all amounts
received by the Agent hereunder from the Borrower and each Lender’s share
thereof; provided, however, the failure by Lender or Agent to
maintain such records shall not
adversely affect Agent or any Lender. 
The records of Agent with respect to Borrower’s Account shall be
conclusive evidence absent manifest error of the amounts of Advances and other
charges thereto and of payments applicable thereto.

Section 2.6             Manner
of Borrowing and Payment.

(a)           The Term Loans shall be advanced
according to the applicable Commitment Percentages of Lenders.

(b)           Each payment (including each
prepayment) by Borrower on account of the principal of and interest on the Term
Loans shall be applied to the Term Loans pro rata according to the applicable
Commitment Percentages of Lenders. 
Except as expressly provided herein, all payments (including
prepayments) to be made by Borrower on account of principal, interest and fees
shall be made without set off or counterclaim and shall be made to Agent on
behalf of Lenders to the Payment Office, in each case on or prior to 1:00 p.m.,
New York City time, in Dollars and in immediately available funds.

(c)           (i) Each Lender shall be
entitled to earn interest at the Term Loans Rate (or Default Rate, if
applicable) on outstanding Advances which it has funded.

 27
 

 

(ii)           If any Lender or Participant (a “benefited
Lender”) shall at any time receive any payment of all or part of its Advances,
or interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily or by set-off) in a greater proportion than any
such payment to and Collateral received by any other Lender, if any, in respect
of such other Lender’s Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly permitted
hereunder, such benefited Lender shall purchase for cash from the other Lenders
a participation in such portion of each such other Lender’s Advances, or shall
provide such other Lender with the benefits of any such Collateral, or the
proceeds thereof, as shall be necessary to cause such benefited Lender to share
the excess payment or benefits of such Collateral or proceeds ratably with each
of the other Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.  Each Lender so purchasing a portion of
another Lender’s Advances may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.

Section 2.7             Optional
Prepayments.

(a)           At
Borrower’s option, upon notice given as provided below, Borrower may, at any time
and from time to time prepay, to Agent, for the ratable benefit of the Lenders,
all or any portion of the principal of the Term Loans; provided that if such
prepayment is a portion of the Term Loans, such prepayment shall be made using
funds attributable to Excess Cash Flow in a minimum amount of $1,000,000 and
integral multiples of $1,000,000, and in an amount equal to (i) the principal amount to be
prepaid, plus (ii) accrued unpaid interest on the principal amount
so prepaid, plus (iii) (1) any expenses and/or damages for
which the Lenders may be expressly entitled to receive payment or reimbursement
hereunder (including the payment of any Eurodollar Rate breakage costs in
accordance with Section 2.2(b) hereof) or (2) if the Term Loans are
being prepaid in full, then the aggregate amount of all other Obligations, plus (iv) unless otherwise provided herein,
a premium equal to the applicable percentage (as set forth below) of the
aggregate principal amount of the Term Loans so prepaid and applied in accordance
with the following table based upon the date on which such prepayment is made:

	
  Prepayment

  	
   

  	
  Date Premium

  	
   

  
	
  Closing Date through
  the first anniversary of the Closing Date

  	
   

  	
  2

  	
  %

  
	
  After the first
  anniversary of the Closing Date through the second anniversary of the Closing
  Date

  	
   

  	
  1

  	
  %

  
	
  Thereafter

  	
   

  	
  0

  	
  %

  

 

The amounts described in Section
2.7(a)(iv), whether payable pursuant to Section 2.7, Section 2.8
or otherwise, shall be referred to herein as “Prepayment Premium.”

 28

 

Optional
partial prepayments of the Term Loans in amounts less than $1,000,000 shall not
be permitted.

(b)           The
notice of any prepayment shall not thereafter be revocable by Borrower and
Agent will promptly notify each Lender thereof and of such Lender’s Commitment
Percentage of such prepayment.  The
payment amount specified in such notice shall be due and payable on the date specified
therein.  Together with each Prepayment
Premium, Borrower shall pay any amounts required pursuant to Section 2.7(a).

(c)           Each
prepayment under this Section 2.7 shall be applied first to any
expenses, fees and/or damages to which Agent and/or Lenders may be entitled,
second to accrued interest on the principal amount prepaid, third to any
applicable Prepayment Premium, and fourth to installments of principal in the
inverse order of their maturities.  The
amount of any such prepayment may not be reborrowed by Borrower.  Borrower shall give notice of any optional
prepayment to Agent not less than thirty (30) days nor more than sixty (60)
days before the date for prepayment, specifying in each such notice the date
upon which prepayment is to be made and the principal amount (together with
accrued interest and any applicable Prepayment Premium) to be prepaid on such
date.  Notice of prepayment having been
so given, the applicable prepayment amount shall become due and payable on the
specified prepayment date.  Borrower
shall have no right to prepay the Term Notes except as provided in this Section
2.7 or in Section 2.8.

Section 2.8             Mandatory Prepayments.  Unless otherwise specified below, any
prepayment under this Section 2.8 shall be applied in the same order as
set forth in Section 2.7(c).  The
amount of any such mandatory prepayment may not be reborrowed by Borrower.  Subject, in each instance, to the rights of
the holders of the Other Senior Debt set forth in the Intercreditor Agreement,
Borrower shall make mandatory prepayments in each of the following
circumstances:

(a)           In
the event of any Public Offering by Borrower or any of its Subsidiaries of its
debt or equity securities, at Agent’s option, Borrower shall prepay the
Advances and any other Obligations in an amount equal the lesser of
(i) the net proceeds of any such Public Offering received by Borrower or
such Subsidiary or (ii) the aggregate amount of all Obligations then
outstanding, any such prepayment to be made within five (5) Business Days of
receipt of the proceeds of such Public Offering by Borrower or such Subsidiary;
provided however, if Agent opts not to require Borrower to prepay the Advances
and the other Obligations in accordance with the terms of this clause (a), and
Borrower opts to prepay any such Advances and Obligations, such prepayment
shall be made in accordance with the terms of Section 2.7, including the
payment of any applicable Prepayment Premium.

(b)           In
the event of any Change in Control or Change of Ownership, Borrower shall
prepay all Advances and any other Obligations (including the applicable
Prepayment Premium, if any) then outstanding, such prepayment to be made within
five (5) Business Days from the date of the occurrence of such Change of
Control or Change of Ownership.

 29
 

 

(c)           Promptly
after Borrower’s receipt of the proceeds of any issuance of any Capital Stock
of Borrower, Borrower shall prepay the outstanding principal amount of the
Advances equal to the net proceeds of such issuance (i.e., gross proceeds, less
the reasonable costs of such issuance). 
Such repayments shall be applied to the outstanding principal
installments of the Advances in the inverse order of the maturities thereof.

(d)           Subject to Section
4.3 hereof, when Borrower or any of its Subsidiaries sells or otherwise
disposes of any Collateral, other than Inventory in the ordinary course of
business, Borrower shall repay
the Advances in an amount equal to the net proceeds of such sale or other
disposition (i.e., gross proceeds less the reasonable costs of such sales or
other dispositions), such repayments to be made promptly, but in no event more
than one (1) Business Day following receipt of such net proceeds, and, until
the date of payment, such proceeds shall be held in trust for Agent.  The foregoing shall not be deemed to be
implied consent to any such sale otherwise prohibited by the terms and
conditions hereof.  Such repayments shall
be applied to the outstanding principal installments of the Term Loans, in the
inverse order of the maturities thereof.

Section 2.9             Use of Proceeds.  Borrower shall apply the proceeds of the
Advances made to it on the Closing Date to (a) pay in full the outstanding
principal amount of, and all accrued and unpaid interest on, the Subordinated
Loans, (b) pay
accrued dividends on the issued and outstanding Class A-1 Preferred Partnership
Rights of Borrower, which payment on such accrued dividends shall not exceed
$600,821.92 in aggregate amount, (c) pay accrued dividends on and redeem
in full the issued and outstanding Class A-2 Preferred Partnership Rights of
Borrower, which payment on such accrued dividends shall not exceed $2,000,000
in aggregate amount and which redemption price shall not exceed $12,500,000 in
aggregate amount, (d) pay fees and expenses relating to the foregoing and
this Agreement and the Other Senior Credit Agreement, and (e) provide for
the working capital needs of Borrower and its Subsidiaries.

ARTICLE 3

INTEREST AND FEES

Section 3.1             Interest.  Interest on Advances shall be payable
quarterly in arrears on the first Business Day of each calendar quarter
commencing on January 1, 2006 and on the first Business Day of each
subsequent calendar quarter thereafter. 
Interest charges shall be computed on the actual principal amount of
Advances outstanding at a rate per annum equal to the sum of (x) the
greater of (A) the Eurodollar Rate and (B) three and one-half of one
percent (3.50%) plus (y) six and one-half of one percent (6.50%) (“Term
Loans Rate”).

Section 3.2             Default Rate.  Notwithstanding anything to the contrary
contained in this Agreement, upon and after the occurrence of an Event of
Default, and during the continuation thereof, at the option of Agent or at the
direction of Required Lenders, the Obligations shall bear interest at the Term
Loans Rate & two (2%) percent per mum (the “Default Rate”).

Section 3.3             Certain Fees.  Borrower shall pay to Agent and/or ORIX (as
applicable) all fees, costs, expenses and other amounts referred to in the Fee
Letter, as and when the same are due or payable in accordance with the Fee
Letter.

 30
 

 

Section 3.4             [Intentionally Omitted.]

Section 3.5             Computation
of Interest and Fees.  Subject to Section
3.6, interest and fees hereunder shall be computed on the basis of a year
of 360 days and for the actual number of days elapsed.  If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall accrue as provided in Section
3.1 or 3.2, as applicable, during such extension.

Section 3.6             Maximum Charges.

(a)           Notwithstanding
anything to the contrary contained in this Agreement or any Other Document, no
interest rate or amount of interest contracted for, charged or received (after
taking into account any and all fees, charges or other amounts which constitute
interest under Applicable Law) specified in this Agreement or any Other
Document shall at any time exceed the Maximum Rate or the maximum amount
thereof that would result from the Maximum Rate.  If at any time the Term Loans Rate (after
taking into account any and all fees, charges and other amounts which
constitute interest under Applicable Law) for any Obligation shall exceed the
Maximum Rate, thereby causing the interest accruing on such Obligation to be
limited to the Maximum Rate, then any subsequent reduction in the Term Loans
Rate for such Obligation shall not reduce the rate of interest on such
Obligation below the Maximum Rate until the aggregate amount of interest
accrued on such Obligation equals the aggregate amount of interest which would
have accrued on such Obligation if the Term Loans Rate for such Obligation had
at all times been in effect.

(b)           Notwithstanding
anything to the contrary contained in this Agreement or the Other Documents,
none of the terms and provisions of this Agreement or the Other Documents shall
ever be construed to create a contract or obligation to pay interest at a rate
in excess of the Maximum Rate; and neither Agent nor any Lender shall ever
charge, receive, take, collect, reserve or apply, as interest on the
Obligations, any amount in excess of the Maximum Rate.  The parties hereto agree that any interest,
charge, fee, expense or other obligation provided for in this Agreement or in
the Other Documents which constitutes interest under applicable law shall be,
ipso facto and under any and all circumstances, limited or reduced to an amount
equal to the lesser of (i) the amount of such interest, charge, fee,
expense or other obligation that would be payable in the absence of this Section
3.6 or (ii) an amount, which when added to all other interest payable
under this Agreement and the Other Documents, equals the Maximum Rate.  If, notwithstanding the foregoing, Agent or
any Lender ever contracts for, charges, receives, takes, collects, reserves or
applies as interest any amount in excess of the Maximum Rate, such amount which
would be deemed excessive interest shall be deemed a partial payment or
prepayment of principal of the Obligations and treated hereunder as such; and
if the Obligations, or applicable portions thereof, are paid in fill, any
remaining excess shall promptly be paid to Borrower or the other appropriate
Loan Party.  In determining whether the
interest paid or payable, under any specific contingency, exceeds the Maximum
Rate, each Loan Party, Agent and Lenders shall, to the maximum extent permitted
by Applicable Law, (A) characterize any nonprincipal payment as an
expense, 

 31
 

 

fee or premium rather than as interest, (B) exclude voluntary prepayments
and the effects thereof, and (C) amortize, prorate, allocate and spread in
equal or unequal parts the total amount of interest throughout the entire
contemplated term of the Obligations, or applicable portions thereof, so that the interest rate does not exceed the Maximum
Rate at any time during the term of the Obligations; provided, however,
that, if the unpaid principal balance is paid and performed in full prior to
the end of the full contemplated term thereof, and if the interest received for
the actual period of existence thereof exceeds the Maximum Rate, Agent and/or
Lenders, as appropriate, shall refund to Borrower or the other appropriate Loan
Party the amount of such excess and, in such event, Agent and Lenders shall not
be subject to any penalties provided by any laws for contracting for, charging,
receiving, taking, collecting, reserving or applying interest in excess of the
Maximum Rate.

(c)           Pursuant
to Chapter 346 of the Texas Finance Code, as amended, Loan Parties agree that
such Chapter 346 (which regulates certain revolving credit loan accounts and
revolving tri-party accounts) shall not govern or in any manner apply to this
Agreement or any Other Document or any of the Obligations.

Section 3.7             Increased Costs.  In the event that any change in any
applicable law, treaty or governmental regulation or in the interpretation or
application thereof, or compliance by any Lender (for purposes of this Section
3.7, the term “Lender” shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) and the office or branch
where Agent or any Lender (as so defined) makes or maintains any Term Loans
with any request or directive (whether or not having the force of law) from any
central bank or other financial, monetary or other authority, shall:

(a)           subject
Agent or any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Other Document or change the basis of taxation of payments to
Agent or any Lender of principal, fees, interest or any other amount payable
hereunder or under any Other Documents (except for changes in the rate of tax
on the overall net income of Agent or any Lender by the jurisdiction in which
it maintains its principal office);

(b)           impose,
modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of,
advances or loans by, or other credit extended by, any office of Agent or any
Lender, including (without limitation) pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or

(c)           impose
on Agent or any Lender or the London interbank Eurodollar market any other
condition with respect to this Agreement or any Other Document; and the result
of any of the foregoing is to increase the cost to Agent or any Lender of
making, renewing or maintaining its Advances hereunder by an amount that Agent
or such Lender deems to be material or to reduce the amount of any payment
(whether of principal, interest or otherwise) in respect of any of the Advances
by an amount that Agent or such Lender deems to be material, then, in any case
Borrower shall promptly pay Agent or such Lender, upon its demand, such
additional amount as will compensate 

 32
 

 

Agent or such Lender for such additional cost or such reduction, as the
case may be, provided that the foregoing shall not apply to increased costs
which are reflected in the Eurodollar Rate, as the case may be.  Agent or such Lender shall certify the amount
of such additional cost or reduced amount to Borrower, and such certification
shall be conclusive absent manifest error.

Section 3.8             [Intentionally Omitted.]

Section 3.9             Capital Adequacy.

(a)           In
the event that Agent or any Lender shall have determined that any change in any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any Lender (for purposes of
this Section 3.9, the term “Lender” shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Term Loans with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on Agent or any Lender’s capital as a consequence of its obligations hereunder
to a level below that which Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration Agent’s and each
Lender’s policies with respect to capital adequacy) by an amount deemed by
Agent or any Lender to be material, then, from time to time, Borrower shall pay
upon demand to Agent or such Lender such additional amount or amounts as will
compensate Agent or such Lender for such reduction.  In determining such amount or amounts, Agent
or such Lender may use any reasonable averaging or attribution methods.  The protection of this Section 3.9
shall be available to Agent and each Lender regardless of any possible
contention of invalidity or inapplicability with respect to the applicable law,
regulation or condition.

(b)           A
certificate of Agent or such Lender setting forth such amount or amounts as
shall be necessary to compensate Agent or such Lender with respect to Section
3.9(a) hereof when delivered to Borrower shall be conclusive absent
manifest error.

Section 3.10           Gross Up for Taxes.

(a)           All
payments by Borrower or any other Loan Party of principal of and interest on
the Loans and of all fees and other amounts payable under this Agreement and
the Other Documents shall be made free and clear of, and without withholding or
deduction by reason of, any present or future taxes, levies, duties, imposts,
assessments or other charges levied or imposed by any Governmental Body (other
than franchise taxes and taxes on or measured by the overall net income of any
Lender) (collectively, “Taxes”).  If
Borrower or any other Loan Party shall be required by Applicable Law to withhold
or deduct any Taxes from or in respect of any sum payable under this Agreement
or any of the Other Documents, (i) the sum payable to Agent or such Lender

 33
 

 

shall be increased as may be necessary so that, after making all
required withholding or deductions, Agent or such Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
withholding or deductions been made, (ii) Borrower or such other Loan
Party, as applicable, shall make such withholding or deductions, and (iii) Borrower
or such other Loan Party, as applicable, shall pay the full amount withheld or
deducted to the relevant taxation authority or other Governmental Body in
accordance with Applicable Law.  Borrower
and each other Loan Party shall promptly furnish to Agent for distribution to
each affected Lender, as the case may be, upon request of Agent or such Lender,
official receipts evidencing such withholding, deduction or payment.

(b)           Borrower
and each other Loan Party will indemnify Agent and each Lender (without
duplication) against, and reimburse Agent and each Lender for, all present and
future Taxes (including interest and penalties) levied or collected (whether or
not legally or correctly imposed, assessed, levied or collected) on or with
respect to this Agreement or any Other Document or the Obligations or any
portion thereof.  Each such
indemnification shall be on an after-tax basis, taking into account any such
Taxes imposed on the amounts paid as indemnity.

(c)           Without
prejudice to the survival of any other term or provision of this Agreement, the
Obligations of Borrower and the other Loan Parties under this Section 3.10
shall survive the payment of the Loans and other Obligations and the
termination of the Commitments.

Section 3.11           Tax
Withholding Clause.  Each Lender or
assignee or participant of a Lender that is not incorporated or organized under
the laws of the U.S. or a state thereof (and, upon the written request of
Agent, each other Lender or assignee or participant of a Lender) agrees that it
will deliver to each of Borrower and Agent two (2) duly completed appropriate
valid Withholding Certificates (as defined under § 1.1441-1(c)(16) of the Income Tax Regulations (the “Regulations”))
certifying its status (i.e. U.S. or
foreign person) and, if appropriate,
making a claim of reduced, or exemption from, U.S. withholding tax on the basis
of an income tax treaty or an exemption provided by the Code.  The term “Withholding Certificate” means a
Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and
the related statements and certifications as required under
§ 1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in § 1.871-14(c)(2)(v) of the Regulations; or
any other certificates under the Code or Regulations that certify or establish
the status of a payee or beneficial owner as a U.S. or foreign person.  Each Lender, assignee or participant required
to deliver to Borrower and Agent a Withholding Certificate pursuant to the
preceding sentence shall deliver such valid Withholding Certificate as
follows:  (a) each Lender
which is a party hereto on the Closing Date shall deliver such valid
Withholding Certificate at least five (5) Business Days prior to the first date
on which any interest or fees are payable by Borrower hereunder for the account
of such Lender; and (b) each assignee or participant shall deliver such
valid Withholding Certificate at least five (5) Business Days before the
effective date of such assignment or participation (unless Agent in its sole
discretion shall permit such assignee or participant to deliver such valid
Withholding Certificate less than five (5) Business Days before such date in
which case it shall be due on the date specified by Agent).  Each Lender, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver to each
of Borrower and Agent two (2) 

 34
 

 

additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by Borrower or Agent. 
Notwithstanding the submission of a Withholding Certificate claiming a
reduced rate of or exemption from U.S. withholding tax, Agent shall be entitled
to withhold U.S. federal income taxes at the full 30% withholding rate if in
its reasonable judgment it is required to do so under the due diligence
requirements imposed upon a withholding agent under § 41.1441-7(b) of the
Regulations.  Further, Agent is
indemnified under § 1.1461-1(e)
of the Regulations against any claims and demands of any Lender or assignee or
participant of a Lender for the amount of any tax it deducts and withholds in
accordance with regulations under § 1441 of the Code.

ARTICLE 4

COLLATERAL AND GUARANTIES; GENERAL TERMS

Section 4.1             Security Interests and Liens in
and to the Collateral.

(a)           To secure the prompt
payment and performance to Agent and each Lender of the Obligations, each Loan
Party hereby assigns, pledges and grants to Agent for its benefit and for the
ratable benefit of each Lender a continuing security interest and Lien in and
to all of such Loan Party’s Collateral, whether now owned or existing or
hereafter acquired or arising and wherever located; provided, however, that (i) such assignment, pledge and
grant of a security interest and Lien in and to the Capital Stock of a Foreign
Subsidiary of Borrower shall be subject to
Section 4.l(b) and (ii) such assignment, pledge and grant of a
security interest and Lien in and to any property or assets of a Foreign
Subsidiary shall be subject to Section 4.21(b).  Each such Loan Party shall mark its books and
records as may be necessary or appropriate to evidence, protect and perfect
Agent’s security interest and shall cause its financial statements to reflect
such security interest.  Each such Loan
Party shall promptly provide Agent with written notice of all commercial tort
claims in which it is the plaintiff, such notice to contain the case title
together with the applicable court and a brief description of the
claim(s).  Upon delivery of each such
notice, each such Loan Party shall be deemed to hereby grant to Agent a
security interest and Lien in and to such commercial tort claims and all
proceeds thereof.

(b)           Without limiting the
generality of Section 4.l(a) above, to secure the prompt payment and
performance to Agent and each Lender of the Obligations, each of Borrower and
each of its Subsidiaries hereby assigns, pledges and grants to Agent for its
benefit and for the ratable benefit of each Lender a continuing security
interest in and to (i) 100% of the issued and outstanding Subsidiary
Capital Stock of each Domestic Subsidiary and (ii) 66% (or such greater
percentage that, due to a change in an Applicable Law after the date hereof,
(A) could not reasonably be expected to cause the undistributed earnings
of such Foreign Subsidiary as determined for U.S. federal income tax purposes
to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and
(B) could not reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding Subsidiary Capital Stock entitled
to vote 

 35
 

 

(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of
the issued and outstanding Subsidiary Capital Stock not entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign
Subsidiary directly owned by Borrower or any Domestic Subsidiary.  Promptly after any request therefor made by
Agent to Borrower after the Closing Date, each Loan Party which owns any
Capital Stock of any Foreign Subsidiary shall cause to be executed and
delivered to Agent (1) a
Pledge Agreement in form and substance satisfactory to Agent which is in form
and substance appropriate for use in, and valid and enforceable under the laws
of, the foreign jurisdiction in which such Foreign Subsidiary is organized and
(2) all such further agreements, documents, instruments and legal opinions
as Agent may request in connection therewith to perfect such security interest
or to ensure or confirm the validity and enforceability thereof, in each case
under the laws of such foreign jurisdiction.

(c)           As
to the Collateral which consists of Real Property, Borrower and each Subsidiary
which owns any such Real Property or interest therein shall execute and deliver
to Agent, as security for the Obligations, a Mortgage in form and substance
satisfactory to Agent, which Mortgage shall be executed and delivered on or
before the Closing Date, with respect to Real Property so owned on such date,
or within 30 days after the acquisition of such Real Property, with respect to
Real Property acquired after the Closing Date; provided, however, that, unless Agent subsequently requests such
a Mortgage in writing after the occurrence of an Event of Default, Borrower and
its Subsidiaries shall not be obligated to execute or deliver a Mortgage
covering the Real Property consisting of any leasehold interest or consisting
of any Real Property located in a foreign country.

Section 4.2             Perfection
of Security Interest.  Each Loan
Party shall each take all actions that may be necessary or desirable, or that
Agent may reasonably request, so as at all times to maintain the validity,
perfection, enforceability and priority of Agent’s security interest in the
Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (a) promptly
discharging all Liens other than Permitted Encumbrances, (b) upon Agent’s
request to Borrower made not earlier than 30 days after the Closing Date,
obtaining any landlords’, bailees’ or mortgagees’ waivers, subordinations
and/or access agreements related to Real Property (whether owned in fee simple or leased by Borrower or any of
its Subsidiaries) located in the U.S. and not obtained as of the Closing Date,
(c) delivering to Agent, endorsed or accompanied by such instruments of
assignment as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all chattel paper, instruments, letters of credits
and advices thereof and documents evidencing or forming a part of the
Collateral, (d) entering into warehousing, lockbox and other custodial
arrangements satisfactory to Agent, and (e) executing and delivering
financing statements, control agreements, security agreements, instruments of
pledge, mortgages, notices, assignments and amendments and/or modifications of any
of the foregoing, this Agreement and each Other Loan Document in each case in
form and substance satisfactory to Agent, relating to the creation, validity,
perfection, maintenance or continuation of Agent’s security interest under the
UCC or other Applicable Law.  Agent is
hereby authorized to file financing statements without signature in accordance
with the UCC as in effect in the State of Texas or any other jurisdiction from
time to time.  By its signature hereto,
each Loan Party hereby authorizes Agent to file against such Loan Party one or
more financing continuation or amendment statements pursuant to the UCC in form

 36
 

 

and
substance satisfactory to Agent (which statements may have a description of
collateral which is broader than that set forth herein, provided that the
description of the Collateral described in this Agreement or the Other
Documents shall be controlling as to the property or assets in which Agent has
been granted a Lien).  All charges,
expenses and fees Agent may incur in doing any of the foregoing, and any local
taxes relating thereto, shall be charged to Borrower’s Account and added to the
Obligations, or, at Agent’s option, shall be paid to Agent for its benefit and
for the ratable benefit of Lenders promptly upon demand.

Section 4.3             Disposition of Collateral.  Each Loan Party will safeguard and protect
all Collateral for Agent’s general account and make no disposition thereof
whether by sale, lease or otherwise except (a) the sale of Inventory in
the ordinary course of business and (b) the disposition or transfer of
Equipment to Foreign Subsidiaries of Borrower during any fiscal year having an
aggregate fair market value of not more than $2,500,000.00 and (c) the
disposition or transfer of obsolete and worn-out Equipment or unusable Inventory
in the ordinary course of business during any fiscal year having an aggregate
fair market value of not more than $50,000.00 and only to the extent that
(i) any proceeds of any such disposition of Equipment are used to acquire
replacement Equipment which is subject to Agent’s second priority security
interest subject to the first Lien of Senior Agent or (ii) subject to the
terms of the Intercreditor Agreement, any proceeds of any such disposition are
remitted to Agent to be applied pursuant to Section 2.8; provided, however that, with respect to dispositions or transfers
referred to in clause (b) preceding, the Equipment so disposed of
or transferred shall be disposed of or transferred expressly subject to Agent’s
second priority security interest therein (which security interest shall
continue in full force and effect subject to the first Lien of Senior Agent)
and, substantially concurrently with such disposition or transfer, such
Equipment shall be replaced with newly acquired Equipment of equal or greater
value owned by Borrower or a Domestic Subsidiary of Borrower and located in the
U.S. in which Agent has a perfected, second priority security interest (subject
to the first Lien of Senior Agent) as security for the Obligations.

Section 4.4             Preservation
of Collateral.  Following the
occurrence and during the continuance of a Default or Event of Default and in
addition to the rights and remedies set forth in Section 11.1 hereof, Agent: 
(a) may at any time take such steps as Agent deems necessary to
protect Agent’s interest in and to preserve the Collateral, including the
hiring of such security guards or the placing of other security protection
measures as Agent may deem appropriate; (b) may employ and maintain at any
of any Loan Party’s premises a custodian who shall have full authority to do
all acts necessary to protect Agent’s interests in the Collateral; (c) may
lease warehouse facilities to which Agent may move all or part of the
Collateral; (d) may use any Loan Party’s owned or, to the extent permitted
by the applicable lease, leased lifts, hoists, trucks and other facilities or
equipment for handling or removing the Collateral; and (e) shall have, and
is hereby granted, a right of ingress and egress to the places where the
Collateral is located, and may proceed over and through any of any Loan Party’s
owned or leased property.  Each Loan
Party shall cooperate fully with all of Agent’s efforts to preserve the
Collateral and will take such actions to preserve the Collateral as Agent may
direct.  All of Agent’s expenses of
preserving the Collateral, including any expenses relating to the bonding of a
custodian, shall be charged to Borrower’s Account and added to the Obligations.

Section 4.5             Ownership of Collateral.  With respect to the Collateral, at the time
the Collateral becomes subject to Agent’s security interest:  (a) each Loan Party (as applicable)
shall 

 37
 

 

be the sole owner of and fully authorized and
able to sell, transfer, pledge and/or grant a second priority security interest
in each and every item of the its respective Collateral to Agent subject to a
first priority security interest in favor of Senior Agent, and, except for
Permitted Encumbrances, the Collateral shall be free and clear of all Liens and
encumbrances whatsoever; (b) each document and agreement executed by any Loan Party
or delivered to Agent or any Lender in connection with this Agreement shall be
true and correct in all respects; (c) all signatures and endorsements of
each Loan Party that appear on such documents and agreements shall be genuine
and each Loan Party shall have full capacity to execute same; and (d) each
Loan Party’s Equipment and Inventory
shall be located at the places for such Loan Party as set forth on Schedule
4.5 and shall not be removed from such location(s) without the prior
written consent of Agent except with respect to the sale of Inventory in the
ordinary course of business and Equipment to the extent permitted in Section
4.3 hereof.  Each Loan Party has
acquired, and at all times will continue to have, good and marketable title to
all of the property and assets purported to be owned by such Loan Party, free
and clear of all Liens, security interests, claims or encumbrances of any kind
except Permitted Encumbrances.

Section 4.6             Defense of Agent’s and Lenders’
Interests.  Until (a) payment
and performance in full of all of the Obligations and (b) termination of
this Agreement, Agent’s interests in the Collateral shall continue in full
force and effect.  During such period
none of the Loan Parties shall, without Agent’s prior written consent, pledge,
sell (except to the extent permitted in Section 4.3 hereof), assign,
transfer, create or suffer to exist a Lien upon or encumber or allow or suffer
to be encumbered in any way, except for Permitted Encumbrances, any part of the
Collateral.  Each Loan Party shall defend
Agent’s interests in the Collateral against any and all Persons
whatsoever.  At any time following demand
by Agent for payment of all Obligations in accordance with the terms of this
Agreement, Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained, including
without limitation:  labels, stationery,
documents, instruments and advertising materials.  If Agent exercises this right to take
possession of the Collateral, the Loan Parties shall, upon demand, assemble it
in the best manner possible and make it available to Agent at a place
reasonably convenient to Agent within the continental U.S. (for purposes
hereof, the places set forth on Schedule 4.6 shall be deemed reasonably
convenient to Agent).  In addition, with
respect to all Collateral, Agent and Lenders shall be entitled to all of the
rights and remedies set forth herein and further provided by the UCC or other
applicable law.  After the occurrence of
an Event of Default, the Loan Parties shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehousers or others receiving
or holding cash, checks, Inventory, documents or instruments in which Agent
holds a security interest to deliver same to Agent and/or subject to Agent’s
order and, if they shall come into any Loan Party’s possession, they, and each
of them, shall be held by such Loan Party in trust as Agent’s trustee, and such
Loan Party will immediately deliver them to Agent in their original form
together with any necessary endorsement.

Section 4.7             Books
and Records.  The Loan Parties
shall:  (a) keep proper books of
record and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs;
(b) set up on its books accruals with respect to all taxes, assessments,
charges, levies and claims; and (c) on a reasonably current basis set up
on its books, from its earnings, allowances against doubtful Receivables,
advances and investments and all other proper accruals (including without limitation by reason of enumeration, 

 38
 

 

accruals
for premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set aside from
such earnings in connection with its business. 
All determinations pursuant to this subsection shall be made in
accordance with, or as required by, GAAP consistently applied in the opinion of
such independent public accountant as shall then be regularly engaged by
Borrower.

Section 4.8             Financial Disclosure.  Each Loan Party hereby irrevocably authorizes
and directs all accountants and auditors engaged or employed by such Loan Party
at any time during the Term to exhibit and deliver to Agent and each Lender
copies of any of such Loan Party’s financial statements, trial balances or
other accounting records of any sort in the accountant’s or auditor’s
possession, and to disclose to Agent and each Lender any information such
accountants may have concerning each such Loan Party’s financial status and
business operations.  Each Loan Party
hereby authorizes all federal, state and municipal authorities to furnish to
Agent and each Lender copies of reports or examinations relating to such Loan
Party, whether made by any such Loan Party or otherwise.  Notwithstanding anything to the contrary in
this Section 4.8, Agent and each Lender will attempt to obtain such
information or materials directly from the Loan Parties prior to obtaining such
information or materials from such accountants or such authorities, as the case
may be.

Section 4.9             Compliance with Laws.  Each Loan Party shall comply in all material
respects with all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to the Collateral or any
part thereof or to the operation of its business.  Each Loan Party may, however, contest or
dispute any acts, rules, regulations, orders and directions of those bodies or
officials in any reasonable manner, provided that any related Lien is inchoate
or stayed and sufficient reserves are established to the reasonable
satisfaction of Agent to protect Agent’s Lien on or security interest in the
Collateral.  The assets of the Loan
Parties at all times shall be maintained in accordance with the requirements of
all insurance carriers which provide insurance with respect to the assets of
the Loan Parties so that such insurance shall remain in full force and effect.

Section 4.10           Examinations, Inspection of
Premises and Appraisals.  At all
reasonable times and in any event no less than twice during each fiscal year,
Agent and each Lender shall have full access to and the right to audit, check,
inspect and make abstracts and copies from each of the Loan Parties’ books,
records, audits, correspondence and all other papers relating to the Collateral
and the operation of its business. 
Agent, any Lender and their agents may enter upon any of the Loan Party’s
premises at any time during business hours and at any other reasonable time,
and from time to time, for the purpose of conducting field examinations and
inspecting the Collateral and any and all records pertaining thereto and the
operation of each Loan Party’s business. 
Notwithstanding the foregoing, at any time after the occurrence and
during the continuance of a Default or Event of Default, Agent may conduct any
examination, inspection or appraisal without any restriction or limitation and
at Borrower’s sole expense.

Section 4.11           Insurance.  Borrower and each Loan Party shall bear the
full risk of any loss of any nature whatsoever with respect to the
Collateral.  At Borrower’s own cost and
expense in amounts and with carriers acceptable to Agent, each of the Loan
Parties shall (a) keep all its insurable properties and properties in
which it has an interest insured against the hazards of fire, flood (provided
that flood insurance shall not be required with respect to Real Property that 

 39
 

 

is not located in a flood plain), sprinkler
leakage, those hazards covered by extended coverage insurance and such other
hazards, and for such amounts, as is customary in the case of companies engaged
in businesses similar to such Loan Party’s business, including, without
limitation, business interruption insurance; (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar
to such Loan Party’s insuring against larceny, embezzlement or other criminal
misappropriation of insured’s officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of any Loan Party either directly or through
authority to draw upon such funds or to direct generally the disposition of
such assets; (c) maintain public and product liability insurance against
claims for personal injury, death or property damage suffered by others;
(d) maintain all such worker’s compensation or similar insurance as may be
required under the laws of any state or jurisdiction in which such Loan Party
is engaged in business; (e) maintain all such other types of insurance as
may be required by Agent in its reasonable credit judgment from time to time; (f) furnish Agent with (i) copies of all
policies and evidence of the maintenance of such policies by the renewal
thereof at least 30 days before any expiration date, and (ii) appropriate
loss payable endorsements in form and substance satisfactory to Agent, naming
Agent as a co-insured and loss payee as its interests may appear with respect
to all insurance coverage referred to in clauses (a) and (c) above, and either (i) providing
(A) that all proceeds thereunder shall be payable to Agent, (B) no
such insurance shall be affected by any act or neglect of the insured or owner
of the property described in such policy, and (C) that such policy and
loss payable clauses may not be cancelled, amended or terminated unless at
least 30 days’ prior written notice is given to Agent or (ii) otherwise
acceptable to Agent.  In the event of any
loss thereunder, the carriers named therein hereby are directed by Agent and
each Loan Party to make and deliver payment for such loss to Agent and not to
any Loan Party and Agent jointly.  If any
insurance losses are paid by check, draft or other instrument payable to any
Loan Party and Agent jointly, each Loan Party hereby appoints Agent or Agent’s
designee as such Loan Party’s attorney-in-fact with the power to endorse such
Loan Party’s name thereon and do such other things as Agent may deem advisable
to reduce the same to cash.  Agent is
hereby authorized to adjust and compromise claims under insurance coverage
referred to in clauses (a), (b) and (c) above. 
All loss recoveries received by Agent upon any such insurance shall be
applied to the Obligations, in such order as Agent in its sole discretion shall
determine.  Any surplus shall be paid by
Agent to Borrower or applied as may be otherwise required by law.  Any deficiency thereon shall be paid by
Borrower to Agent on demand.

Section 4.12           Failure to Pay Insurance.  If any Loan Party fails to obtain insurance
as hereinabove provided, or to keep the same in force, Agent, if Agent so
elects, may obtain such insurance and pay the premium therefor on behalf of
such Loan Party, and charge Borrower’s Account therefor and such expenses so
paid shall be part of the Obligations.

Section 4.13           Payment of Taxes.  Each Loan Party will pay, when due, all
taxes, assessments and other Charges lawfully levied or assessed upon such Loan
Party or any of the Collateral, including, without limitation, real and
personal property taxes, assessments and charges and all franchise, income, employment, social
security benefits, withholding, and sales taxes, other than taxes contested by
such Loan Party in good faith by appropriate proceedings diligently pursued and
for which adequate reserves have been established in accordance with GAAP and
with respect to which no Lien has been filed. 
If any tax by any Governmental Body is or may be imposed on or as a
result of any transaction between any Loan Party and Agent or 

 40
 

 

any Lender which Agent or any Lender may be
required to withhold or pay or if any taxes, assessments or other Charges
remain unpaid after the date fixed for their payment, or if any claim shall be
made which, in Agent’s or any Lender’s opinion, may possibly create a valid
Lien on the Collateral, Agent may without notice to any Loan Party pay the
taxes, assessments or other Charges and each Loan Party hereby indemnifies and
holds Agent and each Lender harmless in respect thereof.  The amount of any payment by Agent under this
Section 4.13 shall be charged to Borrower’s Account and added to the
Obligations and, until Borrower shall furnish Agent with an indemnity therefor
(or supply Agent with evidence satisfactory to Agent that due provision for the
payment thereof has been made), Agent may hold without interest any balance
standing to Borrower’s and each Loan Party’s credit and Agent shall retain its
security interest in any and all Collateral held by Agent.

Section 4.14           Payment
of Leasehold Obligations.  Each Loan
Party shall at all times pay, when and as due, its rental obligations under all
leases under which it is a tenant, other than rental obligations contested by such Loan Party in good faith
by appropriate proceedings diligently pursued and for which adequate reserves
have been established in accordance with GAAP and with respect to which no Lien
has been filed, and shall otherwise comply, in all material respects, with all
other terms of such leases and keep them in full force and effect and, at Agent’s
request, will provide evidence of having done so.

Section 4.15           Receivables.

(a)           Nature
of Receivables.  Each of the
Receivables of any Loan Party shall be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to be a breach
hereof) with respect to an absolute sale or lease and delivery of goods upon
stated terms of such Loan Party, or work, labor or services theretofore
rendered by such Loan Party as of the date each Receivable is created.  The same shall be due and owing in accordance
with Borrower’s standard terms of sale without dispute, setoff or counterclaim
except as may be permitted pursuant to the definition of “Eligible Receivables”
as defined in the Other Senior Credit Agreement and/or stated on the accounts
receivable schedules delivered by Borrower to Agent.

(b)           Solvency
of Customers.  Each Customer, to the
best of Borrower’s knowledge, as of the date each Receivable is created, is and
will be solvent and able to pay all Receivables on which the Customer is
obligated in full when due or, with respect to such Customers of any Loan Party
who are not solvent, such Loan Party has set up on its books and in its
financial records bad debt reserves adequate to cover such Receivables.

(c)           Location
of Loan Parties.  The chief executive
office of each Loan Party is located at 7000 Sunwood Drive NW, Ramsey, Minnesota
55303.  Until written notice is given to
Agent by Borrower of any other office at which any Loan Party keeps its records
pertaining to Receivables, all such records shall be kept at such executive
office.

 41
 

 

(d)           Collection
of Receivables.  Subject to the terms
of the Intercreditor Agreement, until any Loan Party’s authority to do so is
terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default or when Agent in its sole
discretion deems it to be in Lenders’ best interest to do so), each Loan Party
will, at such Loan Party’s sole cost and expense, but on Agent’s behalf and for
Agent’s account, collect as Agent’s property and in trust for Agent all amounts
received on Receivables, and shall not commingle such collections with any Loan
Party’s finds or use the same except to pay Obligations and the Other Senior
Debt.  Subject to the terms of the Other
Senior Credit Documents and the Intercreditor Agreement, Borrower shall deposit
in a Blocked Account or, upon request by Agent, deliver to Senior Agent or
Agent, in original form and on the date of receipt thereof, all checks, drafts,
notes, money orders, acceptances, cash and other evidences of Indebtedness.

(e)           Notification of
Assignment of Receivables.  Subject
to the terms of the Intercreditor Agreement, at any time following the
occurrence of an Event of Default or Default, Agent shall have the right to send notice of the assignment of, and
Agent’s security interest in, the Receivables to any and all Customers or any
third party holding or otherwise concerned with any of the Collateral.  Thereafter, Agent shall have the right to
collect the Receivables, take possession of the Collateral, or both.  Agent’s actual collection expenses,
including, but not limited to, stationery and postage, telephone and telegraph,
secretarial and clerical expenses and the salaries of any collection personnel
used for collection, may be charged to Borrower’s Account and added to the
Obligations.

(f)            Power
of Agent to Act on Borrower’s Behalf. 
Subject to the terms of the Intercreditor Agreement, Agent shall have
the right, at any time following the occurrence and during the continuance of a
Default, to receive, endorse, assign and/or deliver in the name of Agent or any
Loan Party any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and such Loan Party hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed.  Each Loan Party hereby appoints Agent or
Agent’s designee as such Loan Party’s attorney with power, at any time
following the occurrence and during the continuance of a Default, subject to
the terms of the Intercreditor Agreement, (i) to endorse such Loan Party’s
name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment or Collateral; (ii) to sign such Loan Party’s name on
any invoice or bill of lading relating to any of the Receivables, drafts
against Customers, assignments and verifications of Receivables; (iii) to
send verifications of Receivables to any Customer; (iv) to sign such Loan
Party’s name on all financing statements or any other documents or instruments
deemed necessary or appropriate by Agent to preserve, protect, or perfect Agent’s
interest in the Collateral and to file same; (v) to demand payment of the
Receivables; (vi) to enforce payment of the Receivables by legal
proceedings or otherwise; (vii) to exercise all of such Loan Party’s
rights and remedies with respect to the collection of the Receivables and any
other Collateral; (viii) to settle, adjust, compromise, extend or renew
the Receivables; (ix) to settle, adjust or compromise any legal
proceedings brought to collect Receivables; (x) to prepare, file and sign
such Loan Party’s name on a proof of claim in bankruptcy or similar document
against any Customer; (xi) to prepare, file and sign such Loan Party’s
name on any notice of Lien, 

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assignment or satisfaction of Lien or similar document in connection
with the Receivables; and (xii) to do all other acts and things necessary
to carry out this Agreement.  All acts of
said attorney or designee are hereby ratified and approved, and said attorney
or designee shall not be liable for any acts of omission or commission or for
any error of judgment or mistake of fact or of law, unless done maliciously or
with gross (not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid.  Subject to the terms of the Intercreditor
Agreement, Agent shall have the right, at any time following the occurrence of
an Event of Default or Default, to change the address for delivery of mail
addressed to any Loan Party to such address as Agent may designate and to
receive, open and dispose of all mail addressed to any Loan Party.

(g)           No
Liability.  Neither Agent nor any
Lender shall, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof, or for any damage resulting therefrom.  Subject to the terms of the Intercreditor
Agreement, following the occurrence and during the continuance of an Event of
Default or Default, Agent may, without notice to or consent from any Loan
Party, sue upon or otherwise collect, extend the time of payment of, compromise
or settle for cash, credit or upon any terms any of the Receivables or any
other securities, instruments or insurance applicable thereto and/or release
any obligor thereof.  Agent is authorized
and empowered to accept, following the occurrence and during the continuance of
an Event of Default, the return of the goods represented by any of the Receivables,
without notice to or consent by any Loan Party, all without discharging or in
any way affecting any Loan Party’s liability hereunder.

(h)           Establishment of a
Lockbox Account, Dominion Account. 
All proceeds of Collateral shall be deposited by Borrower into a lockbox
account, dominion account or such other “blocked account” (“Blocked Accounts”)
maintained with PNC or another commercial bank reasonably acceptable to Agent
as Agent may require pursuant to an arrangement with such bank as may be
acceptable to Agent.  Subject to the
terms of the Intercreditor Agreement, Borrower shall (i) grant to Agent control over the Blocked Accounts (unless
and until all Obligations are paid and performed in full and this Agreement has
been terminated, subject to Section 13.2) and (ii) issue to any
such bank irrevocable instructions directing said bank to transfer such funds
so deposited to Agent, either to any account maintained by Agent at said bank
or by wire transfer to appropriate account(s) of Agent.  Subject to the terms of the Intercreditor
Agreement, all funds deposited in such Blocked Accounts shall immediately
become the property of Agent and Borrower shall obtain the agreement by such
bank to waive any offset rights against the funds so deposited.  Neither Agent nor any Lender assumes any responsibility
for such blocked account arrangement, including, without limitation, any claim
of accord and satisfaction or release with respect to deposits accepted by any
bank thereunder.  All depository accounts
and other bank accounts of any Loan Party, including, without limitation, all
Blocked Accounts, are described and set forth on Schedule 4.15(h)
hereto.

(i)            Adjustments.  No Loan Party will, without Agent’s consent,
compromise or adjust any material amount of the Receivables (or extend the time
for payment thereof) 

 43
 

 

or accept any material returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances as have been heretofore
customary in the business of such Loan Party.

Section 4.16           Inventory.  To the extent Inventory held for sale or
lease has been produced by any Loan Party, it has been and will be produced by
such Loan Party in accordance with the Federal Fair Labor Standards Act of
1938, as amended, and all rules, regulations and orders thereunder.

Section 4.17           Maintenance of Equipment.  The Equipment shall be maintained in good
operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and
preserved.  No Loan Party shall use or
operate the Equipment in violation of any law, statute, ordinance, code, rule
or regulation.  Each Loan Party shall
have the right to sell its Equipment to the extent set forth in Section 4.3
hereof.

Section 4.18           Exculpation of Liability.  Nothing herein contained shall be construed
to constitute Agent or any Lender as any Loan Party’s agent for any purpose
whatsoever, nor shall Agent or any Lender be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause
thereof.  Neither Agent nor any Lender,
whether by anything herein or in any assignment or otherwise, assumes any of
any Loan Party’s obligations under any contract or agreement assigned to Agent
or such Lender, and neither Agent nor any Lender shall be responsible in any
way for the performance by any Loan Party of any of the terms and conditions
thereof.

Section 4.19           Environmental Matters.

(a)           Each
Loan Party shall ensure that the Real Property is maintained in compliance in
all material respects with all applicable Environmental Laws and shall not place
or permit to be placed any Hazardous Substances on any Real Property except as
authorized by Applicable Law or appropriate Governmental Bodies.

(b)           Each Loan Party which
owns any fee interest in any Real Property on which Hazardous Substances or
Hazardous Waste may be produced, generated, stored, used or maintained shall
establish and maintain a system to assure and audit continued compliance with all applicable Environmental Laws, which
system shall include periodic reviews of such compliance.

(c)           Each
Loan Party shall dispose of any and all Hazardous Waste generated at the Real
Property only at facilities authorized under applicable Environmental Laws to
manage Hazardous Wastes.  Each Loan Party
shall use its best efforts to obtain certificates of disposal, such as
hazardous waste manifest receipts, from all treatment, transport, storage or
disposal facilities or operators employed by such Loan Party in connection with
the transport or disposal of any Hazardous Waste generated at the Real
Property.

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(d)           In
the event any Loan Party obtains, gives or receives notice of any Release or
threat of Release of a reportable quantity of any Hazardous Substances at the
Real Property (any such event being hereinafter referred to as a “Hazardous
Discharge”) or receives any notice of violation, request for information or
notification that it is potentially responsible for investigation or cleanup of
environmental conditions at the Real Property, demand letter or complaint,
order, citation or other written notice with regard to any Hazardous Discharge
or violation of Environmental Laws affecting the Real Property or any Loan
Party’s interest therein (any of the foregoing is referred to herein as an “Environmental
Complaint”) from any Person, including any state agency responsible in whole or
in part for environmental matters in the state in which the Real Property is
located or the United States Environmental Protection Agency (any such person
or entity hereinafter the “Authority”), then Borrower shall, within five (5) Business
Days, give written notice of same to Agent detailing facts and circumstances of
which any Loan Party is aware giving rise to the Hazardous Discharge or
Environmental Complaint.  Such
information is to be provided to allow Agent to protect its security interest
in the Real Property and the Collateral and is not intended to create nor shall
it create any obligation upon Agent or any Lender with respect thereto.

(e)           Borrower
shall promptly forward to Agent copies of any request for information, notification
of potential liability, demand letter relating to potential responsibility with
respect to the investigation or cleanup of Hazardous Substances at any other
site owned, operated or used by any Loan Party to dispose of Hazardous
Substances and shall, unless otherwise agreed by Agent, continue to forward
copies of correspondence between any Loan Party and the Authority regarding
such claims to Agent until the claim is settled.  Borrower shall promptly forward to Agent
copies of all documents and reports concerning a Hazardous Discharge at the
Real Property that any Loan Party is required to file with an Authority under
any Environmental Laws.  Such information
is to be provided solely to allow Agent to protect Agent’s security interest in
the Real Property and the Collateral.

(f)            Each Loan Party shall
respond in accordance with applicable Environmental Laws to any Hazardous
Discharge or Environmental Complaint and take all action reasonably necessary
to avoid subjecting the Collateral or Real Property to any Lien.  If neither Borrower nor the applicable Loan
Party shall respond in accordance with applicable Environmental Laws to any
Hazardous Discharge or Environmental Complaint, Agent on behalf of Lenders may,
but without the obligation to do so, for the sole purpose of protecting Agent’s
interest in the Collateral: 
(A) give such notices or (B) enter onto the Real Property (or
authorize third parties to enter onto the Real Property) and take such actions
as Agent (or such third parties as directed by Agent) deems reasonably
necessary or advisable, to clean up, remove, mitigate or otherwise remediate
any such Hazardous Discharge or Environmental Complaint, as may be required by
Applicable Law.  All reasonable costs and
expenses incurred by Agent and Lenders (or such third parties) in the exercise
of any such rights, including any sums paid in connection with any judicial or administrative investigation or
proceedings, fines and penalties, together with interest thereon from the date
expended at the Default Rate shall be paid upon demand by Borrower, and until
paid shall be added to and become a part of 

 45
 

 

the Obligations secured by the Liens created
by the terms of this Agreement or any other agreement between Agent, any Lender
and any Loan Party.

(g)           Promptly
upon the written request of Agent following receipt by Agent of written notice
of a Hazardous Discharge pursuant to Section 4.19(d), Borrower shall
provide Agent, at Borrower’s expense, with an environmental site assessment or
environmental audit report prepared by an environmental engineering firm
acceptable in the reasonable opinion of Agent, to assess with a reasonable
degree of certainty the existence of a Hazardous Discharge and, in the event
(i) the existence of such Hazardous Discharge violates applicable
Environmental Laws and (ii) a third party is not reasonably expected to take clean-up
responsibility, the costs reasonably expected to be required by the applicable
authority to achieve the required level of abatement, cleanup and remediation
of such Hazardous Discharge in accordance with standards applicable to
commercial properties.  If such
estimates, individually or in the aggregate, exceed $250,000, Agent shall have
the right to require Borrower to post a bond, letter of credit or other
security reasonably satisfactory to Agent to secure payment of these costs and
expenses.  Any report or investigation of
such Hazardous Discharge proposed and acceptable to an appropriate Authority
that is charged to oversee the clean-up of such Hazardous Discharge shall be
acceptable to Agent.  Borrower
shall deliver to Agent, within 20 days after receipt thereof by Borrower, a
copy of any environmental site assessment or environmental audit report in
Borrower’s possession or control concerning and created by or on behalf of any
third party deemed responsible by an Authority for the release and/or presence
of any Hazardous Substance on, under, at or within the Real Property.

(h)           Borrower
shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their respective
employees, agents, directors and officers harmless from and against all loss,
liability, damage and expense, claims, costs, fines and penalties, including
attorney’s fees, suffered or incurred by Agent or Lenders under or on account
of any Environmental Laws, including, without limitation, the assertion of any
Lien thereunder, with respect to any Hazardous Discharge, the presence of any
Hazardous Substances affecting the Real Property, whether or not the same
originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable
to any Hazardous Discharge resulting from actions on the part of Agent or any
Lender.  Borrower’s obligations under
this Section 4.19 shall arise upon the discovery of the presence of any
Hazardous Substances at the Real Property, whether or not any federal, state or
local environmental agency has taken or threatened any action in connection
with the presence of any Hazardous Substances. 
Borrower’s obligation and the indemnifications hereunder shall survive
the termination of this Agreement.

(i)            For
purposes of Section 4.19 and 5.7, all references to Real Property
shall be deemed to include all of each Loan Party’s right, title and interest
in and to both its owned and leased premises.

Section 4.20           Financing Statements.  Except for the financing statements filed by
Agent and the financing statements described on Schedule 1.2(a) and any
other financing statements 

 46
 

 

filed to evidence or perfect Permitted
Encumbrances, no financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office.

Section 4.21           Guaranties and Security Agreements
of Subsidiaries.

(a)           Except
as provided in Section 4.21(b), Borrower will, as of the Closing Date
(with respect to each Subsidiary of Borrower existing as of the Closing Date)
or contemporaneously with the creation or acquisition of any Subsidiary of Borrower
(with respect to each Subsidiary of Borrower organized or created after the
Closing Date), cause such Subsidiary of Borrower to (a) guarantee the
payment and performance of the Obligations pursuant to a Guaranty in form and
substance satisfactory to Agent and (b) grant to Agent, as security for
the payment and performance of the Obligations, a Lien in and to all Collateral
of such Subsidiary pursuant to a Guarantor Security Agreement in form and
substance satisfactory to Agent.  In
connection with each Guarantor Security Agreement, Borrower will cause its
Subsidiary executing such Guarantor Security Agreement to authorize Agent to
file all financing statements necessary or appropriate, in its discretion, to
perfect its Lien on the Collateral covered thereby.

(b)           Notwithstanding
anything to the contrary contained in this Agreement, if execution of a
Guaranty or a Guarantor Security Agreement by a Foreign Subsidiary in
accordance with Section 4.21(a) could reasonably be expected to
(i) cause the undistributed earnings of such Foreign Subsidiary as
determined for U.S. federal income tax purposes to be treated as a deemed
dividend to such Foreign Subsidiary’s U.S. parent or could reasonably be
expected to cause any other material adverse tax consequences to Borrower under
U.S. tax law or (ii) violate
the laws of the jurisdiction in which such Foreign Subsidiary is organized,
then such Foreign Subsidiary shall not be required to execute a Guaranty and/or
shall not be required to execute (and shall not be deemed to have executed
pursuant to Section 4.1 of this Agreement) a Guarantor Security
Agreement (as applicable, whichever causes such adverse tax or legal
consequences) in accordance with Section 4.21 (a).

Section 4.22           Pledge
Agreements of Limited Partners and General Partner.  To further secure the prompt payment and
performance to Agent and each Lender of the Obligations, (a) each Loan
Party will cause each Limited Partner to execute and deliver to Agent a Pledge
Agreement pursuant to which such Limited Partner grants to Agent a security
interest in all of his or its Borrower Partnership Interests and General
Partner Membership Interests (it being agreed and understood, however, that no
Person who becomes a limited partner of Borrower as a result of the exercise of
a Warrant, other than a Limited Partner existing on the Closing Date or a
transferee or assignee of any of such a Limited Partner’s Borrower Partnership
Interests or a transferee or assignee of such a Limited Partner’s or its
assignees’ or transferees’ rights with respect to such Warrant, shall be
required to deliver any such Pledge Agreement), (b) General Partner will execute and deliver to Agent a Pledge
Agreement pursuant to which General Partner grants to Agent a security interest
in all of its Borrower Partnership Interests and (c) each Loan Party shall
cause each Limited Partner to, and General Partner will, deliver to Agent, or
Senior Agent pursuant to the Intercreditor Agreement, the certificates
representing such Capital Stock 

 47
 

 

so pledged
by it, together with duly executed (in blank) stock powers or other instruments
of transfer in form and substance satisfactory to Agent.

Section 4.23           “Opt
In” to Article 8.  Each Loan Party
which is a limited partnership, general partnership or limited liability
company agrees that it will, at all times during the Term of this Agreement and
thereafter until the Obligations are paid in full and pursuant to its
applicable Organizational Documents as Agent may reasonably request, (a) ”opt
in” to Article 8 of the UCC so that the partnership interests, membership
interests or other equity interests issued by such Loan Party are treated as a
security for purposes of Articles 8 and 9 of the UCC and (b) ensure that such
partnership interests, membership interests or other equity interests issued by
such Loan Party are certificated; provided, however, that the obligation of any Foreign Subsidiary
pursuant to this Section 4.23 shall arise only after request is made by
Agent to Borrower for such Foreign Subsidiary to comply with this Section
4.23 and in connection with Agent’s request for execution and delivery of a
Pledge Agreement covering the Capital Stock of such Foreign Subsidiary that is
valid under the laws of the foreign jurisdiction in which such Foreign Subsidiary
is organized made in accordance with the last sentence of Section 4.1(b).

Section 4.24           Investment Property.  As of the Closing Date each Loan Party
represents and warrants that all of each Loan Party’s right, title and/or
interest in and to its Investment Property is described and set forth in Section
4.24 hereto.

Section 4.25           Real Property.  As of the Closing Date each Loan Party
represents and warrants that all of each Loan Party’s right, title and/or
interest in and to both its owned and leased premises are identified on Schedule
4.25 hereto.

Section 4.26           No Unlawful Financial Assistance.  Notwithstanding anything to the contrary
contained in this Agreement or the Other Documents, the parties hereto agree
that nothing contained herein or in any of the Other Documents shall be
construed or interpreted such that either Vision-Ease Europe or Vision-Ease
Lens is obligated to assume, guarantee or provide collateral, indemnity or
covenant, or have assumed, guaranteed or provided collateral, indemnity or covenant,
in respect of the indebtedness, liabilities or obligations of Borrower or any
other Loan Party (other than, with respect to each, itself) or taken any other
action, in each case if and to the extent the same would be construed as
rendering unlawful financial assistance under the laws of the jurisdictions in
which Vision-Ease Europe and Vision-Ease Lens are organized.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

Each Loan Party hereby
jointly and severally represents and warrants to Agent and Lenders as follows:

Section 5.1             Authority.  Each Loan Party has full power, authority and
legal right to enter into this Agreement and the Other Documents to which it is
a party and to perform all its respective Obligations hereunder and thereunder.  This Agreement and the Other Documents
constitute the legal, valid and binding obligations of such Loan Party which is
party thereto, enforceable in accordance with their terms, except as such
enforceability may be limited by any 

 48
 

 

applicable bankruptcy, insolvency, moratorium
or similar laws affecting creditors’ rights generally.  The execution, delivery and performance of
this Agreement and of the Other Documents (a) are within such Loan Party’s
corporate or other entity powers, have been duly authorized, are not in contravention
of law or the terms of such Loan Party’s Organizational Documents or of any
material agreement or undertaking to which it is a party or by which it is
bound, and (b) will not conflict with or result in any breach in any of
the provisions of, or constitute a default under or result in the creation of
any Lien, except Permitted Encumbrances, upon any property or asset of such
Loan Party under the provisions of any agreement, Organizational Document or
other instrument to which it is a party or by which it or its property or
assets may be bound.

Section 5.2             Formation and Qualification.

(a)           Each Loan Party is duly
incorporated or organized, as applicable, and in good standing under the laws
of the state listed on Schedule 5.2(a) and is qualified to do business
and is in good standing in the
states listed on Schedule 5.2(a) which constitute all states in which
qualification and good standing are necessary for such Loan Party to conduct
its business and own its property and where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect.  Each Loan Party has delivered to Agent true
and complete copies of its Organizational Documents and will promptly notify
Agent of any amendment or changes thereto.

(b)           As of the Closing Date,
the only Subsidiaries of Borrower are listed on Schedule 5.2(b).

Section 5.3             Survival of Representations and
Warranties.  All representations and
warranties of each Loan Party contained in this Agreement and the Other
Documents shall be true at the time of its execution of this Agreement and the
Other Documents, and shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions described
therein or related thereto.

Section 5.4             Tax Returns.  Each Loan Party’s federal tax identification
number is set forth on Schedule 5.4. 
Each Loan Party has filed all federal, state and local tax returns and
other reports it is required by law to file and has paid all taxes,
assessments, fees and other governmental charges that are due and payable.  The provision for taxes on the books of each
Loan Party is adequate in all material respects for all years not closed by
applicable statutes, and for its current fiscal year, and no Loan Party has any
Knowledge of any deficiency or additional assessment in connection therewith
not provided for on its books.

Section 5.5             Financial Statements.

(a)           The
pro forma balance sheet of Borrower (the “Pro Forma Balance Sheet”) furnished
to Agent on or before the Closing Date reflects the consummation of the
Transactions and is based on historical information combined with projected
information based on management’s reasonable judgment and reasonable
assumptions and fairly reflects the financial condition of Borrower as of the
Closing Date after giving effect to the Transactions, and has been prepared in
accordance with GAAP, consistently 

 49
 

 

applied.  The Pro Forma Balance
Sheet has been certified as based on historical information combined with
projected information based on management’s reasonable judgment and reasonable
assumptions in all material respects by the President and Chief Financial
Officer of Borrower.  All financial
statements referred to in this Section, including the related schedules and
notes thereto, have been prepared in accordance with GAAP, except as may be
otherwise disclosed therein.

(b)           The 12-month cash flow
projections and income statements of Borrower and its projected balance sheets
as of the Closing Date, copies of which are annexed hereto as Exhibit 5.5(b)
(the “Projections”) were prepared by Borrower, are based on underlying
assumptions which Borrower believes provide a reasonable basis for the
projections contained therein and reflect Borrower’s judgment based on present
circumstances of the most likely set of conditions and course of action
determined by Borrower in good faith for the projected period.  The cash flow Projections together with the Pro Forma Balance Sheet,
are referred to as the “Pro Forma Financial Statements”.

Section 5.6             Entity
Name.  No Loan Party has been known
by any other corporate or other entity name in the past five years and no Loan
Party sells Inventory under any other name except as set forth on Schedule
5.6.  No Loan Party has been a party
to a merger or consolidation or acquired all or substantially all of the assets
of any Person during the preceding five (5) years, except for Borrower’s acquisition of substantially all assets of
Seller pursuant to the Acquisition Agreement and except as set forth on Schedule
5.6.

Section 5.7             O.S.H.A. and Environmental
Compliance.

(a)           As
of the Closing Date, except as disclosed on Schedule 5.7, each Loan
Party has duly complied with, and its facilities, business, assets, property,
leaseholds and Equipment are in compliance in all material respects with, the
applicable provisions of the Federal Occupational Safety and Health Act, RCRA
and all other applicable Environmental Laws; there are no unresolved citations,
notices or orders of non-compliance that have been issued to any Loan Party or
relating to its business, assets, property, leaseholds or Equipment under any
such laws, rules or regulations.

(b)           Each
Loan Party has received or been issued, or will cause to be filed with the
appropriate Governmental Bodies in accordance with applicable Environmental
Laws, all documentation required to be filed so that the appropriate
Governmental Body may issue to Borrower all federal, state and local licenses,
certificates or permits required by applicable Environmental Laws to operate
the business of Borrower and its Subsidiaries.

(c)           As
of the Closing Date, except as disclosed on Schedule 5.7, (i) there
are no visible signs of releases, spills, discharges, leaks or disposal
(collectively referred to as “Releases”) of Hazardous Substances at, upon,
under or within any Real Property or any premises leased by any Loan Party;
(ii) there are no underground storage tanks or polychlorinated biphenyls
on the Real Property or any premises leased by any Loan Party;
(iii) neither the Real Property nor any premises leased by any Loan Party
has ever been used as a treatment, storage or disposal facility (as such terms
are defined under 

 50
 

 

RCRA) of Hazardous Waste; and (iv) no Hazardous Substances are
present on the Real Property or any premises leased by any Loan Party, excepting
such quantities as are handled in accordance with all applicable manufacturer’s
instructions and governmental regulations and in proper storage containers and
as are necessary for the operation of the commercial business of any Loan Party
or of its tenants.

Section 5.8             Solvency; No Litigation,
Violation, Indebtedness or Default.

(a)           Both
immediately prior to and after giving effect to the Transactions, each Loan
Party is solvent, able to pay its debts as they mature, has capital sufficient
to carry on its business and all businesses in which it is about to engage, and
(i) as of the Closing Date, the fair present saleable value of its assets,
calculated on a going concern basis, is in excess of the amount of its
liabilities and (ii) subsequent to the Closing Date, the fair saleable
value of its assets (calculated on a going concern basis) will be in excess of
the amount of its liabilities.

(b)           As
of the Closing Date, except as disclosed in Schedule 5.8(b), no Loan
Party has any (i) pending or threatened litigation, arbitration, actions
or proceedings which involve the possibility of having a Material Adverse
Effect, (ii) liabilities or indebtedness for borrowed money other than the
Other Senior Debt and the Obligations, or (iii) liabilities for the obligations
of any Person by assumption, endorsement or guarantee or any other contingent
liabilities, indebtedness or obligations other than liabilities or obligations
consisting of the Obligations and the “Obligations” as defined in the Other
Senior Credit Agreement.

(c)           No Loan Party is in
violation of any applicable statute, regulation or ordinance in any respect
which could reasonably be expected to have a Material Adverse Effect, and no
Loan Party is in violation of
any order of a material nature of any court, governmental authority or
arbitration board or tribunal.

(d)           Neither
any Loan Party nor any member of the Controlled Group maintains, sponsors or
has any obligation or liability to any Plan other than those listed on Schedule
5.8(d) hereto.  Except as set forth
in Schedule 5.8(d):

(i)            no
Plan has incurred any “accumulated funding deficiency,” as defined in Section
302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and
each Loan Party and each member of the Controlled Group has met all applicable
minimum funding requirements under Section 302 of ERISA in respect of each
Plan;

(ii)           each
Plan which is intended to be a qualified plan under Section 401(a) of the Code
as currently in effect has received, or applied for, a determination letter
from the Internal Revenue Service as to such qualified status and the tax
exempt status of the trust related thereto or, with respect to any relevant
provision of the Code for which the Internal Revenue Service is not currently
considering determination letter requests, appropriate Plan amendments 

 51
 

 

have been made, and, to the Knowledge of the Loan Parties, nothing has
occurred which would cause the loss of such Plan’s qualification;

(iii)          neither
any Loan Party nor any member of the Controlled Group has incurred any
liability to the PBGC other than for the payment of premiums, and there are no
premium payments which have become due which are unpaid;

(iv)          no
Plan subject to Title IV of ERISA has been terminated by the plan administrator
thereof nor by the PBGC, and, to the Knowledge of the Loan Parties, there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan;

(v)           except
as may be set forth in Schedule 5.8(d), at this time, the current value
of the assets of each Plan exceeds the present value of the accrued benefits
and other liabilities of such Plan and neither any Loan Party nor any member of
the Controlled Group knows of any facts or circumstances which would materially
change the value of such assets and accrued benefits and other liabilities;

(vi)          neither
any Loan Party nor any member of the Controlled Group has breached any of the
responsibilities, obligations or duties of a material nature imposed on it by
ERISA with respect to any Plan, and each Plan is in compliance in all material
respects with the applicable provisions of the Code and relevant other federal
or state law;

(vii)         neither
any Loan Party nor any member of a Controlled Group has incurred any material
liability for any excise tax arising under Section 4972 or 4980B of the Code,
and, to the Knowledge of the Loan Parties, no fact exists which could
reasonably be expected to give rise to any such material liability;

(viii)        neither
any Loan Party nor any member of the Controlled Group nor any fiduciary of, nor
any trustee to, any Plan, has engaged in a “prohibited transaction” as
described in Section 406 of the ERISA or Section 4975 of the Code nor taken any
action which would constitute or result in a Termination Event;

(ix)           each
Loan Party and each member of the Controlled Group have made all contributions
due and payable with respect to each Plan, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of
the Code has been made with respect to any Plan;

(x)            there
exists no event described in Section 4043(b) of ERISA for which the 30-day
notice period contained in 29 C.F.R. § 2615.3 has not been waived;

(xi)           neither
any Loan Party nor any member of the Controlled Group has any fiduciary
responsibility for investments with respect to any Plan existing 

 52
 

 

for the benefit of persons other than employees or former employees (or
their beneficiaries) of any Loan Party and any member of the Controlled Group;

(xii)          neither
any Loan Party nor any member of the Controlled Group has withdrawn, completely
or partially, from any Multiemployer Plan so as to incur liability under the
Multiemployer Pension Plan Amendments Act of 1980; and

(xiii)         there
are no Foreign Plans.

Section 5.9             Patents,
Trademarks, Copyrights and Licenses. 
All patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, copyrights, copyright applications,
design rights, tradenames, assumed names, trade secrets and licenses owned or
utilized by any Loan Party are set forth on Schedule 5.9, are valid
(subject to any disclaimers duly filed by a Loan Party) and have been duly
registered or filed with all appropriate Governmental Bodies and constitute all
of the Intellectual Property rights of each Loan Party which are necessary for
the operation of its business.  No Loan Party has Knowledge of any
objection to or pending challenge to the validity of any such patent,
trademark, copyright, design right, tradename, trade secret or license and no
Loan Party is aware of any grounds for any such challenge, except as may be set
forth in Schedule 5.9 hereto. 
Except as disclosed on Schedule 5.9(a), each patent, patent application,
patent license, trademark, trademark application, trademark license, service
mark, service mark application, service mark license, design right, copyright,
copyright application and copyright license of a material nature owned or held
by any Loan Party and all trade secrets used by any Loan Party consist of original
material or property developed by such Loan Party or was lawfully acquired by
such Loan Party from the proper and lawful owner thereof.  Each of such items has been maintained so as
to, in all material respects, preserve the value thereof from the date of
creation or acquisition thereof.  With
respect to all software used by any Loan Party, such Loan Party is in
possession of all source and object codes related to each piece of software or
is the beneficiary of a source code escrow agreement or similar agreement which
ensures such Loan Party’s practical ability to utilize such software, each such
source code escrow agreement or similar agreement being listed on Schedule
5.9 hereto.  As of the Closing Date,
the estimated aggregate book value of all Inventory of Borrower which is
identified by, associated with, intended to be sold under or otherwise subject
to a trademark, patent or other Intellectual Property, which Intellectual
Property is (a) owned by another Person and is licensed to Borrower and (b) not
fully assignable to both Borrower and Agent, does not exceed $1,000,000.

Section 5.10           Licenses and Permits.  Except as otherwise described in Section
5.7(b) and as set forth in Schedule 5.10, each Loan Party
(a) is in compliance with and (b) has procured and is now in
possession of, all material licenses or permits required by any applicable
federal, state or local law or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits could reasonably be
expected to have a Material Adverse Effect.

Section 5.11           Default of Indebtedness.  No Loan Party is in default in the payment of
the principal of or interest due in respect of any Indebtedness in an aggregate
principal amount in excess of $100,000 or under any instrument or agreement
under or subject to which any such 

 53
 

 

Indebtedness has been issued, and no event
has occurred under the provisions of any such instrument or agreement which, with
or without the lapse of time or the giving of notice, or both, constitutes or
would constitute an event of default thereunder.

Section 5.12           No Default.  No Loan Party is in default in the payment or
performance of any of its contractual obligations of a material nature, and no
default has occurred and is in continuance thereunder.

Section 5.13           No Burdensome Restrictions.  Except as may be disclosed on Schedule 5.13,
no Loan Party is party to any contract or agreement the performance of which
could reasonably be expected to have a Material Adverse Effect.  No Loan Party has agreed or consented to
cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter acquired, to be
subject to a Lien which is not a Permitted Encumbrance.

Section 5.14           No Labor Disputes.  No Loan Party is involved in any labor
dispute of a material nature; there are no strikes or walkouts or union
organization of any Loan Party’s or any of its Subsidiaries’ employees
threatened or in existence and no labor contract is scheduled to expire during
the Term other than as set forth on Schedule 5.14 hereto.

Section 5.15           Margin
Regulations.  No Loan Party is
engaged, nor will it engage, principally or as one of its important activities,
in the business of extending credit for the purpose of “purchasing” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect. 
No part of the proceeds of any Advance will be used for “purchasing” or “carrying”
“margin stock” as defined in
Regulation U of such Board of Governors.

Section 5.16           Investment Company Act.  No Loan Party is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.

Section 5.17           Disclosure.  No representation or warranty made by any
Loan Party in this Agreement or in any financial statement, report, certificate
or any other document furnished in connection herewith or therewith contains
any untrue statement of material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading.  There is no fact of which Borrower has
Knowledge which Borrower has not disclosed to Agent in writing with respect to
the Transactions which could reasonably be expected to have a Material Adverse
Effect.

Section 5.18           Swaps.  No Loan Party is a party to, nor will it be a
party to, any swap agreement whereby it has agreed or will agree to swap
interest rates or currencies unless same provides that damages upon termination
following an event of default thereunder are payable on an unlimited “two-way
basis” without regard to fault on the part of either party.

Section 5.19           Conflicting
Agreements.  No provision of any
mortgage, indenture, contract, agreement, judgment, decree or order binding on
any Loan Party or affecting the Collateral conflicts with, or requires any
Consent which has not already been obtained to, or

 54

 

would in any way prevent the execution,
delivery or performance of, the terms of this Agreement or the Other Documents.

Section 5.20           Application of Certain Laws and
Regulations.  No Loan Party is
subject to any statute, rule or regulation which regulates the incurrence of
any Indebtedness, including without limitation, statutes or regulations
relative to common or interstate carriers or to the sale of electricity, gas,
steam, water, telephone, telegraph or other public utility services.

Section 5.21           Business and Property of Loan
Parties.

(a)           Upon
and after the Closing Date, Borrower does not propose to engage in any business
other than the businesses currently conducted by Borrower and its Subsidiaries
and activities necessary to continue therewith. 
On the Closing Date, each of Borrower and its Subsidiaries will own all
the Property and possess all of the rights and Required Consents necessary for
the conduct of the business of Borrower and its Subsidiaries.  Upon and after the Closing Date, General
Partner does not propose to engage in any business other than its ownership of
Borrower and matters incidental thereto.

(b)           As
of the Closing Date, (i) each of Asia LLC, Canada LLC and Canada LP is a
holding company that does not engage in any business activities of a material
nature (other than those relating to the ownership of its Subsidiaries),
(ii) the business engaged in by Vision-Ease Canada, Vision-Ease Europe and
Vision Ease Lens is solely that of providing sales and marketing and related
services, and distribution of goods, for Borrower, (iii) the assets of
each of Vision-Ease Canada, individually and Vision-Ease Europe and Vision-Ease
Lens, collectively, consist solely of a lease of real property whereat its
office is located and related office furniture and equipment and accounts
receivable and inventory having an aggregate book value of approximately
$574,000.00 and $2,706,000.00, respectively, and (iv) the assets of
Vision-Ease Asia consist of certain rights in real property whereat its office
is located and related manufacturing equipment and accounts receivable and
inventory having an aggregate book value of approximately $13,230,000.00.

Section 5.22           Delivery of Certain Documents.  Borrower has delivered to Agent a true and
complete copy of the Acquisition Documents and the Other Senior Credit
Documents (including in each case, all exhibits, schedules and disclosure
letters referred to therein or delivered pursuant thereto, if any) and all
amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof. 
None of such documents and agreements has been amended or supplemented,
nor have any of the provisions thereof been waived, except pursuant to a
written agreement or instrument which has heretofore been delivered to Agent.

Section 5.23           Material Contracts.  As
of the Closing Date, Schedule 5.23 contains a complete list of all
Material Contracts.  As of the Closing
Date, except as may be disclosed on Schedule 5.23, each of the Material
Contracts is in full force and effect, none of the Loan Parties is in default
under any Material Contract, each of the Material Contracts is assignable to
Agent without the consent or approval of any party thereto and, to the
Knowledge of each Loan Party, no other Person that is a party thereto is in
material default under any of the Material Contracts.  To
the Knowledge of 

 55
 

 

each
Loan Party, none of the Material Contracts prohibits any of the transactions
contemplated by this Agreement or the Other Documents.  Except
as may be disclosed on Schedule 5.23, each of the Material Contracts is
in the name of Borrower or one of its Subsidiaries or, has been assigned to
Borrower with the approval or consent (to the extent such approval or consent
is required) of all other parties thereto.  Borrower has delivered to Agent a true and
correct copy of each Material Contract existing as of the Closing Date and
which is identified on Schedule 5.23 as being so delivered (those
Material Contracts which may not be delivered to Agent without the breach of a
confidentiality agreement currently existing are expressly identified on Schedule
5.23 as not being delivered due to such confidentiality agreement).  Except
as set forth in Section 5.7(b) or as disclosed on Schedule 5.10
or Schedule 5.23, all Required Consents have been obtained.  None of the Required Consents which has not
been obtained could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.  To
the Knowledge of Borrower, such Required Consents which have not been obtained
are able to be obtained without undue difficulty or unreasonable delay.

Section 5.24           Anti-Terrorism Laws.

(a)           General.  Neither any Loan Party nor any Affiliate of
any Loan Party is in violation of any Anti-Terrorism Law or engages in or
conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

(b)           Executive
Order No. 13224.  Neither any Loan
Party nor any Affiliate of any Loan Party, nor any of their respective agents
acting or benefiting in any capacity in connection with the Loans, Letters of
Credit or other transactions hereunder, is any of the following (each a “Blocked
Person”):

(i)            a
Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;

(ii)           a
Person owned or controlled by, or acting for or on behalf of, any Person that
is listed in the annex to, or is otherwise subject to the provisions of, Executive
Order No. 13224;

(iii)          a
Person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;

(iv)          a
Person that commits, threatens or conspires to commit or supports “terrorism”
as defined in Executive Order No. 13224;

(v)           a
Person that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement
official publication of such list; or

(vi)          a
Person who is affiliated or associated with a Person listed above.

 56
 

 

Neither any Loan Party
nor, to the Knowledge of any Loan Party, any of its agents acting in any
capacity in connection with the Terms Loans or other transactions hereunder
(A) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (B) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to Executive Order
No. 13224.

ARTICLE 6

AFFIRMATIVE COVENANTS

Each Loan Party covenants
and agrees with Agent and Lenders that such Loan Party shall, and shall cause
each other Loan Party to, until payment in full of the Obligations and
termination of this Agreement:

Section 6.1             Payment
of Fees.  Promptly pay to Agent on
demand all usual and customary fees and expenses which Agent incurs in
connection with (a) the forwarding of Advance proceeds and (b) the establishment and maintenance
of any Blocked Account as provided for in Section 4.15(h).  Agent may, without making demand, charge
Borrower’s Account for all such fees and expenses.

Section 6.2             Conduct of Business and
Maintenance of Existence and Assets. 
(a) Conduct continuously and operate actively its business
according to standard industry practices and maintain all of its properties
useful or necessary in its business in good working order and condition (reasonable
wear and tear excepted and except as may be disposed of in accordance with the
terms of this Agreement) and maintain in effect all of its Material Contracts
and other contracts and rights relating thereto (or replace such Material
Contracts or other contracts or rights from time to time with other Material
Contracts or other contracts or rights comparable thereto) useful or necessary
in the conduct of its business as commonly conducted, including, without
limitation, all licenses, patents, copyrights, design rights, tradenames, trade
secrets and trademarks and take all actions necessary to enforce and protect
the validity of any Intellectual Property right or other right of a material
nature included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all
such reports and pay all such franchise and other taxes and license fees and do
all such other acts and things as may be lawfully required to maintain its
rights, licenses, leases, powers and franchises under the laws of the US. or
any political subdivision thereof.

Section 6.3             Violations.  Promptly notify Agent in writing of any
violation of any law, statute, regulation or ordinance of any Governmental
Body, or of any agency thereof, applicable to any Loan Party or any Limited
Partner which could reasonably be expected to have a Material Adverse Effect.

Section 6.4             Government Receivables.  Take all steps necessary to protect Agent’s
interest in the Collateral under the Federal Assignment of Claims Act or other
applicable state or local statutes or ordinances and deliver to Agent,
appropriately endorsed, any instrument or 

 57
 

 

chattel paper connected with any Receivable
arising out of contracts between any Loan Party and the U.S., any state or any
department, agency or instrumentality of any of them.

Section 6.5             Fixed
Charge Coverage Ratio.  Commencing
December 31, 2005, and continuing as of the last day of each fiscal
quarter ending thereafter, maintain a Fixed Charge Coverage Ratio of no less
than 1.10 to 1.00, such ratio to be tested as of the last day of each fiscal
quarter for the period of four (4)
fiscal quarters then ended.

Section 6.6             Tangible Net Worth.  On the last day of each fiscal quarter,
commencing with the fiscal quarter ending December 31, 2005, maintain
Tangible Net Worth in an amount equal to not less than the sum of (a) -0- plus (b) for each fiscal quarter ending after December 31,
2005 and on a cumulative basis for all fiscal quarters thereafter, fifty
percent (50%) of the positive net income of Borrower and its consolidated
Subsidiaries for the previously ended fiscal quarter.

Section 6.7             Execution of Supplemental
Instruments.  Promptly execute and
deliver to Agent from time to time, upon demand, such supplemental agreements,
statements, assignments and transfers, or instructions or documents relating to
the Collateral, and such other instruments as Agent may reasonably request, in
order that the full intent of this Agreement may be carried into effect.

Section 6.8             Payment of Indebtedness, etc.  Pay, discharge or otherwise satisfy at or
before maturity (subject, where applicable, to specified grace periods and, in
the case of the trade payables, to normal payment practices) all its
Indebtedness, obligations and liabilities of whatever nature (including,
without limitation, taxes, trade accounts payable and the Other Senior Debt),
except when the failure to do so could not reasonably be expected to have a
Material Adverse Effect or when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and Borrower shall
have established such reserves as Agent may reasonably deem proper and
necessary, subject at all times to any applicable subordination arrangement in
favor of Agent and/or Lenders.

Section 6.9             Standards of Financial
Statements.  Cause all financial
statements or reports referred to in Sections 9.7 through 9.12 as to which GAAP is applicable to be complete and correct in
all material respects (subject, in the case of interim financial statements, to
normal year-end audit adjustments and the absence of footnotes) and to be
prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein (except as concurred in by such
reporting accountants or officer, as the case may be, and disclosed therein).

Section 6.10           Exercise of Rights.  Enforce all of its rights of a material
nature under the Acquisition Documents, including, but not limited to, all
indemnification rights, and pursue all remedies available to it with reasonable
diligence and in good faith in connection with the enforcement of any such
rights.

Section 6.11           Subsidiaries.  Except as set forth in Section 4.21(b),
Borrower agrees that it shall cause each of its Subsidiaries existing as of the
Closing Date to guarantee the payment and performance of the Obligations and to
assign, pledge and grant to Agent for its benefit and 

 58
 

 

for the ratable benefit of each Lender a
continuing security interest and Lien in and to all of its property as security
for the payment and performance of the Obligations.  Except as provided in Section 4.21(b),
contemporaneously with the creation or acquisition of any Subsidiary after the
Closing Date, Borrower agrees that it shall cause such Subsidiary to guarantee
the payment and performance of the Obligations and grant to Agent for its
benefit and for the ratable benefit of each Lender a continuing security
interest and Lien in and to all of its property as security for the payment and
performance of the Obligations.  Borrower
shall not permit any of its Domestic Subsidiaries existing as of the Closing Date,
or permit any Subsidiary created or acquired after the Closing Date, to be or
become a Foreign Subsidiary without the prior written consent of Agent and
Required Lenders.

Section 6.12           Total Leverage Ratio.  Commencing December 31, 2005, and
continuing as of the last day of each fiscal quarter ending thereafter,
maintain a Total Leverage Ratio of no greater than the ratio set forth below
for the periods ending on the dates specified below:

	
  Fiscal Quarter Ending

  	
   

  	
  Maximum Total Leverage Ratio

  	
   

  
	
  12/31/05

  	
   

  	
  4.25
  to 1.00

  	
   

  
	
  3/31/06

  	
   

  	
  4.25
  to 1.00

  	
   

  
	
  6/30/06

  	
   

  	
  4.125
  to 1.00

  	
   

  
	
  9/30/06

  	
   

  	
  4.126
  to 1.00

  	
   

  
	
  12/31/06

  	
   

  	
  4.00
  to 1.00

  	
   

  
	
  3/31/07

  	
   

  	
  3.75
  to 1.00

  	
   

  
	
  6/30/07

  	
   

  	
  3.625
  to 1.00

  	
   

  
	
  9/30/07

  	
   

  	
  3.50
  to 1.00

  	
   

  
	
  12/31/07

  	
   

  	
  3.50
  to 1.00

  	
   

  
	
  3/31/08

  	
   

  	
  3.50
  to 1.00

  	
   

  
	
  6/30/2008

  	
   

  	
  3.25
  to 1.00

  	
   

  
	
  9/30/2008

  	
   

  	
  3.25
  to 1.00

  	
   

  
	
  12/31/2008 and
  thereafter

  	
   

  	
  3.00 to 1.00

  	
   

  

 

Section 6.13           Unadjusted EBITDA.  Commencing December 31, 2005, not permit
Unadjusted EBITDA for the then most recently ended four fiscal quarters ending
as of the dates indicated below to be less than the following:

	
  Fiscal Quarter Ending

  	
   

  	
  Unadjusted EBITDA

  	
   

  
	
  12/31/05

  	
   

  	
  $

  	
  14,750,000

  	
   

  
	
  3/31/06

  	
   

  	
  $

  	
  14,750,000

  	
   

  
	
  6/30/06

  	
   

  	
  $

  	
  15,250,000

  	
   

  
	
  9/30/06

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  12/31/06

  	
   

  	
  $

  	
  16,250,000

  	
   

  

 

Section 6.14           Post
Closing IP Covenant.  Within 30 days
after the Closing Date, Borrower shall make any filings, and shall provide
Agent with a written copy of such filings, with the U.S. Patent & Trademark Office (“PTO”) and any foreign patent or trademark office or
agency sufficient for the title records of the PTO or such office or agency to
identify Borrower as the owner of any intellectual property set forth on
Schedule 5.9 (with the exception of 

 59
 

 

provisional
patent applications) owned by Borrower for which Borrower has not yet made a
filing identifying Borrower as owner as of the Closing Date.  Such filings shall include, without
limitation, filings of assignment documents under which Borrower is assigned
ownership of U.S. Patent Application No. 101684,202 and U.S. Trademark
Registration No. 2,587,760.

Section 6.15           Post Closing Deliverables.  Borrower and the other Loan Parties shall, on
or before 45 days after the Closing Date (provided that such 45 days shall be
extended to the soonest practicable date after the end of such 45 day period if
and to the extent Borrower is using all reasonable efforts to accomplish the
following and, notwithstanding such efforts, additional time is reasonably
necessary):  (a) execute and deliver
to Agent a Pledge Agreement with respect to Vision-Ease Europe and such further
agreements, documents, instruments and legal opinions referred to in the last
sentence of Section 4.1(b) hereof, each in form and substance
satisfactory to Agent; provided however, that notwithstanding the foregoing,
the commencement of the initial 45-day time period described above shall not
begin until Agent makes a written request for such Pledge Agreement and
(b) execute and deliver to Agent a Blocked Account Agreement and/or any
other similar deposit account control agreement with respect to the Deposit
Accounts referenced on Schedule 4.15(h) hereof with PNC Bank, National
Association as the depository bank, each in form and substance satisfactory to
Agent and sufficient to grant “control” of such Depository Accounts to Agent
but which shall be subject to a blocked account agreement and/or other deposit
account control agreement in favor of, and in form and substance reasonably
satisfactory to, Senior Agent.

ARTICLE 7

NEGATIVE COVENANTS

Each of the Loan Parties
covenants and agrees with Agent and Lenders that such Loan Party shall not, and
shall not permit any other Loan Party to, until payment in full of the
Obligations and termination of this Agreement:

Section 7.1             Merger, Consolidation,
Acquisition and Sale of Assets.

(a)           Consummate
any merger, consolidation or other reorganization with or into any other Person
or acquire all or a substantial portion of the property or assets or Capital
Stock of any Person or permit any other Person to consolidate with or merge
with it; provided, however, that any
Subsidiary of Borrower may merge with and into Borrower or a wholly-owned
Subsidiary of Borrower if, in the case of a merger to which Borrower is a
party, Borrower is the entity surviving such merger and, if such merger
involves a Foreign Subsidiary and a Domestic Subsidiary, the Domestic
Subsidiary is the entity surviving such merger.

(b)           Sell,
lease, transfer or otherwise dispose of any of its properties or assets, except
as may be permitted by Section 4.3.

Section 7.2             Creation of Liens.  Create or suffer to exist any Lien upon or
against any of its property or assets now owned or hereafter acquired, except
Permitted Encumbrances.

 60
 

 

Section 7.3             Guarantees.  Become liable upon the obligations of any
Person by assumption, endorsement or guaranty thereof or otherwise (other than
to Lenders) except (a) the endorsement of checks in the ordinary course of
business and (b) Guarantees of Indebtedness of a Subsidiary of Borrower
permitted in accordance with Section 7.8 provided by Borrower or any
Subsidiary of Borrower in the ordinary course of its business.

Section 7.4             Investments.  Purchase or acquire obligations or Capital
Stock of, or any other interest in, any Person, except (a) obligations
issued or guaranteed by the U.S. or any agency thereof, (b) commercial paper with maturities of not
more than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating), (c) certificates of time deposit and bankers’
acceptances having maturities of not more than 180 days and repurchase
agreements backed by U.S. government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000,
or (ii) its debt obligations, or those of a holding company of which it is
a Subsidiary, are rated not less than A (or the equivalent rating) by a
nationally recognized investment rating agency, (d) U.S. money market
funds that invest solely in obligations issued or guaranteed by the U.S. or an
agency thereof, and (e) investments by Borrower in the Capital Stock of a
Subsidiary of Borrower if the existence or creation of such a Subsidiary is
permitted by Section 7.12, provided that (A) the aggregate amount
of such investments made by Borrower in all of its Subsidiaries shall not at
any time exceed $1,200,000 and (B) the aggregate amount of such
investments made by Borrower in any Foreign Subsidiary shall not at any time
exceed $700,000 as to each such Foreign Subsidiary.

Section 7.5             Loans.  Make advances, loans or extensions of credit
to any Person, including without limitation, any Parent, Subsidiary or
Affiliate, other than advances, loans or extensions of credit made to the
Foreign Subsidiaries in an aggregate amount not to exceed $1,000,000 during any
calendar year for the purpose of permitting such Subsidiaries to find their
payroll and other operating expenses in the ordinary course of their
businesses.

Section 7.6             Capital Expenditures.  Subject to clause (e) of Section
7.8, contract for, purchase or make any expenditure or commitments for
Capital Expenditures in any fiscal year in an aggregate amount in excess of
$6,500,000 for Borrower and its Subsidiaries collectively; provided, however, that the aggregate amount of such Capital
Expenditures during the period from the Closing Date through and including
December 31, 2005 shall not exceed $900,000.

Section 7.7             Management Fees; Dividends;
Distributions.  Declare, pay or make
any management fees or similar fees or any dividend or distribution on any of
the Capital Stock of Borrower or any Subsidiary of Borrower (other than dividends
or distributions payable in its Capital Stock of the same issuer and the same
class), or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any such Capital Stock or of any options or
warrants to purchase or acquire any such Capital Stock, except that:

(a)           Subsidiaries
of Borrower may pay or make to Borrower (but only to Borrower) any management
fees or similar fees or any dividend or distribution;

(b)           if
(but only if) no Default or Event of Default shall have occurred and be
continuing and so long as Borrower is a partnership for federal income tax
purposes, then Borrower may make distributions to General Partner and Limited
Partners in each 

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calendar year in an aggregate amount equal to the federal and state
taxes that Borrower would have been required to pay were it a corporation for
federal income tax purposes filing a Form 1120 and equivalent state tax returns
for such calendar year (a “Permitted Tax Payment”), which amount shall
be distributed to General Partner and Limited Partners in accordance with the
terms of the First Amended and Restated Limited Partnership Agreement of
Borrower dated effective as of October 31, 2004, as the same may be
amended, restated or otherwise modified from time to time with the prior
written consent of Agent, which consent shall not be unreasonably withheld; provided,
however, that (i) immediately after giving effect to any such
dividend or distribution, there shall not then exist any Default or Event of
Default; (ii) each such distribution by Borrower shall be made
substantially concurrently with the date of the corresponding income tax
payments required to be paid by General Partner and Limited Partners based upon
their ownership interests in Borrower; and (iii) if Borrower would have
received or become entitled to receive any return, reimbursement and/or other
credit in respect of a Permitted Tax Payment were it a corporation, the amount
of which is not otherwise reflected in the calculation of the Permitted Tax
Payment for the current year, then the amount thereof, but not in excess of the
total Permitted Tax Payments made to General Partner and Limited Partners,
shall be promptly paid over and contributed to Borrower by General Partner and
Limited Partners in proportion to the related Permitted Tax Payment distributed
to or received by such Person;

(c)           if (but only if)
(i) a notice of termination with regard to this Agreement shall not be
outstanding, (ii) no Default or Event of Default shall have occurred and
be continuing, (iii) immediately
prior to and after giving effect to the payment of such management fees,
dividends and/or distributions, the Undrawn Availability (as defined in the
Other Senior Credit Agreement) shall exceed $1,000,000, (iv) with respect
to any such payment (whether of dividends, distributions or management fees),
the purpose for such payment and the compliance of such payment with the
conditions set forth in this Section 7.7(c) shall be set forth in
writing delivered by Borrower to Agent at least ten (10) days prior to such
payment and such payment shall in fact be used for such purpose, and
(v) with respect to clause (A) below so long
as the Total Leverage Ratio for the applicable period is less than 2.75 to 1,
then, Borrower shall be permitted to pay (A) to Rosewood, after the first
anniversary of the Closing Date, dividends or distributions on the Class A-1
Preferred Partnership Rights of the Borrower owned by Rosewood during any
fiscal year in an aggregate amount not to exceed $300,000 during such fiscal
year and (B) management fees during any fiscal year in an aggregate amount
not to exceed $1,020,000 during such fiscal year; provided, however,
that (1) immediately after giving effect to any such payment referred to
in this clause (c), there shall not then exist any Default or
Event of Default, and (2) notwithstanding clause (B) preceding, the aggregate amount of management fees paid pursuant to clause (B) preceding during the period from the Closing Date through and
including December 31, 2005, shall not exceed $85,000.  The compensation permitted to be paid to
Borrower’s executives in accordance with Section 7.21 hereof shall not
be subject to the limitations of this Section;

(d)           Borrower shall be
entitled to honor any “put” of the Warrants or the securities acquired upon
exercise of the Warrants by the holders thereof, in either case in accordance
with the terms of the Subordinated Credit Agreement; provided, however, 

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notwithstanding anything to the contrary in the Subordinated Credit
Agreement, if, at the time any such “put” is exercised, Borrower shall not be entitled to pay for
such “put” in cash, but shall only be permitted to issue a Put Subordinated
Note in exchange therefor pursuant to the Subordinated Credit Agreement and in
accordance with this Agreement and the Subordination Agreement, provided,
further, however, that, notwithstanding the foregoing, Borrower shall be
entitled to pay for such “put” in cash to the extent (but only to the extent)
that, substantially concurrently with Borrower’s payment for such “put” in
cash, Borrower has received a new equity contribution from its owners (other
than General Partner) in the form of cash in an amount equal to or greater than
the amount of such cash payment of Borrower.

Section 7.8             Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness (exclusive of trade debt and accrued payroll and accrued taxes
arising in the ordinary course of business) except in respect of:

(a)           Indebtedness
of the Loan Parties to Lenders under this Agreement and the Other Documents;

(b)           Indebtedness
of Borrower consisting of (i) the Other Senior Debt or any replacement or
refinancing thereof as permitted by the Intercreditor Agreement or
(ii) the aggregate principal amount (if any) owed under the Put Subordinated
Notes then outstanding, provided that Borrower agrees that it shall not, until
satisfaction in full of the Obligations and termination of this Agreement,
(A) issue Put Subordinated Notes except in accordance with the terms of
the Subordinated Credit Documents and the Subordination Agreement,
(B) amend or otherwise modify the terms of the indebtedness permitted
pursuant to this clause (b)(ii) except as permitted by the Subordination
Agreement, (C) amend or otherwise modify the terms of the Warrants, the
Warrant Securities (as defined in the Subordinated Credit Agreement), the Put
Subordinated Notes or the Subordination Agreement, except as permitted by the
Subordination Agreement, without the prior written consent of Agent; provided,
further  however, that Borrower may not reborrow any indebtedness
permitted pursuant to this clause (b) (other than with respect to the Revolving Advances as defined
in the Other Senior Credit Agreement) which has been previously repaid;

(c)           endorsements
of negotiable instruments in the ordinary course of business;

(d)           subject
to clause (e) of this Section 7.8, Indebtedness incurred for
Capital Expenditures permitted under Section 7.6;

(e)           Capitalized
Lease Obligations and purchase money Indebtedness of Borrower incurred to
purchase Equipment and other fixed assets, provided that (i) the
Liens securing such Capitalized Lease Obligations and purchase money
Indebtedness shall attach only to the Equipment or fixed assets acquired by the
incurrence thereof, (ii) the aggregate amount of such Capitalized Lease
Obligations and purchase money Indebtedness outstanding at any time shall not
exceed $4,000,000 and (iii) he aggregate amount of such Capitalized Lease
Obligations and purchase money Indebtedness incurred 

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during any fiscal year and Capital Expenditures made during such fiscal
year shall not exceed $4,000,000;

(f)            unsecured
Indebtedness of Borrower and/or its Subsidiaries incurred in the ordinary
course of business of Borrower or such Subsidiary not to exceed $5,000,000 in
the aggregate (as to all such entities) at any time outstanding; and

(g)           unsecured
Indebtedness of Borrower and/or its Subsidiaries owed to the Original Owners
incurred in connection with the ordinary working capital needs of the Borrower
not to exceed $5,000,000 in the aggregate (as to all Original Owners) at any
time outstanding; provided, however,
that the payment of such Indebtedness shall be fully subordinated to the
payment in full of any and all Obligations on terms and conditions satisfactory
to Agent and (i) no principal payments may be made on such subordinated
Indebtedness and (ii) any accrued interest on such subordinated Indebtedness
shall only be payable in kind, in each case, until all Obligations have been
paid in full and the termination of this Agreement.

Section 7.9             Nature
of Business.  Substantially change
the nature of the business in which it is presently engaged, nor except as
specifically permitted hereby purchase or invest, directly or indirectly, in
any assets or property other than in the ordinary course of business for assets
or property which are useful in, necessary for and are to be used in its
business as presently conducted.  Without
limiting the generality of the foregoing, none of the Foreign Subsidiaries
shall (a) engage in any business other than the business in which it is
engaged as of the Closing Date as represented and warranted in Section
5.21(b) hereof or (b) at
any time after the Closing Date acquire property having an aggregate fair
market value exceeding, (i) as to Vision-Ease Asia, $1,000,000 per fiscal
year, exclusive of the fair market value of Equipment transferred to such
Foreign Subsidiary in accordance with Section 4.3, (ii) as to
Vision-Ease Canada, $100,000 per fiscal year, and (iii) as to each of
Vision-Ease Europe and Vision-Ease Lens, $100,000 per fiscal year, in each case
without the prior written consent of Agent and Required Lenders.

Section 7.10           Transactions with Affiliates.  Directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise deal with, any Affiliate, except (a) transactions in the or-
course of business and on an arm’s-length basis on terms no less favorable than
terms which would have been obtainable from a Person other than an Affiliate
and (b) dispositions or transfers of Equipment to Foreign Subsidiaries of
Borrower which are permitted in accordance with Section 4.3.

Section 7.11           Leases.  Enter as lessee into any lease arrangement
for real or personal property (unless capitalized and permitted under Section
7.6 hereof) if, after giving effect thereto, the aggregate amount of all
rental payments during any fiscal year for all leased property would exceed
$3,000,000 for Borrower and its Subsidiaries collectively.

Section 7.12           Subsidiaries.

(a)           Form or acquire any
Subsidiary without the prior written consent of Agent and Required
Lenders.  In connection with the
formation or acquisition of any Subsidiary 

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so consented
to, Borrower shall promptly (i) cause such Subsidiary to execute and deliver to
Agent a Guaranty and a Guarantor Security Agreement and (ii) deliver to Agent
all documents, including legal opinions, as Agent may reasonably require in
connection therewith.

(b)           Enter
into any partnership, joint venture or similar arrangement.

Section 7.13           Fiscal Year and Accounting Changes.  Change its fiscal year end from December 31st
or make any change (a) in accounting treatment and reporting practices
except as required by GAAP or (b) in tax reporting treatment except as
required by law.

Section 7.14           Pledge of Credit.  Now or hereafter pledge Agent’s or any Lender’s
credit on any purchases or for any purpose whatsoever or use any portion of any
Advance in or for any business other than such Loan Party’s business as
conducted on the date of this Agreement.

Section 7.15           Amendment of Organizational
Documents.  Amend, modify or waive
any term or provision of its Organizational Documents unless required by law or
unless such amendment, modification or waiver could not reasonably be expected
to adversely affect any right or remedy of any Loan Party, Agent or any Lender,
the validity or enforceability of any Lien or the value or benefit of any
Collateral or any Other Document to Agent or any Lender.

Section 7.16           Compliance with ERISA.

(a)           (i) Maintain, or
permit any member of the Controlled Group to maintain, any Plan other than
those Plans existing on the Closing Date which are disclosed on Schedule
5.8(d); (ii) become
obligated to contribute, or permit any member of the Controlled Group to become
obligated to contribute, to any Plan that could reasonably be expected to
materially increase the contribution obligations of any Loan Party, other than
those Plans in existence on the Closing Date which are disclosed on Schedule
5.8(d); or (iii) materially expand the coverage of, or the benefits
under, any Plan as compared with that existing on the Closing Date;

(b)           engage, or permit any
member of the Controlled Group to engage, in any nonexempt “prohibited
transaction”, as that term is defined in Section 406 of ERISA and Section 4975 of the Code;

(c)           incur,
or permit any member of the Controlled Group to incur, any “accumulated funding
deficiency”, as that term is defined in Section 302 of ERISA or Section 412 of
the Code;

(d)           terminate,
or permit any member of the Controlled Group to terminate, any Plan where such
event could result in any liability of Borrower or any member of the Controlled
Group, other than liability for the payment of benefits under the Plan which
are already funded, or the imposition of a Lien on any property of Borrower or
any member of the Controlled Group pursuant to Section 4068 of ERISA;

(e)           assume,
or permit any member of the Controlled Group to assume, any obligation to
contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d);

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(f)            incur,
or permit any member of the Controlled Group to incur, any withdrawal liability
to any Multiemployer Plan;

(g)           fail
promptly to notify Agent of the occurrence of any Termination Event;

(h)           fail
to comply, or permit a member of the Controlled Group to fail to comply, in all
material respects with the requirements of ERISA or the Code or other
Applicable Laws in respect of any Plan;

(i)            fail
to meet, or permit any member of the Controlled Group to fail to meet, all
minimum funding requirements under ERISA or the Code or postpone or delay, or
allow any member of the Controlled Group to postpone or delay, beyond the time
permitted by Applicable Law, any funding requirement with respect of any Plan;

(j)            fail
to maintain, or permit any member of the Controlled Group to fail to maintain,
the qualification under Section 401(a) of the Code of any Plan which is
qualified under that Section;

(k)           fail
to make, or permit any member of the Controlled Group to fail to make, all
required contributions to any Plan in accordance with the Plan’s terms;

(l)            engage
in a transaction, or permit any member of the Controlled Group to engage in a
transaction, that could be subject to Sections 4069 or 4212(c) of ERISA; or

(m)          sponsor,
establish or maintain, or permit any Loan Party or member of the Controlled
Group to sponsor, establish or maintain, any obligation or liability with
respect to a Foreign Plan.

Section 7.17           Prepayment
of Indebtedness.  At any time,
directly or indirectly, prepay any Indebtedness for borrowed money (other than
to Lenders), or repurchase, redeem, retire or otherwise acquire any such
Indebtedness; (provided, however, the foregoing
shall not prohibit Borrower from (a) prepaying
any of the Other Senior Debt or (b) honoring the “put” of the Warrants or the securities acquired upon
exercise of the Warrants as permitted by Section 7.7(d).

Section 7.18           Subordinated Loans.  At any time, directly or indirectly,
(a) pay, prepay, repurchase, redeem, retire or otherwise acquire, or make
any payment on account of any principal of, interest on or premium payable in
connection with the repayment or redemption of any of the Put Subordinated
Notes, or (b) amend or modify any of the Subordinated Credit Documents, in
each case except as expressly permitted by the Subordination Agreement.

Section 7.19           Transfer
of Funds.  Unless otherwise approved
in writing by Agent, make any loan or advance to, make any investment in or
otherwise transfer any funds to, any Affiliate, except that Borrower may
(a) make investments ‘in Subsidiaries if and to the extent permitted by Section
7.4 and Section 7.12, (b) pay management fees and make
dividends and distributions if and to the extent permitted by Section 7.7,
(c) pay salaries or other compensation if and to the extent permitted by Section
7.20, and (d) engage in transactions to the
extent permitted by Section 7.10.

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Section 7.20           Compensation.  Pay to (a) any Limited Partner or
General Partner, (b) any Affiliate of any Limited Partner or General
Partner, or (c) any individual who is an officer, director, manager,
partner, shareholder or other owner or representative of any Limited Partner or
General Partner or any Affiliate (other than Borrower or any Subsidiary of
Borrower) thereof, any amount of compensation in any form (other than
dividends, distributions and management fees permitted to be paid in accordance
with Section 7.7(c)).

Section 7.21           Anti-Terrorism Laws.  (a) Conduct, or permit any of its
Affiliates or agents to conduct, any business or engage in any transaction or
dealing with any Blocked Person, including the making or receiving of any
contribution of funds, goods or services to or for the benefit of any Blocked
Person; (b) deal in, or otherwise engage in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order No.
13224, or permit any of its Affiliates or agents to so deal or engage in; or
(c) engage in or conspire to engage in, or permit any of its Affiliates or
agents to engage in or conspire to engage in, any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in Executive Order No. 13224, the USA Patriot Act
or any other Anti-Terrorism Law. 
Borrower shall deliver to Agent and Lenders any certification or other
evidence requested from time to time by Agent or any Lender, in its sole
discretion, conforming compliance with this Section 7.21.

Section 7.22           Other Senior Debt.  At any time, amend or modify the Other Senior
Credit Agreement or any of the Other Senior Credit Documents, in each case, except as expressly
permitted by the Intercreditor Agreement. 
Borrower further (i) agrees that, on or before six (6) months prior
to the maturity date of the Other Senior Debt, to use commercially reasonable
efforts in seeking to obtain replacement financing of the Other Senior Debt on
terms and conditions as permitted by the Intercreditor Agreement or on terms
generally available in the applicable lending market at such time (subject to
written approval thereof by Agent which shall not be unreasonably withheld) and
(ii) agrees to provide to Agent (A) a binding commitment therefor or (B)
written evidence of Senior Agent’s agreement to extend the maturity date of the
Other Senior Credit Agreement in accordance with the terms of the Intercreditor
Agreement or on terms generally available in the applicable lending market at
such time (subject to written approval thereof by Agent which shall not be
unreasonably withheld), in each case, on or before one (1) month prior to such
maturity date.

ARTICLE 8

CONDITIONS PRECEDENT

Section 8.1             Conditions to Initial Advances.  The agreement of Lenders to make the Advances
requested to be made on the Closing Date is subject to the satisfaction, or
waiver by Lenders, immediately prior to or concurrently with the making of such
Advances, of the following conditions precedent:

(a)           This
Agreement and Other Documents.  This
Agreement shall have been executed and delivered by each party hereto and all
Other Documents contemplated to be executed in connection with this Agreement
on the Closing Date shall have been executed and/or delivered by all parties
thereto, and the Loan Parties and the Limited 

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Partners shall have performed and complied with all covenants, agreements
and conditions contained herein and in the Other Documents which are required
to be performed or complied with by any one or more of the Loan Parties or the
Limited Partners on or before the Closing Date;

(b)           Notes.  Agent shall have received the Term Notes,
each such note duly executed and delivered by an authorized officer of
Borrower;

(c)           Filings,
Registrations and Recordings, etc. 
Each document (including, without limitation, any UCC financing
statement and any landlord’s, bailees’ or mortgagees’ waivers, subordinations
and/or access agreement) required by this Agreement, any Other Document or
under law or reasonably requested by Agent to be executed, filed, registered or
recorded in order to create or ensure, in favor of Agent, a perfected, second
priority security interest in or Lien (subject only to Senior Agent’s Lien) upon the Collateral (other than
the Collateral of the Foreign Subsidiaries) shall have been prepared in form
satisfactory to Agent and shall be in the possession of Agent to be filed,
registered or recorded in each jurisdiction in which the filing, registration
or recordation thereof is so required or requested;

(d)           UCC
and Lien Searches.  Agent shall have
received a complete search of the records of each filing office located in the
U.S. where a financing statement, judgment Lien, tax Lien or other Lien naming
any Loan Party, any Limited Partner as debtor must be filed to perfect Agent’s
security interest or Lien, for the benefit of Lenders, in any of the
Collateral, which searches shall be satisfactory to Agent;

(e)           Corporate
Proceedings.  Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to Agent, of the partners, managers, members, board of directors
or other similar governing body, as applicable, of each Loan Party and Limited
Partner executing this Agreement or any Other Document, in each case
authorizing (i) the execution, delivery and performance of this Agreement and
the Other Documents (as applicable), and (ii) with respect to each Loan Party
and Limited Partner, the granting by such Person of the security interests in
and Liens upon the Collateral, in each case certified by the general partner,
secretary or an assistant secretary (or similar officer) of each such Person as
of the Closing Date; and, such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate;

(f)            Incumbency
Certificates of Loan Parties.  Agent
shall have received a certificate of the general partner, secretary or an
assistant secretary (or similar officer) of each Loan Party and Limited
Partner, in each case dated the Closing Date, as to the incumbency and
signature of the officers of such Person executing this Agreement, the Other
Documents or any certificate or other documents (as applicable) to be delivered
by it pursuant hereto, together with evidence of the incumbency of such general
partner, secretary or assistant secretary;

(g)           Certificates.  Agent shall have received a copy of the
Organizational Documents of each Loan Party and Limited Partner, and all
amendments thereto, certified 

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(where possible) by the Secretary of State or other appropriate
official of such Person of its jurisdiction of incorporation or organization,
together with copies of all agreements of each such Person’s partners,
shareholders or owners certified as accurate and complete by the general
partner, secretary or assistant secretary (or similar officer) of each such
Person;

(h)           Good
Standing Certificates.  Agent shall
have received good standing certificates for each Loan Party and Limited
Partner (except Vision-Ease Asia and Vision-Ease Europe), dated not more than
30 days prior to the Closing Date, issued by the Secretary of State or other
appropriate official of such Person’s jurisdiction of incorporation or
organization and each jurisdiction where the conduct of such Person’s business
activities or the ownership of its properties necessitates qualification;

(i)            Legal
Opinions.  Agent shall have received
the executed legal opinions of Hunton & Williams LLP and/or other
counsel of each Loan Party and Limited Partner, in each case in form and
substance satisfactory to Agent, which shall cover such matters incident to the
transactions contemplated by this Agreement, the Other Documents and related
agreements as Agent may reasonably require, and each Loan Party hereby
authorizes and directs such counsel to deliver such opinions to Agent and
Lenders;

(j)            No
Litigation. (i) No litigation, investigation or proceeding before or by any
arbitrator or Governmental Body shall be continuing or threatened against any
Loan Party or Limited Partner or against the officers, directors, members or
managers of any Loan Party or Limited Partner (A) in connection with this
Agreement, the Other Documents, the Acquisition Documents, the Other Senior
Credit Documents or any of the transactions contemplated hereby or thereby and
which, in the reasonable opinion of Agent, is deemed material or (B) which
could, in the reasonable opinion of Agent, have a Material Adverse Effect; and
(ii) no injunction, writ, restraining order or other order of any nature
materially adverse to any Loan Party or the conduct of its business or
inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body;

(k)           Financial
Condition Certificates.  Agent shall
have received an executed Financial Condition Certificate in the form of
Exhibit 8.l(k), and the information contained therein shall be accurate and
complete in all material respects and there shall not exist any material
contingent obligations of Borrower or any other Loan Party except as may be
expressly identified therein;

(l)            Fees
and Expenses.  Agent shall have
received all fees and expense reimbursements payable to Agent and Lenders on or
prior to the Closing Date hereunder, including, without limitation, pursuant to
Article 3 hereof;

(m)          Pro
Forma.  Agent shall have received a
copy of Borrower’s Pro Forma Financial Statements as of the Closing Date and
such Pro Forma Financial Statements shall be reasonably satisfactory to Agent
in all respects;

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(n)           Other Senior Credit
Documents.  Agent shall have received
a true and correct copy of each of the Other Senior Credit Documents and the
transactions contemplated therein shall have been consummated in accordance
with the terms thereof and Agent, Senior Agent, PNC, Borrower, General Partner and the Subsidiaries of Borrower which
are Guarantors shall have entered into the Intercreditor Agreement which shall
be satisfactory in form and substance to Agent in its sole discretion and the
Borrower shall have received the proceeds of the Other Senior Debt pursuant to
the Other Senior Credit Agreement in an amount of not less than $4,539,909.86;

(o)           Repayment of
Indebtedness.  Agent shall have
received the Subordination Agreement executed by all parties thereto and a
payoff letter executed by the holders of the Subordinated Loans and evidence
satisfactory to Agent that, concurrently with the making of the Advances on the
Closing Date, the Subordinated Loans (other than any indebtedness evidenced by
any Put Subordinated Notes) shall have been paid in 111, all obligations of the
Loan Parties under the Subordinated Credit Documents, other than the Warrants,
the Warrant Securities (as defined in the Subordinated Credit Agreement), any
Put Subordinated Notes, the Subordination Agreement and the Subordinated Credit
Agreement to the extent (but only to the extent) such agreement relates to the
foregoing Warrants, Warrant Securities, Put Subordinated Notes and
Subordination Agreement, shall have been released, all Subordinated Credit
Documents, other than the Warrants, the Warrant Securities (as defined in the
Subordinated Credit Agreement), any Put Subordinated Notes, the Subordination
Agreement and the Subordinated Credit Agreement (but only to the extent specified above), shall have been terminated,
and all Liens securing the Subordinated Loans (other than any indebtedness
evidenced by Put Subordinated Notes) or any portion thereof shall have been
released and the Class A-2 Preferred Partnership Rights of Borrower shall have
been redeemed and paid in full;

(p)           Insurance.  Agent shall have received, in form and
substance satisfactory to Agent, certificates of insurance concerning each Loan
Party’s casualty and liability policies naming Agent, with respect to casualty
insurance policies, as loss payee, and naming Agent, with respect to each Loan
Party’s liability insurance policies, as a co-insured;

(q)           Title
Insurance.  Agent shall have received
fully paid mortgagee title insurance policies (or binding commitments to issue
title insurance policies, marked to Agent’s satisfaction to evidence the form
of such policies to be delivered with respect to each Mortgage), in standard
ALTA form, issued by a title insurance company satisfactory to Agent, each in
an amount equal to or not less than the fair market value of the Real Property
located in the U.S. and owned in fee by Borrower subject to such Mortgage,
insuring each Mortgage to create a valid Lien on the fee Real Property covered
thereby as security for the Obligations with no exceptions which Agent shall
not have approved in writing and no survey exceptions;

(r)            Environmental
Reports.  Agent shall have received
all environmental studies and reports requested by Agent prepared by
independent environmental engineering firms with respect to the Real Property;

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(s)           Payment
Instructions.  Agent shall have
received written instructions from Borrower directing the application of proceeds of the
initial Advances made pursuant to this Agreement;

(t)            Blocked
Accounts, etc.  Agent shall have
received duly executed agreements establishing the Blocked Accounts with
respect to all of the bank accounts of Borrower for the collection or servicing
of the Receivables and proceeds of the Collateral, all in form and substance
satisfactory to Agent in its sole discretion;

(u)           Consents.  Agent shall have received any and all
Consents necessary to permit the effectuation of the transactions contemplated
by this Agreement and the Other Documents, and Agent shall have received such
Consents and waivers of such third parties as might assert claims with respect
to the Collateral, as Agent and its counsel shall reasonably deem necessary;

(v)           No
Adverse Material Change.  (i) since
December 3 1, 2004, there shall not have occurred any event, condition or state
of facts which could reasonably be expected to have a Material Adverse Effect
or have a material adverse effect on the value or prospects of the properties
or assets of Borrower and its Subsidiaries taken as a whole, and (ii) no
representations made or information supplied to Agent or Lenders (including
without limitation, information supplied by Borrower in the Other Senior Credit
Documents or in connection with the transactions contemplated thereby) shall
have been proven to be inaccurate or misleading in any material respect;

(w)          Mortgage
and Other Real Property Documents. 
Agent shall have received in form and substance satisfactory to Lenders
(i) an appraisal of the fee parcel of Real Property located in or near Ramsey,
Minnesota, performed by a certified appraiser acceptable to Agent and in the
form and substance satisfactory to Agent, (ii) an executed Mortgage covering
such parcel of Real Property located in or near Ramsey, Minnesota, which
Mortgages shall evidence a second priority Lien (subject only to Senior Agent’s
Lien) on such Real Property in favor of Agent as of the Closing Date, and (iii)
a survey for such parcel of the Real Property located in or near Ramsey,
Minnesota;

(x)            Background
Searches.  Agent shall have reviewed
all books and records, trade references, accounting procedures, insurance
coverages and background searches with respect to the Loan Parties to be
reasonably satisfactory to Agent;

(y)           Closing
Certificate.  Agent shall have
received a closing certificate signed by the chief executive officer of each
Loan Party dated as of the date hereof, stating that (i) all representations
and warranties set forth in this Agreement and the Other Documents are true and
correct in all material respects on and as of such date, (ii) each Loan Party
is on such date in compliance with all the terms and provisions set forth in
this Agreement and the Other Documents and (iii) on such date no Default or
Event of Default has occurred or is continuing;

(z)            Minimum
Availability.  After giving effect to this Agreement,
the Other Documents, the Other Senior Credit Agreement and the Other Senior
Credit Documents 

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to which Borrower is a party and the transactions contemplated therein,
Borrower and its Subsidiaries shall have Undrawn Availability (as defined in the Other Senior Credit Agreement)
in an amount equal to not less than $3,000,000 on the Closing Date and Agent
shall have received satisfactory evidence thereof.

(aa)         Closing
Date Total Leverage Ratio.  After
giving effect to this Agreement, the Other Documents, the Other Senior Credit
Agreement and the Other Senior Credit Documents to which Borrower is a party
and the transactions contemplated therein, the Total Leverage Ratio shall not
exceed 3.75 to 1.

(bb)         Collateral
Examination.  Agent shall have
completed Collateral examinations and received updated appraisals, the results
and form of which shall be satisfactory in form and substance to Lenders, of
the Receivables, Equipment, Real Property and other assets of the Loan Parties
and all books and records in connection therewith, including, without
limitation, an asset-based field audit performed by examiners determined by
Agent.

(cc)         Documentation
Information Questionnaire.  Agent
shall have received a duly completed, executed and delivered Questionnaire
relating to the Loan Parties.

(dd)         Miscellaneous
Due Diligence Review.  Agent and its
counsel shall have received and reviewed, with results satisfactory to Agent
and it counsel, any and all other assurances, certificates, documents, consents
and opinions as Agent or its counsel may require.

(ee)         Employment
Agreement.  Agent shall have received
a copy of the Employment Agreement, in form and substance satisfactory to
Agent.

(ff)           Consulting
Agreement.  Agent shall have received
the Consulting Agreement, duly executed by all parties thereto;

(gg)         Other
Documents and Legal Review.  All
Other Documents shall be in form and substance reasonably satisfactory to Agent
and all legal matters relating thereto shall be reasonably satisfactory to
Agent and its counsel.

ARTICLE 9

INFORMATION AS TO LOAN PARTIES

Each Loan Party shall,
until satisfaction in full of the Obligations and the termination of this
Agreement:

Section 9.1             Disclosure of Material Matters.  Immediately upon learning thereof, report to
Agent all matters materially affecting the value, enforceability or
collectability of any portion of the Collateral, including, without limitation,
any Loan Party’s reclamation or repossession of, or the return to any Loan
Party of, a material amount of goods or claims or disputes asserted by any
Customer or other obligor.

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Section 9.2             Schedules.  If requested by Agent, deliver to Agent
concurrently with the delivery thereof to Senior Agent pursuant to the Other
Senior Credit Agreement, copies of (i) the accounts receivable agings,
inclusive of reconciliations to the general ledger, (ii) accounts payable
schedules inclusive of reconciliations to the general ledger, (iii) Inventory
reports, and (iv) the monthly Borrowing Base Certificate.  In
addition, if requested by Agent, Borrower will deliver to Agent
concurrently with the delivery thereof to Senior Agent pursuant to the Other
Senior Credit Agreement, (A) confirmatory assignment schedules, (B) copies of
Customer’s invoices, (C) evidence of shipment or delivery, and (D) such further schedules, documents
and/or information regarding the Collateral as Agent may require including,
without limitation, trial balances and test verifications.  Agent shall have the right to confirm and
verify all Receivables by any manner and through any medium it considers
advisable and do whatever it may deem reasonably necessary to protect its interests
hereunder.  The items to be provided
under this Section are to be in form satisfactory to Agent and executed by
Borrower and delivered to Agent from time to time solely for Agent’s
convenience in maintaining records of the Collateral, and Borrower’s failure to
deliver any of such items to Agent shall not affect, terminate, modify or
otherwise limit Agent’s Lien with respect to the Collateral.

Section 9.3             Environmental Reports.  Furnish Agent, concurrently with the delivery
of the financial statements referred to in Sections 9.7 and 9.8,
with a certificate signed by an executive officer of Borrower stating, to the
Knowledge of Borrower after reasonable investigation, that each Loan Party is
in compliance in all material respects with all applicable Environmental Laws.  To the extent any Loan Party is not in
compliance with the foregoing laws, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action such Loan Party
will implement in order to achieve full compliance.

Section 9.4             Litigation.  Promptly notify Agent in writing of any
litigation, suit or administrative proceeding affecting any Loan Party, whether
or not the claim is covered by insurance, and of any suit or administrative
proceeding, which in any such case could reasonably be expected to have a
Material Adverse Effect.

Section 9.5             Material
Occurrences.  Promptly notify Agent
in writing upon the occurrence of (a) any Event of Default or Default; (b) any “Event
of Default” or “Default” (in each case, as defined in the Other Senior Credit
Agreement), and promptly provide Agent with copies of any written notices with
respect thereto including, without limitation, any notice of acceleration of
all or any portion of the “Obligations” as defined in the Other Senior Credit
Agreement; (c) any event, development or circumstance whereby any financial
statements or other reports furnished to Agent fail in any material respect to
present fairly, in accordance with GAAP consistently applied, the financial
condition or operating results of any Loan Party as of the date of such
statements; (d) the receipt of any notice with respect to the potential exercise of a “put” under the Subordinated
Credit Agreement and promptly provide to Agent a copy of any such notice; (e)
any accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Code, could subject any Loan Party to a tax imposed by Section 4971 of
the Code; (f) each and every
default by any Loan Party which might result in the acceleration of the
maturity of any Indebtedness, including the names and addresses of the holders
of such Indebtedness with respect to which there is a default existing or with
respect to which the maturity has been or could be accelerated, and the amount
of such Indebtedness; and (g) any other development in the 

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business
or affairs of any Loan Party which could reasonably be expected to have a
Material Adverse Effect; in each case describing the nature thereof and the
action such Loan Party proposes to take with respect thereto.

Section 9.6             Government Receivables.  Notify Agent immediately if any of its
Receivables arise out of contracts between any Loan Party and the U.S., any
state or any department, agency or instrumentality of any of them.

Section 9.7             Annual
Financial Statements.  Furnish Agent,
within one hundred twenty (120) days after the end of each fiscal year of
Borrower, consolidated financial statements of Borrower and its consolidated
Subsidiaries, together with consolidating schedules, including, but not limited
to, statements of income and shareholders’ equity and cash flow from the
beginning of the current fiscal year to the end of such fiscal year and the
balance sheet as at the end of such fiscal year, all prepared in accordance
with GAAP applied on a basis consistent with prior practices, and in reasonable
detail and audited and reported upon without qualification by an independent
certified public accounting firm selected by Borrower and reasonably
satisfactory to Agent (the “Accountants”).  The report of the Accountants shall be
accompanied by a statement of the Accountants certifying that (a) they have
caused this Agreement to be reviewed, (b) in making the examination upon which
such report was based, either no information came to their attention which to
their knowledge constituted a Default or an Event of Default under this
Agreement or any Other Document or any related agreement or, if such
information came to their attention, specifying any such Default or Event of Default,
its nature, when it occurred and whether it is continuing, and such report
shall contain or have appended thereto calculations which set forth the Loan
Parties’ compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 6.11, 7.6, 7.8 and 7.11 hereof. 
In addition, the reports shall be accompanied by a certificate of
Borrower’s chief financial officer which shall state that, based on an
examination sufficient to permit him to make an informed statement and, to such
officer’s Knowledge after reasonable investigation, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event
of Default, its nature, when it occurred, whether it is continuing and the
steps being taken by each Loan Party with respect to such event, and such
certificate shall have appended thereto calculations which set forth the Loan
Parties’ compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 6.11, 7.6, 7.8 and 7.11 hereof.

Section 9.8             Monthly
Financial Statements.  Furnish Agent,
within 30 days after the end of each month, an unaudited balance sheet of
Borrower and its consolidated Subsidiaries and unaudited statements of income
and shareholders’ equity and cash flow of Borrower and its consolidated Subsidiaries
reflecting results of operations from the beginning of the fiscal year to the
end of such month and for such month, in each case together with consolidating
schedules and prepared on a basis consistent with prior practices and complete
and correct in all material respects, subject to normal and recurring year end
adjustments that individually and in the aggregate are not material to any Loan
Party’s business.  Such reports shall be
accompanied by a certificate of Borrower’s chief executive officer or chief
financial officer, which shall state that such reports have been prepared in
accordance with GAAP and are based on an examination sufficient to permit him
to make an informed statement and, to such officer’s Knowledge after reasonable
investigation, no Default or Event of Default exists, or, if such is not the
case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by each Loan Party with respect to
such event, and such certificate 

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shall have
appended thereto calculations which set forth the Loan Parties’ compliance with
the requirements or restrictions imposed by Sections 6.5, 6.6, 6.11,
7.6, 7.8 and 7.11 hereof and, in
addition to the foregoing, on a quarterly basis commencing with the fiscal
quarter ending March 31, 2006 and for each fiscal quarter thereafter,
concurrently with the delivery of the applicable financial information and
certificate described in this Section 9.8, furnish to Agent a management report
narrative and all exhibits thereto.

Section 9.9             Other Collateral Reporting.  If requested by Agent in writing, furnish to
Agent copies of the following concurrently with the delivery thereof to Senior
Agent pursuant to Section 9.9 of the Other Senior Credit Agreement, (i) reports
of trade accounts receivable, including but not limited to sales, collections
and credit memos, (ii) reports of existing inventory by location, (iii) current
Borrowing Base Certificate, (iv) on or before 60 days after the end of each calendar
year, a desktop appraisal of the Inventory owned by Borrower and its
Subsidiaries as of the last day of the calendar year then most recently ended,
prepared by a professional independent appraiser acceptable to Agent, and (v)
on the 30th day of June of each year, a complete Inventory appraisal of the
Inventory owned by Borrower and its Subsidiaries as of a date which is not more
than 30 days prior to such delivery date, prepared by a professional
independent appraiser acceptable to Agent.

Section 9.10           Additional Information.  Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Other Documents have been complied with by the Loan Parties,
including, without limitation and without the necessity of any request by
Agent, (a) copies of all environmental audits and reviews, (b) at least 30 days
prior thereto, notice of any Loan Party’s opening of any new office or place of
business or any Loan Party’s closing of any existing office or place of
business, (c) at least 30 days prior thereto, notice of Borrower’s creation or
acquisition of any Subsidiary, and (d) promptly upon any Loan Party’s learning
thereof, notice of any labor dispute of a material nature to which any Loan
Party may become a party, any strikes or walkouts relating to any of its plants
or other facilities, and the expiration of any labor contract to which any Loan
Party is a party or by which it is bound.

Section 9.11           Projected Operating Budget.  Furnish Agent, no later than 30 days after
the beginning of each of Borrower’s fiscal years commencing with fiscal year
ending December 3 1,2005, a month by month projected operating budget and cash
flow of Borrower and its Subsidiaries for such fiscal year (including an income
statement and balance sheet for and at the end of each month), such projections
to be accompanied by a certificate signed by the chief executive officer or
chief financial officer of Borrower to the effect that such projections have
been prepared on the basis of sound financial planning practices consistent
with past budgets and financial statements and that such officer believes that
the material assumptions on which such projections were prepared are
reasonable.

Section 9.12           [Intentionally omitted.]

Section 9.13           Notice of Suits, Adverse Events.  Furnish Agent with prompt notice of (a) any
lapse or other termination of any Consent issued to any Loan Party by any
Governmental Body or any other Person that is material to the operation of any
Loan Party’s business, (b) any refusal by any Governmental Body or any other Person to
renew or extend any such Consent, (c) 

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copies of any periodic or special reports
filed by any Loan Party with any Governmental Body or Person, if such reports
indicate any material change in the business, operations, affairs or condition
of any Loan Party, or if copies thereof are requested by Agent, and (d) copies
of any material notices and other communications from any Governmental Body or
Person which specifically relate to any Loan Party.

Section 9.14           ERISA Notices and Requests.  Furnish Agent with prompt written notice in
the event that:

(a)           any
Loan Party or any member of the Controlled Group knows or has reason to know
that a Termination Event has occurred or will occur, together with a written
statement describing such Termination Event and the action, if any, which such
Loan Party or any member of the Controlled Group has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto;

(b)           any Loan Party or any
member of the Controlled Group knows or has reason to know that a non-exempt prohibited
transaction (as defined in Section 406 of ERISA and Section 4975 of the Code) has occurred or will
occur, together with a written statement describing such transaction and the
action which any Loan Party or any member of the Controlled Group has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;

(c)           a
funding waiver request has been filed with respect to any Plan together with a
copy of such request and all communications received by any Loan Party or any
member of the Controlled Group with respect to such request;

(d)           any
change in the benefits of any existing Plan which could materially increase any
Loan Party’s or a member of the Control Group’s costs with respect thereto or
the establishment of any new Plan or the commencement of contributions to any
Plan by any Loan Party or any member of the Controlled Group to which any Loan
Party or any member of the Controlled Group was not previously contributing
shall occur;

(e)           any
Loan Party or any member of the Controlled Group shall receive a notice of
intention to terminate a Plan or to have a trustee appointed to administer a
Plan under Title IV of ERISA, together with copies of each such notice;

(f)            any
Loan Party or any member of the Controlled Group shall receive any favorable,
unfavorable or adverse determination letter from the Internal Revenue Service
regarding the qualification of a Plan under Section 401(a) of the Code,
together with copies of each such letter;

(g)           any
Loan Party or any member of the Controlled Group shall receive a notice
regarding the imposition of liability regarding a Multiemployer Plan, together
with copies of each such notice;

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(h)           any
Loan Party or any member of the Controlled Group shall fail to make a required
installment or any other required payment under Section 412 of the Code or
Section 302 of ERISA on or before the due date for such installment or payment;
and

(i)            any Loan Party or any
member of the Controlled Group knows that (i) a Multiemployer Plan has been or
will be terminated or become insolvent or involved in a reorganization, (ii)
the administrator or plan sponsor of a Multiemployer Plan intends to terminate
a Multiemployer Plan, or (iii) any Loan Party or any member of the Controlled
Group incurs any liability
(other than for negotiated employer contributions) with respect, or relating,
to a Multiemployer Plan.

Upon request, or, in the
event that such filing reflects a significant change with respect to the
matters covered thereby, furnish Agent with immediate copies of (A) each
relevant annual report (form 5500 series), including Schedule B thereto, filed
by any Loan Party or any member of the Controlled Group with the PBGC, the
Department of Labor or the Internal Revenue Service with respect to each Plan,
(B) a copy of each other relevant filing or notice filed by any Loan Party or a
member of the Controlled Group with the PBGC, the Department of Labor or the Internal
Revenue Service with respect to each Plan, and (C) copies of each relevant actuarial
report and annual report for any Plan.

Section 9.15           [Intentionally Omitted.]

Section 9.16           Documentation Information
Questionnaire.  Furnish Agent,
concurrently with the delivery of the annual financial statements referred to
in Section 9.7, a duly completed, executed and delivered Questionnaire
relating to the Loan Parties and the Limited Partners.

Section 9.17           Additional Documents.  Execute and deliver to Agent, upon request,
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement or the
Other Documents.

ARTICLE 10

EVENTS OF DEFAULT

The occurrence of any one
or more of the following events shall constitute an “Event of Default”:

Section 10.1           Any failure by Borrower to pay any
principal or interest on the Loans or other Obligations when due, whether at
maturity or by reason of acceleration pursuant to the terms of this Agreement,
by notice of intention to prepay, by required prepayment or otherwise, or (b) any failure by any Loan Party to
pay any other liabilities or make any other payment, fee or charge provided for
herein or in any Other Document within five (5) Business Days after when due;

Section 10.2           Any representation or warranty made
or deemed made by any Loan Party or Limited Partner in this Agreement or any
Other Document or related agreement or in any certificate, document or
financial or other statement furnished at any time in connection herewith 

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or therewith shall prove
to have been misleading in any material respect on the date when made or deemed
to have been made;

Section 10.3           Any failure by any Loan Party to (a)
furnish financial information in accordance with this Agreement within five (5)
Business Days after when due or when requested, or (b) permit the inspection of
its books or records in accordance with this Agreement;

Section 10.4           Any issuance of a notice of Lien
(other than a Permitted Encumbrance), levy, assessment, injunction or
attachment against a material portion of any Loan Party’s property or assets
which is not stayed or lifted within 30 days;

Section 10.5           Except as otherwise provided for in Sections
10.1 and 10.3, any failure or neglect of any Loan
Party or Limited Partner to perform, keep or observe any term, provision,
condition, covenant herein contained, or contained in any other agreement or
arrangement, now or hereafter entered into
between any Loan Party or Limited Partner and Agent or any Lender (including,
without limitation, any Other Document), except for a failure or neglect of any
Loan Party to perform, keep or observe any term, provision, condition or
covenant contained in Sections 4.6, 4.7, 4.9, 4.14, 4.15, 4.16, 4.17, 4.19, 6.1, 6.3, 6.4, 7.15, 9.1,
9.4, 9.6,  9.10, 9.13 and 9.14 hereof which is cured within 15 days from
the initial occurrence of such failure or neglect;

Section 10.6           Any judgment or judgments are
rendered, or judgment liens are filed, against any Loan Party for an amount in
excess of $500,000, for any individual judgment or lien, or $1,000,000, in the
aggregate, after deducting any amounts received from any available insurance
proceeds and indemnification obligations, for all such judgments and liens
which (a) is/are not promptly contested in good faith by appropriate
proceedings diligently conducted and reserved for adequately in amounts Agent
reasonably deems proper and necessary or (b) notwithstanding clause (a),
within 40 days of such rendering or filing and continuing thereafter, is/are
neither satisfied, stayed or discharged of record;

Section 10.7           Any Loan Party shall (a) apply for,
consent to or suffer the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (b) make a general assignment for
the benefit of creditors, (c) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (d) be adjudicated a
bankrupt or insolvent, (e) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (f) acquiesce to, or fail to
have dismissed, within 60 days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (g) take any action for the
purpose of effecting any of the foregoing;

Section 10.8           Any Loan Party shall admit in writing
its inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business;

Section 10.9           Any Affiliate or Subsidiary of any
Loan Party shall (a) apply for, consent to or suffer the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
fiduciary of itself or of all or a substantial part of its property, (b) admit
in writing its inability, or be generally unable, to pay its debts as they
become due or cease operations of its present business, (c) make a general assignment for the
benefit of creditors, (d) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in 

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effect),
(e) be adjudicated a bankrupt or insolvent, (f) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (g) acquiesce to,
or fail to have dismissed, within 60 days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (h) take any action for the
purpose of effecting any of the foregoing;

Section 10.10         Any change in the condition or affairs
(financial or otherwise) of any Loan Party which in Agent’s opinion has a
Material Adverse Effect and the expiration of at least three Business Days
after notice thereof has been given by Agent to Borrower;

Section 10.11         Any Lien created (or purported to be
created) hereunder or provided (or purported to be provided) for hereunder or
under any Other Document or related agreement for any reason ceases to be or is
not a valid and perfected Lien having a first priority interest;

Section 10.12         An event of default has occurred under
or with respect to (a) any of the Other Senior Credit Documents (including,
without limitation, the Other Senior Credit Agreement) or the Subordinated
Credit Documents (including, without limitation, the Warrants, any Put Subordinated
Note and the Subordination Agreement) or (b) any other indebtedness of any Loan
Party in an aggregate principal amount in excess of $100,000, which default
shall not have been cured or waived within any applicable grace period, or any
failure to comply with, or breach of, the Intercreditor Agreement or the Subordination Agreement as applicable;
without limiting the generality of the foregoing, the occurrence of any “Event
of Default” under Article 10 ‘of the Other Senior Credit Agreement shall constitute
an Event of Default under this Agreement;

Section 10.13         [Intentionally omitted];

Section 10.14         A default of the indebtedness,
liabilities or obligations of any Loan Party under any other agreement to which
it is a party shall occur which results in a Material Adverse Effect and which
default is not cured within any applicable grace period;

Section 10.15         Termination or breach of any Guaranty
or Guaranty Security Agreement or Other Document executed and delivered to
Agent in connection with the Obligations of any Loan Party, or if any Guarantor
attempts to terminate, challenges the validity of, or its liability under, any
such Guaranty or Guaranty Security Agreement or Other Document;

Section 10.16         Any Change of Control or Change of
Ownership shall occur (other than as may occur in connection with the sale or
other disposition of Borrower Partnership Interests approved by Agent);

Section 10.17         Any material provision of this
Agreement or any Other Document shall, for any reason, cease to be valid and
binding on any Loan Party or Limited Partner, or any Loan Party or Limited
Partner shall so claim in writing to Agent;

Section 10.18         (a) Any Governmental Body shall (i)
revoke, terminate, suspend or adversely modify any license, permit, patent
trademark or tradename of a material nature of any Loan Party, or (ii) commence proceedings to suspend,
revoke, terminate or adversely modify any such license, permit, trademark,
tradename or patent and such proceedings shall not be dismissed or discharged
within 60 days, or (iii) schedule or conduct a hearing on the renewal of any 

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license,
permit, trademark, tradename or patent necessary for the continuation of any
Loan Party’s business and the staff of such Governmental Body issues a report
recommending the termination, revocation, suspension or material, adverse
modification of such license, permit, trademark, tradename or patent, in each
case where such action could reasonably be expected to have a Material Adverse
Effect; (b) any agreement which is necessary or material to the operation of
any Loan Party’s business shall be revoked or terminated and not replaced by a
substitute acceptable to Agent within 30 days after the date of such revocation
or termination, and such revocation or termination and non-replacement could
reasonably be expected to have a Material Adverse Effect;

Section 10.19         Any portion of the Collateral shall be
seized or taken by a Governmental Body, or any Loan Party or the title or
rights of any Loan Party or Limited Partner which is the owner of any material
portion of the Collateral shall have become the subject matter of litigation
which could reasonably be expected, upon final determination, to result in
impairment or loss of the security provided by this Agreement or the Other
Documents; or

Section 10.20         Any material portion of the operations
of any of Borrower’s or any of its Subsidiaries’ manufacturing facilities are
interrupted at any time for more than five (5) consecutive Business Days unless
Borrower shall (a) be entitled to receive, for such period of interruption,
proceeds of business interruption insurance sufficient to assure that its per
diem cash needs during such period is at least equal to its average per diem
cash needs for the consecutive three month period immediately preceding the
initial date of interruption and (b) receive such proceeds in the amount
described in clause (a) preceding not later than 30 days following the
initial date of any such interruption; provided, however, that notwithstanding the provisions of clauses
(a) and (b) of this section, an Event of Default shall be deemed to
have occurred if Borrower or any of its Subsidiaries shall be receiving the
proceeds of business interruption insurance for a period of 30 consecutive days;
and

Section 10.21         An event or condition specified in Sections
7.16 or 9.14 hereof shall occur or exist with
respect to any Plan and, as a result of such event or condition, together with
all other such events or conditions, any Loan Party or any member of the
Controlled Group shall incur, or be reasonably likely to incur, a liability
which, in the reasonable judgment of Agent, could reasonably be expected to
have a Material Adverse Effect.

ARTICLE 11

RIGHTS AND REMEDIES AFTER DEFAULT

Section 11.1           Rights and Remedies.  Upon the occurrence of (a) an Event of
Default pursuant to Section 10.7, all Obligations shall be immediately
due and payable and this Agreement shall be deemed terminated, (b) any of the
other Events of Default and at any time thereafter (such default not having
previously been cured), at the option of Agent or Required Lenders, all
Obligations shall be immediately due and payable and Lenders shall have the
right to terminate this Agreement.  Upon
the occurrence of any Event of Default, Agent shall have the right, subject to
the terms of the Intercreditor Agreement, to exercise any and all other rights
and remedies provided for herein, under the UCC and at law or equity generally,
including, without limitation, the right to foreclose the security interests
granted herein and to realize upon any 

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Collateral by any available judicial
procedure and/or to take possession of and sell any or all of the Collateral
with or without judicial process.  Agent
may enter any of any Loan Party’s premises or other premises without legal
process and without incurring liability to any Loan Party therefor, and Agent
may thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as Agent may deem
advisable and Agent may require any Loan Party to make the Collateral available
to Agent at a convenient place within the continental U.S.  With or without having the Collateral at the
time or place of sale, Agent may sell the Collateral, or any part thereof, at
public or private sale, at any time or place, in one or more sales, at such
price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect.  Except as
to that part of the Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Agent shall give the applicable Loan Party reasonable notification of such sale
or sales, it being agreed that in all events written notice sent to such Loan
Party at least five (5) days prior to such sale or sales is reasonable
notification.  At any public sale Agent
or any Lender may bid for and become the purchaser, and Agent, any Lender or
any other purchaser at any such sale thereafter shall hold the Collateral sold
absolutely free from any claim or right of whatsoever kind, including any
equity of redemption and such right and equity are hereby expressly waived and
released by each Loan Party.  In
connection with the exercise of the foregoing remedies, Agent is granted
permission to use all of each Loan Party’s (i) trademarks, trade styles, trade
names, patents, patent applications, licenses, franchises and other proprietary
rights which are used in connection with Inventory for the purpose of disposing
of such Inventory and (ii) Equipment for the purpose of completing the
manufacture of unfinished goods.  The
proceeds realized from the sale of any Collateral shall be applied in the order
set forth in Section 11.5 hereof. 
If any deficiency shall arise, each Loan Party shall remain liable to
Agent and Lenders therefor.

Section 11.2           Agent’s
Discretion.  Agent shall have the
right in its sole discretion to determine which rights, Liens, security
interests or remedies Agent may at any time pursue, relinquish, subordinate or modify or to take any other action with
respect thereto and such determination will not in any way modify or affect any
of Agent’s or Lenders’ rights hereunder.

Section 11.3           Setoff.  In addition to any
other rights which Agent or any Lender may have under Applicable Law, upon the
occurrence and during the continuance of an Event of Default hereunder, Agent and such Lender shall have a right to
apply any Loan Party’s property held by Agent and such Lender to reduce the
Obligations.

Section 11.4           Rights and Remedies not Exclusive.  The enumeration of the foregoing rights and
remedies is not intended to be exhaustive and the exercise of any rights or
remedies shall not preclude the exercise of any other rights or remedies
provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.

Section 11.5           Allocation of Payments After Event
of Default.  Notwithstanding any
other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or
received by Agent on account of the Obligations or any other amounts
outstanding under any of the Other Documents or in respect of the Collateral
may, at Agent’s discretion, be paid over or delivered as follows:

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FIRST, to the payment of
all reasonable out-of-pocket costs and expenses (including without limitation,
reasonable attorneys’ fees) of Agent in connection with enforcing its rights
and the rights of Agent and/or Lenders under this Agreement and the Other
Documents and any protective advances made by Agent with respect to the
Collateral under or pursuant to the terms of this Agreement;

SECOND,
to payment of any fees
owed to Agent;

THIRD,
to the payment of all
reasonable out-of-pocket costs and expenses (including without limitation,
reasonable attorneys’ fees) of each of the Lenders in connection with enforcing
its rights under this Agreement and the Other Documents or otherwise with
respect to the Obligations owing to such Lender;

FOURTH,
to the payment of all of the Obligations consisting of accrued fees and
interest;

FIFTH,
to the payment of the
outstanding principal amount of the Obligations;

SIXTH,
to all other Obligations and other obligations which shall have become due and
payable under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and

SEVENTH,
to the payment of the surplus, if any, to whoever may be lawfully entitled to
receive such surplus.

In carrying out the
foregoing, (a) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category;
and (b) each of the Lenders shall receive an amount equal to its pro rata share
(based on the proportion that the then outstanding Advances held by such Lender
bears to the aggregate then outstanding Advances) of amounts available to be
applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above.

ARTICLE 12

WAIVERS AND JUDICIAL PROCEEDINGS

Section 12.1           Waiver of Notice.  Each Loan Party hereby waives notice of
non-payment of any of the Receivables, demand, presentment, notice of intent to
accelerate and notice of acceleration, protest and notice thereof with respect
to any and all instruments, notice of acceptance hereof, notice of loans or
advances made, credit extended, Collateral received or delivered, or any other
action taken in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein.

Section 12.2           Delay.  No delay or omission on Agent’s or any Lender’s
part in exercising any right, remedy or option shall operate as a waiver of
such or any other right, remedy or option or of any default.

Section
12.3           Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN

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CONNECTION
HEREWlTH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE, AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

ARTICLE 13

EFFECTIVE DATE AND
TERMINATION

Section 13.1           Term.  This Agreement, which shall inure to the
benefit of and shall be binding upon the respective successors and permitted
assigns of each Loan Party, Agent and each Lender, shall become effective on
the date hereof.  Lenders’ obligations to
make Advances in accordance with the terms and provisions of this Agreement
shall continue in full force and effect for the period (the “Term”)
commencing on the effective date of this Agreement and ending on the earlier of
(i) December 1, 2011 or (ii)
the date this Agreement is terminated as herein provided.

Section 13.2           Termination.  The termination of this Agreement shall not
affect any Loan Party’s, Agent’s or any Lender’s rights, or any of the
Obligations, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
have been fully disposed of, concluded or liquidated.  Without limiting the generality of the
foregoing, the security interests, Liens and rights granted to Agent and
Lenders hereunder and the financing statements filed hereunder shall continue
in full force and effect,
until all of the Obligations have been paid or performed in full after the
termination of this Agreement. 
Accordingly, each Loan Party waives any rights which it may have under the UCC to demand the filing
of termination statements with respect to the Collateral, and Agent shall not
be required to send such termination statements to any Loan Party, or to file
them with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations indefeasibly paid
in full in immediately available funds. 
All representations, warranties, covenants, waivers and agreements
contained herein shall survive such termination hereof until all Obligations
are indefeasibly paid or performed in full.

ARTICLE 14

REGARDING AGENT

Section 14.1           Appointment.  Each Lender hereby designates ORIX to act as
Agent for such Lender under this Agreement and the Other Documents.  Each Lender hereby irrevocably authorizes
Agent to take such action on its behalf under the provisions of this Agreement
and the 

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Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto and Agent shall hold all
Collateral, payments of principal and interest, fees, charges and collections
(without giving effect to any collection days) received pursuant to this
Agreement, for the ratable benefit of Lenders. 
Agent may perform any of its duties hereunder by or through its agents
or employees.  As to any matters not
expressly provided for by this Agreement (including without limitation,
collection of the Notes) Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding; provided,
however, that Agent shall not be required to take any action which
exposes Agent to liability or which is contrary to this Agreement or the Other
Documents or Applicable Law unless Agent is furnished with an indemnification
reasonably satisfactory to Agent with respect thereto.

Section 14.2           Nature of Duties.  Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents.  Neither Agent nor any
of its officers, directors, employees or agents shall be (a) liable for any
action taken or omitted by them as such hereunder or in connection herewith, unless
caused by their gross (not mere) negligence or willful misconduct, or (b)
responsible in any manner for any recitals, statements, representations or
warranties made by any Loan Party or Limited Partner or any officer thereof
contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or any of
the Other Documents or for the value, validity, effectiveness, genuineness, due
execution, enforceability or sufficiency of this Agreement, or any of the Other
Documents or for any failure of any Loan Party or Limited Partner to perform
its obligations hereunder or under any Other Document.  Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any of
the Other Documents, or to inspect the properties, books or records of any Loan
Party or any Limited Partner.  The duties
of Agent as respects the Advances to Borrower shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship with respect to any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement except as
expressly set forth herein.

Section 14.3           Lack
of Reliance on Agent and Resignation. 
Independently and without reliance upon Agent or any other Lender, each
Lender has made and shall continue to make (a) its own independent
investigation of the financial condition and affairs of each Loan Party and
Limited Partner in connection
with the making any Advances hereunder and the taking or not taking of any
action in connection herewith, and (b) its
own appraisal of the creditworthiness of each Loan Party and Limited
Partner.  Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before making of the Advances or at any time or
times thereafter except as shall be provided by any Loan Party pursuant to the
terms hereof.  Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement 

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delivered
in connection with or for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any Other
Document, or of the financial condition of any Loan Party or Limited Partner,
or be required to make any inquiry concerning either the performance or
observance of any of the term, provisions or conditions of this Agreement, the
Notes, the Other Documents or the financial condition of any Loan Party or
Limited Partner, or the existence of any Event of Default or any Default.

Agent may resign on 60
days’ written notice to each of Lenders and Borrower and, upon such
resignation, the Required Lenders will promptly designate a successor Agent,
which successor Agent shall be reasonably satisfactory to Borrower if (but only
if) no Default then exists.

Any such successor Agent
shall succeed to the rights, powers and duties of Agent, and the term “Agent”
shall mean such successor agent effective upon its appointment, and the former
Agent’s rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent.  After any Agent’s resignation as Agent, the
provisions of this Article 14 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

Section 14.4           Certain Rights of Agent.  If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled
to refrain from such act or taking such action unless and until Agent shall
have received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining.  Without limiting the foregoing, Lenders shall
not have any right of action whatsoever against Agent as a result of its acting
or refraining from acting hereunder in accordance with the instructions of the
Required Lenders.

Section 14.5           Reliance.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity,
and, with respect to all legal matters pertaining to this Agreement and the
Other Documents and its duties hereunder, upon advice of counsel selected by
it.  Agent may employ agents and
attorneys-in-fact and shall not be liable for the default or misconduct of any
such agents or attorneys-in-fact selected by Agent with reasonable care.

Section 14.6           Notice
of Default.  Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder or under the Other Documents, unless Agent has received
notice from a Lender or Borrower referring to this Agreement or the Other
Documents, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the event that Agent receives such a
notice, Agent shall give notice thereof to Lenders.  Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided, however, that, unless and until Agent
shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of Lenders.

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Section 14.7           Indemnification.  To the extent Agent is not reimbursed and
indemnified by Borrower, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of its Commitment Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Agent in performing its duties hereunder, or in any way relating to or arising
out of this Agreement or any Other Document; provided that, Lenders shall not
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent’s gross (not mere) negligence or willful misconduct.

Section 14.8           Agent in its Individual Capacity.  With respect to the obligation of Agent to
lend under this Agreement, the Advances made by it shall have the same rights
and powers hereunder as any other Lender and as if it were not performing the
duties as Agent specified herein; and the term “Lender” or any similar term
shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender.  Agent
may engage in business with any Loan Party or Limited Partner as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Loan Party or Limited Partner for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.

Section 14.9           Delivery
of Documents.  To the extent Agent
receives financial statements required under Sections 9.7, 9.8, 9.11
or 9.12, from Borrower pursuant to the terms
of this Agreement, Agent will
promptly furnish such documents and information to Lenders.

Section 14.10         Borrower’s Undertaking to Agent.  Without prejudice to its obligations to
Lenders under the other provisions of this Agreement, Borrower hereby
undertakes with Agent to pay to Agent from time to time on demand all amounts
from time to time due and payable by Borrower for the account of Agent or
Lenders or any of them pursuant to this Agreement to the extent not already
paid.  Any payment made pursuant to any
such demand shall pro tanto satisfy Borrower’s obligations to make payments for
the account of Lenders or the relevant one or more of them pursuant to this
Agreement.

Section 14.11         No Reliance on Agent’s Customer
Identification Program.  Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates,
participants or assignees, may rely on the Agent to carry out such Lender’s or
its Affiliate’s, participant’s or assignee’s customer identification program,
or other obligations required or imposed under,or pursuant to the USA Patriot
Act or the regulations thereunder, including the regulations contained in 31
CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”),
or any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties,
their Affiliates or their agents, this Agreement or the Other Documents or the
transactions hereunder or contemplated hereby: (a) any identity verification
procedures, (b) any recordkeeping, (c) comparisons with government lists, (d)
customer notices or (e) other procedures required under the CIP Regulations or
such other laws.

Section 14.12         Certifications
from Banks and Participants regarding USA Patriot Act.  Each Lender or assignee or participant of a
Lender that is not incorporated under the laws of the U.S. or a state thereof
(and is not excepted from the certification requirement contained in 

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Section 313 of the USA Patriot Act and the
applicable regulations because it is both (a) an affiliate of a depository
institution or foreign bank that maintains a physical presence in the U.S.  or foreign county, and (b) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to Agent the certification, or, if
applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA Patriot Act
and the applicable
regulations: (i) within 10 days after the Closing Date, and (ii) at such other
times as are required under the USA Patriot Act.

ARTICLE 15

MISCELLANEOUS

Section 15.1           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas applied to
contracts to be performed wholly within the State of Texas.  Any judicial proceeding brought by or against
Borrower or any other Loan Party with respect to any of the Obligations, this
Agreement, the Other Documents or any related agreement may be brought in any
court of competent jurisdiction referred to in the last sentence of this
Section below, and, by execution and delivery of this Agreement, each Loan
Party accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of such courts, and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement.  Each Loan Party hereby waives
personal service of any and all process upon it and consents that all such
service of process may be made by registered mail (return receipt requested) directed
to it at its address set forth in Section 15.6 and service so made shall
be deemed completed five (5) days after the same shall have been so deposited
in the mails of the U.S.  Nothing herein
shall affect the right to serve process in any manner permitted by law.  Each of Loan Party, Agent and Lenders waives
any objection to jurisdiction and venue of any action instituted hereunder in
any court referred to in the last sentence of this Section, and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  Each Loan Party waives the
right to remove any judicial proceeding brought against it in any state court
to any federal court.  Any judicial
proceeding by any Loan Party against Agent or any Lender, or by Agent or any
Lender against any Loan Party, involving, directly or indirectly, any matter or
claim in any way arising out of, related to or connected with this Agreement or
any related agreement, shall be brought only in the courts of (a) the State of Texas
sitting in Dallas, Texas, or the U.S. for the Northern District (Dallas
Division) of the State of Texas or (b)
the State of New York sitting in New York, New York, or the U.S.  for the Southern District of the State of New
York.

Section 15.2           Entire Understanding.

(a)           This
Agreement and the Other Documents are intended by each Loan Party, Agent and
Lenders to be the final, complete and exclusive expression of the agreements
between and/or among them.  This
Agreement and the Other Documents supersede any and all prior oral or written
agreements relating to the subject matter hereof and thereof.

(b)           THIS
WRITTEN AGREEMENT AND THE OTHER DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
AND AMONG THE PARTIES 

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AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

(c)           Neither
this Agreement nor any portion or provisions hereof may be changed, modified,
amended, waived, supplemented, discharged, cancelled or terminated orally or by
any course of dealing, or in any manner other than by an agreement in writing,
signed by the party to be charged.  Each
Loan Party acknowledges that it has been advised by counsel in connection with
the execution of this Agreement and Other Documents and is not relying upon
oral representations or statements inconsistent with the terms and provisions
of this Agreement.

(d)           The
Required Lenders, Agent and Borrower may, subject to the provisions of this Section
15.2 (b), from time to time enter into written supplemental agreements to
this Agreement or the Other Documents for the purpose of adding or deleting any
provisions or otherwise changing, varying or waiving in any manner the rights
of Lenders, Agent, Borrower or any other Loan Party thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that no such supplemental agreement shall, without the
consent of all Lenders:

(i)            increase
the Commitment Percentage of any Lender, the maximum dollar commitment of any
Lender, or the Term Loans Amount; or

(ii)           extend
the maturity of any Loan or Note or the due date for any amount payable
hereunder, or decrease the rate of interest or reduce any fee payable by
Borrower to Lenders pursuant to this Agreement; or

(iii)          alter
the definition of the term Required Lenders or alter, amend or modify this Section
15.2(b); or

(iv)          release
any Collateral during any calendar year (other than in accordance with the
provisions of this Agreement) having an aggregate value in excess of $250,000;
or

(v)           change
the rights and duties of Agent; or

(vi)          release
any Guarantor.

Any such supplemental
agreement shall apply equally to each Lender and shall be binding upon each
Loan Party, Lenders and Agent and all future holders of the Obligations.  In the case of any waiver, each Loan Party,
Agent and Lenders shall be restored to their former positions and rights, and
any Event of Default waived shall be deemed to be cured and not continuing, but
no waiver of a specific Event of Default shall extend to any subsequent Event
of Default (whether or not the subsequent Event of Default is the same as the
Event of Default which was waived), or impair any right consequent thereon.

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In
the event that Agent requests the consent of a Lender pursuant to this Section
15.2 and such Lender shall not respond or reply to Agent in writing within
five (5) days of delivery of such request, such Lender shall be deemed to have
consented to the matter that was the subject of the request.  In the event that Agent requests the consent
of a Lender pursuant to this Section 15.2 and such consent is denied,
then ORIX may, at its option, require such Lender to assign its interest in the
Advances to ORM or to another Lender or to any other Person designated by Agent
(the “Designated Lender”), for a price equal to the then outstanding
principal amount thereof plus accrued and unpaid interest and fees due such
Lender, which interest and fees shall be paid when collected from Borrower or
any other Loan Party.  In the event ORIX
elects to require any Lender to assign its interest to ORIX or to the
Designated Lender, ORIX will so notify such Lender in writing within 45 days
following such Lender’s denial, and such Lender will assign its interest to
ORIX or the Designated Lender no later than five (5) days following receipt of
such notice pursuant to a Commitment Transfer Supplement executed by such
Lender, ORIX or the Designated Lender, as appropriate, and Agent.

Section 15.3           Successors and Assigns;
Participations; New Lenders.

(a)           This
Agreement shall be binding upon and inure to the benefit of Borrower, Agent,
each Lender, all future holders of the Obligations and their respective
successors and assigns, except that neither Borrower nor any other Loan Party
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of Agent and each Lender.

(b)           Each
Loan Party acknowledges that in the regular course of commercial banking
business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other financial institutions (each
such transferee or purchaser of a participating interest, a “Transferee”).  Each Transferee may exercise all rights of
payment (including without limitation rights of set-off) with respect to the
portion of such Advances held by it or other Obligations payable hereunder as
fully as if such Transferee were the direct holder thereof, provided that
Borrower shall not be required to pay to any Transferee more than the amount
which it would have been required to pay to Lender which granted an interest in
its Advances or other Obligations payable hereunder to such Transferee had such
Lender retained such interest in the Advances hereunder or other Obligations
payable hereunder and in no event shall Borrower be required to pay any such
amount arising from the same circumstances and with respect to the same Advances
or other Obligations payable hereunder to both such Lender and such
Transferee.  Borrower hereby grants to
any Transferee a continuing security interest in any deposits, moneys or other
property actually or constructively held by such Transferee as security for the
Transferee’s interest in the Advances.

(c)           Any
Lender may, with the consent of Agent and, if (but only if) no Default has then
occurred and is continuing, with the consent of Borrower, which consent, in
each case, shall not be unreasonably withheld or delayed, sell, assign or
transfer all or any part of its rights under this Agreement and the Other
Documents to one or more additional banks or financial institutions and one or
more additional banks or financial institutions may commit to make Advances
hereunder (each a “Purchasing Lender”), in minimum amounts of not less
than $1,000,000 pursuant to a Commitment Transfer 

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Supplement, executed by a Purchasing Lender, the transferor Lender and
Agent and delivered to Agent for recording. 
Upon such execution, delivery, acceptance and recording, from and after
the transfer effective date determined pursuant to such Commitment Transfer
Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Commitment Percentage as set forth
therein, and (ii) the transferor Lender thereunder shall, to the extent
provided in such Commitment Transfer Supplement, be released from its obligations
under this Agreement, the Commitment Transfer Supplement creating a novation
for that purpose.  Such Commitment
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Lender
and the resulting adjustment of the Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other Documents.  Borrower hereby consents, upon the addition
of such Purchasing Lender, to the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. 
Borrower shall execute and deliver such further documents and do such
further acts and things in order to effectuate the foregoing.

(d)           Agent shall maintain at
its address a copy of each Commitment Transfer Supplement delivered to it and a
register (the “Register”) for the recordation of the names and addresses
of each Lender and the outstanding principal, accrued and unpaid interest and
other fees due hereunder.  The entries in the Register shall be conclusive,
in the absence of manifest error, and each Loan Party, Agent and Lenders may
treat each Person whose name is recorded in the Register as the owner of the
Advance recorded therein for the purposes of this Agreement.  The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.  Agent
shall receive a fee in the amount of $3,500 payable by the applicable
Purchasing Lender upon the effective date of each transfer or assignment to
such Purchasing Lender.

(e)           Each
Loan Party authorizes each Lender to disclose to any Transferee or Purchasing
Lender and any prospective Transferee or Purchasing Lender any and all
financial information in such Lender’s possession concerning any Loan Party or
Limited Partner which has been delivered to such Lender by or on behalf of any
Loan Party or Limited Partner pursuant to this Agreement or any Other Document
or in connection with such Lender’s credit evaluation of any Loan Party or
Limited Partner.

Section 15.4           Application of Payments.  Agent shall have the continuing and exclusive
right to apply or reverse and re-apply any payment and any and all proceeds of
Collateral to any portion of the Obligations in accordance with the terms of
this Agreement.  To the extent that any
Loan Party or Limited Partner makes a payment or Agent or any Lender receives
any payment or proceeds of the Collateral for any Loan Party’s or Limited
Partner’s benefit, which are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part 

 90
 

 

thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Agent or such Lender.

Section 15.5           Indemnity.  Each Loan Party shall indemnify Agent, each
Lender and each of their respective officers, directors, Affiliates, attorneys,
employees and agents from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
fees and disbursements of counsel) which may be imposed on, incurred by or
asserted against Agent or any Lender in any litigation, proceeding or
investigation instituted or conducted by any governmental agency or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Agent or any Lender is a party
thereto, EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING ARISES OUT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY BEING INDEMNIFIED.

Section 15.6           Notice.  Any notice or request hereunder may be given
to any Loan Party or to Agent or any Lender at their respective addresses set
forth below or at such other address as may hereafter be specified in a notice
designated as a notice of change of address under this Section.  Any notice, request, demand, direction or
other communication (for purposes of this Section 15.6 only, a “Notice”)
to be given to or made upon any party hereto under any provision of this
Agreement shall be given or made by telephone or in writing (which includes by
means of electronic transmission (i.e., “e-mail”) or facsimile transmission or
by setting forth such Notice on a site on the World Wide Web (a “Website
Posting”) if Notice of such Website Posting (including the information
necessary to access such site) has previously been delivered to the applicable
parties hereto by another means set forth in this Section 15.6) in
accordance with this Section 15.6. 
Any such Notice must be delivered to each applicable party hereto at the
addresses or numbers set forth under its name in this Section 15.6 or in
accordance with any subsequent unrevoked Notice from any such party that is
given in accordance with this Section 15.6.  Any Notice shall be effective:

(a)           In
the case of hand-delivery, when delivered;

(b)           If
given by mail, four (4) days after such Notice is deposited with the United
States Postal Service, with first-class postage prepaid, return receipt
requested;

(c)           In
the case of a telephonic Notice, when a party is contacted by telephone, if
delivery of such telephonic Notice is confirmed no later than the next Business
Day by hand delivery, a facsimile or electronic transmission, a Website Posting
or an overnight courier delivery of a confirmatory Notice (received at or
before noon on such next Business Day);

(d)           In
the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;

(e)           In
the case of electronic transmission, when actually received;

 91
 

 

(f)            In
the case of a Website Posting, upon delivery of a Notice of such posting
(including the information necessary to access such site) by another means set
forth in this Section 15.6; and

(g)           If
given by any other means (including by overnight courier), when actually
received.

Any
Lender giving a Notice to any Loan Party shall concurrently send a copy thereof
to Agent, and Agent shall promptly notify the other Lenders of its receipt of
such Notice.

(i)            If
to Agent or ORIX:

	
  

  	
  ORIX USA Corporation

  
	
   

  	
  171 7 Main
  Street, Suite 900

  
	
   

  	
  Dallas, Texas
  75201

  
	
   

  	
  Attn:

  	
  Ann Erickson Operations Manager

  
	
   

  	
   

  	
  Corporate Finance Group

  
	
   

  	
  Telephone: (214)
  237-2366

  
	
   

  	
  Telecopier: (2
  14) 237-2352

  
	
   

  	
  Email:
  aerickson@orix.com

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Patton Boggs LLP

  
	
   

  	
  2001 Ross
  Avenue, Suite 3000

  
	
   

  	
  Dallas, Texas
  75201

  
	
   

  	
  Attn: James L.
  Baker, Esq.

  
	
   

  	
  Telephone: (214)
  758-1512

  
	
   

  	
  Telecopier:
  (214) 758-1550

  
	
   

  	
  Email:
  jbaker@pattonboggs.com

  
				

 

(ii)           If
to a Lender other than Agent, at its address, etc., as specified on the
signature pages hereof or in any Commitment Transfer Supplement to which it is
a party.

(iii)          If
to Borrower or any other Loan Party:

 92
 

 

 

	
   

  	
  Insight Equity A.P. X, LP

  
	
   

  	
  (or, in the case
  of a Loan Party other than

  
	
   

  	
  Borrower, to
  such Loan Party

  
	
   

  	
  c/o Insight
  Equity A.P. X, LP)

  
	
   

  	
  1400 Civic
  Place, Suite 250

  
	
   

  	
  Southlake, Texas
  76092

  
	
   

  	
  Attn: Theodore
  W. Beneski

  
	
   

  	
  Telephone:
  817-488-7744

  
	
   

  	
  Facsimile:
  817-488-7739

  
	
   

  	
  Email:
  tbeneski@insightequity.com

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Insight Equity A.P. X, LP

  
	
   

  	
  (or, in the case
  of a Loan Party other than

  
	
   

  	
  Borrower, to
  such Loan Party

  
	
   

  	
  c/o Insight
  Equity A.P. X, LP)

  
	
   

  	
  7000 Sunwood
  Drive NW

  
	
   

  	
  Ramsey,
  Minnesota 55303

  
	
   

  	
  Attn: Rich Faber

  
	
   

  	
  Telephone:
  763-506-9027

  
	
   

  	
  Facsimile:
  763-506-9222

  
	
   

  	
  Email:
  rich.faber@vision-ease.com

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Hunton & Williams LLP

  
	
   

  	
  Energy Plaza, 30th Floor

  
	
   

  	
  1601 Bryan
  Street

  
	
   

  	
  Dallas, Texas
  75201-3402

  
	
   

  	
  Attn: Robert J.
  Conner

  
	
   

  	
  Telephone:
  214-979-3085

  
	
   

  	
  Facsimile:
  214-880-0011

  
	
   

  	
  Email:
  rconner@hunton.com

  

 

Section 15.7           Survival.  The obligations of Loan Parties under Sections
2.2(b), 3.7, 3.8, 3.9, 4.19(h), 14.7 and
15.5 shall survive termination of this
Agreement and the Other Documents and payment in full of the Obligations.

Section 15.8           Severability.  If any part of this Agreement is contrary to,
prohibited by or deemed invalid under Applicable Laws or applicable
regulations, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not
be invalidated thereby and shall be given effect so far as possible.

Section 15.9           Expenses.  All reasonable costs and expenses of Agent or
(subject to the limitations below) any Lender paid or incurred in any way in
connection with this Agreement or the Other Documents or any of the
transactions contemplated hereby or thereby, including, without limitation,
reasonable attorneys’ fees (including the allocated costs of in house counsel)
and disbursements incurred by Agent on its behalf or on behalf of Lenders or
incurred by other Lenders for one law firm retained by such other Lenders
(which law fm shall be appointed with 

 93
 

 

the approval of the Required Lenders) (a) in
all efforts made to enforce payment of any Obligation or effect collection of
any Collateral, or (b)
in connection with the
entering into, or modification, amendment, administration and/or enforcement
of, this Agreement or any Other Document or any rights or remedies or consents
or waivers hereunder or thereunder and all related agreements, documents and
instruments, or (c) in instituting, maintaining, preserving, enforcing and
foreclosing on Agent’s security interest in or Lien on any of the Collateral,
whether through judicial proceedings or otherwise, or (d) in defending or
prosecuting any actions or proceedings arising out of or relating to Agent’s or
any Lender’s transactions with any Loan Party or Limited Partner, or (e) in
connection with any advice given to Agent or any Lender with respect to its
rights, remedies, duties or obligations under this Agreement and all related
agreements, may be charged to Borrower’s Account and shall be part of the
Obligations and shall be payable on demand by Agent.

Section 15.10         Injunctive Relief.  Each Loan Party recognizes that, in the event
any Loan Party fails to perform, observe or discharge any of its Indebtedness,
obligations or liabilities under this Agreement or any Other Document, any
remedy at law may prove to be inadequate relief to Lenders; therefore, Agent,
if Agent so requests, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving that actual damages
are not an adequate remedy.

Section 15.11         Consequential Damages.  Neither Agent nor any Lender, nor any agent
or attorney for any of them, shall be liable to any Loan Party or any Limited
Partner for consequential, special, incidental or any similar damages arising
from any breach of contract, tort or other wrong relating to the establishment,
administration or collection of the Obligations.

Section 15.12         Captions.  The captions and headings at various places
in this Agreement are intended for convenience only and do not constitute and
shall not be interpreted as part of this Agreement.

Section 15.13         Counterparts; Facsimile Signatures.  This Agreement may be executed in any number
of and by different parties hereto on separate counterparts, all of which, when
so executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. 
Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.

Section 15.14         Construction.  The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits thereto.

Section 15.15         Confidentiality; Sharing Information.

(a)           Agent, each Lender and
each Transferee shall hold all non-public information obtained by Agent, such
Lender or such Transferee pursuant to the requirements of this Agreement in
accordance with Agent’s, such Lender’s and such Transferee’s customary
procedures for handling confidential information of this nature; provided,
however, Agent, each Lender and each Transferee may disclose such 

 94
 

 

confidential information (i) to its examiners, affiliates, outside
auditors, counsel and other professional advisors, (ii) to Agent, any Lender or
to any prospective Transferees and Purchasing Lenders, and (iii) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided.  Further,
however, that (A) unless specifically prohibited by Applicable Law or court
order, Agent, each Lender and each Transferee shall use its best efforts, prior
to disclosure thereof, to notify Borrower of the applicable request for
disclosure of such non-public information (1) by a Governmental Body or
representative thereof (other than any such request in connection with an
examination of the financial condition of a Lender or a Transferee by such
Governmental Body) or
(2) pursuant to legal process and (B) in no event shall Agent, any Lender or
any Transferee be obligated to return any materials furnished by any Loan Party
or Limited Partner other than those documents and instruments in possession of
Agent or any Lender in order to perfect its Lien on the Collateral once the
Obligations have been paid in full and this Agreement has been terminated.

(b)           Each
Loan Party acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to any Loan Party or one
or more of its Affiliates (in connection with this Agreement or otherwise) by
any Lender or by one or more Subsidiaries or Affiliates of such Lender, and each
Loan Party hereby authorizes each Lender to share any information delivered to
such Lender by any Loan Party or Limited Partner pursuant to this Agreement, or
in connection with the decision of such Lender to enter into this Agreement, to
any such Subsidiary or Affiliate of such Lender, it being understood that any
such Subsidiary or Affiliate of any Lender receiving such information shall be
bound by the provisions of this Section 15.15 as if it were a Lender hereunder.  Such authorization shall survive the
repayment of the other Obligations and the termination of the Loan Agreement.

Section 15.16         Publicity.  Each Loan Party and each Lender hereby
authorizes Agent to make appropriate announcements of the financial arrangement
entered into among Loan Parties, Agent and Lenders, including, without
limitation, announcements which are commonly known as tombstones, in such
publications and to such selected parties as Agent shall in its sole and
absolute discretion deem appropriate.

Section 15.17         Subordination Agreement and
Intercreditor Agreement.

(a)           Agent
hereby acknowledges and agrees that the liens and security interests granted to
Agent and/or Lenders pursuant to the terms of this Agreement are subject to,
and junior and subordinate to Senior Agent to the extent set forth in, the
Intercreditor Agreement.

(b)           Each
of the Lenders hereby (i) consents to Agent’s execution, delivery and
performance of the Subordination Agreement and the Intercreditor Agreement for
and on behalf of Agent and Lenders and (ii) acknowledges and agrees that it is
bound by all terms and provisions of the Subordination Agreement and the
Intercreditor Agreement as if it were a signatory thereto and that each of the
Subordination Agreement and the Intercreditor Agreement constitutes valid and
enforceable obligations of such Lender enforceable against it in accordance
with the terms thereof (except as such enforceability 

 95
 

 

may be limited by any applicable bankruptcy, insolvency, moratorium or
similar laws affecting creditor’s rights generally).

[Remainder of page intentionally left blank]

 96
 

 

 

Each of the parties has
signed this Agreement as of the day and year first above written.

	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  INSIGHT EQUITY A.P. X, LP

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Insight Equity A.P. X Company, LLC

  
	
   

  	
   

  	
  Title: General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W.
  Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On the 1st day of
December, 2005, before
me personally came Ted W. Beneski, to me known, who being by me duly sworn, did
depose and say that he is the Chairman of the Board of Insight Equity A.P. X
Company, LLC, a limited liability company which is the general partner of
Insight Equity A.P. X, LP which is
the limited partnership described in and which executed the foregoing
agreement, and that he signed his name thereto as the act and deed of such
limited liability company in its capacity as general partner, and for and on
behalf, of Insight Equity A.P. X, LP by order of the Managers of such limited
liability company.

	
  

  	
  /s/ Linda G.
  McKie

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Linda G. McKie

  
	
   

  	
  Commission
  Expires: Feb. 4, 2009

  

 

 97
 

 

 

	
  

  	
  SUBSIDIARIES:

  
	
   

  	
   

  
	
   

  	
  INSIGHT EQUITY A.P. X,
  ASIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On
the 1st day of December, 2005, before me personally came Ted W. Beneski to me known, who being by me duly
sworn, did depose and say that he is the Chairman of the Board of INSIGHT
EQUITY A.P. X ASIA, LLC, the entity described in and which executed the
foregoing agreement, and that he signed his name thereto as the act and deed of
such entity by order of the sole Member of such entity.

	
  

  	
  /s/ Linda G.
  McKie

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Linda G. McKie

  
	
   

  	
  Commission
  Expires: Feb. 4, 2009

  

 

 98
 

 

 

	
  

  	
  PT. VISION-EASE ASIA:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: President Commissioner

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On the 1st day
of December, 2005, before
me personally came Ted W. Beneski to me known, who being by me duly sworn, did
depose and say that he is the President Commissioner of PT. VISION-EASE ASIA, the entity described in
and which executed the foregoing agreement, and that he signed his name thereto
as the act and deed of such entity by order of the board of commissioners,
board of directors and shareholders of such entity.

	
  

  	
  /s/ Linda G.
  McKie

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Linda G. McKie

  
	
   

  	
  Commission
  Expires: Feb. 4, 2009

  

 

 99
 

 

 

	
  

  	
  INSIGHT EQUITY A.P. X CANADA, LLC:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: President Commissioner

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On the 1st day
of December, 2005, before me personally came Ted W. Beneski to me known, who being by
me duly sworn, did depose and say that he is the Chairman of the Board of
INSIGHT EQUITY A.P. X CANADA, LLC, the entity described in and which executed
the foregoing agreement, and that he signed his name thereto as the act and
deed of such entity by order of the sole Member of such entity.

	
  

  	
  /s/ Linda G.
  McKie

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Linda G. McKie

  
	
   

  	
  Commission
  Expires: Feb. 4, 2009

  

 

 100
 

 

 

	
  

  	
  INSIGHT EQUITY A.P. X CANADA

  
	
   

  	
  PARTNERS, LP:

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Insight Equity A.P. X Company, LLC

  
	
   

  	
   

  	
  Title: General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On
the 1st day of December, 2005, before me personally came Ted W. Beneski to me known, who being by me duly sworn, did depose and say
that he is the Chairman of the Board of the limited liability company which is
the general partner of INSIGHT EQUITY A.P. X CANADA PARTNERS, LP, the entity
described in and which executed the foregoing agreement, and that he signed his
name thereto as the act and deed of such limited liability company in its
capacity as general partner, and for and on behalf, of Insight Equity A.P. X
Canada Partners, LP by order of the sole Member of such limited liability
company.  

	
  

  	
  /s/ Helen
  Stephen Huebert

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Helen Stephen Huebert

  
	
   

  	
  Commission
  Expires: 2-19-06

  

 

 101
 

 

 

	
  

  	
  VISION-EASE CANADA CO.:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
  Name:

  	
  Ted
  W. Beneski

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman of the
  Board

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
									

 

On the 1st day of December, 2005, before me personally came Ted W. Beneski to me known, who being by me duly sworn,
did depose and say that he/she is the Chairman of the Board of VISION-EASE
CANADA CO., the entity described in and which executed the foregoing agreement,
and that he/she signed his/her name thereto as the act and deed of such entity
by order of the directors of such entity.

	
  

  	
  /s/ Helen
  Stephen Huebert

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Helen Stephen Huebert

  
	
   

  	
  Commission
  Expires: 2-19-06

  

 

 102
 

 

 

	
  

  	
  VISION EASE LENS EUROPE 

  
	
   

  	
  LIMITED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Faber

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Richard G. Faber

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
  STATE OF
  MINNESOTA

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DAKOTA

  	
  )

  	
   

  
									

 

On
the 1st day of December,
2005, before me personally came Richard G. Faber to me known, who being known by me duly sworn, did depose and say that he/she is the Director of VISION EASE LENS EUROPE LIMITED, the
entity described in and which executed the forgoing agreement, and that he/she signed
his/her name thereto as the
act and deed of such entity by order of the board of directors of such
entity.

	
  

  	
  /s/ DiAnn D.
  Johnson

  
	
   

  	
  Notary Public in
  and for the State of Minnesota

  
	
   

  	
  Printed Name of
  Notary: DiAnn D. Johnson

  
	
   

  	
  Commission
  Expires: Jan. 31, 2010

  

 

 103
 

 

 

	
  

  	
  VISION-EASE LENS LIMITED:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Faber

  	
   

  
	
   

  	
  Name:

  	
  Richard
  G. Faber

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF
  MINNESOTA

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DAKOTA

  	
  )

  	
   

  
									

 

On the 1st day
of December, 2005, before
me personally came Richard G. Faber to me known, who being by me
duly sworn, did depose and my that he/she is the Director of VISION-EASE LENS LIMITED, the entity
described in and which executed the foregoing agreement, and that he/she signed his/her
name thereto as the act and deed of such
entity by order of the board of
directors of such entity.

	
  

  	
  /s/ DiAnn D.
  Johnson

  
	
   

  	
  Notary Public in
  and for the State of Minnesota

  
	
   

  	
  Printed Name of
  Notary: DiAnn D. Johnson

  
	
   

  	
  Commission
  Expires: Jan. 31, 2010

  

 

 104
 

 

 

	
  

  	
  GENERAL PARTNER:

  
	
   

  	
   

  
	
   

  	
  INSIGHT EQUITY A.P. X COMPANY,

  
	
   

  	
  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ted W. Beneski

  	
   

  
	
   

  	
   

  	
  Name: Ted W. Beneski

  
	
   

  	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
								

 

On the 1st day
of December, 2005, before me personally came Ted W. Beneski, to me known, who being by
me duly sworn, did depose and say that he is the Chairman of the Board of
Insight Equity A.P. X Company, LLC, the limited liability company described in
and which executed the foregoing agreement, and that he signed his name thereto
as the act and deed of such limited liability company by order of the sole
Manager of such limited liability company.

	
  

  	
  /s/ Helen
  Stephen Huebert

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Helen Stephen Huebert

  
	
   

  	
  Commission
  Expires: 2-19-2006

  

 

 105
 

 

 

	
  

  	
  AGENT AND A LENDER:

  
	
   

  	
   

  
	
   

  	
   

  	
  PNC BANK, NATIONAL
  ASSOCIATION, as Lender and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Wattinger

  	
   

  
	
   

  	
  Name:

  	
  John Wattinger

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
  Two Tower Center
  Boulevard

  East Brunswick, New Jersey  08816

  
	
   

  	
   

  
	
   

  	
  Commitment Percentage: 100%

  
	
  STATE OF TEXAS

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF DALLAS

  	
  )

  	
   

  
									

 

On this 1st day of December, 2005, before me personally came John Wattinger,
to me known, who, being by
me duly sworn, did depose and say that he is the Vice President of PNC BANK, NATIONAL ASSOCIATION, and that he was
authorized to sign his name thereto.

	
  

  	
  /s/ Helen
  Stephen Huebert

  
	
   

  	
  Notary Public in
  and for the State of Texas

  
	
   

  	
  Printed Name of
  Notary: Helen Stephen Huebert

  
	
   

  	
  Commission
  Expires: 2-19-2006

  

 

 106

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