Document:

<PAGE>

                                                                   Exhibit 10.48

                            AMENDMENT NO. 1 TO LEASE
                            ------------------------

          THIS AGREEMENT made this 19 day of June, 2001, by and between EWE
WAREHOUSE INVESTMENTS V, LTD. successor to MILLER-VALENTINE PARTNERS, as Lessor
and MERRIMACK SERVICES CORPORATION dba PC CONNECTION SERVICES, successor to PC
CONNECTIONS, INC. successor by assignment to MICRO WAREHOUSE, INC., as Lessee
located at 2907-2931 Old State Route 73, Wilmington, Ohio 45177.

                              W I T N E S S E T H:

          WHEREAS, Lessor and Lessee entered into a Lease dated May 13, 1993, as
assigned December 13, 1999, and

          WHEREAS, the Lessor and Lessee desire to amend the Lease of
approximately 32,000 square feet to add an Option to Renew.

          NOW THEREFORE, the Lease is amended as follows.

          1. OPTION TO RENEW. shall be added as follows. Lessee is hereby
             ---------------
granted an option to renew this Lease for an additional term of two (2) years
effective October 1, 2003 on the same terms and conditions contained herein
except for the rental and the length of the term, upon the conditions that:

          a. written notice of the exercise of such option shall be given by
Lessee to Lessor not less than one hundred eighty (180) days prior to the end of
the term of this Lease; and

          b. at the time of the giving of such notice and at the expiration of
the term of this Lease, there are no defaults in the covenants, agreements,
terms and conditions on the part of Lessee to be kept and performed, and all
rents are and have been fully paid. Provided also, that the rent to be paid
during each year of the said renewal period shall be as determined in accordance
with the following procedure:

          (1) The index to be used for this adjustment shall be the Consumer
Price Index (North Central Region, All Urban Consumers, All Items, 1982-1984
equaling a base of 100, from the U. S. Department of Labor, Bureau of Labor
Statistics, Washington, D. C.).

          (2) The Consumer Price Index of 1993 for the month of June shall be
the "Base Period Consumer Price Index".

          (3) The Consumer Price Index for the month of June each succeeding
year shall be determined from the published figures and shall be the "Adjustment
Period Consumer Price Index".

          (4) The Base Period Consumer Price Index shall be subtracted from the
Adjustment Period Consumer Price Index; the difference shall be divided by the
Base Period Consumer Price Index. This quotient shall then be multiplied by
$129,279.96 and the result shall then be added to $129,279.96. This arithmetical
sum shall then be the adjusted Basic Annual Rent for such immediately succeeding
leasehold year which shall be paid in equal monthly payments. Notwithstanding
the Index, the annual percentage increase shall not be less than three percent
(3%). All calculations of said procedure shall be provided to the Lessee in
their entirety directly from EWE Warehouse Investments V, Ltd., the Lessor.

<PAGE>

          (5) If the said Consumer Price Index is, at any time during the term
of this Lease, discontinued by the Government, then the most nearly comparable
index shall be substituted for the purpose of the aforesaid calculations.

          2. Except as expressly amended herein, all other terms and conditions
of the Lease remain in full force and effect.

          IN WITNESS WHEREOF, the Lessor and Lessee have affixed their
signatures to duplicates of this Amendment, this 15 day of June, 2001, as to
Lessee and this 19 day of June, 2001, as to Lessor.

Signed and acknowledged     LESSOR: EWE WAREHOUSE INVESTMENTS V, LTD.
in the presence of:                 BY MILLER-VALENTINE REALTY, INC.
                                    ITS MANAGING AGENT

                                    /s/ Robert A. Gallinis
 /s/ Barbara J. Gilmore             ------------------------------
--------------------------  By:     Robert A. Gallinis
 /s/ Nicholas Atkins
--------------------------  Its:    President

                            LESSEE: MERRIMACK SERVICES CORPORATION

 /s/ Robert Pratt           By:     /s/ Wayne Wilson
--------------------------         -------------------------------
 /s/ Barbara Jaus           Title:  President
--------------------------         -------------------------------

STATE OF OHIO, COUNTY OF MONTGOMERY, SS:

          The foregoing instrument was acknowledged before me this 19 day of
June, 2001, by Robert A. Gallinis, President Of Miller-Valentine Realty, Inc.,
Managing agent for EWE INVESTMENTS V, LTD.

                                     /s/ Rita A. Hughes
                                    ------------------------------
                                    Notary Public

                                       RITA A. HUGHES, Notary Public
                                       In and for the State of Ohio
                                       My Commission Expires May 4, 2006

STATE OF New Hampshire  COUNTY OF Hillsborough,  SS:
         -------------            ------------

          The foregoing instrument was acknlwledged before me this 15 day of
June, 2001, by Wayne L. Wilson, the President of MERRIMACK SERVICES CORPORATION,
a corporation on behalf of said corporation.

                                    /s/ Dolores R. Collins
                                    ------------------------------------
                                    NOTARY PUBLIC

                                                       [SEAL]
Revised by Legal Dept. 5/3/01

<PAGE>

                        REVISED AMENDMENT NO. 3 TO LEASE
                        --------------------------------

          THIS AGREEMENT made this 19 day of June, 2001, by and between EWE
WAREHOUSE INVESTMENTS V, LTD. successor to MILLER-VALENTINE PARTNERS, as Lessor
and MERRIMACK SERVICES CORPORATION dba PC CONNECTION SERVICES, successor to PC
CONNECTIONS, INC. successor by assignment to MICRO WAREHOUSE, INC., as Lessee
located at 2841-2901 Old State Route 73, Wilmington, Ohio 45177.

                              W I T N E S S E T H:

          WHEREAS, Lessor and Lessee entered into a Lease dated August 12, 1991,
as amended May 1, 1992 and October 18, 1992 and as assigned December 13, 1999,
and

          WHEREAS, the Lessor and Lessee desire to amend the Lease of
approximately 70,400 square feet to extend the term and revise the rent.

          NOW THEREFORE, the Lease is amended as follows.

          1. Article 1. TERM. shall be revised as follows. Effective October 1,
                        ----
2001, the term of this Lease shall be extended for an additional two (2) years
for a total term of twelve (12) years, commencing October 1, 1991 and ending
September 30, 2003, both dates inclusive.

          2. Lessee warrants that Lessee has accepted and is now in possession
of the Premises and that the Lease is valid and presently in full force and
effect. Lessee accepts the Premises in its present "as is" condition.

          3. Article 4. RENT. shall be revised as follows. For the period
                        ----
commencing October 1, 2001 and ending September 30, 2002, the Lessee shall pay
to the Lessor as Annual Rent for the Leased Premises the sum of THREE HUNDRED
FIFTY FIVE THOUSAND FIVE HUNDRED TWENTY AND 04/100 DOLLARS ($355,520.04) which
shall be paid in equal monthly installments of TWENTY NINE THOUSAND SIX HUNDRED
TWENTY SIX AND 67/100 DOLLARS ($29,626.67), due and payable on the first day of
each month, in advance, without demand.

          Checks should be made payable to EWE Warehouse Investments V, Ltd. and
sent c/o Miller-Valentine Realty, Inc., Post Office Box 744, Dayton, Ohio
45401-0744, ATTN: ACCOUNTS RECEIVABLE.

          The Basic Annual Rent of $355,520.04 shall be adjusted annually based
on any increases in the Consumer Price Index beginning October 1, 2002 and at
the end of each year thereafter, whether during the term of this Lease or any
renewal or extension thereof. Increases in the Annual Rent shall be made in
accordance with the following procedure:

<PAGE>

          a. The index to be used for this adjustment shall be the Consumer
Price Index (NORTH CENTRAL REGION, All Urban Consumers, All Items, 1982-1984
equaling a base of 100, from the U.S. Department of Labor, Bureau of Labor
Statistics, Washington, D.C.).

          b. The Consumer Price Index of 2001 for the month of June shall be the
"Base Period Consumer Price Index". The Consumer Price Index for the month of
June in each adjustment year shall be the "Adjustment Period Consumer Price
Index".

          c. The Base Period Consumer Price Index shall be subtracted from the
Adjustment Period Consumer Price Index; the difference shall be divided by the
Base Period Consumer Price Index. This quotient shall then be multiplied by the
Basic Annual Rent, and the result shall then be added to the Basic Annual Rent.
The resulting sum shall be the adjusted Annual Rent for such immediately
succeeding leasehold period which shall be paid in equal monthly installments.
Notwithstanding the Index, the annual percentage increase shall not be less than
three percent (3%). All calculations of said procedure shall be provided to the
Lessee in their entirety directly from EWE Warehouse Investments V, Ltd., the
Lessor.

          d. If the said Consumer Price Index is, at any time during the term of
this Lease, discontinued by the Government, then the most nearly comparable
index shall be substituted for the purpose of the aforesaid calculations.

          4. OPTION TO RENEW. shall be added as follows. Lessee is hereby
             ---------------
granted an option to renew this Lease for an additional term of two (2) years on
the same terms and conditions contained herein except for the rental and the
length of the term, upon the conditions that:

          a. written notice of the exercise of such option shall be given by
Lessee to Lessor not less than one hundred eighty (180) days prior to the end of
the term of this Lease; and

          b. at the time of the giving of such notice and at the expiration of
the term of this Lease, there are no defaults in the covenants, agreements,
terms and conditions on the part of Lessee to be kept and performed, and all
rents are and have been fully paid. Provided also, that the rent to be paid
during each year of the said renewal period shall be as determined in accordance
with the following procedure:

          (1) The index to be used for this adjustment shall be the Consumer
Price Index (North Central Region, All Urban Consumers, All Items, 1982-1984
equaling a base of 100, from the U. S. Department of Labor, Bureau of Labor
Statistics, Washington, D. C.).

          (2) The Consumer Price Index of 2001 for the month of June shall be
the "Base Period Consumer Price Index".

          (3) The Consumer Price Index for the month of June each succeeding
year shall be determined from the published figures and shall be the "Adjustment
Period Consumer Price Index".

          (4) The Base Period Consumer Price Index shall be subtracted from the
Adjustment Period Consumer Price Index; the difference shall be divided by the
Base Period Consumer Price Index. This quotient shall then be multiplied by
$355,520.04 and the result shall then be added to $355,520.04. This arithmetical
sum shall then be the adjusted Basic Annual Rent for such immediately succeeding
leasehold year which shall be paid in equal monthly payments. Notwithstanding
the Index, the annual percentage increase shall not be less than three percent (
3%). All calculations of said procedure shall be provided to the Lessee in their
entirety directly from EWE Warehouse Investments V, Ltd., the Lessor.

<PAGE>

          (5) If the said Consumer Price Index is, at any time during the term
of this Lease, discontinued by the Government, then the most nearly comparable
index shall be substituted for the purpose of the aforesaid calculations.

          5. Except as expressly amended herein, all other terms and conditions
of the Lease remain in full force and effect.

          IN WITNESS WHEREOF, the Lessor and Lessee have affixed their
signatures to duplicates of this Amendment, this 15 day of June, 2001, as to
Lessee and this 19 day of June, 2001 as to Lessor.

Signed and acknowledged   LESSOR:       EWE WAREHOUSE INVESTMENTS V, LTD.
in the presence of:                     BY MILLER-VALENTINE REALTY, INC.
                                        ITS MANAGING AGENT

/s/ Barbara J. Gilmore    By:           /s/ Robert A. Gallinis
------------------------                ------------------------
/s/ Nicholas Atkins                     Robert A. Gallinis
------------------------  Title:        President

                          LESSEE:       MERRIMACK SERVICES CORPORATION

/s/ Robert Pratt          By:           /s/ Wayne Wilson
-----------------------                 ------------------------
/s/ Barbara Jaus          Title:        President
-----------------------                 ------------------------

STATE OF OHIO, COUNTY OF MONTGOMERY, SS:

          The foregoing instrument was acknowledged before me this 19 day of
June, 2001, by Robert A. Gallinis, President of Miller-Valentine Realty, Inc.,
managing agent for EWE INVESTMENTS V, LTD.

                                  /s/ Rita A. Hughes
                                  -------------------------------------
                                  Notary Public

                                       RITA A. HUGHES, Notary Public
                                       In and for the State of Ohio
                                       My Commission Expires May 4,2006

STATE OF New Hampshire COUNTY OF Hillsborough, ss:
         -------------           ------------
          The foregoing instrument was acknowledged before me this 15, day of
June, 2001 by Wayne L. Wilson, the President of MERRIMACK SERVICES CORPORATION,
a corporation on behalf of said corporation.

                                   /s/ Dolores R. Collins
                                   --------------------------------------
                                   NOTARY PUBLIC

                                                    [SEAL]
Revised by Legal Dept. 5/3/01<PAGE>

                                PROMISSORY NOTE
                                ---------------

                                                                 OFFICER #11049
                                                                 BRANCH: #185

$20,000,000.00                                               DATE: June 26, 2001

     For value received, 1-800 CONTACTS (DELAWARE), INC. (hereinafter referred
to as "Borrower") promises to pay to the order of ZIONS FIRST NATIONAL BANK, a
national banking association (hereinafter referred to as "Lender") at its office
in Salt Lake City, Utah, the sum of Twenty Million & No/100 Dollars
($20,000,000.00) or such other principal balance as may be outstanding hereunder
in lawful money of the United States with interest thereon at an interest rate
hereinafter described.

     Payments. Commencing July 2, 2001, and continuing on the same day of each
     ---------
month thereafter, accrued interest shall be due and payable. In any event, the
unpaid balance of principal and any accrued but unpaid interest shall be due and
payable no later than April 30, 2003.

     Interest Rate. Unless and until Borrower elects a fixed rate of interest,
     -------------
as provided below, this Note will bear interest at a variable rate equal to the
Prime Rate minus .25% per annum. The variable interest rate will change
immediately and automatically with each change in the Prime Rate.

     "Prime Rate" means an index which is determined daily by the published
commercial loan variable rate index held by any two of the following banks: J.P.
Morgan Chase & Co., Wells Fargo Bank N.A., and Bank of America N.T. & S.A. In
the event no two of the above banks have the same published rate, the bank
having the median rate will establish the Prime Rate. If, for any reason beyond
the control of Lender, any of the aforementioned banks becomes unacceptable as a
reference for the purpose of determining the Prime Rate used herein, Lender may,
five days after posting notice, substitute another comparable bank for the one
determined unacceptable. As used in this paragraph, " comparable bank" shall
mean one of the ten largest commercial banks headquartered in the United States
of America. This definition of Prime Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an index to determine the
variable interest rate used herein. It is not the lowest rate at which Lender
may make loans to any of its customers, either now or in the future.

     At any time during the term of this Note, Borrower may elect to convert the
interest rate hereunder to a fixed interest rate equal to 2.350% above Lender's
thirty (30) day London Interbank Offered Rate (LIBOR) per annum. The new rate
shall become effective ten (10) days following receipt by Lender of Borrower's
written request for such conversion and shall remain in effect during the
remaining term of this Note unless and until Borrower elects to reconvert to the
variable interest rate as provided below. Upon conversion to Lender's thirty
(30) day LIBOR, the interest rate will thereafter be adjusted every thirty (30)
days to a fixed interest rate equal to 2.350% above Lender's thirty (30) day
LIBOR per annum. Each date on which the interest rate is adjusted hereunder is
referred to herein as an "Interest Rate Change Date." There shall be no
contractual limitations on the amount of increase or decrease in the interest
rate at each Interest Rate Change Date.

     At any time following Borrower's initial election to convert the interest
rate hereunder to the fixed interest rate set forth above, Borrower may request
that the interest rate hereunder be converted to the variable interest rate set
forth above by providing written notice of its election to Lender. The new rate
shall become effective on the next Interest Rate Change Date following receipt
by Lender of said notice and shall remain in effect during the remaining term of
this Note unless and until Borrower elects to reconvert the interest rate to the
fixed interest rate set forth above in the same manner as provided in the
immediately preceding paragraph.

     As used herein, Lender's thirty (30) day LIBOR shall mean the rates per
annum quoted by Lender as Lender's thirty (30) day LIBOR based upon quotes for
the London Interbank Offered Rate from the British Bankers Association Interest
Settlement Rates, Lasser Marshall Inc., or other comparable services. This
definition of Lender's thirty (30) day LIBOR is to be strictly interpreted and
is not intended to serve any purpose other than providing an index to determine
the interest rate used herein. Lender's thirty (30) day LIBOR may not
necessarily be the same as the quoted offer side in the eurodollar time deposit
market by any particular institution or service applicable to any interest
period.
<PAGE>

     Notwithstanding any other provision in this Note, if the adoption of any
applicable law, rule, or regulation, or any change therein, 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 Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable
agency shall make it unlawful or impossible for Lender to offer loans based on
Lender's thirty (30) day LIBOR, then upon notice to Borrower by Lender, interest
accruing on the outstanding principal balance under this Note, together with
interest already accrued thereon, shall, at the election of Lender, be
immediately converted to an interest rate equal to the variable rate set forth
above (the "Substitute Rate"). The Substitute Rate shall change on each
applicable Interest Rate Change Date the Substitution Rate is in effect under
this Note.

     Notwithstanding anything to the contrary herein, if Lender determines
(which determination shall be conclusive) that quotations of interest rates
referred to in the definition of Lender's thirty (30) day LIBOR are not being
provided in the relevant amounts or for the relevant maturities for purposes of
Lender's determining Lender's thirty (30) day LIBOR, or if Lender determines
(which determination shall be conclusive) that Lender's thirty (30) day LIBOR
does not accurately cover the cost to Lender of making or maintaining advances
based on Lender's thirty (30) day LIBOR, then Lender shall give notice thereof
to Borrower, whereupon, until Lender notifies Borrower that the circumstances
giving rise to such suspension no longer exist, the interest rate hereunder
shall be converted to the Substitute Rate.

     Upon Lender's receipt of Borrower's company-prepared financial statements
as of each quarter end during the term of this Note, Lender shall determine
the amount of Borrower's leverage by dividing the total outstanding liabilities
by the net worth of the company. If at any time during the term of this Note
such financial statements indicate that the ratio is more than 1.5, the margin
applicable to both the variable interest rate and the fixed interest rate set
forth above shall be increased by .25%, effective on the date of Lender's
determination of such leverage, and such increase shall remain in effect until
Borrower provides to Lender quarterly financial statements which indicate
leverage 1.5 or less, at which time the margin shall be decreased back to the
original margin, effective on the date of Lender's determination of such
leverage.

     Interest on this Note is computed on a 365/360 simple interest basis; that
is, interest is computed by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding.

     Prepayment. During such times as a variable rate of interest is in effect
     ----------
hereunder, Borrower may prepay this Note in whole or in part without penalty,
provided that any partial prepayment will not defer any monthly installments.
During such times as a rate of interest based on LIBOR is in effect, Borrower
shall pay to Lender a fee with respect to the prepayment of any or all of the
remaining principal balance of this Note in an amount equal to the prepaid
principal amount times the difference between: (a) the "Current LIBOR" and (b)
the "Original LIBOR" times the number of years and fractional years remaining
until the earlier of maturity or the next Interest Rate Change Date except that:
(i) no repayment fee shall be required if the "Current LIBOR" is greater than
the "Original LIBOR" and (ii) up to five percent (5%), non cumulative, of the
original amount of this Note may be prepaid in any year without payment of any
prepayment fee.

          "Current LIBOR" is defined as the LIBOR in effect on the date of the
     prepayment for a term equal to the time to the earlier of maturity or the
     next Interest Rate Change Date.

          "Original LIBOR" is defined as the LIBOR in effect on the more recent
     of the date the loan was made or most recent Interest Rate Change Date for
     a term equal to the time to the earlier of maturity or the next Interest
     Rate Change Date.

     Application of Payments. Any and all payments by Borrower under this Note
     -----------------------
shall be applied as follows: first, to the repayment of any Lender Expenditures
advanced by Lender hereunder or pursuant to the loan documents relating to this
Note; second, to the payment of any late charges; third, to the payment of
accrued interest on the principal indebtedness; and fourth, to the payment of
the principal indebtedness hereunder.

     Right of Setoff. Borrower grants to Lender a contractual possessory
     ---------------
security interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and to,
Borrower's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with someone
else and all accounts Borrower may open in the future, excluding however all IRA
and Keogh accounts, and all trust accounts for which the grant of a security
interest would be prohibited by law. Borrower authorizes Lender,

                                       2
<PAGE>

to the extent permitted by applicable law, to charge or setoff all sums owing on
this Note against any and all such accounts.

     Lender's Expenditures. Borrower agrees to pay on demand any expenditures
     ---------------------
made by Lender in accordance with the loan documents relating to this Note,
including, but not limited to, the payment of taxes, insurance premiums, costs
of maintenance and preservation of the collateral, common expense and other
assessments relating to the collateral, and attorney fees and costs incurred in
connection with any matter pertaining hereto or to the security pledged to
secure the principal indebtedness under this Note or any portion thereof
(collectively the "Lender Expenditures"). At the election of Lender, all Lender
Expenditures may be added to the unpaid balance of this Note and become a part
of and on a parity with the indebtedness secured by the collateral and shall
accrue interest at such rate as may be computed from time to time in the manner
prescribed in this Note.

     Lender shall maintain appropriate records of repayments and the applicable
interest rates. Such records may consist of computer records and shall be deemed
correct. Borrower will promptly notify Lender of any possible error contained in
any records which are provided to Borrower.

     Default. Borrower will be in default if any of the following happens: (a)
     -------
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws.
(e) Any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired. (h) Lender in good faith deems itself insecure.

     If any default, other than a default in payment, is curable and if Borrower
has not been given a notice of a breach of the same provision of this Note
within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

     Lender's Rights. Upon default, Lender may declare the entire unpaid
     ---------------
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the applicable interest rate on this
Note 3.000 percentage points. The interest rate will not exceed the maximum rate
permitted by applicable law. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower also will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's reasonable
attorney's fees and Lender's legal expenses whether or not there is a lawsuit,
including reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. If
not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

     Late Charge. If Borrower fails to make any payment of interest or principal
     -----------
within fifteen (15) days from the date on which the same is due and payable, a
late charge with respect to such payment shall be due and payable to cover, in
part, the extra expense of handling such delinquent payment. Such late charge
shall be equal to five percent (5%) of such payment and shall be owing without
notice to Borrower.

     If any payment of this Note becomes due and payable on a Saturday, Sunday
or legal holiday for commercial banks under applicable banking laws, the
maturity thereof shall be extended to the next succeeding business day and
interest thereon shall be payable at the then applicable rate during such
extension.

     Borrower and all endorsers, sureties, and guarantors hereof hereby jointly
and severally waive presentment for payment, demand, protest, notice of protest
and of non-payment and of dishonor, and consent to extensions of

                                       3
<PAGE>

time, renewal, waivers, or modifications without notice and further consent to
the release of any collateral or any part thereof, with or without substitution.

     This Note has been delivered to Lender and accepted by Lender in the State
of Utah. If there is a lawsuit, Borrower agrees upon Lender's request to submit
to the jurisdiction and venue of the courts of Salt Lake County, the State of
Utah. This Note shall be governed by and construed in accordance with the laws
of the State of Utah except as modified by the arbitration provisions.

Arbitration Disclosures:
------------------------

     1.   Arbitration is usually final and binding on the parties and subject to
          only very limited review by a court.
     2.   The parties are waiving their right to litigate in court, including
          their right to a jury trial.
     3.   Pre-arbitration discovery is generally more limited and different from
          court proceedings.
     4.   Arbitrators' awards are not required to include factual findings or
          legal reasoning and any party's right to appeal or to seek
          modification of rulings by arbitrators is strictly limited.
     5.   A panel of arbitrators might include an arbitrator who is or was
          affiliated with the banking industry.
     6.   If you have questions about arbitration, consult your attorney or the
          American Arbitration Association.

Arbitration Provisions:
-----------------------

     (a)  Any controversy or claim between or among the parties, including but
not limited to those arising out of or relating to this Note or any agreements
or instruments relating hereto or delivered in connection herewith, and
including but not limited to a claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The arbitration proceedings shall be conducted in Salt Lake City, Utah. The
arbitrator(s) shall have the qualifications set forth in subparagraph (c)
hereto. All statutes of limitations which would otherwise be applicable in a
judicial action brought by a party shall apply to any arbitration or reference
proceeding hereunder.

     (b)  In any judicial action or proceeding arising out of or relating to
this Agreement or any agreements or instruments relating hereto or delivered in
connection herewith, including but not limited to a claim based on or arising
from an alleged tort, if the controversy or claim is not submitted to
arbitration as provided and limited in subparagraph (a) hereto, all decisions of
fact and law shall be determined by a reference in accordance with Rule 53 of
the Federal Rules of Civil Procedure or Rule 53 of the Utah Rules of Civil
Procedures or other comparable, applicable reference procedure. The parties
shall designate to the court the referee(s) selected under the auspices of the
American Arbitration Association in the same manner as arbitrators are selected
in Association-sponsored arbitration proceedings. The referee(s) shall have the
qualifications set forth in subparagraph (c) hereto.

     (c)  The arbitrator(s) or referee(s) shall be selected in accordance with
the rules of the American Arbitration Association from panels maintained by the
Association. A single arbitrator or referee shall be knowledgeable in the
subject matter of the dispute. Where three arbitrators or referees conduct an
arbitration or reference proceeding, the claim shall be decided by a majority
vote of the three arbitrators or referees, at least one of whom must be
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney. The arbitrator(s) or referee(s) shall award recovery
of all costs and fees (including reasonable attorneys' fees, administrative
fees, arbitrators' fees, and court costs). The arbitrator(s) or referee(s) also
may grant provisional or ancillary remedies such as, for example, injunctive
relief, attachment, or the appointment of a receiver, either during the pendency
of the arbitration or reference proceeding or as part of the arbitration or
reference award.

     (d)  Judgment upon an arbitration or reference award may be entered in any
court having jurisdiction, subject to the following limitation: the arbitration
or reference award is binding upon the parties only if the amount does not
exceed Four Million Dollars ($4,000,000); if the award exceeds that limit,
either party may commence legal action for a court trial de novo. Such legal
action must be filed within thirty (30) days following the date of the
arbitration or reference award; if such legal action is not filed within that
time period, the amount of the arbitration or reference award shall be binding.
The computation of the total amount of an arbitration or reference award shall
include amounts awarded for arbitration fees, attorneys' fees, interest, and all
other related costs.

     (e)  At Lender's option, foreclosure under a deed of trust or mortgage may
be accomplished either by exercise of a power of sale under the deed of trust or
by judicial foreclosure. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

                                       4
<PAGE>

     (f)  Notwithstanding the applicability of other law to any other provision
of this Note, the Federal Arbitration Act, 9 U.S.C. s 1 et seq., shall apply to
                                                        -- ---
the construction and interpretation of this arbitration section.

     Waiver of Claims. Borrower (i) represents that they have no defenses to or
     ----------------
setoffs against any indebtedness or other obligations owing to Lender or its
affiliates (the "obligations"), nor claims against Lender or its affiliates for
any matter whatsoever, related or unrelated to the Obligations, and (ii) release
Lender and its affiliates from all claims, causes of action, and costs, in law
or equity, existing as of the date of this Note, which Borrower has or may have
by reason of any matter of any conceivable kind or character whatsoever, related
or unrelated to the obligations, including the subject matter of this Note. This
provision shall not apply to claims for performance of express contractual
obligations owing to Borrower by Lender or its affiliates.

     This Note is secured by a Security Agreement dated June 26, 2001.

     This Note is made in accordance with a Loan Agreement dated June 26, 2001.

     This is a Renewal and Increase of a Promissory Note from Borrower to Lender
     dated September 17, 1999, amended, in the original principal amount of
     $10,000,000.00.

1-800 CONTACTS (DELAWARE), INC.

By: /s/ Jonathan C. Coon
   -----------------------------
   JONATHAN C. COON, President

                                       5
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
    Principal          Loan Date      Maturity       Loan No.       Call/Coll          Account        Officer        Initials
<S>                   <C>            <C>             <C>            <C>                <C>            <C>            <C>
 $20,000,000.00       06-26-2001     04-30-2003       9003             2/7420          7057008         11049
------------------------------------------------------------------------------------------------------------------------------------
            References in the shaded area are for Lender's use only and do not limit the applicability of this document to
                                            any particular loan or item.
                        Any item above containing "***" has been omitted due to text length limitations.
------------------------------------------------------------------------------------------------------------------------------------

Borrower:   1-800 CONTACTS (DELAWARE), INC.                 Lender:      ZIONS FIRST NATIONAL BANK
            66 EAST WADSWORTH PARK DRIVE 3RD FLOOR                       SALT LAKE COMMERCIAL BANKING CENTER
            DRAPER, UT 84020                                             #1 SOUTH MAIN STREET
                                                                         SALT LAKE CITY, UT 84111

====================================================================================================================================
</TABLE>

THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated June 26, 2001, is made and
executed between 1-800 CONTACTS (DELAWARE), INC. ("Borrower") and ZIONS FIRST
NATIONAL BANK ("Lender") on the following terms and conditions. Borrower has
received prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans or other financial accommodations, including those
which may be described on any exhibit or schedule attached to this Agreement
("Loan"). Borrower understands and agrees that: (A) in granting, renewing, or
extending any Loan, Lender is relying upon Borrower's representations,
warranties, and agreements as set forth in this Agreement, and (B) all such
Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of June 26, 2001, and shall continue
in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows:

     Conditions Precedent to Each Advance. Lender's obligation to make any
     Advance to or for the account of Borrower under this Agreement is subject
     to the following conditions precedent, with all documents, instruments,
     opinions, reports, and other items required under this Agreement to be in
     form and substance satisfactory to Lender:

          (1)  Lender shall have received evidence that this Agreement and all
          Related Documents have been duly authorized, executed, and delivered
          by Borrower to Lender.

          (2)  Lender shall have received such opinions of counsel, supplemental
          opinions, and documents as Lender may request.

          (3)  The security interests in the Collateral shall have been duly
          authorized, created, and perfected with first lien priority and shall
          be in full force and effect.

          (4)  All guaranties required by Lender for the credit facility(ies)
          shall have been executed by each Guarantor, delivered to Lender, and
          be in full force and effect.

          (5)  Lender, at its option and for its sole benefit, shall have
          conducted an audit of Borrower's Inventory, books, records, and
          operations, and Lender shall be satisfied as to their condition.

          (6)  Borrower shall have paid to Lender all fees, costs, and expenses
          specified in this Agreement and the Related Documents as are then due
          and payable.

          (7)  There shall not exist at the time of any Advance a condition
          which would constitute an Event of Default under this Agreement, and
          Borrower shall have delivered to Lender the compliance certificate
          called for in the paragraph below titled "Compliance Certificate."

     Making Loan Advances. Advances under this credit facility, as well as
     directions for payment from Borrower's accounts, may be requested orally or
     in writing by authorized persons. Lender may, but need not, require that
     all oral requests be confirmed in writing. Each Advance shall be
     conclusively deemed to have been made at the request of and for the benefit
     of Borrower (1) when credited to any deposit account of Borrower maintained
     with Lender or (2) when advanced in accordance with the instructions of an
     authorized person. Lender, at its option, may set a cutoff time, after
     which all requests for Advances will be treated as having been requested on
     the next succeeding Business Day.

     Mandatory Loan Repayments. If at any time the aggregate principal amount of
     the outstanding Advances shall exceed the applicable Borrowing Base,
     Borrower, immediately upon written or oral notice from Lender, shall pay to
     Lender an amount equal to the difference between the outstanding principal
     balance of the Advances and the Borrowing Base. On the Expiration Date,
     Borrower shall pay to Lender in full the aggregate unpaid principal amount
     of all Advances then outstanding and all accrued unpaid interest, together
     with all other applicable fees, costs and charges, if any, not yet paid.

     Loan Account. Lender shall maintain on its books a record of account in
     which Lender shall make entries for each Advance and such other debits and
     credits as shall be appropriate in connection with the credit facility.
     Lender shall provide Borrower with periodic statements of Borrower's
     account, which statements shall be considered to be correct and
     conclusively binding on Borrower unless Borrower notifies Lender to the
     contrary within thirty (30) days after Borrower's receipt of any such
     statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Primary Credit Facility and performance of
all other Loan, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security Interests in such property
and assets as Lender may require. Lender's Security Interests in the Collateral
shall be continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Borrower agrees and represents and warrants to
Lender:

     Perfection of Security Interests. Borrower agrees to execute financing
     statements and all documents perfecting Lender's Security Interest and to
     take whatever other actions are requested by Lender to perfect and continue
     Lender's Security Interests in the Collateral. Upon request of Lender,
     Borrower will deliver to Lender any and all of the documents evidencing or
     constituting the Collateral, and Borrower will note Lender's interest upon
     any and all chattel paper and instruments if not delivered to Lender for
     possession by Lender. Contemporaneous with the execution of this Agreement,
     Borrower will execute one or more UCC financing statements and any similar
     statements as may be required by applicable law, and Lender will file such
     financing statements and all such similar statements in the appropriate
     location or locations. Borrower hereby appoints Lender as its irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect or to continue any Security Interest. Lender may at any time, and
     without further authorization from Borrower, file a carbon, photograph,
     facsimile, or other reproduction of any financing statement for use as a
     financing statement. Borrower will reimburse Lender for all expenses for
     the perfection, termination, and the continuation of the perfection of
     Lender's security interest in the Collateral. Borrower promptly will notify
     Lender before any change in Borrower's name including any change to the
     assumed business names of Borrower. Borrower also promptly will notify
     Lender before any change in Borrower's Social Security Number or Employer
     Identification Number. Borrower further agrees to notify Lender in writing
     prior to any change in address or location of Borrower's principal
     governance office or should Borrower merge or consolidate with any other
     entity.

<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                     (Continued)                            Page 2

================================================================================

     Collateral Records. Borrower does now, and at all times hereafter shall,
     keep correct and accurate records of the Collateral, all of which records
     shall be available to Lender or Lender's representative upon demand for
     inspection and copying at any reasonable time. With respect to the
     Inventory, Borrower agrees to keep and maintain such records as Lender may
     require, including without limitation information concerning Eligible
     Inventory and records itemizing and describing the kind, type, quality, and
     quantity of Inventory, Borrower's Inventory costs and selling prices, and
     the daily withdrawals and additions to Inventory. Records related to
     Inventory are or will be located at 66 EAST WADSWORTH PARK DRIVE 3RD FLOOR
     DRAPER, UT 84020. The above is an accurate and complete list of all
     locations at which Borrower keeps or maintains business records concerning
     Borrower's collateral.

     Collateral Schedules. Concurrently with the execution and delivery of this
     Agreement, Borrower shall execute and deliver to Lender schedules of
     Inventory and schedules of Eligible Inventory in form and substance
     satisfactory to the Lender. Thereafter supplemental schedules shall be
     delivered according to the following schedule:

     Representations and Warranties Concerning Inventory. With respect to the
     Inventory, Borrower represents and warrants to Lender: (1) All Inventory
     represented by Borrower to be Eligible Inventory for purposes of this
     Agreement conforms to the requirements of the definition of Eligible
     Inventory; (2) All Inventory values listed on schedules delivered to Lender
     will be true and correct, subject to immaterial variance; (3) The value of
     the Inventory will be determined on a consistent accounting basis; (4)
     Except as agreed to the contrary by Lender in writing, all Eligible
     Inventory is now and at all times hereafter will be in Borrower's physical
     possession and shall not be held by others on consignment, sale on
     approval, or sale or return; (5) Except as reflected in the Inventory
     schedules delivered to Lender, all Eligible Inventory is now and at all
     times hereafter will be of good and merchantable quality, free from
     defects; (6) Eligible Inventory is not now and will not at any time
     hereafter be stored with a bailee, warehouseman, or similar party without
     Lender's prior written consent, and, in such event, Borrower will
     concurrently at the time of bailment cause any such bailee, warehouseman,
     or similar party to issue and deliver to Lender, in form acceptable to
     Lender, warehouse receipts in Lender name evidencing the storage of
     Inventory; and (7) Lender, its assigns, or agents shall have the right at
     any time and at Borrower's expense to inspect and examine the Inventory and
     to check and test the same as to quality, quantity, value, and condition.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.

     Loan Documents. Borrower shall provide to Lender the following documents
     for the Loan: (1) the Note; (2) Security Agreements granting to Lender
     security interests in the Collateral; (3) financing statements and all
     other documents perfecting Lender's Security Interests; (4) evidence of
     insurance as required below; (5) together with all such Related Documents
     as Lender may require for the Loan; all in form and substance satisfactory
     to Lender and Lender's counsel.

     Borrower's Authorization. Borrower shall have provided in form and
     substance satisfactory to Lender properly certified resolutions, duly
     authorizing the execution and delivery of this Agreement, the Note and the
     Related Documents. In addition, Borrower shall have provided such other
     resolutions, authorizations, documents and instruments as Lender or its
     counsel, may require.

     Fees and Expenses Under This Agreement. Borrower shall have paid to Lender
     all fees, costs, and expenses specified in this Agreement and the Related
     Documents as are then due and payable.

     Representations and Warranties. The representations and warranties set
     forth in this Agreement, in the Related Documents, and in any document or
     certificate delivered to Lender under this Agreement are true and correct.

     No Event of Default. There shall not exist at the time of any Advance a
     condition which would constitute an Event of Default under this Agreement
     or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

     Organization. Borrower is a corporation for profit which is, and at all
     times shall be, duly organized, validly existing, and in good standing
     under and by virtue of the laws of the State of Delaware. Except as
     indicated in prospectus or subsequent SEC filings, Borrower is duly
     authorized to transact business in the State of Utah and all other states
     in which Borrower is doing business, having obtained all necessary filings,
     governmental licenses and approvals for each state in which Borrower is
     doing business. Except as indicated in prospectus or subsequent SEC
     filings, specifically, Borrower is, and at all times shall be, duly
     qualified as a foreign corporation in all states in which the failure to so
     qualify would have a material adverse effect on its business or financial
     condition. Borrower has the full power and authority to own its properties
     and to transact the business in which it is presently engaged or presently
     proposes to engage. Borrower maintains an office at 66 EAST WADSWORTH PARK
     DRIVE 3RD FLOOR, DRAPER, UT 84020. Unless Borrower has designated otherwise
     in writing, the principal office is the office at which Borrower keeps its
     books and records including its records concerning the Collateral. Borrower
     will notify Lender prior to any change in the location of Borrower's state
     of organization or any change in Borrower's name. Except as indicated in
     prospectus or subsequent SEC filings, Borrower shall do all things
     necessary to preserve and to keep in full force and effect its existence,
     rights and privileges, and shall comply with all regulations, rules,
     ordinances, statutes, orders and decrees of any governmental or quasi-
     governmental authority or court applicable to Borrower and Borrower's
     business activities.

     Assumed Business Names. Borrower has filed or recorded all documents or
     filings required by law relating to all assumed business names used by
     Borrower. Excluding the name of Borrower, the following is a complete list
     of all assumed business names under which Borrower does business: None.

     Authorization. Borrower's execution, delivery, and performance of this
     Agreement and all the Related Documents have been duly authorized by all
     necessary action by Borrower and do not conflict with, result in a
     violation of, or constitute a default under (1) any provision of Borrower's
     articles of incorporation or organization, or bylaws, or any agreement or
     other instrument binding upon Borrower or (2) any law, governmental
     regulation, court decree, or order applicable to Borrower or to Borrower's
     properties.

     Financial Information. Each of Borrower's financial statements supplied to
     Lender truly and completely disclosed Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change in
     Borrower's financial condition subsequent to the date of the most recent
     financial statement supplied to Lender. Borrower has no material contingent
     obligations except as disclosed in such financial statements.

     Legal Effect. This Agreement constitutes, and any instrument or agreement
     Borrower is required to give under this Agreement when delivered will
     constitute legal, valid, and binding obligations of Borrower enforceable
     against Borrower in accordance with their respective terms.

     Properties. Except as contemplated by this Agreement or as previously
     disclosed in Borrower's financial statements or in writing to Lender and as
     accepted by Lender, and except for property tax liens for taxes not
     presently due and payable, Borrower owns and has good title to all of
     Borrower's properties free and clear of all Security Interests, and has not
     executed any security documents or financing statements relating to such
     properties. All of Borrower's properties are titled in Borrower's legal
     name, and Borrower has not used, or filed a financing statement under, any
     other name for at least the last five (5) years.

     Hazardous Substances. Except as disclosed to and acknowledged by Lender in
     writing, Borrower represents and warrants that: (1) During the period of
     Borrower's ownership of Borrower's Collateral, there has been no use,
     generation, manufacture, storage, treatment, disposal, release or
     threatened release of any Hazardous Substance by any person on, under,
     about or from any of the Collateral. (2) Borrower has no knowledge of, or
     reason to believe that there has been (a) any breach or violation of any
     Environmental Laws; (b) any use, generation, manufacture, storage,
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                      (Continued)                            Page 3

================================================================================

     treatment, disposal, release or threatened release of any Hazardous
     Substance on, under, about or from the Collateral by any prior owners or
     occupants of any of the Collateral; or (c) any actual or threatened
     litigation or claims of any kind by any person relating to such matters.
     (3) Neither Borrower nor any tenant, contractor, agent or other authorized
     user of any of the Collateral shall use, generate, manufacture, store,
     treat, dispose of or release any Hazardous Substance on, under, about or
     from any of the Collateral; and any such activity shall be conducted in
     compliance with all applicable federal, state, and local laws, regulations,
     and ordinances, including without limitation all Environmental Laws.
     Borrower authorizes Lender and its agents to enter upon the Collateral to
     make such inspections and tests as Lender may deem appropriate to determine
     compliance of the Collateral with this section of the Agreement. Any
     inspections or tests made by Lender shall be at Borrower's expense and for
     Lender's purposes only and shall not be construed to create any
     responsibility or liability on the part of Lender to Borrower or to any
     other person. The representations and warranties contained herein are based
     on Borrower's due diligence in investigating the Collateral for hazardous
     waste and Hazardous Substances. Borrower hereby (1) releases and waives any
     future claims against Lender for indemnity or contribution in the event
     Borrower becomes liable for cleanup or other costs under any such laws, and
     (2) agrees to indemnify and hold harmless Lender against any and all
     claims, losses, liabilities, damages, penalties, and expenses which Lender
     may directly or indirectly sustain or suffer resulting from a breach of
     this section of the Agreement or as a consequence of any use, generation,
     manufacture, storage, disposal, release or threatened release of a
     hazardous waste or substance on the Collateral. The provisions of this
     section of the Agreement, including the obligation to indemnify, shall
     survive the payment of the Indebtedness and the termination, expiration or
     satisfaction of this Agreement and shall not be affected by Lender's
     acquisition of any interest in any of the Collateral, whether by
     foreclosure or otherwise.

     Litigation and Claims. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and no other event has occurred which
     may materially adversely affect Borrower's financial condition or
     properties, other than litigation, claims, or other events, if any, that
     have been disclosed to Lender in writing.

     Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns
     and reports that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges have been paid in full,
     except those presently being or to be contested by Borrower in good faith
     in the ordinary course of business and for which adequate reserves have
     been provided.

     Lien Priority. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security Interests and rights in and to such
     Collateral.

     Binding Effect. This Agreement, the Note, all Security Agreements (if any),
     and all Related Documents are binding upon the signers thereof, as well as
     upon their successors, representatives and assigns, and are legally
     enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

     Notices of Claims and Litigation. Promptly inform Lender in writing of (1)
     all material adverse changes in Borrower's financial condition, and (2) all
     existing and all threatened litigation, claims, investigations,
     administrative proceedings or similar actions affecting Borrower or any
     Guarantor which could materially affect the financial condition of Borrower
     or the financial condition of any Guarantor.

     Financial Records. Maintain its books and records in accordance with GAAP,
     applied on a consistent basis, and permit Lender to examine and audit
     Borrower's books and records at all reasonable times.

     Financial Statements. Furnish Lender with the following:

          Annual Statements. As soon as available, but in no event later than
          one-hundred-twenty (120) days after the end of each fiscal year,
          Borrower's balance sheet and income statement for the year ended,
          audited by a certified public accountant satisfactory to Lender.

          Interim Statements. As soon as available, but in no event later than
          45 days after the end of each fiscal quarter, Borrower's balance sheet
          and profit and loss statement for the period ended, prepared by
          Borrower in form satisfactory to Lender.

     All financial reports required to be provided under this Agreement shall be
     prepared in accordance with GAAP, applied on a consistent basis, and
     certified by Borrower as being true and correct.

     Additional Information. Furnish such additional information and statements,
     as Lender may request from time to time reasonably.

     Financial Covenants and Ratios. Comply with the following covenants and
     ratios:

          Working Capital Requirements. Maintain Working Capital in excess of
          $5,000,000.00.

          Except as provided above, all computations made to determine
          compliance with the requirements contained in this paragraph shall be
          made in accordance with generally accepted accounting principles,
          applied on a consistent basis, and certified by Borrower as being true
          and correct. Borrowings under the line of credit will not be counted
          against this covenant through maturity.

     Insurance. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies acceptable to Lender. Borrower, upon request of Lender,
     will deliver to Lender from time to time the policies or certificates of
     insurance in form satisfactory to Lender, including stipulations that
     coverages will not be cancelled or diminished without at least ten (10)
     days prior written notice to Lender. Each insurance policy also shall
     include an endorsement providing that coverage in favor of Lender will not
     be impaired in any way by any act, omission or default of Borrower or any
     other person. In connection with all policies covering assets in which
     Lender holds or is offered a security interest for the Loans, Borrower will
     provide Lender with such lender's loss payable or other endorsements as
     Lender may require.

     Insurance Reports. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonably request, including without limitation the following: (1) the
     name of the insurer; (2) the risks insured; (3) the amount of the policy;
     (4) the properties insured; (5) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (6) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.
     The cost of such appraisal shall be paid by Borrower.

     Other Agreements. Comply with all terms and conditions of all other
     significant agreements, whether now or hereafter existing, between
     Borrower and any other party and notify Lender immediately in writing of
     any material default in connection with any other such agreements.

     Loan Proceeds. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     Taxes, Charges and Liens. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all assessments,
     taxes, governmental charges, levies and liens, of every kind and nature,
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach, and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income, or profits.
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                     (Continued)                             Page 4

================================================================================

     Performance. Perform and comply, in a timely manner, with all terms,
     conditions, and provisions set forth in this Agreement, in the Related
     Documents, and in all other instruments and agreements between Borrower and
     Lender. Borrower shall notify Lender immediately in writing of any default
     in connection with any agreement.

     Operations. Maintain executive and management personnel with substantially
     the same qualifications and experience as the present executive and
     management personnel; provide written notice to Lender of any change in
     executive and management personnel; conduct its business affairs in a
     reasonable and prudent manner.

     Environmental Studies. Promptly conduct and complete, at Borrower's
     expense, all such investigations, studies, samplings and testings as may be
     requested by Lender or any governmental authority relative to any
     substance, or any waste or by-product of any substance defined as toxic or
     a hazardous substance under applicable federal, state, or local law, rule,
     regulation, order or directive, at or affecting any property or any
     facility owned, leased or used by Borrower.

     Compliance with Governmental Requirements. Except as indicated in
     prospectus or subsequent SEC filings, comply with all laws, ordinances, and
     regulations, now or hereafter in effect, of all governmental authorities
     applicable to the conduct of Borrower's properties, businesses and
     operations, and to the use or occupancy of the Collateral, including
     without limitation, the Americans With Disabilities Act. Borrower may
     contest in good faith any such law, ordinance, or regulation and withhold
     compliance during any proceeding, including appropriate appeals, so long as
     Borrower has notified Lender in writing prior to doing so and so long as,
     in Lender's sole opinion, Lender's interests in the Collateral are not
     jeopardized. Lender may require Borrower to post adequate security or a
     surety bond, reasonably satisfactory to Lender, to protect Lender's
     interest.

     Inspection. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession of
     a third party, Borrower, upon request of Lender, shall notify such party to
     permit Lender free access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at Borrower's
     expense.

     Compliance Certificates. Unless waived in writing by Lender, provide Lender
     within forty-five (45) days after the end of each fiscal quarter, with a
     certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

     Environmental Compliance and Reports. Borrower shall comply in all respects
     with any and all Environmental Laws; not cause or permit to exist, as a
     result of an intentional or unintentional action or omission on Borrower's
     part or on the part of any third party, on property owned and/or occupied
     by Borrower, any environmental activity where damage may result to the
     environment, unless such environmental activity is pursuant to and in
     compliance with the conditions of a permit issued by the appropriate
     federal, state or local governmental authorities; shall furnish to Lender
     promptly and in any event within thirty (30) days after receipt thereof a
     copy of any notice, summons, lien, citation, directive, letter or other
     communication from any governmental agency or instrumentality concerning
     any intentional or unintentional action or omission on Borrower's part in
     connection with any environmental activity whether or not there is damage
     to the environment and/or other natural resources.

     Additional Assurances. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, assignments,
     financing statements, instruments, documents and other agreements as Lender
     or its attorneys may reasonably request to evidence and secure the Loans
     and to perfect all Security Interests.

RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except federal, state or local income or franchise taxes
imposed on Lender), reserve requirements, capital adequacy requirements or other
obligations which would (A) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(C) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on
demand, (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term
of any applicable insurance policy; or (2) the remaining term of the Note; or
(C) be treated as a balloon payment which will be due and payable at the Note's
maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

     Indebtedness and Liens. (1)  (2) sell, transfer, mortgage, assign, pledge,
     lease, grant a security interest in, or encumber any of Borrower's assets
     (except as allowed as Permitted Liens), or (3) sell with recourse any of
     Borrower's accounts, except to Lender.

     Continuity of Operations. (1) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (2) cease operations, liquidate, merge, transfer, acquire or consolidate
     with any other entity, change its name, dissolve or transfer or sell
     Collateral out of the ordinary course of business in excess of $250,000, or
     (3) pay any dividends on Borrower's stock (other than dividends payable in
     its stock), provided, however that notwithstanding the foregoing, but only
     so long as no Event of Default has occurred and is continuing or would
     result front the payment of dividends, if Borrower is a "Subchapter S
     Corporation" (as defined in the Internal Revenue Code of 1986, as amended),
     Borrower may pay cash dividends on its stock to its shareholders from time
     to time in amounts necessary to enable the shareholders to pay income taxes
     and make estimated income tax payments to satisfy their liabilities under
     federal and state law which arise solely from their status as Shareholders
     of a Subchapter S Corporation because of their ownership of shares of
     Borrower's stock.

     Loans, Acquisitions and Guaranties in excess of $250,000. (1) Loan, invest
     in or advance money or assets, (2) purchase, create or acquire any interest
     in any other enterprise or entity, or (3) incur any obligation as surety or
     guarantor other than in the ordinary course of business.
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                     (Continued)                             Page 5
================================================================================

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

     Payment Default. Borrower fails to make any payment when due under the
     Loan.

     Other Defaults. Borrower fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Agreement or in any of
     the Related Documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.

     Default in Favor of Third Parties. Borrower or any Grantor defaults under
     any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's or any Grantor's property or
     Borrower's or any Grantor's ability to repay the Loans or perform their
     respective obligations under this Agreement or any of the Related
     Documents.

     False Statements. Any warranty, representation or statement made or
     furnished to Lender by Borrower or on Borrower's behalf under this
     Agreement or the Related Documents is false or misleading in any material
     respect, either now or at the time made or furnished or becomes false or
     misleading at any time thereafter.

     Insolvency. The dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Borrower.

     Defective Collateralization. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     document to create a valid and perfected security interest or lien) at any
     time and for any reason.

     Creditor or Forfeiture Proceedings. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower or by any
     governmental agency against any collateral securing the Loan. This includes
     a garnishment of any of Borrower's accounts, including deposit accounts,
     with Lender. However, this Event of Default shall not apply if there is a
     good faith dispute by Borrower as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding and if
     Borrower gives Lender written notice of the creditor or forfeiture
     proceeding and deposits with Lender monies or a surety bond for the
     creditor or forfeiture proceeding, in an amount determined by Lender, in
     its sole discretion, as being an adequate reserve or bond for the dispute.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness or any Guarantor dies or
     becomes incompetent, or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness. In the event of a death, Lender,
     at its option, may, but shall not be required to, permit the Guarantor's
     estate to assume unconditionally the obligations arising under the guaranty
     in a manner satisfactory to Lender, and, in doing so, cure any Event of
     Default.

     Change in Ownership. Any change in ownership of twenty-five percent (25%)
     or more of the common stock of Borrower.

     Adverse Change. A material adverse change occurs in Borrower's financial
     condition, or Lender believes the prospect of payment or performance of the
     Loan is impaired.

     Insecurity. Lender in good faith believes itself insecure.

     Right to Cure. If any default, other than a default on Indebtedness, is
     curable and if Borrower or Grantor, as the case may be, has not been given
     a notice of a similar default within the preceding twelve (12) months, it
     may be cured (and no Event of Default will have occurred) if Borrower or
     Grantor, as the case may be, after receiving written notice from Lender
     demanding cure of such default: (1) cure the default within fifteen (15)
     days; or (2) if the cure requires more than fifteen (15) days, immediately
     initiate steps which Lender deems in Lender's sole discretion to be
     sufficient to cure the default and thereafter continue and complete all
     reasonable and necessary steps sufficient to produce compliance as soon as
     reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

INVENTORY REPORTS. Borrower shall furnish Lender with a monthly Inventory report
within twenty (20) days of the end of each period in form and content acceptable
to Lender.

ACCOUNTS PAYABLE AGING. Borrower shall furnish to Lender a quarterly Accounts
Payable Aging report in a form acceptable to Lender beginning July 15, 2001.

AUTHORIZATION TO VERIFY ACCOUNTS RECEIVABLE. Borrower hereby authorizes Lender
to verify its accounts receivable through written and/or verbal verification
methods at the discretion of the Lender.

WAIVER OF CLAIMS. BORROWER (i) REPRESENTS THAT THEY HAVE NO DEFENSES TO OR
SETOFFS AGAINST ANY INDEBTEDNESS OR OTHER OBLIGATIONS OWING TO LENDER OR ITS
AFFILIATES (THE "OBLIGATIONS"), NOR CLAIMS AGAINST LENDER OR ITS AFFILIATES FOR
ANY MATTER WHATSOEVER, RELATED OR UNRELATED TO THE OBLIGATIONS, AND (ii) RELEASE
LENDER AND ITS AFFILIATES FROM ALL CLAIMS, CAUSES OF ACTION, AND COSTS, IN LAW
OR EQUITY, EXISTING AS OF THE DATE OF THIS AGREEMENT WHICH BORROWER HAS OR MAY
HAVE BY REASON OF ANY MATTER OF ANY CONCEIVABLE KIND OR CHARACTER WHATSOEVER,
RELATED OR UNRELATED TO THE OBLIGATIONS, INCLUDING THE SUBJECT MATTER OF THIS
AGREEMENT. THIS PROVISION SHALL NOT APPLY TO CLAIMS FOR
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                (Continued)                                  Page 6

================================================================================

PERFORMANCE OF EXPRESS CONTRACTUAL OBLIGATIONS OWING TO BORROWER BY LENDER OR
ITS AFFILIATES.

DEFINITION OF INDEBTEDNESS AND NOTE. "Indebtedness" and "Note" as referenced
herein are hereby deleted in their entirety and replaced with the following:

Indebtedness. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by Lender
against Borrower, or any one or more of them; whether now or hereafter existing,
voluntary or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly with
others; whether Borrower may be obligated as a guarantor, surety, or otherwise;
whether recovery upon such indebtedness may be or hereafter may become barred by
any statute of limitations; and whether such indebtedness may be or hereafter
may become otherwise unenforceable.

Note: The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing note or
notes therefor.

BORROWING BASE CERTIFICATE. Borrower shall furnish to Lender a monthly Borrowing
Base Certificate certified by an authorized office/employee of Borrower, within
twenty (20) days of the end of each period, in a form acceptable to Lender.

COLLATERAL EXAM. Borrower shall allow Lender to perform annual Collateral Exams,
beginning August 2001.

NET PROFIT. Borrower shall maintain a Net Profit After Tax of not less than
$1,250,000.00, measured quarterly.

DISTRIBUTIONS. Borrower shall not pay any cash dividends or distributions
without the written consent of Lender, to be measured quarterly.

TOTAL LIABILITIES. Borrower shall maintain a ratio of Total Liabilities to Net
Worth of not more than 2.00 to 1.00 at all times, This calculation shall be
measured quarterly.

UNUSED LINE OF CREDIT FEE. A fee based on the unused portion of the line of
credit will be calculated quarter. The fee will be equal to one eight of one
percent of the unused amount based on the average unused balance of the line of
credit for the previous quarter. The first quarterly fee will be calculated on
October 31, 2001.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     Amendments. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to he charged or bound by the alteration or
     amendment.

     Arbitration Disclosures.

     1.   ARBITRATION IS FINAL AND BINDING ON THE PARTIES AND SUBJECT TO ONLY
          VERY LIMITED REVIEW BY A COURT.
     2.   IN ARBITRATION THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN
          COURT, INCLUDING THEIR RIGHT TO A JURY TRIAL.
     3.   DISCOVERY IN ARBITRATION IS MORE LIMITED THAN DISCOVERY IN COURT.
     4.   ARBITRATORS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
          REASONING IN THEIR AWARDS. THE RIGHT TO APPEAL OR SEEK MODIFICATION OF
          ARBITRATORS' RULINGS IS VERY LIMITED.
     5.   A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS
          AFFILIATED WITH THE BANKING INDUSTRY.
     6.   ARBITRATION WILL APPLY TO ALL DISPUTES BETWEEN THE PARTIES, NOT JUST
          THOSE CONCERNING THE AGREEMENT.
     7.   IF YOU HAVE QUESTIONS ABOUT ARBITRATION, CONSULT YOUR ATTORNEY OR THE
          AMERICAN ARBITRATION ASSOCIATION.

     (a)  Any claim or controversy ("Dispute") between or among the parties and
     their employees, agents, affiliates, and assigns, including, but not
     limited to, Disputes arising out of or relating to this agreement, this
     arbitration provision ("arbitration clause"), or any related agreements or
     instruments relating hereto or delivered in connection herewith ("Related
     Agreements"), and including, but not limited to, a Dispute based on or
     arising from an alleged tort, shall at the request of any party be resolved
     by binding arbitration in accordance with the applicable arbitration rules
     of the American Arbitration Association (the "Administrator"). The
     provisions of this arbitration clause shall survive any termination,
     amendment, or expiration of this agreement or Related Agreements. The
     provisions of this arbitration clause shall supersede any prior arbitration
     agreement between or among the parties.

     (b)  The arbitration proceedings shall be conducted in a city mutually
     agreed by the parties. Absent such an agreement, arbitration will be
     conducted in Salt Lake City, Utah or such other place as may be determined
     by the Administrator. The Administrator and the arbitrator(s) shall have
     the authority to the extent practicable to take any action to require the
     arbitration proceeding to be completed and the arbitrator(s)' award issued
     within 150 days of the filing of the Dispute with the Administrator. The
     arbitrator(s) shall have the authority to impose sanctions on any party
     that fails to comply with time periods imposed by the Administrator or the
     arbitrator(s), including the sanction of summarily dismissing any Dispute
     or defense with prejudice. The arbitrator(s) shall have the authority to
     resolve any Dispute regarding the terms of this agreement, this arbitration
     clause, or Related Agreements, including any claim or controversy regarding
     the arbitrability of any Dispute. All limitations periods applicable to any
     Dispute or defense, whether by statute or agreement, shall apply to any
     arbitration proceeding hereunder and the arbitrator(s) shall have the
     authority to decide whether any Dispute or defense is barred by a
     limitations period and, if so, to summarily enter an award dismissing any
     Dispute or defense on that basis. The doctrines of compulsory counterclaim,
     res judicata, and collateral estoppel shall apply to any arbitration
     proceeding hereunder so that a party must state as a counterclaim in the
     arbitration proceeding any claim or controversy which arises out of the
     transaction or occurrence that is the subject matter of the Dispute. The
     arbitrator(s) may in the arbitrator(s)' discretion and at the request of
     any party: (1) consolidate in a single arbitration proceeding any other
     claim arising out of the same transaction involving another party to that
     transaction that is bound by an arbitration clause with Lender, such as
     borrowers, guarantors, sureties, and owners of collateral; and (2)
     consolidate or administer multiple arbitration claims or controversies as a
     class action in accordance with Rule 23 of the Federal Rules of Civil
     Procedure.

     (c)  The arbitrator(s) shall be selected in accordance with the rules of
     the Administrator from panels maintained by the Administrator. A single
     arbitrator shall have expertise in the subject matter of the Dispute. Where
     three arbitrators conduct an arbitration proceeding, the Dispute shall be
     decided by a majority vote of the three arbitrators, at least one of whom
     must have expertise in the subject matter of the Dispute and at least one
     of whom must be a practicing attorney. The arbitrator(s) shall award to
     the prevailing party recovery of all costs and fees (including attorneys'
     fees and costs, arbitration administration fees and costs, and
     arbitrator(s)' fees). The arbitrator(s), either during the pendency of the
     arbitration proceeding or as part of the arbitration award, also may grant
     provisional or ancillary remedies including but not limited to an award of
     injunctive relief, foreclosure, sequestration, attachment, replevin,
     garnishment, or the appointment of a receiver.

     (d)  Judgement upon an arbitration award may be entered in any court having
     jurisdiction, subject to the following limitation: the arbitration award is
     binding upon the parties only if the amount does not exceed Four Million
     Dollars ($4,000,000.00); if the award exceeds that limit, either party
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                    (Continued)                            Page 7

================================================================================

     may demand the right to a court trial. Such a demand must be filed with the
     Administrator within thirty (30) days following the date of the arbitration
     award; if such a demand is not made with that time period, the amount of
     the arbitration award shall be binding. The computation of the total amount
     of an arbitration award shall include amounts awarded for attorneys' fees
     and costs, arbitration administration fees and costs, and arbitrator(s)'
     fees.

     (e) No provision of this arbitration clause, nor the exercise of any rights
     hereunder, shall limit the right of any party to: (1) judicially or non-
     judicially foreclose against any real or personal property collateral or
     other security; (2) exercise self-help remedies, including but not limited
     to repossession and setoff rights; or (3) obtain from a court having
     jurisdiction thereover any provisional or ancillary remedies including but
     not limited to injunctive relief, foreclosure, sequestration, attachment,
     replevin, garnishment, or the appointment of a receiver. Such rights can be
     exercised at any time, before or after initiation of an arbitration
     proceeding, except to the extent such action is contrary to the arbitration
     award. The exercise of such rights shall not constitute a waiver of the
     right to submit any Dispute to arbitration, and any claim or controversy
     related to the exercise of such rights shall be a Dispute to be resolved
     under the provisions of this arbitration clause. Any party may initiate
     arbitration with the Administrator. If any party desires to arbitrate a
     Dispute asserted against such party in a complaint, counterclaim, cross-
     claim, or third-party complaint thereto, or in an answer or other reply to
     any such pleading, such party must make an appropriate motion to the trial
     court seeking to compel arbitration, which motion must be filed with the
     court within 45 days of service of the pleading, or amendment thereto,
     setting forth such Dispute. If arbitration is compelled after commencement
     of litigation of a Dispute, the party obtaining an order compelling
     arbitration shall commence arbitration and pay the Administrator's filing
     fees and costs within 45 days of entry of such order. Failure to do so
     shall constitute an agreement to proceed with litigation and waiver of the
     right to arbitrate. In any arbitration commenced by a consumer regarding a
     consumer Dispute, Lender shall pay one half of the Administrator's filing
     fee, up to $250.

     (f) Notwithstanding the applicability of any other law to this agreement,
     the arbitration clause, or Related Agreements between or among the parties,
     the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., shall apply to the
     construction and interpretation of this arbitration clause. If any
     provision of this arbitration clause should be determined to be
     unenforceable, all other provisions of this arbitration clause shall remain
     in full force and effect.

     Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of
     Lender's costs and expenses, including Lender's reasonable attorneys' fees
     and Lender's legal expenses, incurred in connection with the enforcement of
     this Agreement. Lender may hire or pay someone else to help enforce this
     Agreement, and Borrower shall pay the costs and expenses of such
     enforcement. Costs and expenses include Lender's reasonable attorneys' fees
     and legal expenses whether or not Lender's salaried employee and whether or
     not there is a lawsuit, including reasonable attorneys' fees and legal
     expenses for bankruptcy proceedings (including efforts to modify or vacate
     any automatic stay or injunction), appeals, and any anticipated post-
     judgment collection services. Borrower also shall pay all court costs and
     such additional fees as may be directed by the court.

     Caption Headings. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     Consent to Loan Participation. Borrower agrees and consents to Lender's
     sale or transfer, whether now or later, of one or more participation
     interests in the Loan to one or more purchasers, whether related or
     unrelated to Lender. Lender may provide, without any limitation whatsoever,
     to any one or more purchasers, or potential purchasers, any information or
     knowledge Lender may have about Borrower or about any other matter relating
     to the Loan, and Borrower hereby waives any rights to privacy Borrower may
     have with respect to such matters. Borrower additionally waives any and all
     notices of sale of participation interests, as well as all notices of any
     repurchase of such participation interests. Borrower also agrees that the
     purchasers of any such participation interests will be considered as the
     absolute owners of such interests in the Loan and will have all the rights
     granted under the participation agreement or agreements governing the sale
     of such participation interests. Borrower further waives all rights of
     offset or counterclaim that it may have now or later against Lender or
     against any purchaser of such a participation interest and unconditionally
     agrees that either Lender or such purchaser may enforce Borrower's
     obligation under the Loan irrespective of the failure or insolvency of any
     holder of any interest in the Loan. Borrower further agrees that the
     purchaser of any such participation interests may enforce its interests
     irrespective of any personal claims or defenses that Borrower may have
     against Lender.

     Governing Law. This Agreement will be governed by, construed and enforced
     in accordance with federal law and the laws of the State of Utah. This
     Agreement has been accepted by Lender in the State of Utah.

     Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's
     request to submit to the jurisdiction of the courts of SALT LAKE County,
     State of Utah.

     No Waiver by Lender. Lender shall not be deemed to have waived any rights
     under this Agreement unless such waiver is given in writing and signed by
     Lender. No delay or omission on the part of Lender in exercising any right
     shall operate as a waiver of such right or any other right. A waiver by
     Lender of a provision of this Agreement shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Agreement. No prior waiver by
     Lender, nor any course of dealing between Lender and Borrower, or between
     Lender and any Grantor, shall constitute a waiver of any of Lender's rights
     or of any of Borrower's or any Grantor's obligations as to any future
     transactions. Whenever the consent of Lender is required under this
     Agreement, the granting of such consent by Lender in any instance shall not
     constitute continuing consent to subsequent instances where such consent is
     required and in all cases such consent may be granted or withheld in the
     sole discretion of Lender.

     Notices. Unless otherwise provided by applicable law, any notice required
     to be given under this Agreement or required by law shall be given in
     writing, and shall be effective when actually delivered in accordance with
     the law or with this Agreement, when actually received by telefacsimile
     (unless otherwise required by law), when deposited with a nationally
     recognized overnight courier, or, if mailed, when deposited in the United
     States mail, as first class, certified or registered mail postage prepaid,
     directed to the addresses shown near the beginning of this Agreement. Any
     party may change its address for notices under this Agreement by giving
     formal written notice to the other parties, specifying that the purpose of
     the notice is to change the party's address. For notice purposes, Borrower
     agrees to keep Lender informed at all times of Borrower's current address.
     Unless otherwise provided by applicable law, if there is more than one
     Borrower, any notice given by Lender to any Borrower is deemed to be notice
     given to all Borrowers.

     Severability. If a court of competent jurisdiction finds any provision of
     this Agreement to be illegal, invalid, or unenforceable as to any
     circumstance, that finding shall not make the offending provision illegal,
     invalid, or unenforceable as to any other circumstance. If feasible, the
     offending provision shall be considered modified so that it becomes legal,
     valid and enforceable. If the offending provision cannot be so modified, it
     shall be considered deleted from this Agreement. Unless otherwise required
     by law, the illegality, invalidity, or unenforceability of any provision of
     this Agreement shall not affect the legality, validity or enforceability of
     any other provision of this Agreement.

     Subsidiaries and Affiliates of Borrower. To the extent the context of any
     provisions of this Agreement makes it appropriate, including without
     limitation any representation, warranty or covenant, the word "Borrower" as
     used in this Agreement shall include all of Borrower's subsidiaries and
     affiliates. Notwithstanding the foregoing however, under no circumstances
     shall this Agreement be construed to require Lender to make any Loan or
     other financial accommodation to any of Borrower's subsidiaries or
     affiliates.

     Successors and Assigns. All covenants and agreements contained by or on
     behalf of Borrower shall bind Borrower's successors and assigns
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                      (Continued)                            Page 8

================================================================================

     and shall inure to the benefit of Lender and its successors and assigns.
     Borrower shall not, however, have the right to assign Borrower's rights
     under this Agreement or any interest therein, without the prior written
     consent of Lender.

     Survival of Representations and Warranties. Borrower understands and agrees
     that in extending Loan Advances, Lender is relying on all representations,
     warranties, and covenants made by Borrower in this Agreement or in any
     certificate or other instrument delivered by Borrower to Lender under this
     Agreement or the Related Documents. Borrower further agrees that regardless
     of any investigation made by Lender, all such representations, warranties
     and covenants will survive the extension of Loan Advances and delivery to
     Lender of the Related Documents, shall be continuing in nature, shall be
     deemed made and redated by Borrower at the time each Loan Advance is made,
     and shall remain in full force and effect until such time as Borrower's
     Indebtedness shall be paid in full, or until this Agreement shall be
     terminated in the manner provided above, whichever is the last to occur.

     Time is of the Essence. Time is of the essence in the performance of this
     Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:

     Advance. The word "Advance" means a disbursement of Loan funds made, or to
     be made, to Borrower or on Borrower's behalf under the terms and conditions
     of this Agreement.

     Agreement. The word "Agreement" means this Business Loan Agreement (Asset
     Based), as this Business Loan Agreement (Asset Based) may be amended or
     modified from time to time, together with all exhibits and schedules
     attached to this Business Loan Agreement (Asset Based) from time to time.

     Borrower. The word "Borrower" means 1-800 CONTACTS (DELAWARE), INC.

     Borrowing Base. The words "Borrowing Base" mean, as determined by Lender
     from time to time, the lesser of (1) $20,000,000.00 or (2) 50.000% of the
     aggregate amount of Eligible Inventory.

     Business Day. The words "Business Day" mean a day on which commercial banks
     are open in the State of Utah.

     Collateral. The word "Collateral" means all property and assets granted as
     collateral security for a Loan, whether real or personal property, whether
     granted directly or indirectly, whether granted now or in the future, and
     whether granted in the form of a security interest, mortgage, collateral
     mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
     collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
     conditional sale, trust receipt, lien, charge, lien or title retention
     contract, lease or consignment intended as a security device, or any other
     security or lien interest whatsoever, whether created by law, contract, or
     otherwise. The word Collateral also includes without limitation all
     collateral described in the Collateral section of this Agreement.

     Eligible Inventory. The words "Eligible Inventory" mean at any time, all of
     Borrower's Inventory as defined below except:

          (1)  Inventory which is not owned by Borrower free and clear of all
          security interests, liens, encumbrances, and claims of third parties.

          (2)  Inventory which Lender, in its sole discretion, deems to be
          obsolete, unsalable, damaged, defective, or unfit for further
          processing.

          (3)  Work in progress

          (4)  Inventory which is not for direct resale including but not
          limited to packaging, labeling, and manufacturing supplies. Inventory
          which is prohibited from being sold by any federal, state, or local
          governmental agency. Inventory which Lender in its sole discretion
          reasonably deems ineligible.

     Environmental Laws. The words "Environmental Laws" mean any and all state,
     federal and local statutes, regulations and ordinances relating to the
     protection of human health or the environment, including without limitation
     the Comprehensive Environmental Response, Compensation, and Liability Act
     of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
     Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
     ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
     1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
     Section 6901, et seq., or other applicable state or federal laws, rules, or
     regulations adopted pursuant thereto.

     Event of Default. The words "Event of Default" mean any of the events of
     default set forth in this Agreement in the default section of this
     Agreement.

     Expiration Date. The words "Expiration Date" mean the date of termination
     of Lender's commitment to lend under this Agreement.

     GAAP. The word "GAAP" means generally accepted accounting principles.

     Grantor. The word "Grantor" means each and all of the persons or entities
     granting a Security Interest in any Collateral for the Loan, including
     without limitation all Borrowers granting such a Security Interest.

     Guarantor. The word "Guarantor" means any guarantor, surety, or
     accommodation party of any or all of the Loan.

     Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender,
     including without limitation a guaranty of all or part of the Note.

     Hazardous Substances. The words "Hazardous Substances" mean materials that,
     because of their quantity, concentration or physical, chemical or
     infectious characteristics, may cause or pose a present or potential hazard
     to human health or the environment when improperly used, treated, stored,
     disposed of, generated, manufactured, transported or otherwise handled. The
     words *Hazardous Substances" are used in their very broadest sense and
     include without limitation any and all hazardous or toxic substances,
     materials or waste as defined by or listed under the Environmental Laws.
     The term "Hazardous Substances" also includes, without limitation,
     petroleum and petroleum by-products or any fraction thereof and asbestos.

     Indebtedness. The word 1ndebtedness" means the indebtedness evidenced by
     the Note or Related Documents, including all principal and interest
     together with all other indebtedness and costs and expenses for which
     Borrower is responsible under this Agreement or under any of the Related
     Documents.

     Inventory. The word "Inventory" means all of Borrower's raw materials, work
     in process, finished goods, merchandise, parts and supplies, of every kind
     and description, and goods held for sale or lease or furnished under
     contracts of service in which Borrower now has or hereafter acquires any
     right, whether held by Borrower or others, and all documents of title,
     warehouse receipts, bills of lading, and all other documents of every type
     covering all or any part of the foregoing. Inventory includes inventory
     temporarily out of Borrower's custody or possession and all
<PAGE>

                     BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9003                      (Continued)                            Page 9

================================================================================

     returns on Accounts.

     Lender. The word "Lender" means ZIONS FIRST NATIONAL BANK, its successors
     and assigns.

     Loan. The word "Loan" means any and all loans and financial accommodations
     from Lender to Borrower whether now or hereafter existing, and however
     evidenced, including without limitation those loans and financial
     accommodations described herein or described on any exhibit or schedule
     attached to this Agreement from time to time.

     Note. The word "Note" means the Note executed by Borrower in the principal
     amount of $20,000,000.00 dated June 26, 2001, together with all renewals
     of, extensions of, modifications of, refinancings of, consolidations of,
     and substitutions for the note or credit agreement.

     Permitted Liens. The words "Permitted Liens" mean (1) liens and security
     interests securing Indebtedness owed by Borrower to Lender; (2) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (4) purchase money
     liens or purchase money security interests upon or in any property acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (5) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by the Lender in writing;
     and (6) those liens and security interests which in the aggregate
     constitute an immaterial and insignificant monetary amount with respect to
     the net value of Borrower's assets.

     Primary Credit Facility. The words "Primary Credit Facility" mean the
     credit facility described in the Line of Credit section of this Agreement.

     Related Documents. The words "Related Documents" mean all promissory notes,
     credit agreements, loan agreements, environmental agreements, guaranties,
     security agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Loan.

     Security Agreement. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     Security Interest. The words "Security Interest" mean, without limitation,
     any and all types of collateral security, present and future, whether in
     the form of a lien, charge, encumbrance, mortgage, deed of trust, security
     deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
     mortgage, chattel trust, factor's lien, equipment trust, conditional sale,
     trust receipt, lien or title retention contract, lease or consignment
     intended as a security device, or any other security or lien interest
     whatsoever whether created by law, contract, or otherwise.

FINAL AGREEMENT. Borrower understands that this Agreement and the related loan
documents are the final expression of the agreement between Lender and Borrower
and may not be contradicted by evidence of any alleged oral agreement.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED JUNE 26, 2001.

BORROWER:

1-800 CONTACTS (DELAWARE) INC.

By:  /s/ JONATHAN C. COON
   ------------------------------------
   JONATHAN C. COON, President of 1-800
   CONTACTS (DELAWARE), INC.

LENDER:

ZIONS FIRST NATIONAL BANK

By:  /s/ Brett L. Eliason
   ------------------------------------
    Authorized Signer

================================================================================
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT

--------------------------------------------------------------------------------
  Principal    Loan Date   Maturity  Loan No Call/Coll Account Officer  Initials
$20,000,000.00 06-26-2001 04-30-2003   9003   2/7420   7057008  11049
--------------------------------------------------------------------------------
 References in the shaded area are for Lender's use only and do not limit the
        applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
--------------------------------------------------------------------------------

<TABLE>
<S>                                                    <C>
Grantor:  1-800 CONTACTS (DELAWARE), INC.              Lender:   ZIONS FIRST NATIONAL BANK
          66 EAST WADSWORTH PARK DRIVE 3RD FLOOR                 SALT LAKE COMMERCIAL BANKING CENTER
          DRAPER, UT 84020                                       #1 SOUTH MAIN STREET
                                                                 SALT LAKE CITY, UT 84111
</TABLE>

================================================================================

THIS COMMERCIAL SECURITY AGREEMENT dated June 26, 2001, is made and executed
between 1-800 CONTACTS (DELAWARE), INC. ("Grantor") and ZIONS FIRST NATIONAL
BANK ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this
Agreement:

     All Inventory, Chattel Paper, Accounts, Equipment and General Intangibles

In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

     (A)  All accessions, attachments, accessories, tools, parts, supplies,
     replacements and additions to any of the collateral described herein,
     whether added now or later.

     (B)  All products and produce of any of the property described in this
     Collateral section.

     (C)  All accounts, general intangibles, instruments, rents, monies,
     payments, and all other rights, arising out of a sale, lease, or other
     disposition of any of the property described in this Collateral section.

     (D)  All proceeds (including insurance proceeds) from the sale,
     destruction, loss, or other disposition of any of the property described in
     this Collateral section, and sums due from a third party who has damaged or
     destroyed the Collateral or from that party's insurer, whether due to
     judgment, settlement or other process.

     (E)  All records and data relating to any of the property described in this
     Collateral section, whether in the form of a writing, photograph,
     microfilm, microfiche, or electronic media, together with all of Grantor's
     right, title, and interest in and to all computer software required to
     utilize, create, maintain, and process any such records or data on
     electronic media.

Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until
such a notice is given.

CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all
obligations, debts and liabilities, plus interest thereon, of Grantor to Lender,
or any one or more of them, as well as all claims by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated whether Grantor may be liable
individually or jointly with others, whether obligated as guarantor, surety,
accommodation party or otherwise, and whether recovery upon such amounts may be
or hereafter may become barred by any statute of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise
unenforceable.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:

     Perfection of Security Interest. Grantor agrees to execute financing
     statements and to take whatever other actions are requested by Lender to
     perfect and continue Lender's security interest in the Collateral. Upon
     request of Lender, Grantor will deliver to Lender any and all of the
     documents evidencing or constituting the Collateral, and Grantor will note
     Lender's interest upon any and all chattel paper if not delivered to Lender
     for possession by Lender. This is a continuing Security Agreement and will
     continue in effect even though all or any part of the Indebtedness is paid
     in full and even though for a period of time Grantor may not be indebted to
     Lender.

     Notices to Lender. Grantor will promptly notify Lender in writing at
     Lender's address shown above (or such other addresses as Lender may
     designate from time to time) prior to any (1) change in Grantor's name; (2)
     change in Grantor's assumed business name(s); (3) change in the management
     of the Corporation Grantor; (4) change in the authorized signer(s); (5)
     change in Grantor's principal office address; (6) change in Grantor's state
     of organization; (7) conversion of Grantor to a new or different type of
     business entity; or (8) change in any other aspect of Grantor that directly
     or indirectly relates to any agreements between Grantor and Lender. No
     change in Grantor's name or state of organization will take effect until
     after Lender has received notice

     No Violation. The execution and delivery of this Agreement will not violate
     any law or agreement governing Grantor or to which Grantor is a party, and
     its certificate or articles of incorporation and bylaws do not prohibit any
     term or condition of this Agreement.

     Enforceability of Collateral. To the extent the Collateral consists of
     accounts, chattel paper, or general intangibles, as defined by the Uniform
     Commercial Code, the Collateral is enforceable in accordance with its
     terms, is genuine, and fully complies with all applicable laws and
     regulations concerning form, content and manner of preparation and
     execution, and all persons appearing to be obligated on the Collateral have
     authority and capacity to contract and are in fact obligated as they appear
     to be on the Collateral. At the time any Account becomes subject to a
     security interest in favor of Lender, the Account shall be a good and valid
     account representing an undisputed, bona fide indebtedness incurred by the
     account debtor, for merchandise field subject to delivery instructions or
     previously shipped or delivered pursuant to a contract of sale, or for
     services previously performed by Grantor with or for the account debtor. So
     long as this Agreement remains in effect, Grantor shall not, without
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                      (Continued)                            Page 2

================================================================================

     Lender's prior written consent, compromise, settle, adjust, or extend
     payment under or with regard to any such Accounts. There shall be no
     setoffs or counterclaims against any of the Collateral, and no agreement
     shall have been made under which any deductions or discounts may be claimed
     concerning the Collateral except those disclosed to Lender in writing.

     Location of the Collateral. Except in the ordinary course of Grantor's
     business, Grantor agrees to keep the Collateral (or to the extent the
     Collateral consists of intangible property such as accounts or general
     intangibles, the records concerning the Collateral) at Grantor's address
     shown above or at such other locations as are acceptable to Lender. Upon
     Lender's request, Grantor will deliver to Lender in form satisfactory to
     Lender a schedule of real properties and Collateral locations relating to
     Grantor's operations, including without limitation the following: (1) all
     real property Grantor owns or is purchasing; (2) all real property Grantor
     is renting or leasing; (3) all storage facilities Grantor owns, rents,
     leases, or uses; and (4) all other properties where Collateral is or may
     be located.

     Removal of the Collateral. Except in the ordinary course of Grantor's
     business, including the sales of inventory, Grantor shall not remove the
     Collateral from its existing location without Lender's prior written
     consent. To the extent that the Collateral consists of vehicles, or other
     titled property, Grantor shall not take or permit any action which would
     require application for certificates of title for the vehicles outside the
     State of Utah, without Lender's prior written consent. Grantor shall,
     whenever requested, advise Lender of the exact location of the Collateral.

     Transactions Involving Collateral. Except for inventory sold or accounts
     collected in the ordinary course of Grantor's business, or as otherwise
     provided for in this Agreement, Grantor shall not sell, offer to sell, or
     otherwise transfer or dispose of the Collateral in excess of $250,000.
     While Grantor is not in default under this Agreement, Grantor may sell
     inventory, but only in the ordinary course of its business and only to
     buyers who qualify as a buyer in the ordinary course of business. A sale in
     the ordinary course of Grantor's business does not include a transfer in
     partial or total satisfaction of a debt or any bulk sale. Grantor shall not
     pledge, mortgage, encumber or otherwise permit the Collateral to be subject
     to any lien, security interest, encumbrance, or charge, other than the
     security interest provided for in this Agreement, without the prior written
     consent of Lender. This includes security interests even if junior in right
     to the security interests granted under this Agreement. Unless waived by
     Lender, all proceeds from any disposition of the Collateral (for whatever
     reason) shall be held in trust for Lender and shall not be commingled with
     any other funds; provided however, this requirement shall not constitute
     consent by Lender to any sale or other disposition. Upon receipt, Grantor
     shall immediately deliver any such proceeds to Lender.

     Title. Grantor represents and warrants to Lender that Grantor holds good
     and marketable title to the Collateral, free and clear of all liens and
     encumbrances except for the lien of this Agreement. No financing statement
     covering any of the Collateral is on file in any public office other than
     those which reflect the security interest created by this Agreement or to
     which Lender has specifically consented. Grantor shall defend Lender's
     rights in the Collateral against the claims and demands of all other
     persons.

     Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause
     others to keep and maintain, the Collateral in good order, repair and
     condition at all times while this Agreement remains in effect. Grantor
     further agrees to pay when due all claims for work done on, or services
     rendered or material furnished in connection with the Collateral so that no
     lien or encumbrance may ever attach to or be filed against the Collateral.

     Inspection of Collateral. Lender and Lender's designated representatives
     and agents shall have the right at all reasonable times to examine and
     inspect the Collateral wherever located.

     Taxes, Assessments and Liens. Grantor will pay when due all taxes,
     assessments and liens upon the Collateral, its use or operation, upon this
     Agreement, upon any promissory note or notes evidencing the Indebtedness,
     or upon any of the other Related Documents. Grantor may withhold any such
     payment or may elect to contest any lien if Grantor is in good faith
     conducting an appropriate proceeding to contest the obligation to pay and
     so long as Lender's interest in the Collateral is not jeopardized in
     Lender's sole opinion. If the Collateral is subjected to a lien which is
     not discharged within fifteen (15) days, Grantor shall deposit with Lender
     cash, a sufficient corporate surety bond or other security satisfactory to
     Lender in an amount adequate to provide for the discharge of the lien plus
     any interest, costs, reasonable attorneys' fees or other charges that could
     accrue as a result of foreclosure or sale of the Collateral. In any contest
     Grantor shall defend itself and Lender and shall satisfy any final adverse
     judgment before enforcement against the Collateral. Grantor shall name
     Lender as an additional obligee under any surety bond furnished in the
     contest proceedings. Grantor further agrees to furnish Lender with evidence
     that such taxes, assessments, and governmental and other charges have been
     paid in full and in a timely manner. Grantor may withhold any such payment
     or may elect to contest any lien if Grantor is in good faith conducting an
     appropriate proceeding to contest the obligation to pay and so long as
     Lender's interest in the Collateral is not jeopardized.

     Compliance with Governmental Requirements. Grantor shall comply promptly
     with all laws, ordinances, rules and regulations of all governmental
     authorities, now or hereafter in effect, applicable to the ownership,
     production, disposition, or use of the Collateral. Grantor may contest in
     good faith any such law, ordinance or regulation and withhold compliance
     during any proceeding, including appropriate appeals, so long as Lender's
     interest in the Collateral, in Lender's opinion, is not jeopardized except
     as indicated in prospectus or subsequent SEC Filings.

     Hazardous Substances. Grantor represents and warrants that the Collateral
     never has been, and never will be so long as this Agreement remains a lien
     on the Collateral, used in violation of any Environmental Laws or for the
     generation, manufacture, storage, transportation, treatment, disposal,
     release or threatened release of any Hazardous Substance. The
     representations and warranties contained herein are based on Grantor's due
     diligence in investigating the Collateral for Hazardous Substances. Grantor
     hereby (1) releases and waives any future claims against Lender for
     indemnity or contribution in the event Grantor becomes liable for cleanup
     or other costs under any Environmental Laws, and (2) agrees to indemnify
     and hold harmless Lender against any and all claims and losses resulting
     from a breach of this provision of this Agreement. This obligation to
     indemnify shall survive the payment of the Indebtedness and the
     satisfaction of this Agreement.

     Maintenance of Casualty Insurance. Grantor shall procure and maintain all
     risks insurance, including without limitation fire, theft and liability
     coverage together with such other insurance as Lender may require with
     respect to the Collateral, in form, amounts, coverages and basis reasonably
     acceptable to Lender and issued by a company or companies reasonably
     acceptable to Lender. Grantor, upon request of Lender, will deliver to
     Lender from time to time the policies or certificates of insurance in form
     satisfactory to Lender, including stipulations that coverages will not be
     cancelled or diminished without at least ten (10) days' prior written
     notice to Lender and not including any disclaimer of the insurer's
     liability for failure to give such a notice. Each insurance policy also
     shall include an endorsement providing that coverage in favor of Lender
     will not be impaired in any way by any act, omission or default of Grantor
     or any other person. In connection with all policies covering assets in
     which Lender holds or is offered a security interest, Grantor will provide
     Lender with such loss payable or other endorsements as Lender may require.
     If Grantor at any time fails to obtain or maintain any insurance as
     required under this Agreement, Lender may (but shall not be obligated to)
     obtain such insurance as Lender deems appropriate, including if Lender so
     chooses "single interest insurance," which will cover only Lender's
     interest in the Collateral.

     Application of Insurance Proceeds. Grantor shall promptly notify Lender of
     any loss or damage to the Collateral. Lender may make proof of loss if
     Grantor fails to do so within fifteen (15) days of the casualty. All
     proceeds of any insurance on the Collateral, including accrued proceeds
     thereon, shall be held by Lender as part of the Collateral. If Lender
     consents to repair or replacement of the damaged or destroyed Collateral,
     Lender shall, upon satisfactory proof of expenditure, pay or reimburse
     Grantor from the proceeds for the reasonable cost of repair or restoration.
     If Lender does not consent to repair or replacement of the Collateral,
     Lender shall retain a sufficient amount of the proceeds to pay all of the
     Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
     not been disbursed within six (6) months after their receipt and
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                     (Continued)                             Page 3

================================================================================

     which Grantor has not committed to the repair or restoration of the
     Collateral shall be used to prepay the Indebtedness.

     Insurance Reserves. Lender may require Grantor to maintain with Lender
     reserves for payment of insurance premiums, which reserves shall be created
     by monthly payments from Grantor of a sum estimated by Lender to be
     sufficient to produce, at least fifteen (15) days before the premium due
     date, amounts at least equal to the insurance premiums to be paid. If
     fifteen (15) days before payment is due, the reserve funds are
     insufficient, Grantor shall upon demand pay any deficiency to Lender. The
     reserve funds shall be held by Lender as a general deposit and shall
     constitute a non-interest-bearing account which Lender may satisfy by
     payment of the insurance premiums required to be paid by Grantor as they
     become due. Lender does not hold the reserve funds in trust for Grantor,
     and Lender is not the agent of Grantor for payment of the insurance
     premiums required to be paid by Grantor. The responsibility for the payment
     of premiums shall remain Grantor's sole responsibility.

     Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
     reports on each existing policy of insurance showing such information as
     Lender may reasonably request including the following: (1) the name of the
     insurer; (2) the risks insured; (3) the amount of the policy; (4) the
     property insured; (5) the then current value on the basis of which
     insurance has been obtained and the manner of determining that value; and
     (6) the expiration date of the policy. In addition, Grantor shall upon
     request by Lender (however not more often than annually) have an
     independent appraiser satisfactory to Lender determine, as applicable, the
     cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

     Payment Default. Grantor fails to make any payment when due under the
     Indebtedness.

     Other Defaults. Grantor fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Agreement or in any of
     the Related Documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Grantor.

     Default in Favor of Third Parties. Should Grantor or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Grantor's property or Grantor's or any
     Grantor's ability to repay the Indebtedness or perform their respective
     obligations under this Agreement or any of the Related Documents.

     False Statements. Any warranty, representation or statement made or
     furnished to Lender by Grantor or on Grantor's behalf under this Agreement
     or the Related Documents is false or misleading in any material respect,
     either now or at the time made or furnished.

     Defective Collateralization. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     document to create a valid and perfected security interest or lien) at any
     time and for any reason.

     Insolvency. The dissolution or termination of Grantor's existence as a
     going business, the insolvency of Grantor, the appointment of a receiver
     for any part of Grantor's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Grantor.

     Creditor or Forfeiture Proceedings. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Grantor or by any
     governmental agency against any collateral securing the Indebtedness. This
     includes a garnishment of any of Grantor's accounts, including deposit
     accounts, with Lender. However, this Event of Default shall not apply if
     there is a good faith dispute by Grantor as to the validity or
     reasonableness of the claim which is the basis of the creditor or
     forfeiture proceeding and if Grantor gives Lender written notice of the
     creditor or forfeiture proceeding and deposits with Lender monies or a
     surety bond for the creditor or forfeiture proceeding, in an amount
     determined by Lender, in its sole discretion, as being an adequate reserve
     or bond for the dispute.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to guarantor, endorser, surety, or accommodation party of any of the
     Indebtedness or guarantor, endorser, surety, or accommodation party dies or
     becomes incompetent or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness.

     Adverse Change. A material adverse change occurs in Grantor's financial
     condition, or Lender believes the prospect of payment or performance of
     the Indebtedness is impaired.

     Insecurity. Lender in good faith believes itself insecure.

     Cure Provisions. If any default, other than a default in payment is curable
     and if Grantor has not been given a notice of a breach of the same
     provision of this Agreement within the preceding twelve (12) months, it may
     be cured (and no event of default will have occurred) if Grantor, after
     receiving written notice from Lender demanding cure of such default: (1)
     cures the default within fifteen (15) days; or (2) if the cure requires
     more than fifteen (15) days, immediately initiates steps which Lender deems
     in Lender's sole discretion to be sufficient to cure the default and
     thereafter continues and completes all reasonable and necessary steps
     sufficient to produce compliance as soon as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Utah Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                     (Continued)                             Page 4

================================================================================

rights and remedies:

     Accelerate Indebtedness. Lender may declare the entire Indebtedness,
     including any prepayment penalty which Grantor would be required to pay,
     immediately due and payable, without notice of any kind to Grantor.

     Assemble Collateral. Lender may require Grantor to deliver to Lender all or
     any portion of the Collateral and any and all certificates of title and
     other documents relating to the Collateral. Lender may require Grantor to
     assemble the Collateral and make it available to Lender at a place to be
     designated by Lender. Lender also shall have full power to enter upon the
     property of Grantor to take possession of and remove the Collateral. If the
     Collateral contains other goods not covered by this Agreement at the time
     of repossession, Grantor agrees Lender may take such other goods, provided
     that Lender makes reasonable efforts to return them to Grantor after
     repossession.

     Sell the Collateral. Lender shall have full power to sell, lease, transfer,
     or otherwise deal with the Collateral or proceeds thereof in Lender's own
     name or that of Grantor. Lender may sell the Collateral at public auction
     or private sale. Unless the Collateral threatens to decline speedily in
     value or is of a type customarily sold on a recognized market, Lender will
     give Grantor reasonable notice of the time after which any private sale or
     any other intended disposition of the Collateral is to be made. The
     requirements of reasonable notice shall be met if such notice is given at
     least fifteen (15) days before the time of the sale or disposition. All
     expenses relating to the disposition of the Collateral, including without
     limitation the expenses of retaking, holding, insuring, preparing for sale
     and selling the Collateral, shall become a part of the Indebtedness secured
     by this Agreement and shall be payable on demand, with interest at the Note
     rate from date of expenditure until repaid.

     Appoint Receiver. Lender shall have the right to have a receiver appointed
     to take possession of all or any part of the Collateral, with the power to
     protect and preserve the Collateral, to operate the Collateral preceding
     foreclosure or sale, and to collect the Rents from the Collateral and apply
     the proceeds, over and above the cost of the receivership, against the
     Indebtedness. Grantor hereby waives any requirement that the receiver be
     impartial and disinterested as to all of the parties and agrees that
     employment by Lender shall not disqualify a person from serving as a
     receiver.

     Collect Revenues, Apply Accounts. Lender, either itself or through a
     receiver, may collect the payments, rents, income, and revenues from the
     Collateral. Lender may at any time in Lender's discretion transfer any
     Collateral into Lender's own name or that of Lender's nominee and receive
     the payments, rents, income, and revenues therefrom and hold the same as
     security for the Indebtedness or apply it to payment of the Indebtedness in
     such order of preference as Lender may determine. Insofar as the Collateral
     consists of accounts, general intangibles, insurance policies, instruments,
     chattel paper, choses in action, or similar property, Lender may demand,
     collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
     realize on the Collateral as Lender may determine, whether or not
     Indebtedness or Collateral is then due. For these purposes, Lender may, on
     behalf of and in the name of Grantor, receive, open and dispose of mail
     addressed to Grantor; change any address to which mail and payments are to
     be sent; and endorse notes, checks, drafts, money orders, documents of
     title, instruments and items pertaining to payment, shipment, or storage of
     any Collateral. To facilitate collection, Lender may notify account debtors
     and obligors on any Collateral to make payments directly to Lender.

     Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
     Lender may obtain a judgment against Grantor for any deficiency remaining
     on the Indebtedness due to Lender after application of all amounts received
     from the exercise of the rights provided in this Agreement. Grantor shall
     be liable for a deficiency even if the transaction described in this
     subsection is a sale of accounts or chattel paper.

     Other Rights and Remedies. Lender shall have all the rights and remedies of
     a secured creditor under the provisions of the Uniform Commercial Code, as
     may be amended from time to time. In addition, Lender shall have and may
     exercise any or all other rights and remedies it may have available at law,
     in equity, or otherwise.

     Election of Remedies. Except as may be prohibited by applicable law, all of
     Lender's rights and remedies, whether evidenced by this Agreement, the
     Related Documents, or by any other writing, shall be cumulative and may be
     exercised singularly or concurrently. Election by Lender to pursue any
     remedy shall not exclude pursuit of any other remedy, and an election to
     make expenditures or to take action to perform an obligation of Grantor
     under this Agreement, after Grantor's failure to perform, shall not affect
     Lender's right to declare a default and exercise its remedies.

DEFINITION OF INDEBTEDNESS AND NOTE. "Indebtedness" and "Note" as referenced
herein are hereby deleted in their entirety and replaced with the following:

Indebtedness, The word " Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by Lender
against Borrower, or any one or more of them; whether now or hereafter
existing, voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated; whether Borrower may be liable individually or
jointly with others; whether Borrower may be obligated as a guarantor, surety,
or otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness may
be or hereafter may become otherwise unenforceable.

Note: The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing note or
notes therefor.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     Amendments. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     Arbitration Disclosures.

     1.  ARBITRATION IS FINAL AND BINDING ON THE PARTIES AND SUBJECT TO ONLY
         VERY LIMITED REVIEW BY A COURT.
     2.  IN ARBITRATION THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN
         COURT, INCLUDING THEIR RIGHT TO A JURY TRIAL.
     3.  DISCOVERY IN ARBITRATION IS MORE LIMITED THAN DISCOVERY IN COURT.
     4.  ARBITRATORS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
         REASONING IN THEIR AWARDS. THE RIGHT TO APPEAL OR SEEK MODIFICATION OF
         ARBITRATORS' RULINGS IS VERY LIMITED.
     5.  A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS
         AFFILIATED WITH THE BANKING INDUSTRY.
     6.  ARBITRATION WILL APPLY TO ALL DISPUTES BETWEEN THE PARTIES, NOT JUST
         THOSE CONCERNING THE AGREEMENT.
     7.  IF YOU HAVE QUESTIONS ABOUT ARBITRATION, CONSULT YOUR ATTORNEY OR THE
         AMERICAN ARBITRATION ASSOCIATION.
     (a) Any claim or controversy ("Dispute") between or among the parties and
     their employees, agents, affiliates, and assigns, including, but not
     limited to, Disputes arising out of or relating to this agreement, this
     arbitration provision ("arbitration clause"), or any related agreements or
     instruments relating hereto or delivered in connection herewith ("Related
     Agreements"), and including, but not limited to, a Dispute based on or
     arising from an alleged tort, shall at the request of any party be resolved
     by binding arbitration in accordance with the applicable arbitration rules
     of the American Arbitration Association (the "Administrator"). The
     provisions of this arbitration clause shall survive any termination,
     amendment, or expiration of this agreement or Related Agreements. The
     provisions of this arbitration clause shall supersede any prior arbitration
     agreement between or among the parties.

<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                     (Continued)                             Page 5
================================================================================

     (b) The arbitration proceedings shall be conducted in a city mutually
     agreed by the parties. Absent such an agreement, arbitration will be
     conducted in Salt Lake City, Utah or such other place as may be determined
     by the Administrator. The Administrator and the arbitrator(s) shall have
     the authority to the extent practicable to take any action to require the
     arbitration proceeding to be completed and the arbitrator(s)' award issued
     within 150 days of the filing of the Dispute with the Administrator. The
     arbitrator(s) shall have the authority to impose sanctions on any party
     that fails to comply with time periods imposed by the Administrator or the
     arbitrator(s), including the sanction of summarily dismissing any Dispute
     or defense with prejudice. The arbitrator(s) shall have the authority to
     resolve any Dispute regarding the terms of this agreement, this arbitration
     clause, or Related Agreements, including any claim or controversy regarding
     the arbitrability of any Dispute. All limitations periods applicable to any
     Dispute or defense, whether by statute or agreement, shall apply to any
     arbitration proceeding hereunder and the arbitrator(s) shall have the
     authority to decide whether any Dispute or defense is barred by a
     limitations period and, if so, to summarily enter an award dismissing any
     Dispute or defense on that basis. The doctrines of compulsory counterclaim,
     res judicata, and collateral estoppel shall apply to any arbitration
     proceeding hereunder so that a party must state as a counterclaim in the
     arbitration proceeding any claim or controversy which arises out of the
     transaction or occurrence that is the subject matter of the Dispute. The
     arbitrator(s) may in the arbitrator(s)' discretion and at the request of
     any party: (1) consolidate in a single arbitration proceeding any other
     claim arising out of the same transaction involving another party to that
     transaction that is bound by an arbitration clause with Lender, such as
     borrowers, guarantors, sureties, and owners of collateral; and (2)
     consolidate or administer multiple arbitration claims or controversies as a
     class action in accordance with Rule 23 of the Federal Rules of Civil
     Procedure.

     (c) The arbitrator(s) shall be selected in accordance with the rules of the
     Administrator from panels maintained by the Administrator. A single
     arbitrator shall have expertise in the subject matter of the Dispute. Where
     three arbitrators conduct an arbitration proceeding, the Dispute shall be
     decided by a majority vote of the three arbitrators, at least one of whom
     must have expertise in the subject matter of the Dispute and at least one
     of whom must be a practicing attorney. The arbitrator(s) shall award to the
     prevailing party recovery of all costs and fees (including attorneys' fees
     and costs, arbitration administration fees and costs, and arbitrator(s)'
     fees). The arbitrator(s), either during the pendency of the arbitration
     proceeding or as part of the arbitration award, also may grant provisional
     or ancillary remedies including but not limited to an award of injunctive
     relief, foreclosure, sequestration, attachment, replevin, garnishment, or
     the appointment of a receiver.

     (d) Judgement upon an arbitration award may be entered in any court having
     jurisdiction, subject to the following limitation: the arbitration award is
     binding upon the parties only if the amount does not exceed Four Million
     Dollars ($4,000,000.00); if the award exceeds that limit, either party may
     demand the right to a court trial. Such a demand must be filed with the
     Administrator within thirty (30) days following the date of the arbitration
     award; if such a demand is not made with that time period, the amount of
     the arbitration award shall be binding. The computation of the total
     amount of an arbitration award shall include amounts awarded for attorneys'
     fees and costs, arbitration administration fees and costs, and
     arbitrator(s)' fees.

     (e) No provision of this arbitration clause, nor the exercise of any rights
     hereunder, shall limit the right of any party to: (1) judicially or non-
     judicially foreclose against any real or personal property collateral or
     other security; (2) exercise self-help remedies, including but not limited
     to repossession and setoff rights; or (3) obtain from a court having
     jurisdiction thereover any provisional or ancillary remedies including but
     not limited to injunctive relief, foreclosure, sequestration, attachment,
     replevin, garnishment, or the appointment of a receiver. Such rights can be
     exercised at any time, before or after initiation of an arbitration
     proceeding, except to the extent such action is contrary to the arbitration
     award. The exercise of such rights shall not constitute a waiver of the
     right to submit any Dispute to arbitration, and any claim or controversy
     related to the exercise of such rights shall be a Dispute to be resolved
     under the provisions of this arbitration clause. Any party may initiate
     arbitration with the Administrator. If any party desires to arbitrate a
     Dispute asserted against such party in a complaint, counterclaim, cross-
     claim, or third-party complaint thereto, or in) an answer or other reply to
     any such pleading, such party must make an appropriate motion to the trial
     court seeking to compel arbitration, which motion must be filed with the
     court within 45 days of service of the pleading, or amendment thereto,
     setting forth such Dispute. If arbitration is compelled after commencement
     of litigation of a Dispute, the party obtaining an order compelling
     arbitration shall commence arbitration and pay the Administrator's filing
     fees and costs within 45 days of entry of such order. Failure to do so
     shall constitute an agreement to proceed with litigation and waiver of the
     right to arbitrate. In any arbitration commenced by a consumer regarding a
     consumer Dispute, Lender shall pay one half of the Administrator's filing
     fee, up to $250.

     (f) Notwithstanding the applicability of any other law to this agreement,
     the arbitration clause, or Related Agreements between or among the parties,
     the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., shall apply to the
     construction and interpretation of this arbitration clause. If any
     provision of this arbitration clause should be determined to be
     unenforceable, all other provisions of this arbitration clause shall remain
     in full force and effect.

     Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
     Lender's costs and expenses, including Lender's reasonable attorneys' fees
     and Lender's legal expenses, incurred in connection with the enforcement of
     this Agreement. Lender may hire or pay someone else to help enforce this
     Agreement, and Grantor shall pay the costs and expenses of such
     enforcement. Costs and expenses include Lender's reasonable attorneys' fees
     and legal expenses whether or not Lender's salaried employee and whether or
     not there is a lawsuit, including reasonable attorneys' fees and legal
     expenses for bankruptcy proceedings (including efforts to modify or vacate
     any automatic stay or injunction), appeals, and any anticipated post-
     judgment collection services. Grantor also shall pay all court costs and
     such additional fees as may be directed by the court.

     Caption Headings. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     Governing Law. This Agreement will be governed by, construed and enforced
     in accordance with federal law and the laws of the State of Utah. This
     Agreement has been accepted by Lender in the State of Utah.

     Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
     request to submit to the jurisdiction of the courts of SALT LAKE County,
     State of Utah.

     No Waiver by Lender. Lender shall not be deemed to have waived any rights
     under this Agreement unless such waiver is given in writing and signed by
     Lender. No delay or omission on the part of Lender in exercising any right
     shall operate as a waiver of such right or any other right. A waiver by
     Lender of a provision of this Agreement shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Agreement. No prior waiver by
     Lender, nor any course of dealing between Lender and Grantor, shall
     constitute a waiver of any of Lender's rights or of any of Grantor's
     obligations as to any future transactions. Whenever the consent of Lender
     is required under this Agreement, the granting of such consent by Lender in
     any instance shall not constitute continuing consent to subsequent
     instances where such consent is required and in all cases such consent may
     be granted or withheld in the sole discretion of Lender.

     Notices. Unless otherwise provided by applicable law, any notice required
     to be given under this Agreement or required by law shall be given in
     writing, and shall be effective when actually delivered in accordance with
     the law or with this Agreement, when actually received by telefacsimile
     (unless otherwise required by law), when deposited with a nationally
     recognized overnight courier, or, if mailed, when deposited in the United
     States mail, as first class, certified or registered mail postage prepaid,
     directed to the addresses shown near (the beginning of this Agreement. Any
     party may change its address for notices under this Agreement by giving
     formal written notice to the other parties, specifying that the purpose of
     the notice is to change (the party's address. For notice purposes, Grantor
     agrees to keep Lender informed at all times of Grantor's current address.
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                     (Continued)                             Page 6

================================================================================

     Unless otherwise provided by applicable law, if there is more than one
     Grantor, any notice given by Lender to any Grantor is deemed to be notice
     given to all Grantors.

     Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect, amend, or to continue the security interest granted in this
     Agreement or to demand termination of filings of other secured parties.
     Lender may at any time, and without further authorization from Grantor,
     file a carbon, photographic or other reproduction of any financing
     statement or of this Agreement for use as a financing statement. Grantor
     will reimburse Lender for all expenses for the perfection and the
     continuation of the perfection of Lender's security interest in the
     Collateral.

     Severability. If a court of competent jurisdiction finds any provision of
     this Agreement to be illegal, invalid, or unenforceable as to any
     circumstance, that finding shall not make the offending provision illegal,
     invalid, or unenforceable as to any other circumstance. If feasible, the
     offending provision shall be considered modified so that it becomes legal,
     valid and enforceable. If the offending provision cannot be so modified, it
     shall be considered deleted from this Agreement. Unless otherwise required
     by law, the illegality, invalidity, or unenforceability of any provision of
     this Agreement shall not affect the legality, validity or enforceability of
     any other provision of this Agreement.

     Successors and Assigns. Subject to any limitations stated in this Agreement
     on transfer of Grantor's interest, this Agreement shall be binding upon and
     inure to the benefit of the parties, their successors and assigns. If
     ownership of the Collateral becomes vested in a person other than Grantor,
     Lender, without notice to Grantor, may deal with Grantor's successors with
     reference to this Agreement and the Indebtedness by way of forbearance or
     extension without releasing Grantor from the obligations of this Agreement
     or liability under the Indebtedness.

     Survival of Representations and Warranties. All representations,
     warranties, and agreements made by Grantor in this Agreement shall survive
     the execution and delivery of this Agreement, shall be continuing in
     nature, and shall remain in full force and effect until such time as
     Grantor's Indebtedness shall be paid in full.

     Time is of the Essence. Time is of the essence in the performance of this
     Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

     Account. The word "Account" means a trade account, account receivable,
     other receivable, or other right to payment for goods sold or services
     rendered owing to Grantor (or to a third party grantor acceptable to
     Lender).

     Agreement. The word "Agreement" means this Commercial Security Agreement,
     as this Commercial Security Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Commercial Security Agreement from time to time.

     Borrower. The word "Borrower" means 1-800 CONTACTS (DELAWARE), INC., and
     all other persons and entities signing the Note in whatever capacity.

     Collateral. The word "Collateral" means all of Grantor's right, title and
     interest in and to all the Collateral as described in the Collateral
     Description section of this Agreement.

     Default. The word "Default" means the Default set forth in this Agreement
     in the section titled "Default".

     Environmental Laws. The words "Environmental Laws" mean any and all state,
     federal and local statutes, regulations and ordinances relating to the
     protection of human health or the environment, including without limitation
     the Comprehensive Environmental Response, Compensation, and Liability Act
     of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
     Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
     ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
     1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
     Section 6901, et seq., or other applicable state or federal laws, rules, or
     regulations adopted pursuant thereto.

     Event of Default. The words "Event of Default" mean any of the events of
     default set forth in this Agreement in the default section of this
     Agreement.

     Grantor. The word "Grantor" means 1-800 CONTACTS (DELAWARE), INC..

     Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
     surety, or accommodation party to Lender, including without limitation a
     guaranty of all or part of the Note.

     Hazardous Substances. The words "Hazardous Substances" mean materials that,
     because of their quantity, concentration or physical, chemical or
     infectious characteristics, may cause or pose a present or potential hazard
     to human health or the environment when improperly used, treated, stored,
     disposed of, generated, manufactured, transported or otherwise handled. The
     words "Hazardous Substances" are used in their very broadest sense and
     include without limitation any and all hazardous or toxic substances,
     materials or waste as defined by or listed under the Environmental Laws.
     The term "Hazardous Substances" also includes, without limitation,
     petroleum and petroleum by-products or any fraction thereof and asbestos.

     Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
     the Note or Related Documents, including all principal and interest
     together with all other indebtedness and costs and expenses for which
     Grantor is responsible under this Agreement or under any of the Related
     Documents.

     Lender. The word "Lender" means ZIONS FIRST NATIONAL BANK, its successors
     and assigns.

     Note. The word "Note" means the Note executed by Grantor in the principal
     amount of $20,000,000.00 dated June 26, 2001, together with all renewals
     of, extensions of, modifications of, refinancings of, consolidations of,
     and substitutions for the note or credit agreement.

     Related Documents. The words "Related Documents" mean all promissory notes,
     credit agreements, loan agreements, environmental agreements, guaranties,
     security agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 26, 2001.
<PAGE>

                         COMMERCIAL SECURITY AGREEMENT
Loan No: 9003                     (Continued)                             Page 7

================================================================================

GRANTOR:

1-800 CONTACTS (DELAWARE), INC.

By: /s/ Jonathan C. Coon
   ---------------------------------------
   JONATHAN  C. COON, President of 1-800
   CONTACTS (DELAWARE), INC.

================================================================================
<PAGE>

STATEMENT OF CONTINUATION, PARTIAL  RELEASE, ASSIGNMENT, ETC. - FORM UCC-3

1. PLEASE TYPE this form. Fold only along perforation for mailing

2. Remove Secured Party and Debtor capies and send other 3 copies with
   interleaved carbon paper to the filing officer.

3. Enclose filing and fill in original Financing Statement number and date
   filed, There is no fee for terminations.

4. If the spaces for any item(s) on the form is inadequate the item(s) should be
   continued on additional ?????, preferably 5" X 8" or *" X 10". Only one copy
   of such additional sheets need be ????? to the filing officer with a set of
   three copies of Form UCC-3. Long ??? of collateral, etc... may be on any size
   paper that is convenient for the secured party. Indicate the number of
   additional ???? that is attached.

5. If collateral is crops or goods which are or are to become fixtures,
   describe generally the real estate and give numbers of record owner.

6  At the time of filing, filing officer will return third copy as an
   acknowledgement

7. Debtors SOC. SEC. No. and/or Emp. Fed Tax I.D. No, ---Must List.

This STATEMENT is presented to a filing officer for filing pursuant to the
Uniform commercial Code;

1. Debtor(s) (Last Name First)and address(es)

1-800 CONTACTS, INC.
13751 SOUTH WADSWORTH PK DRIVE
STE. D-14 DRAPER, UT 84020

Social Security No______________________

Emp, Fed I.D. No. 87-0571643

2. Secured Party (ies) and address(es)
   ZIONS FIRST NATINAL BANK
   2460 SOUTH 3270 WEST
   WEST VALLEY CITY, UT 84119

4. THIS statement refers to original Financing Statement bearing File
   No.01-703306

   DATE Filled  JANUARY 9  2001  Maturity Date JANUARY 9  2006

For filing officer (Date, Time and Filing Office

5. [_] Continuation.    The original financing statement between the foregoing
                        Debtor and Secured Party, bearing file number shown
                        above, is still effective.

6. [_] Termination.     Secured party no longer claims a security interest under
                        the financing statement bearing fie number shown above.

7. [_] Assignment.      The secured party's right under the financing statement
                        bearing file number shown above to the property
                        described in Item 10 have been assigned to the assignee
                        whose name and address appears in. Item 10

8. XX Amendment.        Financing staement bearing file number shown above is
                        amended at set forth in Item 10.

9. [_] Partial Release. Secured Party releases the collateral described in Item
                        10 from the financing statement bearing file number
                        shown above.

10

TO INCLUDE "EQUIPMENT" IN THE CURRENT COLLATERAL DESCRIPTION: ALL INVENTORY,
          CHATTEL PAPER, ACCOUNTS, EQUIPMENT, AND GENERAL INTANGIBLES

CHANGE DEBTOR'(S) ADDRESS TO:  66 EAST WADSWORTH PARK DRIVE 3RD FLOOR
                               DRAPER, UT 84020

                                            No. of additional sheets presented:

--------------------------------------------------------------------------------

-------------------------------------        -----------------------------------
By: /s/ Jonathan C. Coon                     By:   /s/ Brett L. Eliason
-------------------------------------        -----------------------------------
Signature(s) of Debtor(s) (necessary          Signature(s) of Secured Party(ies)
only if item B is applicable).

(1) Filing Officer Copy - Alphabetical      STANDARD FORM - FORM UCC-3

<PAGE>

                       NOTICE OF INSURANCE REQUIREMENTS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
   Principal         Loan Date          Maturity        Loan No       Call/Coll        Account        Officer         Initials
<S>                  <C>               <C>              <C>           <C>              <C>           <C>              <C>
                     06-26-2001                           9003         2/7420          7057008        11049
-----------------------------------------------------------------------------------------------------------------------------------
           References in the shaded area are for Lender's use only and do not limit the applicability of this document to
                                                    any particular loan or item.
                         Any item above containing "***" has been omitted due to text length limitations.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                          <C>
 Grantor:  1-800 CONTACTS (DELAWARE), INC.                   Lender: ZIONS FIRST NATIONAL BANK
           66 EAST WADSWORTH PARK DRIVE 3RD FLOOR                    SALT LAKE COMMERCIAL BANKING CENTER
           DRAPER, UT 84020                                          #1 SOUTH MAIN STREET
                                                                     SALT LAKE CITY, UT 84111
====================================================================================================================================
</TABLE>

<TABLE>
<S>                                                                                                     <C>
           ---------------------------------------------
     TO:      ATTN: Insurance Agent                                                                     DATE: June 26, 2001

           ---------------------------------------------
</TABLE>

     RE:     Policy Number(s):

             Insurance Companies/Company:

Dear Insurance Agent:

Grantor, 1-800 CONTACTS (DELAWARE), INC. ("Grantor") is obtaining a loan from
ZIONS FIRST NATIONAL BANK. Please send appropriate evidence of insurance to
ZIONS FIRST NATIONAL BANK, together with the requested endorsements, on the
following property, which Grantor is giving as security for the loan.

     Collateral: All Inventory, Chattel Paper, Accounts, Equipment and General
                 Intangibles
                 Type. All risks, including fire, theft and liability.
                 Amount. Full Insurable Value.
                 Basis. Replacement value.
                 Endorsements. Lender loss payable clause with stipulation that
                 coverage will not be cancelled or diminished without a minimum
                 of 10 days prior written notice to Lender.
                 Deductibles. $5,000.00
                 Latest Delivery Date: By the loan closing date.

GRANTOR:

1-800 CONTACTS (DELAWARE), INC.

By: /s/ Jonathan C. Coon
    -------------------------------------
    JONATHAN C. COON, President of 1-800
    CONTACTS (DELAWARE), INC.

RETURN TO:

     ------------------------------------------
        ZION FIRST NATIONAL BANK
        Loan Servicing Group 863-C
        2460 South 3270 West
        West Valley City, UT 84119
     -------------------------------------------

<PAGE>

                        AGREEMENT TO PROVIDE INSURANCE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
   Principal         Loan Date          Maturity        Loan No       Call/Coll        Account        Officer         Initials
<S>                  <C>               <C>              <C>           <C>              <C>           <C>              <C>
$20,000,000.00       06-26-2001        04-30-2003         9003          2/7420         7057008        11049
-----------------------------------------------------------------------------------------------------------------------------------
           References in the shaded area are for Lender's use only and do not limit the applicability of this document to
                                                    any particular loan or item.
                         Any Item above containing "***" has been omitted due to text length limitations
-----------------------------------------------------------------------------------------------------------------------------------

 Grantor: 1-800 CONTACTS (DELAWARE), INC.                     Lender: ZIONS FIRST NATIONAL BANK
          66 EAST WADSWORTH PARK DRIVE 3RD FLOOR                      SALT LAKE COMMERCIAL BANKING CENTER
          DRAPER, UT 84020                                            #1 SOUTH MAIN STREET
                                                                      SALT LAKE CITY, UT 84111

===================================================================================================================================
</TABLE>

  INSURANCE REQUIREMENTS. Grantor, 1-800 CONTACTS (DELAWARE), INC. ("Grantor"),
  understands that insurance coverage is required in connection with the
  extending of a loan or the providing of other financial accommodations to
  Grantor by Lender. These requirements are set forth in the security documents
  for the loan. The following minimum insurance coverages must be provided on
  the following described collateral (the "Collateral"):

  Collateral: All Inventory, Chattel Paper, Accounts, Equipment and General
              Intangibles.
              Type. All risks, including fire, theft and liability.
              Amount. Full Insurable Value.
              Basis. Replacement value.
              Endorsements. Lender loss payable clause with stipulation that
              coverage will not be cancelled or diminished without a minimum of
              10 days prior written notice to Lender.
              Deductibles. $5,000.00
              Latest Delivery Date: By the loan closing date.

  INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
  Grantor may choose that is reasonably acceptable to Lender. Grantor
  understands that credit may not be denied solely because insurance was not
  purchased through Lender.

  INSURANCE MAILING ADDRESS. All documents and other materials relating to
  insurance for this loan should be mailed, delivered or directed to the
  following address:

          ZIONS FIRST NATIONAL BANK
          Loan Servicing Group 863-C
          2460 South 3270 West
          West Valley City, UT 84119

  FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the
  latest delivery date stated above, proof of the required insurance as provided
  above, with an effective date of June 26, 2001, or earlier. Grantor
  acknowledges and agrees that if Grantor fails to provide any required
  insurance or fails to continue such insurance in force, Lender may do so at
  Grantor's expense as provided in the applicable security document. The cost of
  any such insurance, at the option of Lender, shall be added to the
  indebtedness as provided in the security document. GRANTOR ACKNOWLEDGES THAT
  IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED
  PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO
  THE LESSER OF (1) THE UNPAID BALANCE OF THE DEBT, EXCLUDING ANY UNEARNED
  FINANCE CHARGES, OR (2) THE VALUE OF THE COLLATERAL; HOWEVER, GRANTOR'S EQUITY
  IN THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT
  PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT
  MEET THE REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

  AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
  authorizes Lender to provide to any person (including any insurance agent or
  company) all information Lender deems appropriate, whether regarding the
  Collateral, the loan or other financial accommodations, or both.

  GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
  PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JUNE
  26, 2001.

  GRANTOR:

  1-800 CONTACTS (DELAWARE), INC.

  By: /s/ Jonathan C. Coon
     --------------------------------------
      JONATHAN C. COON, President of 1-800
      CONTACTS (DELAWARE), INC.

  ----------------------------------------------------------------------------

                              FOR LENDER USE ONLY
                           INSURANCE VERIFICATION

    DATE: ________________                             PHONE _______________
    ______________________
    AGENT'S NAME: _______________
    AGENCY:________________________
    INSURANCE COMPANY: ____________________
    POLICY NUMBER:
    EFFECTIVE DATES: _______________________________________________________
    ________________________________________________________________________
    COMMENTS: ______________________________________________________________
    ________________________________________________________________________

  ----------------------------------------------------------------------------
<PAGE>

                    DISBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
   Principal         Loan Date          Maturity        Loan No       Call/Coll        Account        Officer         Initials
<S>                  <C>               <C>              <C>           <C>              <C>           <C>              <C>
$20,000,000.00       06-26-2001        04-30-2003         9003          2/7420         7057008        11049
-----------------------------------------------------------------------------------------------------------------------------------
           References in the shaded area are for Lender's use only and do not limit the applicability of this document to
                                                    any particular loan or item.
                         Any item above containing "***" has been omitted due to text length limitations.
-----------------------------------------------------------------------------------------------------------------------------------

 Grantor: 1-800 CONTACTS (DELAWARE), INC.                     Lender: ZIONS FIRST NATIONAL BANK
          66 EAST WADSWORTH PARK DRIVE 3RD FLOOR                      SALT LAKE COMMERCIAL BANKING CENTER
          DRAPER, UT 84020                                            #1 SOUTH MAIN STREET
                                                                      SALT LAKE CITY, UT 84111

===================================================================================================================================
</TABLE>

  LOAN TYPE. This is a Variable Rate Nondisclosable Revolving Line of Credit
  Loan to a Corporation for $20,000,000.00 due on April 30, 2003. The reference
  rate (Zions Prime Adjusts: Daily, currently 7.000%) is added to the margin of
  -0.250%, resulting in an initial rate of 6.750. This is a secured renewal
  loan.

  PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:

     [_] Personal, Family, or Household Purposes or Personal Investment.

     [X] Business (Including Real Estate Investment).

  SPECIFIC PURPOSE. The specific purpose of this loan is: TO RENEW AND INCREASE
  REVOLVING LINE OF CREDIT.

  DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
  disbursed until all of Lender's conditions for making the loan have been
  satisfied. Please disburse the loan proceeds of $20,000,000.00 as follows:

           Undisbursed Funds:                                   $19,974,750.00

           Other Charges Financed:                              $       250.00
             $25.00 UCC Recording and Post Search (Delaware)
             $225.00 Documentation Fee

           Total Financed Prepaid Finance Charges:              $    25,000.00
              $25,000.00 Loan Fee (total fee through maturity)
                                                                --------------

           Note Principal:                                      $20,000,000.00

  FINAL AGREEMENT. Borrower understands that the loan documents signed in
  connection with this loan are the final expression of the agreement between
  Lender and Borrower and may not be contradicted by evidence of any alleged
  oral agreement.

  ALLOCATION OF PROCEEDS. The proceeds of this loan will be used to renew an
  outstanding revolving line of credit. The current outstanding balance and the
  amount available are described above in the section entitled Disbursement
  Instructions.

  FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
  WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
  THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL
  CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO
  LENDER. THIS AUTHORIZATION IS DATED JUNE 26, 2001.

  BORROWER:

  1-800 CONTACTS (DELAWARE), INC.

  By: /s/ Jonathan C. Coon
     --------------------------------------
     JONATHAN C. COON, President of 1-800
     CONTACTS (DELAWARE), INC.

================================================================================
<PAGE>

               CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
   Principal        Loan Date         Maturity          Loan No           Call/Coll         Account         Officer         initial
<S>                <C>               <C>                <C>               <C>               <C>             <C>             <C>
$20,000,000.00     06-26-2001        04-30-2003          9003              2/7420           7057008          11049
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   References in the shaded area are for Lender's use only and do not limit the
        applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
--------------------------------------------------------------------------------

Corporation:  1-800 CONTACTS (DELAWARE),     Lender: ZIONS FIRST NATIONAL BANK
               INC.                                  SALT LAKE COMMERCIAL
              66 EAST WADSWORTH PARK DRIVE            BANKING CENTER
              3RD FLOOR                              #1 SOUTH MAIN STREET
              DRAPER, UT 84020                       SALT LAKE CITY, UT 84111

================================================================================

WE, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is
1-800 CONTACTS (DELAWARE), INC. ("Corporation"). The Corporation is a
corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing under and by virtue of the laws of the
State of Delaware. Except as indicated in prospectus or subsequent SEC filings,
the Corporation is duly authorized to transact business in the State of Utah and
all other states in which the Corporation is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
the Corporation is doing business. Except as indicated in prospectus or
subsequent SEC filings, specifically, the Corporation is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or financial
condition. The Corporation has the full power and authority to own its
properties and to transact the business in which it is presently engaged or
presently proposes to engage. The Corporation maintains an office at 66 EAST
WADSWORTH PARK DRIVE 3RD FLOOR, DRAPER, UT 84020. Unless the Corporation has
designated otherwise in writing, the principal office is the office at which the
Corporation keeps its books and records. The Corporation will notify Lender
prior to any change in the location of the Corporation's state of organization
or any change in the Corporation's name. Except as indicated in prospectus or
subsequent SEC filings, the Corporation shall do all things necessary to
preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and the Corporation's business activities.

RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or if the
Corporation is a close corporation having no Board of Directors then at a
meeting of the Corporation's shareholders, duly called and held on April 20,
2001, at which a quorum was present and voting, or by other duly authorized
action in lieu of a meeting, the resolutions set forth in this Resolution were
adopted.

OFFICERS. The following named persons are officers of 1-800 CONTACTS (DELAWARE),
INC.:

     NAMES               TITLES           AUTHORIZED       ACTUAL SIGNATURES
     -----               ------           ----------       -----------------

     JONATHAN C. COON    President             Y      X  /s/ Jonathan C Coon
                                                         -----------------------

     JOHN NICHOLS        Vice President        Y      X  /s/ John Nichols
                                                         -----------------------

     SCOTT TANNER        Chief Financial       Y      X  /s/ Scott Tanner
                          Officer                        -----------------------

ACTIONS AUTHORIZED. Any one (1) of the authorized persons listed above may enter
into any agreements of any nature with Lender, and those agreements will bind
the Corporation. Specifically, but without limitation, any one (1) of such
authorized persons are authorized, empowered, and directed to do the following
for and on behalf of the Corporation:

     Borrow Money. To borrow, as a cosigner or otherwise, from time to time from
     Lender, on such terms as may be agreed upon between the Corporation and
     Lender, such sum or sums of money as in their judgment should be borrowed,
     without limitation.

     Execute Notes. To execute and deliver to Lender the promissory note or
     notes, or other evidence of the Corporation's credit accommodations, on
     Lender's forms, at such rates of interest and on such terms as may be
     agreed upon, evidencing the sums of money so borrowed or any of the
     Corporation's indebtedness to Lender, and also to execute and deliver to
     Lender one or more renewals, extensions, modifications, refinancings,
     consolidations, or substitutions for one or more of the notes, any portion
     of the notes, or any other evidence of credit accommodations.

     Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
     otherwise encumber and deliver to Lender any property now or hereafter
     belonging to the Corporation or in which the Corporation now or hereafter
     may have an interest, including without limitation all real property and
     all personal property (tangible or intangible) of the Corporation, as
     security for the payment of any loans or credit accommodations so obtained,
     any promissory notes so executed (including any amendments to or
     modifications, renewals, and extensions of such promissory notes), or any
     other or further indebtedness of the Corporation to Lender at any time
     owing, however the same may be evidenced. Such property may be mortgaged,
     pledged, transferred, endorsed, hypothecated or encumbered at the time such
     loans are obtained or such indebtedness is incurred, or at any other time
     or times, and may be either in addition to or in lieu of any property
     theretofore mortgaged, pledged, transferred, endorsed, hypothecated or
     encumbered.

     Execute Security Documents. To execute and deliver to Lender the forms of
     mortgage, deed of trust, pledge agreement, hypothecation agreement, and
     other security agreements and financing statements which Lender may require
     and which shall evidence the terms and conditions under and pursuant to
     which such liens and encumbrances, or any of them, are given; and also to
     execute and deliver to Lender any other written instruments, any chattel
     paper, or any other collateral, of any kind or nature, which Lender may
     deem necessary or proper in connection with or pertaining to the giving of
     the liens and encumbrances. Notwithstanding the foregoing, any one of the
     above authorized persons may execute, deliver, or record financing
     statements.

     Negotiate Items. To draw, endorse, and discount with Lender all drafts,
     trade acceptances, promissory notes, or other evidences of indebtedness
     payable to or belonging to the Corporation or in which the Corporation may
     have an interest, and either to receive cash for the same or to cause such
     proceeds to be credited to the Corporation's account with Lender, or to
     cause such other disposition of the proceeds derived therefrom as they may
     deem advisable.

     Further Acts. In the case of lines of credit, to designate additional or
     alternate individuals as being authorized to request advances under such
     lines, and in all cases, to do and perform such other acts and things, to
     pay any and all fees and costs, and to execute and deliver such other
     documents and agreements, including agreements requiring disputes with
     Lender to be submitted to binding arbitration for final resolution, as the
     officers may in their discretion deem reasonably necessary or proper in
     order to carry into effect the provisions of this Resolution. The following
     persons currently are authorized to request advances and authorize payments
     under the line of credit until Lender receives from the Corporation, at
     Lender's address shown above, written notice of revocation of their
     authority: JONATHAN C. COON, President of 1-800 CONTACTS (DELAWARE), INC.;
     JOHN NICHOLS, Vice President of 1-800 CONTACTS (DELAWARE), INC.; and SCOTT
     TANNER, Chief Financial Officer of 1-800 CONTACTS (DELAWARE), INC.
<PAGE>

               CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
Loan No: 9003                     (Continued)                             Page 2
================================================================================

ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all documents or
filings required by law relating to all assumed business names used by the
Corporation. Excluding the name of the Corporation, the following is a complete
list of all assumed business names under which the Corporation does business:
None.

NOTICES TO LENDER. The Corporation will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (A) change in the Corporation's name; (B) change
in the Corporation's assumed business name(s); (C) change in the management of
the Corporation; (D) change in the authorized signer(s); (E) change in the
Corporation's principal office address; (F) change in the Corporation's state of
organization; (G) conversion of the Corporation to a new or different type of
business entity; or (H) change in any other aspect of the Corporation that
directly or indirectly relates to any agreements between the Corporation and
Lender. No change in the Corporation's name or state of organization will take
effect until after Lender has received notice

CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officers named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set opposite their respective names. This
Resolution now stands of record on the books of the Corporation, is in full
force and effect, and has not been modified or revoked in any manner whatsoever.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this Resolution and
performed prior to the passage of this Resolution are hereby ratified and
approved. This Resolution shall be continuing, shall remain in full force and
effect and Lender may rely on it until written notice of its revocation shall
have been delivered to and received by Lender at Lender's address shown above
(or such addresses as Lender may designate from time to time). Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

IN TESTIMONY WHEREOF, We have hereunto set our hand and attest that the
signatures set opposite the names listed above are their genuine signatures.

We each have read all the provisions of this Resolution, and we each personally
and on behalf of the Corporation certify that all statements and representations
made in this Resolution are true and correct. This Corporate Resolution to
Borrow / Grant Collateral is dated June 26, 2001. THIS RESOLUTION IS GIVEN UNDER
SEAL AND IT IS INTENDED THAT THIS RESOLUTION IS AND SHALL CONSTITUTE AND HAVE
THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.

                                        CERTIFIED TO AND ATTESTED BY:

                                        By: /s/ Joe Zeidner               (Seal)
                                            ------------------------------
                                           Authorized Signer for 1-800 CONTACTS
                                           (DELAWARE), INC.

NOTE: If the officers signing this Resolution are designated by the foregoing
document as one of the officers authorized to act on the Corporation's behalf,
it is advisable to have this Resolution signed by at least one non-authorized
officer of the Corporation.
================================================================================

<PAGE>

                           NOTICE OF FINAL AGREEMENT

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
   Principal        Loan Date         Maturity          Loan No           Call/Coll         Account         Officer         Initials
<S>                <C>               <C>                <C>               <C>               <C>             <C>             <C>
$20,000,000.00     06-26-2001        04-30-2003          9003              2/7420           7057008          11049
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

 References in the shaded area are for Lender's use only and do not limit the
        applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
--------------------------------------------------------------------------------

Borrower: 1-800 CONTACTS (DELAWARE), INC.    Lender:  ZIONS FIRST NATIONAL BANK
          66 EAST WADSWORTH PARK DRIVE                SALT LAKE COMMERCIAL
           3RD FLOOR                                   BANKING CENTER
          DRAPER, UT 84020                            #1 SOUTH MAIN STREET
                                                      SALT LAKE CITY, UT 84111

================================================================================

BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THE WRITTEN
LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THE WRITTEN LOAN
AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

--------------------------------------------------------------------------------

As used in this Notice, the following terms have the following meanings:

 Loan. The term "Loan" means the following described loan: a Variable Rate
 Nondisclosable Revolving Line of Credit Loan to a Corporation for
 $20,000,000.00 due on April 30, 2003. The reference rate (Zions Prime Adjusts:
 Daily, currently 7.000%) is added to the margin of -0.250%, resulting in an
 initial rate of 6.750. This is a secured renewal loan.

 Loan Agreement. The term "Loan Agreement" means one or more promises,
 promissory notes, agreements, undertakings, security agreements, deeds of trust
 or other documents, or commitments, or any combination of those actions or
 documents, relating to the Loan, including without limitation the following:

                                LOAN DOCUMENTS
<TABLE>
<S>                                                                    <C>
  Corporate Resolution:  1-800 CONTACTS (DELAWARE), INC.               Business Loan Agreement (Asset Based)
  Promissory Note                                                      UT Commercial Security Agreement: All Inventory, Chattel
  DE UCC-1: All Inventory, Chattel Paper, Accounts, Equipment          Paper, Accounts, Equipment and General Intangibles; owned by
  and General Intangibles; owned by 1-800 CONTACTS (DELAWARE), INC.    1-800 CONTACTS (DELAWARE), INC.
  Request For UCC Information: 1-800 CONTACTS (DELAWARE), INC.         Agreement to Provide Insurance: All Inventory, Chattel
  Notice of Insurance Requirements:                                    Paper, Accounts, Equipment and General Intangibles; owned by
  Disbursement Request and Authorization                               by 1-800 CONTACTS (DELAWARE), INC.
                                                                       Notice of Final Agreement
</TABLE>

 Parties. The term "Parties" means ZIONS FIRST NATIONAL BANK and any and all
 entities or individuals who are obligated to repay the loan or have pledged
 property as security for the Loan, including without limitation the following:

     Borrower:   1-800 CONTACTS (DELAWARE), INC.
     Grantor(s): 1-800 CONTACTS (DELAWARE), INC.

--------------------------------------------------------------------------------

Each Party who signs below, other than ZIONS FIRST NATIONAL BANK, acknowledges,
represents, and warrants to ZIONS FIRST NATIONAL BANK that it has received, read
and understood this Notice of Final Agreement. This Notice is dated June 26,
2001.

BORROWER:

1-800 CONTACTS (DELAWARE), INC.

By: /s/ Jonathan C. Coon
   -------------------------------------
    JONATHAN C. COON, President of 1-800
    CONTACTS (DELAWARE), INC.

LENDER:

ZIONS FIRST NATIONAL BANK

x /s/ Brett L. Eliason
 ---------------------------------------
  Authorized Signer

================================================================================

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