Document:

Prepared by MERRILL CORPORATION

EXHIBIT 10.48

TABLE

OF CONTENTS

	

  ARTICLE I SECURITY INTERESTS

  	

   

  
	

  1.1  GRANT OF SECURITY INTERESTS

  	

   

  
	

  1.2 

  POWER OF ATTORNEY

  	

   

  
	

  ARTICLE

  II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

  	

   

  
	

  2.1  CHIEF EXECUTIVE OFFICE/INVENTORY AND

  EQUIPMENT LOCATIONS

  	

   

  
	

  2.2  STATE OF INCORPORATION

  	

   

  
	

  2.3  TRADE NAMES; CHANGE OF NAME

  	

   

  
	

  ARTICLE III

  PROVISIONS CONCERNING ALL COLLATERAL

  	

   

  
	

  3.1  PROTECTION OF ADMINISTRATIVE AGENT’S

  SECURITY

  	

   

  
	

  3.2  WAREHOUSE RECEIPTS NON-NEGOTIABLE; THIRD-PARTY

  ACKNOWLEDGMENTS

  	

   

  
	

  3.3 

  FURTHER ACTIONS

  	

   

  
	

  3.4  FINANCING STATEMENTS

  	

   

  
	

  ARTICLE

  IV REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

  	

   

  
	

  4.1  REMEDIES; OBTAINING THE COLLATERAL UPON

  DEFAULT

  	

   

  
	

  4.2  REMEDIES; DISPOSITION OF THE COLLATERAL

  	

   

  
	

  4.3 

  WAIVER OF CLAIMS

  	

   

  
	

  4.4  APPLICATION OF PROCEEDS

  	

   

  
	

  4.5  REMEDIES CUMULATIVE

  	

   

  
	

  4.6  DISCONTINUANCE OF PROCEEDINGS

  	

   

  
	

  ARTICLE V INDEMNITY

  	

   

  
	

  5.1 

  INDEMNITY

  	

   

  
	

  5.2  INDEMNITY OBLIGATIONS SECURED BY

  COLLATERAL; SURVIVAL

  	

   

  
	

  ARTICLE VI DEFINITIONS

  	

   

  
	

  ARTICLE VII MISCELLANEOUS

  	

   

  
	

  7.1 

  NOTICES

  	

   

  
	

  7.2 

  WAIVER; AMENDMENT

  	

   

  
	

  7.3  OBLIGATIONS ABSOLUTE

  	

   

  
	

  7.4  SUCCESSORS AND ASSIGNS

  	

   

  
	

  7.5  HEADINGS DESCRIPTIVE

  	

   

  
	

  7.6 

  SEVERABILITY

  	

   

  
	

  7.7 

  GOVERNING LAW

  	

   

  
	

  7.8  EACH GUARANTOR’S DUTIES

  	

   

  
	

  7.9  TERMINATION; RELEASE

  	

   

  
	

  7.10 

  COUNTERPARTS

  	

   

  
	

  7.11  THE ADMINISTRATIVE AGENT

  	

   

  
	

   

  	

   

  
	

  ARTICLE VIII

  	

   

  
	

   

  	

   

  
	

  ANNEX A    SCHEDULE OF CHIEF EXECUTIVE OFFICES

  	

   

  
	

  ANNEX B    SCHEDULE OF INVENTORY AND EQUIPMENT

  LOCATIONS

  	

   

  
	

  ANNEX C    SCHEDULE OF TRADE, FICTITIOUS AND OTHER

  NAMES

  	

   

  

 

SUBSIDIARY

GUARANTOR SECURITY AGREEMENT

THIS SUBSIDIARY

GUARANTOR SECURITY AGREEMENT (this "Agreement"), dated as of

October 12, 2001, is among the undersigned (each an “Guarantor”

and, together with any other entity that becomes party hereto pursuant to Section

7.13 hereof, collectively, the "Guarantors"), BANKERS

TRUST COMPANY, as administrative agent (the “Administrative Agent”) and

U.S. BANK NATIONAL ASSOCIATION ("US Bank") for the benefit of

(i) the Lenders and the Agent under the Credit Agreement hereinafter referred

to (such Lenders and the Agent are hereinafter called the “Bank Creditors”),

(ii) if one or more Lenders (or any Affiliate thereof) enter into one or more

(A) interest rate protection agreements (including, without limitation,

interest rate swaps, caps, floors, collars and similar agreements),

(B) foreign exchange contracts, currency swap agreements or other similar

agreements or arrangements designed to protect against the fluctuations in

currency values and/or (C) other types of hedging agreements from time to

time (collectively, the “Interest Rate Protection or Other Hedging

Agreements”) with, or guaranteed by, Borrower, any such Lender or Lenders

or any Affiliate of such Lender or Lenders (even if the respective Lender

subsequently ceases to be a Lender under the Credit Agreement for any reason)

so long as any such Lender or Affiliate participates in the extension of such

Interest Rate Protection or Other Hedging Agreements and their subsequent

assigns, if any (collectively, the “Other Creditors”) and (iii) US Bank

as lender under the US Bank Letter of Credit Facility (as defined below) (the

"LC Creditor" and, together with the Other Creditors and the

Bank Creditors, hereinafter called the “Secured Creditors”).  Except as otherwise defined herein, terms

used herein and defined in the Credit Agreement (as hereinafter defined) shall

be used herein as so defined.

W I T N E S S E T H :

WHEREAS, BMC

Industries, Inc. (the "Borrower"), the financial institutions

(the “Lenders”) from time to time party thereto and Bankers Trust

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

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

25, 1998, providing for the making of Loans and the issuance of, and

participation in, Letters of Credit as contemplated therein (as used herein,

the term “Credit Agreement” means the Credit Agreement described above

in this paragraph, as in effect on the date hereof and as amended by that certain

Second Amendment and Restatement Agreement dated as of the date hereof, as the

same may be amended, modified, extended, renewed, replaced, restated or

supplemented from time to time, and including any agreement extending the

maturity of or restructuring of all or any portion of the Indebtedness under

such agreement or any successor agreements);

WHEREAS, Borrower

may at any time and from time to time enter into, or guarantee, one or more

Interest Rate Protection or Other Hedging Agreements with one or more Other

Creditors;

WHEREAS, pursuant

to the Amended and Restated Subsidiary Guarantee Agreement, dated the date

hereof, each Guarantor has jointly and severally guaranteed to the Secured

Creditors the payment when due of certain obligations of Borrower and each

Guarantor under or with respect to the Loan Documents, the Interest Rate

Protection or Other Hedging Agreements and the US Bank Letter of Credit

Facility (provided that at no time shall there be more than $2,000,000 under

the US Bank Letter of Credit Facility secured by the Security Documents);

WHEREAS, it is a

condition precedent to each of the above-described extensions of credit that

each Guarantor shall have executed and delivered this Agreement; and

WHEREAS, each

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

condition described in the preceding paragraph;

NOW, THEREFORE, in

consideration of the extensions of credit to be made to Borrower and other

benefits accruing to each Guarantor, the receipt and sufficiency of which are

hereby acknowledged, each Guarantor hereby makes the following representations

and warranties to the Administrative Agent for the benefit of the Secured

Creditors and hereby covenants and agrees with the Administrative Agent for the

benefit of the Secured Creditors as follows:

ARTICLE I

SECURITY INTERESTS

 

1.1           Grant

of Security Interests. 

(a)  As security for the prompt and complete payment and

performance when due of all of the Obligations, each Guarantor does hereby

pledge and grant to the Administrative Agent for the benefit of the Secured

Creditors, a continuing security interest of first priority (subject to Liens

evidenced by Permitted Filings and other Permitted Liens) in, all of the right,

title and interest of such Guarantor in, to and under all of the following,

whether now existing or hereafter from time to time acquired:  (i) each and every Account, (ii) all

Contracts, together with all Contract Rights arising thereunder, (iii) all

Inventory, (iv) all Equipment, (v) all other Goods, General Intangibles,

Chattel Paper, Documents, Investment Property and Instruments, and (vi) all

Proceeds and products of any and all of the foregoing (all of the above,

collectively, the “Collateral”).

 

(b)  The

security interests of the Administrative Agent under this Agreement extend to

all Collateral of the kind which is the subject of this Agreement which any

Guarantor may acquire at any time during the continuation of this Agreement.

1.2           Power

of Attorney.  Each Guarantor hereby constitutes and

appoints the Administrative Agent its true and lawful attorney, with full power

after the occurrence of and during the continuance of an Event of Default (in

the name of such Guarantor or otherwise), in the Administrative Agent’s

reasonable discretion, to take any action and to execute any instrument

required by this Agreement if such Guarantor has failed to do so after demand

by the Administrative Agent.

 

ARTICLE II

GENERAL

REPRESENTATIONS WARRANTIES AND COVENANTS

 

Each Guarantor

represents, warrants and covenants, which representations, warranties and

covenants shall survive execution and delivery of this Agreement, as follows:

2.1           Chief Executive Office/Inventory and

Equipment Locations.  The chief executive office of such Guarantor

is located at the address indicated on Annex A hereto.  All Inventory and Equipment held on the date

hereof by such Guarantor is located at one of the locations shown on Annex B

hereto (other than (i) immaterial portions of Inventory or Equipment or (ii)

Equipment out for repair).    Prior to

January 1, 2002, such Guarantor shall not (x) move its chief executive office

to any of the States of Mississippi, Alabama or Florida, or (y) move any

Inventory or Equipment to any of the States of Mississippi, Alabama or Florida

until (i) it shall have given to the Administrative Agent not less than 30

days’ prior written notice of its intention to do so, (ii) with respect to such

move, it shall have taken all action, reasonably satisfactory to the

Administrative Agent, to maintain the security interest of the Administrative

Agent in the Collateral intended to be granted and perfected under the Uniform

Commercial Code hereby at all times fully perfected and in full force and

effect, (iii) at the reasonable request of the Administrative Agent, it shall have

furnished a customary opinion of counsel reasonably acceptable to the

Administrative Agent to the effect that all financing or continuation

statements and amendments or supplements thereto have been filed in the

appropriate filing office or offices, and all other actions (including, without

limitation, the payment of all filing fees and taxes, if any, payable in

connection with such filings) have been taken, in order to perfect (and

maintain the perfection and priority of) the security interest granted hereby

and (iv) the Administrative Agent shall have received evidence that all other

actions (including, without limitation, the payment of all filing fees and

taxes, if any, payable in connection with such filings) have been taken, in

order to perfect (and maintain the perfection and priority of) the security

interest granted hereby.

 

2.2           State of Incorporation.  The state of incorporation of each Guarantor

is indicated on Annex A hereto. 

No Guarantor will change its state of incorporation except as in accordance

with the last sentence of this Section 2.2.  No Guarantor shall establish a new state of incorporation until

(i) it shall have given to the Administrative Agent not less than 30 days’

prior written notice of its intention to do so, clearly describing such new

state of incorporation and providing such other information in connection

therewith as the Administrative Agent may reasonably request, (ii) with respect

to such new state of incorporation, it shall have taken all action, reasonably

satisfactory to the Administrative Agent, to maintain the security interest of

the Administrative Agent in the Collateral intended to be granted and perfected

under the Uniform Commercial Code hereby at all times fully perfected and in

full force and effect, (iii) at the reasonable request of the Administrative

Agent, it shall have furnished a customary opinion of counsel reasonably

acceptable to the Administrative Agent to the effect that all financing or

continuation statements and amendments or supplements thereto have been filed

in the appropriate filing office or offices, and all other actions (including,

without limitation, the payment of all filing fees and taxes, if any, payable

in connection with such filings) have been taken, in order to perfect (and

maintain the perfection and priority of) the security interest granted hereby

and (iv) the Administrative Agent shall have received evidence that all other

actions (including, without limitation, the payment of all filing fees and

taxes, if any, payable in connection with such filings have been taken, in

order to perfect (and maintain the perfection and priority of) the security

interest granted hereby.

 

2.3           Trade Names; Change of Name.  No Guarantor operates in any jurisdiction

under, nor in the preceding 12 months has operated in any jurisdiction under,

any trade names, fictitious names or other names (including, without

limitation, any names of divisions or operations) except its legal name and

such other trade, fictitious or other names as are listed on Annex C

hereto.  The corporation identification

number or other applicable formation identification number shall be set forth

across from the exact legal name of each Guarantor identified in Annex C.  No Guarantor shall change its legal name or

assume or operate in any jurisdiction under any trade, fictitious or other name

in any manner which might make any financing statement or continuation

statement filed in connection therewith seriously misleading except those names

listed on Annex C hereto and new names (including, without limitation,

any names of divisions or operations) established in accordance with the last

sentence of this Section 2.3.  No

Guarantor shall assume or operate in any jurisdiction under any new trade,

fictitious or other name that would make any financing statement or

continuation statement filed in connection therewith, seriously misleading

until (i) it shall have given to the Administrative Agent not less than 30

days’ prior written notice of its intention so to do, clearly describing such new

name and the jurisdictions in which such new name shall be used and providing

such other information in connection therewith as the Administrative Agent may

reasonably request, (ii) with respect to such new name, it shall have taken all

action to maintain the security interest of the Administrative Agent in the

Collateral intended to be granted hereby at all times fully perfected and in

full force and effect, (iii) at the reasonable request of the Administrative

Agent, it shall have furnished a customary opinion of counsel

reasonably acceptable to the Administrative Agent to the effect that all

financing or continuation statements and amendments or supplements thereto have

been filed in the appropriate filing office or offices, and (iv) the Administrative

Agent shall have received evidence that all other actions (including, without

limitation, the payment of all filing fees and taxes, if any, payable in

connection with such filings) have been taken, in order to perfect (and

maintain the perfection and priority of) the security interest granted hereby.

 

 

ARTICLE III

PROVISIONS CONCERNING ALL COLLATERAL

 

3.1           Protection of Administrative Agent’s

Security.  No Guarantor will do anything to impair the

rights of the Administrative Agent in the Collateral other than dispositions,

the creation of Liens and other encumbrances and other actions permitted

hereunder and under the Credit Agreement and other Loan Documents.

 

3.2           Warehouse Receipts Non-Negotiable;

Third-Party Acknowledgments.  Each Guarantor agrees that if any warehouse

receipt or receipt in the nature of a warehouse receipt is issued with respect

to any of its Inventory, such warehouse receipt or receipt in the nature

thereof shall not be “negotiable” (as such term is used in Section 7-104

of the Uniform Commercial Code as in effect in any relevant jurisdiction or

under other relevant law).  Where

Collateral with a fair market value of greater than $100,000 is in the

possession of a third party, each Guarantor will join with the Administrative

Agent in notifying the third party of the Administrative Agent's security

interest and obtaining an acknowledgment from the third party that it is

holding the Collateral for the benefit of the Administrative Agent.

 

3.3           Further Actions. 

Each Guarantor will, at its own expense, make, execute, endorse,

acknowledge, file and/or deliver to the Administrative Agent from time to time

such lists, descriptions and designations of its Collateral, warehouse

receipts, receipts in the nature of warehouse receipts, bills of lading,

documents of title, vouchers, invoices, schedules, confirmatory assignments,

conveyances, financing statements, transfer endorsements, powers of attorney,

certificates, reports and other assurances or instruments and take such further

steps relating to the Collateral and other property or rights covered by the

security interest hereby granted, which the Administrative Agent deems

reasonably appropriate or advisable to perfect, preserve or protect its

security interest in the Collateral.  Notwithstanding any other provision of this

Agreement, so long as no Unmatured Event of Default or Event of Default shall

have occurred and be continuing, the only obligation of any Guarantor arising

hereunder in connection with the perfection of the security interests granted

in the Collateral listed in Sections 1.1(a)(ii) and (v) above (and Section

1.1(a)(vi), but solely to the extent it relates to Sections 1.1(a)(ii)

and (v)) shall be to deliver financing statements pursuant to Section

3.4 below.

 

3.4           Financing Statements. 

Each Guarantor agrees to deliver to the Administrative Agent such

financing statements, in form reasonably acceptable to the Administrative

Agent, as the Administrative Agent may from time to time reasonably request or

as are reasonably  necessary (or desirable

in the reasonable opinion of the Administrative Agent) to establish and

maintain a valid, enforceable, first priority perfected security interest

(subject only to Permitted Liens) in the Collateral as provided herein and the

other rights and security contemplated hereby all in accordance with the

Uniform Commercial Code as enacted in any and all relevant jurisdictions or any

other relevant law.  Each Guarantor will

pay any applicable filing fees, recordation taxes and related expenses relating

to its Collateral.  Each Guarantor

hereby authorizes the Administrative Agent to file any such Uniform Commercial

Code financing statements without the signature of such Guarantor where

permitted by law.

 

ARTICLE IV

REMEDIES UPON OCCURRENCE OF EVENT OF

DEFAULT

 

4.1           Remedies; Obtaining the Collateral Upon

Default.  Each Guarantor agrees that, if any Event of

Default shall have occurred and be continuing, then and in every such case,

subject to any mandatory requirements of applicable law then in effect, the

Administrative Agent, in addition to any rights now or hereafter existing under

applicable law, shall have all rights as a secured creditor under the Uniform

Commercial Code in all relevant jurisdictions and may:

 

(a)           personally, or by agents or

attorneys, immediately take possession of the Collateral or any part thereof,

from such Guarantor or any other Person who then has possession of any part

thereof with or without notice or process of law, and for that purpose may

enter upon such Guarantor’s premises where any of the Collateral is located and

remove the same and use in connection with such removal any and all services,

supplies, aids and other facilities of such Guarantor; and

(b)           instruct the obligor or obligors on

any agreement, instrument or other obligation (including, without limitation,

the Accounts and the Contracts) constituting the Collateral to make any payment

required by the terms of such agreement, instrument or other obligation

directly to the Administrative Agent and may exercise any and all remedies of

such Guarantor in respect of such Collateral; and

 (c)          sell,

assign or otherwise liquidate, or direct such Guarantor to sell, assign or

otherwise liquidate, any or all of the Collateral or any part thereof, and take

possession of the proceeds of any such sale or liquidation; and

(d)           take possession of the Collateral or

any part thereof, by directing such Guarantor in writing to deliver the same to

the Administrative Agent at any place or places reasonably designated by the

Administrative Agent, in which event such Guarantor shall at its own expense:

(i)            forthwith cause the same to be moved

to the place or places so designated by the Administrative Agent and there

delivered to the Administrative Agent, and

(ii)           store and keep any Collateral so delivered

to the Administrative Agent at such place or places pending further action by

the Administrative Agent as provided in Section 6.2 hereof, and

(iii)          while the Collateral shall be so

stored and kept, provide such guards and maintenance services as shall be

necessary to protect the same and to preserve and maintain them in good

condition; and

it being understood that

each Guarantor’s obligation so to deliver the Collateral is of the essence of

this Agreement and that, accordingly, upon application to a court of equity

having jurisdiction, the Administrative Agent shall be entitled to seek a

decree requiring specific performance by such Guarantor of said obligation.

4.2           Remedies;

Disposition of the Collateral.  If an Event of Default shall have occurred and

be continuing, then any Collateral repossessed by the Administrative Agent

under or pursuant to Section 4.1 hereof and any other Collateral whether

or not so repossessed by the Administrative Agent, may be sold, assigned,

leased or otherwise disposed of under one or more contracts or as an entirety,

and without the necessity of gathering at the place of sale the property to be

sold, and in general in such manner, at such time or times, at such place or

places and on such terms as the Administrative Agent may, in compliance with

any mandatory requirements of applicable law, determine to be commercially

reasonable.  Any of the Collateral may

be so sold, leased or otherwise disposed of, in the condition in which the same

existed when taken by the Administrative Agent or after any overhaul or repair

at the expense of the relevant Guarantor which the Administrative Agent shall

determine to be commercially reasonable. 

Any such disposition which shall be a private sale or other private

proceedings permitted by such requirements shall be made upon not less than 10

days’ written notice to the relevant Guarantor specifying the time at which

such disposition is to be made and the intended sale price or other

consideration therefor, and shall be subject, for the 10 days after the giving

of such notice, to the right of such Guarantor or any nominee of such Guarantor

to acquire the Collateral involved at a price or for such other consideration

at least equal to the intended sale price or other consideration so specified.  Any such disposition which shall be a public

sale permitted by such requirements shall be made upon not less than 10 days’

written notice to the relevant Guarantor specifying the time and place of such

sale and, in the absence of applicable requirements of law, shall be by public

auction (which may, at the Administrative Agent’s option, be subject to

reserve), after publication of notice of such auction not less than 10 days

prior thereto in two newspapers in general circulation in the City of New York

or in such other locations as may be necessary in order for the sale to be

"commercially reasonable" (as such term is used in Article 9 Part V

of the New York Uniform Commercial Code). 

To the extent permitted by any such requirement of law, the Administrative

Agent and the Secured Creditors may bid for and become the purchaser of the

Collateral or any item thereof, offered for sale in accordance with this

Section without accountability to such Guarantor.  If, under mandatory requirements of applicable law, the

Administrative Agent shall be required to make disposition of the Collateral

within a period of time which does not permit the giving of notice to the

relevant Guarantor as hereinabove specified, the Administrative Agent need give

such Guarantor only such notice of disposition as shall be reasonably

practicable in view of such mandatory requirements of applicable law.  Each Guarantor agrees to do or cause to be

done all such other acts and things as may be reasonably necessary to make such

sale or sales of all or any portion of the Collateral valid and binding and in

compliance with any and all applicable laws, regulations, orders, writs,

injunctions, decrees or awards of any and all courts, arbitrators or

governmental instrumentalities, domestic or foreign, having jurisdiction over

any such sale or sales, all at such Guarantor’s expense.

 

4.3           Waiver of Claims. 

Except as otherwise provided in this Agreement, EACH GUARANTOR HEREBY

WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING

IN CONNECTION WITH THE ADMINISTRATIVE AGENT’S TAKING POSSESSION OR THE

ADMINISTRATIVE AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT

LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR

REMEDIES AND ANY SUCH RIGHT WHICH SUCH GUARANTOR WOULD OTHERWISE HAVE UNDER THE

CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and each

Guarantor hereby further waives, to the extent permitted by law:

 

(a)           all damages occasioned by such taking

of possession except any damages which are the direct result of the

Administrative Agent’s gross negligence or willful misconduct;

(b)           all other requirements as to the

time, place and terms of sale or other requirements with respect to the

enforcement of the Administrative Agent’s rights hereunder; and

(c)           all rights of redemption,

appraisement, valuation, stay, extension or moratorium now or hereafter in

force under any applicable law in order to prevent or delay the enforcement of

this Agreement or the absolute sale of the Collateral or any portion thereof,

and such Guarantor, for itself and all who may claim under it, insofar as it or

they now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant

of options to purchase, or any other realization upon, any Collateral shall

operate to divest all right, title, interest, claim and demand, either at law

or in equity, of such Guarantor therein and thereto, and shall be a perpetual

bar both at law and in equity against such Guarantor and against any and all

Persons claiming or attempting to claim the Collateral so sold, optioned or

realized upon, or any part thereof, from, through and under such Guarantor.

4.4           Application of Proceeds.  (a) 

All moneys collected by the Administrative Agent (or, to the extent the

Pledge Agreement or any Mortgage to which any Guarantor is a party requires

proceeds of Collateral under such agreement to be applied in accordance with

the provisions of this Agreement, the Pledgee or Mortgagee under such other agreement)

upon any sale or other disposition of the Collateral, together with all other

moneys received by the Administrative Agent hereunder, shall be applied as

follows:  (i) first, to the payment of

all amounts owing the Administrative Agent of the type described in clauses

(iii) and (iv) of the definition of “Obligations”;

(ii)           second, to the extent proceeds remain

after the application pursuant to the preceding clause (i), an amount equal to

the outstanding Primary Obligations shall be paid to the Secured Creditors as

provided in Section 4.4(e) hereof, with each Secured Creditor receiving

an amount equal to such outstanding Primary Obligations or, if the proceeds are

insufficient to pay in full all such Primary Obligations, its Pro Rata Share of

the amount remaining to be distributed;

(iii)          third, to the extent proceeds remain

after the application pursuant to the preceding clauses (i) and (ii), an amount

equal to the outstanding Secondary Obligations shall be paid to the Secured

Creditors as provided in Section 4.4(e), with each Secured Creditor

receiving an amount equal to its outstanding Secondary Obligations or, if the

proceeds are insufficient to pay in full all such Secondary Obligations, its

Pro Rata Share of the amount remaining to be distributed; and

(iv)          fourth, to the extent proceeds remain

after the application pursuant to the preceding clauses (i) through (iii),

inclusive, and following the termination of this Agreement pursuant to Section

7.9(a) hereof, to such Guarantor or to whomever may be lawfully entitled to

receive such surplus.

(b)           For purposes of this Agreement (i) “Pro

Rata Share” shall mean, when calculating a Secured Creditor’s portion of

any distribution or amount, that amount (expressed as a percentage) equal to a

fraction the numerator of which is the then unpaid amount of such Secured

Creditor’s Primary Obligations or Secondary Obligations, as the case may be,

and the denominator of which is the then outstanding amount of all Primary

Obligations or Secondary Obligations, as the case may be, (ii) “Primary

Obligations” shall mean (A) in the case of the Credit Agreement

Obligations, all principal of, and interest on, all Loans, all Unpaid Drawings

theretofore made (together with all interest accrued thereon), and the

aggregate Stated Amounts of all Letters of Credit issued (or deemed issued)

under the Credit Agreement, and all Fees and (B) in the case of the Other

Obligations, all amounts due under the Interest Rate Protection or Other

Hedging Agreements (other than indemnities, fees (including, without

limitation, attorneys’ fees) and similar obligations and liabilities) and (iii)

“Secondary Obligations” shall mean all Obligations other than Primary

Obligations.

(c)           When payments to Secured Creditors

are based upon their respective Pro Rata Shares, the amounts received by such

Secured Creditors hereunder shall be applied (for purposes of making

determinations under this Section 4.4 only) (i) first, to their Primary

Obligations and (ii) second, to their Secondary Obligations.  If any payment to any Secured Creditor of

its Pro Rata Share of any distribution would result in overpayment to such

Secured Creditor, such excess amount shall instead be distributed in respect of

the unpaid Primary Obligations or Secondary Obligations, as the case may be, of

the other Secured Creditors, with each Secured Creditor whose Primary

Obligations or Secondary Obligations, as the case may be, have not been paid in

full to receive an amount equal to such excess amount multiplied by a fraction

the numerator of which is the unpaid Primary Obligations or Secondary

Obligations, as the case may be, of such Secured Creditor and the denominator

of which is the unpaid Primary Obligations or Secondary Obligations, as the

case may be, of all Secured Creditors entitled to such distribution.

(d)           Each of the Secured Creditors agrees

and acknowledges that if the Bank Creditors are to receive a distribution on

account of undrawn amounts with respect to Letters of Credit issued (or deemed

issued) under the Credit Agreement (which shall only occur after all

outstanding Loans and Unpaid Drawings with respect to such Letters of Credit

have been paid in full), such amounts shall be paid to the Agent under the

Credit Agreement and held by it, for the equal and ratable benefit of the Bank

Creditors, as cash security for the repayment of Obligations owing to the Bank

Creditors as such.  If any amounts are

held as cash security pursuant to the immediately preceding sentence, then upon

the termination of all outstanding Letters of Credit, and after the application

of all such cash security to the repayment of all Obligations owing to the Bank

Creditors after giving effect to the termination of all such Letters of Credit,

if there remains any excess cash, such excess cash shall be returned by the

Agent to the Administrative Agent for distribution in accordance with Section

4.4(a) hereof.

(e)           Except as set forth in Section

4.4(d) hereof, all payments required to be made hereunder shall be made (i)

if to the Bank Creditors, to the Agent under the Credit Agreement for the

account of the Bank Creditors, and (ii) if to the Other Creditors, to the

trustee, paying agent or other similar representative (each a “Representative”)

for the Other Creditors or, in the absence of such a Representative, directly

to the Other Creditors.

(f)            For purposes of applying payments

received in accordance with this Section 4.4, the Administrative Agent

shall be entitled to rely upon (i) the Agent under the Credit Agreement and

(ii) the Representative for the Other Creditors or, in the absence of such a

Representative, upon the Other Creditors for a determination (which the Agent,

each Representative for any Secured Creditors and the Secured Creditors agree

(or shall agree) to provide upon request of the Administrative Agent) of the

outstanding Primary Obligations and Secondary Obligations owed to the Bank

Creditors or the Other Creditors, as the case may be.  Unless it has actual knowledge (including by way of written

notice from a Bank Creditor or an Other Creditor) to the contrary, the Agent

and each Representative, in furnishing information pursuant to the preceding

sentence, and the Administrative Agent, in acting hereunder, shall be entitled

to assume that no Secondary Obligations are outstanding.  Unless it has actual knowledge (including by

way of written notice from an Other Creditor) to the contrary, the

Administrative Agent, in acting hereunder, shall be entitled to assume that no

Interest Rate Protection or Other Hedging Agreements are in existence.

(g)           It is understood and agreed that each

Guarantor shall remain jointly and severally liable to the extent of any

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

the aggregate amount of the sums referred to in clauses (i) through (iii),

inclusive, of Section 4.4(a) hereof.

4.5           Remedies

Cumulative. 

Each and every right, power and remedy hereby specifically given to the

Administrative Agent shall be in addition to every other right, power and

remedy specifically given under this Agreement, the Interest Rate Protection or

Other Hedging Agreements, the other Loan Documents or now or hereafter existing

at law or in equity, or by statute and each and every right, power and remedy

whether specifically herein given or otherwise existing may be exercised from

time to time or simultaneously and as often and in such order as may be deemed

expedient by the Administrative Agent. 

All such rights, powers and remedies shall be cumulative and the

exercise or the beginning of the exercise of one shall not be deemed a waiver

of the right to exercise any other or others. 

No delay or omission of the Administrative Agent in the exercise of any

such right, power or remedy and no renewal or extension of any of the Obligations

and no course of dealing between any Guarantor and the Administrative Agent or

any holder of any of the Obligations shall impair any such right, power or

remedy or shall be construed to be a waiver of any Default or Event of Default

or an acquiescence therein.  No notice

to or demand on any Guarantor in any case shall entitle it to any other or

further notice or demand in similar or other circumstances or constitute a

waiver of any of the rights of the Administrative Agent to any other or further

action in any circumstances without notice or demand.  In the event that the Administrative Agent shall bring any suit

to enforce any of its rights hereunder and shall be entitled to judgment, then

in such suit the Administrative Agent may recover reasonable expenses,

including reasonable attorneys’ fees, and the amounts thereof shall be included

in such judgment.

 

4.6           Discontinuance of Proceedings.  In case the Administrative Agent shall have

instituted any proceeding to enforce any right, power or remedy under this

Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall

have been discontinued or abandoned for any reason or shall have been

determined adversely to the Administrative Agent, then and in every such case

each Guarantor, the Administrative Agent and each holder of any of the

Obligations shall be restored to their former positions and rights hereunder

with respect to the Collateral subject to the security interest created under

this Agreement (except to the extent of any such adverse determination), and

all rights, remedies and powers of the Administrative Agent shall continue (a)

as if no such proceeding had been instituted, in the case of any such

proceeding so discontinued or abandoned, or (b) as if no proceeding had been

instituted, except to the extent of the determination, in the case of any such

proceeding so adversely determined.

 

ARTICLE V

INDEMNITY

 

5.1           Indemnity.  (a)  Each

Guarantor agrees to indemnify and hold harmless the Administrative Agent and

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

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

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

judgments and liabilities (including liabilities for penalties) of whatsoever

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

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

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

it hereunder or under any Interest Rate Hedging Agreement or under any other

Loan Document (but excluding any claims, demands, losses, judgments and

liabilities or expenses to the extent incurred by reason of gross negligence or

willful misconduct of such Indemnitee). 

If and to the extent that the obligations of such Guarantor under this Section

5.1(a) are unenforceable for any reason, such Guarantor hereby agrees to

make the maximum contribution to the payment and satisfaction of such

obligations which is permissible under applicable law.

 

(b)           Without limiting the application of Section

5.1(a) hereof, each Guarantor agrees to pay, or reimburse the

Administrative Agent for any and all reasonable fees, costs and expenses of

whatever kind or nature incurred in connection with the creation, preservation or

protection of the Administrative Agent’s Liens on, and security interest in,

the Collateral, including, without limitation, all reasonable fees and taxes in

connection with the recording or filing of instruments and documents in public

offices, payment or discharge of any taxes or Liens upon or in respect of the

Collateral, premiums for insurance with respect to the Collateral and all other

reasonable fees, costs and expenses in connection with protecting, maintaining

or preserving the Collateral and the Administrative Agent’s interest therein,

whether through judicial proceedings or otherwise, or in defending or

prosecuting any actions, suits or proceedings arising out of or relating to the

Collateral.

(c)           Without limiting the application of Section

5.1(a) or (b) hereof, each Guarantor agrees to pay, indemnify and hold each

Indemnitee harmless from and against any loss, costs, damages and expenses

which such Indemnitee may suffer, expend or incur in consequence of or growing

out of any misrepresentation by such Guarantor in this Agreement, any Interest

Rate Protection or Other Hedging Agreement, any other Loan Document or in any

writing contemplated by or made or delivered pursuant to or in connection with

this Agreement, any Interest Rate Protection or Other Hedging Agreement or any

other Loan Document.

(d)           If and to the extent that the

obligations of any Guarantor under this Section 5.1 are unenforceable

for any reason, each Guarantor hereby agrees to make the maximum contribution

to the payment and satisfaction of such obligations which is permissible under

applicable law.

5.2           Indemnity Obligations Secured by

Collateral; Survival.  Any amounts paid by any Indemnitee as to

which such Indemnitee has the right to reimbursement shall constitute

Obligations secured by the Collateral prior to the release of the Collateral

pursuant to the terms hereof.  The

indemnity obligations of each Guarantor contained in this Article V

shall continue in full force and effect notwithstanding the full payment of all

the Notes issued under the Credit Agreement, the termination of all Interest

Rate Protection or Other Hedging Agreements and the payment of all other

Obligations (but excluding any unasserted contingent and indemnification

obligations which survive the termination hereof) and notwithstanding the

discharge thereof.

 

ARTICLE VI

DEFINITIONS

 

The following

terms shall have the meanings herein specified.  Such definitions shall be equally applicable to the singular and

plural forms of the terms defined.

"Account"

shall have the meaning provided in the Uniform Commercial Code.

“Administrative

Agent” shall have the meaning provided in the first paragraph of this

Agreement.

“Agent”

shall have the meaning provided in the first WHEREAS clause of this Agreement.

“Agreement”

shall mean this Security Agreement as the same may be modified, supplemented,

extended, renewed, replaced, restated or amended from time to time in

accordance with its terms.

"Guarantor"

shall have the meaning provided in the first paragraph of this Agreement.

“Bank Creditor”

shall have the meaning provided in the first paragraph of this Agreement.

“Borrower”

shall have the meaning provided in the first WHEREAS clause of this Agreement.

 “Chattel Paper” shall have the meaning

provided in the Uniform Commercial Code.

“Class”

shall have the meaning provided in Section 7.2 of this Agreement.

“Collateral”

shall have the meaning provided in Section 1.1(a) of this Agreement.

“Contract

Rights” shall mean all rights of an Guarantor (including, without

limitation, all rights to payment) under each Contract.

“Contracts”

shall mean all contracts between an Guarantor and one or more additional

parties (including, without limitation, (i) each partnership agreement to which

an Guarantor is a party and (ii) any Interest Rate Protection or Other Hedging

Agreements), but excluding licenses, agreements and leases, which are

immaterial to the operations of an Guarantor, to the extent that the terms

thereof prohibit the assignment of, or granting of a security interest in, such

licenses, agreements or leases.

 “Credit Agreement” shall have the

meaning provided in the first WHEREAS clause of this Agreement.

“Credit

Agreement Obligations” shall have the meaning provided in the definition of

“Obligations” in this Article VI.

“Default” shall

mean any event which, with notice or lapse of time, or both, would constitute

an Event of Default.

“Documents”

shall have the meaning provided in the Uniform Commercial Code.

“Equipment”

shall mean any “equipment,” as such term is defined in the Uniform Commercial

Code, now or hereafter owned by an Guarantor.

“Event of

Default” shall mean any Event of Default under, and as defined in, the

Credit Agreement and shall in any event, without limitation, include any

payment default on any of the Obligations after the expiration of any

applicable grace period.

“General

Intangibles” shall have the meaning provided in the Uniform Commercial

Code.

“Goods”

shall have the meaning provided in the Uniform Commercial Code.

 “Indemnitee” shall have the meaning

provided in Section 5.1 of this Agreement.

“Instrument”

shall have the meaning provided in Article 9 of the Uniform Commercial

Code.

“Interest Rate

Protection or Other Hedging Agreements” shall have the meaning provided in

the first paragraph of this Agreement.

“Inventory”

shall mean all “inventory” as such term is defined in the Uniform Commercial

Code, now or hereafter owned by an Guarantor.

“Investment

Property” shall have the meaning ascribed thereto in Article 9 of the UCC.

"LC

Creditor" shall have the meaning provided in the first WHEREAS clause

of this Agreement.

“Lenders”

shall have the meaning provided in the first WHEREAS clause of this Agreement.

 “Obligations” shall mean (i) the full

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

otherwise) of all obligations (including, without limitation, all “Obligations”

as such term is defined in the Credit Agreement and all obligations which, but

for the automatic stay under Section 362(a) of the Bankruptcy Code,

would become due) and liabilities of Borrower and each Guarantor now existing

or hereafter incurred under, arising out of or in connection with the Credit

Agreement or any other Loan Document to which Borrower or any Guarantor is a

Party and the due performance and compliance by Borrower and each Guarantor

with all of the terms, conditions and agreements contained in each such Loan

Document (all such obligations and liabilities being herein collectively called

the “Credit Agreement Obligations”); (ii) the full and prompt payment

when due (whether at the stated maturity, by acceleration or otherwise) of all

obligations (including obligations which, but for the automatic stay under Section

362(a) of the Bankruptcy Code, would become due) and liabilities of

Borrower now existing or hereafter incurred under, arising out of or in

connection with (x) any Interest Rate Protection or Other Hedging Agreement,

whether such Interest Rate Protection or Other Hedging Agreement is now in

existence or hereafter arising and the due performance and compliance by

Borrower with all of the terms, conditions and agreements contained therein and

(y) the US Bank Letter of Credit Facility up to a maximum amount of $2,000,000

(provided that at no time shall there be more than $2,000,000 under the US Bank

Letter of Credit Facility secured by the Security Documents) (all such

obligations and liabilities described in this clause (ii) being herein

collectively called the “Other Obligations”); (iii) any and all

sums advanced by the Administrative Agent in order to preserve the Collateral

or preserve its security interest in the Collateral; (iv) in the event of

any proceeding for the collection or enforcement of any indebtedness,

obligations, or liabilities of Borrower or any Guarantor referred to in clauses

(i) and (ii), after an Event of Default shall have occurred and be continuing,

the reasonable expenses of taking, holding, preparing for sale or lease,

selling or otherwise disposing of or realizing on the Collateral, or of any

exercise by the Administrative Agent of its rights hereunder, together with

reasonable attorneys’ fees and court costs; and (v) all amounts paid by any

Indemnitee as to which such Indemnitee has the right to reimbursement under Section

6.1 of this Agreement.  It is

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

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

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

“Other

Creditors” shall have the meaning provided in the first paragraph of this

Agreement.

“Other

Obligations” shall have the meaning provided in the definition of

“Obligations” in this Article VI.

 “Permitted Filings” shall mean any

filing or similar item that is a matter of public record on the date of this

Agreement.

“Primary

Obligations” shall have the meaning provided in Section 4.4(b) of

this Agreement.

“Pro Rata Share”

shall have the meaning provided in Section 4.4(b) of this Agreement.

“Proceeds”

shall have the meaning provided in the Uniform Commercial Code.

 “Representative” shall have the

meaning provided in Section 5.4(e) of this Agreement.

“Required

Secured Creditors” shall mean (i) the Required Lenders (or, to the extent

required by Article XI of the Credit Agreement, all of the Lenders) under

the Credit Agreement so long as any Credit Agreement Obligations remain

outstanding and (ii) in any situation not covered by preceding clause (i),

the holders of a majority of the outstanding principal amount of the Other

Obligations.

“Requisite

Creditors” shall have the meaning provided in Section 7.2 of this

Agreement.

“Secondary

Obligations” shall have the meaning provided in Section 4.4(b) of

this Agreement.

“Secured

Creditors” shall have the meaning provided in the first paragraph of this

Agreement.

 “Termination Date” shall have the

meaning provided in Section 7.9 of this Agreement.

”Uniform

Commercial Code" or ”UCC" shall mean the Uniform

Commercial Code as now or hereafter in effect from time to time in the State of

New York or any other applicable jurisdiction.

"US Bank

Letter of Credit Facility" means that certain revolving letter of

credit facility in effect on the date hereof pursuant to that certain

Continuing Reimbursement Agreement for Commercial Letters of Credit, dated as

of July 14, 2000 by and among the LC Creditor and the Borrower providing for

commercial letters of credit; provided, however, that at no time

shall there be more than a maximum amount of $2,000,000 under the US Bank

Letter of Credit Facility secured by the Security Documents.

ARTICLE VII

MISCELLANEOUS

 

7.1           Notices. 

All such notices and communications hereunder shall be sent or delivered

in accordance with the terms of the Credit Agreement.

 

7.2           Waiver; Amendment.  None of the terms and conditions of this

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

unless in writing duly signed by each Guarantor and the Administrative Agent

(with the written consent of the Required Lenders, or to the extent required by

Section 11.1 of the Credit Agreement, all the Lenders); provided,

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

rights and benefits of a single Class of Secured Creditors (and not all Secured

Creditors in a like or similar manner) shall require the written consent of the

Requisite Creditors of such affected Class. 

For the purpose of this Agreement, the term “Class” shall mean

each class of Secured Creditors, i.e., whether (i) the Bank

Creditors as holders of the Credit Agreement Obligations or (ii) the Other

Creditors as the holders of the Other Obligations; and the term “Requisite

Creditors” of any Class shall mean each of (A) with respect to the Credit

Agreement Obligations, the Required Lenders and (B) with respect to the Other

Obligations, the holders of at least a majority of all obligations outstanding

from time to time under the Interest Rate Protection Agreements or Other

Hedging Agreements.

7.3           Obligations Absolute. 

The obligations of each Guarantor hereunder shall remain in full force

and effect without regard to, and shall not be impaired by, (a) any bankruptcy,

insolvency, reorganization, arrangement, readjustment, composition, liquidation

or the like of such Guarantor; (b) any exercise or non-exercise, or any waiver

of, any right, remedy, power or privilege under or in respect of this

Agreement, any other Loan Document or any Interest Rate Protection or Other

Hedging Agreement except as specifically set forth in a waiver granted pursuant

to Section 7.2 hereof; or (c) any amendment to or modification of any

Loan Document or any Interest Rate Protection or Other Hedging Agreement or any

security for any of the Obligations; whether or not such Guarantor shall have

notice or knowledge of any of the foregoing.

 

7.4           Successors

and Assigns.  This Agreement shall be binding upon the

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

the benefit of the Administrative Agent, each Secured Creditor and each

Guarantor and their respective successors and assigns, provided that no

Guarantor may transfer or assign any or all of its rights or obligations

hereunder without the written consent of the Required Secured Creditors.  All agreements, statements, representations

and warranties made by each Guarantor herein or in any certificate or other

instrument delivered by such Guarantor or on its behalf under this Agreement

shall be considered to have been relied upon by the Secured Creditors and shall

survive the execution and delivery of this Agreement, the other Loan Documents

and the Interest Rate Protection or Other Hedging Agreements regardless of any

investigation made by the Secured Creditors or on their behalf.

 

7.5           Headings Descriptive. 

The headings of the several sections of this Agreement are inserted for

convenience only and shall not in any way affect the meaning or construction of

any provision of this Agreement.

 

7.6           Severability. 

Any provision of this Agreement which is prohibited or unenforceable in

any jurisdiction shall, as to such jurisdiction, be ineffective to the extent

of such prohibition or unenforceability without invalidating the remaining

provisions hereof, and any such prohibition or unenforceability in any

jurisdiction shall not invalidate or render unenforceable such provision in any

other jurisdiction.

 

7.7           GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE

LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD

TO PRINCIPLES OF CONFLICTS OF LAW.

 

7.8           Each Guarantor’s Duties.  It is expressly agreed, anything herein

contained to the contrary notwithstanding, that each Guarantor shall remain

liable to perform all of the obligations, if any, assumed by it with respect to

the Collateral and the Administrative Agent shall not have any obligations or

liabilities with respect to any Collateral by reason of or arising out of this

Agreement, nor shall the Administrative Agent be required or obligated in any

manner to perform or fulfill any of the obligations of such Guarantor under or

with respect to any Collateral.

7.9           Termination;

Release. 

(a)  After the Termination Date, this Agreement shall

automatically terminate (provided that all indemnities set forth herein

including, without limitation, in Section 5.1 hereof shall survive such

termination) and the Administrative Agent, at the request and expense of the

Guarantors, will execute and deliver to each Guarantor a proper instrument or

instruments (including Uniform Commercial Code termination statements on form

UCC-3) acknowledging the satisfaction and termination of this Agreement, and

will duly assign, transfer and deliver to each Guarantor (without recourse and

without any representation or warranty) such of the Collateral of such

Guarantor as has not theretofore been sold or otherwise applied or released

pursuant to this Agreement.  As used in

this Agreement, “Termination Date” shall mean the date upon which the

Total Commitment and all Interest Rate Protection or Other Hedging Agreements

have been terminated, no Note under the Credit Agreement is outstanding (and

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

and all Obligations (as defined in the Credit Agreement) then outstanding

(other than any indemnities described in Section 5.1 hereof and in Section

11.4 of the Credit Agreement with respect to which no claim has been

asserted) have been paid in full in cash.

 

(b)           In the event that any part of the

Collateral is sold or otherwise disposed of in connection with a sale or other

disposition permitted by Section 8.7 of the Credit Agreement or is

otherwise released at the direction of the Required Lenders (or all the Lenders

if required by Section 11.1 of the Credit Agreement) and the proceeds of

such sale or sales or from such release are applied in accordance with the

provisions of Section 4.4 of the Credit Agreement, to the extent

required to be so applied, such Collateral will be sold free and clear of the

Liens created by this Agreement and the Administrative Agent, at the request

and expense of the Guarantors, will duly assign, transfer and deliver to the

relevant Guarantor (without recourse and without any representation or

warranty) such of the Collateral as is then being (or has been) so sold or

released and has not theretofore been released pursuant to this Agreement.  The Administrative Agent shall also be

entitled to and is hereby authorized and directed to duly assign, transfer and

deliver such of the Collateral as provided in Section 11.20(b) of the

Credit Agreement.

(c)           At any time that an Guarantor desires

that the Administrative Agent take any action to acknowledge or give effect to

any release of Collateral pursuant to the foregoing Section 7.9(a) or (b),

as the case may be, it shall deliver to the Administrative Agent a certificate

signed by an Authorized Officer stating that the release of the respective

Collateral is permitted pursuant to Section 7.9(a) or (b), as the case

may be.

(d)           The Administrative Agent shall have

no liability whatsoever to any Secured Creditor as a result of any release of

Collateral by it in accordance with this Section 7.9.

7.10         Counterparts.  This Agreement may be

executed in any number of counterparts and by the different parties hereto on

separate counterparts, each of which when so executed and delivered shall be an

original, but all of which shall together constitute one and the same

instrument.  A set of counterparts

executed by all the parties hereto shall be lodged with each Guarantor and the

Administrative Agent.

7.11         The Administrative Agent.  The Administrative Agent will hold in

accordance with this Agreement all items of the Collateral at any time received

under this Agreement.  It is expressly

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

accepting the benefits of this Agreement, acknowledges and agrees that the

obligations of the Administrative Agent as holder of the Collateral and

interests therein and with respect to the disposition thereof, and otherwise

under this Agreement, are only those expressly set forth in this Agreement and

as provided in the Uniform Commercial Code in the State of New York.  The Administrative Agent shall act hereunder

on the terms and conditions set forth in Article IX and Section 11.18

of the Credit Agreement.

 

                7.12         US Bank.  (a) US

Bank as LC Creditor under the US Bank Letter of Credit Facility and in its

capacity as a Secured Party hereunder hereby irrevocably designates and

appoints Bankers Trust Company as Administrative Agent under this Agreement and

irrevocably authorizes Bankers Trust Company to act as its Administrative Agent

and to take such action on its behalf under the provisions of this Agreement

and to exercise such powers and perform such duties as are expressly delegated

to the Administrative Agent under this Agreement and the Loan Documents,

together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the

contrary in this Agreement, the Administrative Agent shall not have any duties

or responsibilities with respect to US Bank in its capacity LC Creditor under

the US Bank Letter of Credit Facility or any fiduciary relationship with US

Bank, and no implied covenants, functions, responsibilities, duties,

obligations or liabilities shall be read into this Agreement or otherwise exist

against the Administrative Agent.

 

                (b)           For avoidance of doubt, US Bank

expressly acknowledges that all rights and remedies of the Administrative Agent

hereunder shall be exercised by the Administrative Agent in accordance with the

applicable provisions of the Credit Agreement, and no consent of, or notice to,

US Bank shall be required with respect thereto and US Bank shall not undertake

any separate action with respect to the Collateral.  The sole right of US Bank hereunder shall be to receive its

proportionate share of any proceeds received by the Administrative Agent

hereunder in accordance with the terms hereof.

 

                7.13         Additional Guarantors.  It is understood and agreed that any

Subsidiary of Borrower that is required to become a party to this Agreement

after the Restatement Date pursuant to Section 7.12 of the Credit

Agreement shall automatically become a party hereunder upon the execution and

delivery by such Subsidiary of an instrument in the form of Annex D

hereto and the delivery of same to the Administrative Agent, with the same

force and effect as if originally named as a party herein.  The execution and delivery of any instrument

adding an additional party to this Agreement shall not require the consent of

any party hereunder or of any Secured Creditor.  The rights and obligations of each party hereunder shall remain

in full force and effect notwithstanding the addition of any new party hereto.

 

 

 

 

[Signature Page Follows]

.                               IN WITNESS

WHEREOF, the parties hereto have caused this Agreement to be executed and

delivered by their duly authorized officers as of the date first above written.

 

	

   

  	

  VISION-EASE LENS, INC.,

  as Guarantor

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

     /s/Bradley

  D. Carlson

  
	

   

  	

  Name:

  	

    Bradley D.

  Carlson

  
	

   

  	

  Title:

  	

     Treasurer

  
	

   

  	

   

  
	

   

  	

  VISION-EASE LENS AZUSA,

  INC.,
 as Guarantor

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

     /s/Bradley

  D. Carlson

  
	

   

  	

  Name:

  	

    Bradley D.

  Carlson

  
	

   

  	

  Title:

  	

     Treasurer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  BANKERS TRUST COMPANY, 

  as Administrative Agent

  
	

   

  	

   

  
	

   

  	

  By:

  	

     /s/

  Robert Telesca

  
	

   

  	

  Name:

  	

     Robert

  Telesca

  
	

   

  	

  Title:

  	

      Vice

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  U.S. BANK NATIONAL

  ASSOCIATION

  
	

   

  	

   

  
	

   

  	

  By:   

  	

  /s/ William J. Umscheid

  
	

   

  	

  Name:

  	

     William

  J. Umscheid

  
	

   

  	

  Title:

  	

      Vice

  President

  

 

 

ANNEX A

to

Security Agreement

SCHEDULE OF CHIEF EXECUTIVE OFFICES

 

 

(a) Chief

Executive Office

                One Meridian Crossings, Suite 850

                Minneapolis, Minnesota 55423

 

(b) State of

Incorporation

Minnesota

 

 

 

 

 

ANNEX B

to

Security Agreement

SCHEDULE OF INVENTORY

 

AND EQUIPMENT LOCATIONS

 

ARTICLE

VIII

 

Vision-Ease

Lens, Inc.

                Hennepin County,

Minnesota

                Anoka County,

Minnesota

                Stearns County,

Minnesota

 

Vision-Ease

Lens Azusa, Inc.

                Hennepin County,

Minnesota

                Los Angeles

County, California

ANNEX C

to

Security Agreement

SCHEDULE OF TRADE, FICTITIOUS AND OTHER NAMES

 

 

Vision-Ease

Lens, Inc.:

 

                Vision-Ease Lens,

Inc.                                         ID#:  41-1837709

                Vision-Ease Lens

                Vision-Ease

                Optifacts

                Envia Vision

                SunSport

                Custom Rx Lab

 

Vision-Ease

Lens Azusa, Inc.:

 

                Vision-Ease Lens

Azusa, Inc.                            ID#:  41-1904176

                Vision-Ease Lens

Azusa

                Vision-Ease Lens

                Vision-Ease

                SunSport

 

 

ANNEX D

to

Subsidiary Guarantor

Security Agreement

ADDITION

OF NEW GUARANTOR

TO SUBSIDIARY GUARANTOR

SECURITY AGREEMENT

 

ADDITION OF NEW GUARANTOR

TO SUBSIDIARY GUARANTOR SECURITY AGREEMENT (this "Instrument"),

dated as of ___________ __, ______, amending that certain Subsidiary Guarantor

Security Agreement dated as of October __, 2001 (as the same may be amended,

restated, supplemented or otherwise modified from time to time, the "Agreement")

by and among the Guarantors (the "Guarantors") party thereto

and Bankers Trust Company, as Administrative Agent (the "Administrative

Agent") for the Secured Creditors.

Reference is made

to the Amended and Restated Credit Agreement, dated as of June 25, 1998,  by and among BMC Industries, Inc. (the

"Borrower"), the financial institutions (the “Lenders”)

from time to time party thereto and Bankers Trust Company, as Administrative

Agent (together with any successor agent, the “Agent”) providing for the

making of Loans and the issuance of, and participation in, Letters of Credit as

contemplated therein (as used herein, the term “Credit Agreement” means

the Credit Agreement described above in this paragraph, as in effect on October

__, 2001 and as amended by that certain Second Amendment and Restatement

Agreement dated as of the October _, 2001, as the same may be amended,

modified, extended, renewed, replaced, restated or supplemented from time to

time, and including any agreement extending the maturity of or restructuring of

all or any portion of the Indebtedness under such agreement or any successor

agreements).

Capitalized terms

used herein and not otherwise defined herein shall have the meanings assigned

to such terms in the Agreement and the Credit Agreement.

The Guarantors

have entered into the Agreement in order to induce the Lenders to extend credit

pursuant to the Credit Agreement and to induce the Other Creditors to extend

Interest Rate Protection or other Hedging Agreements.  Pursuant to Sections 7.12 of the Credit Agreement, the

undersigned is required to enter into the Agreement.  Section 7.13 of the Agreement provides that additional

parties may become a party under the Agreement by execution and delivery of an

instrument in the form of this Instrument. 

The undersigned (the "New Party") is executing this

Instrument in accordance with the requirements of the Credit Agreement to

become a party under the Agreement in order to induce the Lenders to extend and

continue the extension of credit pursuant to the Credit Agreement.

Accordingly,

the New Party agrees as follows:

SECTION 1.           In accordance with the Agreement, the

New Party by its signature below becomes a party to the Agreement with the same

force and effect as if originally named therein as a party and the New Party

hereby (a) agrees to all the terms and warrants that the representations and

warranties made by it as a party thereunder are true and correct in all

material respects on and as of the date hereof.  Each reference to an "Guarantor" in the Agreement shall

be deemed to include the New Party.  The

Agreement is hereby incorporated herein by reference.

SECTION 2.           The New Party represents and warrants

to the Administrative Agent and the Secured Creditors that this Instrument has

been duly authorized, executed and delivered by it and constitutes its legal,

valid and binding obligation, enforceable against it in accordance with its

terms, except to the extent that the enforceability thereof may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws

generally affecting creditors' rights and by equitable principles (regardless

of whether enforcement is sought in equity or at law).

SECTION 3.           This Instrument may be executed in

counterparts, each of which shall constitute an original, but all of which when

taken together shall constitute a single contract.  This Instrument shall become effective when the Administrative

Agent shall have received a counterpart of this Instrument that bears the

signatures of the New Party.

SECTION 4.           Except as expressly supplemented

hereby, the Agreement shall remain in full force and effect.

SECTION 5.         THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER

THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD

TO PRINCIPLES OF CONFLICTS OF LAW.

SECTION 6.           All communications and notices

hereunder shall be in writing and given as provided in the Agreement.  All communications and notices hereunder to

the New Party shall be given to it at the address set forth under its signature

below.

IN WITNESS

WHEREOF, the New Party has duly executed this Addition of New Guarantor to

Subsidiary Guarantor Security Agreement as of the day and year first above

written.

	

   

  	

  [NAME OF NEW PARTY],

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

  Address:Prepared by MERRILL CORPORATION

EXHIBIT 10.49

AMENDED

AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT

AMENDED AND

RESTATED SUBSIDIARY GUARANTEE AGREEMENT dated as of October 12, 2001 (as

the same may be amended, supplemented or otherwise modified from time to time,

this “Guarantee”), made by each of the undersigned corporations (each, a

“Guarantor” and collectively, the “Guarantors”) in favor of the Beneficiaries

(as hereinafter defined).  Certain

capitalized terms used herein are defined in Section 1 of this Guarantee.

W I T N E S S E T H:

WHEREAS, pursuant

to an Amended and Restated Credit Agreement, dated as of June 25, 1998 among

BMC INDUSTRIES, INC., a Minnesota corporation (“Borrower”), the

financial institutions party thereto (the “Lenders”), Bankers Trust

Company, as Administrative Agent for the Lenders thereunder and a Lender (the “Agent")

and NBD Bank, as documentation agent and a Lender, the Lenders have severally

agreed to make Extensions of Credit to or for the benefit of the Borrower upon

the terms and subject to the conditions set forth therein (as used herein, the

term “Credit Agreement” means the Amended and Restated Credit Agreement

described above in this paragraph, as in effect on the date hereof and as

amended by that certain Second Amendment and Restatement Agreement dated as of

the date hereof, as the same may be amended, modified, extended, renewed,

replaced, restated or supplemented from time to time, and including any

agreement extending the maturity of or restructuring of all or any portion of

the Indebtedness under such agreement or any successor agreements);

WHEREAS,

each Guarantor is a Domestic Subsidiary of the Borrower;

WHEREAS, it is a

condition precedent to the obligation of the Lenders to make Extensions of

Credit that the Guarantors shall have executed and delivered this Guarantee to

the Agent, for the benefit of the Beneficiaries;

WHEREAS, the

proceeds of Extensions of Credit will be used in part to enable the Borrower to

make Valuable Transfers to each of the Guarantors in connection with the

operation of their business; and

WHEREAS, Borrower

and the Guarantors are engaged in related businesses, and each Guarantor will

derive substantial direct and indirect benefit from the making of the

Extensions of Credit;

NOW, THEREFORE, in

consideration of the premises and to induce the Agent and the Lenders to enter

into the Credit Agreement and to induce the Lenders to make their respective

Loans and other Extensions of Credit, each Guarantor hereby agrees with the

Agent, for the benefit of the holders of the Guaranteed Obligations, as

follows:

Section 1.  Definitions.   As used in this Guarantee, capitalized

terms not otherwise defined herein shall have the respective meanings provided

for such terms in the Credit Agreement and the following terms have the

meanings indicated, all such definitions to be equally applicable to the

singular and plural forms of the terms defined:

“Adjusted

Net Worth” of any Guarantor shall mean, as of any date of determination

thereof, the excess of (i) the amount of the “present fair saleable value” of

the assets of such Guarantor as of the date of such determination, over (ii)

the amount of all “liabilities of such Guarantor, contingent or otherwise” as

of the date of such determination, as such quoted terms are determined in

accordance with applicable federal and state laws governing determinations of

the insolvency of debtors.  In

determining the Adjusted Net Worth of such Guarantor for purposes of

calculating the Limit of Liability for such Guarantor in respect of any of the

Guaranteed Obligations, the liabilities of such Guarantor to be used in such

determination pursuant to clause (ii) of the preceding sentence shall exclude

the liabilities of such Guarantor hereunder in respect of the Guaranteed

Obligations and any other guarantees of the obligations of the Borrower

incurred after the date hereof.

“Beneficiaries”

means each of (i) the Lenders and the Agent under the Credit Agreement

hereinafter referred to (such Lenders and the Agent are hereinafter called the

“Bank Creditors”), (ii) if one or more Lenders (or any Affiliate

thereof) enter into one or more (A) interest rate protection agreements

(including, without limitation, interest rate swaps, caps, floors, collars and

similar agreements), (B) foreign exchange contracts, currency swap agreements

or other similar agreements or arrangements designed to protect against the

fluctuations in currency values and/or (C) other types of hedging

agreements from time to time (collectively, the “Interest Rate Protection or

Other Hedging Agreements”) with, or guaranteed by, Borrower, any such

Lender or Lenders or any Affiliate of such Lender or Lenders (even if the

respective Lender subsequently ceases to be a Lender under the Credit Agreement

for any reason) so long as any such Lender or Affiliate participates in the

extension of such Interest Rate Protection or Other Hedging Agreements and

their subsequent assigns, if any (collectively, the “Other Creditors”)

and (iii) US Bank as lender under the US Bank Letter of Credit Facility (as

defined below), collectively, and “Beneficiary” means any one of such

Beneficiaries, individually.

“Determination

Date” shall mean, with respect to any Guarantor, the earlier of (a) the

date of commencement of a case under Title 11 of the United States Code in

which such Guarantor is a debtor and (b) the date enforcement hereunder is

sought with respect to such Guarantor.

“Extension

of Credit” shall mean (i) all loans or advances made to the Borrower under

any Loan Document, (ii) all other extensions of credit to or for the benefit of

the Borrower under any Loan Document and (iii) to the extent not otherwise

included in the foregoing, all Guaranteed Obligations.

“Guaranteed

Obligations” has the meaning assigned to such term in Section 2(a).

“Limit

of Liability” for any Guarantor shall mean, as of the Determination Date

for such Guarantor, the sum of:

(i)            an amount equal to the sum of each

Extension of Credit (or portion thereof) the proceeds of which are used to make

a Valuable Transfer to such Guarantor plus interest on such amount at the

rate specified in the Credit Agreement plus

(ii)           the greater of:

(A)          ninety-five percent (95%) of the

Adjusted Net Worth of such Guarantor at the date of the execution of this

Guarantee before giving effect to any Extensions of Credit made on such date

and

(B)           ninety-five percent (95%) of the

Adjusted Net Worth of such Guarantor at the Determination Date for such

Guarantor.

There shall be deducted

in determining the Limit of Liability for any Guarantor (a) amounts, if any,

collected from such Guarantor in respect of the Guaranteed Obligations by or on

behalf of any holder of the Guaranteed Obligations pursuant to any Loan

Document (other than this Guarantee), plus (b) the amounts, if any,

collected in respect of the Guaranteed Obligations by or on behalf of any

holder of the Guaranteed Obligations from any Subsidiary of such Guarantor

pursuant to any Loan Document (including this Guarantee).

“Subordinate

Claims” has the meaning assigned to that term in Section 8.

"US

Bank Letter of Credit Facility" means that certain revolving letter of

credit facility in effect on the date hereof pursuant to that certain

Continuing Reimbursement Agreement for Commercial Letters of Credit, dated as

of July 14, 2000 by and among the LC Creditor and the Borrower providing for

commercial letters of credit; provided, however, that at no time

shall there be more than a maximum amount of $2,000,000 under the US Bank

Letter of Credit Facility secured by the Security Documents.

“Valuable

Transfer” means, as to any Guarantor, (i) all loans, advances or capital

contributions made to such Guarantor with proceeds of Guaranteed Obligations,

(ii) all debt securities or other obligations of such Guarantor acquired from

such Guarantor or retired by such Guarantor with proceeds of Guaranteed

Obligations, (iii) the fair market value of all property acquired with proceeds

of Guaranteed Obligations and transferred, absolutely and not as collateral, to

such Guarantor and (iv) the value of any quantifiable economic benefits not

included in clauses (i) through (iii) above, but included in accordance with

applicable federal and state laws governing determinations of the insolvency of

debtors, accruing to such Guarantor as a result of the incurrence of Guaranteed

Obligations.

Section 2.  Guarantee

of Obligations.  (a) Each Guarantor

hereby, jointly and severally, unconditionally and irrevocably guarantees to

each of the Beneficiaries, as the primary obligation and debt of such Guarantor

and not as a surety, the due and punctual payment of, without duplication, (i)

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

acceleration or otherwise) of all obligations (including, without limitation,

all “Obligations” as such term is defined in the Credit Agreement and all obligations

which, but for the automatic stay under Section 362(a) of the Bankruptcy

Code, would become due) and liabilities of Borrower and each Guarantor now

existing or hereafter incurred under, arising out of or in connection with the

Credit Agreement or any other Loan Document to which Borrower or any Guarantor

is a Party and the due performance and compliance by Borrower and each

Guarantor with all of the terms, conditions and agreements contained in each

such Loan Document (all such obligations and liabilities being herein

collectively called the “Credit Agreement Obligations”); (ii) the full

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

otherwise) of all obligations (including obligations which, but for the

automatic stay under Section 362(a) of the Bankruptcy Code, would become

due) and liabilities of Borrower now existing or hereafter incurred under,

arising out of or in connection with (x) any Interest Rate Protection or Other

Hedging Agreement, whether such Interest Rate Protection or Other Hedging

Agreement is now in existence or hereafter arising and the due performance and

compliance by Borrower with all of the terms, conditions and agreements

contained therein and (y) the US Bank Letter of Credit Facility up to a maximum

amount of $2,000,000 (provided that at no time shall there be more than

$2,000,000 under the US Bank Letter of Credit Facility secured by the Security

Documents) (all of the foregoing, collectively, the “Guaranteed Obligations”).  In case of the failure of Borrower or any

Guarantor to duly, punctually and indefeasibly make any such payment in full as

and when due and payable, each Guarantor hereby agrees to duly, punctually and

indefeasibly make such payment as and when the same shall become due and payable,

whether on the due date therefor, upon stated maturity, by acceleration, upon

demand or otherwise, in accordance with the terms of this Guarantee, the Credit

Agreement and the other Loan Documents.

(b)           Notwithstanding anything to the

contrary contained in this Guarantee, the obligations and liabilities of each

of the Guarantors pursuant to this Guarantee shall at all times be subject to

each such Guarantor’s Limit of Liability.

(c)           No payment or payments made by

Borrower, any Guarantor, any other guarantor or any other Person or received or

collected by the Agent or any Beneficiary from Borrower, the Guarantor, any

other guarantor or any other Person by virtue of any action or proceeding or

any set–off or appropriation or application at any time or from time to

time in reduction of or in payment of the Guaranteed Obligations shall be

deemed to modify, reduce, release or otherwise affect the liability of any

Guarantor hereunder which shall, notwithstanding any such payment or payments

other than payments made by or received or collected from such Guarantor in

respect of the Guaranteed Obligations, remain liable for the Guaranteed

Obligations up to its Limit of Liability.

Section 3.  Right of

Set-off.  During any period in which

an Event of Default shall have occurred and is continuing, the Agent and each

other Beneficiary are hereby irrevocably authorized by each Guarantor at any

time and from time to time without notice to such Guarantor, any such notice

being hereby waived by such Guarantor, to set off and appropriate and apply any

and all deposits (general or special, time or demand, provisional or final), in

any currency, and any other credits, indebtedness or claims, in any currency,

in each case whether direct or indirect, absolute or contingent, matured or

unmatured, at any time held or owing by the Agent or such other Beneficiary to

or for the credit or the account of such Guarantor, or any part thereof in such

amounts as the Agent or such other Beneficiary may elect on account of the

obligations or liabilities of such Guarantor hereunder and claims of every

nature and description of the Agent or such other Beneficiary against such

Guarantor, in any currency, whether arising hereunder, under the Credit

Agreement or any other Loan Document, whether or not the Agent or such other

Beneficiary has made any demand for payment and although such obligations,

liabilities and claims may be contingent or unmatured.  Each Beneficiary shall notify such Guarantor

and the Agent promptly of any such set–off made by it and the application

made by it of the proceeds thereof; provided, however, that the

failure to give such notice shall not affect the validity of such set–off

and application.  The rights of the

Agent and any other Beneficiary under this paragraph are in addition to other

rights and remedies (including, without limitation, other rights of set–off)

which such party may have.

Section 4. Amendments, etc. with respect to the Guaranteed

Obligations.  Each Guarantor shall

remain obligated hereunder notwithstanding that, without any reservation of

rights against such Guarantor or any other Guarantor, and without notice to or

further assent by such Guarantor, any demand for payment of any of the

Guaranteed Obligations made by the Agent or any other Beneficiary may be

rescinded by the Agent or such other Beneficiary, and any of the Guaranteed

Obligations continued, and the Guaranteed Obligations, or the liability of any

other Person upon or for any part thereof, or any collateral security or

guarantee therefor or right of offset with respect thereto, may, from time to

time, in whole or in part, be renewed, extended, amended, modified,

accelerated, compromised, waived, surrendered or released by the Agent or any

other Beneficiary, and the Credit Agreement, any other Loan Document, any other

document relating to Guaranteed Obligations and any other documents executed

and delivered in connection therewith may be amended, modified, supplemented or

terminated, in whole or in part, as the relevant holders of the Guaranteed Obligations

may deem advisable from time to time and otherwise in accordance with the

Credit Agreement, and any collateral security, guarantee or right of offset at

any time held by the Agent or any other Beneficiary for the payment of the

Guaranteed Obligations may be sold, exchanged, waived, surrendered or

released.  Neither the Agent nor any

other Beneficiary shall have any obligation to protect, secure, perfect or

insure any Lien at any time held by it as security for the Guaranteed

Obligations or for this Guarantee or any property subject thereto.

Section 5. Guarantee Absolute and Unconditional.  Each Guarantor waives any and all notice of

the creation, renewal, extension or accrual of any of the Guaranteed

Obligations and notice of or proof of reliance by the Agent or any other

Beneficiary upon this Guarantee or any other Loan Document to which such

Guarantor is a party or acceptance of this Guarantee or any such other Loan

Document; and all dealings between the Borrower or any Guarantor and the Agent

or any other Beneficiary shall likewise be conclusively presumed to have been

had or consummated in reliance upon this Guarantee and the other Loan

Documents.  Each Guarantor waives

diligence, presentment, protest, demand for payment and notice of default or

nonpayment to or upon the Borrower or any Guarantor with respect to the

Guaranteed Obligations.  This Guarantee

shall be construed as a continuing, absolute and unconditional guarantee of

payment without regard to:

(i) the validity or

enforceability of the Credit Agreement, any other Loan Document, any of the

Guaranteed Obligations or any collateral security therefor or guarantee or

right of offset with respect thereto at any time or from time to time held by

the Agent or any other Beneficiary,

(ii) any defense

(including, without limitation, any statute of limitations), set–off or

counterclaim (other than a defense of payment or performance) which may at any

time be available to or be asserted by the Borrower against the Agent or any

other Beneficiary (each Guarantor hereby agrees not to assert any such defense,

set-off or counterclaim),

(iii) any change in the

time, manner or place of any application of collateral security, or proceeds

thereof, to or of all or any of the Guaranteed Obligations, or any manner of

sale or other disposition of any collateral security for all or any of the

Guaranteed Obligations or any other assets of the Borrower or any of its

Subsidiaries,

(iv) any change,

restructuring or termination of the corporate or partnership structure or

existence of the Borrower or any of its Subsidiaries, or

(v) any other

circumstance whatsoever (with or without notice to or knowledge of the Borrower

or any Guarantor) which constitutes, or might be construed to constitute, an

equitable or legal discharge of the Borrower for the Guaranteed Obligations, or

of any Guarantor under this Guarantee, in bankruptcy or in any other instance

and each Guarantor hereby covenants that this Guarantee will not be discharged

except by final, complete, indefeasible and irrevocable payment and performance

of the obligations contained in the agreements, instruments and documents

evidencing or securing the Guaranteed Obligations and this Guarantee.

When the Agent or any

other Beneficiary is pursuing its rights and remedies hereunder against any

Guarantor, the Agent or any other Beneficiary may, but shall be under no

obligation to, pursue such rights and remedies as it may have against the

Borrower or any other Person or against any collateral security or guarantee

for the Guaranteed Obligations or any right of offset with respect thereto, and

any failure by the Agent or any other Beneficiary to pursue such other rights

or remedies or to collect any payments from the Borrower or any such other

Person or to realize upon any such collateral security or guarantee or to

exercise any such right of offset, or any release of the Borrower or any such

other Person or of any such collateral security, guarantee or right of offset,

shall not relieve any Guarantor of any liability hereunder, and shall not

impair or affect the rights and remedies, whether express, implied or available

as a matter of law, of the Agent and any other Beneficiary against such

Guarantor.

Section 6.  Reinstatement.  Each Guarantor further agrees that if at any

time all or any part of any payment theretofore applied by any Beneficiary to

any of the Guaranteed Obligations is, or must be, rescinded or returned by such

Beneficiary for any reason whatsoever, including, without limitation, the

insolvency, bankruptcy or reorganization of Borrower, any other Guarantor or

any other Subsidiary of Borrower or any other guarantor of all or any portion

of the Guaranteed Obligations, such Guaranteed Obligations or applicable

portion thereof, for purposes of this Guarantee, to the extent that such

payment is or must be rescinded or returned, shall be deemed to have continued

in existence notwithstanding such application, and this Guarantee shall

continue to be effective or be reinstated, as the case may be, as to such

Guaranteed Obligations or applicable portion thereof as though such application

had not been made, irrespective of whether any note or other evidence of

indebtedness has been surrendered or cancelled.

Section 7. Subrogation. No Guarantor will exercise any

rights that it may now or hereafter acquire against the Borrower or any other

Guarantor that arise from the existence, payment, performance or enforcement of

such Guarantor’s obligations under this Guarantee, the Credit Agreement or any

other Loan Document, including, without limitation, any right of subrogation,

reimbursement, exoneration, contribution or indemnification and any right to

participate in any claim or remedy of any Beneficiary against the Borrower or

any other Guarantor or any collateral security, regardless of whether such

claim, remedy or right arises in equity or under contract, statute or common

law, including, without limitation, the right to take or receive from the

Borrower or any other Guarantor, directly or indirectly, in cash or other

property or by set-off or in any other manner, payment or security on account

of such claim, remedy or right, unless and until all of the Guaranteed

Obligations have been paid in full and the Commitments have expired or

terminated.  If any amount is paid to

any Guarantor in violation of the preceding sentence at any time prior to the

later of the payment in full of the Guaranteed Obligations and the Termination

Date, such amount shall be held in trust for the benefit of the Agent to be

credited and applied to the Guaranteed Obligations, whether matured or

unmatured, in accordance with the terms of the Credit Agreement and the other

Loan Documents, or to be held as collateral security for any Guaranteed

Obligations thereafter arising.  If (i)

any Guarantor makes payment to the Agent or any other Beneficiary of all or any

part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations have

been paid in full and (iii) the Termination Date has occurred, the Agent and

the other Beneficiaries will, at any Guarantor’s request and expense, execute

and deliver to such Guarantor the appropriate documents, without recourse and

without representation or warranty, necessary to evidence the transfer by

subrogation to each Guarantor of an interest in the Guaranteed Obligations

resulting from such payment to such Guarantor.

Section 8.  Subordination.  So long as any of the Guaranteed Obligations

shall be outstanding, all claims of any kind or character of any Guarantor or

any of its successors and assigns against Borrower (all such claims of any kind

or character of such Guarantor or any of its successors and assigns being

hereinafter referred to as “Subordinate Claims”), shall be subordinated

in right of payment to the prior indefeasible payment in full of such

Guaranteed Obligations and any Subordinate Claims collected or received by such

Guarantor after an Event of Default has occurred and is continuing, upon notice

by Agent to such Guarantor, shall be held in trust for the Agent for the

benefit of the Beneficiaries and, at the direction of the Agent to such

Guarantor, shall forthwith be paid over to the Agent for the benefit of the

Beneficiaries to be credited and applied against the Guaranteed Obligations but

without affecting, impairing or limiting in any manner the liability of such

Guarantor under any other provision of this Guarantee.

Section 9.  Representations,

Warranties and Covenants.  Each

Guarantor represents and warrants to the Agent and each Beneficiary that:

(a)           such Guarantor is a corporation duly

organized, validly existing and in good standing under the laws of the

jurisdiction of its organization and has the corporate power and authority and

the legal right to own and operate its property, to lease the property it

operates as lessee and to conduct the business in which it is currently

engaged;

(b)           such Guarantor has the corporate

power and authority and the legal right to execute and deliver, and to perform

its obligations under, this Guarantee, and has taken all necessary corporate

action to authorize its execution, delivery and performance of this Guarantee;

(c)           this Guarantee constitutes a legal,

valid and binding obligation of such Guarantor enforceable in accordance with

its terms, except as enforceability may be limited by bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement of

creditors’ rights generally and by general equitable principles;

(d)           the execution, delivery and

performance of this Guarantee by such Guarantor (i) are within such Guarantor’s

corporate power, (ii) have been duly authorized by all necessary corporate,

shareholder and other action on the part of each Person whose authorization is

required, (iii) do not violate any Requirement of Law or any material

Contractual Obligation applicable to such Guarantor, (iv) will not result in or

require the creation or imposition of any Lien of any nature upon or with

respect to any of the properties now owned or hereafter acquired by such Person

and (v) will not require any authorization or approval or other action by, or

notice to or filing or registration with, any Governmental Authority (other

than those which have been obtained and are in force and effect);

(e)           there are no actions, suits,

proceedings or investigations pending or, to the knowledge of such Guarantor,

threatened against or affecting such Guarantor or any of its Subsidiaries or

any of its or their respective properties or assets before any arbitrator or

Governmental Authority or against any of its or their respective properties or

revenues (a) with respect to this Guarantee or any of the actions contemplated

hereby, or (b) which would reasonably be expected to have a Material Adverse

Effect;

(f)            such Guarantor has good and

marketable title in fee simple to, or a valid leasehold interest in all its

material real property, and good title to, or a valid leasehold interest in all

its other material property, and none of such property is subject to any Lien

except for Permitted Liens.

Each Guarantor

agrees that the foregoing representations and warranties shall be deemed to

have been made by such Guarantor on the date of each Extension of Credit under

the Credit Agreement on and as of date of Extension of Credit as though made

hereunder on and as of such date.  Each

Guarantor hereby acknowledges and agrees that it has received a copy of the

Credit Agreement and hereby (i) reaffirms all representations and warranties

contained therein to the extent applicable to it and (ii) agrees to comply with

all covenants and agreements contained therein to the extent applicable to it

and as the same may be amended or modified from time to time in accordance with

the terms of the Credit Agreement.

Section 10.  Events of

Default.  If an Event of Default

arises and is continuing, then in any such event and at any time thereafter (so

long as such failure shall not have been cured or waived in accordance with

Section 14 hereof), the Agent may, and at the direction of the Majority Lenders

shall, declare the obligations of Borrower under the Credit Agreement (whether

or not then due under the Credit Agreement) immediately due and payable

pursuant to this Guarantee as to the Guarantors, and the Agent shall be

entitled to enforce the joint and several obligations of the Guarantors

hereunder.

Section 11. Application of Proceeds.  Subject to any applicable agreements in

effect from time to time relating to the sharing and priority of payment of

proceeds of collateral the net proceeds of any collection, recovery, receipt,

appropriation or realization, after deducting all costs and expenses of every

kind incurred in connection with the foregoing, including reasonable attorneys’

fees and legal expenses, shall be applied to the payment in whole or in part of

the Guaranteed Obligations, in such order as is specified in Section 4.4

of the Subsidiary Guarantor Security Agreement.

Section 12.  Construction.  THIS GUARANTEE SHALL BE DEEMED TO BE A

CONTRACT MADE UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND FOR ALL

PURPOSES BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS

OF SAID STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.

Section 13. Enforceability.  Any provision of this Guarantee that is prohibited or

unenforceable in any jurisdiction shall, as to such jurisdiction, be

ineffective to the extent of such prohibition or unenforceability without

invalidating the remaining provisions hereof or affecting the validity or

enforceability of such provision in any other jurisdiction.  If this Guarantee would be held or

determined by a court of competent jurisdiction in a judicial proceeding to be

void, voidable, invalid or unenforceable on account of the amount of the

aggregate liability of any Guarantor under this Guarantee or by reason of any

inconsistent contractual provision binding on any Guarantor and in effect on or

prior to the Closing Date, then, notwithstanding any other provision of this

Guarantee to the contrary, the aggregate amount of the liability of each

Guarantor under this Guarantee shall, without any further action by any

Guarantor, the Beneficiaries or any other Person, be automatically limited and

reduced to the maximum amount which is valid and enforceable.

Section 14. Remedies Not Exclusive.  No failure or delay on the part of any

Beneficiary in exercising any right, power or remedy under this Guarantee shall

operate as a waiver thereof, nor shall any single or partial exercise of any

such right, power or remedy preclude any other or further exercise thereof or

the exercise of any other right, power or remedy.  The remedies provided for in this Guarantee are cumulative and

are not exclusive of any remedies that may be available to any Beneficiary at

law or in equity or otherwise.  No

amendment, modification, supplement, termination or waiver of or to any

provision of this Guarantee, nor consent to any departure by any Guarantor

therefrom, shall be effective unless the same shall be consented to in writing

by all of the Lenders or the Majority Lenders, as the case may be, pursuant to

subsection 9.1 of the Credit Agreement, as such terms are defined in the Credit

Agreement.  Any amendment, modification

or supplement of or to any provision of this Guarantee, any waiver of any

provision of this Guarantee, and any consent to any departure by any Guarantor

from the terms of any provision of this Guarantee, shall be effective only in

the specific instance and for the specific purpose for which made or

given.  Except where notice is

specifically required by this Guarantee, no notice to or demand on any Guarantor

in any case shall entitle such Guarantor or any other Guarantor to any other or

further notice or demand in similar or other circumstances.

Section 15.  Consent to

Certain Transactions.  Each

Guarantor acknowledges receipt of a copy of the Credit Agreement and the other

Loan Documents in the form in which each was executed and delivered by the

parties thereto, as amended, supplemented or otherwise modified as of the

Closing Date, and agrees that such copies constitute adequate notice of all

matters contained therein and consents to the execution and delivery of such

agreements and the performance of all transactions provided for or contemplated

therein; provided, however, that none of the Beneficiaries shall

be obligated to furnish to any Guarantor any copies of any amendments,

modifications or supplements or waivers with respect to the Credit Agreement or

any of the other Loan Documents.

Section 16.  Notices.  Except where telephonic instructions or

notices are authorized herein to be given, all notices, demands, instructions

and other communications required or permitted to be given to or made upon any

party hereto shall be in writing and shall be personally delivered or sent by

registered or certified mail, postage prepaid, return receipt requested, or by

a reputable courier delivery service, or by prepaid telex, TWX or telegram

(with messenger delivery specified in the case of a telegram), or by

telecopier, and shall be deemed to have been given to each Guarantor for

purposes of this Guarantee on the day that such writing is delivered or sent to

the intended recipient thereof in accordance with the provisions of this

subsection.  Unless otherwise specified

in a notice sent or delivered in accordance with the foregoing provisions of

this subsection, notices, demands, instructions and other communications in

writing shall be given to or made upon the respective parties hereto at their

respective addresses (or to their respective telex, TWX or telecopier numbers)

indicated in the Credit Agreement, and, in the case of telephonic instructions

or notices, by calling the telephone number or numbers indicated for such party

in the Credit Agreement.

Section 17.  Successors

and Assigns.  This Guarantee shall

be binding upon each Guarantor and its successors and assigns and shall inure

to the benefit of, and shall be enforceable by, each of the Beneficiaries and

their respective successors and assigns (including any permitted assignee of

any Lender in accordance with subsection 11.9 of the Credit Agreement); provided,

however, that no Guarantor may assign or transfer any of its obligations

under this Guarantee without the prior written consent of the Majority Lenders.

Section 18.  Release.  Notwithstanding Section 17, the Agent is

authorized to release any Guarantor from its guarantee and other obligations hereunder

in accordance with the provisions of subsection 11.1 of the Credit Agreement.

Section 19.  Further

Assurances.  Each Guarantor, jointly

and severally, agrees to do such further acts and things and to execute and

deliver such additional agreements, powers and instruments, as any Beneficiary

may reasonably require or reasonably deem advisable to carry into effect the

purposes of this Guarantee or to better assure and confirm unto the

Beneficiaries their rights, powers and remedies under this Guarantee, the

Credit Agreement or any other Loan Document.

Section 20.  Submission

to Jurisdiction.  Each Guarantor,

jointly and severally, hereby irrevocably and unconditionally consents and

submits to the nonexclusive jurisdiction of any United States Federal or New

York State court sitting in New York County in any action or proceeding arising

out of or relating to this Guarantee, and each Guarantor, jointly and

severally, hereby irrevocably and unconditionally agrees that all claims in

respect of such action or proceeding brought against any of the Beneficiaries

in respect of this Guarantee shall be brought in such United States Federal or

New York State court.  Each Guarantor,

jointly and severally, irrevocably consents to the service of any and all

process in any such action or proceeding brought in any court in or of the

State of New York by the delivery of copies of such process to such Guarantor

at its address specified in Section 16 or by certified or registered mail

directed to such address.  Nothing herein

shall affect the right of any of the Beneficiaries to serve process in any

other manner permitted by law or to commence legal proceedings or otherwise

proceed against any Guarantor in any other jurisdiction.

Section 21. Waiver of Trial by Jury.  THE PARTIES HERETO HEREBY IRREVOCABLY AND

UNCONDITIONALLY WAIVE TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING

UNDER OR COUNTERCLAIM RELATING TO THIS GUARANTEE, THE CREDIT AGREEMENT OR ANY

OTHER LOAN DOCUMENT, AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY

WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE

LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,

OR THAT IT OR ITS ASSETS IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION,

WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OR MAINTAINING OF ANY SUCH

ACTION OR PROCEEDING IN THE JURISDICTIONS REFERRED TO IN SECTION 20.  EACH BENEFICIARY, BY ITS ACCEPTANCE OF THE

BENEFITS OF THIS GUARANTEE, SHALL BE DEEMED TO HAVE WAIVED ITS RIGHT TO TRIAL

BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING IN WHICH THE GUARANTORS

HAVE WAIVED THEIR RIGHT TO TRIAL BY JURY.

Section 22.  Fees and

Expenses.  Each Guarantor, jointly

and severally, agrees to pay promptly, to the extent not previously finally and

indefeasibly paid in full by Borrower, (i) all reasonable costs and expenses of

any Beneficiary in connection with (A) any and all amounts which any

Beneficiary has paid relative to the curing of any default resulting from the

acts or omissions of any Guarantor under this Guarantee and (B) the enforcement

of this Guarantee and the preservation of the Beneficiaries’ rights hereunder.

Section 23.  Taxes.  Each of the agreements set forth in

subsection 4.6 of the Credit Agreement is hereby incorporated by reference mutatis

mutandis with the same effect as if such agreements had been set

forth herein (it being understood that the intent of the parties under this

Section 23 is to provide that, subject to the limitations of subsection 4.6 of

the Credit Agreement, each Beneficiary receive and retain the same amount net

of all taxes and Non-Excluded Taxes that such Beneficiary would have received

had payment been made by the Borrower under the Credit Agreement).  All references in such incorporated

provisions to “the Borrower” shall be deemed references to each Guarantor and

all references in such incorporated provisions to “this Agreement” shall be

deemed references to this Guarantee. 

Each Guarantor further agrees to pay any and all stamp, transfer and

other taxes or fees payable or determined to be payable in connection with the

execution, delivery, filing and recording of any instrument or document that

may be delivered in connection with this Guarantee, and agrees to save Agent

and each other Beneficiary harmless from and against any and all liabilities

with respect to or resulting from any delay in paying, or omission to pay, such

taxes, fees and expenses.

Section 24.  Counterparts.  This Guarantee may be executed in any number

of counterparts and by the different parties hereto on separate counterparts,

each of which counterparts, when so executed and delivered, shall be deemed to

be an original and all of which counterparts, taken together, shall constitute

but one and the same Guarantee.

Section 25.  Headings.  Section and other headings used in this

Guarantee are for convenience only and shall not affect the construction of

this Guarantee.

                                Section

26.             US Bank.  (a) US Bank as LC Creditor under the US Bank

Letter of Credit Facility and in its capacity as a Beneficiary hereunder hereby

irrevocably designates and appoints Bankers Trust Company as Agent under this

Guarantee and irrevocably authorizes Bankers Trust Company to act as its Agent

and to take such action on its behalf under the provisions of this Guarantee

and to exercise such powers and perform such duties as are expressly delegated

to the Agent under this Guarantee and the Loan Documents, together with such

other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary in this Guarantee,

the Agent shall not have any duties or responsibilities with respect to US Bank

in its capacity as LC Creditor under the US Bank Letter of Credit Facility or

any fiduciary relationship with US Bank, and no implied covenants, functions,

responsibilities, duties, obligations or liabilities shall be read into this

Guarantee or otherwise to exist against the Agent.

 

                (b)           For avoidance of doubt, US Bank

expressly acknowledges that all rights and remedies of the Agent hereunder

shall be exercised by the Agent in accordance with the applicable provisions of

the Credit Agreement, and no consent of, or notice to, US Bank shall be

required with respect thereto and US Bank shall not undertake any separate

action with respect to the Collateral. 

The sole right of US Bank hereunder shall be to receive its

proportionate share of any proceeds received by the Agent hereunder in

accordance with the terms hereof.

 

                                Section

27.             Additional Guarantors.  It is understood and agreed that any

Subsidiary of Borrower that is required to become a party to this Guarantee

after the Restatement Date pursuant to Section 7.12 of the Credit

Agreement shall automatically become a party hereunder upon the execution and

delivery by such Subsidiary of an instrument in the form of Annex A

hereto and the delivery of same to the Agent, with the same force and effect as

if originally named as a party herein. 

The execution and delivery of any instrument adding an additional party

to this Guarantee shall not require the consent of any party hereunder or of

any Beneficiary.  The rights and

obligations of each party hereunder shall remain in full force and effect

notwithstanding the addition of any new party hereto.

 

 

 

 

[BALANCE OF PAGE INTENTIONALLY LEFT

BLANK]

IN

WITNESS WHEREOF, each of the Guarantors has caused this Subsidiary Guarantee

Agreement to be duly executed and delivered by its proper and duly authorized

officer as of the day and year first above written.

	

   

  	

  VISION-EASE LENS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Bradley D. Carlson

  
	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

  Bradley D. Carlson

  
	

   

  	

   

  	

   

  
	

   

  	

  Title:

  	

  Treasurer

  
	

   

  	

   

  	

   

  
	

   

  	

  VISION-EASE LENS AZUSA,

  INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Bradley D. Carlson

  
	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

  Bradley D. Carlson

  
	

   

  	

   

  	

   

  
	

   

  	

  Title:   

  	

   Treasurer

  

 

 

ACKNOWLEDGED AND AGREED TO

AS A BENEFICIARY THIS 12TH DAY

OF OCTOBER, 2001:

 

U.S. BANK NATIONAL ASSOCIATION

 

	

  By:

  	

  /s/ William J. Umscheid

  
	

  Name:

  	

  William J. Umscheid

  
	

  Title:

  	

  Vice President

  

 

ANNEX A

to

Amended and Restated

Subsidiary Guarantee Agreement

ADDITION

OF NEW GUARANTOR

TO AMENDED AND RESTATED

SUBSIDIARY GUARANTEE AGREEMENT

 

ADDITION OF NEW GUARANTOR

TO AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT (this "Instrument"),

dated as of ___________ __, ______, amending that certain Amended and Restated

Subsidiary Guarantor Security Agreement dated as of October __, 2001 (as the

same may be amended, restated, supplemented or otherwise modified from time to

time, the "Agreement") by and among the Guarantors (the "Guarantors")

party thereto and Bankers Trust Company, as Agent (the "Agent")

for the Secured Creditors.

Reference is made

to the Amended and Restated Credit Agreement, dated as of June 25, 1998,  by and among BMC Industries, Inc. (the

"Borrower"), the financial institutions (the “Lenders”)

from time to time party thereto and Bankers Trust Company, as Agent (together

with any successor agent, the “Agent”) providing for the making of Loans

and the issuance of, and participation in, Letters of Credit as contemplated

therein (as used herein, the term “Credit Agreement” means the Credit

Agreement described above in this paragraph, as in effect on October __, 2001

and as amended by that certain Second Amendment and Restatement Agreement dated

as of the October _, 2001, as the same may be amended, modified, extended,

renewed, replaced, restated or supplemented from time to time, and including

any agreement extending the maturity of or restructuring of all or any portion

of the Indebtedness under such agreement or any successor agreements).

Capitalized terms

used herein and not otherwise defined herein shall have the meanings assigned

to such terms in the Agreement and the Credit Agreement.

The Guarantors

have entered into the Agreement in order to induce the Lenders to extend credit

pursuant to the Credit Agreement and to induce the Other Creditors to extend

Interest Rate Protection or other Hedging Agreements.  Pursuant to Sections 7.12 of the Credit Agreement, the

undersigned is required to enter into the Agreement.  Section 27 of the Agreement provides that additional

parties may become a party under the Agreement by execution and delivery of an

instrument in the form of this Instrument. 

The undersigned (the "New Party") is executing this

Instrument in accordance with the requirements of the Credit Agreement to

become a party under the Agreement in order to induce the Lenders to extend and

continue the extension of credit pursuant to the Credit Agreement.

Accordingly,

the New Party agrees as follows:

SECTION 1.           In accordance with the Agreement, the

New Party by its signature below becomes a party to the Agreement with the same

force and effect as if originally named therein as a party and the New Party

hereby (a) agrees to all the terms and warrants that the representations and

warranties made by it as a party thereunder are true and correct in all

material respects on and as of the date hereof.  Each reference to an "Guarantor" in the Agreement shall

be deemed to include the New Party.  The

Agreement is hereby incorporated herein by reference.

SECTION 2.           The New Party represents and warrants

to the Agent and the Beneficiaries that this Instrument has been duly

authorized, executed and delivered by it and constitutes its legal, valid and

binding obligation, enforceable against it in accordance with its terms, except

to the extent that the enforceability thereof may be limited by applicable bankruptcy,

insolvency, reorganization, moratorium or similar laws generally affecting

creditors' rights and by equitable principles (regardless of whether

enforcement is sought in equity or at law).

SECTION 3.           This Instrument may be executed in

counterparts, each of which shall constitute an original, but all of which when

taken together shall constitute a single contract.  This Instrument shall become effective when the Agent shall have

received a counterpart of this Instrument that bears the signatures of the New

Party.

SECTION 4.           Except as expressly supplemented

hereby, the Agreement shall remain in full force and effect.

SECTION 5.         THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER

THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD

TO PRINCIPLES OF CONFLICTS OF LAW.

SECTION 6.           All communications and notices

hereunder shall be in writing and given as provided in the Agreement.  All communications and notices hereunder to

the New Party shall be given to it at the address set forth under its signature

below.

IN WITNESS

WHEREOF, the New Party has duly executed this Addition of New Guarantor to

Amended and Restated Subsidiary Guarantee Agreement as of the day and year

first above written.

	

   

  	

  [NAME OF NEW PARTY],

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

  Address:

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