Document:

$25,000,000

                         SENIOR SECURED, SUPER-PRIORITY
                              DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT

                                  by and among

                               VISTA EYECARE, INC.
                    (f/k/a National Vision Associates, Ltd.),

             INTERNATIONAL VISION ASSOCIATES, LTD., NVAL HEALTHCARE
        SYSTEMS , INC., MIDWEST VISION, INC., FRAME-N-LENS OPTICAL, INC.,
            FAMILY VISION CENTERS, INC., VISION ADMINISTRATORS, INC.,
              NEW WEST EYEWORKS, INC., ALEXIS HOLDING COMPANY, INC.
            VISTA EYECARE NETWORK, LLC, VISTA OPTICAL EXPRESS, INC.,

                                       and

                          FOOTHILL CAPITAL CORPORATION

                            Dated as of April 6, 2000

<PAGE>

<TABLE>
                                TABLE OF CONTENTS
<S>     <C>       <C>                                                                                 <C>

                                                                                                      Page
ATL/689137.6                                              i

1.       DEFINITIONS AND CONSTRUCTION...................................................................2
         1.1      Definitions...........................................................................2
         1.2      Accounting Terms.....................................................................24
         1.3      Code.................................................................................25
         1.4      Construction.........................................................................25
         1.5      Schedules and Exhibits...............................................................25

2.       LOAN AND TERMS OF PAYMENT.....................................................................25
         2.1      Revolving Advances...................................................................25
         2.2      Letters of Credit....................................................................27
         2.3      Term Loan............................................................................29
         2.4      [Intentionally Omitted]..............................................................30
         2.5      Overadvances.........................................................................30
         2.6      Interest and Letter of Credit Fees...................................................30
         2.7      Collection of Accounts...............................................................32
         2.8      Crediting Payments; Application of Collections.......................................34
         2.9      Designated Account...................................................................34
         2.10     Maintenance of Loan Account; Statements of Obligations...............................35
         2.11     Fees.................................................................................35
         2.12     Eurodollar Rate Advances.............................................................36
         2.13     Illegality...........................................................................37
         2.14     Requirements of Law..................................................................38
         2.15     Indemnity............................................................................39
         2.16     Super-Priority Nature of Obligations.................................................40

3.       CONDITIONS; TERM OF AGREEMENT.................................................................40
         3.1      Conditions Precedent to the Initial Advance, Letter of Credit and the Term Loans.....40
         3.2      Conditions Precedent to all Advances, all Letters of Credit and the Term Loans.......42
         3.3      Condition Subsequent.................................................................43
         3.4      Term.................................................................................44
         3.5      Effect of Termination................................................................44
         3.6      Early Termination by Borrowers.......................................................44

4.       CREATION OF SECURITY INTEREST.................................................................45
         4.1      Grant of Security Interest...........................................................45
         4.2      Negotiable Collateral................................................................45
         4.3      Collection of Accounts, General Intangibles, and Negotiable Collateral...............45
         4.4      Delivery of Additional Documentation Required........................................45
         4.5      Power of Attorney....................................................................46
         4.6      Right to Inspect.....................................................................46
         4.7      Grants, Rights and Remedies..........................................................46
         4.8      No Filings Required..................................................................46
         4.9      Survival.............................................................................47

5.       REPRESENTATIONS AND WARRANTIES................................................................48
         5.1      Corporate Existence and Power........................................................48
         5.2      Corporate Authorization; No Contravention............................................48

<PAGE>
         5.3      Governmental Authorization...........................................................49
         5.4      Binding Effect.......................................................................49
         5.5      Litigation...........................................................................49
         5.6      [Intentionally Omitted]..............................................................49
         5.7      ERISA Compliance.....................................................................49
         5.8      Use of Proceeds; Margin Regulations..................................................50
         5.9      Title to Properties..................................................................50
         5.10     Taxes................................................................................50
         5.11     Financial Condition..................................................................51
         5.12     Environmental Matters................................................................51
         5.13     Loan Documents.......................................................................52
         5.14     Regulated Entities...................................................................53
         5.15     No Burdensome Restrictions...........................................................53
         5.16     Copyrights, Patents, Trademarks and Licenses, Etc....................................53
         5.17     Subsidiaries.........................................................................53
         5.18     Insurance............................................................................53
         5.19     Intentionally Omitted................................................................53
         5.20     Full Disclosure......................................................................53
         5.21     Accounts and Inventory...............................................................54
         5.22     Leases...............................................................................54
         5.23     Compliance With Laws.................................................................54
         5.24     Year 2000 Compatibility..............................................................55
         5.25     Material Contracts...................................................................55
         5.26     Appointment of Trustee or Examiner; Liquidation......................................55

6.       AFFIRMATIVE COVENANTS.........................................................................55
         6.1      Financial Statements.................................................................55
         6.2      Certificates; Other Information......................................................56
         6.3      Notices..............................................................................58
         6.4      Preservation of Corporate Existence, Etc.............................................59
         6.5      Maintenance of Property..............................................................60
         6.6      Insurance............................................................................60
         6.7      Payment of Obligations...............................................................62
         6.8      Compliance with Laws.................................................................62
         6.9      Compliance with ERISA................................................................62
         6.10     Inspection of Property and Books and Records.........................................62
         6.11     Environmental Laws...................................................................63
         6.12     Use of Proceeds......................................................................63
         6.13     Further Assurances...................................................................63
         6.14     Bank Accounts........................................................................64
         6.15     Intentionally Omitted................................................................64
         6.16     Covenants Regarding Formation of Subsidiaries........................................64
         6.17     Tax Returns..........................................................................64
         6.18     Returns..............................................................................64
         6.19     Title to Equipment...................................................................64
         6.20     Leases...............................................................................64
<PAGE>
7.       NEGATIVE COVENANTS............................................................................65
         7.1      Limitation on Liens..................................................................65
         7.2      Disposition of Assets................................................................67
         7.3      Consolidations and Mergers...........................................................67
         7.4      Loans and Investments................................................................68
         7.5      Limitation on Indebtedness...........................................................68
         7.6      Transactions with Affiliates.........................................................69
         7.7      Use of Proceeds......................................................................69
         7.8      Contingent Obligations...............................................................69
         7.9      Joint Ventures.......................................................................70
         7.10     Restricted Payments..................................................................70
         7.11     ERISA................................................................................70
         7.12     Change in Business; Change of Name...................................................70
         7.13     Accounting Changes...................................................................71
         7.14     Financial Covenants..................................................................71
         7.15     Amendments...........................................................................71
         7.16     No Other Negative Pledges............................................................71
         7.17     Prepayments..........................................................................71
         7.18     Real Estate; Store Locations.........................................................71
         7.19     Capital Expenditures.................................................................72
         7.20     [Intentionally omitted.].............................................................72
         7.21     Minimum Availability.................................................................72

8.       EVENTS OF DEFAULT.............................................................................72

9.       LENDER'S RIGHTS AND REMEDIES..................................................................76
         9.1      Rights and Remedies..................................................................76
         9.2      Remedies Cumulative..................................................................79

10.      TAXES AND EXPENSES............................................................................79

11.      WAIVERS; INDEMNIFICATION......................................................................79
         11.1     Demand; Protest; etc.................................................................79
         11.2     Lender's Liability for Collateral....................................................80
         11.3     Indemnification......................................................................80

12.      NOTICES.......................................................................................80

13.      CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER....................................................81

14.      DESTRUCTION OF BORROWERS' DOCUMENTS...........................................................82

15.      GENERAL PROVISIONS............................................................................82
         15.1     Effectiveness........................................................................82
         15.2     Successors and Assigns...............................................................82
         15.3     Section Headings.....................................................................83
         15.4     Interpretation.......................................................................83
         15.5     Severability of Provisions...........................................................83

<PAGE>
         15.6     Amendments in Writing................................................................83
         15.7     Counterparts; Facsimile Execution....................................................83
         15.8     Revival and Reinstatement of Obligations.............................................83
         15.9     Integration..........................................................................84
         15.10    Time is of the Essence...............................................................84
         15.11    Pre-Relief Date Loan Agreement.......................................................84

</TABLE>

SCHEDULES AND EXHIBITS

Schedule B-1......         Business Plan
Schedule E-1......         Eligible Inventory Locations
Schedule S-1......         Senior Claims
Schedule S-2......         Sub-Concentration Accounts
Schedule 5.5......         Litigation
Schedule 5.10.....         Taxes
Schedule 5.11.....         Financial Condition
Schedule 5.12.....         Environmental Matters
Schedule 5.17.....         Subsidiaries
Schedule 5.18.....         Insurance
Schedule 5.25 ....         Material Contracts
Schedule 6.14.....         Bank Accounts
Schedule 7.1......         Permitted Liens
Schedule 7.5......         Permitted Indebtedness
Schedule 7.8......         Contingent Obligations

Exhibit A.........         Form of Compliance Certificate
Exhibit B.........         Form of Credit Card Agreement
Exhibit C.........         Form of Wal-Mart Lease
Exhibit D.........         Form of Sam's Club Lease
Exhibit E.........         Form of Fred Meyer, Inc. Lease
Exhibit F.........         Fee Letter

<PAGE>
                         SENIOR SECURED, SUPER-PRIORITY
                              DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT

     THIS SENIOR SECURED, SUPER-PRIORITY  DEBTOR-IN-POSSESSION LOAN AND SECURITY
AGREEMENT  (this  "Agreement"),  is entered  into as of April 6,  2000,  between
FOOTHILL CAPITAL CORPORATION,  a California corporation,  as lender and as agent
for itself and each  Person  that  purchases  any  portion of  Foothill  Capital
Corporation's  rights and obligations  under this Agreement  pursuant to Section
15.2  (collectively,  "Lender"),  with a place of business  located at Northpark
Town Center,  Building 400, 1000  Abernathy  Road,  N.E.,  Suite 1450,  Atlanta,
Georgia 30328, and VISTA EYECARE, INC. (f/k/a National Vision Associates, Ltd.),
INTERNATIONAL  VISION ASSOCIATES,  LTD., NVAL HEALTHCARE SYSTEMS , INC., MIDWEST
VISION, INC.,  FRAME-N-LENS OPTICAL,  INC., FAMILY VISION CENTERS,  INC., VISION
ADMINISTRATORS,  INC., NEW WEST EYEWORKS,  INC.,  ALEXIS HOLDING COMPANY,  INC.,
VISTA  EYECARE  NETWORK,  LLC and VISTA  OPTICAL  EXPRESS,  INC., as debtors and
debtor-in-possessions  (each a "Borrower" and collectively,  "Borrowers"),  each
with its chief executive office located at 296 Grayson  Highway,  Lawrenceville,
Georgia 30045-5737.

                                    RECITALS

         WHEREAS,  on April 5, 2000 (the "Relief  Date"),  each Borrower filed a
petition for relief pursuant to Chapter 11 of the United States  Bankruptcy Code
in the United  States  Bankruptcy  Court for the  Northern  District of Georgia,
Atlanta Division (the "Court"), which cases are being jointly administered under
lead Case No.  00-65214  (the "Case").  Each  Borrower  continues to operate its
business  and  manage  its  properties  as a  debtor-in-possession  pursuant  to
Sections 1107 and 1108 of the United States Bankruptcy Code;

         WHEREAS,  prior to the Relief Date,  Lender and certain  other  lenders
(the "Pre-Petition  Lenders")  provided financing to Vista Eyecare,  Inc. (f/k/a
National Vision  Associates,  Ltd.) ("Parent")  pursuant to that certain Amended
and  Restated  Credit  Agreement  dated as of November 12, 1999 (as modified and
amended, the "Pre-Relief Date Loan Agreement");

         WHEREAS,  Pre-Petition Lenders' commitment to provide ongoing financing
to Parent under the Pre-Relief Date Loan Agreement has been terminated; and

         WHEREAS, Borrowers have requested that Lender provide a senior secured,
super-priority  revolving credit and term facility up to $25,000,000 to fund the
ongoing working capital requirements of Borrowers.  Lender is willing to provide
such financing in the manner and pursuant to the terms of this Agreement;

         NOW, THEREFORE,  in consideration of the mutual agreements,  provisions
and covenants contained herein, and other good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereby
agree as follows:

                                     Page 1
<PAGE>
1.       DEFINITIONS AND CONSTRUCTION.

1.1  Definitions.  As used in this Agreement, the following terms shall have the
     following definitions:

     "Account Debtor" means any Person who is or who may become obligated under,
with respect to, or on account of, an Account.

     "Accounts"  means all currently  existing and hereafter  arising  accounts,
contract rights,  and all other forms of obligations  owing to Borrowers arising
out of the sale or lease of goods or the  rendition  of services  by  Borrowers,
irrespective of whether earned by performance, and any and all credit insurance,
guaranties, or security therefor.

     "Acquisition"  means, with respect to any Person, any transaction or series
of related transactions for the purpose of or resulting, directly or indirectly,
in (a) the  acquisition of all or  substantially  all of the assets of any other
Person, or of any business or division of any other Person, (b) the acquisi-tion
of more than fifty percent (50%) of the capital  stock,  partnership  interests,
membership  interests or equity of any other  Person,  or otherwise  causing any
other  Person  to  become  a  Subsidiary  of such  Person,  or (c) a  merger  or
consolidation  or any other  combination  with any other  Person  (other  than a
Person that is an existing  Subsidiary of such Person) provided that such Person
or a Subsidiary of such Person is the surviving entity.  The term  "Acquisition"
shall not include the  formation  by any Borrower of a new  Subsidiary  provided
that its Investment therein does not violate Section 7.4 hereof.

     "Adjusted  Eurodollar Rate" means, with respect to each Interest Period for
any Eurodollar Rate Advance,  the rate per annum (rounded upwards, if necessary,
to the next 1/16%)  determined by dividing (a) Eurodollar Rate for such Interest
Period by (b) a percentage  equal to (i) one hundred  percent  (100%) minus (ii)
the Reserve Percentage. The Adjusted Eurodollar Rate shall be adjusted on and as
of the effective day of any change in the Reserve Percentage.

     "Adjustment Date" has the meaning set forth in Section 2.3(a).

     "Advances" has the meaning set forth in Section 2.1(a).

     "Affiliate"  means, as applied to any Person, any other Person who directly
or indirectly  controls,  is controlled by, is under common control with or is a
director or officer of such Person.  For purposes of this definition,  "control"
means the possession,  directly or indirectly, of the power to vote five percent
(5%) or more of the securities  having ordinary voting power for the election of
directors or the direct or indirect  power to direct the management and policies
of a Person.

     "Agreement" has the meaning set forth in the preamble hereto.

     "Assignment of Notes" means that certain Assignment of Notes dated the date
hereof by and among Parent and Lender,  in form and  substance  satisfactory  to
Lender.
                                     Page 2
<PAGE>
     "Authorized Person" means any officer or other employee of Parent.

     "Availability" means, as of the date of determination,  the result (so long
as such result is a positive  number) of (a) the lesser of the Borrowing Base or
the Maximum Revolving Amount, less (b) the Revolving Facility Usage.

     "Average Unused Portion of Maximum  Revolving Amount" means, as of any date
of determination,  (a) the lesser of the Borrowing Base or the Maximum Revolving
Amount,  less (b) the sum of (i) the average Daily Balance of Advances that were
outstanding during the immediately  preceding month, plus (ii) the average Daily
Balance  of the  undrawn  Letters  of Credit  that were  outstanding  during the
immediately preceding month.

     "Bankruptcy  Code" means the United States Bankruptcy Code (11 U.S.C. ' 101
et seq.), as amended, and any successor statute.

     "Blocked   Account   Agreements"   means  those  certain   Blocked  Account
Agreements,  in form and substance  reasonably  satisfactory to Lender,  each of
which is among  Parent,  Lender  and a bank at which a Retail  Store  Account is
located.

     "Borrower" has the meaning set forth in the preamble to this Agreement.

     "Borrower  Representative"  shall mean  Parent in its  capacity as Borrower
Representative pursuant to the provisions of Section 2.9.

     "Books and Records"  means all books and records of  Borrowers  and each of
their Subsidiaries,  including:  ledgers;  records indicating,  summarizing,  or
evidencing  Borrowers' or such Subsidiary's  properties or assets (including the
Collateral)  or  liabilities;  all  information  relating to  Borrowers' or such
Subsidiary's  business  operations  or  financial  condition;  and all  computer
programs,  disk or tape  files,  printouts,  runs,  or other  computer  prepared
information.

     "Borrowing Base" has the meaning set forth in Section 2.1(a).

     "Business Day" means any day that is not a Saturday,  Sunday,  or other day
on which national banks located in Atlanta,  Georgia,  New York, New York or Los
Angeles, California are authorized or required to close.

     "Business  Plan" means the Borrowers'  business plan relative to Borrowers'
operations  in the  Chapter 11 Case,  as  presented  to and  accepted by Lender,
attached as Schedule B-1 hereto.

     "Capitalized Lease Obligations" shall mean, with respect to any Person, the
obligations  of such Person under a lease that are required to be classified and
accounted for as capital lease  obligations under GAAP, and for purposes of this
definition,  the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date as determined in accordance with GAAP.

                                     Page 3
<PAGE>
     "Carve-Out Amount" has the meaning set forth in Section 2.16.

     "Carve-Out Expenses" has the meaning set forth in Section 2.16.

     "CERCLA" means the Comprehensive  Environmental Response,  Compensation and
Liability Act of 1980.

     "Change of Control"  means (a) any "person" or "group"  (within the meaning
of Sections  13(d) and  14(d)(2) of the Exchange  Act)  becomes the  "beneficial
owner"  (as  defined  in  Rule  13d-3  under  the  Exchange  Act),  directly  or
indirectly,  of more than thirty-five percent (35%) of the total voting power of
all classes of stock then  outstanding  of any Borrower  entitled to vote in the
election of directors or (b) during any period of twenty-four  (24)  consecutive
months, individuals who at the beginning of such period constituted the Board of
Directors of Borrower  (together  with any new directors  whose election by such
Board or whose  nomination for election by the stockholders of such Borrower was
approved  by a majority  of the  directors  then still in office who were either
directors at the beginning of such period or whose  election or  nomination  for
election  was  previously  so  approved)  cease for any reason to  constitute  a
majority of such Board of Directors then in office.

     "Chapter 11 Case" means  collectively  the  voluntary  petitions for relief
under Chapter 11 of the  Bankruptcy  Code filed by each Borrower in the Court on
the Relief Date and administered as Chapter 11 Case Nos. 00-65214 - 00-65224.

     "Closing  Date"  means the date of the first to occur of the  making of the
initial  Advance or the  issuance  of the  initial  Letter of Credit  under this
Agreement.

     "Code"  means the  Uniform  Commercial  Code,  as in effect in the State of
Georgia from time to time.

     "Collateral"  means all of the real and personal property of each Borrower,
whether now existing or hereafter acquired,  including without limitation,  each
of the following:

          (a) the Accounts,

          (b) Borrowers' Books and Records,

          (c) the Equipment,

          (d) the General Intangibles,

          (e) the Inventory,

          (f) the Equity Interests,

          (g) the Negotiable Collateral,

                                     Page 4
<PAGE>
          (h) the Real Property Collateral,

          (i) any money, or other assets of Borrowers that now or hereafter come
     into the possession, custody, or control of Lender, and

          (j) the proceeds and products,  whether tangible or intangible, of any
     of the foregoing,  including  proceeds of insurance  covering any or all of
     the  Collateral,  and any and all Accounts,  Borrowers'  Books and Records,
     Equipment,  General Intangibles,  Inventory,  Equity Interests,  Negotiable
     Collateral,  Real Property,  money, deposit accounts,  or other tangible or
     intangible property resulting from the sale, exchange, collection, or other
     disposition  of any of the  foregoing,  or any portion  thereof or interest
     therein, and the proceeds thereof.

     "Collateral  Access  Agreement" means a landlord waiver,  mortgagee waiver,
bailee  letter,  or  acknowledgment  agreement of any  warehouseman,  processor,
lessor,  consignee,  or other Person in  possession  of,  having a Lien upon, or
having rights or interests in the Equipment or Inventory,  in each case, in form
and substance satisfactory to Lender.

     "Collections" means all cash, checks, notes,  instruments,  and other items
of payment  (including,  insurance  proceeds,  proceeds  of cash  sales,  rental
proceeds, and tax refunds).

     "Committee" means the official committee of unsecured
creditors  formed,  appointed  or approved by the United  States  Trustee in the
Chapter 11 Case.

     "Compliance  Certificate" means a certificate  substantially in the form of
Exhibit A and delivered by the chief accounting officer of Parent to Lender.

     "Concentration   Accounts"  means,   collectively,   the  Sub-Concentration
Accounts  and the  Master  Concentration  Account,  and each such  Concentration
Account shall be referred to herein as a "Concentration Account".

     "Concentration  Account  Agreement" means a Blocked Account Agreement among
Parent,  the  Concentration  Account  Bank and  Lender,  in form  and  substance
satisfactory to Lender, applicable to one or more of the Concentration Accounts.

     "Concentration  Account  Bank" means First  Union,  or such other Person or
Persons as Lender and Parent may designate from time to time.

     "Contingent  Obligation"  means, with respect to any Person,  any direct or
indirect  liability of that Person,  whether or not contingent,  with or without
recourse,  (a) with  respect to any  Indebtedness,  lease,  dividend,  letter of
credit or other  obligation (the "primary  obligations")  of another Person (the
"primary  obligor"),  including  any  obligation of that Person (i) to purchase,
repurchase  or  otherwise  acquire  such  primary  obligations  or any  security
therefor, (ii) to advance or provide funds for the payment or discharge of any

                                     Page 5
<PAGE>
such primary obligation, or to maintain working capital or equity capital of the
primary  obligor or  otherwise  to  maintain  the net worth or  solvency  or any
balance  sheet  item,  level of income or  financial  condition  of the  primary
obligor,  (iii) to purchase  property,  securities or services primarily for the
purpose of assuring the owner of any such primary  obligation  of the ability of
the  primary  obligor  to make  payment  of  such  primary  obligation,  or (iv)
otherwise to assure or hold  harmless the holder of any such primary  obligation
against  loss in respect  thereof  (each,  a  "Guaranty  Obligation");  (b) with
respect to any Surety  Instrument  (other than any Letter of Credit)  issued for
the account of that Person or as to which that  Person is  otherwise  liable for
reimbursement  of  drawings  or  payments;  or (c) to  purchase  any  materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant  contract or other  related  document or  obligation  requires that
payment for such materials,  supplies or other  property,  or for such services,
shall be made  regardless  of whether  delivery of such  materials,  supplies or
other property is ever made or tendered,  or such services are ever performed or
tendered.

     "Contractual  Obligation"  means, with respect to any Person, any provision
of  any  security  issued  by  such  Person  or of any  agreement,  undertaking,
contract,  indenture,  mortgage, deed of trust or other instrument,  document or
agreement  to which such Person is a party or by which it or any of its property
is bound.

     "Cost" means, with respect to any Eligible Inventory of each Borrower,  the
lower of cost or market  value of such  Eligible  Inventory as  determined  on a
basis  consistent  with  each  Borrower's  current  and  historical   accounting
practices.

     "Court" has the meaning set forth in the first recital paragraph hereto.

     "Credit Card Agreement"  means each letter  agreement  between Parent and a
credit card processor, substantially in the form of Exhibit B.

     "Daily  Balance"  means the  amount of an  Obligation  owed at the end of a
given day.

     "Default"  means an event,  condition,  or default that, with the giving of
notice, the passage of time, or both, would be an Event of Default.

     "Deficiency" has the meaning set forth in Section 7.16.

     "Designated   Account"  means  account  number   2090003164485   of  Parent
maintained with Parent's  Designated Account Bank, or such other deposit account
of Parent  (located  within the United  States)  which has been  designated,  in
writing and from time to time, by Parent to Lender.

     "Designated  Account  Bank" means First  Union,  whose office is located at
Charlotte,  North Carolina, and whose ABA number is 061000227 or such other bank
as may be determined by Lender and Parent from time to time.

                                     Page 6
<PAGE>
     "Dilution" means, in each case based upon the experience of the immediately
prior three (3) month,  the result of dividing the Dollar amount of (a) bad debt
write-downs,  discounts,  advertising,  returns,  promotions,  credits, or other
dilution  with respect to the Accounts  during such period,  by (b)  Collections
(excluding  extraordinary  items) of Borrowers  plus the Dollar amount of clause
(a).

     "Dilution  Reserve"  means,  as of any  date of  determination,  an  amount
sufficient  to reduce  Lender's  advance rate against  Eligible  Accounts by one
percentage  point for each  percentage  point by which  Dilution is in excess of
five percent (5%).

     "Disbursement  Letter" means an instructional letter executed and delivered
by Parent to Lender regarding the extensions of credit to be made on the Closing
Date, the form and substance of which shall be satisfactory to Lender.

     "Disposition" means (i) the sale, lease, conveyance or other disposition of
property  (other  than sales or other  dispositions  expressly  permitted  under
Section 7.2(a) or Section 7.2(b),  operating leases or subleases entered into in
the ordinary  course of business or Investments  permitted  under Section 7.4 or
Liens  permitted under Section 7.1), and (ii) the sale or transfer to any Person
(other than Borrowers) by Borrowers or any Subsidiary of Borrowers of any equity
securities  issued by any  Subsidiary of Borrowers  and held by such  transferor
Person.

     "Dollars or $" means United States dollars.

     "Early Termination Premium" has the meaning set forth in Section 3.6.

     "EBITDA" means, with respect to Borrowers on a consolidated  basis with its
Subsidiaries  for any period,  the Net Income of Borrowers for such period,  (a)
plus, without duplication and to the extent deducted in computing Net Income for
such  period,  the  sum  of (i)  income  taxes,  (ii)  Interest  Expense,  (iii)
depreciation and amortization  expense,  (iv) restructuring  charges,  including
professional fees, store closing expenses and employee retention  payments,  (v)
non-cash charges  associated with the cumulative effect of changes in accounting
principles,  (vi) extraordinary  losses to the extent included in the Borrowers'
fiscal  year  1999  financial  statements,  and  (vii)  other  non-cash  charges
reasonably acceptable to Lender, (b) minus, to the extent included in Net Income
for such period,  extraordinary gains;  provided,  however, that the EBITDA with
respect to any Person or substantially all of the assets of a Person that became
a  Subsidiary  of, or was merged with or  consolidated  into,  Borrowers  or any
Subsidiary  of  Borrowers  during such period  shall  include the EBITDA of such
Person or the EBITDA attributable to such assets for such period.

     "Eligible  Accounts"  means  those  Accounts  created by  Borrowers  in the
ordinary  course of  business,  that  arise out of  Borrowers'  sale of goods or
rendition  of  services,   that  strictly  comply  with  each  and  all  of  the
representations  and warranties  respecting Accounts made by Borrowers to Lender
in the Loan Documents, and that are and at all times continue to be acceptable

                                     Page 7
<PAGE>
to Lender in its reasonable credit judgment in all respects;  provided, however,
that  standards  of  eligibility  may be fixed and revised  from time to time by
Lender in Lender's  reasonable  credit  judgment.  Eligible  Accounts  shall not
include the following:

          (a) Accounts  that the Account  Debtor has failed to pay within ninety
     (90) days of  invoice  date or one  hundred  twenty  (120)  days of date of
     service;

          (b) retail customer Accounts;

          (c) Accounts owed by an Account Debtor or its  Affiliates  where fifty
     percent (50%) or more of all Accounts  owed by that Account  Debtor (or its
     Affiliates) are deemed ineligible under clause (a) above;

          (d) Accounts with respect to which the Account  Debtor is an employee,
     Affiliate, or agent of any Borrower or any Subsidiary of any Borrower;

          (e) Accounts  with  respect to which goods are placed on  consignment,
     guaranteed sale, sale or return, sale on approval,  bill and hold, or other
     terms  by  reason  of  which  the  payment  by the  Account  Debtor  may be
     conditional;

          (f) Accounts  that are not payable in Dollars or with respect to which
     the Account Debtor: (i) does not maintain its chief executive office in the
     United States, or (ii) is not organized under the laws of the United States
     or any State thereof,  or (iii) is the government of any foreign country or
     sovereign  state,  or  of  any  state,  province,  municipality,  or  other
     political  subdivision  thereof,  or  of  any  department,  agency,  public
     corporation,  or other instrumentality  thereof,  unless (y) the Account is
     supported by an irrevocable letter of credit  satisfactory to Lender (as to
     form,  substance,  and issuer or  domestic  confirming  bank) that has been
     delivered to Lender and is directly  drawable by Lender, or (z) the Account
     is covered  by credit  insurance  in form and  amount,  and by an  insurer,
     satisfactory to Lender;

          (g) Accounts  with  respect to which the Account  Debtor is either (i)
     the United States or any  department,  agency,  or  instrumentality  of the
     United States  (exclusive,  however,  of Accounts with respect to which any
     Borrower has complied,  to the satisfaction of Lender,  with the Assignment
     of Claims Act, 31 U.S.C.  ' 3727),  or (ii) any State of the United  States
     (exclusive,  however,  of  Accounts  owed by any State that does not have a
     statutory counterpart to the Assignment of Claims Act);

          (h) Accounts with respect to which the Account Debtor is a creditor of
     any Borrower or any Subsidiary of any Borrower, has or has asserted a right
     of setoff,  has disputed its liability,  or has made any claim with respect
     to the Account (but only to the extent of such setoff, dispute or claim);

                                     Page 8
<PAGE>
          (i) Accounts with respect to an Account Debtor whose total obligations
     owing to any  Borrower,  taken as a whole,  exceed ten percent (10%) of all
     Eligible  Accounts,  to the extent of the obligations owing by such Account
     Debtor in excess of such percentage;

          (j) Accounts  with  respect to which the Account  Debtor is subject to
     any Insolvency Proceeding, or becomes insolvent, or goes out of business;

          (k) Accounts the collection of which Lender,  in its reasonable credit
     judgment,  believes  to be  doubtful  by  reason  of the  Account  Debtor's
     financial condition;

          (l)  Accounts  with  respect  to which the goods  giving  rise to such
     Account  have not been  shipped  and  billed  to the  Account  Debtor,  the
     services  giving rise to such Account have not been  performed and accepted
     by the Account Debtor,  or the Account otherwise does not represent a final
     sale;

          (m) Accounts  with  respect to which the Account  Debtor is located in
     the states of New Jersey,  Minnesota  or West  Virginia (or any other state
     that  requires a creditor  to file a  Business  Activity  Report or similar
     document in order to bring suit or otherwise  enforce its remedies  against
     such Account  Debtor in the courts or through any judicial  process of such
     state),  unless such  Borrower has  qualified to do business in New Jersey,
     Minnesota,  West Virginia,  or such other states,  or has filed a Notice of
     Business  Activities Report with the applicable  division of taxation,  the
     department of revenue,  or with such other state offices,  as  appropriate,
     for the then-current year, or is exempt from such filing requirement;

          (n)  Accounts  that  represent  progress  payments  or  other  advance
     billings  that  are due  prior  to the  completion  of  performance  by any
     Borrower of the subject contract for goods or services;

          (o) Accounts arising other than from the sale of goods or rendition of
     services in the ordinary course of any Borrower's business;

          (p)  Accounts   representing   lease  payments  due  from  doctors  or
     optometrists;

          (q)  Accounts  with  respect to which Lender does not have a valid and
     perfected first priority security interest; and

          (r) to the extent  determined  appropriate by Lender in its reasonable
     credit  judgment,  Accounts  subject to  collection  by an  outside  claims
     processor where such Account has not yet been billed by such processor, and
     credit card Accounts.

     "Eligible Inventory" means Inventory owned by Borrowers consisting of first
quality finished goods (including eyeglass frames, eyeglass lenses, contact

                                     Page 9
<PAGE>
lenses, sunglasses and related accessories) held for sale in the ordinary course
of  Borrowers'  business and raw materials  for such  finished  goods,  that are
located at or in-transit between Borrowers'  premises identified on Schedule E-1
(as  supplemented  from time to time upon at least ten (10) days' prior  written
notice to Lender), that strictly comply with each and all of the representations
and warranties  respecting Inventory made by such Borrower to Lender in the Loan
Documents,  and that are and at all times continue to be acceptable to Lender in
its  reasonable  credit  judgment  in  all  respects;  provided,  however,  that
standards of eligibility may be fixed and revised from time to time by Lender in
Lender's reasonable credit judgment.  An item of Inventory shall not be included
in Eligible Inventory if:

          (a) it is not owned solely by a Borrower,  or a Borrower does not have
     good, valid, and marketable title thereto;

          (b) it is not located in the United States at one of the locations set
     forth on Schedule E-1 (as supplemented  from time to time upon at least ten
     (10) days' prior written notice to Lender);

          (c) it is Inventory  located  within a Sam's Club, a Meijers  store or
     another   leased   department   within  a  retail   store   (i.e.,   not  a
     "free-standing"  store)  which  is  not  subject  to  a  Collateral  Access
     Agreement in form and substance satisfactory to Lender;

          (d) it is not subject to a valid and perfected first priority security
     interest in favor of Lender;

          (e) it consists  of goods  returned  or  rejected  by  customers  of a
     Borrower, or goods in transit;

          (f) it is used, obsolete or slow moving, a restrictive or custom item,
     work-in-process,   packaging  and  shipping  materials,  supplies  used  or
     consumed in a Borrower's business,  Inventory subject to a Lien in favor of
     any third  Person,  bill and hold goods,  defective  goods,  "seconds,"  or
     Inventory acquired on consignment;

          (g) it is located on property  within a United States military base or
     on property leased by a Borrower from the United States government;

          (h) to the extent  determined  appropriate by Lender in its reasonable
     credit  judgment,  (i) it is  Inventory  classified  by a  Borrower  on its
     general ledger,  prepared in a manner consistent with a Borrower's  general
     ledgers  disclosed to Lender prior to the Closing  Date,  as either  "close
     out" or  "discontinued"  Inventory and which "close out" or  "discontinued"
     Inventory  has been owned by a Borrower  for an  aggregate of more than six
     (6) months after being so  classified,  (ii) it is  Inventory  constituting
     non-retail supplies, or (iii) it is not located on property owned or leased
     by a  Borrower  or in a  contract  warehouse,  in each  case,  subject to a
     Collateral Access Agreement executed by the mortgagee, lessor, the

                                     Page 10
<PAGE>
     warehouseman,  or other third party,  as the case may be, and segregated or
     otherwise  separately  identifiable from goods of others, if any, stored on
     the premises; or

          (i) it is Inventory  bearing a  servicemark,  trademark or name of any
     Person  other than a Borrower,  unless it is  Inventory  which is sold to a
     Borrower in the ordinary course of a Borrower's  business for  distribution
     and is not subject to any licensing, patent, royalty, trademark, trade name
     or  copyright  agreement  between a  Borrower  and any other  Person  which
     prohibits or restricts Lender's sale or other disposition of such Inventory
     pursuant to Loan Documents.

     "Entry Date" means the date upon which the Interim  Order is entered on the
docket of the Chapter 11 Case.

     "Environmental   Claims"  means  all  claims,   however  asserted,  by  any
Governmental   Authority  or  other  Person  alleging  potential   liability  or
responsibility  for violation of any Environmental Law, or for release or injury
to the  environment  or threat  to public  health,  personal  injury  (including
sickness,  disease or death),  property damage,  natural  resources  damage,  or
otherwise   alleging  liability  or  responsibility  for  damages  (punitive  or
otherwise),  cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties,  injunctive relief, or other type of relief,  resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional  and   unintentional,   negligent  and   non-negligent,   sudden  or
non-sudden, accidental or non-accidental,  placement, spills, leaks, discharges,
emissions  or  releases) of any  Hazardous  Material  at, in, or from  Property,
whether or not owned by any Borrower or any Subsidiary.

     "Environmental  Laws" means all  federal,  state or local  laws,  statutes,
common law duties, rules,  regulations,  ordinances and codes, together with all
administrative orders, directed duties, requests,  licenses,  authorizations and
permits of, and agreements  with,  any  Governmental  Authorities,  in each case
relating  to  environmental,  health,  safety  and land use  matters;  including
CERCLA,  the Clean Air Act, the Federal Water Pollution Control Act of 1972, the
Solid Waste Disposal Act, the Federal  Resource  Conservation  and Recovery Act,
the  Toxic  Substances   Control  Act,  the  Emergency  Planning  and  Community
Right-to-Know  Act, the California  Hazardous  Waste Control Law, the California
Solid Waste  Management,  Resource,  Recovery and Recycling  Act, the California
Water Code and the California Health and Safety Code.

     "Environmental Permits" has the meaning set forth in Section 5.12(b).

     "Equipment"  means all present and hereafter  acquired  machinery,  machine
tools, motors, equipment, furniture, furnishings,  fixtures, vehicles (including
motor vehicles and trailers), tools, parts and goods (other than consumer goods,
farm products, or Inventory), of any Borrower,  wherever located, including, (a)
any  interest  of  Borrower  in any of the  foregoing  and (b) all  attachments,
accessories,   accessions,   replacements,    substitutions,    additions,   and
improvements to any of the foregoing.

                                     Page 11
<PAGE>
     "Equity  Interests"  means all equity  interests of the  Borrowers  and any
Subsidiary or other Person (other than the Parent), including without limitation
the  Investment  Property and any  partnership  interests,  limited  partnership
interests, limited liability company membership interests and similar interests.

     "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  and
regulations promulgated thereunder.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with a Borrower within the meaning of Section 414(b) or (c)
of the IRC (and  Sections  414(m) and (o) of the IRC for purposes of  provisions
relating to Section 412 of the IRC).

     "ERISA Event" means (a) a Reportable  Event with respect to a Pension Plan;
(b) a  withdrawal  by a  Borrower  or any ERISA  Affiliate  from a Pension  Plan
subject  to  Section  4063  of  ERISA  during  a plan  year  in  which  it was a
substantial  employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations  which is treated as such a withdrawal  under  Section  4062(e) of
ERISA; (c) a complete or partial withdrawal by a Borrower or any ERISA Affiliate
from a  Multiemployer  Plan  or  notification  that a  Multiemployer  Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan  amendment as a termination  under Section 4041 or 4041A of ERISA,  or
the  commencement  of  proceedings  by the PBGC to  terminate a Pension  Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer,  any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA,  other than PBGC
premiums due but not delinquent under Section 4007 of ERISA,  upon a Borrower or
any ERISA Affiliate.

     "Eurodollar  Rate"  means,  with  respect  to  the  Interest  Period  for a
Eurodollar  Rate  Advance,  the interest  rate per annum at which United  States
dollar deposits are offered to Wells Fargo Bank, National Association,  by major
banks in the London  interbank  market (or other Eurodollar Rate market selected
by Lender) on or about 11:00 a.m.  (Eastern time) two (2) Business Days prior to
the commencement of such Interest Period in amounts  comparable to the amount of
the  Eurodollar  Rate  Advances  requested  by  and  available  to  Borrower  in
accordance  with this Agreement,  with a maturity of comparable  duration to the
Interest Period selected by Borrowers.

     "Eurodollar  Rate Advances" means any Advance (or any portion thereof) made
or  outstanding  hereunder  during any period when  interest on such Advance (or
portion thereof) is payable based on the Adjusted Eurodollar Rate.

     "Event of Default" has the meaning set forth in Article 8.

     "Excess  Availability"  means, as of any date of determination,  the result
(so long as such result is a positive number) of (a) Availability,  less (b) the
accounts payable of each Borrower over sixty (60) days past due.

                                     Page 12
<PAGE>
     "Exchange Act" means the Securities  Exchange Act of 1934, and  regulations
promulgated thereunder.

     "Fee  Letter"  means that certain  commitment  letter dated as of March 31,
2000,  setting forth the applicable  fees for Lender  relating to this Agreement
and the Loans, a copy of which is attached hereto Exhibit F.

     "FEIN" means Federal Employer Identification Number.

     "Final  Order" means the order of the Court  entered in the Chapter 11 Case
after a final hearing under Bankruptcy Rule 4001(c)(2), satisfactory in form and
substance  to  Lender,  and from which no appeal has been  timely  filed,  or if
timely  filed,  such  appeal  has been  dismissed  (unless  Lender  waives  such
requirement),  together  with  all  extensions,   modifications  and  amendments
thereto,  which,  among other matters but not by way of  limitation,  authorizes
Borrowers  to obtain  credit,  incur  indebtedness,  and grant  Liens under this
Agreement and the other Loan Documents,  as the case may be, and provide for the
super-priority of Lender's claims, all as set forth in such order.

     "Final  Order  Entry  Date"  means the date upon  which the Final  Order is
entered on the docket in the Chapter 11 case.

     "Foothill" means Foothill Capital  Corporation,  a California  corporation.

     "Foreign  Subsidiary" means any Subsidiary of a Borrower which is organized
or incorporated under the laws of a jurisdiction other than the United States or
any state or territory thereof.

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States, consistently applied.

     "General  Intangibles"  means all of Borrowers'  present and future general
intangibles  and other personal  property  (including  contract  rights,  rights
arising under common law, statutes, or regulations,  choses or things in action,
goodwill,  patents,  trade  names,  trademarks,   servicemarks,  trade  secrets,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists,  rights to payment and other rights
under  any  royalty  or  licensing  agreements,  infringement  claims,  computer
programs, information contained on computer disks or tapes, literature, reports,
catalogs,  deposit  accounts,  insurance premium rebates,  tax refunds,  and tax
refund claims), other than goods, Accounts, and Negotiable Collateral.

     "GOB  Rate"  means the  percentages  determined,  from time to time,  by an
appraiser acceptable to Foothill and using a methodology  acceptable to Foothill
in its  reasonable  credit  judgment  as the  percentage  of Cost  of  Inventory
recoverable on a going-out of business basis,  multiplied by eighty-five percent
(85%).

     "Governing  Documents" means the certificate or articles of  incorporation,
by-laws, or other organizational or governing documents of any Person.

                                     Page 13
<PAGE>
     "Governmental Authority" means any nation or government, any state or other
political  subdivision  thereof,  any  central  bank  (or  similar  monetary  or
regulatory  authority) thereof,  any entity exercising  executive,  legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any  corporation  or other  entity  owned or  controlled,  through  stock or
capital ownership or otherwise, by any of the foregoing.

     "Guaranty  Obligation"  has the  meaning  set  forth in the  definition  of
"Contingent Obligation."

     "Hazardous  Materials" means all those substances that are regulated by, or
which may form the basis of liability under, any  Environmental  Law,  including
any  substance   identified  under  any   Environmental   Law  as  a  pollutant,
contaminant,  hazardous waste, hazardous  constituent,  special waste, hazardous
substance,  hazardous  material,  or toxic substance,  or petroleum or petroleum
derived substance or waste.

     "Indebtedness"  means,  with respect to any Person,  (a) all obligations of
such Person for borrowed money,  (b) all obligations of such Person evidenced by
bonds, debentures,  notes, or other similar instruments and all reimbursement or
other  obligations  of such  Person in respect  of  letters  of credit,  bankers
acceptances,   interest  rate  swaps,  or  other  financial  products,  (c)  all
obligations  of  such  Person  under  capital  leases,  (d) all  obligations  or
liabilities of others secured by a Lien on any property or asset of such Person,
irrespective  of whether such  obligation  or liability is assumed,  and (e) any
obligation  of such  Person  guaranteeing  or  intended  to  guarantee  (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to such Person)
any indebtedness,  lease, dividend, letter of credit, or other obligation of any
other Person.

     "Indemnified Liabilities" has the meaning set forth in Section 11.3.

     "Indemnified Person" has the meaning set forth in Section 11.3.

     "Indenture"  that  certain  Indenture  dated as of  October  8, 1998  among
Parent, as issuer,  the guarantors named therein and State Street Bank and Trust
Company, as trustee.

     "Independent Auditor" has the meaning set forth in Section 6.1(a).

     "Insolvency  Proceeding"  means any proceeding  commenced by or against any
Person under any provision of the Bankruptcy Code or under any other  bankruptcy
or insolvency law, assignments for the benefit of creditors,  formal or informal
moratoria,  compositions,  extensions  generally with creditors,  or proceedings
seeking reorganization, arrangement, or other similar relief.

     "Intangible  Assets" means, with respect to any Person, that portion of the
book value of all of such Person's  assets that would be treated as  intangibles
under GAAP.

                                     Page 14
<PAGE>
     "Interest  Expense"  means,  with  respect to any Person on a  consolidated
basis for any period,  interest  expense and loan fees  determined in accordance
with GAAP,  and  including  capitalized  and  non-capitalized  interest  and the
interest component of Capitalized Lease Obligations.  Unless the context clearly
provides otherwise, any reference to Interest Expense in this Agreement shall be
to the Interest  Expense of each Borrower and its Subsidiaries on a consolidated
basis.

     "Interest  Period"  means,  for any  Eurodollar  Rate  Advance,  the period
commencing  on the  Business  Day such  Eurodollar  Rate Advance is disbursed or
continued, or on the Business Day on which a Reference Rate Advance is converted
to such  Eurodollar  Rate  Advance,  and  ending  on the date  thirty  (30) days
thereafter.

     "Interim Order" means the order of the Court entered in the Chapter 11 Case
after a hearing,  satisfactory  in form and  substance to Lender,  which,  among
other matters but not by way of  limitation,  authorizes the Borrowers to obtain
credit,  incur indebtedness,  and grant Liens under this Agreement and the other
Loan  Documents,  as the case may be,  and  provide  for the  super-priority  of
Lender's claims, all as set forth in such order.

     "Inventory"  means all present and future inventory in which a Borrower has
any interest,  including goods held for sale or lease or to be furnished under a
contract of service and all of Borrowers' present and future raw materials, work
in  process,  finished  goods,  and  packing and  shipping  materials,  wherever
located.

     "Investment  Property"  means all  "investment  property",  as such term is
defined in the Code,  now owned or hereafter  acquired by each  Borrower and, in
any event, including,  without limitation, all securities,  whether certificated
or  uncertificated,   security  entitlements,   securities  accounts,  commodity
contracts and commodity accounts.

     "Inventory Reserves" means reserves (determined from time to time by Lender
in its  discretion)  for the estimated  reclamation  claims of unpaid sellers of
Inventory sold to any Borrower.

     "Investments" has the meaning specified in Section 7.4.

     "IRC"  means  the  Internal  Revenue  Code of  1986,  as  amended,  and the
regulations thereunder.

     "IRS" means the Internal  Revenue Service,  and any Governmental  Authority
succeeding to any of its principal functions under the IRC.

     "Joint Venture" means a single-purpose  corporation,  partnership,  limited
liability  company,  joint venture or other similar legal  arrangement  (whether
created by  contract  or  conducted  through a  separate  legal  entity)  now or
hereafter formed by any Borrower or any of its Subsidiaries  with another Person
(other than a Borrower) in order to conduct a common venture or enterprise  with
such Person.

                                     Page 15
<PAGE>
     "L/C" has the meaning set forth in Section 2.2(a).

     "L/C Guaranty" has the meaning set forth in Section 2.2(a).

     "Lender" has the meaning set forth in the preamble to this Agreement.

     "Lender Account" has the meaning set forth in Section 2.7.

     "Lender  Expenses"  means all:  costs or  expenses  (including  taxes,  and
insurance  premiums)  required to be paid by  Borrowers or any  Subsidiary  of a
Borrower  under any of the Loan  Documents  that are paid or incurred by Lender;
fees or  charges  paid  or  incurred  by  Lender  in  connection  with  Lender's
transactions with Borrowers and their Subsidiaries,  including,  fees or charges
for  photocopying,  notarization,  couriers and  messengers,  telecommunication,
public record  searches  (including tax lien,  litigation,  and UCC searches and
including  searches with the patent and trademark office,  the copyright office,
or the  department  of motor  vehicles),  filing,  recording,  publication,  and
appraisal  (including  periodic  Collateral  appraisals);   costs  and  expenses
incurred by Lender in the  disbursement  of funds to Borrowers (by wire transfer
or otherwise); charges paid or incurred by Lender resulting from the dishonor of
checks;  costs and expenses paid or incurred by Lender to correct any default or
enforce  any  provision  of the Loan  Documents,  or in gaining  possession  of,
maintaining,  handling,  preserving,  storing, shipping,  selling, preparing for
sale,  or  advertising  to  sell  the  Collateral,   or  any  portion   thereof,
irrespective  of  whether  a sale is  consummated;  costs and  expenses  paid or
incurred by Lender  (including any costs and expenses to engage outside parties)
in  examining  the  Books  and  Records  and in  monitoring  and  analyzing  the
Collateral;  costs and  expenses of third party claims or any other suit paid or
incurred by Lender in enforcing or defending the Loan Documents or in connection
with  the   transactions   contemplated   by  the  Loan  Documents  or  Lender's
relationship with Borrowers or any guarantor; and Lender's reasonable attorneys'
fees  and  expenses,  actually  incurred  in  advising,  structuring,  drafting,
reviewing,  administering,  amending, terminating, enforcing (including, without
limitation,  reasonable  attorneys'  fees  and  expenses  actually  incurred  in
connection   with  the   Chapter   11  Case  or  in  any  other   "workout,"   a
"restructuring," or any other Insolvency  Proceeding concerning Borrowers or any
guarantor of the  Obligations),  defending,  or concerning  the Loan  Documents,
irrespective of whether suit is brought.

     "Letter  of  Credit"  means  an  L/C  or an L/C  Guaranty,  as the  context
requires.

     "Lien" means any interest in property  securing an obligation owed to, or a
claim by, any Person other than the owner of the property, whether such interest
shall be based on the common law,  statute,  or contract,  whether such interest
shall be recorded or perfected,  and whether such  interest  shall be contingent
upon the  occurrence  of some future  event or events or the  existence  of some
future  circumstance or  circumstances,  including the lien or security interest
arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation,

                                     Page 16
<PAGE>
assignment,  deposit arrangement,  security agreement,  adverse claim or charge,
conditional sale or trust receipt, or from a lease, consignment, or bailment for
security purposes and also including  reservations,  exceptions,  encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Real Property.

     "Loan Account" has the meaning set forth in Section 2.10.

     "Loan Documents" means this Agreement, the Orders, the Disbursement Letter,
the Fee Letter,  the Letters of Credit, the Trademark  Security  Agreement,  the
Pledge Agreement, any note or notes executed by Borrowers and payable to Lender,
and any other agreement  entered into, now or in the future,  in connection with
this Agreement.

     "Loans" means, collectively, the Advances and the Term Loans.

     "Lockbox Account" shall mean a depositary account  established  pursuant to
one of the Lockbox Agreements.

     "Lockbox  Agreements"  means those  certain  Lockbox  Operating  Procedural
Agreements  and  those  certain  Depository  Account  Agreements,  in  form  and
substance  satisfactory to Lender, each of which is among Parent, Lender and one
of the Lockbox Banks. "Lockbox Banks" means First Union, or such other Person or
Persons as Lender and Parent may designate from time to time.

     "Managed  Care  Subsidiary"  shall  mean (a)  NVAL  VisionCare  Systems  of
California,  Inc.,  ProCare Eye Exam, Inc. and NVAL VisionCare  Systems of North
Carolina,  Inc. and (b) any other  Subsidiary  of a Borrower  formed or acquired
after the Closing Date whose  financial  condition or  activities  are regulated
under the laws of any state in connection with its provision of health or vision
care  products  or  services  (or  related  administrative  services)  and shall
include,  and without  limitation,  a health maintenance  organization  (whether
single or multi service), third party administrator or any entity similar to any
of the foregoing.

     "Margin Stock" means "margin stock" as such term is defined in Regulation U
or X of the Board of Governors of the Federal Reserve System.

     "Master Concentration Account" means account number 2080000695022 of Parent
maintained at the  Concentration  Account Bank, or such other deposit account of
Parent (located in the United States),  into which cash received in the Lockbox,
the other  Concentration  Accounts  and certain  Retail  Store  Accounts is wire
transferred as provided in Section 2.7.

     "Material  Adverse  Effect"  means (a) a material  adverse  change in, or a
material adverse effect upon, the operations,  business,  properties,  condition
(financial  or  otherwise)  or prospects of Borrowers or of Borrowers  and their
Subsidiaries  taken as a whole; (b) a material  impairment of the ability of any
Borrower to perform under any Loan Document; or (c) a material adverse effect

                                     Page 17
<PAGE>
upon (i) the legality,  validity,  binding effect or enforceability  against any
Borrower of any Loan  Document,  or (ii) the  perfection or priority of any Lien
granted under any of the Loan Documents.

     "Material Contracts" has the meaning set forth in Section 5.25.

     "Maturity Date" means May 31, 2001.

     "Maximum Amount" means $25,000,000.

     "Maximum  Revolving  Amount" means,  as of any date of  determination,  the
result  of (a) the  Maximum  Amount,  minus (b) the then  outstanding  aggregate
principal balance of the Term Loans.

     "Meijer" means Meijer, Inc.

     "Multiemployer  Plan" means a "multiemployer  plan",  within the meaning of
Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes,
is making, or is obligated to make  contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.

     "Negotiable  Collateral" means all of Borrowers' present and future letters
of  credit,   notes,  drafts,   instruments,   investment   property,   security
entitlements,  securities  (including  the  shares of stock of  Subsidiaries  of
Borrowers),  documents,  personal  property  leases (wherein any Borrower is the
lessor), chattel paper, and Books and Records relating to any of the foregoing.

     "Net Income" means, with respect to any Person on a consolidated  basis for
any period,  its net income (or deficit)  determined  in  accordance  with GAAP.
Unless the context clearly  provides  otherwise,  any reference to Net Income in
this Agreement shall be to the Net Income of Borrowers and their Subsidiaries on
a consolidated basis.

     "Net Proceeds" means, as to any Disposition by a Person,  proceeds in cash,
checks or other cash  equivalent  financial  instruments as and when received by
such Person, net of: (a) the direct costs relating to such Disposition excluding
amounts  payable to such Person or any  Affiliate  of such  Person,  (b) income,
sale, use or other  transaction taxes paid or payable by such Person as a direct
result  thereof,  and (c)  amounts  required  to be applied to repay  principal,
interest and prepayment premiums and penalties on Indebtedness secured by a Lien
on the  asset  which is the  subject  of such  Disposition  and (d)  appropriate
amounts to be set aside by such Person as a reserve,  in  accordance  with GAAP,
against any liabilities  associated  with such  Disposition and retained by such
Person after such Disposition,  including without  limitation  pension and other
post-employment benefit liabilities,  liabilities related to environment matters
and  liabilities  under any  indemnification  obligations  associated  with such
Disposition.

                                     Page 18
<PAGE>
     "Obligations"  means all Loans, debts,  principal,  interest (including any
interest  that,  but for the  provisions  of the  Bankruptcy  Code,  would  have
accrued),  contingent reimbursement obligations under any outstanding Letters of
Credit, premiums (including Early Termination Premiums),  liabilities (including
all amounts charged to Borrowers' Loan Account  pursuant  hereto),  obligations,
fees,  charges,  costs, or Lender Expenses (including any fees or expenses that,
but for the  provisions  of the  Bankruptcy  Code,  would have  accrued),  lease
payments, guaranties,  covenants, and duties owing by Borrowers to Lender of any
kind and description  (whether pursuant to or evidenced by the Loan Documents or
pursuant to any other agreement  between Lender and Borrowers,  and irrespective
of whether for the payment of money),  whether  direct or indirect,  absolute or
contingent,  due or to become  due,  now  existing  or  hereafter  arising,  and
including any debt, liability, or obligation owing from Borrowers to others that
Lender may have obtained by assignment or otherwise,  and further  including all
interest not paid when due and all Lender  Expenses that  Borrowers are required
to pay or reimburse by the Loan Documents, by law, or otherwise.

     "Orders" means the Interim Order and the Final Order.

     "Overadvance" has the meaning set forth in Section 2.5.

     "Parent" has the meaning set forth in the second recital paragraph hereof.

     "Participant"  means any Person to which  Lender  has sold a  participation
interest in its rights under the Loan Documents.

     "PBGC" means the Pension Benefit Guaranty Corporation,  or any Governmental
Authority succeeding to any of its principal functions under ERISA.

     "Pension  Plan" means a pension  plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which any Borrower sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions,  or in the case of a
multiple  employer  plan (as  described  in  Section  4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.

     "Permitted Liens" has the meaning set forth in Section 7.1.

     "Permitted  Protest"  means the right of any  Borrower  to protest any Lien
other than any such Lien that  secures  the  Obligations,  pro-vided  that (a) a
reserve  with respect to such  obligation  is  established  on the books of such
Borrower  in an  amount  that  is  reasonably  satisfactory  to  Lender  in  its
reasonable  credit  judgment,  (b) any such protest is instituted and diligently
prosecuted  by such  Borrower in good faith,  and (c) Lender is satisfied  that,
while  any  such  protest  is  pending,  there  will  be no  impairment  of  the
enforceability,  validity,  or  priority of any of the Liens of Lender in and to
the Collateral.

                                     Page 19
<PAGE>
     "Person"  means  and  includes  natural  persons,   corporations,   limited
liability  companies,  limited  partnerships,   general  partnerships,   limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other  organizations,  irrespective  of  whether  they are legal  entities,  and
governments and agencies and political subdivisions thereof.

     "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which any Borrower  sponsors or maintains  or to which any  Borrower  makes,  is
making, or is obligated to make contributions and includes any Pension Plan.

     "Pledge Agreement" means that certain Debtor-in-Possession Pledge Agreement
of even date herewith among Borrowers,  the Administrative  Agent and Lender, in
form and substance satisfactory to Lender,  together with any supplement thereto
executed and delivered after the date hereof between Borrowers and Lender.

     "Pledged Collateral" has the meaning specified in the Pledge Agreement.

     "Pre-Petition  Lenders" has the meaning set forth in the second  recital to
this Agreement.

     "Pre-Relief  Date Loan  Agreement"  has the meaning set forth in the second
recital paragraph hereto.

     "Pre-Relief  Date  Obligations"  means all  indebtedness,  obligations  and
liabilities of the Borrowers to the  Pre-Petition  Lenders incurred prior to the
Relief Date arising from or related to the Pre-Relief Date Loan Agreement or the
"Loan Documents" as defined therein,  plus interest thereon accruing both before
and after the Relief Date, whether such indebtedness, obligations or liabilities
are direct or  indirect,  joint or several,  absolute or  contingent,  due or to
become due,  whether  for  payment or  performance,  now  existing or  hereafter
arising.

     "Purchase  Money  Indebtedness"  means  any  Indebtedness  of any  Borrower
incurred for the purpose of financing  all or any part of the purchase  price or
the cost of installation, construction or improvement of any property.

     "Qualified  Proceeds"  means any of the following or any combination of the
following: (i) cash, (ii) cash equivalents, (iii) assets that are used or usable
in the  business of any  Borrower as existing on the Closing  Date or a business
reasonably related or complimentary thereto and (iv) capital stock of any Person
engaged  primarily  in the  business of any  Borrower as existing on the Closing
Date or a business  reasonably  related or complimentary  thereto so long as, in
connection  with the receipt by any Borrower of such capital stock,  such Person
is merged with or into or transfers or conveys  substantially  all or all of its
assets to, or is liquidated into, any Borrower.

     "Real   Property"   means  any  estates  or  interests  in  real  property,
specifically including,  without limitation,  all leaseholds and other such real
property interests, now owned or hereafter acquired by Borrowers.

                                     Page 20
<PAGE>
     "Real Property Collateral" means any parcel or parcels of real property and
the related improvements  thereto owned by Borrowers,  and all leaseholds now or
hereafter  occupied by any Borrwer,  and any Real Property hereafter acquired by
Borrowers.

     "Reference  Rate" means the  variable  rate of  interest,  per annum,  most
recently announced by Wells Fargo Bank, National  Association,  or any successor
thereto,  as its "base rate," irrespective of whether such announced rate is the
best rate available from such financial institution.

     "Relief  Date" has the  meaning  set forth in the first  recital  paragraph
hereto.

     "Requirement  of  Law"  means,  as to any  Person,  any law  (statutory  or
common),  treaty,  rule or regulation or  determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.

     "Reserve  Percentage"  means and refers to, as of the date of determination
thereof;  the maximum  percentage  (rounded upward,  if necessary to the nearest
1/100th of one percent  (1%)),  as determined by Lender (or its  Affiliates)  in
accordance with its (or their ) usual procedures (which  determination  shall be
conclusive in the absence of manifest error),  that is in effect on such date as
prescribed by the Federal Reserve Board for determining the reserve requirements
(including  supplemental,  marginal,  and emergency reserve  requirements)  with
respect  to  eurocurrency   funding  (currently  referred  to  as  "eurocurrency
liabilities") by Lender or its Affiliates.

     "Responsible   Officer"  means  the  chief  executive  officer,  the  chief
financial  officer or the  president  of  Parent,  or any other  officer  having
substantially  the same  authority  and  responsibility;  or,  with  respect  to
compliance with financial covenants, the chief financial officer, the controller
or the treasurer of Parent,  or any other officer having  substantially the same
authority and responsibility.

     "Restricted Payments" has the meaning set forth in Section 7.10.

     "Retail  Store  Accounts"  means those bank  accounts set forth on Schedule
6.14 other than the Lockbox Account or the Concentration Accounts.

     "Revolving  Facility  Usage" means,  as of any date of  determination,  the
aggregate  amount of  Advances  and  undrawn or  unreimbursed  Letters of Credit
outstanding.

     "Sam's Club" means Sam's Club, a division of Wal-Mart.

     "SEC" means the Securities  and Exchange  Commission,  or any  Governmental
Authority succeeding to any of its principal functions.

                                     Page 21
<PAGE>
     "Senior  Claims" means (a) those  pre-Relief Date claims or liens set forth
on Schedule S-1 attached  hereto,  if any, that have priority  over, or are pari
passu  with,  the  claims  and Liens of  Lender,  to the  extent  allowed by the
Bankruptcy  Court and (b) all Permitted  Liens (other than Liens permitted under
paragraphs (c), (d) and (g) of Section 7.1).

     "Senior Notes" means those certain senior  unsecured  notes due 2005 issued
by Parent pursuant to the Indenture.

     "Solvent"  means,  as to any Person at any time, that (a) the fair value of
the  property  of such  Person  is  greater  than the  amount  of such  Person's
liabilities  (including  disputed,  contingent and unliquidated  liabilities) as
such value is  established  and  liabilities  evaluated  for purposes of Section
101(31) of the  Bankruptcy  Code;  (b) the present  fair  saleable  value of the
property of such Person is not less than the amount that will be required to pay
the probable  liability of such Person on its debts as they become  absolute and
matured;  (c) such Person is able to realize upon its property and pay its debts
and  other  liabilities   (including   disputed,   contingent  and  unliquidated
liabilities)  as they mature in the normal  course of business;  (d) such Person
does  not  intend  to,  and  does  not  believe  that it  will,  incur  debts or
liabilities  beyond such Person's  ability to pay as such debts and  liabilities
mature; and (e) such Person is not engaged in business or a transaction,  and is
not  about to engage in  business  or a  transaction,  for which  such  Person's
property would constitute unreasonably small capital.

     "Sub-Concentration  Accounts"  means  those bank  accounts of Parent at the
Concentration Account Bank set forth on Schedule S-2.

     "Subsidiary"of  a Person means any corporation,  association,  partnership,
limited liability company,  joint venture or other business entity of which more
than fifty  percent  (50%) of the voting  stock,  membership  interests or other
equity interests (in the case of Persons other than  corporations),  is owned or
controlled  directly  or  indirectly  by  the  Person,  or one  or  more  of the
Subsidiaries  of the  Person,  or a  combination  thereof.  Unless  the  context
otherwise  clearly  requires,  references  herein to a  "Subsidiary"  refer to a
Subsidiary of a Borrower.

     "Surety  Instruments"  means all letters of credit  (including  standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

     "Term A Rate" has the meaning set forth in Section 2.6(a)(iii).

     "Term B Rate" has the meaning set forth in Section 2.6(a)(iv).

     "Term Loan A" has the meaning set forth in Section 2.3(a).

     "Term Loan B" has the meaning set forth in Section 2.3(b).

                                     Page 22
<PAGE>
     "Term Loans" means, collectively, Term Loan A and Term Loan B.

     "Termination Date" has the meaning set forth in Section 3.4.

     "Trademark License" means any oral or written agreement now or hereafter in
existence  granting to any Borrower any right to use any trademark,  as the same
may be amended and in effect from time to time.

     "Trademarks" means collectively all of the following now owned or hereafter
created or acquired by any Borrower: (a) all trademarks,  trade names, corporate
names, company names,  business names,  fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the  foregoing  have appeared or appear,  all  registrations  and  recordings
thereof,  and  all  applications  in  connection  therewith  including,  without
limitation,  those listed in the schedules to the Trademark Security  Agreement;
(b) all renewals thereof; (c) all income, royalties, damages and payments now or
hereafter  due and/or  payable under any of the foregoing or with respect to any
of the foregoing including,  without limitation,  damages and payments for past,
present and future  infringements of any of the foregoing;  (d) the right to sue
for past,  present and future  infringements  of any of the  foregoing;  (e) all
rights  corresponding to any of the foregoing  throughout the world; and (f) all
goodwill associated with and symbolized by any of the foregoing.

     "Trademark  Security  Agreement"  means the  trademark  security  agreement
executed and delivered, if applicable, by Parent, Frame-n-Lens Optical, Inc. and
New West Eyeworks, Inc., to Lender as the same may be amended and in effect from
time to time.

     "Unfunded  Pension   Liability"  means  the  excess  of  a  Plan's  benefit
liabilities  under Section  4001(a)(16) of ERISA, over the current value of that
Plan's assets,  determined in accordance with the  assumptions  used for funding
the Pension  Plan  pursuant to Section  412 of the IRC for the  applicable  plan
year.

     "Voidable Transfer" has the meaning set forth in Section 15.8.

     "Wachovia Swap Obligations" has the meaning set forth in Section 7.5(e).

     "Wal-Mart" means Wal-Mart Stores, Inc., a Delaware corporation.

     "Wal-Mart  Master Lease  Agreement" means that certain Vision Center Master
License Agreement dated as of June 16, 1994, by and between Wal-Mart and Parent,
and all Addenda and Attachments thereto.

1.2  Accounting  Terms.  All accounting  terms not  specifically  defined herein
     shall be  construed in  accordance  with GAAP.  When used herein,  the term
     "financial  statements"  shall  include  the notes and  schedules  thereto.
     Whenever the term "Borrowers" is used in respect of a financial covenant or
     a  related  definition,  it  shall be  understood  to mean  Borrowers  on a
     consolidated  basis with  Subsidiaries  unless the context clearly requires
     otherwise.
                                     Page 23
<PAGE>
1.3  Code.  Any terms used in this  Agreement that are defined in the Code shall
     be construed and defined as set forth in the Code unless otherwise  defined
     herein.

1.4  Construction.  Unless  the  context  of  this  Agreement  clearly  requires
     otherwise, references to the plural include the singular, references to the
     singular include the plural, the term "including" is not limiting,  and the
     term "or" has,  except where  otherwise  indicated,  the inclusive  meaning
     represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
     "hereunder," and similar terms in this Agreement refer to this Agreement as
     a whole and not to any particular provision of this Agreement.  An Event of
     Default shall "exist",  "continue" or be  "continuing"  until such Event of
     Default has been waived in writing by Lender. Section, subsection,  clause,
     schedule,  and exhibit  references are to this Agreement  unless  otherwise
     specified. Any reference in this Agreement or in the Loan Documents to this
     Agreement  or any of the Loan  Documents  shall  include  all  alterations,
     amendments,  changes, extensions,  modifications,  renewals,  replacements,
     substitutions, and supplements, thereto and thereof, as applicable.

1.5  Schedules and Exhibits.  All of the schedules and exhibits attached to this
     Agreement shall be deemed incorporated herein by reference.

2.   LOAN AND TERMS OF PAYMENT.

2.1  Revolving Advances.

     (a) Subject to the terms and conditions of this Agreement, Lender agrees to
make advances  ("Advances") to Borrowers in an aggregate amount  outstanding not
to exceed at any one time the lesser of (i) the  Maximum  Revolving  Amount less
the  aggregate  outstanding  balance of all undrawn or  unreimbursed  Letters of
Credit,  (ii) the Borrowing Base less the aggregate  outstanding  balance of all
undrawn or  unreimbursed  Letters of Credit.  For  purposes  of this  Agreement,
"Borrowing Base", as of any date of determination, shall mean the result of:

          (I) the lowest of:

          (v)  seventy-five  percent  (75%) of EBITDA for the most recent twelve
     (12) month  period for which  financial  statements  have been  provided to
     Lender pursuant to Section 6.1(c);

          (w) one  hundred  fifty  percent  (150%) of EBITDA for the most recent
     twelve (12) month period for which financial  statements have been provided
     to Lender pursuant to Section 6.1(c),  less the aggregate  principal amount
     of the Term Loans then outstanding; and

          (x) the sum of:

               (A) the lowest of (i) $7,500,000,  (ii) eighty-five percent (85%)
          of  Eligible  Accounts,  less  the  amount,  if any,  of the  Dilution
          Reserve,  and (iii) an amount equal to one-sixth  (1/6) of Collections
          of  each  Borrower  with  respect  to  Accounts  for  the  immediately
          preceding sixty (60) day period, plus

                                     Page 24
<PAGE>
               (B) the lowest of (i)  $12,500,000,  (ii) thirty percent (30%) of
          the Cost of  Eligible  Inventory,  less the  aggregate  amount  of the
          Inventory  Reserves,  and (iii)  the GOB Rate of the Cost of  Eligible
          Inventory as determined  based on the most recent  appraisals  thereof
          less the aggregate amount of the Inventory Reserves; and

          (y) an amount equal to one-third (1/3) of Collections of each Borrower
     with  respect to  Accounts  for the  immediately  preceding  sixty (60) day
     period; and

          (z) an  amount  equal  to  two-thirds  (2/3)  of  Collections  of each
     Borrower with respect to Accounts for the immediately  preceding sixty (60)
     day  period,  less the  aggregate  principal  amount of the Term Loans then
     outstanding,

          minus,

          (II) (without  duplication) the aggregate amount of reserves,  if any,
     established by Lender under Section  2.1(b),  Section 2.1(c) and Article 10
     hereof.

     (b) Anything to the contrary in this Section notwithstanding,  Lender shall
have the right to establish  reasonable  reserves  against the Borrowing Base or
adjust the standards of eligibility in such amounts as Lender, in its reasonable
judgment -(from the  perspective of an asset-based  lender) shall deem necessary
or appropriate, including (x) reserves on account of (i) sums that Borrowers are
required to pay (such as taxes, assessments, insurance premiums, or, in the case
of leased  assets,  rents or other amounts  payable under such leases other than
leases or other executory  contracts with respect to which the Borrowers  intend
to file a motion to reject  under  section 365 of the  Bankruptcy  Code) and has
failed to pay under any Section of this  Agreement  or any other Loan  Document,
(ii) without duplication of the foregoing,  amounts owing by any Borrower to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral,
which  Lien or  trust,  in the  reasonable  determination  of  Lender  (from the
perspective  of an  asset-based  lender),  would be  likely  to have a  priority
superior to the Liens of Lender (such as landlord  liens,  ad valorem taxes,  or
sales taxes where given  priority under  applicable  law) in and to such item of
Collateral,  (y)  reserves  to the  extent  that the final  audit and  appraisal
referenced in Section 3.3(c)  received by Foothill after the Closing Date reveal
any material  negative  variances from the  preliminary  results of such reports
delivered  to  Lender  prior to the  Closing  Date,  and (z) a  reserve  for the
Carve-Out Expenses in the Carve-Out Amount, for anticipated statutorily mandated
fees payable to the United States  Trustee in respect of the Case pursuant to 28
U.S.C. ss. 1930, and for any fees payable to the clerk of the Court in the Case.

     (c) Lender  shall have no  obligation  to make  Advances  hereunder  to the
extent  they would  cause the  outstanding  Obligations  to exceed  the  Maximum
Revolving Amount.

                                     Page 25
<PAGE>
     (d)  Amounts  borrowed  pursuant  to this  Section  2.1 may be repaid  and,
subject to the terms and  conditions of this  Agreement,  reborrowed at any time
during the term of this Agreement. The principal amount of all Advances shall be
repaid in full on the date this Agreement is terminated.

2.2  Letters of Credit.

     (a) Subject to the terms and conditions of this Agreement, Lender agrees to
issue  letters of credit for the  account of  Borrowers  (each,  an "L/C") or to
issue guarantees of payment (each such guaranty, an "L/C Guaranty") with respect
to letters of credit  issued by an issuing  bank for the  account of  Borrowers.
Lender  shall  have no  obligation  to issue a Letter  of  Credit  if any of the
following would result:

          (i) The  aggregate  amount of all types of  undrawn  and  unreimbursed
     Letters  of Credit  would  exceed  the  Borrowing  Base less the  amount of
     outstanding  Advances less the aggregate  amount of Inventory  Reserves and
     reserves established under Section 2.1(b) and Section 2.1(c); or

          (ii) the aggregate  amount of all undrawn or  unreimbursed  Letters of
     Credit would exceed the lower of: (x) the Maximum Revolving Amount less the
     amount of  outstanding  Advances  less the  aggregate  amount of  Inventory
     Reserves and reserves established under Section 2.1(b),  Section 2.1(c) and
     Article 10 hereof; or (y) $4,000,000; or

          (iii) the outstanding Obligations would exceed the Maximum Amount.

     Borrowers  expressly  understand  and  agree  that  Lender  shall  have  no
obligation to arrange for the issuance by issuing banks of the letters of credit
that are to be the subject of L/C Guaranties.  Borrowers and Lender  acknowledge
and agree that  certain of the  letters of credit  that are to be the subject of
L/C Guaranties  may be  outstanding  on the Closing Date.  Each Letter of Credit
shall  have an expiry  date no later  than  sixty (60) days prior to the date on
which this Agreement is scheduled to terminate under Section 3.4 (without regard
to any  potential  renewal term) and all such Letters of Credit shall be in form
and  substance  acceptable  to  Lender  in its sole  discretion.  If  Lender  is
obligated to advance funds under a Letter of Credit, Borrowers immediately shall
reimburse such amount to Lender and, in the absence of such  reimbursement,  the
amount  so  advanced  immediately  and  automatically  shall be  deemed to be an
Advance  hereunder  and,  thereafter,  shall  bear  interest  at the  rate  then
applicable to Advances under Section 2.6.

     (b) Borrowers  hereby agree to  indemnify,  save,  defend,  and hold Lender
harmless from any loss, cost, expense, or liability,  including payments made by
Lender,  expenses,  and actual and reasonable attorneys' fees incurred by Lender
arising out of or in connection with any Letter of Credit,  except to the extent
arising from Lender's own gross negligence or wilful misconduct. Borrowers agree
to be bound by the issuing bank's regulations and interpretations of any Letters
of Credit guaranteed by Lender and opened to or for Borrowers' account or by

                                     Page 26
<PAGE>
Lender's  interpretations  of any L/C  issued  by  Lender  to or for  Borrowers'
account,  even though this  interpretation may be different from Borrowers' own,
and  Borrowers  understand  and agree  that  Lender  shall not be liable for any
error, negligence,  or mistake, whether of omission or commission,  in following
Borrowers  instructions  or those  contained  in the  Letter  of  Credit  or any
modifications, amendments, or supplements thereto. Borrowers understand that the
L/C  Guaranties  may require  Lender to  indemnify  the issuing bank for certain
costs or  liabilities  arising out of claims by  Borrowers  against such issuing
bank.  Borrowers  hereby  agree to  indemnify,  save,  defend,  and hold  Lender
harmless with respect to any loss, cost, expense (including, without limitation,
actual and reasonable  attorneys'  fees), or liability  incurred by Lender under
any L/C  Guaranty as a result of Lender's  indemnification  of any such  issuing
bank,  except to the extent arising from Lender's own gross negligence or wilful
misconduct.

     (c) Borrowers  hereby authorize and direct any bank that issues a letter of
credit guaranteed by Lender to deliver to Lender all instruments, documents, and
other writings and property received by the issuing bank pursuant to such letter
of credit, and to accept and rely upon Lender's instructions and agreements with
respect to all matters  arising in connection with such letter of credit and the
related  application.  Borrowers may or may not be the  "applicant"  or "account
party" with respect to such letter of credit.

     (d) Any and all charges,  commissions,  fees,  and costs incurred by Lender
relating  to the  letters of credit  guaranteed  by Lender  shall be  considered
Lender  Expenses for purposes of this  Agreement  and shall be  reimbursable  by
Borrowers to Lender on demand.

     (e) Immediately upon the termination of this Agreement,  Borrowers agree to
either (i) provide  cash  collateral  to be held by Lender in an amount equal to
one hundred five percent  (105%) of the maximum  amount of Lender's  obligations
under  outstanding  Letters of Credit,  or (ii) cause to be  delivered to Lender
releases of all of Lender's  obligations  under  outstanding  Letters of Credit.
Such cash collateral shall be returned to Borrowers when there are no longer any
Letters of Credit  outstanding,  all Obligations  have been paid in full in cash
and this Agreement has been terminated. At Lender's discretion,  any proceeds of
Collateral  received by Lender after the occurrence and during the  continuation
of an  Event of  Default  may be held as the cash  collateral  required  by this
Section 2.2(e).

     (f) If by reason of (i) any change in any applicable law, treaty,  rule, or
regulation  or  any  change  in  the   interpretation   or  application  by  any
governmental  authority of any such applicable law, treaty, rule, or regulation,
or (ii) compliance by the issuing bank or Lender with any direction, request, or
requirement   (irrespective   of  whether  having  the  force  of  law)  of  any
governmental  authority or monetary  authority  including,  without  limitation,
Regulation  D of the Board of Governors  of the Federal  Reserve  System as from
time to time in effect (and any successor thereto):

                                     Page 27
<PAGE>
          (A) any  reserve,  deposit,  or  similar  requirement  is or  shall be
     imposed or modified in respect of any Letters of Credit  issued  hereunder,
     or

          (B) there  shall be  imposed on the  issuing  bank or Lender any other
     condition  regarding  any  letter  of  credit,  or  Letter  of  Credit,  as
     applicable, issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or Lender of issuing, making,  guaranteeing,  or maintaining
any  letter of  credit,  or Letter of Credit,  as  applicable,  or to reduce the
amount  receivable in respect thereof by such issuing bank or Lender,  then, and
in any such case,  Lender may, at any time within a reasonable  period after the
additional cost is incurred or the amount received is reduced, notify Borrowers,
and Borrowers shall pay on demand such amounts as the issuing bank or Lender may
specify  to be  necessary  to  compensate  the  issuing  bank or Lender for such
additional cost or reduced  receipt,  together with interest on such amount from
the date of such demand  until  payment in full thereof at the rate set forth in
Section  2.6(a)(i) or (c)(i),  as applicable.  The  determination by the issuing
bank or Lender,  as the case may be, of any amount due  pursuant to this Section
2.2(f), as set forth in a certificate  setting forth the calculation  thereof in
reasonable detail,  shall, in the absence of manifest or demonstrable  error, be
final and conclusive and binding on all of the parties hereto.

2.3  Term Loan.

     (a) Term Loan A.  Subject to the terms and  conditions  of this  Agreement,
Lender has agreed to make a Term Loan on the Final  Order  Entry Date (the "Term
Loan A") to  Borrowers  in the  original  principal  amount of  $2,500,000.  The
outstanding  unpaid principal  balance and all accrued and unpaid interest under
the Term Loan A shall be due and payable on the earlier of (x) the Maturity Date
and (y) the termination of this Agreement,  whether by its terms, by prepayment,
by acceleration,  or otherwise.  All amounts  outstanding  under the Term Loan A
shall constitute  Obligations.  Notwithstanding  anything otherwise contained in
this  Agreement,  Lender  shall not make any Term Loans to  Borrowers  until the
Final Order Entry Date.

     (b) Term Loan B.  Subject to the terms and  conditions  of this  Agreement,
Lender has agreed to make a Term Loan on the Final  Order  Entry Date (the "Term
Loan B") to Borrowers  in the  original  principal  amount of  $10,000,000.  The
outstanding  unpaid principal  balance and all accrued and unpaid interest under
the Term Loan B shall be due and payable on the earlier of (x) the Maturity Date
and (y) the termination of this Agreement,  whether by its terms, by prepayment,
by acceleration,  or otherwise.  All amounts  outstanding  under the Term Loan B
shall constitute  Obligations.  Notwithstanding  anything otherwise contained in
this  Agreement,  Lender  shall not make any Term Loans to  Borrowers  until the
Final Order Entry Date.

                                     Page 28
<PAGE>
     (c)  Prepayments.  The  unpaid  principal  balance of the Term Loans may be
voluntarily  prepaid by Borrowers in whole or in part without penalty or premium
at any time during the term of this Agreement so long as (i) at the time of such
prepayment  no  Default  or Event of  Default  then  exists  or would be  caused
thereby, and (ii) immediately before and after giving effect to such prepayment,
Availability  (less a reasonable reserve for past due accounts payable) shall be
not less than  $2,000,000.  All  prepayments  of the Term  Loans  shall be in an
amount  not  less  than  $500,000.  Notwithstanding  anything  to  the  contrary
contained  herein,  so long as no Default or Event of Default then  exists,  all
prepayments  of the Term Loans shall be applied pro rata between the Term Loan A
and the Term Loan B.

2.4  [Intentionally Omitted].

2.5  Overadvances.

     Lender may, in its sole  discretion,  make Advances  hereunder in excess of
the amount set forth in Section 2.1  hereof.  If, at any time or for any reason,
the amount of Obligations  owed by Borrowers to Lender  pursuant to Sections 2.1
and 2.2 is greater than the  applicable  Dollar or  percentage  limitations  set
forth in Sections 2.1 or 2.2 (an "Overadvance"), Borrowers immediately shall pay
to Lender on demand,  in cash,  the  amount of such  excess to be used by Lender
first, to repay Advances  outstanding under Section 2.1 and,  thereafter,  to be
held by  Lender as cash  collateral  to secure  Borrowers'  obligation  to repay
Lender for all amounts paid pursuant to Letters of Credit.

2.6  Interest  and Letter of Credit Fees:  Rates,  Payments,  and  Calculations;
     Promise to Pay.

     (a) Interest Rate. Except as provided in clause (b) below, (i) all Advances
which are  Eurodollar  Rate  Advances  shall bear  interest on the Daily Balance
thereof at a per annum rate of three and one-quarter  percentage  points (3.25%)
above the Adjusted  Eurodollar  Rate, (ii) all Advances which are Reference Rate
Advances shall bear interest on the Daily Balance thereof at a per annum rate of
two percent (2.00%) above the Reference  Rate,  (iii) the Term Loan A shall bear
interest  on the Daily  Balance  thereof at a per annum rate of fifteen  percent
(15.00%)  (the "Term A Rate");  and (iv) the Term Loan B shall bear  interest on
the Daily Balance thereof at a per annum rate of fifteen  percent  (15.00%) (the
"Term B Rate").

     (b) Letter of Credit Fee.  Borrowers shall pay Lender a fee (in addition to
the charges, commissions,  fees, and costs set forth in Section 2.2(d)) equal to
one and one-half percent (1.50%) per annum times the aggregate undrawn amount of
all Letters of Credit that were  outstanding  during the  immediately  preceding
month.

     (c) Default Rate.  Upon the  occurrence and during the  continuation  of an
Event of Default,  (i) all Obligations (except for undrawn Letters of Credit and
the Term Loan) shall bear interest on the Daily  Balance  thereof at a per annum

                                     Page 29
<PAGE>
rate  equal to four  percentage  points  (4.00%)  percentage  points  above  the
Reference  Rate,  (ii) the Term Loan A shall bear  interest on the Daily Balance
thereof at a per annum rate equal to two  percentage  points  (2.00%)  above the
Term A Rate,  (iii) the Term Loan B shall  bear  interest  on the Daily  Balance
thereof at a per annum rate equal to two  percentage  points  (2.00%)  above the
Term B Rate,  and (iv) the Letter of Credit fee provided in Section 2.6(b) shall
be increased to three and one-half percent (3.50%) per annum times the amount of
the  undrawn  Letters of Credit  that were  outstanding  during the  immediately
preceding month.

     (d) [Intentionally Omitted].

     (e) Payments. Interest and Letter of Credit fees payable hereunder shall be
due and  payable,  in  arrears,  on the first day of each month  during the term
hereof.  Borrowers hereby authorize Lender, at its option,  without prior notice
to  Borrowers,  to charge such  interest and Letter of Credit  fees,  all Lender
Expenses (as and when  incurred),  the  charges,  commissions,  fees,  and costs
provided for in Section  2.2(d) (as and when accrued or incurred),  the fees and
charges provided for in Section 2.11 (as and when accrued or incurred),  and all
installments  or other payments due under the Term Loans or any Loan Document to
Borrowers' Loan Account,  which amounts  thereafter shall accrue interest at the
rate then applicable to Advances hereunder.

     (f)  Computation.  The Reference  Rate as of the date of this  Agreement is
nine percent  (9.0%) per annum.  In the event the Reference Rate is changed from
time to time hereafter,  the applicable rate of interest hereunder automatically
and  immediately  shall be  increased  or  decreased  by an amount equal to such
change in the Reference  Rate. All interest and fees  chargeable  under the Loan
Documents shall be computed on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed.

     (g) Intent to Limit  Charges to Maximum  Lawful Rate.  Borrowers and Lender
hereby agree and stipulate that the only charges  imposed upon Borrowers for the
use of money in  connection  with this  Agreement  are and shall be the specific
interest and fees  described  in this Article 2 and in any other Loan  Document.
Notwithstanding the foregoing,  Borrowers and Lender further agree and stipulate
that all agency  fees,  syndication  fees,  facility  fees,  underwriting  fees,
default charges,  late charges,  funding or "breakage"  charges,  increased cost
charges,  the  Early  Termination  Premium,   "float"  or  "clearance"  charges,
attorneys' fees and reimbursement for costs and expenses paid by Lender to third
parties or for damages  incurred by Lender are charges to compensate  Lender for
underwriting  and  administrative  services  and  costs or losses  performed  or
incurred,  and to be performed and incurred,  by Lender in connection  with this
Agreement  and the other Loan  Documents  and shall  under no  circumstances  be
deemed to be charges for the use of money  pursuant to Official  Code of Georgia
Annotated  Sections  7-4-2 and 7-4-18.  In no event shall the amount of interest
and other charges for the use of money payable under this  Agreement  exceed the
maximum amounts permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrowers and Lender, in

                                     Page 30
<PAGE>
executing and delivering this  Agreement,  intend legally to agree upon the rate
or rates of  interest  and  other  charges  for the use of money  and  manner of
payment stated within it; provided,  however, that, anything contained herein to
the contrary  notwithstanding,  if the amount of such interest and other charges
for the use of money or manner of payment  exceeds the maximum amount  allowable
under  applicable  law,  then,  ipso  facto  as of the  date of this  Agreement,
Borrowers  are and shall be  liable  only for the  payment  of such  maximum  as
allowed by law,  and payment  received  from  Borrowers  in excess of such legal
maximum,  whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.

     (h) Promise to Pay.  Borrowers  hereby promise to pay in full to Lender the
amount of all  Obligations,  including  the  principal  amount of all  Advances,
together  with accrued  interest,  fees and other  amounts due  thereon,  all in
accordance with the terms of this Agreement.

2.7  Collection of Accounts.

     (a)  Collections.  To the extent not already done prior to the Relief Date,
Borrowers shall have (but in no event later than April 30, 2000)  instructed all
Account Debtors (other than retail customers and  optometrists)  with respect to
the Accounts,  General  Intangibles  and  Negotiable  Collateral of Borrowers to
remit, on each Business Day, all Collections in respect thereof  directly to the
Lockbox or to a Concentration  Account via electronic funds transfer (including,
but not limited to ACH  transfers).  From and after the Closing Date,  Borrowers
shall cause all  Collections  and other amounts  received by any Borrower at any
retail  store  location to be  deposited  on a daily  basis into a Retail  Store
Account or a Concentration Account. In addition,  Borrowers agree that all other
Collections and other amounts received directly by any Borrower from any Account
Debtor or any other source  immediately  upon receipt shall be deposited  into a
Concentration  Account.  Borrowers  shall  cause  all funds in excess of $500 on
deposit in each Retail Store  Account to be sent by  electronic  funds  transfer
(including,  but not  limited  to,  ACH  transfers)  on each  Business  Day to a
Concentration Account.

     (b) Lockbox  and  Concentration  Accounts.  With  respect to each  Lockbox,
Parent, Lender and the applicable Lockbox Bank shall have entered into a Lockbox
Agreement,  which  among  other  things  shall  provide  (i) for the  opening or
maintenance of a Lockbox Account at such Lockbox Bank into which all Collections
received in such  Lockbox  shall be deposited on a daily basis and (ii) that all
cash  deposited  into such Lockbox  Account  shall be sent by  electronic  funds
transfer  (including,  but not limited to ACH transfers) on each Business Day to
the  Master  Concentration   Account.  With  respect  to  the  Sub-Concentration
Accounts, Parent, Lender and First Union shall have entered into a Concentration
Account  Agreement,  which  among  other  things  shall  provide  that  all cash
deposited into each Sub-Concentration  Account shall be sent by electronic funds
transfer  (including,  but not limited to ACH transfers) on each Business Day to
the Master Concentration  Account.  Upon the terms and subject to the conditions
set forth in the Concentration Account Agreement with respect to the Master

                                     Page 31
<PAGE>
Concentration  Account, all amounts received in the Master Concentration Account
shall  be wired  each  Business  Day  into an  account  (the  "Lender  Account")
maintained by Lender at a depository selected by Lender.

     (c) Retail Store  Accounts.  Borrowers  shall,  with respect to each Retail
Store Account,  have delivered to Lender either (i) a Blocked Account  Agreement
with respect to such Retail Store Account or (ii) evidence that  Borrowers  have
provided to the bank at which such  Retail  Store  Account is located  notice in
writing  of  Lender's  security  interest  in  such  Retail  Store  Account  and
irrevocable directions in writing, in form and substance satisfactory to Lender,
to send by  electronic  funds  transfer  (including,  but not  limited  to,  ACH
transfers) on each Business Day to a  Concentration  Account all funds in excess
of $500 on deposit in such Retail Store Account and that each bank has agreed to
do so.  Notwithstanding  the  foregoing,  promptly  upon the  request of Lender,
Borrowers  shall deliver a Blocked  Account  Agreement to Lender with respect to
any Retail Store  Account  identified by Lender  (which shall  include,  without
limitation,   each  Retail  Store  Account  with  Wells  Fargo  Bank,   National
Association).  Each Blocked Account Agreement shall provide, among other things,
that all cash in excess of $500 deposited into the Retail Store Accounts covered
thereby shall be sent by electronic funds transfer  (including,  but not limited
to ACH transfers) on each Business Day to a Concentration Account.

     (d) Miscellaneous.  No Lockbox Agreement,  Concentration Account Agreement,
Blocked Account Agreement or other arrangement  contemplated in this Section 2.7
shall be modified by any Borrower without the prior written consent of Lender.

2.8  Crediting Payments; Application of Collections.

     The receipt of any  Collections by Lender (whether from transfers to Lender
by  the  Concentration  Account  Bank  pursuant  to  the  Concentration  Account
Agreement or otherwise) immediately shall be applied provisionally to reduce the
Obligations  herein  and any  unpaid  Advances  under the  Pre-Relief  Date Loan
Agreement in the order as  determined  by Lender,  in its sole  discretion,  but
shall not be considered a payment on account  unless such  Collection  item is a
wire transfer of immediately  available  federal funds and is made to the Lender
Account or unless and until such  Collection  item is honored when presented for
payment.  From and after the Closing  Date,  Lender  shall be entitled to charge
Borrowers  for two (2) Business Days of  'clearance'  or 'float' at the rate set
forth  in  Section  2.6(a)(i),  Section  2.6(a)(ii)  or  Section  2.6(c)(i),  as
applicable,  on all  Collections  that are  received  by Lender  (regardless  of
whether  forwarded  by  the  Concentration  Account  Bank  to  Lender,   whether
provisionally   applied  to  reduce  the  Obligations   under  Section  2.1,  or
otherwise). This across-the-board two (2) Business Day clearance or float charge
on all  Collections  is  acknowledged  by the parties to  constitute an integral
aspect of the  pricing of  Lender's  financing  of  Borrowers,  and shall  apply
irrespective of the  characterization of whether receipts are owned by Borrowers
or Lender, and whether or not there are any outstanding Advances,  the effect of
such clearance or float charge being the equivalent of charging two (2) Business
Days of interest on such Collections. Should any Collection item not be honored

                                     Page 32
<PAGE>
when presented for payment, then Borrowers shall be deemed not to have made such
payment,  and  interest  shall  be  recalculated  accordingly.   Notwithstanding
anything herein which may be construed to the contrary,  no Collections  will be
remitted to Borrowers  unless and until such  Collections  are fully  collected.
Anything to the contrary contained herein  notwithstanding,  any Collection item
shall be  deemed  received  by Lender  only if it is  received  into the  Lender
Account  on a  Business  Day on or  before  2:00  p.m.  (Eastern  time).  If any
Collection  item is received into the Lender  Account on a  non-Business  Day or
after 2:00 p.m.  (Eastern  time) on a Business  Day,  it shall be deemed to have
been  received  by Lender  as of the  opening  of  business  on the  immediately
following Business Day.  Notwithstanding  the foregoing,  (i) any Collections or
other amounts  received by Lender prior to the occurrence of an Event of Default
that are not  directed  to be  applied to the Loans in any  particular  order by
Borrowers or elsewhere in this Agreement  shall be applied to the Obligations as
Lender,  in its sole discretion,  shall  determine,  and (ii) any Collections or
other  amounts  received by Lender after the  occurrence  of an Event of Default
shall be applied to the  Obligations as Lender,  in its sole  discretion,  shall
determine.

2.9  Designated Account.

     Lender is authorized  to make the  Advances,  the Letters of Credit and the
Term Loans under this  Agreement  based upon  telephonic  or other  instructions
received  from  anyone  purporting  to  be  an  Authorized  Person,  or  without
instructions  if pursuant to Section  2.6(e).  Borrowers  agree to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving  the proceeds of the  Advances  requested by Borrowers  and made by
Lender hereunder.  Unless otherwise agreed by Lender and Borrowers,  any Advance
requested  by  Borrowers  and  made by  Lender  hereunder  shall  be made to the
Designated Account. Each Borrower hereby designates Parent as its representative
and  agent  on its  behalf  for the  purposes  of  requesting  Advances,  giving
instructions  with  respect to the  disbursement  of the  proceeds of the Loans,
selecting  interest  rate  options,  requesting  Letters of  Credit,  giving and
receiving  all other  notices and  consents  hereunder or under any of the other
Loan Documents and taking all other actions  (including in respect of compliance
with  covenants) on behalf of any Borrower  under the Loan  Documents.  Borrower
Representative hereby accepts such appointment.  Lender may regard any notice or
other communication  pursuant to any Loan Document from Borrower  Representative
as a notice or  communication  from all  Borrowers,  and may give any  notice or
communication  received or  permitted  to be such to any  Borrower  hereunder to
Borrower  Representative  on behalf of such Borrower.  Each Borrower agrees that
each notice,  election,  representation  and warranty,  covenant,  agreement and
undertaking  made on its behalf by Borrower  Representative  shall be deemed for
all  purposes to have been made by such  Borrower  and shall be binding upon and
enforceable  against  such  Borrower  to the same extent as if the same had been
made directly by such Borrower.

                                     Page 33
<PAGE>
2.10 Maintenance of Loan Account; Statements of Obligations.

     Lender shall maintain an account on its books in the name of Borrowers (the
"Loan  Account")  on which  Borrowers  will be charged with all Advances and the
Term Loans made by Lender to Borrowers  or for  Borrowers'  account,  including,
accrued  interest,  Lender  Expenses,  and  any  other  payment  Obligations  of
Borrowers.  In  accordance  with  Section 2.8, the Loan Account will be credited
with all payments  received by Lender from Borrowers or for Borrowers'  account,
including  all amounts  received in the Lender  Account  from the  Concentration
Account  Bank.  Lender shall  render  statements  regarding  the Loan Account to
Borrowers,  including principal, interest, fees, and including an itemization of
all charges and expenses constituting Lender Expenses owing, and such statements
shall be  conclusively  presumed to be correct and  accurate and  constitute  an
account stated between Borrowers and Lender unless,  within forty-five (45) days
after receipt  thereof by Borrowers,  Borrowers  shall deliver to Lender written
objection  thereto  describing  the  error  or  errors  contained  in  any  such
statements.

2.11 Fees.

     (a) Fee Letter.  Borrowers  shall pay to Lender the fees, if any, set forth
in the Fee Letter.

     (b) Unused Line Fee. On the first day of each month during the term of this
Agreement,  Borrowers shall pay to Lender, in arrears,  an unused line fee in an
amount  equal to  one-half  of one  percent  (0.50%) per annum times the Average
Unused Portion of the Maximum Revolving Amount.

     (c) Miscellaneous.  The fees set forth above shall be fully earned when due
and  non-refundable  when paid and,  if  applicable,  computed on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.

2.12 Eurodollar Rate Advances.

     Any other provisions herein to the contrary notwithstanding,  the following
provisions  shall  govern with  respect to  Eurodollar  Rate  Advances as to the
matters covered:

     (a) Borrowing; Conversion;  Continuation.  Borrowers may from time to time,
on or after the Closing  Date,  request in written or  telephonic  communication
with Lender:  (i) Advances to constitute  Eurodollar  Rate  Advances;  (ii) that
Reference Rate Advances be converted  into  Eurodollar  Rate Advances;  or (iii)
that  existing  Eurodollar  Rate Advances  continue for an  additional  Interest
Period.  Any such request shall  specify the  aggregate  amount of the requested
Eurodollar Rate Advances,  the proposed  funding date therefor (which shall be a
Business Day, and with respect to continued  Eurodollar  Rate Advances  shall be
the last day of the Interest  Period of the existing  Eurodollar  Rate  Advances
being continued),  and the proposed Interest Period, in each case subject to the
limitations set forth below. Eurodollar Rate Advances may only be made,

                                     Page 34
<PAGE>
continued,  or extended if, as of the proposed funding date therefor each of the
following conditions is satisfied:

          (v) no Event of Default exists;

          (w) no more than five (5) Eurodollar Rate Advances may be in effect at
     any one time;

          (x) the amount of each Eurodollar Rate Advance borrowed, converted, or
     continued  must be in an  amount  not less  than  $1,000,000  and  integral
     multiples of $500,000 in excess thereof;

          (y) Lender shall have determined that the Adjusted  Eurodollar Rate is
     available  to Lender  and can be readily  determined  as of the date of the
     request for such Eurodollar Rate Advance by Borrowers; and

          (z)  Lender  shall  have  received  such  request  at least  three (3)
     Business Days prior to the proposed funding date therefor.

     Any request by Borrowers to borrow  Eurodollar  Rate  Advances,  to convert
Reference Rate Advances to Eurodollar Rate Advances, or to continue any existing
Eurodollar Rate Advances shall be irrevocable,  except to the extent that Lender
shall determine under Sections  2.12(a),  2.13 or 2.14 that such Eurodollar Rate
Advances cannot be made or continued.

     (b)  Determination of Interest Period.  Eurodollar Rate Advances shall only
be available  for Interest  Periods of thirty (30) days.  The  determination  of
Interest Periods shall be subject to the following provisions:

          (i) in the  case of  immediately  successive  Interest  Periods,  each
     successive  Interest  Period  shall  commence  on the day on which the next
     preceding Interest Period expires;

          (ii) if any Interest Period would  otherwise  expire on a day which is
     not a Business Day, the Interest  Period shall be extended to expire on the
     next  succeeding  Business  Day;  provided,   however,  that  if  the  next
     succeeding  Business Day occurs in the following  calendar month, then such
     Interest Period shall end on the last Business Day of the calendar month at
     the end of such Interest Period;

          (iii) if any  Interest  Period  begins on the last  Business  Day of a
     month or on a day for which there is no  numerically  corresponding  day in
     the calendar  month at the end of such Interest  Period,  then the Interest
     Period shall end on the last Business Day of the calendar  month at the end
     of such Interest Period; and

          (iv)  Borrowers  may not request a  Eurodollar  Rate  Advance  with an
     Interest Period which expires later than the applicable Renewal Date.

                                     Page 35
<PAGE>
     (c) Automatic  Conversion;  Optional  Conversion by Lender.  Any Eurodollar
Rate Advance shall  automatically  convert to a Reference  Rate Advance upon (x)
the  occurrence of any Event of Default,  or (y) the last day of the  applicable
Interest  Period,  unless  Lender  has  received  a  request  to  continue  such
Eurodollar  Rate  Advance at least three (3)  Business  Days prior to the end of
such  Interest  Period in  accordance  with the terms of Section  2.12 (a).  Any
Eurodollar  Rate Advance shall,  at Lender's  option,  upon notice to Borrowers,
convert to a  Reference  Rate  Advance in the event that (i) an Event of Default
shall have occurred and be continuing as of the last day of the Interest  Period
for such Eurodollar Rate Advance,  or (ii) this Agreement shall  terminate,  and
Borrowers  shall pay to Lender any amounts  required by Section 2.15 as a result
thereof.

2.13 Illegality.

     Any other provision herein to the contrary notwithstanding, if the adoption
of or  any  change  in any  Requirement  of  Law  or in  the  interpretation  or
application  thereof  shall  make it  unlawful  for  Lender to make or  maintain
Eurodollar Rate Advances as  contemplated by this Agreement,  (a) the obligation
of Lender hereunder to make Eurodollar Rate Advances,  continue  Eurodollar Rate
Advances as such,  and  convert  Reference  Rate  Advances  to  Eurodollar  Rate
Advances  shall  forthwith  be  suspended  and  (b)  Lender's  then  outstanding
Eurodollar Rate Advances, if any, shall be converted  automatically to Reference
Rate Advances on the respective last days of the then current  Interest  Periods
with respect thereto or within such earlier period as required by law; provided,
however,  that before making any such demand,  Lender  agrees to use  reasonable
efforts   (consistent   with  its  internal  policy  and  legal  and  regulatory
restrictions and so long as such efforts would not be  disadvantageous to it, in
its reasonable  discretion,  in any legal,  economic,  or regulatory  manner) to
designate a different  lending office if the making of such a designation  would
allow  Lender or its lending  office to continue to perform its  obligations  to
make  Eurodollar  Rate  Advances.  If any such  conversion of a Eurodollar  Rate
Advance  occurs on a day which is not the last day of the then current  Interest
Period with respect thereto, Borrowers shall pay to Lender such amounts, if any,
as may be  required  pursuant to Section  2.15.  If  circumstances  subsequently
change so that Lender shall  determine that it is no longer so affected,  Lender
will promptly notify Borrowers, and upon receipt of such notice, the obligations
of Lender to make or continue  Eurodollar Rate Advances or to convert  Reference
Rate Advances into Eurodollar Rate Advances shall be reinstated.

2.14 Requirements of Law.

     (a) If the  adoption of or any change in any  Requirement  of Law or in the
interpretation  or application  thereof or compliance by Lender with any request
or  directive  (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:

          (i) shall subject Lender to any tax, levy, charge, fee, reduction,  or
     withholding  of any kind  whatsoever  with respect to this Agreement or any
     Advance, or change the basis of taxation of payments to Lender in respect

                                     Page 36
<PAGE>
     thereof (except for the  establishment  of a tax based on the net income of
     Lender or changes in the rate of tax on the net income of Lender);

          (ii) shall  impose,  modify or hold  applicable  any reserve,  special
     deposit,  compulsory loan, or similar  requirement  against assets held by,
     deposits or other  liabilities  in or for the account of,  Eurodollar  Rate
     Advances  or other  extensions  of credit by, or any other  acquisition  of
     funds by, any office of Lender; or

          (iii) shall impose on Lender any other  condition with respect to this
     Agreement or any Eurodollar Rate Advance;

and the  result of any of the  foregoing  is to  increase  the cost to Lender of
making,  converting into, continuing, or maintaining Eurodollar Rate Advances or
to reduce any amount  receivable  hereunder in respect of such  Advances,  or to
forego any other sum payable  thereunder or make any payment on account thereof,
then, in any such case,  Borrowers  shall promptly pay Lender,  upon its demand,
any additional amounts necessary to compensate Lender for such increased cost or
reduced  amount  receivable;  provided,  however,  that  before  making any such
demand,  Lender agrees to use reasonable  efforts  (consistent with its internal
policy and legal and regulatory  restrictions  and so long as such efforts would
not be  disadvantageous  to it,  in its  reasonable  discretion,  in any  legal,
economic,  or  regulatory  manner) to designate a different  Eurodollar  lending
office if the making of such  designation  would allow Lender or its  Eurodollar
lending office to continue to perform its  obligations to make  Eurodollar  Rate
Advances or to continue to fund or maintain  Eurodollar  Rate Advances and avoid
the need for, or materially reduce the amount of, such increased cost. If Lender
becomes entitled to claim any additional  amounts pursuant to this Section 2.14,
Lender shall  notify  Borrowers of the event by reason of which it has become so
entitled.  A certificate as to any additional  amounts payable  pursuant to this
Section 2.14 submitted by Lender to Borrowers shall be conclusive in the absence
of manifest  error.  If Borrowers so notify Lender within five (5) Business Days
after Lender notifies  Borrowers of any increased cost pursuant to the foregoing
provisions of this Section 2.14 and reimburses Lender for any cost in accordance
with Section  2.15,  Borrowers  may convert all  Eurodollar  Rate  Advances then
outstanding  into Reference Rate Advances in accordance  with Section 2.12. This
covenant shall survive the  termination of this Agreement and the payment of the
Obligations.

     (b) If Lender shall have  determined  that the adoption of or any change in
any Requirement of Law regarding  capital adequacy or in the  interpretation  or
application  thereof or  compliance by Lender or any Person  controlling  Lender
with any request or directive  regarding capital adequacy (whether or not having
the force of law) from any  Governmental  Authority made  subsequent to the date
hereof  does or shall  have the  effect of  increasing  the  amount  of  capital
required to be  maintained  or  reducing  the rate of return on Lender's or such
Person's capital as a consequence of its obligations  hereunder to a level below
that which such Lender or such Person could have achieved but for such change or
compliance (taking into consideration Lender's or such Person's policies with

                                     Page 37
<PAGE>
respect to capital adequacy) by an amount deemed by Lender to be material,  then
from time to time,  after  submission by Lender to Borrowers of a prompt written
request  therefor,  Borrowers  shall pay to  Lender  such  additional  amount or
amounts  as will  compensate  Lender or such  Person  for such  reduction.  This
covenant shall survive the  termination of this Agreement and the payment of the
Obligations.

2.15 Indemnity.

     Borrowers  agree to indemnify  Lender and to hold Lender  harmless from any
loss or expense  which  Lender may  sustain or incur as a  consequence  of (a) a
default by Borrowers in payment when due of the principal  amount of or interest
on any Eurodollar Rate Advance, (b) a default by Borrowers in making a borrowing
of, conversion into, or continuation of Eurodollar Rate Advances after Borrowers
have given a notice  requesting  the same in accordance  with the  provisions of
this  Agreement,  (c) a default by  Borrowers  in making any  prepayment  of any
Eurodollar  Rate  Advance  after  Borrowers  have  given  a  notice  thereof  in
accordance  with  the  provisions  of this  Agreement,  or (d) the  making  of a
prepayment of Eurodollar  Rate Advances on a day which is not the last day of an
Interest  Period with respect  thereto  (whether due to the  termination of this
Agreement upon an Event of Default or otherwise),  including,  in each case, any
such loss or expenses  arising from the  reemployment of funds obtained by it or
from fees payable to terminate the deposits from which such funds were obtained.
Calculation  of all amounts  payable to Lender  under this Section 2.15 shall be
made as though Lender had actually  funded the relevant  Eurodollar Rate Advance
through the purchase of a deposit bearing  interest at the Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Advance and having a maturity
comparable to the relevant Interest Period;  provided,  however, that Lender may
fund each of the  Eurodollar  Rate  Advances  in a manner  it sees fit,  and the
foregoing  assumption  shall be  utilized  only for the  calculation  of amounts
payable under this Section 2.15.  This covenant shall survive the termination of
this Agreement and the payment of the Obligations.

2.16 Super-Priority Nature of Obligations.

     Each Borrower hereby agrees that all  Obligations  under the Loan Documents
shall constitute administrative expenses of Borrower in the Chapter 11 Case with
priority under Section  364(c)(1) of the Bankruptcy  Code over any and all other
administrative  expenses of the kind  specified in Sections  105, 326, 330, 331,
503, 507 and 726 of the  Bankruptcy  Code, and shall also have priority over any
claims now existing or hereafter  arising under Section 506(c) of the Bankruptcy
Code, subject and subordinate only to the following  (hereinafter referred to as
the  "Carve-Out  Expenses"):  fees and  disbursements  incurred on and after the
Closing Date by professionals retained pursuant to Court order in the Chapter 11
Case pursuant to Section 327 or 1103 of the Bankruptcy  Code by Borrowers or the
Committee,  and any  statutorily  mandated  costs and fees of the United  States
Trustee with respect to the Chapter 11 Case,  up to a maximum  aggregate  amount
outstanding and unpaid not to exceed $750,000 (such dollar amount being referred
to herein as the "Carve-Out Amount") (in addition to fees and expenses which may

                                     Page 38
<PAGE>
be paid on an interim  basis)  provided  that the Carve-Out  Expenses  shall not
include any other  claims that are or may be senior to or pari passu with any of
the Carve-Out Expenses.  No other claim having a priority superior or pari passu
to that granted to Lender by the Interim  Order or the Final Order,  as the case
may be, shall be granted or approved while any Obligations  under this Agreement
remain outstanding. Anything to the contrary herein notwithstanding, neither the
liens nor the  superpriority  claims  granted  herein shall apply to proceeds of
bankruptcy avoidance actions.

3.   CONDITIONS; TERM OF AGREEMENT.

3.1  Conditions Precedent to the Initial Advance, Letter of Credit and the Term
Loans.

     The obligation of Lender to make the initial Advance,  to issue the initial
Letter of Credit or to make the Term Loans is subject to the fulfillment, to the
satisfaction of Lender and its counsel,  of each of the following  conditions on
or before the Closing Date:

     (a) the Closing Date shall occur on or before April 7, 2000;

     (b) Lender  shall  have  received  each of the  following  documents,  duly
executed, and each such document shall be in full force and effect:

          a. the Lockbox  Agreements,  or the  inclusion  of such  findings  and
     decretal  portions  in and of the  Interim  Order  as  Lender,  in its sole
     discretion,  may  deem  equivalent  to,  and  acceptable  in lieu  of,  the
     execution and delivery of the above-referenced Lockbox Agreements;

          b. the  Concentration  Account  Agreements,  or the  inclusion of such
     findings and decretal  portions in and of the Interim  Order as Lender,  in
     its sole discretion, may deem equivalent to, and acceptable in lieu of, the
     execution  and  delivery  of  the  above-referenced  Concentration  Account
     Agreements;

          c. the Disbursement Letter; and

          d. the Pledge Agreement; and

          e. the Trademark Security Agreement; and

          f. the Assignment of Notes; and

     (c) Lender shall have  received a certificate  of insurance,  together with
the endorsements thereto, as are required by Section 6.6, the form and substance
of which shall be satisfactory to Lender and its counsel;

     (d) Lender shall have  received duly  executed  certificates  of title with
respect to that portion of the  Collateral  that is subject to  certificates  of
title;

                                     Page 39
<PAGE>
     (e) Lender shall have  received  such  Collateral  Access  Agreements  from
lessors, warehousemen,  bailees and other third persons as Lender may require or
the inclusion of such findings and decretal portions in and of the Interim Order
as Lender,  in its sole  discretion,  may deem  equivalent to, and acceptable in
lieu of, the execution and delivery of the  above-referenced  Collateral  Access
Agreements.

     (f) [intentionally omitted];

     (g) Lender shall have received the financial  projections and Business Plan
of Borrowers  for the period  ending  December 31, 2000,  in form and  substance
satisfactory to Lender in its sole discretion;

     (h) [intentionally omitted];

     (i) Lender shall have  received  evidence  satisfactory  to it that,  after
making the initial Advance  hereunder on the Closing Date,  Borrowers shall have
on the Closing Date cash on hand or Excess Availability in an amount equal to or
greater than $2,000,000;

     (j) the  Interim  Order,  in form and  substance  satisfactory  to  Lender,
approving the  transactions  contemplated  hereby and granting a first  priority
perfected  security  interest in the  Collateral  subject only to Senior  Claims
shall have been entered by the Court and Lender shall have  received a certified
copy of such Interim Order;

     (k) the automatic  stay shall have been modified to permit the creation and
perfection  of  Lender's  Liens  and  security  interests  and  shall  have been
automatically  vacated to permit  enforcement  of Lender's  rights and  remedies
under the Loan Documents;

     (l)  all  other   documents  and  legal  matters  in  connection  with  the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and  substance  satisfactory  to Lender and its
counsel; and

     (m) with respect to Lender's  obligation to make the Term Loans,  the Final
Order  approving  in full the  transactions  contemplated  hereby and granting a
first priority,  perfected  security interest in the Collateral  subject only to
the Senior  Claims,  shall have been  entered by the Court and Lender shall have
received a certified copy of such Final Order.

3.2  Conditions  Precedent to all  Advances,  all Letters of Credit and the Term
     Loans.

     The following shall be conditions precedent to all Advances, all Letters of
Credit and the Term Loans hereunder:

                                     Page 40
<PAGE>
     (a) the representations and warranties  contained in this Agreement and the
other Loan Documents  shall be true and correct in all respects on and as of the
date of such extension of credit,  as though made on and as of such date (except
to the extent  that such  representations  and  warranties  relate  solely to an
earlier date);

     (b) no Default or Event of Default shall have occurred and be continuing on
the date of such  extension of credit,  nor shall either  result from the making
thereof;

     (c) no injunction,  writ,  restraining  order, or other order of any nature
prohibiting,  directly or  indirectly,  the  extending of such credit shall have
been  issued  and  remain in force by any  Governmental  Authority  against  any
Borrower, Lender, or any of their Affiliates;

     (d) Lender shall have a first priority  perfected  security interest in the
Collateral, except for Senior Claims;

     (e) Borrowers shall be in compliance with Section 7.21 hereof; and

     (f) (1) on or prior to the date of such  Advance or issuance of such Letter
of Credit or funding of such Term Loan, the Interim Order or the Final Order, as
the case may be, shall have been signed and entered by the Bankruptcy Court, and
(2) on or prior to the date of the funding of such Term  Loans,  the Final Order
shall have been signed and entered by the  Bankruptcy  Court,  and Lender  shall
have  received  a copy of the same and such  order  shall be in full  force  and
effect and shall not have been reversed,  stayed, modified or amended absent the
express  written  joinder or consent of  Lender,  and unless  Lender  shall have
expressly joined therein or expressly consented thereto in writing,  there shall
be no motion  pending (i) to reverse,  modify or amend the Final Order,  (ii) to
permit any  administrative  expense against any Borrower to have  administrative
priority  equal to or superior  to the  priority of the Lender in respect of the
Obligations  or  (iii)  to grant  or  permit  the  grant of a Lien on any of the
Collateral;

     (g) with  respect  to any  Advance or  issuance  of any Letter of Credit or
funding of a Term Loan to be made on or after the thirtieth (30th) day following
the Entry Date,  the Final Order shall be in full force and effect and shall not
have been  reversed,  stayed,  modified or amended  absent the  express  written
joinder or consent of Lender; and

     (h) the Borrowers shall have paid all fees, costs,  expenses and taxes then
payable by the Borrowers to the Lenders hereunder.

3.3  Condition Subsequent.

     As a condition  subsequent to initial  closing  hereunder,  Borrowers shall
perform or cause to be performed the  following  (the failure by Borrowers to so
perform or cause to be performed constituting an Event of Default):

                                     Page 41
<PAGE>
     (a) Within thirty (30) days of the Closing Date, Borrowers shall deliver to
Lender the  certified  copies of the policies of  insurance,  as are required by
Section 6.6, the form and substance of which shall be satisfactory to Lender and
its  counsel;  provided,  however,  that  copies  of all  endorsements  to  such
insurance  policies shall be delivered within thirty (30) days after the Closing
Date.

     (b) Within  thirty  (30) days after the  Closing  Date,  Lender  shall have
received  appraisals  of the  Inventory  satisfactory  to  Lender  in  its  sole
discretion.

     (c) [intentionally omitted]

     (d) On or before April 30, 2000,  Borrowers  will provide a  reconciliation
between the year end  (December 31, 1999)  perpetual  inventory and the year end
(December 31, 1999) general ledger.

     (e) Within  forty-five  (45) days of the Entry Date,  the Final Order Entry
Date  shall  have  occurred  and  Borrowers  shall  have  delivered  to Lender a
certified copy of such Final Order. .

     (f) Within fifteen (15) days of the Closing Date,  Borrowers  shall correct
or  supplement,  as necessary,  the  Schedules to this  Agreement as required in
Section 5.13(c).

3.4  Term.

     This  Agreement  shall become  effective  upon the  execution  and delivery
hereof by Borrowers and Lender and shall continue in full force and effect for a
term ending on the date that is the earlier of (a) the  Maturity  Date,  (b) the
sale of all or substantially all of Borrowers' assets, whether under Section 363
of the Bankruptcy Code, a plan of reorganization or otherwise, (c) the effective
date of a  confirmed  plan or  plans of  reorganization  of  Borrowers,  (d) the
appointment  of a  trustee  in any of  Borrower's  Chapter  11  Cases,  (e)  the
conversion  of any  Borrower's  of Chapter 11 Cases to a case under Chapter 7 of
the Bankruptcy  Code, (f) forty-five  (45) days from the Entry Date if the Final
Order shall not have been entered  during such  thirty-day  period,  and (g) the
date of  termination  of this  Agreement in accordance  with its terms after the
occurrence and during the  continuation  of an Event of Default (the earliest to
occur  of  the  foregoing   being  the   "Termination   Date").   The  foregoing
notwithstanding,  Lender shall have the right to terminate its obligations under
this Agreement immediately and without notice upon the occurrence and during the
continuation of an Event of Default.

3.5  Effect of Termination.

     On the date of termination of this Agreement,  all  Obligations  (including
contingent   reimbursement   obligations   of  Borrowers  with  respect  to  any
outstanding Letters of Credit) immediately shall become due and payable without

                                     Page 42
<PAGE>
notice or demand.  No termination of this Agreement,  however,  shall relieve or
discharge Borrowers of Borrower's duties,  Obligations,  or covenants hereunder,
and Lender's  continuing  security  interests in the Collateral  shall remain in
effect until all Obligations have been fully and finally discharged and Lender's
obligation to provide additional credit hereunder is terminated.

3.6  Early Termination by Borrowers.

     Borrowers have the option, at any time upon ninety (90) days' prior written
notice to Lender,  to terminate  this  Agreement  prior to the Maturity  Date by
paying to Lender,  in cash,  the  Obligations  (including an amount equal to one
hundred five percent (105%) of the undrawn amount of the Letters of Credit),  in
full, together with a premium (the "Early Termination Premium") equal to the sum
of (a) one percent (1.00%) of the Maximum Revolving Amount,  and (b) one percent
(1.00%)  of the  outstanding  balance  of the  Term  Loans,  each as  determined
immediately  prior to termination.  If this Agreement is terminated prior to the
Maturity Date (including  without limitation upon any of the events described in
Sections  3.4(b)  through  (f)),  in view of the  impracticability  and  extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable  calculation  of Lender's  lost profits as a result  thereof,
Borrowers  shall pay to Lender upon the effective  date of such  termination,  a
premium  in an  amount  equal  to  the  Early  Termination  Premium.  The  Early
Termination  Premium shall be presumed to be the amount of damages  sustained by
Lender as the result of the early  termination  and  Borrowers  agree that it is
reasonable under the  circumstances  currently  existing.  The Early Termination
Premium  provided  for in this  Section  3.7  shall be  deemed  included  in the
Obligations.  Upon  termination  of this  Agreement  by  Borrowers  prior to the
Maturity Date, or by its terms prior to or upon the Maturity Date as a result of
Borrowers'  reorganization,  Lender  shall  have the right of first  refusal  to
extend  post-reorganization  financing to Borrowers on  equivalent  terms to any
valid  competing  offer in effect as of the date of  confirmation of any plan of
reorganization in the Case.

4.   CREATION OF SECURITY INTEREST.

4.1  Grant of Security Interest.

     Borrowers  hereby  grant to Lender a  continuing  security  interest in all
currently  existing and  hereafter  acquired or arising  Collateral  in order to
secure prompt repayment of any and all Obligations and in order to secure prompt
performance  by each Borrower of each of its covenants and duties under the Loan
Documents.  Lender's  security  interests in the Collateral  shall attach to all
Collateral  without further act on the part of Lender or any Borrower.  Anything
contained  in  this  Agreement  or any  other  Loan  Document  to  the  contrary
notwithstanding,  except  for the sale of  Inventory  to buyers in the  ordinary
course of business,  Borrowers have no authority, express or implied, to dispose
of any item or portion of the Collateral, and except for sales under section 363
of the Bankruptcy Code as approved by the Court and consented to by Lender.

                                     Page 43
<PAGE>
4.2  Negotiable Collateral.

     In the event that any Collateral,  including  proceeds,  is evidenced by or
consists of Negotiable  Collateral,  Borrowers,  immediately upon the request of
Lender,  shall  endorse  and  deliver  physical  possession  of such  Negotiable
Collateral to Lender.

4.3  Collection of Accounts, General Intangibles, and Negotiable Collateral.

     At any time when an Event of Default has occurred and is continuing, Lender
or Lender's  designee may (a) notify  customers or Account  Debtors of Borrowers
that the  Accounts,  General  Intangibles,  or Negotiable  Collateral  have been
assigned  to Lender or that  Lender has a  security  interest  therein,  and (b)
collect the Accounts,  General Intangibles,  and Negotiable  Collateral directly
and charge the collection costs and expenses to the Loan Account.  Each Borrower
agrees  that  it will  hold in  trust  for  Lender,  as  Lender's  trustee,  any
Collections  that it receives and immediately  will deliver said  Collections to
Lender in their original form as received by Borrowers.

4.4  Delivery of Additional Documentation Required.

     At any time upon the request of Lender, Borrowers shall execute and deliver
to Lender all financing statements,  continuation financing statements,  fixture
filings, security agreements, pledges, assignments, endorsements of certificates
of title,  applications for title, affidavits,  reports,  notices,  schedules of
accounts,  letters of authority,  and all other documents that Lender reasonably
may request,  in form satisfactory to Lender, to perfect and continue  perfected
Lender's security interests in the Collateral,  and in order to fully consummate
all of the  transactions  contemplated  hereby  and  under  the  other  the Loan
Documents.

4.5  Power of Attorney.

     Each Borrower hereby  irrevocably makes,  constitutes,  and appoints Lender
(and any of Lender's  officers,  employees,  or agents  designated by Lender) as
each Borrower's true and lawful attorney,  with power to (a) if Borrower refuses
to, or fails  timely to execute and deliver any of the  documents  described  in
Section 4.4, sign the name of such Borrower on any of the documents described in
Section  4.4,  (b) at any time  that an Event of  Default  has  occurred  and is
continuing,  sign such Borrower's name on any invoice or bill of lading relating
to any Account,  drafts against  Account  Debtors,  schedules and assignments of
Accounts,  verifications of Accounts,  and notices to Account Debtors,  (c) send
requests for  verification of Accounts,  (d) endorse such Borrower's name on any
Collection item that may come into Lender's possession,  (e) at any time that an
Event of  Default  has  occurred  and is  continuing,  notify  the  post  office
authorities  to change the address for  delivery of such  Borrower's  mail to an
address  designated  by Lender,  to receive and open all mail  addressed to such
Borrower,  and to retain all mail  relating  to the  Collateral  and forward all
other  mail to such  Borrower,  (f) at any time  that an Event  of  Default  has
occurred and is continuing, make, settle, and adjust all claims under such

                                     Page 44
<PAGE>
Borrower's  policies of insurance and make all determinations and decisions with
respect  to such  policies  of  insurance,  and (g) at any time that an Event of
Default has occurred and is  continuing,  settle and adjust  disputes and claims
respecting  the Accounts  directly  with Account  Debtors,  for amounts and upon
terms  that  Lender  determines  to be  reasonable,  and  Lender may cause to be
executed and delivered  any documents and releases that Lender  determines to be
necessary.  The appointment of Lender as each Borrower's attorney,  and each and
every one of Lender's  rights and powers,  being  coupled with an  interest,  is
irrevocable  until all of the Obligations have been fully and finally repaid and
performed and Lender's obligation to extend credit hereunder is terminated.

4.6  Right to Inspect.

     Lender (through any of its officers,  employees,  or agents) shall have the
right,  from time to time hereafter to inspect  Borrowers' Books and Records and
to check,  test,  and  appraise  the  Collateral  in order to verify  Borrowers'
financial condition or the amount,  quality,  value,  condition of, or any other
matter  relating to, the  Collateral.  Lender,  two times each calendar year, or
more frequently as determined by Lender in its reasonable good faith judgment as
being necessary,  may obtain appraisal reports and updates in form and substance
satisfactory to Lender.

4.7  Grants, Rights and Remedies.

     The Liens and security  interests granted by each Borrower to Lender by and
pursuant  to  Section  4.1  hereof and  administrative  priority  granted by and
pursuant  to  Section  2.16  hereof  may be  independently  granted  by the Loan
Documents and by other Loan Documents  hereafter  entered into.  This Agreement,
the Interim Order, the Final Order and such other Loan Documents supplement each
other, and the grants,  priorities,  rights and remedies of Lender hereunder and
thereunder are cumulative.

4.8  No Filings Required.

     The Liens and security  interests granted by each Borrower to Lender herein
shall be deemed valid,  binding,  continuing,  enforceable  and  fully-perfected
first  priority  Liens on the  Collateral  by entry of the Interim Order and the
Final  Order,  as the case may be.  Lender  shall  not be  required  to file any
financing statements,  notice of Lien or similar instruments in any jurisdiction
or filing office or to take any other action in order to validate or perfect the
Liens and  security  interests  granted by or  pursuant to this  Agreement,  the
Interim Order, the Final Order or any other Loan Document.

4.9  Survival.

     The Liens and security  interests  granted to Lender,  the priority of such
Liens and security interests, and the administrative priorities and other rights
and remedies  granted to Lender pursuant to this  Agreement,  the Interim Order,
the Final Order and the other Loan Documents (specifically including but not

                                     Page 45
<PAGE>
limited to the  existence,  perfection  and  priority of the Liens and  security
interest provided herein and therein) and the  administrative  priority provided
herein and therein  shall not be modified,  altered or impaired in any manner by
any other financing or extension of credit or incurrence of debt by any Borrower
(pursuant  to  Section  364 of the  Bankruptcy  Code  or  otherwise),  or by any
dismissal or  conversion  of the Chapter 11 Case,  or by  financing,  extension,
incurrence, dismissal, conversion, act or omission:

     (a) except for Carve-Out Expenses having a priority over the Obligations to
the extent set forth in Section  2.16,  no costs or expenses  of  administration
which have been or may be incurred in the Chapter 11 Case or any  conversion  of
the same or in any other  proceedings  related thereto,  and no priority claims,
are or will be prior to or on a parity  with any  claim of  Lender  against  the
Borrowers in respect of any Obligation;

     (b) the Liens and security  interests granted by each Borrower to Lender by
and pursuant to Section 4.1 hereof shall constitute valid, binding,  continuing,
enforceable and  fully-perfected  first priority  Liens,  subject only to Senior
Claims,  to which such Liens and security  interests shall or may be subordinate
and junior, and shall be prior to all other Liens and interests, now existing or
hereafter  arising,  in  favor  of  any  other  creditor  or  any  other  Person
whatsoever; and

     (c) The Liens and security  interests granted by each Borrower to Lender by
and  pursuant  to  Section  4.1  hereof  shall  continue  to be valid,  binding,
continuing,  enforceable and fully-perfected without the necessity for Lender to
file any financing  statements  or to otherwise  perfect such Liens and security
interests under applicable non-bankruptcy law.

5.   REPRESENTATIONS AND WARRANTIES.

     In order to induce Lender to enter into this Agreement,  Borrowers make the
following  representations  and  warranties  which shall be true,  correct,  and
complete in all respects as of the date hereof, and shall be true, correct,  and
complete in all  respects as of the Closing  Date,  and at and as of the date of
the making of each Advance,  Letter of Credit or Term Loan made  thereafter,  as
though made on and as of the date of such Advance, Letter of Credit or Term Loan
(except to the extent that such  representations and warranties relate solely to
an earlier  date) and such  representations  and  warranties  shall  survive the
execution and delivery of this Agreement:

5.1  Corporate Existence and Power.

     The Governing  Documents of each Borrower delivered to Lender in connection
with the Pre-Relief  Date Loan Agreement have not been amended or modified since
that  delivery,  and  continue  in full force and effect as of the date  hereof.
Further, each Borrower and each of its Subsidiaries:

                                     Page 46
<PAGE>
     (a) is a corporation or limited liability  company duly organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation or organization;

     (b)  has  the  power  and   authority   and  all   governmental   licenses,
authorizations,  consents and approvals to own its assets, carry on its business
and, as applicable,  to execute,  deliver, and perform its obligations under the
Loan Documents;

     (c) is duly qualified as a foreign corporation or limited liability company
and is licensed and in good standing under the laws of each  jurisdiction  where
its  ownership,  lease or  operation  of property or the conduct of its business
requires such  qualification or license and where the failure to be so qualified
or licensed  could  reasonably  be expected to have a Material  Adverse  Effect,
including all  jurisdictions  in which it was so qualified as of the date of the
Pre-Relief Date Loan Agreement; and

     (d) is in compliance in all material respects with all Requirements of Law;

5.2  Corporate Authorization; No Contravention.

     The execution,  delivery and performance by each Borrower of this Agreement
and each  other Loan  Document  to which  such  Person is party,  have been duly
authorized by all necessary corporate action, and do not and will not:

     (a) contravene the terms of any of that Person's Governing Documents;

     (b)  conflict  with or result in any  breach  or  contravention  of, or the
creation of any Lien under, any document  evidencing any Contractual  Obligation
to which such Person is a party or any order, injunction,  writ or decree of any
Governmental Authority to which such Person or its property is subject; or

     (c) violate any Requirement of Law.

5.3  Governmental Authorization.

     Other than the entry of the Interim Order, no approval, consent, exemption,
authorization,   or  other  action  by,  or  notice  to,  or  filing  with,  any
Governmental   Authority  is  necessary  or  required  in  connection  with  the
execution,  delivery or performance by, or enforcement  against, any Borrower of
the Agreement or any other Loan Document.

5.4  Binding Effect.

     This  Agreement  and each other Loan  Document to which each  Borrower is a
party  constitute  the legal,  valid and binding  obligations of Borrower to the
extent it is a party thereto, enforceable against such Person in accordance with
their respective  terms,  except as  enforceability  may be limited by equitable
principles.

                                     Page 47
<PAGE>
5.5  Litigation.

     Except for the  Chapter 11 Case and claims to be asserted  therein,  and as
specifically   disclosed  in  Schedule  5.5,   there  are  no  actions,   suits,
proceedings,  claims  or  disputes  pending,  or to the best  knowledge  of each
Borrower,  threatened or  contemplated,  at law, in equity,  in  arbitration  or
before any Governmental Authority,  against each Borrower or its Subsidiaries or
any of their  respective  properties,  which,  if  determined  adversely  to any
Borrower  or any of its  Subsidiaries,  could  reasonably  be expected to have a
Material Adverse Effect. None of the items disclosed on Schedule 5.5:

     (a) purport to affect this Agreement or any other Loan Document,  or any of
the transactions contemplated hereby or thereby; or

     (b) if  determined  adversely to any  Borrower or any of its  Subsidiaries,
could reasonably be expected to have a Material Adverse Effect.

     No injunction, writ, temporary restraining order or any order of any nature
has been  issued  by any court or other  Governmental  Authority  purporting  to
enjoin or restrain the  execution,  delivery or performance of this Agreement or
any other Loan Document,  or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.

5.6  [Intentionally omitted.]

5.7  ERISA Compliance.

     (a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA,  the IRC and other federal or state law. Each Plan which is
intended to qualify  under  Section  401(a) of the IRC has  received a favorable
determination  letter from the IRS and, to the best  knowledge of each Borrower,
nothing has  occurred  which would  cause the loss of such  qualification.  Each
Borrower and each ERISA  Affiliate  has made all required  contributions  to any
Plan subject to Section 412 of the IRC, and no application  for a funding waiver
or an extension of any  amortization  period  pursuant to Section 412 of the IRC
has been made with respect to any Plan;

     (b)  There  are no  pending  or, to the best  knowledge  of each  Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could  reasonably  be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary  responsibility  rules with respect to any Plan which
has  resulted or could  reasonably  be expected to result in a Material  Adverse
Effect; and

     (c) (i) No ERISA  Event has  occurred or is  reasonably  expected to occur;
(ii) no Pension  Plan has any  Unfunded  Pension  Liability;  (iii)  neither any
Borrower nor any ERISA Affiliate has incurred,  or reasonably  expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other

                                     Page 48
<PAGE>
than premiums due and not delinquent under Section 4007 of ERISA);  (iv) neither
any Borrower nor any ERISA  Affiliate  has incurred,  or  reasonably  expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA,  would result in such liability) under Section 4201
or 4243 of ERISA with  respect to a  Multiemployer  Plan;  and (v)  neither  any
Borrower  nor any ERISA  Affiliate  has engaged in a  transaction  that could be
subject to Section 4069 or 4212(c) of ERISA, which in the case of any occurrence
described  in any of clauses  (i)  through  (v) above has  resulted  in or could
reasonably  be  expected  to  result  in a  liability  of any  Borrower  and its
Subsidiaries in excess of $250,000.

5.8  Use of Proceeds; Margin Regulations.

     The  proceeds of the Loans are to be used solely for the purposes set forth
in and permitted by Section 6.12 and not prohibited by Section 7.7.  Neither any
Borrower nor any  Subsidiary is generally  engaged in the business of purchasing
or selling  Margin Stock or extending  credit for the purpose of  purchasing  or
carrying Margin Stock.

5.9  Title to Properties.

     Each  Borrower  has good record and  marketable  title in fee simple to, or
valid  leasehold  interests  in,  all  real  property  necessary  or used in the
ordinary  conduct of its  businesses,  except for such defects in title as could
not reasonably be expected to have a Material Adverse Effect.  As of the Closing
Date, the property of each Borrower is subject to no Liens, other than Permitted
Liens.

5.10 Taxes.

     Each  Borrower  has filed all  Federal and other  material  tax returns and
reports required to be filed, and has paid all Federal and other material taxes,
assessments,  fees and other  governmental  charges levied or imposed upon it or
its properties,  income or assets otherwise due and payable,  except those which
are subject to a Permitted Protest. There is no material proposed tax assessment
against any Borrower.  The amounts and types of all estimated accrued and unpaid
taxes (including,  without  limitation,  any sales or ad valorem taxes) owing by
any Borrower is set forth, as of November 12, 1999, on Schedule 5.10.

5.11 Financial Condition.

     (a) The audited  consolidated  financial  statements  of the  Borrowers and
their  Subsidiaries  dated  January  1,  2000,  and  the  related   consolidated
statements of income or operations,  shareholders' equity and cash flows for the
fiscal year ended on that date:

          (i)  were  prepared  in  accordance  with  GAAP  consistently  applied
     throughout the period covered thereby,  except as otherwise expressly noted
     therein;

                                     Page 49
<PAGE>
          (ii) fairly present the financial  condition of the Borrower and their
     Subsidiaries  as of the date  thereof  and  results of  operations  for the
     period covered thereby; and

          (iii)  except as  specifically  disclosed in Schedule  5.11,  show all
     material indebtedness and other liabilities,  direct or contingent, of each
     Borrower  and  its  consolidated  Subsidiaries  as  of  the  date  thereof,
     including  liabilities  for  taxes,  material  commitments  and  Contingent
     Obligations.

     (b) Except for the  commencement  of the Case,  and except as expressly set
forth in the financial  statements  provided in accordance with subparagraph (a)
above,  since  January  1, 2000,  there has  occurred  no event  which has had a
Material Adverse Effect.

     (c) Each Borrower's and its  Subsidiaries'  fiscal year end is a 52/53 week
retail  calendar  year ending on the Saturday  closest to December  31st (except
that certain of the Managed Care  Subsidiaries and the Foreign  Subsidiaries may
have a calendar year end).

5.12 Environmental Matters.

     (a)  Except as  specifically  disclosed  in  Schedule  5.12,  the  on-going
operations of each Borrower and each of its Subsidiaries  comply in all respects
with all  Environmental  Laws,  except such  non-compliance  which would not (if
enforced in  accordance  with  applicable  law) result in liability in excess of
$250,000 in the aggregate.

     (b) Except as  specifically  disclosed in Schedule 5.12,  each Borrower and
each  of  its  Subsidiaries  have  obtained  all  material  licenses,   permits,
authorizations   and   registrations   required  under  any   Environmental  Law
("Environmental  Permits") and necessary for their  respective  ordinary  course
operations,  all  such  Environmental  Permits  are in good  standing,  and each
Borrower and each of its  Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits.

     (c) Except as  specifically  disclosed in Schedule 5.12, none of Borrowers,
any of  their  Subsidiaries  or any of  their  respective  present  property  or
operations,  is subject to any outstanding  written order from or agreement with
any   Governmental   Authority,   nor  subject  to  any   judicial  or  docketed
administrative proceeding, respecting any Environmental Law, Environmental Claim
or  Hazardous  Material,  which  would  reasonably  be  expected to give rise to
Environmental   Claims  with   potential   liability  of  Borrowers   and  their
Subsidiaries in excess of $250,000 in the aggregate.

     (d)  Except  as  specifically  disclosed  in  Schedule  5.12,  there are no
Hazardous  Materials or other conditions or circumstances  existing with respect
to any  property of any  Borrower or any of its  Subsidiaries,  or arising  from
operations prior to the Closing Date, of any Borrower or any of its Subsidiaries

                                     Page 50
<PAGE>
that would  reasonably be expected to give rise to  Environmental  Claims with a
potential  liability of any Borrower and its  Subsidiaries in excess of $250,000
in the aggregate for any such condition,  circumstance or property. In addition,
(i) neither any Borrower nor any of its Subsidiaries has any underground storage
tanks  (x)  that are not  properly  registered  or  permitted  under  applicable
Environmental  Laws, or (y) that are leaking or disposing of Hazardous Materials
off-site, and which in the case of any occurrence described in clause (x) or (y)
could  reasonably be expected to give rise to Environment  Claims with potential
liability  of any  Borrower  and its  Subsidiaries  in excess of $250,000 in the
aggregate,  and (ii) each  Borrower and its  Subsidiaries  have  notified all of
their  respective  employees  of the  existence,  if any,  of any health  hazard
arising from the conditions of their  employment  and have met all  notification
requirements under Title III of CERCLA and all other Environmental Laws.

5.13 Loan Documents.

     (a) The provisions of each of the Loan Documents are effective to create in
favor of  Lender,  acting on its own behalf  and for its own  benefit,  a legal,
valid and enforceable first priority  security interest in all right,  title and
interest  of  Borrowers  and  their  Subsidiaries  in the  Collateral  described
therein,  subject to Permitted  Liens, if any, which are not subordinated to the
Liens under the Loan Documents.

     (b) All  representations  and  warranties  of each  Borrower  party thereto
contained in the Loan Documents are true and correct. .

     (c) All of the  Schedules  attached  hereto are  identical to the Schedules
attached to the Pre-Relief Date Loan Agreement,  and such Schedules  remain true
and correct in all material  respects.  To the extent the Schedules  contain any
immaterial  discrepancies or are incomplete in any material  respect,  Borrowers
shall  supplement or replace such  Schedules  within fifteen (15) days after the
Closing Date.

5.14 Regulated Entities.

     None  of  any  Borrower,  any  Person  controlling  any  Borrower,  or  any
Subsidiary of any Borrower, is an "Investment Company" within the meaning of the
Investment Company Act of 1940.  Borrower is not subject to regulation under the
Public  Utility  Holding  Company  Act of  1935,  the  Federal  Power  Act,  the
Interstate  Commerce Act, any state public  utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.

5.15 No Burdensome Restrictions.

     Neither any Borrower nor any of its  Subsidiaries is a party to or bound by
any  Contractual  Obligation,  or subject to any  restriction  in any  Governing
Document,  or any Requirement of Law, which could reasonably be expected to have
a Material Adverse Effect.

                                     Page 51
<PAGE>
5.16 Copyrights, Patents, Trademarks and Licenses, Etc.

     Each Borrower and its  Subsidiaries  own or are licensed or otherwise  have
the right to use all of the material patents,  trademarks,  service marks, trade
names, copyrights, contractual franchises,  authorizations and other rights that
are  reasonably  necessary  for the  operation of their  respective  businesses,
without  conflict with the rights of any other Person.  To the best knowledge of
each Borrower, no slogan or other advertising device, product,  process, method,
substance,  part or other  material  now  employed,  or now  contemplated  to be
employed, by each Borrower or any of its Subsidiaries  infringes upon any rights
held by any other Person which could reasonably be expected to result in a claim
by any other Person in excess of $250,000.  Except as specifically  disclosed in
Schedule 5.5, no claim or  litigation  regarding any of the foregoing is pending
or threatened, and no patent, invention,  device, application,  principle or any
statute, law, rule, regulation, standard or code is pending or, to the knowledge
of any Borrower, proposed.

5.17 Subsidiaries.

     Each Borrower has no Subsidiaries other than those  specifically  disclosed
in part (a) of Schedule 5.17 hereto and has no equity  investments  in any other
corporation  or entity  other than those  specifically  disclosed in part (b) of
Schedule 5.17.

5.18 Insurance.

     Except as  specifically  disclosed in Schedule 5.18, the properties of each
Borrower and its Subsidiaries  are insured with financially  sound and reputable
insurance  companies which are not Affiliates of any Borrower,  in such amounts,
with such  deductibles  and covering  such risks as are  customarily  carried by
companies  engaged  in  similar  businesses  and owning  similar  properties  in
localities where such Borrower or such Subsidiary operates.

5.19 Intentionally Omitted.

5.20 Full Disclosure.

     None of the  representations  or  warranties  made by Borrowers in the Loan
Documents as of the date such  representations and warranties are made or deemed
made, and none of the statements contained in any exhibit,  report, statement or
certificate  furnished by or on behalf of Borrowers in connection  with the Loan
Documents contains any untrue statement of a material fact or omits any material
fact  required to be stated  therein or  necessary to make the  statements  made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.

5.21 Accounts and Inventory.

     (a)  (i) The  Eligible  Accounts  are and  will  continue  to be bona  fide
existing obligations created by the sale of goods, the rendering of services, or

                                     Page 52
<PAGE>
the  furnishing  of other  good and  sufficient  consideration  to the  relevant
Account  Debtors  in the  regular  course of  business;  (ii) all  shipping  and
delivery receipts and other documents  furnished or to be furnished to Lender in
connection  therewith  are and will be genuine;  and (iii) none of the  Accounts
identified  or  included  on any  schedule,  certificate  or report as  Eligible
Accounts will, to each Borrower's  knowledge,  fail at the time so identified or
included to satisfy any of the  requirements  for  eligibility  set forth in the
definition of Eligible Accounts.

     (b)  As to  each  schedule  of  Inventory  delivered  to  Lender,  to  each
Borrower's knowledge:

          (i) the descriptions,  origins, sizes, qualities, quantities, weights,
     and markings of all goods stated thereon, or on any attachment thereto, are
     true and correct in all material respects; and

          (ii) none of the goods are  defective,  of second  quality,  used,  or
     goods returned after shipment, except where described as such.

5.22 Leases.

     (a) Each of the supplements to the master lease between Wal-Mart and Parent
with respect to retail locations of Parent or any of its Subsidiaries located in
a Wal-Mart retail store is substantially in the form of Exhibit C;

     (b) Each of the leases  between  Wal-Mart and Parent with respect to retail
locations  of Parent or any of its  Subsidiaries  located in a Sam's Club retail
store is substantially in the form of Exhibit D; and

     (c) Each of the leases between Fred Meyer, Inc. and Parent is substantially
in the form of Exhibit E.

5.23 Compliance With Laws.

     Each Borrower and its Subsidiaries  has timely filed all material  reports,
documents and other  materials  required to be filed by it under all  applicable
Requirements of Law with any Governmental  Authority,  has retained all material
records  and  documents  required  to be  retained  by it under  all  applicable
Requirements of Law, and is otherwise in material compliance with all applicable
Requirements  of Law in respect of the conduct of its business and the ownership
and operation of its properties.

5.24 Year 2000 Compatibility.

     Any  reprogramming  by  or on  behalf  of  each  Borrower  or  any  of  its
Subsidiaries,  required to permit the proper  functioning after January 1, 2000,
of each Borrower's and its  Subsidiaries'  (i)  computer-based  systems and (ii)
equipment  containing  embedded  microchips  (including  systems  and  equipment
supplied by others or with which each Borrower's or any of its Subsidiaries'

                                     Page 53
<PAGE>
systems  interface),  and the testing of all such systems and  equipment,  as so
reprogrammed,  has been  completed.  The  computer  and  management  information
systems of each Borrower and its  Subsidiaries  are and,  with  ordinary  course
upgrading and  maintenance  will continue for the term of this  Agreement to be,
sufficient  to permit  each  Borrower  and its  Subsidiaries  to  conduct  their
respective businesses without a Material Adverse Effect.

5.25 Material Contracts.

     Schedule  5.25 lists,  as of the Closing  Date,  each  "material  contract"
(within the meaning of Item 601(b)(10) of Regulation S-K under the Exchange Act)
to which each Borrower or any of its  Subsidiaries  is a party,  by which any of
them or their respective  properties is bound or to which any of them is subject
(collectively,  "Material Contracts"). As of the Closing Date, (i) each Material
Contract is in full force and effect and is enforceable in all material respects
by each  Borrower or the  Subsidiary of each Borrower that is a party thereto in
accordance  with  its  terms,  and  (ii)  neither  any  Borrower  nor any of its
Subsidiaries (nor, to the knowledge of any Borrower, any other party thereto) is
in breach of or default under any Material  Contract in any material  respect or
has given  notice of  termination  or  cancellation  of any  Material  Contract.
Schedule  5.25 also  lists,  as of the  Closing  Date,  all of the  Credit  Card
Agreements then in effect.

5.26 Appointment of Trustee or Examiner; Liquidation.

     No order has been entered in this  Chapter 11 Case (i) for the  appointment
of a chapter 11 trustee,  (ii) for the  appointment of an examiner with enlarged
powers (beyond those set forth in Sections  1106(a)(3) and (4) of the Bankruptcy
Code)  under  Section  1106(b) of the  Bankruptcy  Code or (iii) to convert  the
Chapter 11 Case to a chapter 7 case or to dismiss the Chapter 11 Case.

6.   AFFIRMATIVE COVENANTS.

     Borrowers covenant and agree that, so long as any credit hereunder shall be
available and until full and final payment of the Obligations, and unless Lender
shall otherwise consent in writing, Borrowers shall do all of the following:

6.1  Financial Statements. Borrowers shall deliver to Lender:

     (a) as soon as available, but not later than ninety (90) days after the end
of  each  fiscal  year,  a  copy  of  the  audited  consolidated  and  unaudited
consolidating balance sheet of Borrowers and their Subsidiaries as at the end of
such year and the  related  audited  consolidated  and  unaudited  consolidating
statements of income or operations, shareholders' equity and cash flows for such
year,  setting  forth  in each  case in  comparative  form the  figures  for the
previous fiscal year, and accompanied by the opinion of a  nationally-recognized
independent  public accounting firm  ("Independent  Auditor") which report shall
state that such consolidated  financial  statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis

                                     Page 54
<PAGE>
consistent  with prior  fiscal  years.  Such  opinion  shall not be qualified or
limited  because of a  restricted  or  limited  examination  by the  Independent
Auditor of any material  portion of any Borrower's or any  Subsidiary's  records
and shall be delivered to Lender;

     (b) as soon as available, but not later than forty-five (45) days after the
end of  each of the  first  three  (3)  fiscal  quarters  of  each  fiscal  year
(commencing with the fiscal quarter ended closest to September 30, 2000), a copy
of the unaudited  consolidated and consolidating  balance sheet of Borrowers and
their  Subsidiaries,  as of the end of such  quarter and the  related  unaudited
consolidated and consolidating  statements of income,  shareholders'  equity and
cash flows for the period commencing on the first day and ending on the last day
of such quarter, and certified by a Responsible Officer as fairly presenting, in
accordance   with  GAAP  (subject  to  ordinary,   good  faith   year-end  audit
adjustments),  the  financial  position  and the results of  operations  of each
Borrower and its Subsidiaries;

     (c) as soon as available, but not later than thirty (30) days after the end
of each month  (commencing  with the month ended April 30, 2000),  a copy of the
unaudited  consolidated and consolidating  balance sheets of Borrowers and their
Subsidiaries and the related consolidating  statements of income,  shareholders'
equity and cash flows for such  month and a  statement  of EBITDA for the twelve
(12) month period then ended,  all certified by a Responsible  Officer as fairly
presenting,  in accordance  with GAAP (subject to ordinary,  good faith year-end
audit adjustments), the financial position and the results of operations of each
Borrower and its Subsidiaries.

6.2  Certificates; Other Information. Borrowers shall furnish to Lender:

     (a) The following documents at the fol-lowing times in form satisfactory to
Lender: (i) on each Business Day, a flash sales report,  collection journal, and
credit register, (ii) on a monthly basis and, in any event, by no later than the
thirtieth  (30th) day of each month  during  the term of this  Agreement,  (x) a
detailed  calculation of the Borrowing Base, and (y) a detailed aging, by total,
of the Accounts,  (iii) on a monthly  basis and, in any event,  by no later than
the  thirtieth  (30th) day of each month  during the term of this  Agreement,  a
summary  aging,  by vendor,  of the accounts  payable and any book  overdraft of
Borrowers,  (iv) on a weekly basis, Inventory reports specifying Borrowers' cost
of its Inventory by category,  with additional  detail showing  additions to and
deletions from the Inventory,  (v) to the extent not delivered  under clause (i)
above, on each Business Day, notice of all returns,  disputes,  or claims,  (vi)
upon  request,  copies of invoices in  connection  with the  Accounts,  customer
statements,  credit  memos,  remittance  advices  and  reports,  deposit  slips,
shipping  and  delivery  documents  in  connection  with  the  Accounts  and for
Inventory and Equipment acquired by any Borrower,  purchase orders and invoices,
(vii) a monthly basis, a calculation of the Dilution for the prior month; (viii)
promptly  upon  the  opening  of any new  location  of any  Borrower,  a  report
detailing  the  address of such new  location  and  whether  such  Borrower  has
delivered to Lender (A) a Uniform Commercial Code financing statement with

                                     Page 55
<PAGE>
respect  to the  jurisdiction  in which  such  location  is  situated  and (B) a
Collateral  Access  Agreement with respect to such location;  (ix) promptly when
filed with the Court or delivered to the United  States  Trustee for the Chapter
11 Case or the Committee, all pleadings, motions, applications, monthly reports,
projections or other  information  respecting  Borrowers'  business or financial
condition  or prospects  filed with the Court or delivered to the United  States
Trustee for the Chapter 11 Case or the  Committee;  and (x) such other  reports,
including,  without limitation,  electronic data, as to the Collateral as Lender
may request from time to time;

     (b) concurrently with the delivery of the financial  statements referred to
in Section  6.1(a),  a certificate of the  Independent  Auditor  stating that in
making the  examination  necessary  therefor no  knowledge  was  obtained of any
Default or Event of Default  under  Section  7.14,  except as  specified in such
certificate;

     (c) concurrently with the delivery of the financial  statements referred to
in Section 6.1(a) and Section  6.1(b),  a Compliance  Certificate  executed by a
Responsible Officer;

     (d) concurrently with the delivery of the financial  statements referred to
in Section 6.1(b), a certificate executed by a Responsible Officer setting forth
dividends  and  other  distributions  any  Subsidiaries  to  Borrowers  for  the
immediately preceding fiscal quarter;

     (e) no later than sixty  (60) days  prior to the end of  Borrowers'  fiscal
year, an updated and extended  Business Plan which shall go out at least through
the Maturity Date. Such updated and extended  Business Plan shall be provided in
the same form as Schedule B-1 hereto and be approved by Lender.

     (f) promptly, copies of all financial statements and reports that Borrowers
send to their shareholders,  and copies of all financial statements and regular,
periodical  or  special  reports  (including  Forms  10K,  10Q and 8K)  that any
Borrower or any Subsidiary may make to, or file with, the SEC;

     (g) promptly upon receipt, a copy of any "management letter" received by it
that has been prepared by its internal or outside accountants;

     (h) promptly, such additional information regarding the business, financial
or corporate  affairs of any Borrower or any  Subsidiary as Lender may from time
to time reasonably request; and

     (i) with respect to store closings not previously disclosed to Lender prior
to the date  hereof,  at least  fifteen  (15) days  prior to the  closing of any
retail  store  location,  notice of the closing of such retail  store  location,
together with an estimate of reasonably  anticipated  cash closing  expenses for
such closing and a calculation of the total cash closing expenses for all retail
store closings from the Closing Date.

                                     Page 56
<PAGE>
6.3  Notices. Borrowers shall promptly notify Lender:

     (a) of the occurrence of any Default or Event of Default;

     (b) of (i) any breach or  non-performance  of, or any  default  under,  any
Contractual  Obligation of any Borrower or any of its  Subsidiaries  which could
reasonably  be expected  to result in a Material  Adverse  Effect;  and (ii) any
dispute, litigation, investigation,  proceeding or suspension which may exist at
any time between any Borrower or any of its  Subsidiaries  and any  Governmental
Authority  which could  reasonably  be expected to result in a Material  Adverse
Effect;

     (c) other than actions or proceedings in the Case, of the  commencement of,
or any material  development  in, any  litigation  or  proceeding  affecting any
Borrower or any of its  Subsidiaries  (i) in which the amount of damages claimed
is $250,000 (or its equivalent in another  currency or currencies) or more, (ii)
in which  injunctive  or  similar  relief  is sought  and  which,  if  adversely
determined,  would reasonably be expected to have a Material Adverse Effect,  or
(iii)  in  which  the  relief  sought  is an  injunction  or  other  stay of the
performance of this Agreement or any Loan Document;

     (d) upon, but in no event later than ten (10) days after, becoming aware of
(i)  any  and  all  enforcement,  cleanup,  removal  or  other  governmental  or
regulatory actions  instituted,  completed or threatened against any Borrower or
any of its  Subsidiaries or any of their respective  properties  pursuant to any
applicable  Environmental Laws, (ii) all other  Environmental  Claims, and (iii)
any environmental or similar condition on any real property  adjoining or in the
vicinity of the property of any Borrower or any of its  Subsidiaries  that could
reasonably  be  anticipated  to cause such  property  or any part  thereof to be
subject to any restrictions on the ownership, occupancy,  transferability or use
of such  property  under any  Environmental  Laws,  and which in the case of any
event  described  in  clause  (i),  (ii) or (iii)  above has  resulted  or could
reasonably   be  expected  to  result  in  liability  of  Borrowers   and  their
Subsidiaries in excess of $250,000 in the aggregate;

     (e) of any other litigation or proceeding  affecting any Borrower or any of
its  Subsidiaries  which any  Borrower  would be  required  to report to the SEC
pursuant to the Exchange Act,  within four (4) days after  reporting the same to
the SEC;

     (f) of the occurrence of any of the following events affecting any Borrower
or any ERISA  Affiliate  which has resulted or could  reasonably  be expected to
result in liability of any Borrower and its  Subsidiaries  in excess of $250,000
in the aggregate (but in no event more than ten (10) days after such event), and
deliver to Lender a copy of any notice with  respect to such event that is filed
with a  Governmental  Authority  and  any  notice  delivered  by a  Governmental
Authority to any Borrower or any ERISA Affiliate with respect to such event:

                                     Page 57
<PAGE>
          (i) an ERISA Event;

          (ii) a material  increase in the  Unfunded  Pension  Liability  of any
     Pension Plan;

          (iii) the adoption of, or the  commencement of  contributions  to, any
     Plan  subject  to  Section  412 of the  IRC by any  Borrower  or any  ERISA
     Affiliate; or

          (iv) the adoption of any amendment to a Plan subject to Section 412 of
     the IRC, if such amendment  results in a material increase in contributions
     or Unfunded Pension Liability.

     (g) of any material  change in accounting  policies or financial  reporting
practices by any Borrower or any of its consolidated Subsidiaries; and

     (h) at least  thirty (30) days prior  thereto,  that any Borrower or any of
its  Subsidiaries  intends to change its name or address from that  disclosed to
Lender as of the Closing  Date,  together with  disclosures  of such new name or
address.

     Each notice under this Section shall be accompanied by a written  statement
by a Responsible  Officer  setting forth details of the  occurrence  referred to
therein,  and stating what action such  Borrower or any affected  Subsidiary  of
Borrower  proposes to take with  respect  thereto and at what time.  Each notice
under Section  6.3(a) shall describe with  particularity  any and all clauses or
provisions  of this  Agreement  or  other  Loan  Document  that  have  been  (or
foreseeably will be) breached or violated.

6.4  Preservation of Corporate Existence, Etc.

     Borrowers shall, and shall cause each Subsidiary to:

     (a) preserve and maintain in full force and effect its corporate  existence
and good standing under the laws of its state or jurisdiction of incorporation.

     (b) preserve and maintain in full force and effect all governmental rights,
privileges,  qualifications,  permits,  licenses  and  franchises  necessary  or
desirable  in the  normal  conduct of its  business  except in  connection  with
transactions  permitted by Section 7.3 and sales of assets  permitted by Section
7.2;

     (c) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and

     (d) preserve or renew all of its material registered  patents,  trademarks,
trade names and service marks.

     Nothing in this Section 6.4 shall  prohibit the  liquidation or dissolution
of any Subsidiary into any Borrower or another Subsidiary of a Borrower.

                                     Page 58
<PAGE>
6.5  Maintenance of Property.

     Each Borrower shall maintain,  and shall cause each of its  Subsidiaries to
maintain,  and preserve all its property which is used or useful in its business
in good working order and condition,  ordinary wear and tear excepted, except as
permitted  by Section  7.2.  Each  Borrower  and each  Subsidiary  shall use the
standard of care typical in the industry in the operation and maintenance of its
facilities;  provided,  however,  that nothing in this Section 6.5 shall prevent
any Borrower or any of its Subsidiaries from discontinuing the use, operation or
maintenance  of any of its  properties,  or  disposing  of any of them,  if such
discontinuance or disposal is, in the judgment of the Board of Directors of such
Borrower or of the Board of  Directors  of the  Subsidiary  concerned,  or of an
officer (or other agent employed by such Borrower or any of its Subsidiaries) of
such  Borrower or such  Subsidiary  having  managerial  responsibility  for such
property,  desirable  in the conduct of the  business  of such  Borrower or such
Subsidiary;  provided  further,  however,  that  any  disposal  of any  property
pursuant to the immediately  preceding proviso shall be subject to the terms and
conditions of Article 7 of this Agreement.

6.6  Insurance.

     (a) At Borrowers' expense,  Borrowers and their Subsidiaries shall keep the
Collateral insured against loss or damage by fire, theft, explosion, sprinklers,
and all other hazards and risks, and in such amounts,  as are ordinarily insured
against by other owners in similar businesses.  Borrowers and their Subsidiaries
also shall maintain business interruption,  public liability, product liability,
and  property  damage  insurance  relating  to  their  ownership  and use of the
Collateral,  as well as insurance  against larceny,  embezzlement,  and criminal
misappropriation. All such insurance shall contain an endorsement showing Lender
as an additional insured or loss payee, as applicable.

     (b) All such  policies  of  insurance  shall  be in such  form,  with  such
companies,  and in such amounts as may be reasonably satisfactory to Lender. All
insurance  required herein shall be written by companies which are authorized to
do insurance business in the State of California.  All hazard insurance and such
other insurance as Lender shall specify,  shall contain a California Form 438BFU
(NS) mortgagee endorsement, or an equivalent endorsement satisfactory to Lender,
showing  Lender  as sole  loss  payee  thereof,  and  shall  contain a waiver of
warranties.  Every  policy of  insurance  referred to in this  Section 6.6 shall
contain an agreement  by the insurer that it will not cancel such policy  except
after thirty (30) days prior written  notice to Lender and that any loss payable
thereunder  shall  be  payable  notwithstanding  any  act or  negligence  of any
Borrower,  any of its Subsidiaries or Lender which might, absent such agreement,
result in a forfeiture  of all or a part of such  insurance  payment.  Borrowers
shall  deliver to Lender  certified  copies of such  policies of  insurance  and
evidence of the payment of all premiums  therefor within ninety (90) days of the
Closing Date.

     (c)  Original  policies  or  certificates  thereof  satisfactory  to Lender
evidencing such insurance shall be delivered to Lender at least thirty (30) days

                                     Page 59
<PAGE>
prior to the expiration of the existing or preceding  policies.  Borrowers shall
give  Lender  prompt  notice of any loss in excess of  $250,000  covered by such
insurance, and Lender shall have the right to adjust any loss. Lender shall have
the  exclusive  right to adjust  all  losses  payable  under any such  insurance
policies  without  any  liability  to any  Borrower  or any of its  Subsidiaries
whatsoever in respect of such  adjustments.  Any monies  received as payment for
any loss in  excess  of  $250,000  under  any  insurance  policy  including  the
insurance  policies  mentioned above, shall be paid over to Lender to be applied
at the option of Lender  either to the  prepayment  of the  Obligations  without
premium,  in such order or manner as Lender may elect,  or shall be disbursed to
Borrowers or any of their Subsidiaries under stage payment terms satisfactory to
Lender for application to the cost of repairs,  replacements,  or  restorations;
provided,  however,  that all insurance  proceeds received by any Borrower after
the  occurrence  and during  the  continuation  of an Event of Default  shall be
promptly paid over to Lender to be applied to the  Obligations  as determined by
Lender in its sole discretion. All repairs,  replacements, or restorations shall
be effected with reasonable promptness and shall be of a value at least equal to
the  value  of  the  items  or  property  destroyed  prior  to  such  damage  or
destruction.  Upon the occurrence of an Event of Default,  Lender shall have the
right to apply all prepaid  premiums to the payment of the  Obligations  in such
order or form as Lender shall determine.

     (d)  Neither  any  Borrower  nor any of its  Subsidiaries  shall  take  out
separate insurance  concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.6, unless Lender is included
thereon  as named  insured  with the loss  payable  to Lender  under a  standard
California  438BFU (NS) Mortgagee  endorsement,  or its local  equivalent.  Each
Borrower  immediately  shall notify Lender  whenever such separate  insurance is
taken out,  specifying  the insurer  thereunder  and full  particulars as to the
policies  evidencing the same, and originals of such policies  immediately shall
be provided to Lender.

6.7  Payment of Obligations.

     Except as permitted by the  Bankruptcy  Code and to the extent  included in
the Business Plan, each Borrower shall, and shall cause each of its Subsidiaries
to, pay and  discharge  as the same shall  become  due and  payable,  all of the
following obligations and liabilities:

     (a) all tax  liabilities,  assessments and  governmental  charges or levies
upon it or its  properties  or  assets,  unless  the same are the  subject  of a
Permitted Protest; and

     (b) all lawful claims which, if unpaid, would by law become a Lien upon its
property, unless the same are the subject of a Permitted Protest.

6.8  Compliance with Laws.

     Each Borrower  shall comply,  and shall cause each of its  Subsidiaries  to
comply, in all material respects with all Requirements of Law of any

                                     Page 60
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Governmental  Authority having  jurisdiction over it or its business  (including
the Federal Fair Labor Standards  Act),  except such as may be contested in good
faith or as to which a bona fide dispute may exist.

6.9  Compliance with ERISA.

     Each Borrower shall,  and shall cause each of its ERISA  Affiliates to: (a)
maintain each Plan in compliance  in all material  respects with the  applicable
provisions of ERISA, the IRC and other federal or state law; (b) cause each Plan
which  is  qualified   under  Section   401(a)  of  the  IRC  to  maintain  such
qualification;  and (c) make all required  contributions  to any Plan subject to
Section 412 of the IRC, except where such Borrower's  failure to comply with the
requirements of (a), (b) and (c) hereof has not resulted or could not reasonably
be expected to result in liability  of such  Borrower  and its  Subsidiaries  in
excess of $250,000 in the aggregate.

6.10 Inspection of Property and Books and Records.

     Each Borrower shall maintain,  and shall cause each of its  Subsidiaries to
maintain,  proper books of record and account,  in which full,  true and correct
entries  in  conformity  with  GAAP  consistently  applied  shall be made of all
financial  transactions  and matters  involving  the assets and business of such
Borrower and such Subsidiary (which shall include, without limitation,  accurate
records of all intercompany transfers among such Borrower and its Subsidiaries).
Each Borrower shall permit,  and shall cause each of its Subsidiaries to permit,
representatives  and independent  contractors of Lender to visit and inspect any
of their respective Books and Records,  properties,  to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom,  and to discuss their respective affairs,  finances and accounts with
their respective directors, officers, and independent public accountants, and to
check,  test  and  appraise  the  Collateral  (including,  but not  limited  to,
appraisals for the purpose of determining the GOB Rate) in order to verify their
respective financial condition or the amount,  quality,  value, condition of, or
any other matter  relating to, the  Collateral,  all at the expense of Borrowers
and at such reasonable times during normal business hours and as often as may be
reasonably  desired,  upon  reasonable  advance  notice to Borrowers;  provided,
however,  when an Event of Default  exists Lender may do any of the foregoing at
the expense of Borrowers at any time during  normal  business  hours and without
advance notice.

6.11 Environmental Laws.

     (a) Each  Borrower  shall,  and shall  cause each of its  Subsidiaries  to,
conduct its  operations  and keep and maintain its property in compliance in all
material respects with all Environmental Laws.

     (b) Upon the written  request of Lender,  each  Borrower  shall  submit and
cause each of its Subsidiaries to submit, to Lender, at Borrowers' sole cost and
expense, at reasonable intervals, a report providing an update of the status of

                                     Page 61
<PAGE>
any  environmental,  health or safety  compliance,  hazard  or  liability  issue
identified in any notice or report  required  pursuant to Section  6.3(d),  that
could,  individually  or in the  aggregate,  result  in  liability  in excess of
$250,000.

6.12 Use of Proceeds.

     Borrowers   shall  use  the  proceeds  of  the  Loans  to  finance  capital
expenditures and for working capital and other general  corporate  purposes and,
only  upon the  Final  Order  Entry  Date,  to  repay  in full  all  Obligations
outstanding under the Pre-Relief Date Loan Agreement.

6.13 Further Assurances.

     (a)  Borrowers  shall  ensure that all written  information,  exhibits  and
reports  furnished to Lender do not and will not contain any untrue statement of
a material  fact and do not and will not omit to state any material  fact or any
fact necessary to make the statements  contained therein not misleading in light
of the  circumstances  in which made,  and will promptly  disclose to Lender and
correct  any  defect  or error  that may be  discovered  therein  or in any Loan
Document or in the execution, acknowledgment or recordation thereof.

     (b) Promptly upon request by Lender,  each Borrower  shall (and shall cause
any  of  its  Subsidiaries  to)  do,  execute,  acknowledge,   deliver,  record,
re-record,  file,  re-file,  register and re-register,  any and all such further
acts, deeds, conveyances,  security agreements, mortgages, assignments, estoppel
certificates,   financing  statements  and  continuations  thereof,  termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments  Lender  may  reasonably  require  from time to time in order (i) to
carry out more  effectively  the  purposes of this  Agreement  or any other Loan
Document,  (ii) to subject to the Liens created by any of the Loan Documents any
of the  properties,  rights or interests  covered by any of the Loan  Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of any of
the Loan  Documents and the Liens  intended to be created  thereby,  and (iv) to
better assure, convey, grant, assign, transfer, preserve, protect and confirm to
Lender the rights  granted or now or hereafter  intended to be granted to Lender
under any Loan  Document  or under any other  document  executed  in  connection
therewith.

     (c) Original sales invoices  evidencing daily sales shall be mailed by each
Borrower to each Account Debtor (other than retail  customers)  and, at Lender's
direction  after the  occurrence  and  during  the  continuation  of an Event of
Default,  the  invoices  shall  indicate on their face that the Account has been
assigned to Lender and that all payments are to be made directly to Lender.

6.14 Bank Accounts.

     Each Borrower shall not open or maintain any deposit or investment  account
with any bank or other financial  institution other than the accounts  described
on Schedule 6.14 as supplemented on a quarterly basis by notice of Lender.

                                     Page 62
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6.15 Intentionally Omitted.

6.16 Covenants Regarding Formation of Subsidiaries.

     Borrowers shall not form or organize any new Subsidiaries.

6.17 Tax Returns.

     Each Borrower  shall deliver to Lender copies of each of Borrower's and its
Subsidiaries'  future  federal income tax returns,  and any amendments  thereto,
within thirty (30) days of the filing thereof with the IRS.

6.18 Returns.

     Cause  returns and  allowances,  if any, as between  each  Borrower and its
respective  Account  Debtors to be on the same basis and in accordance  with the
usual  customary  practices of each  Borrower,  as they exist at the time of the
execution and delivery of this Agreement. If, at a time when no Event of Default
has occurred and is continuing,  any Account Debtor returns any Inventory to any
Borrower,  such Person  promptly shall determine the reason for such return and,
if such Person accepts such return, issue a credit memorandum in the appropriate
amount  to such  Account  Debtor.  If, at a time  when an Event of  Default  has
occurred and is continuing,  any Account  Debtor (other than a retail  customer)
returns any Inventory to any Borrower,  such Person promptly shall determine the
reason for such  return,  issue a credit  memorandum  (with a copy to be sent to
Lender) in the appropriate amount to such Account Debtor.

6.19 Title to Equipment.

     Upon Lender's request,  each Borrower  immediately shall deliver to Lender,
properly  endorsed,  any and all  certificates  of  title  or  applications  for
certificates of title to any items of Equipment of such Borrower.

6.20 Leases.

     Except as  permitted by the  Bankruptcy  Code or with respect to any leases
the  Borrowers  intend to  reject in the Case,  pay when due all rents and other
amounts  payable  under any leases to which any  Borrower is a party or by which
Borrowers' properties and assets are bound, unless such payments are the subject
of a Permitted  Protest.  To the extent that any  Borrower  fails timely to make
payment  of such  rents and other  amounts  payable  when due under its  leases,
Lender shall be entitled, in its discretion,  to reserve an amount equal to such
unpaid amounts  against the Borrowing  Base. Each Borrower shall promptly notify
Lender of the  assumption or rejection of any such leases by any Borrower  under
the Bankruptcy Code.

                                     Page 63
<PAGE>
7.   NEGATIVE COVENANTS.

     Borrowers covenant and agree that, so long as any credit hereunder shall be
available and until full and final payment of the  Obligations,  Borrowers  will
not do any of the following without Lender's prior written consent:

7.1  Limitation on Liens.

     Each  Borrower  shall  not,  and  shall not  suffer  or  permit  any of its
Subsidiaries to, directly or indirectly,  make, create,  incur, assume or suffer
to exist any Lien upon or with respect to any part of its property,  whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):

     (a) any Lien (other than a Lien on the Collateral)  existing on property of
any  Borrower  or any of its  Subsidiaries  on the Relief  Date and set forth in
Schedule 7.1 securing  Indebtedness  outstanding  on such date or any extension,
renewal or refinancing thereof so long as the Indebtedness  secured by such Lien
is not increased and the terms of such extension, renewal or refinancing are not
more onerous on such  Borrower and its  Subsidiaries  than the  Indebtedness  so
extended, renewed or refinanced;

     (b) any Lien created under any Loan Document;

     (c) Liens for taxes, fees,  assessments or other governmental charges which
are not  delinquent or remain  payable  without  penalty,  or to the extent that
non-payment thereof is permitted by Section 6.7, provided that no notice of lien
has been filed or recorded under the IRC;

     (d)  carriers',  warehousemen's,   mechanics',  landlords',  materialmen's,
repairmen's  or other similar  Liens arising in the ordinary  course of business
which are not  delinquent or remain payable  without  penalty or which are being
contested in good faith and by appropriate  proceedings,  which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;

     (e) Liens  (other  than any Lien  imposed  by ERISA  and other  than on the
Collateral) consisting of pledges or deposits required in the ordinary course of
business in connection with workers'  compensation,  unemployment  insurance and
other social security legislation;

     (f)  Liens  on the  property  of any  Borrower  or any of its  Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations,  (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business,  provided all
such  Liens in the  aggregate  would not  (even if  enforced)  cause a  Material
Adverse Effect;

     (g) Liens  consisting of judgment or judicial  attachment liens that do not
constitute Events of Default under Section 8.1(i);

                                     Page 64
<PAGE>
     (h) easements,  rights-of-way,  restrictions and other similar encumbrances
incurred in the ordinary  course of business  which,  in the aggregate,  are not
substantial in amount,  and which do not in any case materially detract from the
value of the property  subject thereto or interfere with the ordinary conduct of
the businesses of any Borrower and its Subsidiaries;

     (i) Liens on assets of  corporations  which become  Subsidiaries  after the
date of this Agreement;  provided,  however, that such Liens existed at the time
the  respective  corporations  became  Subsidiaries  and  were  not  created  in
anticipation  thereof,  and the Indebtedness  secured thereby shall be permitted
under Section 7.5(f);

     (j) purchase money security  interests on any property  acquired or held by
any Borrower or its Subsidiaries  securing  Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such property;
provided that (i) any such Lien attaches to such property  concurrently  with or
within  forty-five  (45) days  after  the  acquisition  thereof,  (ii) such Lien
attaches  solely to the  property  so acquired  in such  transaction,  (iii) the
principal amount of the debt secured thereby does not exceed one hundred percent
(100%) of the cost of such property,  and (iv) the Purchase  Money  Indebtedness
secured by any and all such purchase money security interests shall be permitted
under Section 7.5(f);

     (k) Liens securing  Capitalized Lease Obligations on assets subject to such
leases,  provided that the Indebtedness secured thereby shall be permitted under
Section 7.5(f);

     (l) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens,  rights of set-off or similar rights and remedies as
to  deposit  accounts  or other  funds  maintained  with a  creditor  depository
institution;  provided  that (i) such  deposit  account is not a dedicated  cash
collateral  account and is not  subject to  restrictions  against  access by any
Borrower in excess of those set forth by regulations promulgated by the Board of
Governors of the Federal  Reserve  System,  and (ii) such deposit account is not
intended by any Borrower or any of its Subsidiaries to provide collateral to the
depository institution;

     (m) Liens on any Managed Care Subsidiary  pursuant to the applicable  rules
and  regulations  of, or  undertakings  made to, any  regulatory  entity  having
jurisdiction and authority over such Managed Care Subsidiary; and

     (n) Liens on  intercompany  Indebtedness  permitted  under  Section  7.5(c)
hereof.

     The  prohibition  provided for in this Section 7.1  specifically  includes,
without  limitation,  any motion filed by Borrowers,  the Committee or any other
party-in-interest  in the Chapter 11 Case, which is not dismissed within 30 days
of the date of filing thereof,  to "prime" or create pari passu to any claims or
interests  of Lender any Lien  irrespective  of whether such claims or interests
may be "adequately protected."

                                     Page 65
<PAGE>
7.2  Disposition of Assets.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
directly or  indirectly,  sell,  assign,  lease,  convey,  transfer or otherwise
dispose of (whether in one or a series of transactions) any property  (including
accounts  and notes  receivable,  with or  without  recourse)  or enter into any
agreement to do any of the foregoing, except:

     (a)  dispositions of (i) Inventory in the ordinary  course of business,  or
(ii) used,  worn-out or surplus  Equipment in the ordinary course of business in
an amount  not to  exceed  $250,000  in the  aggregate  during  the term of this
Agreement;

     (b) the sale of  Equipment,  in an  amount  not to exceed  $250,000  in the
aggregate  during the term of this Agreement,  to the extent that such Equipment
is  exchanged  for credit  against  the  purchase  price of similar  replacement
Equipment,  or the proceeds of such sale are reasonably  promptly applied to the
purchase price of such replacement  Equipment;  provided,  that (i) Lender shall
have a first priority perfected Lien on such replacement  Equipment and (ii) any
cash proceeds  remaining after the purchase of such Replacement  Equipment shall
be applied as a repayment of the Obligations;

     (c) Dispositions not otherwise  permitted hereunder which are made for fair
market value;  provided,  that (i) at the time of any  disposition,  no Event of
Default  shall exist or shall result from such  Disposition,  (ii) the aggregate
sales price from such disposition shall be paid in Qualified Proceeds, (iii) (x)
the aggregate  value of all assets so sold by Borrowers and their  Subsidiaries,
together,  shall not exceed $100,000, or (y) such Disposition shall constitute a
Disposition of a retail store location permitted under Section 7.18(b), and (iv)
the cash portion of Net Proceeds relating to any such Disposition promptly shall
be used to make a prepayment  of the Loans and the non-cash  portion of any such
Net  Proceeds  promptly  shall be pledged  to Lender to secure  the  Obligations
pursuant to documentation reasonably acceptable to Lender;

     (d)  subleases  of real  property and  Equipment in the ordinary  course of
business to independent eye care professionals; and

     (e) sales  contemplated in connection with the store closings  disclosed to
Lender prior to the date hereof.

7.3  Consolidations and Mergers.

     Each  Borrower  shall  not,  and  shall not  suffer  or  permit  any of its
Subsidiaries to, merge, reorganize,  recapitalize,  reclassify its capital stock
or other equity interests,  consolidate with or into, or convey, transfer, lease
or  otherwise  dispose  of  (whether  in  one  transaction  or  in a  series  of
transactions  all or  substantially  all of its  assets  (whether  now  owned or
hereafter  acquired) to or in favor of any Person,  form any new subsidiary,  or
liquidate,   wind  up,  or  dissolve   itself  (or  suffer  any  liquidation  or
dissolution), except:

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<PAGE>
     (a) any Subsidiary may merge with any Borrower, provided that such Borrower
shall be the continuing or surviving corporation; and

     (b) any  Subsidiary  may sell or transfer all or  substantially  all of its
assets (upon voluntary liquidation or otherwise), to any Borrower.

7.4  Loans and Investments.

     Each  Borrower  shall not  purchase  or  acquire,  or suffer or permit  any
Subsidiary to purchase or acquire, or make any commitment therefor,  any capital
stock,  equity  interest,  or any  obligations  or other  securities  of, or any
interest in, any Person, or make or commit to make any Acquisitions,  or make or
commit to make any advance, loan, extension of credit or capital contribution to
or any other  investment in, any Person  including any Affiliate of any Borrower
(together, "Investments"), except for:

     (a) Investments  held by any Borrower or any Subsidiary in the form of cash
equivalents;

     (b) extensions of credit in the nature of accounts  receivable arising from
the sale or lease of goods or services in the ordinary course of business;

     (c) Investments by any Borrower in any of its Subsidiaries; and

     (d) Loans to employees of any  Borrower or its  Subsidiaries  not to exceed
$200,000 at any time outstanding.

7.5  Limitation on Indebtedness.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
create,  incur, assume,  suffer to exist, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness, except:

     (a) Indebtedness incurred pursuant to this Agreement;

     (b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.8;

     (c) Intercompany Indebtedness issued to any Borrower by another Borrower;

     (d) Indebtedness existing on the Relief Date and set forth in Schedule 7.5;

     (e) [intentionally omitted];

     (f)  Indebtedness  in an aggregate  amount not to exceed  $1,000,000 at any
time secured by Liens otherwise  permitted by Section 7.1(i),  (j) and (k);

     (g) Indebtedness outstanding under the Senior Notes; and

                                     Page 67
<PAGE>
     (h)  Any  extension,  renewal  or  refinancing  of  any  of  the  foregoing
Indebtedness  so long as the  principal  amount  thereof is not  increased  as a
result thereof and the terms thereof are no more adverse to any Borrower and its
Subsidiaries or Lender than the Indebtedness so extended, renewed or refinanced.

7.6  Transactions with Affiliates.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
enter into any transaction with any Affiliate of any Borrower,  except upon fair
and reasonable  terms no less favorable to such Borrower or such Subsidiary than
would  obtain in a  comparable  arm's-length  transaction  with a Person  not an
Affiliate of such Borrower or such Subsidiary.

7.7  Use of Proceeds.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
use any portion of the  proceeds of the Loans or any Letter of Credit,  directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance  Indebtedness  of any Borrower or others incurred to purchase or carry
Margin  Stock,  (iii) to extend credit for the purpose of purchasing or carrying
any Margin  Stock,  or (iv) to acquire any security in any  transaction  that is
subject to Section 13 or 14 of the Exchange Act,  except in compliance with such
Sections.

7.8  Contingent Obligations.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
create, incur, assume or suffer to exist any Contingent Obligations except:

     (a)  endorsements  for  collection  or  deposit in the  ordinary  course of
business;

     (b) [intentionally omitted];

     (c) Contingent Obligations of any Borrower and its Subsidiaries existing as
of the Closing Date and listed in Schedule 7.8;

     (d) Contingent  Obligations with respect to Surety Instruments  incurred to
provide  security for  workers'  compensation  claims,  payment  obligations  in
connection with self-insurance or similar requirements, in each case incurred in
the  ordinary  course of business  and  securing  obligations  not  constituting
Indebtedness;

     (e) Contingent  Obligations with respect to Surety Instruments  incurred in
respect of trade letters of credit,  standby  letters of credit or  performance,
surety or appeal bonds, in each case incurred in the ordinary course of business
and securing obligations not constituting  Indebtedness and not exceeding at any
time  $250,000  in the  aggregate  in respect of Borrower  and its  Subsidiaries
together; and

                                     Page 68
<PAGE>
     (f)  Contingent  Obligations  with respect to any liability of any Borrower
which is otherwise permitted under this Agreement.

7.9  Joint Ventures.

     Each Borrower  shall not, and shall not suffer or permit any  Subsidiary to
enter into any Joint Venture, except that each Borrower and its Subsidiaries may
enter into alliances  with other  retailers or managed care companies to solicit
and  perform  managed  care  contracts  which   agreements  must  be  reasonably
acceptable to Lender.

7.10 Restricted Payments.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
declare  or  make  any  dividend  payment  or  other   distribution  of  assets,
properties,  cash, rights, obligations or securities on account of any shares of
any class of its capital  stock,  or purchase,  redeem or otherwise  acquire for
value any  shares of its  capital  stock or any  warrants,  rights or options to
acquire  such  shares,  now  or  hereafter   outstanding  (all  such  dividends,
distributions,  purchases, redemptions or acquisitions are herein referred to as
"Restricted Payments"), except that any Borrower may:

     (a)  declare and make  dividend  payments  or other  distributions  payable
solely in its common stock; and

     (b) make  repurchases of the common stock of any Borrower from employees of
any Borrower or any of its Subsidiaries or their authorized  representatives  or
successors  upon the death,  disability  or  termination  of  employment of such
employees in an aggregate  amount not to exceed $100,000 in any calendar year as
long as no Default or Event of Default  shall have occurred and be continuing or
result therefrom.

7.11 ERISA.

     Each  Borrower  shall not,  and shall not suffer or permit any of its ERISA
Affiliates  to: (a)  engage in a  prohibited  transaction  or  violation  of the
fiduciary  responsibility  rules with  respect to any Plan which has resulted or
could  reasonably  expected to result in  liability of Borrowers in an aggregate
amount in excess of  $250,000;  or (b)  engage in a  transaction  that  could be
subject  to  Section  4069 or  4212(c)  of ERISA  which  has  resulted  or could
reasonably  be expected to result in  liability  by  Borrowers  in an  aggregate
amount in excess of $250,000.

7.12 Change in Business; Change of Name.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
engage in any  material  line of  business  which is not  reasonably  related or
complimentary to those lines of business carried on by each Borrower and its

                                     Page 69
<PAGE>
Subsidiaries  on the Closing Date. Each Borrower shall not, and shall not suffer
or permit any  Subsidiary  to,  change  its  corporate  or other  organizational
structure  (within  the  meaning of  Section  11-9-402(7)  of the Code)  without
Lender's prior written consent. Each Borrower shall not, and shall not suffer or
permit  any  Subsidiary  to,  change  its  name,  or  identity,  or add  any new
fictitious name, without thirty (30) days' prior written notice to Lender.

7.13 Accounting Changes.

     Each Borrower  shall not, and shall not suffer or permit any Subsidiary to,
make any  significant  change in  accounting  treatment or reporting  practices,
except as required by GAAP,  or change the fiscal year of any Borrower or of any
Subsidiary.

7.14 Financial Covenants.

     Minimum EBITDA.  Borrowers shall maintain, on a consolidated basis, EBITDA,
measured  on the  last  day of  each  fiscal  month  and  based  on the  rolling
twelve-month  period ending therewith,  of not less than Fifteen Million Dollars
($15,000,000).

7.15 Amendments.

     Each Borrower  shall not, and shall not permit any Subsidiary to, permit or
suffer any material amendments,  modifications,  supplements, or restatements of
(a) its certificate of incorporation,  by-laws, or other governing documents, as
applicable,  or (b) in any  manner  adverse to Lender,  the  Senior  Notes,  the
Indenture,  any leases  referred to in Section 5.22 or any of its other Material
Contracts, or any Indebtedness permitted under Section 7.5.

7.16 No Other Negative Pledges.

     Each  Borrower  will  not,  and  will  not  permit  or  cause  any  of  its
Subsidiaries  to,  directly  or  indirectly,  enter  into or suffer to exist any
agreement or restriction  that prohibits or conditions the creation,  incurrence
or  assumption  of any Lien upon or with  respect to any part of its property or
assets,  whether  now  owned or  hereafter  acquired,  or agree to do any of the
foregoing,  other  than as set forth in (i) this  Agreement,  the  Orders or the
Indenture,  (ii) any agreement or instrument creating a Permitted Lien (but only
to the extent such  agreement or  restriction  applies to the assets  subject to
such Permitted Lien),  and (iii) operating  leases of real or personal  property
entered  into by each  Borrower  or any of its  Subsidiaries  as  lessee  in the
ordinary course of business.

7.17 Prepayments.

     Except in  connection  with a  refinancing  permitted  by  Section  7.5(h),
prepay, redeem, retire, defease, purchase, or otherwise acquire any Indebtedness
owing to any third Person,  other than the  Obligations in accordance  with this
Agreement.

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<PAGE>
7.18 Real Estate; Store Locations.

     Each  Borrower  will  not,  and  will  not  permit  or  cause  any  of  its
Subsidiaries  to, (a) purchase any real  property or (b) close any of its retail
store  locations  without the prior written consent of Lender which shall not be
unreasonably  withheld,  except for store closings  disclosed to Lender prior to
the date hereof.

7.19 Capital Expenditures.

     Each Borrower shall not, and shall not permit any of its  Subsidiaries  to,
make capital  expenditures in excess of $2,500,000 in any of the second,  third,
or fourth  quarters of fiscal year 2000, or in excess of $3,500,000 in the first
quarter of fiscal year 2001,  but in any event not to exceed  $8,100,000  in the
aggregate during the term of this Agreement.

7.20 [Intentionally omitted.]

7.21 Minimum Availability.

     The  Borrowers  shall at all times,  before and after giving  effect to all
Advances and Letters of Credit made hereunder, but not deducting amounts paid as
the  Waiver  Fee  under  the  Fee  Letter,   maintain  minimum  Availability  of
$2,000,000.

8.   EVENTS OF DEFAULT.

     Any of the following shall constitute an "Event of Default":

8.1  Non-Payment.

     If  Borrowers  fail to pay when due and  payable or when  declared  due and
payable,  any portion of the Obligations (whether of principal,  interest,  fees
and charges due  Lender,  reimbursement  of Lender  Expenses,  or other  amounts
constituting Obligations); or

8.2  Representation or Warranty.

     Any  representation  or warranty by any Borrower or any of its Subsidiaries
made or deemed  made  herein  (other  than in Section  5.20),  in any other Loan
Document or which is  contained  in any  certificate,  document or  financial or
other  statement by any  Borrower,  any of its  Subsidiaries  or any  Authorized
Person,  furnished  at any time under this  Agreement,  or in or under any other
Loan Document, is incorrect in any material respect on or as of the date made or
deemed made; or

8.3  Specific Defaults.

     Borrowers  fail or neglect to perform  or  observe  any term,  covenant  or
agreement  contained in any of Sections  6.1,  6.2,  6.3, 6.6, 6.9 or 6.12 or in
Article 7; or

                                     Page 71
<PAGE> 8.4 Other Defaults.

     Borrowers  or any of their  Subsidiaries  party  thereto fail to perform or
observe any other term or covenant contained in this Agreement or any other Loan
Document,  and such default shall  continue  unremedied for a period of five (5)
Business Days after the date upon which an Authorized  Person knew or reasonably
should have known of such failure; or

8.5  Cross-Default.

     Borrowers or any of their  Subsidiaries  (A) shall have received  notice of
termination  with respect to, or notice of an intent to terminate,  the Wal-Mart
Master Lease Agreement,  (B) shall be in default with respect to fifteen (15) or
more leases of real property  related to retail store locations  within Wal-Mart
stores to the extent the defaults  under such leases  would  permit  termination
thereof,  or (c) shall be in default  with respect to  twenty-five  (25) or more
leases of real property  related to retail store locations (other than locations
within  Wal-Mart  stores ) to the extent the  defaults  under such leases  would
permit termination thereof,  other than leases the Borrowers intend to reject in
the Case; or

8.6  Intentionally Omitted.

8.7  Intentionally Omitted.

8.8  ERISA.

     (i)  An  ERISA  Event  shall  occur  with  respect  to a  Pension  Plan  or
Multiemployer  Plan which has resulted or could reasonably be expected to result
in  liability  of any  Borrower  under  Title IV of ERISA to the  Pension  Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $250,000;  or
(ii) the aggregate amount of Unfunded Pension  Liability among all Pension Plans
at any time exceeds $250,000; or (iii) any Borrower or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable  grace period,  any
installment payment with respect to its withdrawal  liability under Section 4201
of  ERISA  under a  Multiemployer  Plan in an  aggregate  amount  in  excess  of
$250,000; or

8.9  Monetary Judgments.

     One or more non-interlocutory judgments,  non-interlocutory orders, decrees
or arbitration awards (other than restructuring  charges) is entered against any
Borrower or any  Subsidiary  after the Relief Date  involving in the aggregate a
liability (to the extent not covered by independent  third-party insurance as to
which the insurer does not dispute  coverage) as to any single or related series
of  transactions,  incidents  or  conditions,  of  $250,000  or more,  and which
liability  constitutes  an  administrative  or other  priority claim against the
Borrowers'  estates,  and the  same  shall  remain  unsatisfied,  unvacated  and
unstayed  pending  appeal  for a period  of  twenty  (20)  days  after the entry
thereof; or

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<PAGE>
8.10 Non-Monetary Judgments.

     Any non-monetary judgment,  order or decree is entered against any Borrower
or any Subsidiary  which does or would reasonably be expected to have a Material
Adverse Effect,  and there shall be any period of twenty (20)  consecutive  days
during which a stay of  enforcement  of such  judgment or order,  by reason of a
pending appeal or otherwise, shall not be in effect; or

8.11 Change of Control. There occurs any Change of Control; or

8.12 Loss of Licenses.

     Any Governmental  Authority revokes or fails to renew any material license,
permit or franchise of any  Borrower or any  Subsidiary,  or any Borrower or any
Subsidiary for any reason loses any material  license,  permit or franchise,  or
any Borrower or  Subsidiary  suffers the  imposition of any  restraining  order,
escrow,  suspension  or  impound  of funds  in  connection  with any  proceeding
(judicial or  administrative)  with respect to any material  license,  permit or
franchise,  provided that such event results in or could  reasonably be expected
to result in a loss of  annual  revenue  or  potential  revenue  of at least the
lesser of (i)  $3,000,000 or (ii) one percent (1%) of the gross  revenues of any
Borrower (on a consolidated  basis with its  Subsidiaries) for the most recently
ended twelve (12) month period; or

8.13 Adverse Change.

     There occurs a Material Adverse Effect; or

8.14 Collateral.

     (a) any material  provision of any Loan Document shall for any reason cease
to be valid and  binding on or  enforceable  against  Borrowers  or any of their
Subsidiaries  party thereto or any Borrower or any of its Subsidiaries  shall so
state in  writing  or bring an action to limit its  obligations  or  liabilities
thereunder; or

     (b) any Loan  Document  shall for any reason  (other  than  pursuant to the
terms  thereof)  cease to create a valid  security  interest  in the  Collateral
purported to be covered  thereby or such security  interest shall for any reason
cease to be a perfected and first  priority  security  interest  subject only to
Permitted Liens; or

8.15 James W. Krause shall cease to be the chairman and chief executive  officer
of  Parent  and  shall  not  have  been  replaced  by a new  officer  reasonably
acceptable to Lender within ninety (90) days; or

8.16  Any  Borrower  or any  Subsidiary  shall at any  time  disavow  any of its
obligations  under, or shall assert the invalidity or enforceability  of, any of
the Loan Documents; or

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<PAGE>
8.17 If any Borrower or any  Subsidiary is enjoined,  restrained,  or in any way
prevented by court order from  continuing to conduct all or any material part of
its business affairs; or

8.18  If any  Borrower  or any  Subsidiary  makes  any  payment  on  account  of
Indebtedness that has been contractually subordinated in right of payment to the
payment of the  Obligations,  except to the extent such  payment is permitted by
the terms of the subordination provisions applicable to such Indebtedness.

8.19 (a) If a notice  of Lien,  levy,  or  assessment  is filed of  record  with
respect to any Borrower's or any Subsidiary's  properties or assets in an amount
in excess of  $150,000  by the  United  States  government,  or any  department,
agency,  or  instrumentality  thereof,  or by any state,  county,  municipal  or
governmental agency (except with respect to any taxes which are the subject of a
Permitted Protest),  or (b) if any taxes or debts owing at any time hereafter to
any one or more of such  entities  becomes  a Lien in an  amount  in  excess  of
$150,000,  whether choate or otherwise,  upon any Borrower's or any Subsidiary's
properties  or  assets  and the same is not  paid on the  payment  date  thereof
(except with respect to any taxes which are the subject of a Permitted Protest);
provided  that Lender  shall have the right to  establish a reserve  against the
Borrowing  Base in an amount of any such Lien  without  waiving  its  rights and
remedies with respect to an Event of Default arising under this Section 8.20.

8.20 If any party to this  Agreement or any other Person brings a motion,  which
is not  dismissed  within 30 days of the  filing  thereof,  in the Case:  (a) to
obtain additional  financing under Section 364(c) or (d) of the Bankruptcy Code;
(b) to grant  any Lien  upon or  affecting  any  Collateral;  or (c)  except  as
provided in the  Interim  Order or the Final  Order,  as the case may be, to use
cash  collateral of Lender under Section 363(c) of the  Bankruptcy  Code without
Lender's consent;

8.21 If any claim or claims under Section 506(c) of the Bankruptcy  Code against
or with respect to any of the Collateral is allowed;

8.22 If any of the following occur (i) a post-Relief Date judgment is entered or
liability  incurred that would constitute an administrative  expense (other than
trade  payables,  professional  fees and other  such  expenses  incurred  in the
ordinary  course of business) in excess of $250,000  (other than trade  payables
incurred in the  ordinary  course of  business),  or (ii) any  post-Relief  Date
judgments are entered or liabilities are incurred,  including but not limited to
any  occurrences  specified  in subpart  (i) of this  Section  8.22,  that would
individually or in the aggregate result in a Material Adverse Change;

8.23 If the Final Order is not entered within 45 days after the Entry Date;

8.24 The filing of any plan of reorganization or disclosure  statement attendant
thereto by any Borrower or any other  Person  which does not require  payment in
full of the Obligations under this Agreement;

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<PAGE>
8.25 The entry of an order  confirming  a plan of  reorganization  that does not
require  repayment  in  full of all of the  Borrowers'  Obligations  under  this
Agreement and the  obligations of Borrowers to Lender under the Pre-Relief  Date
Loan   Agreement  on  the  earlier  of  the  effective  date  of  such  plan  of
reorganization  or thirty (30) days following entry of the order confirming such
plan of reorganization;

8.26  The  entry of an  order  amending,  supplementing,  staying,  vacating  or
otherwise  modifying the Loan  Documents or the Interim Order or the Final Order
without the written consent of Lender;

8.27 The payment of, or  application  for  authority  to pay,  any  pre-petition
claim,  other than those of trade  creditors and other than those required to be
paid with the initial Advance  pursuant to the terms of this Agreement,  without
Lender's prior written consent or pursuant to an order of the Court after notice
and hearing;

8.28 The sale  without  Lender's  consent,  of all or  substantially  all of any
Borrower's  assets  either  through a sale under  Section 363 of the  Bankruptcy
Code,  through a confirmed  plan of  reorganization  in the Chapter 11 Case,  or
otherwise, unless such sale results in the payment in full of all Obligations;

8.29 The dismissal of the Chapter 11 Case,  or the  conversion of the Chapter 11
Case from one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code;

8.30 The  commencement of a suit or action against Lender and, as to any suit or
action  brought by any Person  other than any Borrower or an officer or employee
of any Borrower, the continuation thereof without dismissal for thirty (30) days
after service thereof on Lender,  that assert,  by or on behalf of any Borrower,
or any  official  committee  in the  Chapter  11  Case,  any  claim  or legal or
equitable remedy which seeks subordination of the claim or Lien of Lender;

8.31 If, without Lender's consent,  an interim or permanent trustee is appointed
in the Chapter 11 Case, or an examiner with expanded powers to operate or manage
the financial affairs, the business, or reorganization of Borrowers is appointed
in the Chapter 11 Case; or

8.32 If an order by the Court is entered  granting  relief from or modifying the
automatic stay of Section 362 of the  Bankruptcy  Code (i) to allow any creditor
to execute upon or enforce a Lien on any Collateral, or (ii) with respect to any
Lien of or the  granting  of any Lien on any  Collateral  to any  state or local
environmental or regulatory agency or authority.

9.   LENDER'S RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default,  Lender may, at its election,  without  notice of its election
and  without  demand,  do any one or more of the  following,  all of  which  are
authorized by Borrowers:

                                     Page 75
<PAGE>
     (a) Declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan Documents, or otherwise, immediately due and payable;

     (b) Cease  advancing  money or  extending  credit to or for the  benefit of
Borrowers  under this Agreement,  under any of the Loan Documents,  or under any
other agreement between Borrowers and Lender;

     (c) Terminate  this Agreement and any of the other Loan Documents as to any
future liability or obligation of Lender,  but without affecting Lender's rights
and security interests in the Collateral and without affecting the Obligations;

     (d) Settle or adjust  disputes and claims directly with Account Debtors for
amounts  and upon terms which  Lender  considers  advisable,  and in such cases,
Lender will credit Borrowers' Loan Account with only the net amounts received by
Lender in payment of such disputed  Accounts after deducting all Lender Expenses
incurred or expended in connection therewith;

     (e) Cause  Borrowers  to hold all  returned  Inventory in trust for Lender,
segregate  all  returned  Inventory  from all other  property of Borrowers or in
Borrowers'  possession and  conspicuously  label said returned  Inventory as the
property of Lender;

     (f) Without notice to or demand upon Borrowers or any guarantor,  make such
payments and do such acts as Lender considers necessary or reasonable to protect
its  security  interests  in the  Collateral.  Borrowers  agree to assemble  the
Collateral if Lender so requires, and to make the Collateral available to Lender
as Lender may  reasonably  designate.  Borrowers  authorize  Lender to enter the
premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase,  contest, or compromise any
encumbrance,  charge, or Lien that in Lender's determination appears to conflict
with its  security  interests  and to pay all  expenses  incurred in  connection
therewith. With respect to any of Borrowers' owned or leased premises, Borrowers
hereby grant Lender a license to enter into  possession  of such premises and to
occupy the same,  without  charge,  for up to one hundred  twenty  (120) days in
order to exercise any of Lender's rights or remedies provided herein, at law, in
equity, or otherwise;

     (g) Without notice to Borrowers (such notice being expressly  waived),  and
without  constituting  a  retention  of any  collateral  in  satisfaction  of an
obligation  (within  the meaning of Section  11-9-505 of the Code),  set off and
apply to the  Obligations  any and all (i) balances and deposits of any Borrower
held by Lender (including any amounts received in the Blocked Accounts), or (ii)
indebtedness  at any  time  owing to or for the  credit  or the  account  of any
Borrower held by Lender;

     (h) Hold,  as cash  collateral,  any and all  balances  and deposits of any
Borrower held by Lender,  and any amounts received in the Blocked  Accounts,  to
secure the full and final repayment of all of the Obligations;

                                     Page 76
<PAGE>
     (i) Ship, reclaim,  recover, store, finish,  maintain,  repair, prepare for
sale,  advertise  for sale,  and sell (in the manner  provided  for  herein) the
Collateral.  Lender is hereby granted a non-exclusive  license or other right to
use, without charge,  Borrowers' labels, patents,  copyrights,  rights of use of
any name, trade secrets, trade names, trademarks, service marks, and advertising
matter,  or any property of a similar nature,  as it pertains to the Collateral,
in completing  production of,  advertising  for sale, and selling any Collateral
and  Borrowers'  rights under all licenses and all  franchise  agreements  shall
inure to  Lender's  benefit(to  the  extent  it does not  cause a  violation  or
forfeiture thereof);

     (j) Sell the Collateral at either a public or private sale, or both, by way
of one or more contracts or  transactions,  for cash or on terms, in such manner
and at such places  (including  Borrowers'  premises)  as Lender  determines  is
commercially  reasonable.  It is not necessary that the Collateral be present at
any such sale;

     (k) Lender  shall  give  notice of the  disposition  of the  Collateral  as
follows:

          (1) Lender shall give Borrowers and each holder of a security interest
     in the Collateral who has filed with Lender a written request for notice, a
     notice in writing of the time and place of public sale,  or, if the sale is
     a private sale or some other  disposition other than a public sale is to be
     made of the Collateral, then the time on or after which the private sale or
     other disposition is to be made;

          (2) The  notice  shall be  personally  delivered  or  mailed,  postage
     prepaid,  to  Borrowers  as  provided in Section 12, at least five (5) days
     before  the date fixed for the sale,  or at least five (5) days  before the
     date on or after which the private sale or other disposition is to be made;
     no notice needs to be given prior to the  disposition of any portion of the
     Collateral that is perishable or threatens to decline  speedily in value or
     that  is of a type  customarily  sold on a  recognized  market.  Notice  to
     Persons other than Borrowers  claiming an interest in the Collateral  shall
     be sent to such addresses as they have furnished to Lender;

          (3) If the sale is to be a public sale,  Lender also shall give notice
     of the time and place by  publishing  a notice  one time at least  five (5)
     days before the date of the sale in a newspaper of general  circulation  in
     the county in which the sale is to be held;

     (l) Lender may credit bid and purchase at any public sale;

     (m) Any  deficiency  that exists after  disposition  of the  Collateral  as
provided  above  will be paid  immediately  by  Borrowers.  Any  excess  will be
returned, without interest and subject to the rights of third Persons, by Lender
to Borrowers; and

                                     Page 77
<PAGE>
     (n) Borrowers  acknowledge  that the Obligations  arose out of a commercial
transaction,  and agree that if an Event of Default  shall  occur,  Lender shall
have the right to an immediate  writ of possession  without  notice of a hearing
provided,  however, that notwithstanding the foregoing, Lender agrees to give to
Borrowers and counsel approved by the Court for the Committee, at least five (5)
Business  Days'  notice  prior to the  exercise  of any  remedy in the nature of
liquidation of all or  substantially  all of the Collateral;  provided  further,
however, that such notice need only indicate that Lender intends to exercise one
or more remedies under one or more of the Loan  Documents,  at law or in equity,
and Lender shall not be required to specify any particular  remedy or the timing
thereof, nor shall such notice limit in any way Lender's discretion with respect
to the pursuit and timing of any available remedy,  nor shall Lender be required
to give more than one such notice.

9.2  Remedies Cumulative.

     Lender's rights and remedies under this Agreement,  the Loan Documents, the
Interim  Order,  the Final Order and all other  agreements  shall be cumulative.
Lender shall have all other rights and  remedies  not  inconsistent  herewith as
provided  under the Code,  by law,  or in equity.  No  exercise by Lender of one
right or  remedy  shall be deemed  an  election,  and no waiver by Lender of any
Event of Default shall be deemed a continuing  waiver.  No delay by Lender shall
constitute a waiver, election, or acquiescence by it.

10.  TAXES AND EXPENSES.

     If Borrowers fail to pay any monies (whether taxes, assessments,  insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third  Persons,  or fails to make any deposits
or furnish any required  proof of payment or deposit,  all as required under the
terms of this  Agreement,  then, to the extent that Lender  determines that such
failure by Borrowers  could  reasonably  be expected to have a Material  Adverse
Effect,  in its discretion and without prior notice to Borrowers,  Lender may do
any or all of the  following:  (a) make payment of the same or any part thereof;
(b) set up such reserves in Borrowers' Loan Account as Lender deems necessary to
protect  Lender from the  exposure  created by such  failure;  or (c) obtain and
maintain  insurance  policies of the type described in Section 6.6, and take any
action with respect to such policies as Lender deems  prudent.  Any such amounts
paid by Lender shall  constitute  Lender  Expenses.  Any such  payments  made by
Lender shall not  constitute an agreement by Lender to make similar  payments in
the future or a waiver by Lender of any Event of Default  under this  Agreement.
Lender  need not inquire as to, or contest the  validity  of, any such  expense,
tax,  or Lien and the  receipt  of the usual  official  notice  for the  payment
thereof shall be conclusive evidence that the same was validly due and owing.

11.  WAIVERS; INDEMNIFICATION.

                                     Page 78
<PAGE> 11.1 Demand; Protest; etc.

     Borrowers waive demand,  protest,  notice of protest,  notice of default or
dishonor,  notice of payment and  nonpayment,  nonpayment at maturity,  release,
compromise,   settlement,   extension,   or  renewal  of  accounts,   documents,
instruments,  chattel paper,  and guarantees at any time held by Lender on which
Borrowers may in any way be liable.

11.2 Lender's Liability for Collateral.

     So long as Lender  complies  with its  obligations,  if any,  under Section
11-9-207  of the  Code,  Lender  shall  not in any way or  manner  be  liable or
responsible  for: (a) the safekeeping of the Collateral;  (b) any loss or damage
thereto  occurring or arising in any manner or fashion  from any cause;  (c) any
diminution  in the value  thereof;  or (d) any act or  default  of any  carrier,
warehouseman,  bailee,  forwarding  agency,  or other Person.  All risk of loss,
damage, or destruction of the Collateral shall be borne by Borrowers.

11.3 Indemnification.

     Borrowers shall pay, indemnify,  defend, and hold Lender, each Participant,
and each of their respective officers,  directors,  employees,  counsel, agents,
and  attorneys-in-fact  (each, an "Indemnified Person") harmless (to the fullest
extent  permitted by law) from and against any and all claims,  demands,  suits,
actions, investigations, proceedings, and damages, and all reasonable attorneys'
fees and  disbursements  and  other  costs and  expenses  actually  incurred  in
connection  therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in  connection  with or as a  result  of or  related  to the  execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions  contemplated  herein, and with respect
to any investigation,  litigation,  or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission,  event  or  circumstance  in  any  manner  related  thereto  (all  the
foregoing, collectively, the "Indemnified Liabilities"). Borrowers shall have no
obligation to any Indemnified Person under this Section 11.3 with respect to any
Indemnified Liability that a court of competent  jurisdiction finally determines
to have  resulted  from the  gross  negligence  or  willful  misconduct  of such
Indemnified  Person.  This  provision  shall  survive  the  termination  of this
Agreement and the repayment of the Obligations.

12.  NOTICES.

     Unless otherwise provided in this Agreement,  all notices or demands by any
party  relating to this Agreement or any other Loan Document shall be in writing
and (except for financial statements and other informational documents which may
be sent by first-class mail,  postage prepaid) shall be personally  delivered or
sent by registered or certified mail (postage prepaid, return receipt

                                     Page 79
<PAGE>
requested),  overnight  courier,  or facsimile to Borrower or to Lender,  as the
case may be, at its address set forth below:

         If to Borrower:   VISTA EYECARE, INC.
                           296 Grayson Highway
                           Lawrenceville, Georgia 30045-5737
                           Attn: Chief Financial Officer
                           Fax No. (770) 822-2027

         with copies to:   VISTA EYECARE, INC.
                           296 Grayson Highway
                           Lawrenceville, Georgia 30045-5737
                           Attn: General Counsel
                           Fax No. (770) 822-2029

         with copies to:   Kilpatrick Stockton LLP
                           1100 Peachtree Street
                           Suite 2800
                           Atlanta, Georgia 30309
                           Attn: Joel Piassick, Esq.
                           Fax No. (404) 815-6555

         If to Lender:     FOOTHILL CAPITAL CORPORATION
                           60 State Street
                           Suite 1150
                           Boston, Massachussetts 02109
                           Attn:  Account Executive
                           Fax: (617) 722-9493

         with copies to:   Paul, Hastings, Janofsky & Walker LLP
                           600 Peachtree Street, N.E., Suite 2400
                           Atlanta, Georgia 30308
                           Attn: Jesse H. Austin, III, Esq.
                           Fax No. (404) 815-2424

     The  parties  hereto may  change  the  address at which they are to receive
notices  hereunder,  by notice in writing in the  foregoing  manner given to the
other.  All notices or demands  sent in  accordance  with this Section 12, other
than notices by Lender in connection  with Sections  11-9-504 or 11-9-505 of the
Code,  shall be deemed  received on the earlier of the date of actual receipt or
three  (3)  Business  Days  after the  deposit  thereof  in the mail.  Borrowers
acknowledge  and agree that notices sent by Lender in  connection  with Sections
11-9-504 or 11-9-505 of the Code shall be deemed sent when deposited in the mail
or personally  delivered,  or, where permitted by law, transmitted  facsimile or
other similar method set forth above.

                                     Page 80
<PAGE>
13.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

     THE  VALIDITY  OF THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS  (UNLESS
EXPRESSLY   PROVIDED  TO  THE  CONTRARY  IN  ANY  OTHER  LOAN   DOCUMENT),   THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING  HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED  UNDER,  GOVERNED
BY, AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF  GEORGIA.  THE
PARTIES AGREE THAT ALL ACTIONS OR  PROCEEDINGS  ARISING IN CONNECTION  WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS  SHALL BE TRIED AND LITIGATED ONLY IN THE
COURT.

14.  DESTRUCTION OF BORROWERS' DOCUMENTS.

     All documents,  schedules,  invoices,  agings, or other papers delivered to
Lender may be destroyed or otherwise disposed of by Lender four (4) months after
they are  delivered  to or  received by Lender,  unless  Borrowers  request,  in
writing,  the return of said  documents,  schedules,  or other  papers and makes
arrangements, at Borrowers' expense, for their return.

15.  GENERAL PROVISIONS.

15.1 Effectiveness.

     This  Agreement  shall be binding  and deemed  effective  when  executed by
Borrowers and Lender.

15.2 Successors and Assigns.

     This  Agreement  shall  bind and  inure to the  benefit  of the  respective
successors  and assigns of each of the parties,  including,  with respect to the
Borrowers,  the estates of  Borrowers,  any trustee or  successor in interest of
Borrowers in the Chapter 11 Case or any subsequent case or cases commenced under
Chapter 7 of the  Bankruptcy  Code;  provided,  however,  that Borrowers may not
assign this Agreement or any rights or duties  hereunder  without Lender's prior
written  consent and any  prohibited  assignment  shall be  absolutely  void. No
consent  to  an  assignment  by  Lender  shall  release   Borrowers  from  their
Obligations.  Lender  may  assign  this  Agreement  and its  rights  and  duties
hereunder and no consent or approval by Borrowers is required in connection with
any such  assignment.  Lender  reserves  the  right to sell,  assign,  transfer,
negotiate,  or grant  participations  in all or any part of, or any  interest in
Lender's rights and benefits  hereunder.  In connection with any such assignment
or participation, Lender may disclose all documents and information which Lender
now or hereafter may have relating to Borrowers or Borrowers'  business.  To the
extent that Lender assigns its rights and obligations  with respect to the Loans
and the  commitment  hereunder to a third  Person,  Lender  thereafter  shall be
released from such assigned  obligations to Borrowers and such assignment  shall
effect a novation between  Borrowers and such third Person.  With respect to any
Person that purchases any portion of Lender's rights and obligations under this

                                     Page 81
<PAGE>
Agreement  pursuant to the terms of this  Section  15.2,  such  Person  shall be
entitled  (i) to all of the  benefits  of  Section  11.3  hereof and (ii) to the
payment of all Lender  Expenses and expenses of the type  described in paragraph
(c) of the Fee Letter as if such Person were the "Lender" as defined  herein and
in the Fee Letter.

15.3 Section Headings.

     Headings  and  numbers  have been set forth  herein for  convenience  only.
Unless the contrary is compelled  by the context,  everything  contained in each
section applies equally to this entire Agreement.

15.4 Interpretation.

     Neither this  Agreement nor any  uncertainty  or ambiguity  herein shall be
construed or resolved  against  Lender or  Borrowers,  whether under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
all parties and shall be  construed  and  interpreted  according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of all parties hereto.

15.5 Severability of Provisions.

     Each  provision  of this  Agreement  shall be  severable  from every  other
provision  of  this  Agreement  for  the  purpose  of   determining   the  legal
enforceability of any specific provision.

15.6 Amendments in Writing.

     This  Agreement  can only be  amended  by a writing  signed  by Lender  and
Borrowers.

15.7 Counterparts; Facsimile Execution.

     This  Agreement  may be  executed  in any  number  of  counterparts  and by
different  parties on separate  counterparts,  each of which,  when executed and
delivered,  shall be deemed to be an  original,  and all of  which,  when  taken
together,  shall  constitute  but one and the  same  Agreement.  Delivery  of an
executed  counterpart  of this  Agreement  by  facsimile  shall  be  equally  as
effective as delivery of an original executed counterpart of this Agreement. Any
party  delivering an executed  counterpart  of this  Agreement by facsimile also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver  an  original  executed  counterpart  shall not affect the  validity,
enforceability, and binding effect of this Agreement.

15.8 Revival and Reinstatement of Obligations.

     If the  incurrence  or  payment  of the  Obligations  by  Borrowers  or any
guarantor of the Obligations or the transfer by either or both of such parties

                                     Page 82
<PAGE>
to Lender of any  property  of either  or both of such  parties  should  for any
reason  subsequently  be  declared  to be void or  voidable  under  any state or
federal  law  relating  to  creditors'  rights,   including  provisions  of  the
Bankruptcy  Code  relating to  fraudulent  conveyances,  preferences,  and other
voidable   or   recoverable   payments  of  money  or   transfers   of  property
(collectively,  a  "Voidable  Transfer"),  and if Lender is required to repay or
restore,  in whole or in part,  any such Voidable  Transfer,  or elects to do so
upon the  reasonable  advice  of its  counsel,  then,  as to any  such  Voidable
Transfer,  or the amount  thereof  that Lender is required or elects to repay or
restore, and as to all reasonable costs, expenses, and attorneys' fees of Lender
related  thereto,  the  liability of Borrowers or such  guarantor  automatically
shall be  revived,  reinstated,  and  restored  and shall  exist as though  such
Voidable Transfer had never been made.

15.9 Integration.

     This Agreement, together with the other Loan Documents, reflects the entire
understanding  of the  parties  with  respect to the  transactions  contemplated
hereby and shall not be contradicted or qualified by any other  agreement,  oral
or written, before the date hereof.

15.10 Time is of the Essence. Time is of the essence of this Agreement.

15.11 Pre-Relief Date Loan Agreement.

     Borrowers  hereby agree that this  Agreement is separate and distinct  from
the Pre-Relief  Date Loan  Agreement,  the Pre-Relief  Date Loan Agreement is in
full force and effect, and by entering into this Agreement Lender does not waive
any  Defaults or Events of Default  under the  Pre-Relief  Date Loan  Agreement;
provided,  however,  that so long as Section  2.11 of this  Agreement is in full
force and effect, the fees described in Section 2.11 of the Pre-Relief Date Loan
Agreement  shall not be owed by any  Borrower.  In the event  that the  adequate
protection  allowances granted pursuant to either the Interim Order or the Final
Order  are  inadequate,  Lender  reserves  its  right  to seek  relief  from the
automatic  stay  to  exercise  its  remedies  under  the  Pre-Relief  Date  Loan
Agreement.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                    Paage 83
<PAGE>
                SIGNATURE PAGE TO SENIOR SECURED, SUPER-PRIORITY
                DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed in Atlanta, Georgia.

                               VISTA EYECARE, INC.,
                               a Georgia corporation, as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               INTERNATIONAL VISION ASSOCIATES, LTD.,
                                  as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               NVAL HEALTHCARE SYSTEMS, INC.,
                                  as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title Vice President

                               MIDWEST VISION, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                                    Page S-1
<PAGE>
                               FRAME-N-LENS OPTICAL, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               FAMILY VISION CENTERS, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               VISION ADMINISTRATORS, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               NEW WEST EYEWORKS, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               ALEXIS HOLDING COMPANY, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                                    Page S-2
<PAGE>
                               VISTA EYECARE NETWORK, LLC, as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               VISTA OPTICAL EXPRESS, INC., as Debtor and
                              Debtor-in-Possession

                               By: /s/ Peter Socha
                                Name: Peter Socha
                              Title: Vice President

                               FOOTHILL       CAPITAL
                               CORPORATION,         a
                             California corporation
                               with  an   office   in
                              Atlanta, Georgia, as
                               lender and as agent
                             for itself and certain
                                  other Persons

                               By:  /s/ Todd W. Colpitts
                             Name: Todd W. Colpitts
                              Title: Vice President

                                    Page S-3<TABLE>

                                                               Exhibit A
<S>        <C>                       <C>             <C>                         <C>

-----------------------------------------------------------------------------------------------------------------------
                             VISTA EMPLOYEE RETENTION / PERFORMANCE COMPENSATION PROGRAMS
---------- ------------------------- -------------- --------------------------- ---------------------------------------
  Level    Position                    Number of                                                 When
                                     Participants            Payment                           Payable
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    1      Retail Managers                800        $1,000 (may be increased                20% - July 1
                                                     up to a total of 10% of               20% - October 1
                                                      base salary subject to                  60% - (A)
                                                      management discretion)
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    2      Support Managers               21         12% of base salary (may                 20% - July 1
                                                       be increased up to a                20% - October 1
                                                       total of 15% of base                   60% - (A)
                                                        salary subject to
                                                      management discretion)
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    3      District Managers              73            25% of base salary                   20% - July 1
                                                                                           20% - October 1
                                                                                              60% - (A)
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    4      Directors of Operations        18            35% of base salary                   20% - July 1
                                                                                           20% - October 1
                                                                                              60% - (A)
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    5      Vice Presidents                13            50% of base salary                  20% - August 1
                                                                                           20% - December 1
                                                                                60% - confirmation of chapter 11 plan
                                                                                    Severance - 12 months base (C)
---------- ------------------------- -------------- --------------------------- ---------------------------------------
    6      Senior Management              10           as set forth herein              15% of base - August 1
                                                                                       15% of base - December 1
                                                                                           Performance (B)
                                                                                    Severance - 12 months base (C)
========== ========================= ============== =========================== =======================================
           TOTAL                          935                   --                                --
---------- ------------------------- -------------- --------------------------- ---------------------------------------

</TABLE>
<PAGE>

          (A)

          60%,  and  prior  40% to the  extent  not  already  paid,  payable  if
          participant actively employed:
                  (i)      on  the  closing  of  a  transaction   involving  the
                           Debtors' sale, reorganization or merger where control
                           of the  Debtors'  business is directly or  indirectly
                           transferred  to  another  employer  (to the  extent a
                           transaction  is closed  that  involves  less that the
                           entirety  of  the  Debtors'   business,   only  those
                           participants   employed  by  the  Debtors'   business
                           subject  to  the  transaction   will  qualify  to  be
                           eligible for the payment);
                  (ii) on the confirmation of a chapter 11 plan of
                           reorganization or plan of liquidation for the
                           Debtors;
                  (iii) on the date the Debtors' cases are converted
                           from chapter 11 to chapter 7 of the
                           Bankruptcy Code; or
                  (iv) the date of involuntary termination other than
                           for cause.

         (B)

         Performance  compensation  payable upon criteria to be  established  by
         Debtor in consultation with the Creditors  Committee.  Maximum possible
         amount  of  performance  compensation  to be not less  than 70% of base
         salary upon satisfaction of agreed criteria.  Performance  compensation
         will incorporate a regular incentive plan for Level 6 participants plus
         any appropriate incentives related to chapter 11.

         (C)
         12 months base salary payable in lump sum upon involuntary  termination
         other than for cause.

         OTHER
         - All regular incentive plans to remain in effect except for Level 6.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]