NEOLENS INC, SC 14D1, 1996-06-05

NEOLENS INC
SC 14D1, 1996-06-05
OPHTHALMIC GOODS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
Under the Securities Exchange Act of 1934
______________________________________________
Neolens, Inc.

(Name of Subject Company)

Sola Acquisition Corp.
a wholly owned subsidiary of
Sola International Inc.
(Bidder)

Common Stock, $.001 Par Value
Series A Convertible Preferred Stock, $.001 Par Value
Series B Convertible Preferred Stock, $.001 Par Value
(Titles of Classes of Securities)

640903308
(CUSIP Number of Class of Securities) (Common Stock)

Sola International Inc.
2420 Sand Hill Road
Suite 200
Menlo Park, CA 94025
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidder)

Copies to:
Peter Golden, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004 - 1980
(212) 859-8000

May 28, 1996
(Date Of Event Which Requires Filing Statement On Schedule 13D)
________________
CALCULATION OF FILING FEE

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Transaction Valuation* Amount of Filing Fee
=============================================================================
$9,376,625 $1,875.32
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* For the purpose of calculating the fee only, this amount assumes the
purchase of 7,720,321 shares of Common Stock of Neolens, Inc. at $1.14 per
share, 3,269 shares of Series A Convertible Preferred Stock of Neolens,
Inc. at $25.20 per share, and 12,000 shares of Series B Convertible
Preferred Stock of Neolens, Inc. at $41.09 per share. Such number of shares
includes all outstanding shares as of May 24, 1996, and assumes the
exercise of outstanding stock options and warrants to purchase an aggregate
of 1,049,015 shares of Common Stock and the exercise of stock rights for
the issuance of 46,000 shares of Common Stock.

|_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing. Amount Previously Paid: Filing
Party: Form or Registration No.: Date Filed:

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<PAGE>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sola Acquisition Corp.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |X|

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3 SEC USE ONLY
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4 SOURCES OF FUNDS (SEE INSTRUCTIONS)
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
773,975 shares of Common Stock (see Item 6)
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) |_|
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
11.2%
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10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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<PAGE>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sola International Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |X|

- --------------------------------------------------------------------------------
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

4 SOURCES OF FUNDS (SEE INSTRUCTIONS)
WC, BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f). |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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4

<PAGE>
This Statement relates to a tender offer by Sola Acquisition Corp., a
Florida corporation (the "Offeror") and a wholly owned subsidiary of Sola
International Inc., a Delaware corporation (the "Parent"), to purchase all
outstanding shares of (i) Common Stock, par value $.001 per share (the "Common
Stock"), (ii) Series A Convertible Preferred Stock, par value $.001 per share
(the "Series A Preferred"), and (iii) Series B Convertible Preferred Stock, par
value $.001 per share (the "Series B Preferred"), of Neolens, Inc., a Florida
corporation (the "Company"), at a purchase price of $1.14 per share of Common
Stock (the "Common Stock Offer Price"), $25.20 per share of Series A Preferred
(the "Series A Preferred Offer Price"), and $41.09 per share of Series B
Preferred (the "Series B Preferred Offer Price"), in each case net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated June 5, 1996 (the "Offer to Purchase"),
and in the related Letters of Transmittal (which together constitute the
"Offer"), copies of which are filed as Exhibits hereto, respectively, and which
are incorporated herein by reference. This Statement shall also constitute a
Statement on Schedule 13D with respect to shares of Common Stock which Parent or
Offeror may be deemed to beneficially own.

Item 1. Security and Subject Company.

(a) The name of the subject company is Neolens, Inc. The address of the
principal executive offices of the Company is set forth in Section 8 ("Certain
Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.

(b) The exact titles of the classes of equity securities of the Company
being sought in the Offer are Common Stock, par value $.001 per share, Series A
Convertible Preferred Stock, par value $.001 per share, and Series B Convertible
Preferred Stock, par value $.001 per share. The information set forth in the
Introduction to the Offer to Purchase is incorporated herein by reference.

(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.

Item 2. Identity and Background.

(a) through (d), (g) The information set forth in the Introduction and
Section 9 ("Certain Information Concerning the Parent and the Offeror") of the
Offer to Purchase, and in Annex I thereto, is incorporated herein by reference.

(e) and (f) Neither the Offeror, nor the Parent, nor, to the best of their
knowledge, any of the persons listed in Annex I of the Offer to Purchase, has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.

<PAGE>
Item 3. Past Contacts, Transactions or Negotiations With the Subject Company.

(a) The information set forth in Section 11 ("Background of the Offer; Past
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference.

(b) The information set forth in the Introduction and Section 11
("Background of the Offer; Past Contacts with the Company") and Section 8
("Certain Information Concerning the Company") of the Offer to Purchase is
incorporated herein by reference.

Item 4. Source and Amount of Funds or Other Consideration.

(a) and (b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.

Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.

(a) through (e) The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts with the Company") and Section 12
("Purpose of the Offer and the Merger; Plans for the Company") and Section 13
("The Merger Agreement and Related Agreements") of the Offer to Purchase is
incorporated herein by reference.

(f) and (g) The information set forth in Section 7 ("Effect of the Offer on
Market for Shares and Registration under the Exchange Act") of the Offer to
Purchase is incorporated herein by reference.

Item 6. Interest in Securities of the Subject Company.

(a) and (b) The information set forth in the Introduction, Section 9
("Certain Information Concerning the Parent and the Offeror") and Section 13
("The Merger Agreement and Related Agreements") of the Offer to Purchase is
incorporated herein by reference.

Item 7. Contracts, Arrangements, Understandings or Relationships With Respect to
the Subject Company's Securities.

The information set forth in the Introduction, Section 11 ("Background of
the Offer; Past Contacts with the Company") and Section 13 ("The Merger
Agreement and Related Agreements") of the Offer to Purchase is incorporated
herein by reference.

Item 8. Persons Retained, Employed or to be Compensated.

The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.

6
<PAGE>

Item 9. Financial Statements of Certain Bidders.

The information set forth in Section 9 ("Certain Information Concerning the
Parent and the Offeror") of the Offer to Purchase, Item 6 ("Selected Financial
Data") of the Form 10-K/A filed by the Parent with the United States Securities
and Exchange Commission (the "Commission") for the Parent's fiscal year ended
March 31, 1995, and Item 1 ("Financial Statements") of the Form 10-Q filed by
the Parent with the Commission for the Quarterly Period Ended December 31, 1995
is incorporated herein by reference. The incorporation by reference herein of
the above-mentioned financial information does not constitute an admission that
such information is material to a decision by a security holder of the Company
as to whether to sell, tender or hold Shares being sought in the Offer.

Item 10. Additional Information.

(a) The information set forth in Section 11 ("Background of the Offer; Past
Contacts, Transactions or Negotiations with the Company"), Section 12 ("Purpose
of the Offer and the Merger; Plans for the Company") and Section 13 ("The Merger
Agreement and Related Agreements") of the Offer to Purchase is incorporated
herein by reference. (b) and (c) The information set forth in Section 16
("Certain Regulatory and Legal Matters") of the Offer to Purchase is
incorporated herein by reference. (d) The information set forth in Section 7
("Effect of the Offer on the Market for Shares and Registration under the
Exchange Act") is incorporated herein by reference in its entirety. (e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety. Item 11.
Material to be Filed as Exhibits.

(a)(1) Offer to Purchase, dated June 5, 1996.

(a)(2) Letters of Transmittal relating to Common Stock, Series A Preferred
Stock and Series B Preferred Stock.

(a)(3) Letter from Georgeson & Company, Inc., as Information Agent, to
Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.

(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.

(a)(5) Notices of Guaranteed Delivery relating to Common Stock, Series A
Preferred Stock and Series B Preferred Stock.

7
<PAGE>

(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.

(a)(7) Press Release issued by the Parent and the Company on May 30,
1996.

(a)(8) Agreement and Plan of Merger, dated as of May 28, 1996, among the
Parent, the Offeror and the Company.

(a)(9) Press Release issued by the Parent on June 5, 1996.

(b)(1) Amended and Restated Bank Credit Agreement,
dated as of March 2, 1995, among Sola International Inc. as the Borrower,
certain commercial lending institutions as the Lenders, and the Bank of Nova
Scotia as the Agent for the Lenders.

(c)(1) Preferred and Common Stock Agreement, dated as of May 28, 1996,
between the Parent and Norman Davidson.

(c)(2) Option Agreement dated as of May 28, 1996, between the Company and
the Parent.

(c)(3) Cancellation Agreement, dated as of May 28, 1996, between the
Company and Strategica Capital Corporation d/b/a Strategica Group.

(c)(4) Termination Agreement, dated as of May 28, 1996, between the Company
and Jon E. Haglund.

(c)(5) Credit Agreement, dated as of May 28, 1996, between the Parent as
the Lender and the Company as the Borrower.

(c)(6) Security Agreement, dated as of May 28, 1996, between the Company as
the Grantor and the Parent as the Lender.

(c)(7) Subordination Agreement, dated as of May 28, 1996, among Leroy
Meshel, M.D. and Strategica Capital Corporation d/b/a Strategica Group as the
Subordinating Creditors, the Company as Borrower, and the Parent as the Lender.

(d) None.

(e) Not applicable.

(f) None.

8
<PAGE>

SIGNATURE

After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

Dated: June 5, 1996
SOLA INTERNATIONAL INC.

By: /s/ John Heine
----------------------------------
Name: John Heine
Title: Chief Executive Officer and
President

SOLA ACQUISITION CORP.

By: /s/ John Heine
----------------------------------
Name:John Heine
Title: President

<PAGE>

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EXHIBIT INDEX

(a)(1) Offer to Purchase, dated June 5, 1996.

(a)(2) Letters of Transmittal relating to Common Stock, Series A Preferred
Stock and Series B Preferred Stock.

(a)(3) Letter from Georgeson & Company, Inc., as Information Agent, to
Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.

(a)(5) Notices of Guaranteed Delivery relating to Common Stock, Series A
Preferred Stock and Series B Preferred Stock.

(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.

(a)(7) Press Release issued by the Parent and the Company on May 30, 1996.

(a)(8) Agreement and Plan of Merger, dated as of May 28, 1996, among the
Parent, the Offeror and the Company.

(a)(9) Press Release issued by the Parent on June 5, 1996.

(b)(1) Amended and Restated Bank Credit Agreement, dated as of March 2,
1995, among Sola International Inc. as the Borrower, certain commercial lending
institutions as the Lenders, and the Bank of Nova Scotia as the Agent for the
Lenders.

(c)(1) Preferred and Common Stock Agreement, dated as of May 28, 1996,
between the Parent and Norman Davidson.

(c)(2) Option Agreement dated as of May 28, 1996, between the Company and
the Parent.

(c)(3) Cancellation Agreement, dated as of May 28, 1996, between the
Company and Strategica Capital Corporation d/b/a Strategica Group.

(c)(4) Termination Agreement, dated as of May 28, 1996, between the Company
and Jon E. Haglund.

(c)(5) Credit Agreement, dated as of May 28, 1996, between the Parent as
the Lender and the Company as the Borrower.

(c)(6) Security Agreement, dated as of May 28, 1996, between the Company as
the Grantor and the Parent as the Lender.

EXHIBIT 99(A)(1)

OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
SERIES A CONVERTIBLE PREFERRED STOCK,
AND SERIES B CONVERTIBLE PREFERRED STOCK

NEOLENS, INC.

AT
$1.14 NET PER SHARE OF COMMON STOCK,
$25.20 NET PER SHARE OF SERIES A CONVERTIBLE PREFERRED STOCK,
AND $41.09 NET PER SHARE OF SERIES B CONVERTIBLE PREFERRED STOCK
BY
SOLA ACQUISITION CORP.

A WHOLLY OWNED SUBSIDIARY OF

SOLA INTERNATIONAL INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,
UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF
COMMON STOCK REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF
COMMON STOCK ON A FULLY DILUTED BASIS (BUT EXCLUDING SHARES ISSUABLE IN
CONNECTION WITH CERTAIN OPTIONS, WARRANTS, AND RIGHTS, INCLUDING SERIES Q
WARRANTS, AS MORE FULLY SET FORTH HEREIN), (ii) THERE BEING VALIDLY TENDERED BY
THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF SERIES A
CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK
REPRESENTING, IN THE AGGREGATE, A MAJORITY OF THE OUTSTANDING SERIES A
CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK TAKEN
TOGETHER AND (iii) SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE
SECTION 15.

THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER DATED
AS OF MAY 28, 1996, AMONG SOLA INTERNATIONAL INC., SOLA ACQUISITION CORP. AND
NEOLENS, INC.

THE BOARD OF DIRECTORS OF NEOLENS, INC. HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER
AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES IN THE OFFER.

IMPORTANT

Any stockholder desiring to tender shares of Common Stock, Series A
Convertible Preferred Stock or Series B Convertible Preferred Stock should
either (i) complete and sign the appropriate Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal and deliver the Letter of Transmittal with the Shares and all other
required documents to the Depositary, or follow the procedure for book-entry
transfer set forth in Section 3 or (ii) request his broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for him. A
stockholder having shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such person if he desires to
tender his shares.

Any stockholder who desires to tender shares and cannot deliver such shares
and all other required documents to the Depositary by the expiration of the
Offer must tender such shares pursuant to the guaranteed delivery procedure set
forth in Section 3.

Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
at its address and telephone numbers set forth on the back cover of this Offer
to Purchase.

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

June 5, 1996
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----

<S> <C>
INTRODUCTION............................................................................ 1

1. TERMS OF THE OFFER................................................................ 4

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES..................................... 5

3. PROCEDURE FOR TENDERING SHARES.................................................... 6

4. WITHDRAWAL RIGHTS................................................................. 9

5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES........................................... 9

6. PRICE RANGE OF SHARES; DIVIDENDS.................................................. 10

7. EFFECT OF THE OFFER ON THE MARKET FOR COMMON SHARES AND REGISTRATION UNDER THE 11
EXCHANGE ACT......................................................................

8. CERTAIN INFORMATION CONCERNING THE COMPANY........................................ 12

9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR......................... 13

10. SOURCE AND AMOUNT OF FUNDS........................................................ 14

11. BACKGROUND OF THE OFFER; PAST CONTACTS WITH THE COMPANY........................... 15

12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY........................ 16

13. THE MERGER AGREEMENT AND RELATED AGREEMENTS....................................... 18

14. DIVIDENDS AND DISTRIBUTIONS....................................................... 29

15. CERTAIN CONDITIONS OF THE OFFER................................................... 29

16. CERTAIN REGULATORY AND LEGAL MATTERS.............................................. 31

17. FEES AND EXPENSES................................................................. 32

18. MISCELLANEOUS..................................................................... 33

CERTAIN INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF THE PARENT AND THE OFFEROR..................................Annex 1
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK,
SERIES A CONVERTIBLE PREFERRED STOCK AND
SERIES B CONVERTIBLE PREFERRED STOCK OF NEOLENS, INC.

INTRODUCTION

Sola Acquisition Corp., a Florida corporation (the "Offeror") and a wholly
owned subsidiary of Sola International Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of common stock, par value
$.001 per share (the "Common Stock"), all outstanding shares of Series A
Convertible Preferred Stock, par value $.001 per share (the "Series A
Preferred"), and all outstanding shares of Series B Convertible Preferred Stock,
par value $.001 per share (the "Series B Preferred," and, collectively with the
Common Stock and the Series A Preferred, the "Shares"), of Neolens, Inc., a
Florida corporation (the "Company"), at a purchase price of $1.14 per share of
Common Stock (the "Common Stock Offer Price"), $25.20 per share of Series A
Preferred (the "Series A Preferred Offer Price"), and $41.09 per share of Series
B Preferred (the "Series B Preferred Offer Price"), in each case net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase, and in the Letters of Transmittal relating
to such shares (which together constitute the "Offer"). Tendering holders of
Shares will not be obligated to pay brokerage fees, commissions or, except as
set forth in the appropriate Letter of Transmittal, transfer taxes on the
purchase of Shares by the Offeror pursuant to the Offer. The Offeror will pay
all charges and expenses of The First National Bank of Boston (the "Depositary")
and Georgeson & Company Inc. (the "Information Agent"), in connection with the
Offer.

The Company effected a reverse stock split of its Common Stock on a 1 for 5
ratio as of May 26, 1995. Accordingly, certificates representing the Common
Stock which are dated prior to May 26, 1995 as a result of such certificates not
being surrendered to the Company in exchange for new certificates, represent 20%
of the number of shares represented by such certificates.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER (AS HEREINAFTER DEFINED), HAS DETERMINED THAT THE TERMS OF EACH OF
THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.

The Offer is conditioned upon, among other things, (i) there being validly
tendered by the expiration date and not withdrawn that number of shares of
Common Stock representing at least a majority of the sum of all outstanding
shares of Common Stock plus any shares of Common Stock issuable upon the
exercise of options (other than options the holders of which have executed
agreements which provide that, for so long as the Merger Agreement (as
hereinafter defined) shall be in effect, such holders will not exercise such
options prior to the consummation of the Merger, which agreements are in full
force and effect at the time of the expiration of the Offer), warrants (other
than Series Q Warrants) or other rights to acquire shares (whether or not
currently exercisable or vested) having an exercise price equal to or less than
the Common Stock Offer Price or upon the conversion of outstanding Series A or
Series B Preferred (other than Series A Preferred and Series B Preferred which
are validly tendered and not withdrawn prior to the expiration of the Offer),
and (ii) there being validly tendered by the expiration of the Offer and not
withdrawn that number of shares of Series A Preferred and Series B Preferred
representing, in the aggregate, a majority of the outstanding Series A Preferred
and Series B Preferred taken together (the "Minimum Condition"). The Offer also
is subject to other terms and conditions. See Section 15.

FURMAN SELZ LLC, THE COMPANY'S FINANCIAL ADVISOR, HAS DELIVERED TO THE
COMPANY'S BOARD OF DIRECTORS ITS WRITTEN OPINION THAT THE CONSIDERATION TO BE
RECEIVED BY THE STOCKHOLDERS OF THE COMPANY PURSUANT TO THE OFFER AND THE MERGER
IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW. A COPY OF SUCH
OPINION IS CONTAINED IN THE
<PAGE>
COMPANY'S STATEMENT ON SCHEDULE 14D-9, WHICH IS BEING DISTRIBUTED TO THE
COMPANY'S STOCKHOLDERS.

Furman Selz LLC has from time to time provided investment banking services
to AEA Investors, Inc. ("AEA") and its portfolio companies. Prior to the
Parent's March 1995 initial public offering, AEA and its senior management owned
all of the voting common stock of the Parent's former corporate parent. AEA
currently owns less than 3% of the common stock of the Parent.

The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of May 28, 1996 (the "Merger Agreement"), among the Parent, the Offeror and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the Business Corporation Act of the
State of Florida (the "Act"), the Offeror will be merged with and into the
Company (the "Merger"). See Section 12. Following consummation of the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly owned subsidiary of the Parent. At the time
the Merger is consummated (the "Effective Time"), each outstanding share of
Common Stock will be converted into and represent the right to receive the
Common Stock Offer Price, each outstanding share of Series A Preferred will be
converted into and represent the right to receive the Series A Preferred Offer
Price, and each outstanding share of Series B Preferred will be converted into
and represent the right to receive the Series B Preferred Offer Price, net to
the seller in cash, without interest thereon (in each case, other than shares
owned by the Company as treasury stock, shares owned by the Parent or the
Offeror or any subsidiary thereof or shares with respect to which appraisal
rights are properly exercised under Florida law ("Dissenting Shares")). See
Section 5 for a description of certain tax consequences of the Offer and the
Merger.

Pursuant to a Preferred and Common Stock Agreement dated as of May 28, 1996
(the "Stockholder Agreement"), a stockholder of the Company has agreed, among
other things, to tender all 495,975 shares of Common Stock and 12,000 shares of
Series B Preferred owned by him in the Offer, and has granted to the Parent an
irrevocable option, subject to the terms and conditions of this agreement, to
purchase these Shares at the Common Stock Offer Price and the Series B Preferred
Offer Price, as the case may be. The shares of Series B Preferred subject to the
Stockholder Agreement represent all shares of Series B Preferred outstanding and
approximately 78.6% of all shares of Series B Preferred and Series A Preferred,
taken together, represented by the Company to be outstanding as of May 24, 1996.
Accordingly, the tender of the Series B Preferred in accordance with the
Stockholder Agreement (and non-withdrawal of such shares) assures satisfaction
of the Minimum Condition insofar as it relates to the Series A Preferred and
Series B Preferred. The shares of Common Stock subject to the Stockholder
Agreement represent approximately 7.5% of the Common Stock represented by the
Company to be outstanding as of May 24, 1996 (and, after giving effect to the
conversion of the Series B Preferred subject to the Stockholder Agreement into
Common Stock (and the payment of accumulated dividends thereon in the form of
Common Stock), represents approximately 11.2% of the Common Stock represented by
the Company to be outstanding as of May 24, 1996). The Parent and the Offeror
may be deemed to beneficially own the Shares subject to the Stockholder
Agreement. See Section 13.

Pursuant to an Option Agreement dated May 28, 1996 (the "Option Agreement"),
the Company has granted the Parent an option to purchase 8,771,625 units (the
"Units") of one one-hundredth of a share of the Company's Series C Junior
Participating Preferred Stock, par value $.001 per share (the "Series C
Preferred"), at a price of $0.65 per Unit. Each Unit of one one-hundredth of a
share of Series C Preferred has economic and voting rights substantially similar
to those of a share of Common Stock and is convertible, at the option of its
holder, into a share of Common Stock if sufficient Common Stock is available. As
a result of its option to acquire the Units, the Parent has the ability to
acquire securities of the Company holding a majority of the voting power of all
of the Company's securities entitled to vote for election of directors and on
certain other matters. Accordingly, the Parent, without the vote of any other
holder of Company securities, could have the power to elect the Board of
Directors of the Company, to implement certain other corporate action and to
prevent other parties from acquiring

2
<PAGE>
control of the Company or engaging in certain transactions, including mergers,
with the Company. See Section 13 for a further description of the Option
Agreement and Section 16 for a discussion of certain provisions of Florida
law which effectively require the prior consent of the Board of Directors of
the Company for the acquisition of more than ten percent of the Company's
stock by a person seeking to engage in a merger with the Company.

The Company has advised the Offeror that as of May 24, 1996, there were
issued and outstanding (a) 6,625,306 shares of Common Stock, 3,269 shares of
Series A Preferred, and 12,000 shares of Series B Preferred, (b) options to
acquire an aggregate of 974,015 shares of Common Stock at an exercise price less
than the Common Stock Offer Price and warrants to acquire an aggregate of 75,000
shares of Common Stock at an exercise price equal to the Common Stock Offer
Price, and (c) stock rights for the issuance of 46,000 shares of Common Stock
for which consideration had already been paid to the Company. As of the date
hereof, neither the Offeror nor the Parent beneficially owns any Shares (other
than as a result of the Stockholder Agreement). Each share of Series A Preferred
and Series B Preferred is convertible into 20 shares of Common Stock plus
additional shares of Common Stock in respect of accrued accumulated dividends on
such shares, which, based on information provided by the Company, aggregated
approximately an additional 44,700 shares of Common Stock. Accordingly, based
upon information provided by the Company, the Minimum Condition, insofar as it
relates to Common Stock, will be satisfied if at least 4,035,201 shares of
Common Stock are validly tendered prior to the expiration of the Offer and not
withdrawn. This number will be reduced to take into account shares of Series A
Preferred and shares of Series B Preferred validly tendered and not withdrawn
and options in respect of which holders have executed agreements pursuant to
which they agree not to exercise such options prior to consummation of the
Merger.

The Offeror would have sufficient voting power to approve the Merger without
the affirmative vote of any other stockholder if it acquires a sufficient number
of Shares to satisfy the Minimum Condition. In the event that the Offeror
acquires at least 80% of the outstanding Common Stock and, in the aggregate, at
least 80% of the outstanding Series A Preferred Stock and Series B Preferred
Stock, taken together, through the Offer or otherwise, the Offeror and the
Parent would be able to effect the Merger pursuant to the short form merger
provisions of the Act, without prior notice to, or any action by, any other
stockholder of the Company. See Section 12.

THIS OFFER TO PURCHASE AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.

As more fully described in Section 13 of this Offer to Purchase, Parent also
(i) has agreed to make loans to the Company pending consummation of the Merger
in order to finance the Company's ongoing operations and certain other matters,
(ii) has entered into an agreement with the President of the Company regarding
termination of his existing employment agreement with the Company, his provision
of consulting services and other matters, and (iii) an agreement with a party
holding warrants to acquire shares of Common Stock upon authorization of
sufficient shares of Common Stock by the Company's stockholders relating to such
warrants and the termination of such party's advisory and consulting
arrangements with the Company.

The Offeror is not offering to purchase pursuant to the Offer any of the
Company's outstanding 7% convertible subordinated debentures. These debentures
are convertible into shares of Common Stock at a conversion price of $10.00 per
share, which is substantially in excess of the Common Stock Offer Price and,
therefore, Offeror does not believe it is in the interests of holders of the
debentures to exercise their conversion rights in order to participate in the
Offer.

Holders of Series A Preferred and Series B Preferred can tender their shares
in the Offer; they are not required to convert their shares in order to
participate in the Offer.

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<PAGE>
1. TERMS OF THE OFFER.

Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Tuesday, July 2, 1996, unless the Offeror shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Offeror, shall expire.

If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time that
notice of such increase is first published, sent or given to holders of Shares
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice is first so published, sent or given,
then the Offer will be extended until the expiration of such period of ten
business days. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday, and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.

THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION. THE
OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. The Offeror
reserves the right (but shall not be obligated), in accordance with applicable
rules and regulations of the United States Securities and Exchange Commission
(the "Commission"), subject to the limitations set forth in the Merger Agreement
and described below, to waive or reduce the Minimum Condition or to waive any
other condition of the Offer. If the Minimum Condition or any of the other
conditions set forth in Section 15 have not been satisfied by 12:00 Midnight,
New York City time, on Tuesday, July 2, 1996 (or any other time then set as the
Expiration Date), the Offeror may, subject to the terms of the Merger Agreement
as described below, elect to (1) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the Offer,
as extended, (2) subject to complying with applicable rules and regulations of
the Commission, accept for payment all Shares so tendered and not extend the
Offer or (3) terminate the Offer and not accept for payment any Shares and
return all tendered Shares to tendering stockholders. Under the terms of the
Merger Agreement, the Offeror may not (except as described in the next
sentence), without prior written consent of the Company, waive the Minimum
Condition, reduce the number of shares of Common Stock, Series A Preferred or
Series B Preferred subject to the Offer, decrease the price per share of Common
Stock, Series A Preferred, or Series B Preferred to be paid pursuant to the
Offer, change the form of consideration payable in the Offer or extend the
Offer, if all the Offer conditions are satisfied or waived. Notwithstanding the
foregoing, the Offeror may, without the consent of the Company, extend the Offer
(i) if, at the then scheduled Expiration Date, any of the conditions to the
Offeror's obligation to accept for payment and pay for Shares shall not be
satisfied or waived, until such time as, or under certain circumstances until
ten business days after, such conditions are satisfied or waived; (ii) for an
aggregate period of not more than ten business days beyond the initial
Expiration Date if all conditions have been satisfied but less than 80% of the
then outstanding shares of Common Stock and, in the aggregate, less than 80% of
the then outstanding shares of Series A Preferred and Series B Preferred taken
together have been validly tendered and not withdrawn (not including Shares
covered by notices of guaranteed delivery); and (iii) for any period required by
any rule, regulation, interpretation or position of the Commission or the staff
applicable to the Offer. Assuming the prior satisfaction or waiver of the
conditions of the Offer and subject to clauses (ii) and (iii) of the preceding
sentence, the Offeror shall, and Parent shall cause the Offeror to, accept for
payment and pay for Shares validly tendered and not withdrawn pursuant to the
Offer as soon as legally permitted after the commencement thereof.

Subject to the limitations set forth in the Merger Agreement and described
above, the Offeror reserves the right (but will not be obligated), at any time
or from time to time in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notice of such extension to the

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<PAGE>
Depositary and by making a public announcement of such extension. There can be
no assurance that the Offeror will exercise its right to extend the Offer.

Subject to the applicable rules and regulations of the Commission and
subject to the limitations set forth in the Merger Agreement, the Offeror also
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to delay payment for any Shares regardless of whether such
Shares were theretofore accepted for payment, or to terminate the Offer and not
to accept for payment or pay for any Shares not theretofore accepted for payment
or paid for, upon the occurrence of any of the conditions set forth in Section
15, by giving oral or written notice of such delay or termination to the
Depositary and (ii) at any time or from time to time, to amend the Offer in any
respect. The Offeror's right to delay payment for any Shares or not to pay for
any Shares theretofore accepted for payment is subject to the applicable rules
and regulations of the Commission, including Rule 14e-1(c) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), relating to the Offeror's
obligation to pay for or return tendered Shares promptly after the termination
or withdrawal of the Offer.

Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the obligation of
the Offeror under such rule or the manner in which the Offeror may choose to
make any public announcement, the Offeror currently intends to make
announcements by issuing a press release to the Dow Jones News Service and
making any appropriate filing with the Commission.

If the Offeror makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including a waiver of the Minimum Condition), the Offeror will
disseminate additional tender offer materials and extend the Offer if and to the
extent required by Rules 14d-4(c), 14d-6(d) and 14(e)-1 under the Exchange Act
or otherwise. The minimum period during which a tender offer must remain open
following material changes in the terms of the offer or the information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changes. With respect to a
change in price or a change in percentage of securities sought, a minimum ten
business day period is generally required to allow for adequate dissemination to
stockholders and investor response.

The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will be
mailed to record holders of the Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.

Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Offeror will accept for payment and will pay for, all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, the Offeror
expressly reserves the right to delay payment for Shares in order to comply in
whole or in part with any applicable law. See Sections 1 and 16. In all cases,
payment for Shares accepted for

5
<PAGE>
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3, (ii) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with all required signature guarantees or, in the case of a book-entry transfer,
an Agent's Message (as defined below) and (iii) any other documents required by
the Letter of Transmittal.

The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.

For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn, if
and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or the Offeror
is unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to the Offeror's rights under Section 1, the Depositary may,
nevertheless, on behalf of the Offeror, retain tendered Shares, and such Shares
may not be withdrawn, except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 below and as otherwise
required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will
interest be paid by the Offeror because of any delay in making such payment.

If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.

If, prior to the Expiration Date, the Offeror increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer.

3. PROCEDURE FOR TENDERING SHARES.

Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal relating to the
Common Stock, Series A Preferred or Series B Preferred, as the case may be (or a
manually signed facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date, or the
tendering stockholder must comply with the guaranteed delivery procedure set
forth below. In addition, either (i) certificates representing such Shares must
be received by the Depositary or such Shares must be tendered pursuant to the
procedure for book-entry transfer set forth below, and a Book-Entry Confirmation
must be received by the Depositary, in each case prior to the Expiration Date or
(ii) the guaranteed delivery procedure set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted.

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<PAGE>
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.

Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) an appropriate Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents, must, in any case, be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase or (ii) the guaranteed delivery procedures
described below must be complied with.

Signature Guarantee. Signatures on the appropriate Letter of Transmittal
must be guaranteed by a member in good standing of the Securities Transfer
Agents Medallion Program, or by any other bank, broker, dealer, credit union,
savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Exchange Act
(each of the foregoing being referred to as an "Eligible Institution" and,
collectively, as "Eligible Institutions"), unless the Shares tendered thereby
are tendered (i) by a registered holder of Shares who has not completed either
the box labeled "Special Delivery Instructions" or the box labeled "Special
Payment Instructions" on the Letter of Transmittal or (ii) for the account of
any Eligible Institution. If the certificates evidencing Shares are registered
in the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
to the Letter of Transmittal.

Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly complied with:

(i) the tender is made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Offeror herewith, is
received by the Depositary, as provided below, prior to the Expiration Date;
and

(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal relating to the Common Stock, Series
A Preferred or Series B Preferred, as the case may be (or a manually signed
facsimile thereof), and any required signature guarantees, or, in the case
of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal are received by the Depositary within
three NASDAQ trading days after the date of such Notice of Guaranteed
Delivery.

The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.

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<PAGE>
THE METHOD OF DELIVERY OF SHARES, AN APPROPRIATE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.

Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
relating to the Common Stock, Series A Preferred or Series B Preferred, as the
case may be (or a manually signed facsimile thereof), with all required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message and (iii) any other documents required by the Letter of Transmittal.

BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH HIS
CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH STOCKHOLDER
IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 8 SET
FORTH IN THE LETTER OF TRANSMITTAL.

Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Offeror, in its sole discretion,
and its determination will be final and binding on all parties. The Offeror
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of the Offeror, be unlawful. The Offeror also reserves
the absolute right to waive any of the conditions of the Offer, subject to the
limitations set forth in the Merger Agreement, or any defect or irregularity in
the tender of any Shares. The Offeror's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
Instructions to the Letter of Transmittal) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of the Offeror, the
Parent, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification.

Other Requirements. By executing the appropriate Letter of Transmittal as
set forth above, a tendering stockholder irrevocably appoints designees of the
Offeror as such stockholder's proxies, each with full power of substitution, in
the manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's right with respect to the Shares tendered by such stockholder and
accepted for payment by the Offeror (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
May 28, 1996). All such proxies shall be considered coupled with an interest in
the tendered Shares. This appointment is effective when, and only to the extent
that, the Offeror accepts for payment the Shares deposited with the Depositary.
Upon acceptance for payment, all prior proxies given by the stockholder with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent proxies may be given or written consent
executed (and, if given or executed, will not be deemed effective). The
designees of the Offeror will, with respect to the Shares and other securities
or rights, be empowered to exercise all voting and other rights of such
stockholder as they in their sole judgment deem proper in respect of any annual
or special meeting of the Company's stockholders, or any adjournment or
postponement thereof. The Offeror reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Offeror's payment
for such Shares, the Offeror must be able to exercise full voting and other
rights with respect to such Shares and the other securities or rights issued or
issuable in respect of such Shares, including voting at any meeting of
stockholders (whether annual or special or whether or not adjourned) in respect
of such Shares.

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<PAGE>
4. WITHDRAWAL RIGHTS.

Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after Saturday, August 3, 1996. If purchase of or payment for Shares is delayed
for any reason or if the Offeror is unable to purchase or pay for Shares for any
reason, then, without prejudice to the Offeror's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of the Offeror and
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as set forth in this Section 4, subject to Rule
14e-1(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or fail to return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the Offer.

For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the type of Shares to be withdrawn (i.e. Common Stock, Series A
Preferred or Series B Preferred), the number of Shares to be withdrawn and the
name in which the certificates representing such Shares are registered, if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedure for book-entry transfer set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Offeror, in its sole discretion, and its determination will be final and binding
on all parties. None of the Offeror, the Parent, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification.

Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.

5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.

The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted into the right to receive cash in the
Merger (including pursuant to the exercise of appraisal rights). The discussion
applies only to holders of Shares in whose hands Shares are capital assets, and
may not apply to Shares received upon conversion of securities or exercise of
warrants or other rights to acquire Shares or pursuant to the exercise of
employee stock options or otherwise as compensation, or to holders of Shares who
are in special tax situations (such as insurance companies, tax-exempt
organizations or non-U.S. persons).

THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL
INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE INDIVIDUAL
CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN
TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH
STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS.

The receipt of cash for Shares pursuant to the Offer or the Merger
(including pursuant to the exercise of appraisal rights) will be a taxable
transaction for federal income tax purposes (and also may

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<PAGE>
be a taxable transaction under applicable state, local and other income tax
laws). In general, for federal income tax purposes, a holder of Shares will
recognize gain or loss equal to the difference between his adjusted tax basis in
the Shares sold pursuant to the Offer or converted into the right to receive
cash in the Merger and the amount of cash received therefor. Gain or loss must
be determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or converted to
cash in the Merger. Such gain or loss will be capital gain or loss (other than,
with respect to the exercise of appraisal rights, amounts, if any, which are or
are deemed to be interest for federal income tax purposes, which amounts will be
taxed as ordinary income) and will be long-term gain or loss if, on the date of
sale (or, if applicable, the date of the Merger), the Shares were held for more
than one year. In the case of an individual, net long-term capital gain may be
subject to a reduced rate of tax and net capital losses may be subject to limits
on deductibility.

Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the stockholder (a) fails to furnish his social security number or TIN, (b)
furnishes an incorrect TIN, (c) fails to properly include a reportable interest
or dividend payment on his federal income tax return, or (d) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN provided is his correct number and that he is not subject
to backup withholding. Backup withholding is not an additional tax but merely an
advance payment, which may be refunded to the extent it results in an
overpayment of tax. Certain persons generally are entitled to exemption from
backup withholding, including corporations and financial institutions. Certain
penalties apply for failure to furnish correct information and for failure to
include reportable payments in income. Each stockholder should consult with his
own tax advisor as to his qualification for exemption from backup withholding
and the procedure for obtaining such exemption. Tendering stockholders may be
able to prevent backup withholding by completing the Substitute Form W-9
included in the appropriate Letter of Transmittal. See Section 3.

6. PRICE RANGE OF SHARES; DIVIDENDS.

According to the Company's Annual Report on Form 10-K for the year ended
October 31, 1995, beginning with the Company's initial public offering in June
1986 and through October 26, 1995, the Common Stock was listed for trading on
the NASDAQ SmallCap Market under the symbol "NEOL." As a result of its failure
to meet the listing requirements for such listing, effective October 26, 1995,
the Common Stock was deleted from the NASDAQ SmallCap Market and since then has
traded on the OTC Bulletin Board. The following table sets forth for the periods
indicated the high and low bid prices per share of Common Stock as quoted by
NASDAQ or on the OTC Bulletin Board, as applicable, based on published financial
sources. Prices quoted prior to May 26, 1995 have been adjusted to reflect the
Company's 5-for-1 reverse split effective as of such date.

<TABLE><CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1994:
Quarter Ended
January 31........................................................... $8 9/32 $3 19/32
April 30............................................................. 6 13/32 3 1/8
July 31.............................................................. 5 25/32 3 9/32
October 31........................................................... 7 1/32 4 1/16
FISCAL 1995:
Quarter Ended
January 31........................................................... 4 3/8 2 21/32
April 30............................................................. 4 3/8 2 3/16
July 31.............................................................. 2 1/4 7/8
October 31........................................................... 2 3/8 1/2
FISCAL 1996:
Quarter Ended
January 31........................................................... 1 3/8 7/16
April 30............................................................. 1 31/32 1/2
July 31.............................................................. 1 7/16 57/64
(through May 29, 1996)
</TABLE>

10
<PAGE>
On May 29, 1996, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing bid per share
of Common Stock as reported on the OTC Bulletin Board was $1 1/64.

Stockholders are urged to obtain current market quotations for the Shares.

The Company has not paid any cash dividends on the Common Stock.

Neither the Series A Preferred nor the Series B Preferred are publicly
traded and, accordingly, no information regarding the prices at which sales, if
any, of such securities have been effected is available to Offeror. The Company
has not paid any cash dividends on the Series A Preferred and the Series B
Preferred, each of which is entitled to cumulative dividends at the rate of 10%
per annum of their respective liquidation preference. Aggregate cumulated
dividends, upon conversion of the Series A Preferred or the Series B Preferred,
also are convertible into shares of common stock in accordance with the terms of
such securities.

7. EFFECT OF THE OFFER ON THE MARKET FOR COMMON SHARES AND
REGISTRATION UNDER THE EXCHANGE ACT.

The Common Stock is currently traded on the OTC Bulletin Board. The purchase
of shares of Common Stock pursuant to the Offer will reduce the number of shares
of Common Stock that might otherwise trade publicly and will reduce the number
of holders of Common Stock, which will likely adversely affect the liquidity and
market value of the remaining Common Stock held by stockholders other than the
Offeror. The extent of the public market, if any, for shares of Common Stock and
the availability of price quotations in respect thereof following the purchase
of Shares pursuant to the Offer will be dependent upon the number of holders of
shares of Common Stock remaining at such time, the interest in maintaining a
market in such shares on the part of securities firms, the possible termination
of registration of such shares under the Exchange Act, as described below, and
other factors.

The Common Stock is currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 record holders of Common Stock. It is the intention
of the Offeror to seek to cause an application for such termination to be made
as soon after consummation of the Offer as the requirements for termination of
registration of the Common Stock are met. Termination of registration of shares
of Common Stock under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission and would make certain provisions of the Exchange Act no longer
applicable to the Company. For example, if such registration were terminated,
the Company would no longer legally be required to disclose publicly in proxy
materials distributed to stockholders the information which it now must provide
under the Exchange Act or to make public disclosure of financial and other
information in annual, quarterly and other reports required to be filed with the
Commission under the Exchange Act; the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions would no longer be
applicable to the Company; and the officers, directors and 10% stockholders of
the Company would no longer be subject to the "short-swing" insider trading
reporting and profit recovery provisions of the Exchange Act. Furthermore, if
such registration were terminated, persons holding "restricted securities" of
the Company may be deprived of their ability to dispose of such securities under
Rule 144 promulgated under the Securities Act of 1933, as amended.

Neither the Series A Preferred nor the Series B Preferred is currently
publicly traded or registered under the Exchange Act. Because shares of the
Series A Preferred and Series B Preferred are both convertible into shares of
Common Stock, the effects of the offer on the Common Stock described above also
may be relevant to holders of the Series A Preferred and the Series B Preferred
and the liquidity and market value of such securities.

11
<PAGE>
8. CERTAIN INFORMATION CONCERNING THE COMPANY.

Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase, including financial information, has been
furnished by the Company or has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources.
Although neither the Offeror nor the Parent has any knowledge that would
indicate that statements contained herein based upon such documents are untrue,
none of the Offeror, the Parent or the Information Agent assumes any
responsibility for the accuracy or completeness of the information concerning
the Company, furnished by the Company, or contained in such documents and
records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to the Offeror and the Parent.

The Company is a Florida corporation with its principal executive offices
located at 18963 Northeast 4th Court, Miami, Florida 33179.

Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in the
Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1995,
and the Company's Form 10-Q for the quarter ended January 31, 1996. More
comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission, and the following summary is
qualified in its entirety by reference to such reports and such other documents
and all the financial information (including any related notes) contained
therein. Such reports and other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth below.

NEOLENS, INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED AS OF AND FOR THE
JANUARY 31 FISCAL YEAR
(UNAUDITED) ENDED OCTOBER 31
--------------- -----------------------------
1996 1995 1995 1994 1993
----- ------ ------- ------- -------

<S> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA
Net Sales....................................... $ 565 $ 556 $ 2,432 $ 2,017 $ 3,223
Costs and Expenses.............................. 881 1,160 4,187 4,680 5,382
Operating earnings (losses)..................... (316) (604) (1,754) (2,663) (2,159)
Net earnings (losses)........................... (393) (647) (2,130) (2,609) (2,405)
Net earnings (losses) per share................. (.07) (.13) (.41) (.57) (.58)

<CAPTION>
AS OF AND FOR
AS OF JAN. 31 THE FISCAL YEAR
(UNAUDITED) ENDED OCTOBER 31
------------- ----------------
1996 1995 1994
------------- ------ ------

<S> <C> <C> <C>
BALANCE SHEET
DATA
Total assets.................................................. $ 2,594 $2,653 $3,344
Net property, plant and equipment............................. 896 930 1,054
Total liabilities............................................. 2,778 2,444 3,194
Stockholders' equity.......................................... (184) 209 151
</TABLE>

The Company is currently subject to the informational requirements of the
Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. The Company is required to disclose in
such reports certain information, as of particular dates, concerning the
Company's directors and

12
<PAGE>
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interests of such persons
in transactions with the Company. Such reports, proxy statements and other
information may be inspected at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street (Suite 400), Chicago, Illinois 60661. Copies of this material may also be
obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.

9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR.

The principal executive offices of the Offeror and the Parent are located at
2420 Sand Hill Road, Suite 200, Menlo Park, California 94025.

The Offeror is a Florida corporation and a wholly owned subsidiary of the
Parent. To date, the Offeror has not conducted any business other than that
incident to its formation, the execution and delivery of the Merger Agreement
and the commencement of the Offer. Accordingly, no meaningful financial
information with respect to the Offeror is available.

The Parent, a Delaware corporation, designs, manufactures and distributes a
broad range of eyeglass lenses, primarily focusing on the plastic lens segment
of the global lens market. The Parent has manufacturing and distribution sites
in three major regions--North America, Europe and the Rest of World (including
primarily Australia, Asia and South America).

Set forth below is certain selected historical consolidated financial
information with respect to the Parent excerpted or derived from financial
information contained in the Parent's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995 and the Parent's Form 10-Q for the quarterly period
ended December 31, 1995. More comprehensive financial information is included in
such reports and other documents filed by the Parent with the Commission, and
the following summary is qualified in its entirety by reference to such reports
and such other documents and all the financial information (including any
related notes) contained therein.

SOLA INTERNATIONAL INC. (FORMERLY SOLA GROUP LTD.)
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE><CAPTION>
AS OF AND
NINE MONTHS FOR THE
ENDED FISCAL
DECEMBER 31 YEAR ENDED
(UNAUDITED) MARCH 31
----------- -----------
1995 1995
----------- -----------
<S> <C> <C>
STATEMENT OF
OPERATIONS DATA
Net Sales............................................................ $ 283,117 $ 345,631
Net income before extraordinary item................................. 22,313 13,640
Net income........................................................... 21,401 9,725
Net income per share before extraordinary item....................... .97 .78
Net income per share................................................. .93 .56
</TABLE>

13
<PAGE>
<TABLE><CAPTION>
AS OF
AND FOR
THE
FISCAL
YEAR
AS OF DEC. 31 ENDED
(UNAUDITED) MARCH 31
------------- --------
1995 1995
------------- --------
<S> <C> <C>
BALANCE SHEET
DATA..............................................................
Total assets........................................................ $ 391,462 $383,457
Net property, plant and equipment................................... 75,311 71,432
Long-term debt, less current portion................................ 3,304 3,741
Bank debt, less current portion..................................... 8,500 --
Senior subordinated notes........................................... 87,871 103,666
Total liabilities................................................... 212,633 224,014
Stockholders' equity................................................ 178,829 159,443
</TABLE>

The Parent is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports and other information with
the Commission relating to its business, financial condition and other matters.
Such reports and other information are available for inspection and copying at
the offices of the Commission in the same manner as set forth with respect to
the Company in Section 8.

Except as described in this Offer to Purchase, none of the Offeror, the
Parent, or, to the best knowledge of the Offeror and the Parent, any of the
persons listed in Annex I to this Offer to Purchase owns or has any right to
acquire any Shares and none of them has effected any transaction in any Shares
during the past 60 days.

10. SOURCE AND AMOUNT OF FUNDS.

The total amount of funds required by the Parent and the Offeror to purchase
Shares validly tendered pursuant to the Offer, consummate the Merger, perform
their obligations to repay certain indebtedness of the Company upon consummation
of the Merger and to pay certain amounts under agreements described in Section
13 of this Offer to Purchase, and to pay related fees and expenses is estimated
to be approximately $16.5 million. (Approximately $13 million will be required
to acquire or cancel all equity securities and options and warrants issued by
the Company.) The Offeror will obtain all of such funds through the Parent,
which will obtain such funds either from working capital or bank borrowings
under available credit facilities.

The Parent is currently party to an Amended and Restated Bank Credit
Agreement, dated March 2, 1995, with the Bank of Nova Scotia, for itself and as
agent for a syndicate of other financial institutions, covering an aggregate
amount of $85 million (the "Revised Bank Facility"). The Revised Bank Facility
consists of a revolving credit facility (the "Revised Revolver") with the amount
thereunder equal to the lesser of (i) $85 million or (ii) 75% of eligible
accounts receivable and 45% of eligible inventory of the Parent and its
subsidiaries, as defined. The Revised Bank Facility contains a number of
covenants, including, among others, covenants restricting the Parent and its
subsidiaries with respect to the incurrence of indebtedness (including
contingent obligations), the ability to declare, pay or make dividends or other
distributions in excess of prescribed levels, the creation of liens, the making
of certain investments and loans, engaging in unrelated business, transactions
with affiliates, the consummation of certain transactions such as sales of
substantial assets, mergers or consolidations and other transactions. The Parent
and its subsidiaries are also required to comply with certain financial tests
and maintain certain financial ratios. The Parent has pledged the shares of its
domestic subsidiaries and has pledged 65% of the shares of certain significant
foreign subsidiaries, as defined, as collateral for the Revised Bank Facility.
It is anticipated that borrowings under the Revised Bank Facility will be

14
<PAGE>
repaid from funds generated internally by the Parent and its subsidiaries
(including the Company) and from other sources which may include other bank
financings.

The foregoing description of the Revised Bank Facility is qualified in its
entirety by reference to the text of the Amended and Restated Bank Credit
Agreement filed as an exhibit to the Tender Offer Statement on Schedule 14D-1 of
the Offeror (the "Schedule 14D-1") which the Parent filed with the Commission in
connection with the Offer and is incorporated herein by reference.

The Offer is not subject to a financing condition.

11. BACKGROUND OF THE OFFER; PAST CONTACTS WITH THE COMPANY.

In March 1995, the Company entered into a distribution agreement with Parent
for the distribution by Parent of the Company's existing polycarbonate lenses on
a world-wide basis. The distribution agreement is for a minimum period of
eighteen months from signing on a semi-exclusive basis, during which period
Parent has exclusive rights to distribute the Company's existing polycarbonate
lenses on a private label basis and the Company will continue to distribute
these products under its own label to its previously existing customers. Under
the terms of the distribution agreement as subsequently modified by the parties,
Parent has the right until March 31, 1996 to convert the semi-exclusive
arrangement into an exclusive arrangement, whereby Parent will have the
exclusive rights to distribute the Company's existing polycarbonate lenses for
the ensuing two year period. Unless either party notifies the other within 90
days of the end of any two year exclusive arrangement, the exclusive arrangement
will automatically renew for consecutive two year terms. If Parent does not
exercise its exclusive rights by March 31, 1996, the Company may solicit new
customers for its existing products and the agreement with Parent will continue
on a semi-exclusive basis through September 30, 1996, unless otherwise renewed
or extended by the parties. The distribution agreement also provides that only
certain specified customers could be retained by the Company during the
semi-exclusive period and that those retained would have to be transferred to
Parent if Parent exercises its exclusive rights. Under the distribution
agreement, Parent is required to purchase certain minimum amounts of the
Company's products each month, which amounts increase in quantity over the term
of the agreement. The Company has reported that sales to Parent during the
Company's fiscal year ended October 31, 1995 were approximately $950,000 or
approximately 39% of the Company's total sales. Through May 24, 1996, the
Company's sales to Parent pursuant to the distribution agreement were
approximately $860,000.

In the course of discussions between senior officers of the Company and
Parent relating to the existing distribution agreement in late 1995 and early
1996, various possible business relationships between the companies were
considered, including alliances. These possibilities were not seriously pursued.

During March 1996, Parent and its representatives commenced a due diligence
review of the Company. In late March, 1996, representatives of Parent, the
Company and Strategica Capital Corporation began discussions regarding the
possible acquisition of the Company by Parent. These discussions continued
through April and May 1996, during which time Parent continued its due diligence
review of the Company, and culminated in the negotiations resulting in the
Merger Agreement and the related agreements described in Section 13 of this
Offer to Purchase.

On May 30, 1996, the Parent and the Company issued a press release
announcing the Merger Agreement. On June 5, 1996, the Offeror commenced the
Offer.

15
<PAGE>
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.

The purpose of the Offer, the Merger, the Merger Agreement, the Option
Agreement, the Stockholder Agreement, and the other agreements described in
Section 13 of this Offer to Purchase is to enable the Parent to acquire control
of, and the entire equity interest in, the Company. Upon consummation of the
Merger, the Company will become a wholly owned subsidiary of the Parent. The
Offer is being made pursuant to the Merger Agreement.

Under the Act, the approval of the Board of Directors of the Company, and
the affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and, in the aggregate, a majority of shares of Series A Preferred
and Series B Preferred taken together are required to approve and adopt the
Merger Agreement and the transactions contemplated thereby, including the
Merger. Section 607.0901 of the Act provides that any business combination with
a beneficial owner of ten percent or more of the voting shares of a Florida
corporation must be approved by two-thirds of the outstanding voting shares of
the Corporation other than those shares held by the ten percent shareholder
unless certain exceptions apply. Also, Section 607.0902 of the Act provides that
the shares of a person acquiring at least 20% of a Florida corporation's voting
power may lose their right to vote and its shares may be subject to redemption
unless the remaining shareholders vote to approve its voting rights at a special
meeting of shareholders. However, neither of these provisions applies where the
transaction at issue has been approved by a majority of the directors not
affiliated with the ten percent shareholder or potential acquirer. As a result
of the approval of the Board of Directors of the Company of the Merger Agreement
and related matters, these sections of the Act will not apply to the Merger. See
Section 16.

The Board of Directors of the Company has approved the Offer, the Merger and
the Merger Agreement and the transactions contemplated thereby and has approved
the transactions contemplated by the Stockholder Agreement and the Option
Agreement, including for the purposes of Sections 607.0901 and 607.0902 of the
Act, and, unless the Merger is consummated pursuant to the short-form merger
provisions under the Act described below (in which event no further corporate
action is required), the only remaining required corporate action of the Company
is the approval and adoption of the Merger Agreement and the transactions
contemplated thereby by the affirmative vote of the holders of a majority of the
shares of Common Stock and, in the aggregate, a majority of the shares of Series
A Preferred and Series B Preferred taken together. See Section 16.

In the Merger Agreement, the Company has agreed to take all action necessary
to convene a meeting of its stockholders as promptly as practicable after the
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby, if such action
is required by the Act. The Parent has agreed that, subject to applicable law,
all Shares owned by the Offeror or any other subsidiary of the Parent will be
voted in favor of the Merger Agreement and the transactions contemplated thereby
(subject to the right of the Parent and the Offeror to vote such Shares as they
may elect in the event of a Superior Proposal (as hereinafter defined)). If the
Offeror owns a majority of the shares of Common Stock and a majority in the
aggregate of the shares of Series A Preferred and Series B Preferred, approval
of the Merger can be obtained without the affirmative vote of any other
stockholder of the Company.

Short Form Merger. Under the Act, if the Offeror acquires at least 80% of
the shares of Common Stock and, in the aggregate, 80% of the shares of Series A
Preferred and Series B Preferred taken together, the Offeror will be able to
approve the Merger without a vote of the Company's stockholders. In such event,
the Offeror anticipates that it will take all necessary and appropriate action
to cause the Merger to become effective as soon as reasonably practicable after
such acquisition without a meeting of the Company's stockholders. If the
conditions to the Offeror's obligation to purchase Shares in the Offer are
satisfied prior to 80% of the Common Stock and, in the aggregate, 80% of the
shares of Series A Preferred and Series Preferred, taken together, being
tendered into the Offer, the Offeror may, subject to certain limitations set
forth in the Merger Agreement, delay its purchase of the Shares tendered to it
in the Offer. See Section 1. If the Offeror does not otherwise acquire at least
80% of the

16
<PAGE>
shares of Common Stock and, in the aggregate, 80% of the shares of Series A
Preferred and Series B Preferred, taken together, pursuant to the Offer or
otherwise, a significantly longer period of time may be required to effect the
Merger, because a vote of the Company's stockholders would be required under the
Act.

Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of the
Shares at the time the Merger is consummated will have certain rights pursuant
to the provisions of Section 607.1302 of the Act to dissent and demand appraisal
of their Shares. Under Section 607.1302, dissenting stockholders who comply with
the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest, if any, as determined in the discretion of the court. Any such
judicial determination of the fair value of the Shares could be based upon
factors other than, or in addition to, the price per share to be paid in the
Merger or the market value of the Shares. The value so determined could be more
or less than the price per Share to be paid in the Offer and the Merger.

Going Private Transactions. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or any other
merger involving the Company. However, Rule 13e-3 would be inapplicable if (a)
the Shares are deregistered under the Exchange Act prior to the merger or (b)
any such merger is consummated within one year after the purchase of the Shares
pursuant to the Offer and such merger provides for stockholders to receive cash
for their Shares in an amount at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockholders prior to the consummation of
the transaction.

Purchases of Shares. Whether or not the Offeror purchases Shares pursuant to
the Offer, the Offeror expressly reserves the right to acquire, following
consummation or termination of the Offer, additional Shares through open market
purchases, privately negotiated transactions, another tender offer or otherwise.
Any such purchases of additional Shares might be on terms which are the same as,
or more or less favorable than, those of this Offer. In any event, the Offeror
is under no obligation to effect any such purchases. The Offeror also reserves
the right, subject to the terms of the Merger Agreement, to dispose of any or
all Shares that it may acquire.

Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. Except for Jon E. Haglund,
currently the Chairman of the Board, Chief Executive Officer and acting
President of the Company, who has entered into an agreement relating to the
termination of his employment and his provision of consulting services after the
consummation of the Merger, the Parent generally expects to continue to employ
the Company's employees. The directors of the Offeror at the Effective Time will
be the directors of the Surviving Corporation and the then officers of the
Company (other than Mr. Haglund) and such other persons as are designated by the
Parent shall be the officers of the Surviving Corporation. After the purchase of
Shares pursuant to the Offer and prior to the consummation of the Merger, it is
anticipated that the Company will not declare any dividends on the Shares. As
described in Section 13, following the purchase of Shares in the Offer, the
Parent will be entitled to designate at least a majority of the Board of
Directors of the Company.

The Parent will continue to evaluate the business and operations of the
Company during the pendency of the Offer and after the consummation of the Offer
and the Merger, and will take such actions as it deems appropriate under the
circumstances then existing. The Parent intends to conduct a

17
<PAGE>
comprehensive review of the Company's business, operations and capitalization
with a view to optimizing exploitation of the Company's potential in conjunction
with the Parent's business.

Except as indicated in this Offer to Purchase, the Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any other
material changes in the Company's corporate structure or business, or the
composition of the Company's Board of Directors or management.

13. THE MERGER AGREEMENT AND RELATED AGREEMENTS.

The following is a summary of the certain provisions of the Merger
Agreement, the Option Agreement, the Stockholder Agreement, and certain other
agreements, copies of which are filed as exhibits to the Schedule 14D-1 filed by
the Parent and the Offeror with respect to the Offer and referred to in Section
18. This summary is not intended to be a complete description of these
agreements and is qualified in its entirety by reference to the complete text of
these agreements which have been filed as exhibits to the Schedule 14D-1.

THE MERGER AGREEMENT

The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement.

The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the Act, the
Offeror shall be merged with and into the Company. Following the Merger, the
separate corporate existence of the Offeror shall cease and the Company shall
continue as the Surviving Corporation and shall succeed to and assume all the
rights and obligations of the Offeror in accordance with the Act. The Articles
of Incorporation of the Offeror, as in effect immediately prior to the time the
Merger is consummated (the "Effective Time"), shall be amended to change the
name of the Offeror to that of the Company, and, as so amended, the Articles of
Incorporation and By-Laws of the Offeror shall be the Articles of Incorporation
and By-Laws of the Surviving Corporation. The directors of the Offeror
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation and the officers of the Company immediately prior to the Effective
Time (other than Mr. Haglund) and such other persons as designated by the Parent
shall be the officers of the Surviving Corporation as of the Effective Time.

Conversion of Securities. At the Effective Time, (i) each share of Common
Stock issued and outstanding immediately prior thereto will be converted into
the right to receive the Common Stock Offer Price, without interest, (ii) each
share of Series A Preferred issued and outstanding immediately prior thereto
will be converted into the right to receive the Series A Preferred Offer Price,
without interest, and (iii) each share of Series B Preferred issued and
outstanding immediately prior thereto will be converted into the right to
receive the Series B Preferred Offer Price, without interest (except in each
such case for any Shares held by the Company as treasury shares, Shares owned by
the Parent or any of its subsidiaries, including the Offeror, and Dissenting
Shares (as defined below)).

Dissenting Shares. The Merger Agreement provides that, if required by the
Act, Shares which are held by holders who have properly exercised appraisal
rights with respect thereto in accordance with Section 607.1320 of the Act
("Dissenting Shares") will not be exchangeable for the right to receive the
Common Stock Offer Price, the Series A Preferred Offer Price, or the Series B
Preferred Offer Price, as the case may be, and holders of such Dissenting Shares
will be entitled to receive payment of the appraised value of their Shares in
accordance with the Act unless such holders fail to perfect or withdraw or lose
their right to appraisal and payment under the Act. If, after the Effective
Time, any

18
<PAGE>
holder fails to perfect or effectively withdraws or loses such right, such
Dissenting Shares will thereupon be treated as if they had been converted into,
at the Effective Time, the right to receive, without interest, the Common Stock
Offer Price, the Series A Preferred Offer Price or the Series B Preferred Offer
Price, as the case may be.

Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to the Parent and the Offeror,
including, but not limited to, representations and warranties relating to the
Company's organization, qualification, capitalization, authority to enter into
the Merger Agreement and carry out the transactions contemplated thereby,
required consents and approvals, filings made by the Company with the Commission
under the Securities Act of 1933 or the Exchange Act (including financial
statements included in the documents filed by the Company under these acts), the
absence of certain events that could have a material adverse effect on the
Company, litigation, compliance with applicable law, employee benefit plans,
employment relations, environmental matters, intellectual property, insurance
and taxes.

In addition, the Parent and the Offeror also have made customary
representations and warranties to the Company, including, but not limited to,
representations and warranties relating to the Parent's and the Offeror's
organization and good standing, the Parent's and the Offeror's authority to
enter into the Merger Agreement and carry out the transactions contemplated
thereby, required consents and approvals and the availability of sufficient
funds to consummate the Offer and the Merger.

Covenants Relating to the Conduct of Business. Pursuant to the Merger
Agreement, the Company has agreed that, prior to the Effective Time, the Company
shall in all material respects carry on its business in, and not enter into any
material transaction other than in accordance with, the regular and ordinary
course and, to the extent consistent therewith, use its reasonable best efforts
to preserve intact its current business organization, keep available the
services of its current officers and employees and preserve its relationships
with customers, suppliers and others having business dealings with it. Without
limiting the generality of the foregoing, the Company shall not, without the
prior written consent of the Parent: (a) other than in connection with (i) the
conversion of the Series A Preferred or the Series B Preferred into Common Stock
in accordance with their current terms, (ii) the exercise of options or warrants
outstanding prior to the date of the Merger Agreement in accordance with their
current terms and (iii) the payment of pay-in-kind dividends on the Series A
Preferred or the Series B Preferred in accordance with their current terms, (x)
declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital stock, or
otherwise make any payments to stockholders of the Company in their capacity as
such, other than dividends declared prior to the date of the Merger Agreement,
(y) split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of its capital stock or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities; (b) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible securities
or equity equivalent (other than as specified in (i) through (iii) of clause
(a)); (c) amend or prepare any amendment or change to its Articles of
Incorporation or By-Laws; (d) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of or
equity in, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any assets, in each case that are material,
individually or in the aggregate, to the Company; (e) sell, lease or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, any of its assets
that are material, individually or in the aggregate, to the Company; (f) make
any commitment or enter into any contract or agreement except in the ordinary
course of business consistent with past practice or make or commit to make any
capital expenditure of $25,000 or more; (g) except pursuant to the credit
agreement dated the date of the Merger Agreement between the

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Company and the Parent, incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice, loans from Strategica
Capital Corporation to fund expenses related to the transactions contemplated by
the Merger Agreement on the terms set forth in its current credit and loan
agreement with the Company or loans from the Parent, or make any loans, advances
or capital contributions to, or investments in, any other person, other than to
the Company and other than in the ordinary course of business consistent with
past practice; (h) alter through merger, liquidation, reorganization,
restructuring or in any other fashion its corporate structure or ownership; (i)
except as may be required as a result of a change in law or in generally
accepted accounting principles, change any of the accounting principles or
practices used by it; (j) revalue any of its assets, including, without
limitation, writing down the value of its inventory or writing off notes or
accounts receivable, other than in the ordinary course of business; (k) make any
tax election or settle or compromise any income tax liability; (l) settle or
compromise any pending or threatened suit, action or claim relating to the
transactions contemplated by the Merger Agreement; (m) pay, discharge or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities reflected or
reserved against in, or contemplated by, the financial statements (or the notes
thereto) of the Company or incurred in the ordinary course of business
consistent with past practice; (n) increase in any manner the compensation or
fringe benefits of any of its directors, officers and other key employees or pay
any pension or retirement allowance not required by any existing plan or
agreement to any such employees, or become a party to, amend or commit itself to
any pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or directors of
the Company made in the ordinary course of business consistent with past
practice, or, except to the extent required by law, voluntarily accelerate the
vesting of any compensation or benefit; (o) other than pursuant to the
Cancellation Agreement (which is described below under "Cancellation Agreement")
and the Termination Agreement (which is described below under "Termination
Agreement"), waive, amend or allow to lapse any term or condition of any
confidentiality, "standstill," consulting, advisory or employment agreement to
which the Company is a party; and (p) take, or agree in writing or otherwise to
take, any of the foregoing actions or any action which would make any of the
representations or warranties of the Company contained in the Merger Agreement
untrue or incorrect as of the date when made or would result in any of the
conditions to the Offer not being satisfied.

The Merger Agreement also provides that, as requested by the Parent, the
Company shall confer on a regular basis with one or more representatives of the
Parent with respect to material operational matters and provide certain
information to the Parent.

In addition, the Merger Agreement provides that the Company shall not be
permitted to call a meeting of its stockholders for the purpose of obtaining a
stockholder vote on the authorization of 35,000,000 shares of Common Stock and
shall not be permitted to take actions reasonably related thereto, including the
filing with the Commission and mailing to stockholders of proxy materials and
the solicitation of votes in favor of such authorization.

Acquisition Proposals. The Merger Agreement provides that (a) the Company
shall not, and the Company shall direct and use its reasonable best efforts to
cause its officers, directors, employees and authorized agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it) not to initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, the Company (any such proposal or offer being an
"Acquisition Proposal") or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person

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<PAGE>
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; (b) that the Company shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing and shall take the necessary steps to inform the
individuals or entities referred to above of the obligations of the Company
described in this paragraph; and (c) that it shall notify the Parent immediately
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with the Company, including, without limitation, the
identity of the other party or the terms of its proposals; provided, however,
that the Board of Directors of the Company shall not be prohibited from (i)
furnishing information to, or entering into discussions or negotiations with,
any person or entity to acquire the Company or substantially all of the assets
of the Company on terms which, in the exercise of their fiduciary duty after the
consideration of advice from the Company's legal and financial advisors, a
majority of the Company's directors determines is likely to be more beneficial
to each of the holders of the Common Stock and the holders of the Preferred
Stock than the transaction contemplated by the Merger Agreement, and provided
further that the Company's legal and financial advisors may engage in
discussions regarding such written offer to clarify the terms of such offer for
the purpose of rendering the advice referred to above to the Board of Directors
of the Company, in each case, provided that, the Company and its advisors, prior
to or concurrently with furnishing such information to, or entering into
discussions or negotiations with, such a person or entity, shall provide written
notice to Parent to the effect that it is furnishing information to, or entering
into discussions with, such a person or entity, and shall keep Parent informed
of the status (including, without limitation, the identity of such person or
entity and the terms of any proposal) of such discussions or negotiations; and
(ii) to the extent applicable, complying with Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal.

Annual Meeting of Company Stockholders. Pursuant to the Merger Agreement,
the Company agreed to postpone the holding of its annual meeting of stockholders
indefinitely pending consummation of the Merger unless the Company is otherwise
required to hold such meeting by an order from a court of competent
jurisdiction.

Company Stockholder Approval and Proxy Statement. The Company will use its
reasonable best efforts and take all appropriate steps to obtain the approval or
action in respect of the Merger that is required by applicable law, including
calling a meeting of its stockholders for the purpose of voting on the Merger,
using its reasonable best efforts to obtain stockholder approval of the Merger,
filing a preliminary proxy statement or information statement with the
Commission and working to obtain Commission clearance of such proxy statement or
information statement. The Parent has agreed to cause all Shares acquired
pursuant to the Offer (and any other Shares owned by the Parent or its
subsidiaries) in favor of approval of the Merger.

Fees and Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs and
expenses, except as otherwise described below. If the Merger Agreement is
terminated (1) by the Parent or the Company under the provisions specified below
under "Termination by the Parent or the Company", by reason of the failure of a
condition of the Offer specified in clauses (f) or (g) of Section 15 of this
Offer to Purchase; (2) by the Company under the provisions specified below in
clause (b) under "Termination by the Company"; (3) by the Parent under the
provisions specified below in "Termination by the Parent"; or (4) by the Parent
following the time an Acquisition Proposal has been made or publicly announced,
as a result of the failure to satisfy the Minimum Condition or pursuant to the
termination provisions of the Merger Agreement described below in clauses (a) or
(b) under "Conditions Precedent", the Company shall, in the case of termination
by Parent, promptly, but in no event later than two business days after the
first of such events to occur, or, in the case of termination by the Company, at
or prior to the time of such termination, pay Parent $750,000 plus up to a
maximum of $75,000 of expenses. If the Company fails to pay such amount when

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<PAGE>
due, Parent shall be entitled to the payment from the Company, in addition to
such amount, of any legal fees and expenses incurred in collecting such amount
and interest thereon at a rate of 10% per annum. If the Merger Agreement is
terminated by the Parent as a result of the failure of any of the conditions of
the Offer specified in clause (e) of Section 15 of this Offer to Purchase, the
Company shall reimburse Parent and Offeror for expenses up to a maximum of
$75,000.

Company Stock Options. The Merger Agreement provides that the Company shall
(i) terminate the stock option plans of the Company immediately prior to the
Effective Time without prejudice to the holders of company stock options and
(ii) grant no additional company stock options after the date of the Merger
Agreement. In addition, the Merger Agreement provides that the Company shall use
its best efforts to cause each holder of an option to purchase shares of Common
Stock granted under the 1986 Stock Option Plan (each a "1986 Plan Option") and
warrants granted pursuant to a consulting arrangement (the "Consulting Agreement
Warrants") to execute an agreement with the Company prior to the purchase of the
Shares pursuant to the Offer providing that such holder's 1986 Plan Option or
Consultant Agreement Warrants shall be canceled at the Effective Time. Such
agreement shall provide, (i) if the difference between the exercise price per
share of Common Stock subject to the 1986 Plan Option and the Common Stock Offer
Price is positive, that in consideration of such cancellation the holder shall
receive a payment promptly following the effective time of the Merger equal to
the number of shares of Common Stock subject to the holder's 1986 Plan Option,
whether or not vested, multiplied by the difference between the exercise price
per share of Common Stock subject to the 1986 Plan Option and the Common Stock
Offer Price, (ii) if the difference between the exercise price per Share subject
to the 1986 Plan Option and the Common Stock Offer Price is zero or negative,
that in consideration of such cancellation such holders shall receive payments
promptly following the effective time of the Merger not to exceed $500 in the
aggregate for all such options, whether or not vested and (iii) with respect to
the Consulting Agreement Warrants, in consideration of the cancellation of the
Consulting Agreement Warrants, the holder shall receive $7,500 promptly
following the Effective Time.

Warrants. The Merger Agreement provides that Parent shall pay, or shall
cause the Surviving corporation in the Merger to pay, to the holder of each
Warrant, upon delivery to the Surviving Corporation of such Warrant for
cancellation, an amount in cash equal to the number of shares of Common Stock
which may be acquired upon exercise of the vested portion of such Warrant
(whether or not the Company has sufficient reserved or authorized shares of
Common Stock available for issuance upon exercise of such Warrant) multiplied by
the positive difference (if any) between the exercise price per share of Common
Stock covered by the applicable Warrant and the Common Stock Offer Price.

In addition, the Merger Agreement provides that, notwithstanding the
foregoing, with respect to the Series Q Warrants owned by Strategica Capital
Corporation, the Parent shall pay, or shall cause the Surviving Corporation to
pay, to the holder of such warrants, 80% of the amount due to such holder
pursuant to the immediately preceding sentence as promptly as practicable after
the purchase of Shares pursuant to the Offer in consideration of such holder's
agreement to assign its rights under such warrant in respect of 80% of the
shares subject thereto to the Parent, and the Parent shall pay or cause the
Surviving Corporation to pay to such holder, 20% of the amount due under the
immediately preceding sentence upon delivery of each such warrant for
cancellation upon the earlier to occur of (i) the Effective Time and (ii) the
date 60 days after the date on which the Offeror first purchases Shares pursuant
to the Offer.

Indemnification and Insurance. From and after the Effective Time of the
Merger, the Parent agrees to cause the Surviving Corporation to indemnify and
hold harmless all past and present officers, directors, employees and agents of
the Company to the full extent such persons may be indemnified by the Company
pursuant to the Company's Articles of Incorporation and By-Laws as in effect on
the date of the Merger Agreement, for acts and omissions occurring at or prior
to the effective time of the Merger. Pursuant to the Merger Agreement, the
Parent has agreed to guarantee the obligations of the

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<PAGE>
Surviving Corporation to the directors of the Company pursuant to the
immediately preceding sentence, for the period from the Effective Time through
the second anniversary of the Effective Time.

Board Representation. The Merger Agreement provides that, promptly upon the
purchase of Shares pursuant to the Offer, the Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give the Parent, subject to compliance
with Section l4(f) of the Exchange Act, representation on the Board of Directors
equal to the product of (a) the total number of directors on the Board of
Directors and (b) the percentage that the number of Shares purchased by the
Parent bears to the number of Shares outstanding, and the Company shall, upon
request by the Parent, promptly increase the size of the Board of Directors
and/or exercise its reasonable best efforts to secure the resignations of such
number of directors as is necessary to enable the Parent's designees to be
elected to the Board of Directors and shall cause the Parent's designees to be
so elected. The Company has agreed to take, at its expense, all action required
pursuant to Section 14(f) and Rule 14f-1 of the Exchange Act in order to fulfill
its obligations under this provision of the Merger Agreement and shall include
in the Schedule 14D-9 or otherwise timely mail to its stockholders such
information with respect to the Company and its officers and directors as is
required by Section 14(f) and Rule 14f-l in order to fulfill its obligations
under this provision of the Merger Agreement. The Parent will supply to the
Company in writing and be solely responsible for any information with respect to
itself and its nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-l.

Repayment of Loans. The Merger Agreement provides that upon the earlier to
occur of (i) the Effective Time and (ii) the date which is 60 days after the
date on which the Parent or the Offeror purchases Shares pursuant to the Offer,
the Parent shall cause the Surviving Corporation in the Merger to pay an
aggregate of $1,810,000 plus accrued and unpaid interest thereon to Strategica
Capital Corporation as complete repayment of all amounts borrowed by the Company
from it. The Merger Agreement also provides that as promptly as practicable
following the Effective Time, the Parent shall cause the Surviving Corporation
to pay an aggregate of $300,000 plus accrued and unpaid interest thereon to
Leroy Meshel, M.D. ("Meshel") as complete repayment of all amounts borrowed by
the Company from him.

Conditions Precedent to the Merger. The Merger Agreement provides that the
respective obligations of each party to the Merger Agreement to effect the
Merger are subject to the fulfillment at or prior to the Effective Time of the
following conditions: (a) if approval of the Merger by the holders of Common
Stock is required by applicable law, the Merger shall have been approved by the
requisite vote of such holders; (b) if approval of the Merger by the holders of
Series A Preferred or the holders of Series B Preferred is required by
applicable law, the Merger shall have been approved by the requisite vote of
such holders; and (c) none of the Parent, the Offeror or the Company shall be
subject to any order or injunction of a court of competent jurisdiction which
prohibits or has the effect of prohibiting the consummation of the transactions
contemplated by this Agreement.

Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:

Termination by Mutual Consent: The Merger Agreement may be terminated by the
mutual consent of the Parent and the Company prior to the purchase of the Shares
pursuant to the Offer.

Termination by the Company: The Merger Agreement may be terminated by the
Company if (a) the Offer shall not have been timely commenced, (b) (i) there is
an offer to acquire all the outstanding Common Stock or substantially all of the
assets of the Company that, in the good faith judgment of the Board of Directors
of the Company, is financially superior for holders of shares of Common Stock
and Preferred Stock to the Offer and the Merger (a "Superior Offer"), and (ii)
the Board of Directors of the Company determines after receiving a written
opinion from counsel to the Company to the effect that the failure to approve
such offer would not be consistent with the fiduciary duties of the Board of

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<PAGE>
Directors of the Company to its stockholders; provided, however, that the right
to terminate the Merger Agreement pursuant to this provision of the Merger
Agreement shall not be available: (i) if the Company has breached in any respect
its obligations under provisions of the Merger Agreement described above under
"Acquisition Proposals"; (ii) in respect of an offer subject to a financing
condition; (iii) in respect of an offer involving consideration that is not
entirely cash or does not permit stockholders to receive payment of the offered
consideration in respect of all shares at the same time, unless the Board of
Directors of the Company has been furnished with a written opinion of a
nationally recognized investment banking firm to the effect that such offer
provides a higher value per share than the consideration per share pursuant to
the Offer and the Merger; or (iv) if, prior to or concurrently with any
purported termination pursuant to this provision, the Company shall not have
paid the fees payable to the Parent under the Merger Agreement at the time of
such termination as specified above under "Fees and Expenses"; and unless the
Company has provided the Parent and the Offeror with at least five business
days' prior written notice of its intent to so terminate the Merger Agreement
together with a detailed summary of the terms and conditions of such offer and
the identity of the person making such offer, (c) there has been a breach by the
Parent or the Offeror of any representation or warranty contained in the Merger
Agreement which would have or would be reasonably likely to have a material
adverse effect on the ability of the Parent and the Offeror to consummate the
transactions contemplated by the Merger Agreement and which breach has not been
cured within five business days following receipt by Parent or Offeror of notice
of the breach, or (d) there has been a material breach of any of the covenants
or agreements set forth in the Merger Agreement on the part of the Parent or the
Offeror, including, without limitation, the obligation of the Offeror to
purchase Shares pursuant to the Offer, unless such failure results from a breach
of the Company of any obligation, representation, or warranty under the Merger
Agreement which has not been cured within five business days following the
Company's receipt of notice of the breach.

Termination by the Parent: The Merger Agreement may be terminated by the
Parent if the Board of Directors of the Company shall have failed to recommend,
or shall have withdrawn, modified or amended in any material respect its
approval or recommendations of the Offer or the Merger or shall have resolved to
do any of the foregoing, or shall have failed to reject an Acquisition Proposal
within ten business days after receipt by the Company or public announcement
thereof.

Termination by the Parent or the Company: The Merger Agreement may be
terminated by the Parent or the Company if (a) the Merger shall not have been
consummated by November 15, 1996; provided, however, that the right to terminate
the Merger Agreement pursuant to this provision shall not be available to the
Parent if the Offeror or any affiliate of the Offeror acquires Shares pursuant
to the Offer, or to any party whose failure to fulfill any of its obligations
under the Merger Agreement has been the cause of, or resulted in, the failure of
any such condition, (b) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by the Merger
Agreement and such order, decree, or ruling shall have become final and
nonappealable, (c) upon a vote of a duly held meeting or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any approval
required by applicable law, (d) as the result of the failure of any of the
conditions set forth in Section 15 of this Offer to Purchase, the Offer shall
have terminated or expired in accordance with its terms without Offeror having
purchased any Shares pursuant to the Offer; provided, however, that the right to
terminate the Merger Agreement pursuant to this clause shall not be available to
any party whose failure to fulfill any of its obligations under this Agreement
results in the failure of any such condition, or (e) the Parent shall have
reasonably determined that any condition specified in Section 15 of this Offer
to Purchase (other than the Minimum Condition) is not capable of being satisfied
at any time in the future and the Offeror has not purchased Shares pursuant to
the Offer; provided, however, that the right to terminate the Merger Agreement
pursuant to this clause shall not be available to any party whose failure to
fulfill any of its obligations under the Merger Agreement results in the failure
of any such condition.

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<PAGE>
Employees. At the Effective Time, the Parent has agreed to assume and to
honor and keep in effect the Company's existing employment agreements with
Kenneth W. Pugh, the Company's Director of Manufacturing, Don H. Rotenberg, Vice
President of Research and Development, Philip G. Heineman, Vice President and
Chief Financial Officer of the Company, Daniel J. Kunst, a consultant to the
Company, and Malcolm M. Walker, a consultant to the Company.

THE STOCKHOLDER AGREEMENT

Pursuant to the Stockholder Agreement, Norman Davidson (the "Stockholder"),
who owns 495,975 shares of Common Stock and 12,000 shares of Series B Preferred
has agreed to tender and sell to the Parent pursuant to the Offer all Shares
held by him and not to withdraw any Shares tendered into the Offer. The
Stockholder also has granted to the Parent an irrevocable option to purchase
all, but not less than all, of the Shares owned by the Stockholder subject to
the Preferred and Common Stock Agreement at a purchase price with respect to the
shares of Common Stock equal to the Common Stock Offer Price and with respect to
the shares of Series B Preferred equal to the Series B Preferred Offer Price.
The Parent may exercise this option at any time prior to the earlier of (a) the
Effective Time and (b) the date forty-five days after termination of the Merger
Agreement. The Stockholder also has agreed not to convert his Series B Preferred
into Common Stock and, at any meeting of the stockholders of the Company and in
any action by written consent of the stockholders of the Company, to vote (or
execute a consent in respect of) (a) in favor of the Merger, the Merger
Agreement and any of the transactions contemplated by the Merger Agreement, (b)
against any action or agreement that would impede, interfere with or attempt to
discourage the Offer or the Merger, or would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation of
the Company under the Merger Agreement, and (c) against any action or agreement
that would reasonably be expected to impede, interfere with or attempt to
discourage the Offer or the Merger, including but not limited to: (i) any
extraordinary corporate transaction (other than the Merger), such as a merger,
reorganization, recapitalization or liquidation involving the Company or any
proposal made in opposition to or in competition with the Merger; (ii) a sale or
transfer of a material amount of assets of the Company; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed to
in writing by the Parent; (iv) any material change in the present capitalization
or dividend policy of the Company; or (v) any other material change in the
Company's corporate structure or business. The Stockholder has agreed not to
solicit, encourage or engage in discussions with third parties relating to any
acquisition of his Shares or an acquisition of the Company, by merger or
otherwise. The Stockholder Agreement terminates on the earliest of the
consummation of the Merger, May 28, 1997, and termination of the Merger
Agreement if it is terminated for reasons unrelated to the making of a proposal
for the acquisition of the Company.

OPTION AGREEMENT

Pursuant to the Option Agreement, the Company has granted the Parent an
option to purchase 8,771,625 Units at a price of $.65 per Unit. Each Unit
consists of one one-hundredth of a share of a newly created series of preferred
stock of the Company, the Series C Preferred. Each Unit has economic and voting
rights substantially similar to those of a share of Common Stock. (Shares of
Series C Preferred are entitled to 100 times the dividends on shares of Common
Stock, if and when such dividends are declared and paid. Subject to customary
anti-dilution adjustments, each share of Series C Preferred entitles the holder
to 100 votes on all matters submitted to a vote of the stockholders of the
Company, with the holders of shares of Series C Preferred and the holders of
shares of Common Stock voting together as one class on all matters submitted to
a vote of stockholders of the Corporation except as otherwise provided by the
Articles of Incorporation of the Company or by law. Upon any liquidation,
dissolution or winding up of the Company, the holders of Series C Preferred
generally are entitled to 100 times distributions to holders of Common Stock. In
the event that the Company enters into any merger or other transaction in which
the shares of Common Stock are exchanged for or changed into

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other stock or securities, cash and/or any other property, then the shares of
Series C Preferred shall at the same time be similarly exchanged or changed in
an amount per share equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property into which or for which each share of
Common Stock is changed or exchanged, subject to customary anti-dilution
provisions. At any time after the Company has sufficient authorized and reserved
shares of its Common Stock to permit such conversion (which it currently does
not), each holder of Series C Preferred will be entitled to convert all or any
portion of his Series C Preferred into fully paid, non-assessable shares of
Common Stock at such holder's election at the rate of 100 shares of Common Stock
for each share of Series C Preferred (or one share of Common Stock for each one
one-hundredth of a share of Series C Preferred Stock), subject to customary
anti-dilution adjustments. The shares of Series C Preferred are not redeemable
by the Company.)

The option is exercisable by the Parent, in whole or in part, at any time
prior to the Effective Time or forty-five days after termination of the Merger
Agreement. If the option is exercised, the Parent and the Offeror have agreed to
waive the conditions to the Offer set forth in paragraphs (c), (e), (g) and (h)
of Section 15 of this Offer to Purchase.

THE CANCELLATION AGREEMENT

Strategica Capital Corporation ("Strategica") and the Company are party to a
Consulting Agreement and an Advisory Agreement (collectively the "Strategica
Agreements") which provide for certain payments and fees by the Company to
Strategica and certain additional payments and penalties to be paid by the
Company to Strategica in the event that the Company's stockholders do not
approve an increase of the Company's authorized Common Stock to at least
35,000,000 shares (the "Share Authorization") by May 8, 1996 (all of such
payments, fees and penalties, collectively, the "Payments"). In connection with
the Merger Agreement, the Company, the Parent and Strategica have entered into a
Cancellation Agreement dated as of May 28, 1996 (the "Cancellation Agreement").

Pursuant to the Cancellation Agreement, the Strategica Agreements will
terminate effective as of the earlier to occur of Effective Time and 150 days
after Shares are purchased in the Offer. In consideration for such termination
and in full satisfaction of the Company's obligations under the Strategica
Agreements, the Company shall pay to Strategica on that date $440,000. Pursuant
to the Cancellation Agreement, Strategica has agreed not to request payment of
all or any portion of the Payments or institute any action or otherwise seek
damages or other remedies for the failure of the Company to obtain authorization
of sufficient shares of the Company's common stock to permit exercise of the
Series Q Warrants, the Share Authorization or the breach by the Company, or
failure to satisfy any other obligation of the Company to Strategica pursuant
to, any agreement or understanding. Strategica also has agreed to hold
confidential and not release to third parties any and all secret, confidential,
or proprietary information, knowledge, or data relating to the Company and its
businesses acquired by Strategica during its consulting to or affiliation with
the Company. Effective as of the Effective Time, Strategica, on the one had, and
the Company and the Parent, on the other hand, will release it each other from
claims and actions relating to the Strategica Agreements and events occurring
prior to May 28, 1996.

The Cancellation Agreement requires the Parent to pay Strategica 80% of the
amount due under the Merger Agreement in respect of its warrants to acquire
Common Stock of the Company as promptly as practicable after Shares are
purchased in the Offer and to pay the remaining 20% of such amounts on the
earlier of the Effective Time and 60 days after Shares are purchased in the
Offer. In addition, the Parent has agreed to pay or cause the Company to pay all
amounts owed to Strategica under Strategica's credit agreement with the Company
(which amounts currently are $1,810,000 plus accrued interest) on the earlier of
the Effective Time and 60 days after Shares are purchased in the Offer.

26
<PAGE>
The Cancellation Agreement shall terminate upon termination of the Merger
Agreement. It also is terminable in Strategica's discretion if the Offeror has
not purchased Shares pursuant to the Offer within sixty days after commencement
of the Offer if no Acquisition Proposal has been made by a third party or, if an
Acquisition Proposal has been made by a third party, November 15, 1996.

THE TERMINATION AGREEMENT

Jon E. Haglund ("Haglund") is currently employed as Chairman of the Board,
Chief Executive Officer and acting President of the Company pursuant to an
Employment Agreement dated September 1, 1995 with the Company (the "Employment
Agreement"). In connection with the Merger Agreement, the Company and Haglund
have entered into a Termination Agreement dated as of May 28, 1996 (the
"Termination Agreement") pursuant to which Haglund and the Company have agreed
to terminate the Employment Agreement effective as of the Effective Time, and
Haglund has agreed that as of the Effective Time he is resigning as an officer,
director and employee of the Company. In consideration for the termination of
the Employment Agreement and in full satisfaction of the Company's obligations
thereunder, the Company has agreed to pay Haglund $400,000 at the Effective
Time.

Pursuant to the Termination Agreement, for a period of 90 days after the
Effective Time, Haglund will act as a consultant to the Company. Upon completion
of the 90-day period, the Company will pay Haglund $151,469. During such 90-day
period, the Company will reimburse Haglund for all reasonable out-of-pocket
expenses incurred by Haglund in connection with providing services to the
Company which are requested by the Company. Haglund also has agreed that he will
not engage in certain activities competitive with the business of the Company
for a period of two years after the Effective Time. He also has agreed to hold
confidential and not release to third parties any secret, confidential, or
proprietary information, knowledge, or data relating to the Company and its
businesses acquired by him during his employment by or affiliation with the
Company.

Haglund and the Company have released each other from claims arising out of,
relating to, or in connection with the Employment Agreement, Haglund's service
as an officer, director and employee of the Company, the termination of
Haglund's employment relationship with the Company and all actions prior to the
date of the Termination Agreement, except for claims relating to the Termination
Agreement or the Merger Agreement. The Termination Agreement will terminate upon
termination of the Merger Agreement.

THE CREDIT AGREEMENT

The Company and the Parent have entered into a Credit Agreement pursuant to
which the Parent has agreed to make loans to the Company of (i) up to $100,000
for each thirty-day period following the date of the Credit Agreement (up to a
maximum of $300,000 unless Shares are purchased pursuant to the Offer, in which
case, additional amounts agreed to be reasonably necessary to fund the
operations of the Company pending consummation of the Merger shall be provided)
in order to fund the Company's operations consistent with past practice, (ii) up
to $100,000 to pay the fees of the Company's financial advisor in connection
with the Merger Agreement, and (iii) up to $50,000 for any legal fees incurred
in connection with any litigation which might arise relating to the transactions
by the Merger Agreement. Loans under the Credit Agreement shall bear interest at
an annual rate of 10%. Loans are secured by all of the Company's inventory and
equipment and certain other assets. Upon termination of the Merger Agreement (1)
by the Parent or the Company pursuant to their rights described under the
"Termination by the Parent or the Company" in the description of the Merger
Agreement herein by reason of the failure of a condition of the Offer given in
clauses (f) or (g) of Section 15 of this Offer to Purchase; (2) by the Company
pursuant to its rights described in clause (b) of the "Termination by the
Company" portion of the description of the Merger Agreement herein; (3) by the
Parent pursuant to its rights described in the "Termination by the Parent"
portion of the description of the Merger Agreement

27
<PAGE>
herein; or (4) as a result of the failure to satisfy the Minimum Condition to
the Offer or either of clauses (a) or (b) in the "Conditions Precedent" portion
of the description of the Merger Agreement herein following an Acquisition
Proposal by a third party, the Parent's commitment to make the loans terminates
and the loans, plus accrued but unpaid interest thereon, become immediately due
and payable. If the Merger Agreement is terminated for any reason other than (i)
as set forth in the preceding sentence or (ii) by the Company pursuant to its
rights described in clause (c) or (d) of the "Termination by the Company"
portion of the description of the Merger Agreement herein, then the Parent's
commitment to make loans terminates and all outstanding principal amounts of the
loans, plus all accrued but unpaid interest thereon, become immediately due and
payable within thirty (30) days after such event and the Company may satisfy its
payment obligations through the delivery of inventory to the Parent in
accordance with the marketing and distribution agreement between the Parent and
the Company valued in accordance with that agreement. If the Merger Agreement is
terminated by the Company pursuant to its rights described in clause (c) or (d)
in the "Termination by the Company" portion of the description of the Merger
Agreement, then the Parent's commitment to make loans terminates and without any
action by the parties to the Credit Agreement all principal amounts of the
loans, plus accrued plus unpaid interest thereon, shall be forgiven by the
Parent and the Company will have no obligation to make any payments to the
Parent in respect thereof.

The Credit Agreement also contains representations, warranties and covenants
by the Company which are customary in agreements of this type.

THE SUBORDINATION AGREEMENT

Leroy Meshel, M.D., an individual who has loaned the Company $300,000, and
Strategica (together with Meshel, the "Subordinating Creditors"), the Company,
and the Parent have entered into a Subordination Agreement dated as of May 28,
1996 (the "Subordination Agreement"). In connection with his execution of the
Subordination Agreement, the Company has agreed to pay Meshel $12,500 at the
Effective Time.

Pursuant to the Subordination Agreement, the Subordinating Creditors have
agreed not to ask for, demand, sue for, take, or receive from the Company, or
from any successor or assign of the Company or from any entity acting on behalf
of or for the benefit of the Company, by payment, judgment, setoff or in any
other manner, and the Company will not pay, or make any payment in respect of,
the whole or any part of the indebtedness owed by it to the Subordinated
Creditors (other than the payment of interest on amount borrowed under the
Meshel Agreement and the Strategica Credit Agreement paid in accordance with the
existing terms of such agreements) unless and until all obligations,
liabilities, and indebtedness of the Company to the Parent pursuant to the
Credit Agreement, up to $500,000 have been paid (all such obligations,
indebtedness and liabilities of the Company to the Parent are hereinafter
referred to as the "Liabilities"). All rights, liens, and security interests of
each of the Subordinating Creditors in any asset of the Company or any other
assets securing the indebtedness owed to it will be and are subordinated to the
rights and interests of the Parent in those assets. Neither Subordinating
Creditor will have nor exercise any right to possession of any such asset or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Liabilities up to $500,000 will have been fully paid.
Without limiting the foregoing, each of the Subordinating Creditors has
consented to the Company entering into a security agreement with the Parent
pursuant to which a security interest in certain of the Company's assets has
been granted to the Parent to secure borrowings made under the Credit Agreement
and the Subordinating Creditors agree that such security interest shall be
senior and prior to any security interest the Subordinating Creditors have in
such assets. Should any payment or distribution or security or instrument be
received by any Subordinating Creditor with respect to the indebtedness prior to
the payment of all of the Liabilities up to $500,000, such Subordinating
Creditor will receive and hold the same in trust, for the benefit of the Parent
and shall deliver the same to the Parent in precisely the form received (except
for endorsement or assignment where necessary), for application to payment or
satisfaction of any of the Liabilities up to $500,000. As

28
<PAGE>
a result of the Subordination Agreement, in the event of any distribution of the
assets or readjustment of the obligations and indebtedness of the Company,
whether by reason of liquidation, bankruptcy, reorganization, receivership,
assignment for the benefit of creditors or any action or proceeding involving
the readjustment of all or any of the indebtedness hereby subordinated, the
Parent shall be entitled to receive payment in full of the Liabilities up to
$500,000 prior to any payments to the Subordinating Creditors.

14. DIVIDENDS AND DISTRIBUTIONS.

As noted in Section 6 of this Offer to Purchase, the Company has not paid
cash dividends on any Shares. The Merger Agreement provides that the Company
will not, among other things, prior to the Effective Time (i) declare, set aside
or pay any dividend or make any other distribution or payment with respect to
any shares of its capital stock, (ii) directly or indirectly redeem, purchase,
or otherwise acquire any shares of capital stock of the Company or capital stock
of any of its subsidiaries or make any commitment for any such action or (iii)
split, combine or reclassify any of its capital stock.

15. CERTAIN CONDITIONS OF THE OFFER.

Notwithstanding any other term of the Offer, the Offeror shall not be
required to accept for payment or pay for, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) of the Exchange Act, any
Shares not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Shares unless there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer (i) that number of shares
of Common Stock which would represent at least a majority of the sum of all
outstanding shares of Common Stock plus any shares of Common Stock issuable upon
the exercise of options (other than options the holders of which have executed
agreements which provide that, for so long as the Merger Agreement shall be in
effect, such holders will not exercise such options prior to the Effective Time,
which agreements are in full force and effect at the time of the expiration of
the Offer), warrants (other than Series Q Warrants) or other rights to acquire
shares (whether or not currently exercisable or vested) having an exercise price
equal to or less than the Common Stock Offer Price or upon the conversion of
outstanding Series A or Series B Preferred (other than Series A Preferred and
Series B Preferred which are validly tendered and not withdrawn prior to the
expiration of the Offer) and (ii) that number of Shares of Series A Preferred
and Series B Preferred which would represent, in the aggregate, at least a
majority of the outstanding Shares of Series A Preferred and Series B Preferred
of the Company (the "Minimum Condition"). Furthermore, notwithstanding any other
term of the Offer, the Offeror shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for payment
or paid for, and may terminate or amend the Offer if at any time on or after May
28, 1996 and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exist or shall occur and remain in
effect:

(a) there shall have been instituted, pending or threatened any action
or proceeding by any governmental, regulatory or administrative agency or
authority, which (i) seeks to challenge the acquisition by Parent of Shares
pursuant to the Offer, restrain, prohibit or delay the making or
consummation of the Offer or the Merger, or obtain any material damages in
connection therewith, (ii) seeks to make the purchase of or payment for some
or all of the Shares pursuant to the Offer or the Merger illegal, (iii)
seeks to impose limitations on the ability of Parent (or any of its
affiliates) effectively to acquire or hold, or to require Parent or the
Company or any of their respective affiliates to dispose of or hold
separate, any portion of the assets or the business of Parent and its
affiliates taken as a whole or the Company, or (iv) seeks to impose material
limitations on the ability of Parent (or any of its affiliates) to exercise
full rights of ownership of the Shares purchased by it, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the stockholders of the Company; or

29
<PAGE>
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign government or governmental authority or by any court, domestic or
foreign, any statute, rule, regulation, judgment, decree, order or
injunction that could reasonably be expected to, in the judgment of Parent,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (iv) of subsection (a) above; or

(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) the declaration
of a banking moratorium or any suspension of payments in respect of banks in
the United States, (iii) the commencement of a war, armed hostilities or
other international or national calamity directly or indirectly involving
the United States which would reasonably be expected to have a Material
Adverse Effect on the Company or prevent (or materially delay) the
consummation of the Offer, or (iv) from the date of the Merger Agreement
through the date of termination or expiration of the Offer, a decline of at
least 25% in either the Dow Jones Industrial Average or the Standard &
Poor's 500 Index; or

(d) the Company and Parent shall have reached an agreement or
understanding that the Offer or the Merger Agreement be terminated or the
Merger Agreement shall have been terminated in accordance with its terms; or

(e) any of the representations and warranties made by the Company in the
Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in any material respect as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement; provided, however, that all references in
this Agreement to the phrases "knowledge of the Company" and "to the best
knowledge of the Company," and variants thereof, shall be disregarded for
the purposes of determining whether the Company shall have breached its
representations, warranties and covenants resulting in the ability of Parent
to terminate this Agreement pursuant to this clause (e); or

(f) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Parent or shall have
withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing, or shall have failed to reject any Acquisition Proposal
within 10 business days after receipt by the Company or public announcement
thereof; or

(g) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent, one or more of
its affiliates or any beneficial owner of Shares on the date hereof, shall
have acquired beneficial ownership of 20% or more of the outstanding shares
of Common Stock or 20% or more of the outstanding shares of Preferred Stock,
or shall have been granted any options or rights, conditional or otherwise,
to acquire a total of 20% or more of the outstanding shares of Common Stock
or 20% or more of the outstanding shares of Preferred Stock; (ii) any new
group shall have been formed which beneficially owns 25% or more of the
outstanding shares of Common Stock or 25% or more of the outstanding shares
of Preferred Stock; (iii) any person (other than Parent, one or more of its
affiliates or any beneficial owner of Shares on the date hereof) shall have
entered into an agreement in principle or definitive agreement with the
Company with respect to a tender or exchange offer for any Shares or a
merger, consolidation or other business combination with or involving the
Company; or (iv) any person (other than Parent, one or more of its
affiliates or any beneficial owner of Shares on the date hereof) shall have
offered to tender or exchange for any 20% or more of the outstanding shares
of Common Stock or 20% or more of the outstanding shares of Preferred Stock
or offered to merge, consolidate or effect some other business combination
with or involving the Company; for the purpose of this clause (g)

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<PAGE>
warrants and options which are exercisable at prices above the offer price
shall not, unless exercised, be counted for the purpose of the percentages
specified in this clause (g).

(h) all holders of Company Stock Options shall not have entered into
cancellation agreements, as contemplated by Section 7.4(b) of the Merger
Agreement.

(i) the Cancellation Agreement between Parent and Strategica Capital
Corporation and, provided there is indebtedness or a commitment under the
Credit Agreement between Parent and the Company, the Subordination Agreement
among Parent, the Company, Strategica and another party shall not remain in
full force and effect.

The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition and may be waived by Parent, in whole or in part, at any time and from
time to time, in the sole discretion of Parent. The failure by Parent at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
right, the waiver of such right with respect to any particular facts or
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances, and each right will be deemed an ongoing right which may be
asserted at any time and from time to time.

Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.

16. CERTAIN REGULATORY AND LEGAL MATTERS.

Except as set forth in this Section, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to the Offeror's right to decline to purchase Shares if any of
the conditions specified in Section 15 shall have occurred. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions, or that adverse
consequences might not result to the Company's business or that certain parts of
the Company's business might not have to be disposed of if any such approvals
were not obtained or other action taken.

Florida Law. Section 607.0901 of the Act (the "Affiliated Transactions
Statute") prohibits certain "affiliated transactions" (defined to include
mergers and consolidations) involving a Florida corporation and an "interested
shareholder" (defined generally as a person who is the beneficial owner of more
than 10% of the outstanding voting shares of the subject corporation) unless the
transaction has been approved by (i) a majority of "disinterested directors" of
the board of directors of the subject corporation (defined generally as
directors who were elected to the board prior to the time the shareholder became
an interested shareholder), (ii) holders of two-thirds of the outstanding voting
shares of the subject corporation, exclusive of those shares beneficially owned
by the shareholder who, but for such approval, would be an "interested
shareholder" or (iii) certain other statutory conditions have been met. At a
special meeting held on May 21, 1996, the Board of Directors of the Company
approved the Merger Agreement, the Stockholder Agreement, the Option Agreement,
the Credit Agreement and related agreements, the Merger and the transactions
contemplated thereby (collectively, the "Merger Transaction") and determined
that each of the Offer and the Merger are fair to, and in the best interest of,
the Company's holders of Shares. Accordingly, the requirements of Affiliated
Transactions Statute has been satisfied with respect to the Parent and the
Offeror in connection with the Merger Transaction.

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<PAGE>
Section 607.0902 of the Act (the "Control Share Acquisitions Statute")
limits, in certain circumstances, the voting rights of "control shares" (defined
generally as those shares of an issuing public corporation which, when added to
the number of shares of the corporation already owned or controlled by a person,
entitle that person, immediately after the acquisition of the shares, to
exercise, directly or indirectly, alone or as part of a group, at least
one-fifth of the voting power of the corporation in the election of directors)
acquired in a "control share acquisition" (defined generally to mean the
acquisition directly or indirectly by any person of ownership of, where the
Parent is to direct the exercise of, voting power with respect to issued and
outstanding control shares) unless the acquisition of the control shares of an
issuing public corporation has been approved by the board of directors of such
issuing public corporation or certain other statutory conditions have been met.
At a special meeting held on May 21, 1996, the Board of Directors of the Company
approved the acquisition of the Shares pursuant to the Offer and the acquisition
of securities pursuant to the Option Agreement. Accordingly, the Control Share
Acquisition Statute is inapplicable to the Parent and the Purchaser in
connection with the Merger Transaction.

State Takeover Laws. A number of states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects in such states. In Edgar v. MITE Corp., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover statute, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
held that the State of Indiana may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquirer from voting on the
affairs of a target corporation without the prior approval of the remaining
presenting stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the state and were incorporated there.

The Company may conduct business in a number of states, some of which have
enacted takeover laws. Except as described above with respect to Sections
607.0901 and 607.0902 of the Act, the Offeror has not attempted to comply with
any such laws. Should any person seek to apply any state takeover law, the
Offeror will take such action as then appears desirable, which may include
challenging the validity or applicability of any such statute in appropriate
court proceedings. In the event it is asserted that one or more state takeover
laws is applicable to the Offer or the Merger, and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer, the
Offeror might be required to file certain information with, or receive approvals
from, the relevant state authorities. In addition, if enjoined, the Offeror
might be unable to accept for payment any Shares tendered pursuant to the Offer,
or be delayed in continuing or consummating the Offer and the Merger. In such
case, the Offeror may not be obligated to accept for payment any Shares
tendered. See Section 15.

Legal Proceedings. The Offeror is not aware of any pending or overtly
threatened legal proceedings which would affect the Offer or the Merger. If any
such matters were to arise, the Offeror may not be required to accept for
payment any Shares tendered in the Offer. See Section 15.

17. FEES AND EXPENSES.

Neither the Offeror nor the Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or the Parent, will pay any fees or
commissions to any broker, dealer or other person (other than the Information
Agent and the Depositary) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Offeror for customary mailing and
handling expenses incurred by them in forwarding materials to their customers.

32
<PAGE>
The Offeror has retained Georgeson & Company, Inc. as Information Agent and
The First National Bank of Boston as Depositary in connection with the Offer.
The Information Agent and the Depositary will receive reasonable and customary
compensation for their services hereunder and reimbursement for their reasonable
out-of-pocket expenses. The Information Agent and the Depositary will also be
indemnified by the Offeror against certain liabilities in connection with the
Offer.

18. MISCELLANEOUS.

The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Offeror by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.

No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal, and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror.

The Offeror and the Parent have filed with the Commission the Schedule
14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1
promulgated thereunder, furnishing certain information with respect to the
Offer. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained at the same places and in the same manner
as set forth with respect to the Company in Section 8 (except that they will not
be available at the regional offices of the Commission).

SOLA ACQUISITION CORP.

June 5, 1996

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ANNEX I

CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE PARENT AND THE OFFEROR

1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below is the
name, age, current business address, citizenship, present principal occupation
or employment and five-year employment history of each director and executive
officer of the Parent. Unless otherwise indicated, each person identified below
has been employed by the Parent for the last five years, and each such person's
business address is 2420 Sand Hill Road, Suite 200, Menlo Park, California
94025. All persons listed below are citizens of the United States of America
unless otherwise indicated.

<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR
NAME OFFICE SINCE AGE
- ----------------------------------- ----------------------------------- ---------- ---
<S> <C> <C> <C>
Irving S. Shapiro.................. Chairman of the Board 12/94 79
Skadden, Arps, Slate, Meagher and
Flom
One Rodney Square
P.O. Box 636
Wilmington, DE 19899
Douglas D. Danforth................ Director 12/94 73
Executive Associates
One PPG Place, #2210
Pittsburgh, PA 15222
Hamish Maxwell..................... Director 12/94 69
Philip Morris Companies, Inc.
120 Park Avenue
New York, NY 10017
Ruben F. Mettler................... Director 12/94 72
11150 Santa Monica Blvd., #1230
Los Angeles, CA 90025
Laurence Za Yu Moh................. Director 12/94 70
15 Bin Tong Park
Singapore 1026
Jackson L. Schultz................. Director 11/95 70
1780 Manor Drive
Hillsborough, CA 94010
John E. Heine...................... President and Chief Executive 12/93 52
Officer, Director
James H. Cox....................... Vice President, Assistant Secretary 12/93 47
Sola Optical USA and Assistant Treasurer;
1500 Cader Lane President, Sola Optical USA
Petaluma, CA 94954
Ian S. Gillies..................... Vice President, Finance, Chief 12/93 54
Financial Officer, Secretary and
Treasurer
Stephen J. Lee..................... Vice President, Human Resources 12/93 43
Barry J. Packham................... Vice President, Manufacturing 12/93 49
Sola Optical Australia Development
Group Manufacturing Development
Sherriffs Road
Lonsdale SA 5160, Australia
</TABLE>

A-1
<PAGE>
<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR
NAME OFFICE SINCE AGE
- ----------------------------------- ----------------------------------- ---------- ---
<S> <C> <C> <C>
Colin M. Perrott................... Vice President, Technology and 12/93 49
Development
John J. Bastian.................... Vice President, Regional Director, 12/93 44
Sola Optical Australia Australia
Sherriffs Road
Lonsdale SA 5160, Australia
Bernard Freiwald................... Vice President, Business 12/93 57
Development
Theodore Gioia..................... Vice President, Strategic Planning 12/93 38
Owen W. Roe........................ Vice President, Regional Director, 12/93 45
Sola Asia Regional Office Asia
Sherriffs Road
Lonsdale SA 5160, Australia
Aurelio F. deB. Seco............... Vice President, Regional Director, 12/93 61
Sola South America Regional Office South America
Rua: Mario Gelli, 119
25665-450 Petropolis RJ, Brazil
Mark T. Mackenzie.................. Vice President, Regional Director, 5/94 46
Sola European Regional Office Europe
Suite B, 18 Lion & Lamb Yard
Famham, Surrey GU9 7LL, United
Kingdom
Alan S. Vaughan.................... Vice President, Worldwide Rx 6/94 52
Sola Group Rx Operations
Whitemill Industrial Estate
Wexford Town, Ireland
</TABLE>

The principal occupations and positions for at least the past five years of
each of the executive officers of the Parent are as follows (references to the
Parent include its predecessors):

Irving S. Shapiro has been Chairman of the Board of the Parent since
December 1994. Mr. Shapiro is Of Counsel to Skadden, Arps, Slate, Meagher &
Flom. He was Chairman and Chief Executive Officer of E.I. du Pont de Nemours and
Company from 1974 to 1981. He has been Chairman of the Board of the Howard
Hughes Medical Institute since 1990 and is a director of J.P. Morgan Florida
Federal Savings Bank and Pediatric Service Company of America.

Douglas D. Danforth has been a director of the Parent since December 1994.
He was Chairman and Chief Executive Officer of Westinghouse Corporation from
1983 to 1987. He is a director of Travelers, Inc.

Hamish Maxwell has been a director of the Parent since December 1994. Mr.
Maxwell was Chairman of the Executive Committee of the Board of Directors of
Philip Morris Companies, Inc. from September 1991 through April 1995 and was
Chairman and Chief Executive Officer of such company from 1984 to 1991. He is a
director of Bankers Trust Company, Bankers Trust New York Corporation and The
News Corporation Limited.

Ruben F. Mettler has been a director of the Parent since December 1994. He
was Chairman and Chief Executive Officer of TRW Inc. from 1977 to 1988.

Laurence Za Yu Moh has been a director of the Parent since December 1994. He
is Chairman Emeritus of Universal Furniture Limited, which he founded in 1959.
In addition, Mr. Moh is a director of Stimsonite Corp. Mr. Moh is a citizen of
Singapore.

A-2
<PAGE>
Jackson L. Schultz has been a director of the Parent since November 1995.
Mr. Schultz joined Wells Fargo Bank in 1970, retiring in 1990 as Senior
Vice-President responsible for Public and Governmental Affairs. Mr. Schultz
remains a consultant to the bank. Mr. Schultz is also a director of Cooper
Development Company.

John E. Heine has served as Chief Executive Officer and President of the
Parent since November 1981 and served as Chairman of the Board of the Parent
from September 1993 to December 1994. Mr. Heine joined the Parent in 1981 as
Managing Director of Sola International Holdings, Ltd. and previously held
general management positions with Southern Farmers Holdings, Ltd. in Adelaide
and J.J. Heinz in Melbourne, Australia. Mr. Heine is a citizen of Australia.

James H. Cox was appointed Vice President, Assistant Secretary and Assistant
Treasurer of the Parent in September 1993 and President of Sola Optical USA, the
Parent's North American eyeglass lens business in 1991. He joined the Parent as
Vice President, Manufacturing in 1985. Mr. Cox was formerly Executive Vice
President of Operations with Bausch & Lomb's Consumer Products Division.

Ian S. Gillies was appointed Vice President, Finance, Chief Financial
Officer and Treasurer of the Parent in 1991, having previously held the
positions of Regional Director of the Parent's European operations and Managing
Director of Pilkington Ophthalmic Products. Mr. Gillies joined Pilkington in
1966. Mr. Gillies was elected to the position of Secretary of the Parent in
September 1995. Mr. Gillies is a citizen of the United Kingdom.

Stephen J. Lee was appointed Vice President, Human Resources of the Parent
in 1988 and was formerly Director of Personnel for Pilkington's Ophthalmic and
Insulation Divisions. Mr. Lee joined the Pilkington Group in 1974. Mr. Lee is a
citizen of the United Kingdom.

Barry J. Packham joined the Parent as Vice President, Manufacturing
Development in February 1993. Mr. Packham was Managing Director of Ceramic Fuel
Cells Ltd., a research and development joint venture consortium in Melbourne,
Australia, from 1991 to 1993 and formerly held manufacturing and general
management positions with Kodak and Leigh-Mardon Pty. Ltd. Mr. Packham is a
citizen of Australia.

Colin M. Perrott is the Parent's Vice President of Technology and
Development. Dr. Perrott joined the Parent in 1984 and was formerly Officer in
Charge of the Commonwealth Scientific and Industrial Research Organization's
Manufacturing Technology Unit in Adelaide, South Australia. Mr. Perrott is a
citizen of Australia.

John J. Bastian has served as Regional Director, Australia of Parent since
1987. Mr. Bastian joined the Parent in 1983 as Group General Manager, Marketing
in Sola International Holdings, South Australia following a six-year career with
PA Management Consultants. Mr. Bastian is a citizen of Australia.

Bernard Freiwald has served as Vice President, Business Development of
Parent since July 1994. He was formerly the Parent's Regional Director, Europe
since 1991. Mr. Freiwald joined the Parent in 1977 as Vice President of
Marketing and Sales in Sola Optical USA and was subsequently appointed Executive
Vice President of Sola Optical USA in 1989.

Theodore Gioia has served as Vice President, Strategic Planning of Parent
since 1992. Mr. Gioia joined the Parent as Director of Strategic Planning in
1989, having sold the start-up recording company he founded in 1987. Mr. Gioia
was previously a consultant with McKinsey & Company and the Boston Consulting
Group.

Owen W. Roe is the Parent's Regional Director, Asia. Mr. Roe joined the
Parent as Management Accountant in Sola Optical Australia in 1976, becoming
Group Financial Controller in 1983. Following a two-year assignment as Marketing
Manager of the Parent's U.K. operations, Mr. Roe served as

A-3
<PAGE>
Group Human Resources Manager until he was appointed to his current position in
1988. Mr. Roe is a citizen of Australia.

Aurelio F. deB. Seco has served as the Parent's Regional Director, South
America since 1989. Mr. Seco joined the Parent in 1974 as chief engineer in the
Parent's Brazilian factory, and was subsequently appointed the Chief Executive
Officer of SOLA-Brazil. Mr. Seco is a citizen of Australia.

Mark. T. Mackenzie was appointed Regional Director, Europe of Parent in
April 1994. Mr. Mackenzie served as Group Marketing Director of Tarkett Pegulan
AG, and as General Manager of the Residential Flooring Division, based in
Germany. He formerly held marketing and sales positions with Gillette, L'Oreal
and Cadbury Schweppes. Mr. Mackenzie is a citizen of the United Kingdom.

Alan S. Vaughan was appointed Vice President, Worldwide Rx Operations of
Parent in June 1994, having previously served as European Manufacturing and
Technical Director. Mr. Vaughan joined the Parent in 1978 as Managing Director
of Sola ADC Lenses in Ireland. He was previously Director of Operations with
Johnson & Johnson (Ireland). Mr. Vaughan is a citizen of the United Kingdom.

2. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. Unless otherwise
indicated in this Annex I, each person identified below has been employed by the
Parent for the last five years, each such person's business address is 2420 Sand
Hill Road, Suite 200, Menlo Park, California 94025, and all information
concerning the present principal occupation or employment and five-year
employment history for each person is the same as the information given above.
Each person was elected as a director and/or appointed as an officer of Offeror
in 1996. Directors are indicated with an asterisk. All persons listed below are
citizens of the United States of America unless indicated otherwise in this
Annex I.

<TABLE>
<CAPTION>
President........................... John E. Heine*
<S> <C>
Vice President, Finance;
Secretary and Treasurer........... Ian S. Gillies*
Vice President, Human Resources..... Stephen J. Lee*
Vice President...................... James H. Cox
</TABLE>

A-4

<PAGE>

Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one
of the addresses set forth below:

The Depositary for the Offer is:
THE FIRST NATIONAL BANK OF BOSTON
-------------------

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Shareholder Services Division The First National Bank of Boston Banc Boston Trust Company
P.O. Box 1889 Shareholder Services Division of New York
Mail Stop 45-02-53 150 Royall Street 55 Broadway, Third Floor
Boston, Massachusetts 02105 Mail Stop: 45-02-53 New York, New York
(617) 575-3400 Canton, Massachusetts 02021

By Facsimile:
(617) 575-2232
(617) 575-2233
(For Eligible Institutions Only)

Confirm Facsimile by Telephone:
(617) 575-3400
</TABLE>

Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may
be directed to the Information Agent at its telephone number and location listed
below. Stockholders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

[GEORGESON AND COMPANY LOGO]
Wall Street Plaza
88 Pine Street
New York, New York 10005
Banks and Brokerage Firms please call collect
(212) 440-9800
or
Call Toll-Free (800) 223-2064

EXHIBIT 99(A)(2)

LETTER OF TRANSMITTAL

TO TENDER SHARES OF COMMON STOCK
OF

NEOLENS, INC.

PURSUANT TO THE OFFER TO PURCHASE

DATED JUNE 5, 1996

SOLA ACQUISITION CORP.

AN WHOLLY OWNED SUBSIDIARY OF

SOLA INTERNATIONAL INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,
UNLESS THE OFFER IS EXTENDED.

The Depositary:

THE FIRST NATIONAL BANK OF BOSTON

By Facsimile: Confirm Facsimile by Telephone:
(617) 575-2232 (617) 575-3400
(617) 575-2233
(For Eligible Institutions Only)
</TABLE>

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

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE
A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE
SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW.
<PAGE>
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by stockholders of Neolens,
Inc. if certificates are to be forwarded herewith or, unless an Agent's Message
(as defined in the Offer to Purchase) is utilized, if delivery of Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company or the Philadelphia Depository Trust Company
(hereinafter collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as
defined below).

Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), or who
cannot comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares pursuant to the guaranteed delivery procedure
set forth in Section 3 of the Offer to Purchase. See Instruction 2.

<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED COMMON SHARES TENDERED
HOLDER(S) (PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
SHARE NUMBER OF SHARES
CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
Total Shares
* Need not be completed by stockholders tendering by book-entry transfer. IF A CERTIFICATE LISTED IN
THE FIRST COLUMN IS DATED PRIOR TO MAY 26, 1995 ("PRE-SPLIT SHARES"), THE DATE THE COMPANY EFFECTED A
REVERSE STOCK SPLIT OF ITS COMMON STOCK ON A 1 FOR 5 RATIO, THE NUMBER OF SHARES SET FORTH IN THE
SECOND COLUMN SHOULD BE ONE-FIFTH OF THE NUMBER OF PRE-SPLIT SHARES SET FORTH ON SUCH CERTIFICATE.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates
delivered to the Depositary are being tendered. See Instruction 4.
</TABLE>

<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering
Institution _______________________________________________________________
Account No.______________________________________________________________at
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code No. ______________________________________________________

/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering
Stockholder(s) _____________________________________________________________
Date of Execution of Notice of Guaranteed
Delivery __________________________________________________________________
Window Ticket Number (if
any) ______________________________________________________________________
Name of Institution which Guaranteed
Delivery __________________________________________________________________
If delivery is by book-entry
transfer __________________________________________________________________
Name of Tendering
Institution _______________________________________________________________

Account No. at ____________________________________________________________

/ / The Depository Trust Company

/ / Philadelphia Depository Trust Company

Transaction Code No. ______________________________________________________
<PAGE>
Ladies and Gentlemen:

The undersigned hereby tenders to Sola Acquisition Corp. (the "Offeror"), a
Florida corporation and a wholly owned subsidiary of Sola International Inc., a
Delaware corporation (the "Parent"), the above-described shares of common stock,
par value $0.001 per share (the "Shares"), of Neolens, Inc., a Florida
corporation (the "Company"), pursuant to the Offeror's offer to purchase, among
other things, all of the outstanding Shares at a purchase price of $1.14 per
share of Common Stock, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
June 5, 1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which together with the Offer to Purchase
constitute the "Offer"). The Offer is being made in connection with the
Agreement and Plan of Merger, dated as of May 28, 1996, among the Parent, the
Offeror and the Company.

Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers to
or upon the order of the Offeror all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other Shares or other
securities issued or issuable in respect thereof on or after May 28, 1996) and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and all such other Shares or
securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other Shares or securities), or
transfer ownership of such Shares (and all such other Shares or securities) on
the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Offeror, (b) present such Shares (and
all such other Shares or securities) for transfer on the books of the Company
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and all such other Shares or securities), all in
accordance with the terms of the Offer.

The undersigned hereby irrevocably appoints representatives of the Offeror
as John E. Heine and Ian Gillies, the attorneys and proxies of the undersigned,
each with full power of substitution, to exercise all voting and other rights of
the undersigned in such manner as each such attorney and proxy or his substitute
shall in his sole judgment deem proper, with respect to all of the Shares
tendered hereby which have been accepted for payment by the Offeror prior to the
time of any vote or other action (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
May 28, 1996), at any meeting of stockholders of the Company (whether annual or
special and whether or not an adjourned meeting) or otherwise. This proxy is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Offeror in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy or
written consent granted by the undersigned at any time with respect to such
Shares (and all such other Shares or other securities or rights), and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed effective).

The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after May 28, 1996) and that when the
same are accepted for payment by the Offeror, the Offeror will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other Shares
or other securities or rights).

All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.

The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Offeror upon the terms and subject to the conditions of the Offer.

Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned (and, in
the case of Shares tendered by book-entry transfer, by credit to the account at
the Book-Entry Transfer Facility designated above). Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any Shares purchased and return any certificates for Shares
not tendered or not purchased (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Offeror has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder(s) thereof if the Offeror does not accept for
payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if the check for the purchase price of Shares purchased or
certificates for Shares not tendered or not purchased are to be issued in the
name of someone other than the undersigned, or if Shares tendered by book-entry
transfer that are not purchased are to be returned by credit to an account at
one of the Book-Entry Transfer Facilities other than that designated above.

Issue check and/or certificates to:

Name............................................................................
(PLEASE PRINT)

Address.........................................................................

...............................................................................
(ZIP CODE)

...............................................................................
(TAXPAYER IDENTIFICATION NO.)

(See Substitute Form W-9)

/ / Credit unpurchased Shares tendered by book-entry transfer to the account set
forth below:

Name of Account Party...........................................................

Account No......................................................................

/ / The Depository Trust Company

/ / Philadelphia Depository Trust Company

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if the check for the purchase price of Shares purchased or
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature(s).

Mail check and/or certificates to:

Name............................................................................
(PLEASE PRINT)

Address.........................................................................

...............................................................................
(ZIP CODE)

...............................................................................
(TAXPAYER IDENTIFICATION NO.)
<PAGE>
SIGN HERE
(Complete Substitute Form W-9 below)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Owner(s)

- --------------------------------------------------------------------------------
Name(s) ________________________________________________________________________

- --------------------------------------------------------------------------------
Capacity (full
title) _________________________________________________________________________
Address ________________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)

- --------------------------------------------------------------------------------
Area Code and Telephone
Number _________________________________________________________________________
Taxpayer Identification
Number _________________________________________________________________________
Dated: _________________________________________________________________________
1996

(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by the person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title
and see Instruction 5).

GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN
SPACE BELOW.
Authorized
signature(s) ___________________________________________________________________
Name ___________________________________________________________________________
Name of
Firm ___________________________________________________________________________
Address ________________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone
Number ___________________________________________________________________
Dated: _________________________________________________________________________
1996
<PAGE>
PAYER'S NAME: [INSERT DEPOSITARY'S NAME HERE]

SUBSTITUTE

FORM W-9
PART 1--PLEASE PROVIDE
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY
SIGNING AND DATING
BELOW.
PART III--Social Security
Number or Employer
Identification Number
______________________________
(If awaiting TIN write
"Applied For")
PART II--For Payees exempt from backup withholding,
see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form
W-9 and complete as instructed therein.

CERTIFICATION--Under penalties of perjury, I
certify that:

(1) The number shown on this form is my correct TIN
(or I am waiting for a number to be issued to
me); and

(2) I am not subject to backup withholding either
because I have not been notified by the
Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a
failure to report all interest or dividends, or
the IRS has notified me that I am no longer
subject to backup withholding.

CERTIFICATION INSTRUCTIONS--You must cross out Item
(2) above if you have been notified by the IRS that
you are subject to backup withholding because of
underreporting interest or dividends on your tax
return. However, if after being notified by the IRS
that you were subject to backup withholding, you
received another notification from the IRS that you
were no longer subject to backup withholding, do
not cross out item (2). (Also see instructions in
the enclosed Guidelines).
DEPARTMENT OF THE
TREASURY
INTERNAL REVENUE SERVICE

PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN")
SIGNATURE: _______________________________ DATE:
___________

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a TIN has not been issued to
me, and either (1) I have mailed or delivered an application to receive a
TIN to the appropriate IRS Center or Social Security Administration Office
or (2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a TIN by the time of payment, 31% of all
payments pursuant to the Offer made to me thereafter will be withheld until
I provide a number.
Signature: ______________________________________ Date: __________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agents Medallion Program or
by any other bank, broker, dealer, credit union, savings association or other
entity which is an "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the
foregoing constituting an "Eligible Institution"), unless the Shares tendered
thereby are tendered (i) by a registered holder of Shares who has not completed
either the box labeled "Special Payment Instructions" or the box labeled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. See Instruction 5. If the certificates are
registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered certificates
must be endorsed or accompanied by duly executed stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear on
the certificates or stock powers, with the signatures on the certificates or
stock powers guaranteed by an Eligible Institution as provided herein. See
Instruction 5.

2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and any other
documents required by this Letter of Transmittal, or an Agent's Message in the
case of a book entry delivery, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal by the
Expiration Date. Stockholders who cannot deliver their Shares and all other
required documents to the Depositary by the Expiration Date must tender their
Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made
by or through an Eligible Institution; (b) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Offeror, must be received by the Depositary prior to the Expiration Date;
and (c) the certificates for all tendered Shares, in proper form for tender, or
a confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three NASDAQ
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as provided in Section 3 of the Offer to Purchase.

The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through a Book-Entry Transfer Facility,
is at the option and risk of the tendering stockholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.

No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a manually signed facsimile thereof), the tendering stockholder waives any right
to receive any notice of the acceptance for payment of the Shares.

3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.

4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares which are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the appropriate box on this Letter of Transmittal, as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.

If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.

If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificate must be
endorsed or accompanied by, appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.

If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Offeror of the authority, of such person so to act must be submitted.

6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted.
<PAGE>
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.

7. Special Payment and Delivery Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check or any certificates for
Shares not tendered or not purchased are to be mailed to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal at an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Stockholders tendering
Shares by book-entry transfer may request that Shares not purchased be credited
to such account at any of the Book-Entry Transfer Facilities as such stockholder
may designate under "Special Payment Instructions." If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer Facilities designated above.

8. Substitute Form W-9. The tendering stockholder is required to provide the
Depositary with such stockholder's correct TIN on Substitute Form W-9, which is
provided above, unless an exemption applies. Failure to provide the information
on the Substitute Form W-9 may subject the tendering stockholder to a $50
penalty and to 31% federal income tax backup withholding on the payment of the
purchase price for the Shares.

9. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may be
obtained from the Information Agent at its addresses or telephone numbers set
forth below.

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).

IMPORTANT TAX INFORMATION

Under federal income tax law, a stockholder whose tendered Common Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such stockholder with respect to Shares purchased pursuant to
the Offer may be subject to backup withholding.

Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
<PAGE>
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained.

PURPOSE OF SUBSTITUTE FORM W-9

To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Common Shares purchased pursuant to the Offer,
the stockholder is required to notify the Depositary of his or her correct TIN
by completing the form certifying that the TIN provided on the Substitute Form
W-9 is correct.

WHAT NUMBER TO GIVE THE DEPOSITARY

The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Common Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on which
number to report.
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:

[GEORGESON & COMPANY LOGO]

WALL STREET PLAZA
88 PINE STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERAGE FIRMS PLEASE CALL COLLECT (212) 440-9800
OR
CALL TOLL-FREE (800) 223-2064

JUNE 5, 1996

<PAGE>
LETTER OF TRANSMITTAL

TO TENDER SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK
OF

NEOLENS, INC.

PURSUANT TO THE OFFER TO PURCHASE

DATED JUNE 5, 1996

SOLA ACQUISITION CORP.
AN WHOLLY OWNED SUBSIDIARY OF
SOLA INTERNATIONAL INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,
UNLESS THE OFFER IS EXTENDED.

The Depositary:

THE FIRST NATIONAL BANK OF BOSTON

<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
Shareholder Services Division The First National Bank of Boston Banc Boston Trust Company
P.O. Box 1889 Shareholder Services Division of New York
Mail Stop 45-02-53 150 Royall Street 55 Broadway, Third Floor
Boston, Massachusetts 02105 Mail Stop: 45-02-53 New York, New York
(617) 575-3400 Canton, Massachusetts 02021

By Facsimile: Confirm Facsimile by Telephone:
(617) 575-2232 (617) 575-3400
(617) 575-2233
(For Eligible Institutions Only)
</TABLE>

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

<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) SERIES A CONVERTIBLE PREFERRED SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
NUMBER AND CLASS
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
Total Shares
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates
delivered to the Depositary are being tendered. See Instruction 4.
</TABLE>

<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution _____________________________________________
Account No._____________________________________________________________ at
/ / The Depository Trust Company / / Philadelphia
Depository Trust Company
Transaction Code No. ___________________________________________________

/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s) _______________________________________
Date of Execution of Notice of Guaranteed
Delivery __________________________________________________________________
Window Ticket Number (if any) _____________________________________________
Name of Institution which Guaranteed
Delivery __________________________________________________________________
If delivery is by book-entry transfer _____________________________________
Name of Tendering Institution _____________________________________________
Account No. ____________________________________________________________ at

/ / The Depository Trust Company / / Philadelphia
Depository Trust Company

Transaction Code No. ______________________________________________________
<PAGE>
Ladies and Gentlemen:

The undersigned hereby tenders to Sola Acquisition Corp. (the "Offeror"), a
Florida corporation and a wholly owned subsidiary of Sola International Inc., a
Delaware corporation (the "Parent"), the above-described shares of Series A
Convertible Preferred Stock par value $.001 per share (the "Shares"), of
Neolens, Inc., a Florida corporation (the "Company"), pursuant to the Offeror's
offer to purchase, among other things, all of the outstanding Shares at a
purchase price of $25.20 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 5, 1996 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together with the Offer
to Purchase constitute the "Offer"). The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of May 28, 1996, among the Parent,
the Offeror and the Company.

Issue check and/or certificates to:

Name............................................................................

(PLEASE PRINT)

Address.........................................................................

...............................................................................

(ZIP CODE)

...............................................................................

(TAXPAYER IDENTIFICATION NO.)

(See Substitute Form W-9)
/ / Credit unpurchased Shares tendered by book-entry transfer to the account set
forth below:

Name of Account Party...........................................................

Account No......................................................................

/ / The Depository Trust Company

/ / Philadelphia Depository Trust Company

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

Mail check and/or certificates to:

Name............................................................................

(PLEASE PRINT)

Address.........................................................................

...............................................................................

(ZIP CODE)

...............................................................................

(TAXPAYER IDENTIFICATION NO.)
<PAGE>
SIGN HERE
(Complete Substitute Form W-9 below)

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

Signature(s) of Owner(s)

- -------------------------------------------------------------------------------
Name(s) _______________________________________________________________________

- -------------------------------------------------------------------------------
Capacity (full
title) _______________________________________________________________________
Address _______________________________________________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)

- --------------------------------------------------------------------------------
Area Code and Telephone
Number __________________________________________________________
Taxpayer Identification
Number ____________________________________________________________
Dated:
_____________________________________________________________________________,
1996

GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)

FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION
GUARANTEE IN SPACE BELOW.
Authorized
signature(s) __________________________________________________________________
Name __________________________________________________________________________
Name of
Firm___________________________________________________________________________
Address _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone
Number __________________________________________________________
Dated: ________________________________________________________________________,
1996
<PAGE>
PAYOR'S NAME: [INSERT DEPOSITARY'S NAME HERE]

SUBSTITUTE

FORM W-9
PART 1--PLEASE PROVIDE
YOUR TIN IN THE BOX AT
THE RIGHT AND CERTIFY
BY SIGNING AND DATING
BELOW.
PART III--Social Security
Number or Employer
Identification Number
______________________________
(If awaiting TIN write
"Applied For")
PART II--For Payees exempt from backup withholding,
see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form
W-9 and complete as instructed therein.

CERTIFICATION--Under penalties of perjury, I
certify that:

(1) The number shown on this form is my correct TIN
(or I am waiting for a number to be issued to
me); and

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a TIN has not been issued to
me, and either (1) I have mailed or delivered an application to receive a
TIN to the appropriate IRS Center or Social Security Administration Office
or (2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a TIN by the time of payment, 31% of all
payments pursuant to the Offer made to me thereafter will be withheld until
I provide a number.
Signature: ________________________________________ Date:__________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.

If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.

If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
<PAGE>
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificate must be
endorsed or accompanied by, appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.

Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.

IMPORTANT TAX INFORMATION

Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such stockholder with respect to Shares purchased pursuant to
the Offer may be subject to backup withholding.

If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained.

PURPOSE OF SUBSTITUTE FORM W-9

To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of his or her correct TIN by
completing the form certifying that the TIN provided on the Substitute Form W-9
is correct.
<PAGE>
WHAT NUMBER TO GIVE THE DEPOSITARY

The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidelines on which number to
report.
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:

[GEORGESON & COMPANY LOGO]

WALL STREET PLAZA
88 PINE STREET
NEW YORK, NEW YORK 10005
(212) 440-9800 (CALL COLLECT)
OR
CALL TOLL-FREE (800) 223-2064

JUNE 5, 1996

<PAGE>

Letter of Transmittal
To Tender Shares of
Series B Convertible Preferred Stock

Neolens, Inc.

Pursuant to the Offer to Purchase
Dated June 5, 1996

Sola Acquisition Corp.

an wholly owned subsidiary of

Sola International Inc.

- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary:

THE FIRST NATIONAL BANK OF BOSTON

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:

Shareholder Services Division The First National Bank of Boston Banc Boston Trust Company
P.O. Box 1889 Shareholder Services Division of New York
Mail Stop 45-02-53 150 Royall Street 55 Broadway, Third Floor
Boston, Massachusetts 02105 Mail Stop: 45-02-53 New York, New York
(617) 575-3400 Canton, Massachusetts 02021
</TABLE>

By Facsimile:
(617) 575-2232
(617) 575-2233
(For Eligible Institutions Only)

Confirm Facsimile by Telephone:
(617) 575-3400

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

<PAGE>

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by stockholders of
Neolens, Inc. if certificates are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase) is utilized, if delivery of Shares
(as defined below) is to be made by book-entry transfer to the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below).

Stockholders whose certificates for Shares are not immediately
available or who cannot deliver their Shares and all other documents required
hereby to the Depositary by the Expiration Date (as defined in the Offer to
Purchase), or who cannot comply with the book-entry transfer procedures on a
timely basis, may nevertheless tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Series B Convertible Preferred Shares Tendered
(Please fill in, if blank) (Attach additional list if necessary)
- -------------------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C>
Share Number of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
---------------- ----------------- ----------------

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

---------------- ----------------- ----------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to
the Depositary are being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:

Name of Tendering Institution___________________________________________________

Account No.__________________________________________________________________ at

|_| The Depository Trust Company

|_| Philadelphia Depository Trust Company

<PAGE>

Transaction Code No.____________________________________________________________

|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:

Name(s) of Tendering Stockholder(s)_____________________________________________

Date of Execution of Notice of Guaranteed Delivery______________________________

Window Ticket Number (if any)___________________________________________________

Name of Institution which Guaranteed Delivery___________________________________

If delivery is by book-entry transfer___________________________________________

Name of Tendering Institution__________________________________________

Account No.__________________________________________________________at

|_| The Depository Trust Company

|_| Philadelphia Depository Trust Company

Transaction Code No.___________________________________________________

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

<PAGE>

Ladies and Gentlemen:

The undersigned hereby tenders to Sola Acquisition Corp. (the
"Offeror"), a Florida corporation and a wholly owned subsidiary of Sola
International Inc., a Delaware corporation (the "Parent"), the above-described
shares of Series B Convertible Preferred Stock, par value of $.001 per share
(the "Shares"), of Neolens, Inc., a Florida corporation (the "Company"),
pursuant to the Offeror's offer to purchase, among other things, all of the
outstanding Shares at a purchase price of $41.09 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated June 5, 1996 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together with the Offer to Purchase constitute the "Offer"). The Offer
is being made in connection with the Agreement and Plan of Merger, dated as of
May 28, 1996, among the Parent, the Offeror and the Company.

Subject to and effective upon acceptance for payment of and payment for
the Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of the Offeror all right, title and interest in
and to all the Shares that are being tendered hereby (and any and all other
Shares or other securities issued or issuable in respect thereof on or after May
28, 1996) and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all such
other Shares or securities), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares (and all such other Shares or
securities), or transfer ownership of such Shares (and all such other Shares or
securities) on the account books maintained by any of the Book-Entry Transfer
Facilities, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Offeror, (b) present such
Shares (and all such other Shares or securities) for transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and all such other Shares or securities),
all in accordance with the terms of the Offer.

The undersigned hereby irrevocably appoints representatives of the
Offeror as John E. Heine and Ian Gillies, the attorneys and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole judgment deem proper, with respect to all of
the Shares tendered hereby which have been accepted for payment by the Offeror
prior to the time of any vote or other action (and any and all other Shares or
other securities or rights issued or issuable in respect of such Shares on or
after May 28, 1996), at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned meeting) or otherwise. This
proxy is irrevocable and is granted in consideration of, and is effective upon,
the acceptance for payment of such Shares by the Offeror in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy or
written consent granted by the undersigned at any time with respect to such
Shares (and all such other Shares or other securities or rights), and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed effective).

<PAGE>

The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities or rights
issued or issuable in respect of such Shares on or after May 28, 1996) and that
when the same are accepted for payment by the Offeror, the Offeror will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claims. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other Shares
or other securities or rights).

All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.

The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Offeror upon the terms and subject to the conditions of the Offer.

<PAGE>

SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)

To be completed ONLY if the check for the To be completed ONLY if the check for
purchase price of Shares purchased or certificates the purchase price of Shares purchased or
for Shares not tendered or not purchased are to be certificates for Shares not tendered or not
issued in the name of someone other than the purchased are to be mailed to someone other than
undersigned, or if Shares tendered by book-entry the undersigned or to the undersigned at an
transfer that are not purchased are to be returned address other than that shown below the
by credit to an account at one of the Book-Entry undersigned's signature(s).
Transfer Facilities other than that designated
above. Mail check and/or certificates to:

Issue check and/or certificates to:

Name________________________________________________ Name______________________________________________
(Please Print)

Address___________________________________________
Address_____________________________________________
__________________________________________________
(Zip Code)
____________________________________________________
(Zip Code)
__________________________________________________
(Taxpayer Identification No.)
____________________________________________________
(Taxpayer Identification No.)
(See Substitute Form W-9)

|_| Credit unpurchased Shares tendered by book-entry
transfer to the account set forth below:

Name of Account Party_______________________________

Account No._________________________________________
at
|_|The Depository Trust Company

|_|Philadelphia Depository Trust Company

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

<PAGE>

================================================================================
SIGN HERE
(Complete Substitute Form W-9 below)

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

- --------------------------------------------------------------------------------
Signature(s) of Owner(s)

Name(s)_________________________________________________________________________

Capacity (full title)___________________________________________________________

Address_________________________________________________________________________

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

- --------------------------------------------------------------------------------
(Include Zip Code)

Area Code and Telephone Number__________________________________________________

Taxpayer Identification Number__________________________________________________

Dated:____________________________________________________________________, 1996

GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)

FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.

Authorized signature(s)_________________________________________________________

Name____________________________________________________________________________

Name of Firm____________________________________________________________________

Address_________________________________________________________________________

________________________________________________________________________________
(Include Zip Code)

Area Code and Telephone Number__________________________________________________

Dated:____________________________________________________________________, 1996

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

- ------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: [INSERT DEPOSITARY'S NAME HERE]
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Part I--PLEASE PROVIDE YOUR TIN IN Part III--Social Security Number or
THE BOX AT THE RIGHT AND CERTIFY BY Employer Identification Number
SUBSTITUTE SIGNING AND DATING BELOW.

Form W-9
Department of the Treasury -------------------------------------
Internal Revenue Service (If awaiting TIN write "Applied
For")
---------------------------------------------------------------------------
Payor's Request for Part II--For Payees exempt from backup withholding, see the enclosed
Taxpayer Identification Guidelines for Certification of Taxpayer Identification Number on
Number ("TIN") Substitute Form W-9 and complete as instructed therein.

Certification--Under penalties of perjury, I certify that:

(1) The number shown on this form is my correct TIN (or I am waiting for
a number to be issued to me); and

(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (IRS) that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to
backup withholding.

Certification Instructions--You must cross out Item (2) above if you have
been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to
backup withholding, you received another notification from the IRS that
you were no longer subject to backup withholding, do not cross out
item (2). (Also see instructions in the enclosed Guidelines).
---------------------------------------------------------------------------

SIGNATURE:_____________________________________________DATE:_______________

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

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.

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

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a TIN has not been issued to me, and either (1) I have mailed or
delivered an application to receive a TIN to the appropriate IRS Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a TIN by
the time of payment, 31% of all payments pursuant to the Offer made to me thereafter will be withheld until I
provide a number.

Signature:____________________________________________________________________________ Date:______________________

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

<PAGE>

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1. Guarantee of Signatures. Except as otherwise provided below,
signatures on all Letters of Transmittal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which is
a member in good standing of the Securities Transfer Agents Medallion Program or
by any other bank, broker, dealer, credit union, savings association or other
entity which is an "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the
foregoing constituting an "Eligible Institution"), unless the Shares tendered
thereby are tendered (i) by a registered holder of Shares who has not completed
either the box labeled "Special Payment Instructions" or the box labeled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. See Instruction 5. If the certificates are
registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered certificates
must be endorsed or accompanied by duly executed stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear on
the certificates or stock powers, with the signatures on the certificates or
stock powers guaranteed by an Eligible Institution as provided herein. See
Instruction 5.

2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
if the delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and any other
documents required by this Letter of Transmittal, or an Agent's Message in the
case of a book entry delivery, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal by the
Expiration Date. Stockholders who cannot deliver their Shares and all other
required documents to the Depositary by the Expiration Date must tender their
Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made
by or through an Eligible Institution; (b) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Offeror, must be received by the Depositary prior to the Expiration Date;
and (c) the certificates for all tendered Shares, in proper form for tender, or
a confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three NASDAQ
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as provided in Section 3 of the Offer to Purchase.

<PAGE>

The method of delivery of Shares, the Letter of Transmittal and all
other required documents, including delivery through a Book-Entry Transfer
Facility, is at the option and risk of the tendering stockholder. If delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended.

No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be purchased. By executing this Letter of Transmittal
(or a manually signed facsimile thereof), the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.

3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.

4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as promptly as practicable following the expiration or
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.

If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in different names
on different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.

<PAGE>

If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Offeror of the authority, of such person so to act must be
submitted.

6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes
with respect to the sale and transfer of any Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted.

Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.

7. Special Payment and Delivery Instruction. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at any of the Book-Entry Transfer
Facilities as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not purchased
will be returned by crediting the account at the Book-Entry Transfer Facilities
designated above.

8. Substitute Form W-9. The tendering stockholder is required to
provide the Depositary with such stockholder's correct TIN on Substitute Form
W-9, which is provided above, unless an exemption applies. Failure to provide
the information on the Substitute Form W-9 may subject the tendering stockholder
to a $50 penalty and to 31% federal income tax backup withholding on the payment
of the purchase price for the Shares.

9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be obtained from the Information Agent at its addresses or
telephone numbers set forth below.

Important: This Letter of Transmittal or a manually signed facsimile
copy hereof (together with certificates or confirmation of book-entry transfer
and all other required documents) or Notice of Guaranteed Delivery must be
received by the Depositary on or prior to the Expiration Date (as defined in the
Offer to Purchase).

<PAGE>

IMPORTANT TAX INFORMATION

If backup withholding applies, the Depositary is required to withhold
31% of any payments made to the stockholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If backup withholding
results in an overpayment of taxes, a refund may be obtained.

Purpose of Substitute Form W-9

To prevent backup federal income tax withholding on payments that are
made to a stockholder with respect to Shares purchased pursuant to the Offer,
the stockholder is required to notify the Depositary of his or her correct TIN
by completing the form certifying that the TIN provided on the Substitute Form
W-9 is correct.

What Number to Give the Depositary

<PAGE>

The Information Agent for the Offer is:

GEORGESON & COMPANY INC.

Wall Street Plaza
88 Pine Street

New York, New York 10005

Banks and Brokerage Firms please call collect (212) 440-9800
or

Call Toll-Free (800) 223-2064

June 5, 1996

EXHIBIT 99(A)(3)

<PAGE>
OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK,
SERIES A CONVERTIBLE PREFERRED STOCK,
AND SERIES B CONVERTIBLE PREFERRED STOCK

NEOLENS, INC.

$1.14 NET PER SHARE OF COMMON STOCK,
$25.20 NET PER SHARE OF SERIES A CONVERTIBLE PREFERRED STOCK,
AND $41.09 NET PER SHARE OF SERIES B CONVERTIBLE PREFERRED STOCK
BY
SOLA ACQUISITION CORP.

A WHOLLY OWNED SUBSIDIARY OF

SOLA INTERNATIONAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,
UNLESS THE OFFER IS EXTENDED

June 5, 1996

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:

Sola Acquisition Corp., a Florida corporation (the "Offeror") and a wholly
owned subsidiary of Sola International Inc., a Delaware corporation (the
"Parent"), is offering to purchase, among other things, all outstanding shares
of common stock, par value $.001 per share (the "Shares"), of Neolens, Inc., a
Florida corporation (the "Company"), at a purchase price of $1.14 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 5, 1996 (the "Offer to
Purchase"), and in the related Letters of Transmittal (which together constitute
the "Offer") enclosed herewith.

The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of May 28, 1996, among the Parent, the Offeror and the Company (the
"Merger Agreement").

Holders of Shares whose certificates for such Shares (the "Certificates")
are not immediately available or who cannot deliver their Certificates and all
other required documents to the Depositary or complete the procedures for
book-entry transfer prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) must tender their Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.

Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.

Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:

1. The Offer to Purchase dated June 5, 1996.
<PAGE>
2. The Letter of Transmittal to tender shares of Common Stock for your
use and for the information of your clients. Facsimile copies of the Letter
of Transmittal (with manual signatures) may be used to tender Shares.

3. A letter to stockholders of the Company from Jon E. Haglund, the
Chairman of the Board, Chief Executive Officer and acting President of the
Company, together with a Solicitation/Recommendation Statement on Schedule
14D-9 filed with the Securities and Exchange Commission by the Company and
mailed to the stockholders of the Company, each recommending that
stockholders accept the Offer and tender their Shares.

4. The Notice of Guaranteed Delivery for shares of Common Stock to be
used to accept the Offer if neither of the two procedures for tendering
shares of Common Stock set forth in the Offer to Purchase can be completed
on a timely basis.

5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.

6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996, UNLESS THE OFFER
IS EXTENDED.

Please note the following:

1. THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 28, 1996, AMONG THE PARENT, THE OFFEROR AND THE COMPANY. THE
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE
MERGER AGREEMENT AND HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES IN THE OFFER.

2. The tender price is $1.14 per Share, net to the seller in cash,
without interest.

3. The Offer is being made for all of the outstanding Shares.

4. The Offer is conditioned upon (i) there being validly tendered by the
expiration date and not withdrawn that number of shares of Common Stock
representing at least a majority of all outstanding shares of Common Stock
on a fully diluted basis (but excluding shares issuable upon the exercise of
certain options and warrants, as described in the Offer to Purchase) and
(ii) satisfaction of certain other terms and conditions set forth in the
Offer to Purchase.

5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.

In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase) or other required
documents should be sent to the Depositary and (ii) certificates representing
the tendered Shares or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) should be delivered to the Depositary in accordance with the
instructions set forth in the Offer.

If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in Section 3
of the Offer to Purchase.

Neither the Offeror, the Parent nor any officer, director, stockholder,
agent or other representative of the Offeror will pay any fees or commissions to
any broker, dealer or other person (other than the Depositary and the
Information Agent as described in the Offer to Purchase) for soliciting tenders
of Shares pursuant to the Offer. The Offeror will, however, upon request,
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your
<PAGE>
clients. The Offeror will pay or cause to be paid any transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to
Georgeson & Company Inc., Wall Street Plaza, 88 Pine Street, New York, New York
10005, (212) 440-9800 (call collect).

Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.

Very truly yours,

SOLA ACQUISITION CORP.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.

EXHIBIT 99(A)(4)

<PAGE>
OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK,
SERIES A CONVERTIBLE PREFERRED STOCK,
AND SERIES B CONVERTIBLE PREFERRED STOCK

NEOLENS, INC.

$1.14 NET PER SHARE OF COMMON STOCK,
$25.20 NET PER SHARE OF SERIES A CONVERTIBLE PREFERRED STOCK,
AND $41.09 NET PER SHARE OF SERIES B CONVERTIBLE PREFERRED STOCK
BY
SOLA ACQUISITION CORP.

A WHOLLY OWNED SUBSIDIARY OF

SOLA INTERNATIONAL INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT

12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 2, 1996,

UNLESS THE OFFER IS EXTENDED

June 5, 1996

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated June 5,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to an offer by Sola Acquisition Corp.,
a Florida corporation (the "Offeror") and a wholly owned subsidiary of Sola
International Inc., a Delaware corporation (the "Parent"), to purchase, among
other things, all outstanding shares of common stock, par value $.001 per share
(the "Shares"), of Neolens, Inc., a Florida corporation (the "Company"), at a
purchase price of $1.14 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer.

The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of May 28, 1996, among the Parent, the Offeror and the Company (the
"Merger Agreement").

This material is being forwarded to you as the beneficial owner of Shares
carried by us in your account but not registered in your name.

A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.

Accordingly, we request instructions as to whether you wish to tender any or
all of the Shares held by us for your account, upon the terms and conditions set
forth in the Offer.

Please note the following:

1. THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 28, 1996, AMONG THE PARENT, THE OFFEROR AND THE COMPANY. THE
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE
MERGER AGREEMENT AND HAS DETERMINED THAT THE TERMS OF THE
<PAGE>
OFFER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES IN THE OFFER.

2. The tender price is $1.14 per Share, net to the seller in cash,
without interest.

3. The Offer is being made for all of the outstanding Shares.

4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, July 2, 1996, unless the Offer is extended.

5. The Offer is conditioned upon (i) there being validly tendered by the
expiration date and not withdrawn that number of shares of Common Stock
representing at least a majority of all outstanding shares of Common Stock
on a fully diluted basis (but excluding shares issuable upon the exercise of
certain options and warrants, as described in the Offer to Purchase) and
(ii) satisfaction of certain other terms and conditions set forth in the
Offer to Purchase.

6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.

If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.

The Offer is made solely by the Offer to Purchase and the related Letters of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
SERIES A CONVERTIBLE PREFERRED STOCK,
AND SERIES B CONVERTIBLE PREFERRED STOCK
OF
NEOLENS, INC.

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated June 5, 1996 (the "Offer to Purchase"), and the related Letter
of Transmittal (which together constitute the "Offer") in connection with the
offer by Sola Acquisition Corp., a Florida corporation (the "Offeror") and a
wholly owned subsidiary of Sola International Inc., a Delaware corporation, to
purchase, among other things, all outstanding shares of common stock, par value
$.001 per share ("Shares"), of Neolens, Inc., a Florida corporation.

This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.

Number of shares of Common Stock to be Tendered:*

Account Number:

Date:

SIGN HERE

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

Signature(s)

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

(Print Name(s))

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

(Print Address(es))

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

(Area Code and Telephone Number(s))

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

(Taxpayer Identification or
Social Security Number(s))

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

* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.

EXHIBIT 99(A)(5)

<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK

NEOLENS, INC.

This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of common stock, par
value $.001 per share (the "Shares"), of Neolens, Inc., a Florida corporation
(the "Company"), are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or facsimile transmission, or mail to the Depositary. See
Section 3 of the Offer to Purchase, dated June 5, 1996 (the "Offer to
Purchase").

THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
Shareholder Services Division The First National Bank of Boston Banc Boston Trust Company
P.O. Box 1889 Shareholder Services Division of New York
Mail Stop 45-02-53 150 Royall Street 55 Broadway, Third Floor
Boston, Massachusetts 02105 Mail Stop: 45-02-53 New York, New York
(617) 575-3400 Canton, Massachusetts 02021

By Facsimile:
<S> <C> <C>
(617) 575-2232
(617) 575-2233
(For Eligible Institutions Only)

Confirm Facsimile by Telephone:
(617) 575-3400
</TABLE>

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

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.

The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.

THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:

The undersigned hereby tenders to Sola Acquisition Corp., a Florida
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and the related Letter of Transmittal with respect to the Shares
(which together constitute the "Offer"), receipt of which is hereby
acknowledged, Shares of the Company, pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.

<TABLE>

<S> <C>
Number of Shares:_________________________ SIGN HERE
__________________________________________
Name(s):
Certificate No(s) (if available):
__________________________________________ __________________________________________
__________________________________________
__________________________________________
If Shares will be tendered by
book-entry transfer:_________________________ (Please Print)
Name of Tendering Institutions
Address:___________________________________
__________________________________________
__________________________________________
Account No.:____________________________ at
/ / The Depository Trust Company (Zip Code)

/ / Philadelphia Depository Trust Company Area Code and Telephone No.:

__________________________________________

Signature(s):_______________________________

__________________________________________

</TABLE>

<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three NASDAQ trading days of
the date hereof.

<TABLE>
<S> <C>
Name of Firm: Title:
Name:
(Authorized Signature) (Please Print or Type)
Address: Area Code and Telephone No.:
</TABLE>

DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM

CERTIFICATES SHOULD BE SENT WITH LETTER OF TRANSMITTAL

Dated: , 1996

<PAGE>
NOTICE OF GUARANTEED DELIVERY
OR
TENDER OF SHARES OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
NEOLENS, INC.

This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Series A Convertible
Preferred Stock, par value $.001 per share (the "Shares"), of Neolens, Inc., a
Florida corporation (the "Company"), are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or time
will not permit all required documents to reach the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or facsimile transmission, or mail to the Depositary. See
Section 3 of the Offer to Purchase, dated June 5, 1996 (the "Offer to
Purchase").

THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<CAPTION>
By Mail: By Overnight Courier:
<S> <C>
Shareholder Services Division The First National Bank of Boston
P.O. Box 1889 Shareholder Services Division
Mail Stop 45-02-53 150 Royall Street
Boston, Massachusetts 02105 Mail Stop: 45-02-53
(617) 575-3400 Canton, Massachusetts 02021

By Facsimile:
<S> <C>
(617) 575-2232
(617) 575-2233
(For Eligible Institutions Only)

Confirm Facsimile by Telephone:
(617) 575-3400
</TABLE>

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

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.

THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:

<TABLE>

<S> <C>
Number of Shares:_________________________ SIGN HERE
__________________________________________
Name(s):
Certificate No(s) (if available):
__________________________________________ __________________________________________
__________________________________________
__________________________________________
If Shares will be tendered by
book-entry transfer:_________________________ (PleasePrint)
Name of Tendering Institutions
Address:___________________________________
__________________________________________
__________________________________________
Account No.:____________________________ at
/ / The Depository Trust Company (Zip Code)

/ / Philadelphia Depository Trust Company Area Code and Telephone No.:

__________________________________________

Signature(s):_______________________________

__________________________________________

</TABLE>

<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

<TABLE>
<S> <C>
Name of Firm:___________________________ Title:___________________________

________________________________________ Name:____________________________
(Authorized Signature) (Please Print or Type)

Address:________________________________ Area Code and Telephone No.: _______
</TABLE>

DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM

CERTIFICATES SHOULD BE SENT WITH LETTER OF TRANSMITTAL

Dated: , 1996

<PAGE>

Notice of Guaranteed Delivery
for
Tender of Shares
Series B Convertible Preferred Stock
of
Neolens, Inc.

This form, or one substantially equivalent hereto, must be used to
accept the Offer (as defined below) if certificates for shares of shares of
Series B Preferred Stock, par value $.001 per share (the "Shares"), of Neolens,
Inc., a Florida corporation (the "Company"), are not immediately available or if
the procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary on or prior
to the Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or facsimile transmission, or mail to the Depositary. See
Section 3 of the Offer to Purchase, dated June 5, 1996 (the "Offer to
Purchase").

The Depositary for the Offer is:

THE FIRST NATIONAL BANK OF BOSTON

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:

By Facsimile:

(617) 575-2232
(617) 575-2233
(For Eligible Institutions Only)

Confirm Facsimile by Telephone:
(617) 575-3400

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

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.

THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.

<PAGE>

Ladies and Gentlemen:

<TABLE>
<S> <C>
Number of Shares:__________________________________ SIGN HERE

Certificate No(s) (if available): Name(s):

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

- --------------------------------------------------- ---------------------------------------------------------
(Please Print)

If Shares will be tendered by

book-entry transfer:_______________________________ Address: _______________________________________________

---------------------------------------------------------
Name of Tendering Institutions (Zip Code)

___________________________________________________ Area Code and Telephone No.:

Account No.: ___________________________________ at _________________________________________________________

|_| The Depository Trust Company

|_| Philadelphia Depository Trust Company Signature(s): _______________________________________

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

<PAGE>

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program or a bank, broker, dealer, credit union,
savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees the delivery to the Depositary of
the Shares tendered hereby, together with a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile(s) thereof) and any other
required documents, or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery of Shares, all within three NASDAQ trading
days of the date hereof.

<TABLE>
<S> <C>
Name of Firm:________________________________________ Title:_______________________________________________

_____________________________________________________ Name:________________________________________________
(Authorized Signature) (Please Print or Type)

Address: ___________________________________________ Area Code and Telephone No.: _______________________
</TABLE>

DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM

CERTIFICATES SHOULD BE SENT WITH LETTER OF TRANSMITTAL

Dated: ________________________________, 1996

EXHIBIT 99(A)(6)

EXHIBIT I

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER--
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
GIVE THE
GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT NUMBER OF: FOR THIS TYPE OF ACCOUNT NUMBER OF:
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. An individual's The individual 9. A valid trust, Legal entity (Do not
account estate, or pension furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account title).5
2. Two or more The actual owner of 10. Corporate account The corporation
individuals (joint the account or, if
account) combined funds, the
first individual on
the account1
3. Husband and wife The actual owner of 11. Association, club, The organization
(joint account) the account or, if religious,
joint funds, the charitable,
first individual on educational or other
the account1 tax- exempt
organization account
4. Custodian account of The minor2 12. Partnership account The partnership
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the 13. A broker or The broker or
(joint account) minor is the only registered nominee nominee
contributor, the
minor1
6. Account in the name The ward, minor or 14. Account with the The public entity
of guardian or incompetent person3 Department of
committee for a Agriculture in the
designated ward, name of a public
minor or incompetent entity (such as a
person State or local
government, school
district or prison)
that receives
agricultural program
payments
7. a. The usual The grantor-trustee1
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner2
account that is
not a legal or
valid trust under
State law
8. Sole proprietorship The owner4
account
- ---------------------------------------------------------------------------------------------------
</TABLE>

1 List first and circle the name of the person whose number you furnish.

2 Circle the minor's name and furnish the minor's social security number.

3 Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.

4 You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.

5 List first and circle the name of the legal trust, estate, or pension trust.

NOTE: if no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.

<PAGE>
HOW TO OBTAIN A TIN

If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments by the
Payer include the following:

. A corporation.

. A financial institution.

. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).

. The United States or any agency or instrumentality thereof.

. A State, the District of Columbia, a possession of the United States or any
subdivision or instrumentality thereof.

. A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.

. An international organization or any agency or instrumentality thereof.

. A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.

. A real estate investment trust.

. A common trust fund operated by a bank under section 584(a).

. An exempt charitable reminder trust, or a non-exempt trust described in
section 4947(a)(1).

. An entity registered at all times under the Investment Company Act of 1940.

. A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:

. Payments to nonresident aliens subject to withholding under section 1441.

. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.

. Payments of patronage dividends where the amount received is not paid in
money.

. Payments made by certain foreign organizations.

. Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the
following:

. Payments of interest on obligations issued by individuals.

NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade of business and you have not
provided your correct taxpayer identification number to the payer.

. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).

. Payments described in section 6049(b)(5) to nonresident aliens.

. Payments on tax-free covenant bonds under section 1451.

. Payments made by certain foreign organizations.

. Payments made to a nominee.

Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE
"EXEMPT" ON THE FACE OF THE FORM IN PART II, SIGN AND DATE THE FORM, AND RETURN
IT TO THE PAYER.

Certain payments, other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.

PRIVACY ACT NOTICE.--Section 6019 requires most recipients of dividend, interest
or other payments to give their correct taxpayer identification numbers to
payers who must report the payments to IRS. IRS uses the numbers for
identification purposes and to help verify the accuracy of tax returns. Payers
must be given the numbers whether or not recipients are required to file tax
returns. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.

PENALTIES

(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.

EXHIBIT 99(A)(7)

SOLA INTERNATIONAL INC. AND NEOLENS, INC.
ANNOUNCE AGREEMENT FOR SOLA
TO ACQUIRE NEOLENS

May 30, 1996. Menlo Park, Ca; Miami, Fl. Sola International Inc. (NYSE: SOL) and
Neolens, Inc. (OTC Bulletin Board: NEOL) jointly announced today that they have
entered into a definitive merger agreement which provides for the acquisition by
Sola of Neolens, a Florida corporation engaged in the manufacture of
Polycarbonate eyeglass lenses. The aggregate purchase price will be
approximately $16 million, including the assumption of Neolens debt.

Pursuant to the merger agreement, Sola Acquisition Corp., a subsidiary of Sola,
will commence a cash tender offer within 5 business days for all outstanding
shares of Neolens Common Stock, Series A Preferred stock and Series B Preferred
stock at a price per share of $1.14 per share of Common Stock, $25.20 per share
of Series A Convertible Preferred Stock and $41.09 per share of Series B
Convertible Preferred Stock. The tender offer will be conditioned upon the
acquisition of at least a majority of the outstanding Neolens Common Stock on a
fully diluted basis, the acquisition of a majority, in the aggregate, of the
outstanding Neolens Series A and Series B Preferred Stock and other customary
conditions.

John Heine, President and CEO of Sola commented "Sola and Neolens have been
working closely for some time to build a high quality finished lens product line
in Polycarbonate. This proposed acquisition is a natural evolution of this
activity and will give Sola an important new manufacturing technology to allow
the development of incremental Polycarbonate business."

Jon E. Haglund, Chairman of the Board and Chief Executive Officer of Neolens
stated, "Neolens has developed a strong partnership with Sola for the past year
that needs to be taken to another level. Economic, competitive and financial
conditions have been studied closely by Neolens management and Board of
Directors. We strongly believe that a merger with Sola is the best future course
for Neolens and is in the best interests of its stockholders, employees and
other interested parties."

Sola International Inc. designs, manufactures and distributes a broad range of
eyeglass lenses, primarily focusing on the faster growing plastic lens segment
of the global lens market. The Company has manufacturing operations in ten
countries and employs 5,800 people worldwide.

For further information, please contact: at Sola: John Heine, President and CEO,
415-324-6868; at Neolens: Jon Haglund, Chairman and CEO, 305-651-0003.

EXHIBIT 99(A)(8)

EXECUTION COPY

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

AGREEMENT AND PLAN OF MERGER

Among

Sola International Inc.

Sola Acquisition Corp.

And

Neolens, Inc.

Dated as of May 28, 1996

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

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS

Page
----
<C> <C> <S> <C>
ARTICLE I THE OFFER
Section 1.1 The Offer..............................................................................2
Section 1.2 Company Actions........................................................................3

ARTICLE II THE MERGER
Section 2.1 The Merger.............................................................................5
Section 2.2 Effective Time.........................................................................5
Section 2.3 Effects of the Merger..................................................................6
Section 2.4 Certificate of Incorporation and Bylaws; Directors and Officers........................6
Section 2.5 Conversion of Securities...............................................................6
Section 2.6 Exchange of Certificates...............................................................7
Section 2.7 Dissenting Company Shares..............................................................9
Section 2.8 Merger Without Meeting of Stockholders.................................................9
Section 2.9 No Further Ownership Rights in the Shares..............................................9
Section 2.10 Closing of Company Transfer Books.....................................................10
Section 2.11 Further Assurances....................................................................10

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT
Section 3.1 Organization, Standing and Power......................................................10
Section 3.2 Authority; Non-Contravention..........................................................10
Section 3.3 Offer Documents and Proxy Statement...................................................12
Section 3.4 Financing.............................................................................12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization, Standing and Power......................................................12
Section 4.2 Capital Structure.....................................................................13
Section 4.3 Authority; Non-Contravention..........................................................14
Section 4.4 SEC Documents.........................................................................15
Section 4.5 Offer Documents and Proxy Statement...................................................16
Section 4.6 Absence of Certain Events.............................................................17
Section 4.7 Litigation............................................................................17
Section 4.8 Compliance with Applicable Law........................................................18
Section 4.9 Employee Plans........................................................................18
Section 4.10 Employment Relations and Agreement....................................................20
Section 4.11 Contracts.............................................................................21
</TABLE>
-i-

<PAGE>
<TABLE>
<C> <C> <S> <C>
Section 4.12 Environmental Laws and Regulations....................................................21
Section 4.13 Property and Leases...................................................................23
Section 4.14 Patents, Trademarks, Copyrights.......................................................23
Section 4.15 Insurance.............................................................................24
Section 4.16 Takeover Statutes.....................................................................24
Section 4.17 Taxes.................................................................................24
Section 4.18 No Change of Control..................................................................25
Section 4.19 Brokers...............................................................................25

ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING SUB
Section 5.1 Organization and Standing.............................................................25
Section 5.2 Authority; Non-Contravention..........................................................26

ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business by the Company Pending the Merger.................................26
Section 6.2 Acquisition Proposals.................................................................29
Section 6.3 Annual Meeting of Stockholders........................................................30
Section 6.4 Conduct of Business of Sub Pending the Merger.........................................31

ARTICLE VII ADDITIONAL AGREEMENTS
Section 7.1 Company Stockholder Approval; Proxy Statement.........................................31
Section 7.2 Access to Information.................................................................32
Section 7.3 Fees and Expenses.....................................................................32
Section 7.4 Company Stock Options.................................................................33
Section 7.5 Warrants..............................................................................34
Section 7.6 Reasonable Best Efforts...............................................................34
Section 7.7 Public Announcements..................................................................35
Section 7.8 Indemnification.......................................................................35
Section 7.9 Employees.............................................................................36
Section 7.10 Board Representation..................................................................36
Section 7.11 Notification of Certain Matters.......................................................36
Section 7.12 Repayment of Loans....................................................................37
Section 7.13 Other Payments........................................................................37
Section 7.14 Option Agreement......................................................................37

ARTICLE VIII CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger............................37

ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination...........................................................................38
Section 9.2 Effect of Termination.................................................................40
</TABLE>
-ii-

<PAGE>

<TABLE>
<C> <C> <S> <C>
Section 9.3 Amendment.............................................................................40
Section 9.4 Waiver................................................................................40
Section 9.5 Procedure for Termination, Amendment or Waiver........................................41

ARTICLE X GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties........................................41
Section 10.2 Notices...............................................................................41
Section 10.3 Interpretation........................................................................42
Section 10.4 Counterparts..........................................................................42
Section 10.5 Entire Agreement; No Third-Party Beneficiaries........................................42
Section 10.6 Governing Law.........................................................................42
Section 10.7 Assignment............................................................................43
Section 10.8 Severability..........................................................................43
Section 10.9 Enforcement of this Agreement.........................................................43
Section 10.10 Incorporation of Exhibits.............................................................43

EXHIBIT A CONDITIONS OF THE OFFER......................................................... A-1
SCHEDULE 4.14 PATENTS AND PATENT APPLICATIONS.......................................S-Error! Bookmark not defined.
SCHEDULE 7.9 EMPLOYMENT AGREEMENTS.................................................S-Error! Bookmark not defined.
</TABLE>
-iii-

<PAGE>

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of May 28, 1996 (this "Agreement"),
among Sola International Inc., a Delaware corporation ("Parent"), Sola
Acquisition Corp., a Florida corporation ("Sub") and a wholly owned subsidiary
of Parent, and Neolens, Inc., a Florida corporation (the "Company") (Sub and the
Company, collectively, the "Constituent Corporations").

W I T N E S S E T H:

WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent pursuant to a tender
offer (the "Offer") by Sub for (i) all of the outstanding shares of Common
Stock, par value $0.001 per share ("Common Stock"), of the Company at a price of
$1.14 per share, net to the seller in cash, without interest (the "Common Stock
Offer Price"), (ii) for all of the outstanding shares of Series A Preferred
Stock of the Company (the "Series A Preferred") at a price per share of $25.20,
net to the seller in cash, without interest (the "Series A Preferred Offer
Price") and (iii) for all of the outstanding shares of the Series B Preferred
Stock of the Company (the "Series B Preferred") at a price of $41.09 per share,
net to the seller in cash, without interest (the "Series B Preferred Offer
Price"), each of the Series A Preferred and the Series B Preferred having a par
value of $0.001 (the "Preferred Stock" and, collectively with the Common Stock,
the "Shares"), followed by a merger (the "Merger") of Sub with and into the
Company upon the terms and subject to the conditions set forth herein;

WHEREAS, Parent and Sub have required, as a condition to entering into this
Agreement, that, simultaneously with the execution and delivery of this
Agreement, a certain holder of shares of Preferred Stock and Common Stock enter
into an agreement with Parent (the "Stockholder Agreement") concerning, among
other things, the voting and tender of such Preferred Stock and Common Stock;

WHEREAS, Parent and Sub have required, as a condition to entering into this
Agreement, that the Company enter into an agreement with the Purchaser granting
the Purchaser the option, under certain circumstances, to purchase Series C
Junior Preferred Stock of the Company (the "Option Agreement");

WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have each determined that a business combination between Parent and the Company
is fair and in the best interests of their respective companies and
stockholders;

<PAGE>

WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer, the Merger, the Stockholder Agreement and the Option
Agreement (and the acquisition of Company securities pursuant thereto) and
recommending that the Company's stockholders accept the Offer and tender their
shares; and

WHEREAS, pursuant to the Merger, each issued and outstanding Share not
owned directly or indirectly by Parent or the Company, except Shares held by
holders who comply with the provisions of Florida law regarding the right of
stockholders to dissent from the Merger and require appraisal of their Shares,
will be converted into the right to receive the per share consideration paid
pursuant to the Offer in respect of the Common Stock, Series A Preferred, or
Series B Preferred, as the case may be.

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, Parent, Sub and the
Company hereby agree as follows:

ARTICLE I

THE OFFER

Section 1.1 The Offer. (a) Subject to the provisions of this Agreement and
the occurrence of the event specified in Section 7.12(c) of this Agreement,
within five business days after the first public announcement of this Agreement,
Sub shall, and Parent shall cause Sub to, commence, within the meaning of Rule
14d-2 under the Exchange Act (as hereinafter defined), the Offer. The obligation
of Sub to, and of Parent to cause Sub to, commence the Offer and accept for
payment, and pay for, any Shares tendered pursuant to the Offer shall be subject
to the conditions set forth in Exhibit A and to the terms and conditions of this
Agreement. The Offer shall initially expire 20 business days after the date of
its commencement, unless this Agreement is terminated in accordance with Article
IX, in which case the Offer (whether or not previously extended in accordance
with the terms hereof) shall expire on such date of termination. Without the
prior written consent of the Company, Sub shall not (i) waive the Minimum
Condition (as defined in Exhibit A), (ii) reduce the number of Shares subject to
the Offer, (iii) reduce the price per share of any class or the Shares to be
paid pursuant to the Offer, (iv) except as provided in the following sentence,
extend the Offer, if all of the Offer conditions are satisfied or waived, or (v)
change the form of consideration payable in the Offer. Notwithstanding the
foregoing, Sub may, without the consent of the Company, extend the Offer at any
time, and from time to time, (i) if at the then scheduled expiration date of the
Offer any of the conditions to Sub's obligation to accept for payment and pay
for the Shares shall not have been satisfied or waived, until such time as such
conditions are satisfied or waived; (ii) for any period required by any rule,

-2-
<PAGE>

regulation, interpretation or position of the SEC (as hereinafter defined) or
its staff applicable to the Offer; (iii) until ten business days following the
expiration of the ten business day period referred to in the condition in clause
(f) of Exhibit A and if such condition (f) shall not have been satisfied, for as
long as Parent and Sub shall determine until, in their sole discretion, all
Offer conditions are satisfied; and (iv) if all Offer conditions are satisfied
or waived but the number of Shares tendered is less than 80% of the then
outstanding number of shares of Common Stock and less than 80% of the then
outstanding, in the aggregate, shares of Series A Preferred and Series B
Preferred, for an aggregate period of not more than 10 business days (for all
such extensions) beyond the latest expiration date that would be permitted under
clause (i), (ii) or (iii) of this sentence. So long as this Agreement is in
effect and the Offer conditions have not been satisfied or waived, Sub shall,
and Parent shall cause Sub to, cause the Offer not to expire. Subject to the
terms and conditions of the Offer and this Agreement, Sub shall, and Parent
shall cause Sub to, pay for all of the Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the expiration of the Offer.

(b) On the date of commencement of the Offer, Parent and Sub shall file
with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement
on Schedule 14D-1 with respect to the Offer, which shall contain an offer to
purchase and a related letter of transmittal (such Schedule 14D-1 and the
documents therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents prior to the filing thereof with the SEC. The Offer Documents shall
comply as to form in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (including the rules and regulations
promulgated thereunder, the "Exchange Act"), and on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
the Offer Documents shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or Sub with respect to information supplied by the Company for inclusion in the
Offer Documents. Each of Parent, Sub and the Company agrees to correct promptly
any information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect, and each of Parent, Sub and Company further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws.

Section 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company
at a meeting duly called and held has duly adopted resolutions (i) approving
this Agreement, the Offer and the Merger, (ii) determining that the Merger is

-3-
<PAGE>

advisable and that the terms of the Offer and Merger are fair to, and in the
best interests of, the Company, and the holders of shares of Common Stock, the
holders of shares of Series A Preferred and the holders of shares of Series B
Preferred and (iii) recommending that the Company's stockholders accept the
Offer and tender their Shares and approve the Merger and this Agreement. The
Company hereby consents to the inclusion in the Offer Documents of such
recommendation of the Board of Directors of the Company. The Company represents
that its Board of Directors has received the written opinion (the "Fairness
Opinion") of Furman Selz LLC (the "Financial Advisor") that the proposed
consideration to be received by the holders of shares of Common Stock, the
holders of shares of Series A Preferred and the holders of shares of Series B
Preferred pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has been authorized by the Financial
Advisor to permit, subject to the prior review and consent by the Financial
Advisor (such consent not to be unreasonably withheld), the inclusion of the
Fairness Opinion (or a reference thereto) in the Offer Documents, the Schedule
14D-9 (as hereinafter defined) and the Proxy Statement (as hereinafter defined).
The Board of Directors of the Company has taken all appropriate action,
including, without limitation, approving the Offer, the Merger, the Option
Agreement and the Stockholder Agreement so that neither Parent nor Sub will be
an "interested shareholder" within the meaning of Section 607.0901 of the Act
(as hereinafter defined), or an "acquiring person" within the meaning of Section
607.0902 of the Act, by virtue of the Parent's or Sub's entry into this
Agreement, the Option Agreement and the Stockholder Agreement and the
consummation of the transactions contemplated hereunder and thereby, including,
without limitation, the purchase of securities pursuant to the Offer and the
acquisition of securities pursuant to the Option Agreement and the Stockholder
Agreement.

(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendations set forth in
paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of the
Company as required by Rule 14D-9 promulgated under the Exchange Act. To the
extent practicable, the Company shall cooperate with Parent in mailing or
otherwise disseminating the Schedule 14D-9 with the appropriate Offer Documents
to the Company's stockholders. Parent and its counsel shall be given an
opportunity to review and comment upon the Schedule 14D-9 prior to the filing
thereof with the SEC. The Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Parent or Sub for inclusion in the

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Schedule 14D-9. Each of the Company, Parent and Sub agrees to correct promptly
any information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company agrees to provide
Parent and Sub and their counsel in writing with any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.

(c) In connection with the Offer, the Company shall cause its transfer
agent to promptly furnish Sub with a list of the holders of Shares and mailing
labels containing the names and addresses of the record holders of Shares as of
a recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings (including Shares held by depositories) and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Shares, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Sub may reasonably request in communicating the Offer to
the Company's stockholders. The Company acknowledges that Sub intends to
commence the Offer by sending Offer materials to the holders of the Shares and,
therefore, the obligations of the Company as set forth in this subparagraph are
extremely time-sensitive.

ARTICLE II

THE MERGER

Section 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Business Corporation Act of the State of
Florida, as amended (the "Act"), Sub shall be merged with and into the Company
at the Effective Time (as hereinafter defined). Following the Merger, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of Sub in accordance with the Act.

Section 2.2 Effective Time. The Merger shall become effective when Articles
of Merger, executed in accordance with the relevant provisions of the Act (the
"Articles of Merger"), are filed with the Department of State of the State of
Florida. When used in this Agreement, the term "Effective Time" shall mean the
later of the date and time at which the Articles of Merger are filed or such
later time established by the Articles of Merger. The filing of the Articles of

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Merger shall be made as soon as reasonably practicable after the satisfaction or
waiver of the conditions to the Merger set forth herein.

Section 2.3 Effect of the Merger. The Merger shall have the effects set
forth in the Act.

Section 2.4 Certificate of Incorporation and Bylaws; Directors and
Officers. (a) The Articles of Incorporation of Sub, as in effect immediately
prior to the Effective Time, shall be amended to change the name of Sub to
"Neolens, Inc." and, as so amended, the Articles of Incorporation and the
By-Laws of Sub shall be the Articles of Incorporation and the By-Laws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.

(b) The directors of Sub at the Effective Time shall, from and after the
Effective Time, be the initial directors of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal, in accordance with the Surviving
Corporation's Articles of Incorporation and By-Laws.

(c) The officers of the Company at the Effective Time and such other
persons as designated by the Parent shall, from and after the Effective Time, be
the initial officers of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal, in accordance with the Surviving Corporation's Articles
of Incorporation and By-Laws.

Section 2.5 Conversion of Securities. As of the Effective Time, by virtue
of the Merger and without any action on the part of any stockholder of the
Company:

(a) All Shares that are held in the treasury of the Company and any
Shares owned by Parent, Sub or any other wholly owned Subsidiary (as
hereinafter defined) of Parent shall be canceled and no consideration shall
be delivered in exchange therefor.

(b) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares of Common Stock to be
canceled in accordance with Section 2.5(a) and other than Dissenting
Company Shares (as hereinafter defined)) shall be converted into the right
to receive from the Surviving Corporation in cash, without interest, the
Common Stock Offer Price, without interest (the "Common Stock Merger
Consideration"). All such shares of Common Stock, when so converted, shall
no longer be outstanding and shall automatically be canceled and retired
and each holder of a certificate or certificates (the "Common Stock
Certificates") representing any such shares of Common Stock shall cease to

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have any rights with respect thereto, except the right to receive the
Common Stock Merger Consideration.

(c) Each Share of Series A Preferred issued and outstanding
immediately prior to the Effective Time (other than shares of Series A
Preferred to be canceled in accordance with Section 2.5(a) and other than
Dissenting Company Shares) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the Series A
Preferred Offer Price, without interest (the "Series A Preferred Merger
Consideration"). All such shares of Series A Preferred, when so converted,
shall no longer be outstanding and shall automatically be canceled and
retired and each holder of a certificate or certificates (the "Series A
Preferred Certificates") representing any such shares shall cease to have
any rights with respect thereto, except the right to receive the Series A
Preferred Merger Consideration.

(d) Each share of Series B Preferred issued and outstanding
immediately prior to the Effective Time (other than shares of Series B
Preferred to be canceled in accordance with Section 2.5(a) and other than
Dissenting Company Shares) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the Series B
Preferred Offer Price, without interest (the "Series B Preferred Merger
Consideration" and, collectively with the Common Stock Merger Consideration
and the Series A Merger Consideration, the "Merger Consideration"). All
such shares of Series B Preferred, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and each holder
of a certificate or certificates (the "Series B Preferred Certificates"
and, collectively with the Common Stock Certificates and the Series A
Preferred Certificates, the "Certificates") representing any such shares
shall cease to have any rights with respect thereto, except the right to
receive the Series B Preferred Merger Consideration.

(e) Each issued and outstanding share of the capital stock of Sub
shall be converted into and become one fully paid and nonassessable share
of common stock, par value $.0.001 per share, of the Surviving Corporation.

Section 2.6 Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall appoint a commercial bank or trust company to act
as paying agent hereunder (the "Paying Agent") for the payment of the Merger
Consideration upon surrender of Certificates. All of the fees and expenses of
the Paying Agent shall be borne by Parent.

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(b) Surviving Corporation to Provide Funds. Parent shall take all steps
necessary to enable and cause the Surviving Corporation to provide the Paying
Agent with cash in amounts necessary to pay for all of the Shares pursuant to
Section 2.5 (determined as though there are no Dissenting Company Shares), when
and as such amounts are needed by the Paying Agent.

(c) Exchange Procedures. As soon as practicable after the Effective Time,
the Paying Agent shall mail to each holder of record of a Certificate, other
than Parent, the Company and any Subsidiary of Parent, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by the Surviving
Corporation, together with such letter of transmittal, duly executed, and such
other documents as may reasonably be required by the Paying Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor the amount of
cash into which the Shares theretofore represented by such Certificate shall
have been converted pursuant to Section 2.5, and the Certificates so surrendered
shall forthwith be canceled. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate. If payment is to be made to a
person other than the person in whose name the Certificate so surrendered is
registered, it shall be a condition of payment that such Certificate shall be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by reason
of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.6, each Certificate (other than Certificates
representing Dissenting Company Shares and Certificates representing any Shares
owned by Parent or any Subsidiary of Parent or held in the treasury of the
Company) shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the amount of cash, without interest,
into which the Shares theretofore represented by such Certificate shall have
been converted pursuant to Section 2.5. After six months following the Effective
Time, holders of Shares shall look only to the Surviving Corporation (subject to
the terms of this Agreement) as a general creditor for payment of the Merger
Consideration, without interest, upon the surrender of any Certificates held by
them. If any Certificate shall not have been surrendered prior to three years
after the Effective Time (or immediately prior to such time on which any payment
in respect hereof would otherwise escheat or become the property of any
governmental unit or agency), the payment in respect of such Certificate shall,
to the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto. Notwithstanding the foregoing, none of the Paying Agent, the

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Surviving Corporation or any party hereto shall be liable to any former
stockholder of the Company for any cash or interest delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.

Section 2.7 Dissenting Company Shares. Notwithstanding any provision of
this Agreement to the contrary, if required by the Act but only to the extent
required thereby, Shares which are issued and outstanding immediately prior to
the Effective Time and which are held by holders of such Shares who have
properly exercised appraisal rights with respect thereto in accordance with
Section 607.1320 of the Act (the "Dissenting Company Shares") will not be
exchangeable for the right to receive the Merger Consideration, and holders of
such Shares will be entitled to receive payment of the appraised value of such
Shares in accordance with the provisions of such Section 607.1320 unless and
until such holders fail to perfect or effectively withdraw or lose their rights
to appraisal and payment under the Act. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
Shares will thereupon be treated as if they had been converted into and have
become exchangeable for, at the Effective Time, the right to receive the Merger
Consideration, without any interest thereon. Upon the Company's receipt of any
notice of election to dissent in accordance with the provisions of such Section
607.1320, the Company shall promptly provide Parent with a copy of such notice
of election to dissent. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any such election to dissent
or offer to settle or settle any such election to dissent.

Section 2.8 Merger Without Meeting of Stockholders. In the event that Sub,
or any other direct or indirect subsidiary of Parent, shall acquire at least 80%
of the outstanding shares of Common Stock and at least 80% of the outstanding
shares of the Preferred Stock, the parties hereto agree to take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a meeting of stockholders
of the Company, in accordance with Section 607.1104 of the Act.

Section 2.9 No Further Ownership Rights in the Shares. From and after the
Effective Time, the holders of Shares which were outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided in this Agreement or by applicable law. All cash
paid upon the surrender of Certificates in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the Shares.

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Section 2.10 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of Shares
shall thereafter be made. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged as
provided in this Article II.

Section 2.11 Further Assurances. If at any time after the Effective Time
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either of the Constituent Corporations in the Merger, all such deeds,
bills of sale, assignments and assurances and do, in the name and on behalf of
such Constituent Corporations, all such other acts and things necessary,
desirable or proper to vest, perfect or confirm its right, title or interest in,
to or under any of the rights, privileges, powers, franchises, properties or
assets of such Constituent Corporation and otherwise to carry out the purposes
of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to the Company as follows:

Section 3.1 Organization, Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on its
business as now being conducted.

Section 3.2 Authority; Non-Contravention. Parent has all requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent and
the consummation by Parent of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Parent and (assuming the valid
authorization, execution and delivery of this Agreement by the Company)
constitutes a valid and binding obligation of Parent enforceable against Parent
in accordance with its terms. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give

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rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of Parent or any of its Subsidiaries under, any provision of (i) the
Certificate of Incorporation or By-Laws of Parent or the comparable charter or
organization documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or any
of its Subsidiaries or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any of its Subsidiaries or
any of their respective properties or assets, other than, in the case of clauses
(ii) or (iii), any such conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the aggregate, would
not have a Material Adverse Effect (as defined hereinafter) on Parent,
materially impair the ability of Parent to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby. No
filing or registration with, or authorization, consent or approval of, any
domestic (federal and state), foreign or supranational court, commission,
governmental body, regulatory or administrative agency, authority or tribunal (a
"Governmental Entity") is required by or with respect to Parent or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
Parent or is necessary for the consummation of the Offer, the Merger and the
other transactions contemplated by this Agreement, except for (i) in connection
or in compliance with the Exchange Act, (ii) the filing of the Articles of
Merger with the Department of State of the State of Florida and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iii) such filings and consents, if any, as may be
required under any environmental, health or safety law or regulation pertaining
to any notification, disclosure or required approval triggered by the Offer, the
Merger or the transactions contemplated by this Agreement, and (iv) such other
consents, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on Parent, materially impair the
ability of Parent to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. For purposes of
this Agreement (a) "Material Adverse Change" or "Material Adverse Effect" means,
when used with respect to Parent, Sub or the Company, as the case may be, any
change or effect, either individually or in the aggregate, that is or may be
materially adverse to the business, assets, liabilities, properties, condition
(financial or otherwise) or results of operations of all or any material part of
Parent and its Subsidiaries taken as a whole, Sub, or the Company, as the case
may be, and (b) "Subsidiary" means any corporation, partnership, joint venture
or other legal entity of which Parent or the Company, as the case may be (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests the holders of

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which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.

Section 3.3 Offer Documents and Proxy Statement. None of the information to
be supplied by Parent or Sub for inclusion or incorporation by reference in the
Offer Documents, the Schedule 14D-9, the information statement, if any, filed by
the Company in connection with the Offer pursuant to Rule 14F-1 promulgated
under the Exchange Act (the "Information Statement"), or the proxy statement
(together with any amendments or supplements thereto, the "Proxy Statement") or
if applicable an information statement relating to the Stockholder Meeting (as
hereinafter defined) will (i) in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective time such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, or (ii) in the case of the Proxy Statement or if applicable an
information statement, at the time of the mailing of the Proxy Statement, or if
applicable an information statement, and at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the purchase of Shares pursuant to the Offer
there shall occur any event with respect to Parent, its officers and directors
or any of its Subsidiaries which is required to be set forth in the Offer
Documents, such event shall be so set forth, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the stockholders of the Company.

Section 3.4 Financing. Parent has available and will make available to Sub
sufficient funds to enable each to consummate the Offer and the Merger on the
terms contemplated by this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Sub as follows:

Section 4.1 Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted. The Company is
duly qualified to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or held under lease or the nature of
its activities makes such qualification necessary, except where the failure to
be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. The Company has no Subsidiaries.

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Section 4.2 Capital Structure. The authorized capital stock of the Company
consists of 10,000,000 shares of Common Stock and 1,000,000 shares of Preferred
Stock, par value $0.001 per share, issuable in one or more series, of which
52,000 shares of Series A Preferred Stock, 12,000 shares of Series B Preferred
Stock and 88,000 shares of Series C Junior Preferred Stock have been designated.
Each share of Series A and Series B Preferred Stock is convertible, at the
option of the holder, into 20 shares of Common Stock. At the close of business
on May 24, 1996, (i) 6,625,306 shares of Common Stock were issued and
outstanding and (ii) 3,348,914 shares of Common Stock were reserved for issuance
upon the exercise of outstanding options, warrants convertible securities and
stock rights in the Company. At the close of business on May 24, 1996, (i) 3,269
shares of Series A Preferred Stock were issued and outstanding, (ii) 12,000
shares of Series B Preferred Stock were issued and outstanding, and (iii) no
shares of Series C Junior Preferred Stock were issued and outstanding. All
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable and not subject to preemptive rights. As of May 24, 1996,
the Company had granted Options to acquire an aggregate 974,015 shares of Common
Stock at $0.65 per share and 2,920 shares of Common Stock at an average of $2.55
per share, pursuant to certain employment agreements, the 1986 Stock Option
Plan, the 1994 Consultants and Directors Stock Option Plan (collectively, the
"Stock Plans"), and Options to acquire 5,000 shares of Common Stock at $4.84 per
share and 20,000 shares of Common Stock at an average of $6.75 per share,
pursuant to agreements for investor relations services. As of May 24, 1996, the
following Warrants granted by the Company are outstanding: (i) Series F Warrants
to acquire an aggregate of 16,544 shares of Common Stock, exercisable at $3.40
per share, (ii) Series G Warrants to acquire an aggregate of 133,333 shares of
Common Stock, exercisable at $3.00 per share, (iii) Series H Warrants to acquire
an aggregate of 1,041,667 shares of Common Stock, exercisable at $3.00 per
share, (iv) Series I Warrants to acquire an aggregate of 133,333 shares of
Common Stock, exercisable at $3.00 per share, (v) Series J Warrants to acquire
an aggregate of 1,041,667 Shares, exercisable at $3.00 per share, (vi) Series L
Warrants to acquire an aggregate of 29,665 shares of Common Stock, exercisable
at $1.25 per share, (vii) Series M Warrants to acquire an aggregate of 60,000
shares of Common Stock, exercisable at $1.875 per share, (viii) Series O
Warrants to acquire an aggregate of 100,000 shares of Common Stock, exercisable
at $1.50 per share, (ix) Series Q Warrants to acquire an aggregate of 8,771,625
shares of Common Stock, exercisable at $0.65 per share, and (x) Consulting
Agreement Warrants to acquire an aggregate of 75,000 shares of Common Stock,
exercisable at $1.14 per share. As of May 24, 1996, the Company had outstanding
$119,000 face value of its 7% Convertible Subordinated Debentures Due 1998,
convertible at $10.00 per share. As of May 24, 1996, the Company had outstanding
stock rights for the issuance of 46,000 shares of Common Stock for which
consideration had already been paid to the Company. Except as otherwise set
forth in this Section 4.2, there are no options, warrants, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company is a
party or by which it is bound obligating the Company to issue, deliver or sell,

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or cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company, including any securities pursuant to
which rights to acquire capital stock became exercisable only after a change of
control of the Company or upon the acquisition of a specified amount of the
Common Stock or voting powers of the Company. Since May 24, 1996, no shares of
the Company's capital stock have been issued other than pursuant to the exercise
of Company stock options and warrants already in existence and outstanding on
such date, or conversion of Preferred Stock, and the Company has not granted any
stock options, warrants or other rights to acquire any capital stock of the
Company. Except as specified in the Company Disclosure Letter (the "Company
Disclosure Letter"), there are no securities issued by the Company or
agreements, arrangements or other understandings to which the Company is a party
giving any person any right to acquire equity securities of the Surviving
Corporation at or following the Effective Time and all securities, agreements,
arrangements and understandings relating to the right to acquire equity
securities of the Company (whether pursuant to the exercise of options, warrants
or otherwise) provide that, at and following the Effective Time, such right
shall entitle the holder thereof to receive the consideration he would have
received in the Merger had he exercised his right immediately before the
Effective Time.

Section 4.3 Authority; Non-Contravention. The Board of Directors of the
Company has declared the Merger and the Option Agreement advisable, fair and in
the best interests of the Company and each of the holders of Common Stock,
Series A Preferred and Series B Preferred, and the Company has all requisite
power and authority to enter into this Agreement and the Option Agreement and,
subject to approval of the Merger by the stockholders of the Company (if
required), to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Option Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of the Company, subject to such approval of the Merger by the stockholders of
the Company (if required). The only votes of the holders of any class or series
of Company capital stock necessary to approve the Merger are the affirmative
votes of (i) the holders of a majority of the outstanding shares of Common
Stock, voting separately as a class, and (ii) voting as a single class, the
holders of a majority of the Series A Preferred Stock and Series B Preferred
Stock. This Agreement and the Option Agreement have been duly executed and
delivered by the Company and (assuming the valid authorization, execution and
delivery of this Agreement and the Option Agreement by Parent and Sub, as
applicable) constitute a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by creditors' rights generally or by general principles
of equity. Except as set forth in the Company Disclosure Letter, the execution
and delivery of this Agreement and the Option Agreement do not, and the
consummation of the transactions contemplated hereby and thereby and compliance

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with the provisions hereof will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company under, any provision of (i) the Articles of Incorporation
or By-Laws of the Company (true and complete copies of which as of the date
hereof have been delivered to Parent), (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Company, or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its properties or assets, other than, in the case of
clause (ii) or (iii), any such conflicts, violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
thereunder or prevent the consummation of any of the transactions contemplated
hereby. No filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to the Company in
connection with the execution and delivery of this Agreement and the Option
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby or thereby, except for (i) in connection or in compliance
with the provisions of the Exchange Act, (ii) the filing of the Articles of
Merger with the Department of State of the State of Florida and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iii) such filings and consents, if any, as may be
required under any environmental, health or safety law or regulation pertaining
to any notification, disclosure or required approval triggered by the Offer, the
Merger or the transactions contemplated by this Agreement, and (iv) such other
consents, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.

Section 4.4 SEC Documents. (a) Since October 31, 1992, the Company has
filed all documents with the SEC required to be filed by the Company under the
Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder), or the Exchange Act (the "Company SEC Documents"). As
of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Company has
delivered to Parent its Annual Report on Form 10-K for the fiscal year ended
October 31, 1995 including audited balance sheets and statements of income,

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changes in stockholders' equity, and cash flow and notes thereto as of and for
the fiscal year ended October 31, 1995 (the "1995 Financial Statements"). The
financial statements of the Company included in the Company SEC Documents and
the 1995 Financial Statements comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present the financial position of the Company as at the dates thereof
and the results of its operations and changes in financial position for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments set forth therein).

(b) Except as set forth in the Company SEC Documents, the 1995 Financial
Statements or the Company Disclosure Letter, the Company does not have any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) which would be required to be reflected on a balance sheet, or in the
notes thereto, prepared in accordance with generally accepted accounting
principles, except for liabilities and obligations incurred in the ordinary
course of business consistent with past practice since February 1, 1996 which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. The Company has no obligations in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any combination
of the foregoing transactions.

(c) The Company has heretofore made available or promptly shall make
available to Parent a complete and correct copy of any amendments or
modifications, which have not yet filed with the SEC, to agreements, documents
or other instruments which previously have been filed with the SEC pursuant to
the Exchange Act.

Section 4.5 Offer Documents and Proxy Statement. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the Offer Documents or the Schedule 14D-9, the Information
Statement, if any, the Proxy Statement, if any, the information statement
relating to the Stockholder Meeting, if any, or any amendment or supplement to
any of the foregoing, will (i) in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, or (ii) in the case of the Proxy Statement, if any, or the
information statement relating to the Stockholder Meeting, if any, at the time

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of the mailing of the Proxy Statement and/or the information statement and at
the time of the Stockholder Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event with respect to the Company, its officers and
directors should occur which is required to be set forth in an amendment of, or
a supplement to, the Proxy Statement, the information statement relating to the
Stockholder Meeting or the Offer Documents, such event shall be so set forth,
and such amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company. The Proxy
Statement shall comply as to form in all material respects with the requirements
of the Exchange Act.

Section 4.6 Absence of Certain Events. Since February 1, 1996, the Company
has operated its business only in the ordinary course consistent with past
practice and, except as set forth in the Company Disclosure Letter, there has
not occurred (i) any event, occurrence or condition which, individually or in
the aggregate, has, or is reasonably likely to have, a Material Adverse Effect
on the Company (other than events after the date hereof related to changes in
technology, general or industry-wide economic conditions, or events relating to
the Company's commercial arrangements with Parent); (ii) any entry into any
commitment or transaction that, individually or in the aggregate, has or is
reasonably likely to have, a Material Adverse Effect on the Company; (iii) any
change by the Company in its accounting methods, principles or practices; (iv)
any amendments or changes in the Articles of Incorporation or By-Laws of the
Company; (v) any revaluation by the Company of any of its assets, including,
without limitation, write-offs of accounts receivable, other than in the
ordinary course of the Company's business consistent with past practices; (vi)
any damage, destruction or loss which resulted in or is reasonably likely to
result in a Material Adverse Effect on the Company; (vii) any declaration,
setting aside or payment of any dividend or other distribution with respect to
any shares of capital stock of the Company, or any repurchase, redemption or
other acquisition by the Company of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company; (viii) any
grant of any severance or termination pay to any director, executive officer or
key employee of the Company; (ix) any entry into any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director, executive officer or key employee of the Company;
(x) any increase in benefits payable under any existing severance or termination
pay policies or employment agreements with any director, executive officer or
key employee of the Company; or (xi) any increase in compensation, bonus or
other benefits payable to directors, executive officers or key employees of the
Company.

Section 4.7 Litigation. Except as set forth in the Company Disclosure
Letter, there are no actions, suits or proceedings pending against the Company
or, to the knowledge of the Company, threatened against the Company, at law or

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in equity, or before or by any federal or state commission, board, bureau,
agency, regulatory or administrative instrumentality or other Governmental
Entity or any arbitrator or arbitration tribunal, that are reasonably likely to
have a Material Adverse Effect on the Company, and, to the knowledge of the
Company, no development has occurred with respect to any pending or threatened
action, suit or proceeding that is reasonably likely to result in a Material
Adverse Effect on the Company or would prevent or delay the consummation of the
transactions contemplated hereby.

Section 4.8 Compliance with Applicable Law. The Company holds and at all
required times has held, all permits, licenses, variances, exceptions, orders
and approvals of all Governmental Entities necessary for the lawful conduct of
its business (the "Company Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which do not, individually
or in the aggregate, have, and are not reasonably likely to have, a Material
Adverse Effect on the Company. The Company is, and at all times has been, in
compliance with the terms of the Company Permits, except where the failure so to
comply does not have a Material Adverse Effect on the Company. The business of
the Company is not being, and has not been, conducted in violation of any law,
ordinance or regulation of any Governmental Entity except for violations or
possible violations which, individually or in the aggregate, do not and are not
reasonably likely to have a Material Adverse Effect on the Company. Except as
set forth in the Company Disclosure Letter, no investigation or review by any
Governmental Entity with respect to the Company is pending or, to the knowledge
of the Company, threatened, nor, to the knowledge of the Company, has any
Governmental Entity indicated an intention to conduct the same, other than, in
each case, those which are not reasonably likely to have a Material Adverse
Effect on the Company.

Section 4.9 Employee Plans. (a) The Company has complied with and performed
all contractual obligations and all obligations under applicable federal, state
and local laws, rules and regulations (domestic and foreign) required to be
performed by it under or with respect to any of the Company Benefit Plans (as
hereinafter defined) or any related trust agreement or insurance contract, other
than where the failure to so comply or perform does not have, nor is reasonably
likely to have, a Material Adverse Effect on the Company. All contributions and
other payments required to be made by the Company to any Company Benefit Plan or
Multiemployer Plan (as hereinafter defined) prior to the date hereof have been
made, other than where the failure to so contribute or make payments will not
have, nor is reasonably likely to have, a Material Adverse Effect on the
Company, and all accruals required to be made under any Company Benefit Plan or
Multiemployer Plan have been made. There is no claim, dispute, grievance,
charge, complaint, restraining or injunctive order, litigation or proceeding
pending, threatened or anticipated (other than routine claims for benefits)
against or relating to any Company Benefit Plan or against the assets of any
Company Benefit Plan, which is reasonably likely to have a Material Adverse
Effect on the Company. The Company has not communicated generally to employees
or specifically to any employee regarding any future increase of benefit levels

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(or future creations of new benefits) with respect to any Company Benefit Plan
beyond those reflected in the Company Benefit Plans, which benefit increases or
creations, either individually or in the aggregate, will have or are reasonably
likely to have, a Material Adverse Effect on the Company. The Company does not
presently sponsor, maintain, contribute to, nor is the Company required to
contribute to, nor has the Company ever sponsored, maintained, contributed to,
or been required to contribute to, any employee pension benefit plan within the
meaning of section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any multiemployer plan within the meaning of section
3(37) or 4001(a)(3) of ERISA, other than those plans set forth in the Company
Disclosure Letter.

(b) Except as set forth in the Company Disclosure Letter, each Company
Benefit Plan can be terminated or otherwise discontinued without liability to
the Company. With respect to each Company Benefit Plan subject to Title IV of
ERISA, (i) no termination of any Company Benefit Plan has occurred pursuant to
which all liabilities have not been satisfied in full, and no event has occurred
and no condition exists that could reasonably be expected to result in the
Company incurring a liability under Title IV of ERISA or could constitute
grounds for terminating any Plan (as hereinafter defined); (ii) each such
Company Benefit Plan which is subject to Part 3 of Subtitle B of Title I of
ERISA or Section 412 of the Internal Revenue Code of 1986, as amended (the
"Code"), has been maintained in compliance with the minimum funding standards of
ERISA and the Code and no such Company Benefit Plan has incurred any
"accumulated funding deficiency," as defined in Section 412 of the Code and
Section 302 of ERISA, whether or not waived, (iii) the Company has not sought or
received a waiver of its funding requirements with respect to any Company
Benefit Plan and all contributions payable with respect to each Plan have been
timely made; (iv) no reportable event, within the meaning of Section 4043 of
ERISA, and no event set forth in Section 4062 or 4063 of ERISA, has occurred
with respect to any Company Benefit Plan and (v) the aggregate accumulated
benefit obligations of each Company Benefit Plan subject to Title IV of ERISA
(as of the date of the most recent actuarial valuation prepared for such Company
Benefit Plan) do not exceed the fair market value of the assets of such Company
Benefit Plan (as of the date of such valuation).

(c) The Company has not incurred, nor has any event occurred which has
imposed or is reasonably likely to impose upon the Company, any withdrawal
liability (partial or complete) in respect of any multiemployer plan (within the
meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan"), which
withdrawal liability has not been satisfied or discharged in full or which,
either individually or in the aggregate, will cause, or is reasonably likely to
cause, a Material Adverse Effect on the Company.

(d) Except as set forth in the Company Disclosure Letter, the execution,
delivery and performance of this Agreement and the transactions contemplated

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hereby will not result in the imposition of any federal excise tax with respect
to any Company Benefit Plan.

(e) Except as set forth in the Company Disclosure Letter, no payment or
benefit which will or may be made by the Company with respect to any of their
employees under any plan or agreement in effect on the date hereof will be
characterized as an "excess parachute payment" within the meaning of section
280G(b)(1) of the Code.

(f) Except as set forth in the Company Disclosure Letter, the Company does
not maintain or contribute to (or has maintained or contributed to) any Company
Benefit Plan which provides, or has a liability to provide, life insurance,
medical, severance, or other employee welfare benefit to any employee upon his
retirement or termination of employment, except as may be required by Section
4980B of the Code.

(g) (i) "Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, workers' compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy or
arrangement of any kind, including, but not limited to, any "employee benefit
plan" within the meaning of section 3(3) of ERISA and (ii) "Company Benefit
Plan" means any employee pension benefit plan and any Plan, other than a
Multiemployer Plan, established by the Company or to which the Company
contributes or has contributed (including any such Plans not now maintained by
the Company or to which the Company does not now contribute, but with respect to
which the Company has or may have any liability). Copies of all Plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof and the most recent Forms 5500 required to be filed with
respect thereto shall be promptly furnished to Parent after the date of this
Agreement. The Company Disclosure Letter sets forth each Plan with respect to
which benefits will be accelerated, vested, increased or paid as a result of the
transactions contemplated by this Agreement.

Section 4.10 Employment Relations and Agreement. (a) Except as would not
constitute a Material Adverse Effect on the Company, (i) the Company is, and at
all times has been, in compliance in all material respects with all federal,
state or other applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and has not and is not
engaged in any unfair labor practice; (ii) no unfair labor practice complaint
against the Company is pending before the National Labor Relations Board; (iii)
there is no labor strike, dispute, slowdown or stoppage actually pending or
threatened against or involving the Company; (iv) no representation question
exists respecting the employees of the Company; (v) the Company is not a party
to any collective bargaining agreement; (vi) no collective bargaining agreement
is currently being negotiated by the Company; and (vii) the Company has not

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experienced any material labor difficulty during the last three years. Except as
set forth in the Company Disclosure Letter, there has not been and, to the
knowledge of the Company, there will not be, any change in relations with
employees of the Company as a result of the transactions contemplated by this
Agreement which could have a Material Adverse Effect on the Company.

(b) Except as set forth in the Company Disclosure Letter, the Company has
no written, or to the knowledge of the Company, any binding oral employment
agreement ("Employment Agreements") which is not terminable by the Company with
payment or penalty of less than $20,000. Copies of all Employment Agreements and
all amendments thereto shall be promptly furnished to Parent after the date of
this Agreement.

Section 4.11 Contracts. (a) Except as set forth in the Company Disclosure
Letter, the Company is not a party to, or has any obligation under, any contract
or agreement, written or oral, which contains any covenants currently or
prospectively limiting the freedom of the Company to engage in any line of
business or to compete with any entity. All contracts and agreements to which
the Company is a party or by which any of its assets are bound are valid and
binding, in full force and effect and enforceable against the parties thereto in
accordance with their respective terms, other than (i) such failures to be so
valid and binding, in full force and effect or enforceable which do not, either
individually or in the aggregate, have, and are not reasonably likely to have, a
Material Adverse Effect on the Company, and (ii) subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity. Except as set forth in the Company
Disclosure Letter, there is not under any such contract or agreement any
existing default, or event which, after notice or lapse of time, or both, would
constitute a default, by the Company, or to the Company's knowledge, any other
party, except to the extent such default does not or would not be reasonably
likely to have a Material Adverse Effect on the Company.

(b) The Company has entered into (i) a Cancellation Agreement dated as of
the date hereof between the Company, Purchaser and Strategica Capital
Corporation d/b/a Strategica Group ("Strategica"), (ii) a Subordination
Agreement dated as of the day hereof between the Company, Purchaser, Strategica
and Meshel (as such term is defined in Section 7.12) and (iii) a Termination
Agreement dated as of the date hereof between the Company and Jon Haglund, in
each case, in the forms previously provided to Parent, and such agreements
remain in full force and effect.

Section 4.12 Environmental Laws and Regulations. (a) Except as disclosed in
the Company Disclosure Letter, (i) the Company is in compliance with all
applicable federal, state and local laws, statutes, ordinances, rules and
regulations, and all amendments thereto as of the purchase of shares pursuant to
the Offer, relating to pollution or protection of human health or safety, health

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or safety of employees, sanitation, or the environment, emissions, discharges,
disseminations, releases or threatened releases, of Hazardous Materials (as
hereinafter defined) into the air (indoor and outdoor), surface water,
groundwater, soil, land surface or subsurface, buildings, facilities, real or
personal property or fixtures or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Materials (collectively,
"Environmental Laws"), except for non-compliance that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, which
compliance includes, but is not limited to, the possession by the Company of all
permits, licenses, registrations, consents and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof; (ii) the Company has not received written notice of, or, to
the knowledge of the Company, is the subject of, any action, cause of action,
claim, investigation, demand or notice by any person or entity alleging
liability under or non-compliance with any Environmental Law (an "Environmental
Claim") that, individually or in the aggregate, would have a Material Adverse
Effect on the Company; (iii) the Company has not received any written notice or
other communication that it is or may be a potentially responsible person or
otherwise liable in connection with any waste disposal site allegedly containing
any Hazardous Materials, or other location used for the disposal of any
Hazardous Materials; and (iv) to the knowledge of the Company, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future.

(b) Except as disclosed in the Company Disclosure Letter, there are no
Environmental Claims which, individually or in the aggregate, would have a
Material Adverse Effect on the Company that are pending or, to the knowledge of
the Company, threatened against the Company or, to the knowledge of the Company,
against any person or entity whose liability for an Environmental Claim the
Company has or may have retained or assumed either contractually or by operation
of law.

(c) Except as disclosed in the Company Disclosure Letter, there has been no
spill, discharge, leak, emission, injection, disposal, escape, dumping or
release of any kind on, beneath, above or into the real property owned, leased,
operated, used or in which any other interest is maintained by the Company, or
previously owned by, used by, operated by or leased to the Company
(collectively, the "Property") of any pollutants, contaminants, hazardous
substances, hazardous chemicals, toxic substances, hazardous wastes, infectious
agents or wastes, radioactive materials, pesticides, explosives, flammables,
corrosives, petroleum (including any by-product or any fraction thereof),
asbestos, polychlorinated byphenyls ("PCBs") or solid wastes, including but not
limited to those defined in any Environmental Law (collectively, "Hazardous
Materials"), except such of the foregoing occurrences as do not have a Material
Adverse Effect on the Company.

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(d) Except as disclosed in the Company Disclosure Letter, (i) There has
been no past, and there is no current or anticipated storage, disposal,
generation, manufacture, refinement, transportation, production or treatment of
any Hazardous Materials at, upon or from the Property; (ii) no asbestos or
asbestos-containing materials or PCBs are on the property; and (iii) there are
no underground storage tanks ("UST"), incinerators or surface impoundments on
the Property, nor has any UST been removed during the past 10 years.

Section 4.13 Property and Leases. Except as set forth in the Company
Disclosure Letter, the Company has good title to all material assets reflected
on the 1995 Financial Statements, except for (i) liens for current taxes and
assessments not yet past due, (ii) inchoate mechanics' and materialmen's liens
for construction in progress, (iii) workmen's, repairmen's, warehousemen's and
carriers' liens arising in the ordinary course of business and (iv) all matters
of record, liens and other imperfections of title and encumbrances which
matters, liens and imperfections, in the aggregate, do not have a Material
Adverse Effect on the Company. The real property, equipment and other tangible
property owned, operated, or leased by the Company are in all material respects
in good condition and repair (ordinary wear and tear which are not such as to
affect the operation of the Company's business excepted) and are suitable to
meet the existing operating requirements of the Company's business.

Section 4.14 Patents, Trademarks, Copyrights. (a) All patents and patent
applications owned by or licensed to or used by the Company that are listed in
the Company Disclosure Letter have been duly filed in or issued by the United
States Patent and Trademark Office or the corresponding offices of other
countries or other jurisdictions to the extent set forth in the Company
Disclosure Letter, and have been properly maintained in accordance with all
applicable provisions of law and administrative regulations in the United States
and each such country or other jurisdictions. Except as set forth in the Company
Disclosure Letter: (i) the Company's use of such patents does not require the
consent of any third party; (ii) such patents are freely transferable and are
owned exclusively by the Company free and clear of any attachments, liens,
royalties, encumbrances, adverse claims, licenses or any other ownership or
other interest of any other person whatsoever; (iii) no person has a license
from the Company to use any of such patents or any claim which may arise from
the existence of such patent applications; (iv) no outstanding order, decree,
judgment or stipulation, and no proceeding charging the Company with
infringement of any adversely held patent has been served upon the Company at
any time during the five-year period prior to and ending on the date hereof or,
to the best of the Company's knowledge, is threatened to be filed; (v) the
conduct of the business of the Company as now conducted or proposed to be
conducted will not result in the infringement of any of such patents; and (vi)
to the best of the Company's knowledge, no person is infringing upon any of such
patents.

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<PAGE>

(b) The Company owns or possesses all other adequate licenses or other
valid rights to use all other material patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, copyrights, know-how and other
proprietary information used or held for use in connection with the business of
the Company as currently being conducted and is unaware of any assertions or
claims challenging the validity of any of the foregoing. The conduct of the
business of the Company as now conducted does not conflict with any patents,
patent rights, licenses, trademarks, trademark rights, trade names, trade name
rights or copyrights of others in any material way. No material infringement of
any proprietary right owned by or licensed by or to the Company is known to the
Company.

Section 4.15 Insurance. The Company has been and is insured by financially
sound and reputable insurers unaffiliated with the Company with respect to its
property and the conduct of its business in such amounts and against such risks
as are reasonably adequate to protect its properties and business, including,
without limitation, comprehensive general liability (including, without
limitation, automotive, public risk, property and directors' and officers'
liability) and products liability insurance.

Section 4.16 Takeover Statutes. No "fair price," "moratorium," "control
share acquisition" or other similar antitakeover statute or regulation enacted
under state or federal laws in the United States applicable to the Company
(including, without limitation, Sections 607.0901 and 607.0902 of the Act) is
applicable to the Merger or the other transactions contemplated hereby, the
Stock Option Agreement or the Stockholder Agreement and the transactions
contemplated thereby. The Board of Directors of the Company has taken all
appropriate action so that neither Parent nor Sub will be an "interested
shareholder" within the meaning of Section 607.0901 of the Act, or an "acquiring
person" within the meaning of Section 607.0902 of the Act, by virtue of the
Parent's or Sub's entry into this Agreement, the Stock Option Agreement and the
Stockholder Agreement and the consummation of the transactions contemplated
hereunder and thereunder, including, without limitation, the purchase of
securities pursuant to the Offer, the Stock Option Agreement and the Stockholder
Agreement.

Section 4.17 Taxes. Except as set forth in the Company Disclosure Letter,
(i) the Company has filed all material Tax Returns (as hereinafter defined)
required to have been filed on or before the date hereof, which returns are true
and complete in all material respects; (ii) the Company has duly paid or made
provision on its books for the payment of all material Taxes (as hereinafter
defined) (including material estimated Taxes and any interest or penalties)
which are due and payable on or before the date hereof (whether or not shown on
any such Tax Returns), and the Company has withheld or collected all material
Taxes they are required to withhold and collect, other than Taxes otherwise set
forth in this clause (ii) that are being contested by the Company in good faith;
(iii) the Company has not waived any statute of limitations in respect of
material Taxes of the Company; (iv) no issues that have been raised in writing

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by the relevant taxing authority in connection with the examination of the Tax
Returns referred to in clause (i) are currently pending; and (v) all
deficiencies asserted or assessments made as a result of any examination of the
Tax Returns referred to in clause (i) by a taxing authority have been paid in
full. For purposes of this Agreement (a) "Tax" (and, with correlative meaning,
"Taxes" and "Taxable") means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any governmental authority, and (b) "Tax Return" means any
return, report or similar statement required to be filed with respect to any Tax
(including any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.

Section 4.18 No Change of Control. Except as set forth in the Company
Disclosure Letter, the consummation of the Merger and the transactions
contemplated by this Agreement will not constitute a "change of control" or
similar event under any contract or agreement of the Company giving use to a
right to terminate or accelerate or resulting in an event of default thereunder
or an increase in the Company's obligations thereunder. Copies of any such
contracts or agreements and all amendments thereto will be promptly furnished to
Parent after the date of this Agreement.

Section 4.19 Brokers. No broker, investment banker or other person, other
than the Financial Advisor and Strategica Capital Corporation ("Strategica"),
pursuant to the terms of the Cancellation Agreement dated as of the date hereof
between Strategica and the Company (the "Cancellation Agreement"), the fees and
expenses of which will be paid by the Company, is entitled to any broker's,
finder's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. A copy of the engagement letter between the Financial Advisor and
the Company setting forth the fees and expenses to be paid by the Company in
connection with the transactions contemplated by this Agreement has been
provided to Parent.

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING SUB

Parent and Sub jointly and severally represent and warrant to the Company
as follows:

Section 5.1 Organization and Standing. Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida.
Sub is wholly owned by Parent and was organized solely for the purpose of

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acquiring the Company and engaging in the transactions contemplated by this
Agreement and has not engaged in any business since it was incorporated which is
not in connection with the acquisition of the Company and this Agreement.

Section 5.2 Authority; Non-Contravention. Sub has the requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement, the
performance by Sub of its obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and Parent as its sole stockholder, and, except for the corporate
filings required by state law, no other corporate proceedings on the part of Sub
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by Sub
and (assuming the due authorization, execution and delivery hereof by the
Company) constitutes a valid and binding obligation of Sub enforceable against
Sub in accordance with its terms, except as the enforceability thereof may be
limited by creditors' rights generally or by general principles of equity. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of a material
benefit under, or result in the creation of any lien, security interest, charge
or encumbrance upon any of the properties or assets of Sub under, any provision
of (i) the Articles of Incorporation or By-Laws of Sub, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Sub or (iii)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Sub or any of its properties or assets, other than, in the case of
clauses (ii) or (iii), any such conflicts, violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on Sub, materially impair
the ability of Sub to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.

ARTICLE VI

COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 6.1 Conduct of Business by the Company Pending the Merger. Except
as otherwise expressly contemplated by this Agreement or as set forth in the
Company Disclosure Letter, during the period from the date of this Agreement
through the Effective Time, the Company shall in all material respects carry on
its business in, and not enter into any material transaction other than in
accordance with, the regular and ordinary course and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its current

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business organization, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and others
having business dealings with it. Without limiting the generality of the
foregoing, and except as otherwise expressly contemplated by this Agreement, the
Option Agreement or as set forth in the Company Disclosure Letter, the Company
shall not, without the prior written consent of Parent:

(a) Other than in connection with (i) the conversion of Series A
Preferred or Series B Preferred into Common Stock in accordance with their
current terms, (ii) the exercise of options or warrants outstanding prior
to the date hereof in accordance with their current terms and (iii) the
payment of pay-in-kind dividends on the Series A Preferred and Series B
Preferred in accordance with their current terms, (x) declare, set aside or
pay any dividends on, or make any other actual, constructive or deemed
distributions in respect of, any of its capital stock, or otherwise make
any payments to stockholders of the Company in their capacity as such,
other than dividends declared prior to the date of this Agreement, (y)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;

(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than as specified in clauses (i)
through (iii) of paragraph (a) above);

(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise acquire or
agree to acquire any assets, in each case that are material, individually
or in the aggregate, to the Company;

(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company;

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(f) make any commitment or enter into any contract or agreement except
in the ordinary course of business consistent with past practice or make or
commit to make any capital expenditure of $25,000 or more;

(g) except pursuant to the credit agreement dated the date hereof
between the Company and Sola International Inc., incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any debt
securities or guarantee any debt securities of others, except for
borrowings or guarantees incurred in the ordinary course of business
consistent with past practice, loans from Strategica Capital Corporation to
fund expenses related to the transactions contemplated by this Agreement on
the terms set forth in its current credit and loan agreement or loans from
Parent, or make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company and other than
in the ordinary course of business consistent with past practice;

(h) alter through merger, liquidation, reorganization, restructuring
or in any other fashion its corporate structure or ownership;

(i) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;

(j) revalue any of its assets, including, without limitation, writing
down the value of its inventory or writing off notes or accounts
receivable, other than in the ordinary course of business;

(k) make any tax election or settle or compromise any income tax
liability;

(l) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;

(m) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in, or contemplated
by, the financial statements (or the notes thereto) of the Company or
incurred in the ordinary course of business consistent with past practice;

(n) increase in any manner the compensation or fringe benefits of any
of its directors, officers and other key employees or pay any pension or
retirement allowance not required by any existing plan or agreement to any
such employees, or become a party to, amend or commit itself to any

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pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or
directors of the Company made in the ordinary course of business consistent
with past practice, or, except to the extent required by law, voluntarily
accelerate the vesting of any compensation or benefit;

(o) other than pursuant to the Cancellation Agreement and the
Termination Agreement dated as of the date hereof between the Company and
Jon E. Haglund, waive, amend or allow to lapse any term or condition of any
confidentiality, "standstill", consulting, advisory or employment agreement
to which the Company is a party; or

(p) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any of the representations
or warranties of the Company contained in this Agreement untrue or
incorrect as of the date when made or would result in any of the conditions
set forth in Exhibit A not being satisfied.

During the period from the date of this Agreement through the Effective Time,
(i) as requested by Parent, the Company shall confer on a regular basis with one
or more representatives of Parent with respect to material operational matters;
(ii) the Company shall, within 20 days following each fiscal month, deliver to
Parent financial statements, including an income statement and balance sheet for
such month; and (iii) upon the knowledge of the Company of any Material Adverse
Change to the Company, any material litigation or material governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the breach in any material respect of any
representation or warranty contained herein, the Company shall promptly notify
Parent thereof.

Without limit to the foregoing, the Company shall not be permitted to call a
meeting of its stockholders for the purpose of obtaining a stockholder vote on
the authorization of 35,000,000 shares of Common Stock and shall not be
permitted to take actions reasonably related thereto, including the filing with
the SEC and mailing to stockholders of proxy materials and the solicitation of
votes in favor of such authorization.

Section 6.2 Acquisition Proposals. From and after the date of this
Agreement and prior to the Effective Time, except as provided below, the Company
agrees (a) that the Company shall not, and the Company shall direct and use its
reasonable best efforts to cause its officers, directors, employees and
authorized agents and representatives (including, without limitation, any

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investment banker, attorney or accountant retained by it) not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; (b) that it shall immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and shall take
the necessary steps to inform the individuals or entities referred to above of
the obligations undertaken in this Section 6.2; and (c) that it shall notify
Parent immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it, including, without limitation, the
identity of the other party or the terms of its proposals; provided, however,
that nothing contained in this Section 6.2 shall prohibit the Board of Directors
of the Company from (i) furnishing information to, or entering into discussions
or negotiations with, any person or entity that makes an unsolicited bona fide
proposal in writing to acquire the Company or substantially all of the assets of
the Company on terms which, in the exercise of their fiduciary duty after the
consideration of advice from the Company's legal and financial advisors, a
majority of the Company's directors determines is likely to be more beneficial
to each of the holders of the Common Stock and the holders of the Preferred
Stock than the transaction contemplated hereby, and provided further that the
Company's legal and financial advisors may engage in discussions regarding such
written offer to clarify the terms of such offer for the purpose of rendering
the advice referred to above to the Board of Directors of the Company, in each
case, provided that, the Company and its advisors, prior to or concurrently with
furnishing such information to, or entering into discussions or negotiations
with, such a person or entity, shall provide written notice to Parent to the
effect that it is furnishing information to, or entering into discussions with,
such a person or entity, and shall keep Parent informed of the status
(including, without limitation, the identity of such person or entity and the
terms of any proposal) of such discussions or negotiations; and (ii) to the
extent applicable, complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal. Subject to Article IX, nothing in this
Section 6.2 shall (x) permit the Company to terminate this Agreement, (y) permit
the Company to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement, or (z) affect any other obligation of any
party under this Agreement.

Section 6.3 Annual Meeting of Stockholders. The Company shall
defer/postpone the holding of its Annual Meeting of Stockholders (the "Company
Annual Meeting") indefinitely pending consummation of the Merger unless the
Company is otherwise required to hold the Company Annual Meeting by an order
from court of competent jurisdiction.

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Section 6.4 Conduct of Business of Sub Pending the Merger. During the
period from the date of this Agreement through the Effective Time, Sub shall not
engage in any activities of any nature except as provided in or contemplated by
this Agreement.

ARTICLE VII

ADDITIONAL AGREEMENTS

Section 7.1 Company Stockholder Approval; Proxy Statement. (a) If approval
or action in respect of the Merger by the stockholders of the Company is
required by applicable law, the Company shall, if appropriate, call a meeting of
its stockholders (the "Stockholder Meeting") for the purpose of voting upon the
Merger and shall use its reasonable best efforts to obtain stockholder approval
of the Merger. The Stockholder Meeting shall be held as soon as practicable
following the purchase of Shares pursuant to the Offer and the Company shall,
through its Board of Directors but subject to the fiduciary duties of its Board
of Directors under applicable law as determined by the Board of Directors in
good faith after consultation with the Company's outside counsel, recommend to
its stockholders the approval of the Merger and not rescind its declaration that
the Merger is advisable. The record date for the Stockholder Meeting shall be a
date subsequent to the date Parent or Sub becomes a record holder of Shares
purchased pursuant to the Offer.

(b) If required by applicable law, the Company shall, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement or, if applicable, an information statement with the
SEC with respect to the Stockholder Meeting and shall use its reasonable best
efforts to respond to any comments of the SEC or its staff and to cause the
Proxy Statement or information statement to be cleared by the SEC. The Company
shall notify Parent of the receipt of any comments from the SEC or its staff and
of any request by the SEC or its staff for amendments or supplements to the
Proxy Statement, or the information statement or for additional information and
shall supply Parent with copies of all correspondence between the Company or any
of its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement, the information statement or the
Merger. The Company shall give Parent and its counsel the opportunity to review
the Proxy Statement or, if applicable, the information statement, prior to its
being filed with the SEC and shall give Parent and its counsel the opportunity
to review all amendments and supplements to the Proxy Statement or, if
applicable, the information statement, and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company and Parent agrees to use its reasonable
best efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC. As promptly as
practicable after the Proxy Statement or, if applicable, the information

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statement, has been cleared by the SEC, the Company shall mail the Proxy
Statement or, if applicable, the information statement, to the stockholders of
the Company. If at any time prior to the approval of this Agreement by the
Company's stockholders there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement or, if applicable, the
information statement, the Company shall prepare and mail to its stockholders
such an amendment or supplement.

(c) The Company shall use its reasonable best efforts to obtain any
necessary approvals by its stockholders of the Merger, this Agreement and the
transactions contemplated hereby.

(d) Parent agrees, subject to applicable law, to cause all Shares purchased
pursuant to the Offer and all other Shares owned by Sub or any other Subsidiary
of Parent to be voted in favor of the approval of the Merger.

Section 7.2 Access to Information. The Company shall afford to Parent, and
to Parent's accountants, counsel, financial advisers and other representatives,
reasonable access and permit them to make such inspections as they may
reasonably require during normal business hours during the period from the date
of this Agreement through the Effective Time to all their respective properties,
books, contracts, commitments and records and, during such period, the Company
shall furnish promptly to Parent (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state laws and (ii) all other
information concerning its business, properties and personnel as Parent may
reasonably request. In no event shall the Company be requested to supply to
Parent, or to Parent's accountants, counsel, financial advisors or other
representatives, any information relating to indications of interest from, or
discussions with, any other potential acquirors of the Company that were
received or conducted prior to the date hereof, except to the extent necessary
for use in the Offer Documents, the Schedule 14D-9, the Proxy Statement or, if
applicable, the information statement. Except as required by law, Parent shall
hold, and shall cause its affiliates, associates and representatives to hold,
any nonpublic information in confidence until such time as such information
otherwise becomes publicly available and shall use its reasonable best efforts
to ensure that such affiliates, associates and representatives do not set forth
such information to others without the prior written consent of the Company. In
the event of termination of this Agreement for any reason, Parent shall promptly
destroy all nonpublic documents so obtained from the Company and any copies made
of such documents for Parent and, other than in connection with its evaluation
of whether to consummate the transactions contemplated by this Agreement, Parent
shall not use any such nonpublic documents.

Section 7.3 Fees and Expenses. (a) Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement

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and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses, except as otherwise set forth in this Section 7.3.

(b) If this Agreement is terminated by either party pursuant to Section
9.1(d)(iv) by reason of the failure of any of the conditions set forth in
paragraph (f) or (g) of the conditions set forth in Exhibit A, by the Company
pursuant to Section 9.1(b)(ii), by Parent pursuant to Section 9.1(c), or,
following the time an Acquisition Proposal has been made or publicly announced,
as a result of the failure to satisfy the Minimum Condition to the Offer or
either of the conditions set forth in Sections 8.1(a) and (b), then the Company
shall, in the case of termination by Parent, promptly, but in no event later
than two business days after the first of such events to occur, or, in the case
of termination by the Company, at or prior to the time of such termination, pay
Parent $750,000 in immediately available funds plus up to a maximum of $75,000
of Expenses (as hereinafter defined). If the Company fails to pay such amount
when due in accordance with the immediately preceding sentence, Parent shall be
entitled to the payment from the Company, in addition to such amount, of any
legal fees and expenses incurred in collecting such amount and interest thereon
at the rate of 10% per annum.

(c) If this Agreement is terminated by Parent pursuant to any of the
conditions set forth in paragraph (e) of the conditions set forth in Exhibit A
(other than a termination based upon the proviso set forth in paragraph(e)), the
Company shall reimburse Parent and Sub (not later than two business days after
submission of statements therefor) for all reasonable and documented cost and
expenses (including, without limitation, all legal, investment banking,
printing, depository and related fees and expenses, but excluding any internal
allocations of overhead attributable to the Offer, the Merger or the
transactions contemplated by this Agreement) ("Expenses") up to a maximum of
$75,000.

Section 7.4 Company Stock Options. (a) The Company shall (i) terminate the
Stock Plans immediately prior to the Effective Time without prejudice to the
holders of Company Stock Options and (ii) grant no additional Company Stock
Options after the date hereof.

(b) The Company shall use its best efforts to cause each holder of an
option to purchase shares of Common Stock granted under the 1986 Stock Option
Plan (each a "1986 Plan Option") and the Consulting Agreement Warrants to
execute an agreement with the Company prior to the purchase of the Shares
pursuant to the Offer providing that such holder's 1986 Plan Option or
Consultant Agreement Warrants shall be cancelled at the Effective Time. Such
agreement shall provide, (i) if the difference between the exercise price per
share of Common Stock subject to the 1986 Plan Option and the Common Stock Offer
Price is positive, that in consideration of such cancellation the holder shall
receive a payment promptly following the Effective Time equal to the number of

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shares of Common Stock subject to the Holder's 1986 Plan Option, whether or not
vested, multiplied by the difference between the exercise price per share of
Common Stock subject to the 1986 Plan Option and the Common Stock Offer Price,
(ii) if the difference between the exercise price per Share subject to the 1986
Plan Option and the Common Stock Offer Price is zero or negative, that in
consideration of such cancellation such holders shall receive payments promptly
following the Effective Time not to exceed $500 in the aggregate for all such
options, whether or not vested and (iii) with respect to the Consulting
Agreement Warrants, in consideration of the cancellation of the Consulting
Agreement Warrant, the holder shall receive $7,500 promptly following the
Effective Time.

Section 7.5 Warrants. (a) Except as provided in Section 7.4(b), at the
Effective Time, Parent shall pay, or shall cause the Surviving Corporation to
pay, to the holder of such Warrant, upon delivery to the Surviving Corporation
of such Warrant for cancellation, an amount in cash equal to the number of
shares of Common Stock which may be acquired upon exercise of the vested portion
of such Warrant (whether or not the Company has sufficient reserved or
authorized shares of Common Stock available for issuance upon exercise of such
Warrant) multiplied by the positive difference (if any) between the exercise
price per share of Common Stock covered by the Warrants and the Common Stock
Offer Price.

(b) Notwithstanding the foregoing, with respect to the Series Q Warrants
owned by Strategica, Parent shall pay, or shall cause the Surviving Corporation
to pay, to the holder of such warrants, 80% of the amount due to such holder
pursuant to Section 7.5(a) as promptly as practicable after the purchase of
Shares pursuant to the Offer in consideration of such holder's agreement to
assign its rights under such warrant in respect of 80% of the shares subject
thereto to Parent, and Parent shall pay or cause the Surviving Corporation to
pay to such holder, 20% of the amount due under Section 7.5(a) hereof upon
delivery of each such warrant for cancellation upon the earlier to occur of (i)
the Effective Time and (ii) the date 60 days after the date on which Parent or
Sub first purchase Shares pursuant to the Offer.

Section 7.6 Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger, and the other
transactions contemplated by this Agreement, including (a) the obtaining of all
additional necessary actions or non-actions, waivers, consents and approvals
from Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from any
Governmental Entity, (b) the obtaining of all necessary consents, approvals or

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waivers from third parties, (c) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (d) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by this Agreement; provided, however, that neither Parent, Sub nor the Company
shall be required to take any action pursuant to clause (a), (b), (c) or (d)
above that would have a Material Adverse Effect on such party or would impose on
such party any other terms or conditions which in the reasonable opinion of the
Board of Directors of such party would materially adversely affect the economic
benefits of the transactions contemplated by this Agreement to such party.

Section 7.7 Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, shall consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange.

Section 7.8 Indemnification. (a) From and after the Effective Time, Parent
agrees to cause the Surviving Corporation to indemnify and hold harmless all
past and present officers, directors, employees and agents (the "Indemnified
Parties") of the Company to the full extent such persons may be indemnified by
the Company pursuant to the Company's Articles of Incorporation and By-Laws as
in effect as of the date hereof for acts and omissions occurring at or prior to
the Effective Time. Parent hereby guarantees the obligations of the Surviving
Corporation to the directors of the Company pursuant to the immediately
preceding sentence for the period from the Effective Time through the second
anniversary of the Effective Time.

(b) Any Indemnified Party shall promptly notify the Parent and the
Surviving Corporation of any claim, action, suit, proceeding or investigation
for which such party may seek indemnification under this Section; provided,
however, that the failure to furnish any such notice shall not relieve Parent or
the Surviving Corporation from any indemnification obligation under this Section
except to the extent Parent or the Surviving Corporation is prejudiced thereby.
In the event of any such claim, action, suit, proceeding, or investigation, (x)
the Surviving Corporation shall have the right to assume the defense thereof,
and the Surviving Corporation shall not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred thereafter by such Indemnified Parties in connection with the defense
thereof, except that all Indemnified Parties (as a group) shall have the right
to retain one separate counsel, reasonably acceptable to such Indemnified Party
and Parent, at the expense of the indemnifying party if the named parties to any

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such proceeding include both the Indemnified Party and the Surviving Corporation
and the representation of such parties by the same counsel would be
inappropriate due to a conflict of interest between them, (y) the Indemnified
Parties shall cooperate in the defense of any such matter, and (z) the Surviving
Corporation will not be liable for any settlement effected without its prior
written consent.

Section 7.9 Employees. At the Effective Time, Parent shall assume and agree
to honor and keep in effect, following the Effective Time, each of the
Employment Agreements set forth in the Company Disclosure Letter.

Section 7.10 Board Representation. Promptly upon the purchase of shares of
Common Stock pursuant to the Offer, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as will give Parent, subject to compliance with Section
14(f) of the Exchange Act, representation on the Board of Directors equal to the
product of (a) the total number of directors on the Board of Directors and (b)
the percentage that the number of shares of Common Stock purchased by Parent
bears to the number of shares of Common Stock outstanding, and the Company
shall, upon request by Parent, promptly increase the size of the Board of
Directors and/or exercise its reasonable best efforts to secure the resignations
of such number of directors as is necessary to enable Parent's designees to be
elected to the Board of Directors and shall cause Parent's designees to be so
elected. The Company shall take, at its expense, all action required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 thereunder in order to fulfill
its obligations under this Section 7.10 and shall include in the Schedule 14D-9
or otherwise timely mail to its stockholders such information with respect to
the Company and its officers and directors as is required by such Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under this Section 7.10.
Parent shall supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by such Section 14(f) and Rule 14f-1.

Section 7.11 Notification of Certain Matters. The Company shall give prompt
notice to Parent and Sub, and Parent and Sub shall give prompt notice to the
Company, of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the purchase of the Shares pursuant to the Offer and (ii) any
material failure of the Company, Parent or Sub, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, that the delivery of any notice pursuant to
this Section 7.11 shall not cure such breach or non-compliance or limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.

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Section 7.12 Repayment of Loans. (a) Upon the earlier to occur of (i) the
Effective Time and (ii) the date which is 60 days after the date on which
Purchaser or Sub purchases Shares pursuant to the Offer, Parent shall cause the
Surviving Corporation to pay an aggregate of $1,810,000 to Strategica as
complete repayment of all amounts borrowed plus accrued and unpaid interest
thereon and satisfaction of all obligations pursuant to that certain Credit and
Loan Agreement dated as of August 23, 1995 between the Company and Strategica as
it may have been amended from time to time (the "Strategica Credit Agreement"),
subject only to Strategica executing customary releases at such time of
repayment.

(b) As promptly as practicable following the Effective Time, Parent shall
cause the Surviving Corporation to pay an aggregate of $300,000 to Leroy Meshel,
M.D. ("Meshel") as complete repayment of all amounts borrowed plus accrued and
unpaid interest thereon and satisfaction of all obligations pursuant to that
certain Credit Agreement dated April 5, 1995 between the Company and Meshel, as
it may have been amended from time to time, subject only to Meshel executing
customary releases at such time of repayment.

(c) Meshel shall have executed within five days of the date hereof the
Subordination Agreement among the Company, Parent and Strategica and that
agreement shall remain in full force and effect.

Section 7.13 Other Payments. At or immediately following the Effective
Time, Parent shall cause the Surviving Corporation to pay all amounts required
to be paid, and not previously paid, pursuant to the agreements described in
Section 4.11(b).

Section 7.14 Option Agreement. In the event Parent shall exercise its
option granted pursuant to the Option Agreement, Parent and Sub shall waive the
conditions to the consummation of the Offer specified in paragraphs (c), (e),
(g), and (h) of Exhibit A.

ARTICLE VIII

CONDITIONS PRECEDENT

Section 8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:

(a) Common Stockholder Approval. If approval of the Merger by the
holders of the Common Stock is required by applicable law, the Merger shall
have been approved by the requisite vote of such holders.

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(b) Preferred Stockholder Approval. If approval of the Merger by the
holders of Preferred Stock is required by applicable law, the Merger shall
have been approved by the requisite vote of such holders.

(c) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree or injunction which
prohibits or has the effect of prohibiting the consummation of the Merger;
provided, however, that the Company, Parent and Sub shall, subject to
Section 7.6, use their reasonable best efforts to have any such order,
decree or injunction vacated.

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER

Section 9.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after any approval by the stockholders
of the Company:

(a) by mutual written consent of Parent and the Company prior to the
purchase of the Shares pursuant to the Offer;

(b) by the Company if:

(i) the Offer has not been timely commenced (except as a result
of actions or omissions by the Company) in accordance with Section
1.1(a); or

(ii) (x) there is an offer to acquire all of the outstanding
shares of Common Stock or substantially all of the assets of the
Company that, in the good faith judgment of the Board of Directors of
the Company, is financially superior for holders of shares of Common
Stock and holders of shares of Preferred Stock to the Offer and the
Merger and (y) the Board of Directors of the Company determines after
receiving a written opinion from Arent Fox Kintner Plotkin & Kahn to
the effect that the failure to approve such offer would not be
consistent with the fiduciary duties to stockholders of the Board of
Directors of the Company; provided, however, that the right to
terminate this Agreement pursuant to this clause shall not be
available (i) if the Company has breached in any material respect its
obligations under Section 6.2, (ii) in respect of an offer that is
subject to a financing condition, (iii) in respect of an offer
involving consideration that is not entirely cash or does not permit
stockholders to receive the payment of the offered consideration in
respect of all shares at the same time, unless the Board of Directors
of the Company has been furnished with a written opinion of a

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<PAGE>

nationally recognized investment banking firm to the effect that such
offer provides a higher value per share than the consideration per
share pursuant to the Offer or the Merger or (iv) if, prior to or
concurrently with any purported termination pursuant to this clause,
the Company shall not have paid the fee contemplated by Section
7.3(b); and unless the Company has provided Parent and Sub with at
least five business days' prior written notice of its intent to so
terminate this Agreement together with a detailed summary of the terms
and conditions of such offer and the identity of the person making
such offer; or

(iii) there has been a breach by Parent or Sub of any
representation or warranty that would have a material adverse effect
on Parent's or Sub's ability to perform its obligations under this
Agreement and which breach has not been cured within five business
days following receipt by Parent or Sub of notice of the breach; or

(iv) Parent or Sub fails to comply in any material respect with
any of its material obligations or covenants contained herein,
including, without limitation, the obligation of Sub to purchase
Shares pursuant to the Offer, unless such failure results from a
breach of the Company of any obligation, representation, or warranty
hereunder, which has not been cured within five business days
following Company's receipt of notice of the breach;

(c) by Parent if the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendations of the Offer or the Merger
or shall have resolved to do any of the foregoing, or shall have failed to
reject an Acquisition Proposal within 10 business days after receipt by the
Company or public announcement thereof; or

(d) by either Parent or the Company if:

(i) the Merger has not been effected on or prior to the close of
business on November 15, 1996; provided, however, that the right to
terminate this Agreement pursuant to this clause shall not be
available (x) to Parent, if Sub or any affiliate of Sub acquires
Shares pursuant to the Offer, or (y) to any party whose failure to
fulfill any obligation of this Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred on or prior to
the aforesaid date; or

(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and nonappealable; or

-39-
<PAGE>

(iii) upon a vote at a duly held meeting or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any
approval required by applicable law; or

(iv) as the result of the failure of any of the conditions set
forth in Exhibit A hereto, the Offer shall have terminated or expired
in accordance with its terms without Sub having purchased any Shares
pursuant to the Offer; provided, however, that the right to terminate
this Agreement pursuant to this Section 9.1(d)(iv) shall not be
available to any party whose failure to fulfill any of its obligations
under this Agreement results in the failure of any such condition; or

(v) Parent shall have reasonably determined that any Offer
condition (other than the Minimum Condition) is not capable of being
satisfied at any time in the future and Parent has not purchased
Shares pursuant to the Offer; provided, however, that the right to
terminate this Agreement pursuant to this clause shall not be
available to any party whose failure to fulfill any obligation of this
Agreement has been the cause of, or resulted in, such Offer condition
being incapable of satisfaction.

Section 9.2 Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company, as permitted in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or Sub or their respective officers or
directors (except as set forth in the last two sentences of Section 7.2 and
except for Section 7.3, which shall survive the termination); provided, however,
that nothing contained in this Section 9.2 shall relieve any party hereto from
any liability for any breach of this Agreement.

Section 9.3 Amendment. This Agreement may be amended by the parties hereto,
by or pursuant to action taken by their respective Boards of Directors, at any
time before or after any approval of the Merger by the stockholders of the
Company but, after the purchase of Shares pursuant to the Offer, no amendment
shall be made which decreases the Merger Consideration or which in any way
materially adversely affects the rights of such stockholders, without the
further approval of such stockholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.

Section 9.4 Waiver. At any time prior to the purchase of the Shares
pursuant to the Offer, the parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein which may legally be
waived. Any agreement on the part of a party hereto to any such extension or

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<PAGE>

waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.

Section 9.5 Procedure for Termination, Amendment or Waiver. A termination
of this Agreement pursuant to Section 9.1, an amendment of this Agreement
pursuant to Section 9.3 or a waiver pursuant to Section 9.4 shall, in order to
be effective, require (a) in the case of Parent, action by its Board of
Directors or the duly authorized designee of its Board of Directors and (b) in
the case of the Company, action by its Board of Directors.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the purchase of the Shares pursuant to
the Offer.

Section 10.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):

(a) if to Parent or Sub, to:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, California 94025
Fax: (415) 324-6870
Attention: John Heine

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Fax: (212) 859-4000
Attention: Peter Golden, Esq.

-41-
<PAGE>

(b) if to the Company, to:

Neolens, Inc.
18963 N.E. Fourth Court
Miami, Florida 33179
Fax: (305) 651-5092
Attention: Jon E. Haglund

with a copy to:

Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5339
Fax: (202) 857-6395
Attention: Arnold Westerman, Esq.

Section 10.3 Interpretation. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Unless the context otherwise requires, words describing the
singular shall include the plural and vice versa, words denoting gender shall
include all genders and words denoting persons shall include individuals,
corporations, partnerships and other legal entities. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." As used in
this Agreement, "business day" shall have the meaning ascribed thereto in Rule
14d-1(c)(6) under the Exchange Act.

Section 10.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.

Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) except for the provisions of Section 7.8, is not
intended to confer upon any person other than the parties any rights or remedies
hereunder.

Section 10.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in Delaware without regard to any
principles or choice of law or conflicts of law of such State. All actions and

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<PAGE>

proceedings arising out of or relating to this Agreement shall be heard and
determined in any state or federal court sitting in Delaware.

Section 10.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub or
Parent may assign, in their sole discretion, any of or all their rights,
interests and obligations under this Agreement to each other or any affiliate of
Sub or Parent, whether or not such affiliate exists at the date hereof;
provided, however, that no such assignment shall relieve Sub or Parent of any of
their obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.

Section 10.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions be consummated as originally contemplated to the fullest extent
possible.

Section 10.9 Enforcement of this Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.

Section 10.10 Incorporation of Exhibits. The Company Disclosure Letter and
all Exhibits, Schedules and annexes attached hereto and referred to herein are
hereby incorporated herein and made a part hereof for all purposes as if fully
set forth herein.

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<PAGE>

IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.

SOLA INTERNATIONAL INC.

By: /s/ John E. Heine
----------------------------------------
Name: John E. Heine
Title: Chief Executive Officer

SOLA ACQUISITION CORP.

By: /s/ John E. Heine
----------------------------------------
Name: John E. Heine
Title: President

NEOLENS, INC.

By: /s/ Jon E. Haglund
----------------------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

<PAGE>

EXHIBIT A

CONDITIONS OF THE OFFER

Notwithstanding any other term of the Offer or this Agreement, Sub shall
not be required to accept for payment or pay for, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act,
any Shares not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Shares unless there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer (i) that number of Shares
of common stock which would represent at least a majority of the sum of all
outstanding shares of common stock plus any shares issuable upon the exercise of
options (other than options the holders of which have executed agreements which
provide that, for so long as the Merger Agreement shall be in effect, such
holders will not exercise such options prior to the Effective Time, which
agreements are in full force and effect at the time of the expiration of the
Offer), warrants (other than Series Q Warrants) or other rights to acquire
shares (whether or not currently exercisable or vested) having an exercise price
equal to or less than the Common Stock Offer Price or upon the conversion of
outstanding Series A or Series B Preferred (other than Series A Preferred and
Series B Preferred which are validly tendered and not withdrawn prior to the
expiration of the Offer) and (ii) that number of Shares of Series A Preferred
and Series B Preferred which would represent, in the aggregate, at least a
majority of the outstanding Shares of Series A Preferred and Series B Preferred
of the Company (the "Minimum Condition"). Furthermore, notwithstanding any other
term of the Offer or this Agreement, Sub shall not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore accepted
for payment or paid for, and may terminate or amend the Offer if at any time on
or after the date of this Agreement and before the acceptance of such Shares for
payment or the payment therefor, any of the following conditions exist or shall
occur and remain in effect:

(a) there shall have been instituted, pending or threatened any action
or proceeding by any governmental, regulatory or administrative agency or
authority, which (i) seeks to challenge the acquisition by Parent of Shares
pursuant to the Offer, restrain, prohibit or delay the making or
consummation of the Offer or the Merger, or obtain any material damages in
connection therewith, (ii) seeks to make the purchase of or payment for
some or all of the Shares pursuant to the Offer or the Merger illegal,
(iii) seeks to impose limitations on the ability of Parent (or any of its
affiliates) effectively to acquire or hold, or to require Parent or the
Company or any of their respective affiliates to dispose of or hold
separate, any portion of the assets or the business of Parent and its
affiliates taken as a whole or the Company, or (iv) seeks to impose
material limitations on the ability of Parent (or any of its affiliates) to
exercise full rights of ownership of the Shares purchased by it, including,

A-1
<PAGE>

without limitation, the right to vote the Shares purchased by it on all
matters properly presented to the stockholders of the Company; or

(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign government or governmental authority or by any court, domestic or
foreign, any statute, rule, regulation, judgment, decree, order or
injunction that could reasonably be expected to, in the judgment of Parent,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (iv) of subsection (a) above; or

(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States which would reasonably be expected
to have a Material Adverse Effect on the Company or prevent (or materially
delay) the consummation of the Offer, or (iv) from the date of the Merger
Agreement through the date of termination or expiration of the Offer, a
decline of at least 25% in either the Dow Jones Industrial Average or the
Standard & Poor's 500 Index; or

(e) any of the representations and warranties made by the Company in
the Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in any material respect as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement; provided, however, that all references in
this Agreement to the phrases "knowledge of the Company" and "to the best
knowledge of the Company," and variants thereof, shall be disregarded for
the purposes of determining whether the Company shall have breached its

A-2
<PAGE>

representations, warranties and covenants resulting in the ability of
Parent to terminate this Agreement pursuant to this clause (e); or

(f) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to Parent or shall
have withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing, or shall have failed to reject any Acquisition Proposal
within 10 business days after receipt by the Company or public announcement
thereof; or

(g) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent, one or more of
its affiliates or any beneficial owner of Shares on the date hereof, shall
have acquired beneficial ownership of 20% or more of the outstanding shares
of Common Stock or 20% or more of the outstanding shares of Preferred
Stock, or shall have been granted any options or rights, conditional or
otherwise, to acquire a total of 20% or more of the outstanding shares of
Common Stock or 20% or more of the outstanding shares of the Series A and
Series B Preferred Stock; (ii) any new group shall have been formed which
beneficially owns 25% or more of the outstanding shares of Common Stock or
25% or more of the outstanding shares of the Series A and Series B
Preferred Stock; (iii) any person (other than Parent, one or more of its
affiliates or any beneficial owner of Shares on the date hereof) shall have
entered into an agreement in principle or definitive agreement with the
Company with respect to a tender or exchange offer for any Shares or a
merger, consolidation or other business combination with or involving the
Company; or (iv) any person (other than Parent, one or more of its
affiliates or any beneficial owner of Shares on the date hereof) shall have
offered to tender or exchange for any 20% or more of the outstanding shares
of Common Stock or 20% or more of the outstanding shares of the Series A
and Series B Preferred Stock or offered to merge, consolidate or effect
some other business combination with or involving the Company; for the
purpose of this clause (g) warrants and options which are exercisable at
prices above the offer price shall not, unless exercised, be counted for
the purpose of the percentages specified in this clause (g).

(h) each holder of Company stock options, granted under the 1986 Stock
Option Plan and the Consulting Agreement Warrants, shall not have entered
into cancellation agreements, as contemplated by Section 7.4(b) of the
Agreement.

A-3

<PAGE>

(i) the Cancellation Agreement between Parent and Strategica Capital
Corporation and, provided there is indebtedness or a commitment under the
Credit Agreement between Parent and the Company, the Subordination
Agreement among Parent, the Company, Strategica and Meshel shall not remain
in full force and effect.

Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Paying Agent to the tendering stockholders.

A-4

EXHIBIT 99(A)(9)

SOLA INTERNATIONAL INC. COMMENCES OFFER FOR NEOLENS, INC. AT
------------------------------------------------------------
$1.14 NET PER SHARE OF COMMON STOCK, $25.20 NET PER SHARE OF SERIES A
---------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK, AND $41.09 NET PER
-----------------------------------------------
SHARE OF SERIES B CONVERTIBLE PREFERRED STOCK
-----------------------------------------------

MENLO PARK, CALIFORNIA, June 5, 1996 -- Sola International Inc. (NYSE:SOL)
("Sola") announced that, in accordance with the terms of the previously
announced Merger Agreement with Neolens, Inc. (OTC Bulletin Board:NEOL)
("Neolens"), a subsidiary of Sola today commenced a tender offer for all of the
outstanding shares of Neolens at $1.14 per share of common stock, $25.20 per
share of Series A Convertible Preferred Stock, and $41.09 per share of Series B
Convertible Preferred Stock in cash.
The offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Tuesday, July 2, 1996, unless the offer is extended. The offer is
subject to certain conditions which are described in an Offer to Purchase being
mailed to all of the shareholders of Neolens. The First National Bank of Boston
will act as depositary for the tender offer and Georgeson & Company, Inc., will
act as information agent for the tender offer.
Sola International Inc. designs, manufactures and distributes a broad
range of eyeglass lenses, primarily focusing on the faster growing plastic lens
segment of the global lens market. The Company has manufacturing operations in
ten countries and employs 5,800 people worldwide.
For further information, please contact: at Sola: John Heine,
President and CEO, 415-324-6868; at Neolens: Jon Haglund, Chairman and CEO,
305-651-0003.

Exhibit (b)(1)
[EXECUTION COPY]

U.S. $85,000,000

AMENDED AND RESTATED CREDIT AGREEMENT,

dated as of March 2, 1995,
(amending and restating the
Credit Agreement, dated
as of December 1, 1993 (as amended or
otherwise modified to the date hereof)),

among

SOLA INTERNATIONAL INC.
(formerly known as Sola Group Ltd.),
as the Borrower,

CERTAIN COMMERCIAL LENDING INSTITUTIONS,

as the Lenders

and

THE BANK OF NOVA SCOTIA,

as the Agent for the Lenders.

<PAGE>
TABLE OF CONTENTS

Section Page
- ------- ----

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . 33
1.3. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . 33
1.4. Accounting and Financial Determinations . . . . . . . . . . . . 33

ARTICLE II

COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT

2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment . . . . 34
2.1.2. Letter of Credit Commitment . . . . . . . . . . . . . . . . . . 35
2.1.3. Lenders Not Permitted or Required to Make Loans . . . . . . . . 35
2.1.4. Issuer Not Permitted or Required to Issue Letters of Credit . . 36
2.2. Reduction of the Commitment Amounts . . . . . . . . . . . . . . 36
2.2.1. Optional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2.2. Mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.3. Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . 38
2.3.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . 38
2.3.2. Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . 38
2.4. Continuation and Conversion Elections . . . . . . . . . . . . . 40
2.5. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.6. Letters of Credit Issuance Procedures . . . . . . . . . . . . . 41
2.6.1. Other Lenders' Participation . . . . . . . . . . . . . . . . . . 41
2.6.2. Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.6.3. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.6.4. Deemed Disbursements . . . . . . . . . . . . . . . . . . . . . . 42
2.6.5. Nature of Reimbursement Obligations . . . . . . . . . . . . . . 43
2.7. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

3.1. Repayments and Prepayments; Application . . . . . . . . . . . . 45
3.1.1. Repayments and Prepayments . . . . . . . . . . . . . . . . . . . 45
3.1.2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . 47
3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

-i-

<PAGE>
Section Page
- ------- ----

3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . 49
3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.3.1. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.3.2. Agency Fee, etc. . . . . . . . . . . . . . . . . . . . . . . . . 50
3.3.3. Letter of Credit Fee . . . . . . . . . . . . . . . . . . . . . . 50

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

4.1. LIBO Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . 50
4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . 51
4.3. Increased LIBO Rate Loan Costs, etc. . . . . . . . . . . . . . . 51
4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . 52
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . 56
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . 57
4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 58
4.11. Lender's Duty to Mitigate . . . . . . . . . . . . . . . . . . . 58
4.12. Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . 59

ARTICLE V

CONDITIONS TO EFFECTIVENESS AND BORROWINGS

5.1. Conditions to Effectiveness . . . . . . . . . . . . . . . . . . 60
5.1.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.2. Consummation of Mergers, etc. . . . . . . . . . . . . . . . . . 61
5.1.3. Consummation of IPO . . . . . . . . . . . . . . . . . . . . . . 61
5.1.4. Closing Date Certificate . . . . . . . . . . . . . . . . . . . . 62
5.1.5. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . 62
5.1.6. Reliance Letters . . . . . . . . . . . . . . . . . . . . . . . . 62
5.1.7. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . 62
5.1.8. Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . 62
5.1.9. Affirmation and Consent . . . . . . . . . . . . . . . . . . . . 63
5.1.10. Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . 63
5.1.11. Closing Fees, Expenses, etc. . . . . . . . . . . . . . . . . . . 63
5.1.12. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . 63
5.2. All Credit Extensions . . . . . . . . . . . . . . . . . . . . . 63
5.2.1. Compliance with Warranties, No Default, etc. . . . . . . . . . . 63
5.2.2. Credit Extension Request, etc. . . . . . . . . . . . . . . . . . 64
5.2.3. Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . 65

-ii-

<PAGE>
Section Page
- ------- ----

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . 65
6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . 65
6.3. Government Approval, Regulation, etc. . . . . . . . . . . . . . 66
6.4. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . 67
6.6. No Material Adverse Change . . . . . . . . . . . . . . . . . . . 67
6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . 67
6.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.9. Ownership of Properties . . . . . . . . . . . . . . . . . . . . 68
6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . 68
6.12. Environmental Warranties . . . . . . . . . . . . . . . . . . . . 69
6.13. Intellectual Property . . . . . . . . . . . . . . . . . . . . . 71
6.14. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . 72
6.15. Accuracy of Information . . . . . . . . . . . . . . . . . . . . 72
6.16. Senior Indebtedness, etc. . . . . . . . . . . . . . . . . . . . 73

ARTICLE VII

COVENANTS

7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . 73
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . 74
7.1.2. Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . 77
7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . 77
7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.1.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . 78
7.1.6. Environmental Covenant . . . . . . . . . . . . . . . . . . . . . 79
7.1.7. Future Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 79
7.1.8. Additional Pledge . . . . . . . . . . . . . . . . . . . . . . . 81
7.1.9. Pledge Agreement; Foreign Pledge Agreements . . . . . . . . . . 81
7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 82
7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . 82
7.2.2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.2.4. Financial Condition and Operations . . . . . . . . . . . . . . . 87
7.2.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.2.6. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . 91
7.2.7. Capital Expenditures, etc. . . . . . . . . . . . . . . . . . . . 93
7.2.8. Rental Obligations . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.9. Take or Pay Contracts . . . . . . . . . . . . . . . . . . . . . 94
7.2.10. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . 94
7.2.11. Permitted Dispositions . . . . . . . . . . . . . . . . . . . . . 95
7.2.12. Modification of Certain Agreements . . . . . . . . . . . . . . . 96

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<PAGE>
Section Page
- ------- ----

7.2.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . 97
7.2.14. Negative Pledges, Restrictive Agreements, etc. . . . . . . . . . 98

ARTICLE VIII

EVENTS OF DEFAULT

8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . 98
8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . 98
8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . 99
8.1.3. Non-Performance of Certain Covenants and Obligations . . . . . . 99
8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . 99
8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . 99
8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.1.7. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.1.8. Control of the Borrower . . . . . . . . . . . . . . . . . . . . 100
8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . 100
8.1.10. Impairment of Security, etc. . . . . . . . . . . . . . . . . . . 101
8.1.11. Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . 101
8.2. Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . 102
8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . 102

ARTICLE IX

THE AGENT

9.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.2. Funding Reliance, etc. . . . . . . . . . . . . . . . . . . . . . 103
9.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.5. Loans by Scotiabank . . . . . . . . . . . . . . . . . . . . . . 105
9.6. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . 105
9.7. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 105

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . 105
10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . 107
10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 108
10.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.8. Execution in Counterparts, Effectiveness, etc. . . . . . . . . . 110
10.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . 110
10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 110

-iv-

<PAGE>
Section Page
- ------- ----

10.11. Sale and Transfer of Loans and Notes; Participations in Loans and
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . 113
10.13. Execution on Behalf of Corporation . . . . . . . . . . . . . . . 114
10.14. Forum Selection and Consent to Jurisdiction . . . . . . . . . . 114
10.15. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . 115
10.16. Global Amendment to Loan Documents . . . . . . . . . . . . . . . 115
10.17. Termination of Sola Holdings Undertaking
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 115

SCHEDULE I - Disclosure Schedule

EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Borrowing Base Certificate
EXHIBIT G - Conformed Copy of Pledge Agreement
EXHIBIT H - Conformed Copy of Subsidiary Guaranty
EXHIBIT I - Form of Master Subordination Agreement
EXHIBIT J - Form of Lender Assignment Agreement
EXHIBIT K - Form of Affirmation and Consent
EXHIBIT L-1 - Form of Opinion of New York Counsel
to the Obligors
EXHIBIT L-2 - Form of Opinion of Counsel to AEA
EXHIBIT M - Form of Letter of Comfort

-v-
<PAGE>

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 2, 1995,
among SOLA INTERNATIONAL INC. (formerly known as Sola Group Ltd.), a Delaware
corporation and the surviving corporation of the Sola Merger (such capitalized
term, and other capitalized terms used herein, to have the meanings provided in
Section 1.1) referred to below, the various financial institutions as are or may
- -----------
become parties hereto (collectively, the "Lenders"), and THE BANK OF NOVA SCOTIA
-------
("Scotiabank"), as agent (the "Agent") for the Lenders,
---------- -----

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, the Borrower, the Lenders and the Agent were parties to that
certain Credit Agreement, dated as of December 1, 1993 (as amended, supplemented
or otherwise modified to the date hereof, the "Existing Credit Agreement");
-------------------------

WHEREAS, pursuant to the terms of the Agreement of Merger, dated as of
February 23, 1995 (the "Investors Merger Agreement"), between the Borrower's
--------------------------
corporate parent Sola Holdings Inc., a Delaware corporation ("Sola Holdings")
-------------
and Sola Holdings' corporate parent Sola Investors Inc., a Delaware corporation
("Sola Investors"), Sola Holdings will be merged with and into Sola Investors
--------------
(with such merger being referred to as the "Investors Merger"), with Sola
Investors being the surviving corporation of the Investors Merger;

WHEREAS, pursuant to the terms of the Agreement of Merger, dated as of
February 23, 1995 (the "Sola Merger Agreement"), between Sola Investors (as the
---------------------
surviving corporation of the Investors Merger) and the Borrower, Sola Investors
will, immediately following the effectiveness of the Investors Merger, be merged
with and into the Borrower (such merger being referred to as the "Sola Merger",
-----------
with the "Merger Date" being the date on which the Sola Merger becomes effective
-----------
in accordance with applicable laws and the "Merger Effective Time" being the
---------------------
time of consummation of the Sola Merger), with the Borrower being the surviving
corporation of the Sola Merger;

WHEREAS, pursuant to the Mergers, each share of capital stock of the
Borrower and Sola Holdings will be cancelled and the equity securities of Sola
Investors will become the only outstanding equity securities of the Borrower,
and each share of common stock of Sola Investors will be converted in the
Mergers into 10.3 shares of common stock of the Borrower;

<PAGE>

WHEREAS, the Borrower will be the ultimate surviving corporation of the
Mergers and shall continue to be the Borrower hereunder;

WHEREAS, the Borrower shall continue to be liable under the Existing Credit
Agreement and each other "Loan Document" (as defined in the Existing Credit
Agreement) executed and delivered by the Borrower thereunder or in connection
therewith;

WHEREAS, in connection with the Mergers and an initial public offering (the
"IPO") of the Borrower's common stock pursuant to the terms and conditions set
---
forth in the Borrower's Registration Statement on Form S-1 (Registration No. 33-
87892) (as amended by Amendment Number 1, dated January 31, 1995, Amendment
Number 2, dated February 10, 1995, and Amendment Number 3, dated February 21,
1995, the "Registration Statement"), in each case as filed with the SEC, the
----------------------
Borrower has requested that the Lenders amend and restate the Existing Credit
Agreement in its entirety as set forth above and as follows; and

WHEREAS, the Lenders have agreed, subject to the terms and conditions
hereinafter set forth, to amend and restate the Existing Credit Agreement in its
entirety as provided above and as set forth herein;

NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as set forth above and as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1. Defined Terms. The following terms (whether or not
-------------
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

"Account" means, with respect to any Person, all accounts receivable which,
-------
in accordance with GAAP, would be included as such on a consolidated balance
sheet of such Person and its Subsidiaries.

"Acquisition" means the acquisition of the Sola Business by the Borrower
-----------
pursuant to the Purchase Agreement and the Assignment Agreement.

"Acquisition Date" means December 1, 1993, the date the Acquisition was
----------------
consummated.

-2-

<PAGE>

"Adjusted Net Worth" means, at any time, the sum of all amounts which, in
------------------
accordance with GAAP, would be included under shareholders' equity on the most
recently available consolidated balance sheet of the Borrower and its
Subsidiaries; provided, that (a) the cumulative adjustment due to foreign
--------
currency translation required by FASB 52 shall not be taken into account in
determining Adjusted Net Worth; (b) there shall be excluded from Adjusted Net
Worth (i) extraordinary gains and losses, and (ii) gains and losses arising from
the sale of material assets not in the ordinary course of business; (c) there
shall be included in Adjusted Net Worth (without duplication) the principal
amount of all loans outstanding at such time to employees to finance the
purchase of stock of the Borrower, but only to the extent permitted by clause
------
(h) of Section 7.2.5; and (d) Adjusted Net Worth shall be increased by all non-
- --- -------------
recurring non-cash charges and purchase accounting adjustments arising as a
result of the write-up of the value of certain inventory accounts in connection
with the allocation of the purchase price of the Acquisition and the write-off
of in-process research and development in connection with the Acquisition.

"AEA" means AEA Investors, and its current or future employees,
---
shareholders, directors and officers and (i) trusts for the benefit of such
Persons or the spouses, issue, parents or other relatives of such Persons,
(ii) entities controlling or controlled by such Persons and (iii) in the event
of the death of any such individual Person, heirs or testamentary legatees of
such Person.

"AEA Investors" means AEA Investors Inc., a Delaware corporation.
-------------

"Affiliate" of any Person means any other Person which, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). With respect to any Lender or Issuer, a Person shall
be deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, power to vote 51% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors or
managing general partners. With respect to all other Persons, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, power

(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or

-3-

<PAGE>

(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

"Affirmation and Consent" means the affirmation and consent executed and
-----------------------
delivered pursuant to Section 5.1.9, substantially in the form of Exhibit K
------------- ---------
hereto.

"Agent" is defined in the preamble and includes each other Person as shall
----- --------
have subsequently been appointed as the successor Agent pursuant to Section 9.4.
-----------

"Agreement" means, on any date on and after the Effective Date, the Amended
---------
and Restated Credit Agreement, as amended, supplemented, amended and restated or
otherwise modified and in effect on such date.

"Applicable Commitment Fee Rate" means at all times during the applicable
------------------------------
periods set forth below with respect to the unpaid principal amount of each
Revolving Loan the applicable percentage set forth below under the column
entitled "Applicable Commitment Fee Rate":

Consolidated Debt Applicable
to EBITDA Commitment Fee
Ratio Rate
------------------ --------------

Greater than 2.75:1 0.500%

Less than or equal
to 2.75:1 but greater
than 2.0:1 0.375%

Less than or equal
to 2.0:1 but greater
than 1.5:1 0.250%

Less than or equal
to 1.5:1 0.250%

The Consolidated Debt to EBITDA Ratio used to compute the Applicable
Commitment Fee Rate shall be the Consolidated Debt to EBITDA Ratio set forth in
the Compliance Certificate most recently delivered by the Borrower to the Agent,
beginning with the Compliance Certificate delivered by the Borrower to the Agent
pursuant to Section 5.1.7; changes in the Applicable Commitment Fee Rate
-------------
resulting from a change in the Consolidated Debt to EBITDA Ratio shall become
effective upon delivery by the Borrower to the Agent of a new Compliance
Certificate pursuant to clause (c) of Section 7.1.1. If the Borrower shall fail
---------- -------------
to deliver a Compliance Certificate within 45 days after the end of any Fiscal

-4-

<PAGE>

Quarter as required pursuant to clause (c) of Section 7.1.1, the Applicable
---------- -------------
Commitment Fee Rate from and including the 46th day after the end of such Fiscal
Quarter to but not including the date the Borrower delivers to the Agent a
Compliance Certificate shall conclusively equal the next higher Applicable
Commitment Fee Rate from the Applicable Commitment Fee Rate that was in effect
when the last Compliance Certificate was so delivered by the Borrower to the
Agent.

"Applicable Margin" means at all times during the applicable periods set
-----------------
forth below

(a) with respect to the unpaid principal amount of each Revolving
Loan maintained as a Base Rate Loan, the applicable percentage set forth
below under the column entitled "Applicable Margin for Base Rate Loans";
and

(b) with respect to the unpaid principal amount of each Revolving
Loan maintained as a LIBO Rate Loan, the applicable percentage set forth
below under the column entitled "Applicable Margin for LIBO Rate Loans":

Consolidated Debt Applicable Applicable
to EBITDA Margin For Margin For
Ratio Base Rate Loans LIBO Rate Loans
------------------ --------------- ---------------

Greater than 2.75:1 0.25% 1.50%

Less than or equal
to 2.75:1 but greater
than 2.0:1 0% 1.25%

Less than or equal
to 2.0:1 but greater
than 1.5:1 0% 1.00%

Less than or equal
to 1.5:1 0% 0.75%.

The Consolidated Debt to EBITDA Ratio used to compute the Applicable Margin
shall be the Consolidated Debt to EBITDA Ratio set forth in the Compliance
Certificate most recently delivered by the Borrower to the Agent, beginning with
the Compliance Certificate delivered by the Borrower to the Agent pursuant to
Section 5.1.7; changes in the Applicable Margin resulting from a change in the
- -------------
Consolidated Debt to EBITDA Ratio shall become effective upon delivery by the
Borrower to the Agent of a new Compliance Certificate pursuant to clause (c) of
----------
Section 7.1.1. If the Borrower shall fail to deliver a Compliance Certificate
- -------------
within 45 days after the end of any Fiscal Quarter as required

-5-

<PAGE>

pursuant to clause (c) of Section 7.1.1, the Applicable Margin from and
---------- -------------
including the 46th day after the end of such Fiscal Quarter to but not including
the date the Borrower delivers to the Agent a Compliance Certificate shall
conclusively equal the next higher Applicable Margin from the Applicable Margin
that was in effect when the last Compliance Certificate was so delivered by the
Borrower to the Agent.

"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------

"Assignment Agreement" means the assignment and assumption agreement
--------------------
executed and delivered by Sola Holdings and the Borrower pursuant to Section
5.1.3 of the Existing Credit Agreement.

"Authorized Officer" means, relative to the Borrower and any other Obligor,
------------------
those of its officers whose signatures and incumbency shall have been certified
to the Agent and the Lenders pursuant to Section 5.1.1.
-------------

"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
--------------
determined by reference to the Scotiabank Alternate Base Rate.

"Borrower" means Sola International Inc., a Delaware corporation formerly
--------
known as Sola Group Ltd.

"Borrower Closing Date Certificate" means the closing date certificate
---------------------------------
executed and delivered by the Borrower pursuant to Section 5.1.4, substantially
-------------
in the form of Exhibit D hereto.
---------

"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
---------
Loans, having the same Interest Period made by all Lenders required to make such
Loans on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.1.
-----------

"Borrowing Base Amount" means, at any time, an amount equal to the sum of
---------------------
(x) 75% of the aggregate amount of the consolidated Accounts of the Borrower and
its Subsidiaries (provided, that, with respect to each non-wholly-owned
--------
Subsidiary, the Accounts that shall be included in such calculation shall be
equal to the total Accounts of each such Subsidiary multiplied by the percentage
of the Borrower's direct or indirect ownership interest in such Subsidiary) at
such time plus (y) 45% of the aggregate amount of the consolidated Inventory of
----
the Borrower and its Subsidiaries (provided, that, with respect to each non-
--------
wholly-owned Subsidiary, the Inventory that shall be included in such
calculation shall be equal to the total Inventory of each such Subsidiary
multiplied by the percentage of the Borrower's direct or indirect ownership
interest in such Subsidiary) at such

-6-

<PAGE>

time. The Borrowing Base Amount shall be computed by the Borrower from time to
time in each Borrowing Base Certificate delivered to the Agent pursuant to
clause (i) of Section 7.1.1.
- ---------- -------------

"Borrowing Base Certificate" means a certificate duly completed and
--------------------------
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit F hereto, together with such changes thereto as the Agent may from time
- ---------
to time reasonably request for the purpose of monitoring the Borrower's
compliance herewith.

"Borrowing Request" means a Loan request and certificate duly executed by
-----------------
an Authorized Officer of the Borrower, substantially in the form of Exhibit B-1
-----------
hereto.

"Business Day" means
------------

(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York,
New York; and

(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day which is a Business Day described in clause (a)
----------
above and which is also a day on which dealings in Dollars are carried on
in the interbank eurodollar market of the Agent's LIBOR Office.

"Capital Expenditures" means, for any period, the aggregate amount of all
--------------------
expenditures of the Borrower and its Subsidiaries for fixed or capital assets
(excluding expenditures made by the Borrower or its Subsidiaries for the Sola
Business pursuant to the Purchase Agreement) made during such period which, in
accordance with GAAP, would be classified as capital expenditures (excluding
(i) with respect to all leasing or similar arrangements entered into during such
period which, in accordance with GAAP, would be classified as a capitalized
lease, the aggregate capitalized amount of all rental payments payable during
the term of such lease (including the portion of such payments allocable to
interest expense) and (ii) expenditures made in connection with the replacement
or restoration of assets, to the extent (A) of the sales price received for the
assets being restored or replaced at the time of such expenditure or the credit
granted by the seller of such assets for the assets being traded in at such time
or (B) such replacement or restoration is financed with (x) insurance proceeds
paid on account of the loss of or damage to the assets so replaced or restored
or (y) awards of compensation arising from the taking by condemnation or eminent
domain of the assets so replaced).

"Capitalized Lease Liabilities" means all monetary obligations of the
-----------------------------
Borrower or any of its Subsidiaries under any

-7-

<PAGE>

leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalized leases, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a premium or a penalty.

"Carry-Forward Amount" is defined in Section 7.2.7.
-------------------- -------------

"Cash Equivalent Investment" means, at any time:
--------------------------

(a) any direct obligation of (or guaranteed by) the United States
Government (or any agency or instrumentality thereof) maturing not more
than one year after such time;

(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by

(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of the
District of Columbia and rated A-1 by Standard & Poor's Corporation or
P-1 by Moody's Investors Service, Inc., or

(ii) any Lender (or its holding company);

(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either

(i) any bank organized under the laws of the United States (or
any State thereof), Canada, Japan or any State that is a member of the
European Economic Community and which has (x) a credit rating of Aa or
better from Moody's Investor Services, Inc. or a comparable rating
from Standard & Poor's Corporation and (y) a combined capital and
surplus greater than U.S.$250,000,000 (or equivalent), or

(ii) any Lender; or

(d) any repurchase agreement entered into with any Lender or any
commercial banking institution of the stature referred to in clause (c)(i)
-------------
which

(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), and
----------

-8-

<PAGE>

(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder.

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

"CERCLIS" means the Comprehensive Environmental Response Compensation
-------
Liability Information System List.

"Certificates of Merger" means, collectively, the Investors Certificate of
----------------------
Merger and the Sola Certificate of Merger.

"Change in Control" means either
-----------------

(a) any "person" or "group" (as such terms are used in Rules 13d-3
and 14d of the Exchange Act, whether or not applicable) of persons (other
than AEA) becoming the "beneficial owner" (as such term is used in Rules
13d-3 and 13d-5 of the Exchange Act, whether or not applicable) of more
than 30% of the total voting power in the aggregate of all classes of
common stock of the Borrower then outstanding entitled to vote generally in
elections of directors of the Borrower; or

(b) the merger or consolidation of the Borrower with or into another
corporation or the merger of another corporation into the Borrower with the
effect that immediately after such transaction any "person" or "group" (as
such terms are used in Rules 13d-3 and 14d of the Exchange Act, whether or
not applicable) of persons (other than AEA) holds more than 30% of the
total voting power of the then outstanding securities of the surviving
corporation of such merger or consolidation entitled to vote generally in
the election of directors, managers or trustees of such surviving
corporation; or

(c) during any period of 24 consecutive months, individuals who at
the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election to such Board or
whose nomination for election by the stockholders of the Borrower was
approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Borrower then in
office; or

-9-

<PAGE>

(d) the occurrence of a "Change of Control", as such term is defined
in the Subordinated Note Indenture.

"Code" means the Internal Revenue Code of 1986, and the regulations
----
thereunder, in each case as amended, reformed or otherwise modified from time to
time.

"Commitment" means, as the context may require, a Lender's Revolving Loan
----------
Commitment, Letter of Credit Commitment or Scotiabank's Swing Line Loan
Commitment.

"Commitment Amount" means, as the context may require, the Revolving Loan
-----------------
Commitment Amount, the Letter of Credit Commitment Amount or the Swing Line Loan
Commitment Amount.

"Commitment Termination Date" means, as the context may require, the
---------------------------
Revolving Loan Commitment Termination Date or the Swing Line Loan Commitment
Termination Date.

"Commitment Termination Event" means
----------------------------

(a) the occurrence of any Default described in clauses (a) through
-----------
(d) of Section 8.1.9 with respect to the Borrower or any of its Significant
--- -------------
Subsidiaries; or

(b) the occurrence and continuance of any other Event of Default and
either

(i) the declaration of all or any portion of the Loans to be due
and payable pursuant to Section 8.3, or
-----------

(ii) the giving of notice by the Agent, acting at the direction
of the Required Lenders, to the Borrower that the Commitments have
been terminated.

"Compliance Certificate" means a certificate duly completed and executed by
----------------------
an Authorized Officer of the Borrower, substantially in the form of Exhibit E
---------
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time, together with such changes thereto as the Agent may from time
to time reasonably request for the purpose of monitoring the Borrower's
compliance with the financial covenants contained herein.

"Consolidated Debt" means the outstanding principal amount of all
-----------------
Indebtedness of the Borrower and its consolidated Subsidiaries of the type
referred to in clause (a), (b) or (c) of the definition of "Indebtedness"
---------- --- ---
(exclusive of intercompany Indebtedness between the Borrower and any of its
Subsidiaries or between any Subsidiaries of the Borrower) and (without

-10-

<PAGE>

duplication) any Contingent Liability in respect of any of the foregoing.

"Consolidated Debt to EBITDA Ratio" means, as of the last day of any Fiscal
---------------------------------
Quarter, the ratio of

(a) Consolidated Debt outstanding on the last day of such Fiscal
Quarter

to
- --

(b) EBITDA computed for the period consisting of such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.

"Consolidated Subsidiary Debt" means the outstanding principal amount of
----------------------------
all Consolidated Debt of the Borrower's Subsidiaries; provided, that any
--------
Obligations of any Subsidiary shall be excluded in computing Consolidated
Subsidiary Debt.

"Contingent Liability" means any agreement, undertaking or arrangement by
--------------------
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt, obligation or other
liability guaranteed thereby.

"Continuation/Conversion Notice" means a notice of continuation or
------------------------------
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
---------

"Controlled Group" means all members of a controlled group of corporations
----------------
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.

"Credit Extension" means, as the context may require,
----------------

(a) the making of a Loan by a Lender; or

-11-

<PAGE>

(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.

"Credit Extension Request" means, as the context may require, any Borrowing
------------------------
Request or Issuance Request.

"Current Assets" means, at any time, all amounts (other than cash) which,
--------------
in accordance with GAAP, would be included as current assets on a consolidated
balance sheet of the Borrower and its Subsidiaries at such time.

"Current Liabilities" means, at any time, all amounts which, in accordance
-------------------
with GAAP, would be included as current liabilities on a consolidated balance
sheet of the Borrower and its Subsidiaries at such time, excluding current
maturities of Indebtedness.

"Current Ratio" means, at any time, the ratio of
-------------

(a) Current Assets

to
--

(b) Current Liabilities;

provided, however, that non-recurring non-cash restructuring and acquisition
- -------- -------
related reserves incurred in connection with the Acquisition shall not be given
effect in calculating Current Ratio.

"Default" means any Event of Default or any condition, occurrence or event
-------
which, after notice or lapse of time or both, would constitute an Event of
Default.

"Designated Subsidiary" means, as the context may require, each of Sola
---------------------
Argentina SA, Sola Optical Taiwan Ltd., Sola Hong Kong Ltd., Norinco Sola Ltd.
(China), Sola Brasil Industria Optica Ltda., and any of their respective
Subsidiaries, and in each case each of their respective successors.

"Disbursement" is defined in Section 2.6.2.
------------ -------------

"Disbursement Date" is defined in Section 2.6.2.
----------------- -------------

"Disclosure Schedule" means the Disclosure Schedule attached hereto as
-------------------
Schedule I, as it may be amended, supplemented, amended and restated or
- ----------
otherwise modified from time to time by the Borrower with the written consent of
the Agent and the Required Lenders.

-12-

<PAGE>

"Dollar" and the sign "$" mean lawful money of the United States.
------ -

"Dollar Equivalent" means, (i) with respect to Dollars or an amount
-----------------
denominated in Dollars, such amount, and (ii) with respect to any monetary
amount of a Letter of Credit denominated in a currency other than Dollars, at
any time for the determination thereof, the amount of Dollars obtained by
converting such foreign currency involved in such computation into Dollars at
the spot rate for the purchase of Dollars with the applicable foreign currency
as quoted by the Issuer of such Letter of Credit at approximately 11:00 a.m.
(New York time) on the date of determination thereof specified herein.

"Domestic Office" means, relative to any Lender, the office of such Lender
---------------
designated as such below its signature hereto or designated in a Lender
Assignment Agreement, or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto.

"EBITDA" means, for any applicable period, the sum of
------

(a) Net Income,

plus
- ----

(b) the amount deducted, in determining Net Income, representing
amortization of assets (including amortization with respect to goodwill,
debt discount and deferred financing costs and all other intangible
assets),

plus
- ----

(c) the amount deducted, in determining Net Income, of all income
taxes (whether paid or deferred) of the Borrower and its Subsidiaries,

plus
- ----

(d) Interest Expense,

plus
- ----

(e) the amount deducted, in determining Net Income, representing
depreciation of assets,

-13-

<PAGE>

plus
- ----

(f) the amount deducted, in determining Net Income, of all
management, consulting and termination fees paid or payable by the Borrower
and its Subsidiaries to AEA Investors in accordance with clause (b) of
----------
Section 7.2.13.
--------------

plus
- ----

(g) the amount deducted, in determining Net Income, of all (i) non-
recurring non-cash charges and purchase accounting adjustments arising as a
result of the write-up of the value of certain inventory accounts in
connection with the allocation of the purchase price of the Acquisition and
the write-off of in-process research and development in connection with the
Acquisition and (ii) non-recurring, non-cash charges arising in determining
the Final Closing Working Capital (as defined in the Purchase Agreement) in
connection with the Acquisition,

plus
- ----

(h) for purposes of the calculation of the Interest Coverage Ratio,
the amount of all non-cash charges deducted from (or, in the case of non-
cash gains, added to), Net Income arising from foreign currency translation
adjustments required by FASB 52.

"Effective Date" is defined in Section 5.1.
-------------- -----------

"Environmental Laws" means all applicable federal, state or local statutes,
------------------
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.

"Escrow Account" is defined in Section 2.2.2.
-------------- -------------

"Event of Default" is defined in Section 8.1.
---------------- -----------

"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------

"Existing Credit Agreement" is defined in the first recital.
------------------------- -------------

-14-

<PAGE>

"Existing Letters of Credits" means, collectively, the Letters of Credit
---------------------------
listed on Item 1.1 ("Existing Letters of Credit") of the Disclosure Schedule.
--------

"Existing Revolving Loans" means the "Revolving Loans" under (and as
------------------------
defined in) the Existing Credit Agreement made to the Borrower.

"Existing Revolving Note" means any promissory note executed and delivered
-----------------------
by the Borrower to any Lender pursuant to the Existing Credit Agreement
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from the Existing Revolving Loans.

"Existing Swing Line Loans" means the "Swing Line Loans" under (and as
-------------------------
defined in) the Existing Credit Agreement made to the Borrower.

"Existing Swing Line Note" means the promissory note executed and delivered
------------------------
by the Borrower to Scotiabank,in favor of Scotiabank pursuant to the Existing
Credit Agreement, evidencing the aggregate indebtedness of the Borrower to
Scotiabank resulting from the Existing Swing Line Loans made to the Borrower
under the Existing Credit Agreement.

"Federal Funds Rate" means, for any period, a fluctuating interest rate per
------------------
annum equal for each day during such period to

(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or

(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by Scotiabank from three federal funds brokers of recognized
standing selected by it.

"Fee Letter" means that certain confidential letter, dated January 18,
----------
1995, from the Borrower to Scotiabank.

"Fiscal Quarter" means any quarter of a Fiscal Year.
--------------

"Fiscal Year" means any period of twelve consecutive calendar months ending
-----------
on March 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "1995 Fiscal Year") refer to the Fiscal Year ending on
----
the March 31 occurring during such calendar year.

-15-

<PAGE>

"Foreign Pledge Agreement" means any supplemental pledge agreement governed
------------------------
by the laws of a jurisdiction other than the United States or a State thereof
executed and delivered by the Borrower or any of its Subsidiaries pursuant to
the terms of this Agreement, in form and substance satisfactory to the Agent, as
may be necessary or desirable under the laws of organization or incorporation of
a Subsidiary to further protect or perfect the Lien on and security interest in
any Pledged Shares and/or Pledged Notes (as such terms are defined in the Pledge
Agreement).

"F.R.S. Board" means the Board of Governors of the Federal Reserve System
------------
or any successor thereto.

"GAAP" is defined in Section 1.4.
---- -----------

"Hazardous Material" means
------------------

(a) any "hazardous substance", as defined by CERCLA;

(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended; or

(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.

"Hedging Obligations" means, with respect to any Person, all liabilities of
-------------------
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.

"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or in any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.

"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification

-16-

<PAGE>

(a) which is of a "going concern" or similar nature;

(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or

(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under Section
-------
7.2.4.
-----

"including" and "include" means including without limiting the generality
--------- -------
of any description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.

"Indebtedness" of any Person means, without duplication:
------------

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

(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances, in each case issued for the account of such Person;

(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;

(d) net liabilities (after giving effect to any gains) of such Person
under all Hedging Obligations;

(e) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services (provided, that the term "deferred purchase price for
--------
services" shall not include deferred payment for services incurred or
created by the Person relating to its employees and former employees) and
indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or
is limited in recourse; and

-17-

<PAGE>

(f) all Contingent Liabilities of such Person in respect of any of
the foregoing.

For all purposes of this Agreement, (i) the term "Indebtedness" shall exclude
(y) customer deposits and interest payable thereon in the ordinary course of
business and (z) trade and other accounts and accrued expenses payable in the
ordinary course of business in accordance with customary trade terms, and in the
case of both (y) and (z) above, which are not overdue for a period of more than
90 days or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the books of
such Person, and (ii) the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer (except to the extent that either by
operation of law or by the express terms of the relevant partnership or joint
venture agreement provide that liabilities incurred in connection therewith are
completely without recourse to such Person).

"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------

"Indemnified Parties" is defined in Section 10.4.
------------------- ------------

"Interest Coverage Ratio" means, at the close of any Fiscal Quarter, the
-----------------------
ratio computed for the period consisting of such Fiscal Quarter and each of the
three immediately prior Fiscal Quarters of:

(a) EBITDA (for all such Fiscal Quarters) minus Capital Expenditures
-----
incurred during such Fiscal Quarters

to
- --

(b) the sum (for all such Fiscal Quarters) of Interest Expense.

"Interest Expense" means, for any Fiscal Quarter, the aggregate
----------------
consolidated interest expense (net of interest income) of the Borrower and its
Subsidiaries for such Fiscal Quarter, as determined in accordance with GAAP,
including the portion of any payments made in respect of Capitalized Lease
Liabilities allocable to interest expense, but excluding amortization of debt
discount and deferred financing costs and interest expense on customer deposits.

"Interest Period" means, relative to any LIBO Rate Loan, the period
---------------
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
----------- ---
and shall end on (but exclude) the day which numerically corresponds to such
date one,

-18-

<PAGE>

two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as the Borrower may
select in its relevant notice pursuant to Section 2.3 or 2.4; provided, however,
----------- --- -------- -------
that

(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than five different dates;

(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and

"Inventory" means, with respect to any Person, all "inventory" which, in
---------
accordance with GAAP, is included as such on a consolidated balance sheet of
such Person and its Subsidiaries.

"Investment" means, relative to any Person,
----------

(a) any loan or advance made by such Person to any other Person
(excluding commission, travel, petty cash and similar advances to officers
and employees made in the ordinary course of business);

(b) any Contingent Liability of such Person incurred in connection
with loans or advances described in clause (a); and
----------

The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and otherwise without
adjustment by reason of the financial condition of such other Person) and shall,
if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property at the time of such Investment.

-19-

<PAGE>

"Investors Certificate of Merger" means the Certificate of Merger, dated
-------------------------------
February 27, 1995, of Sola Investors and Sola Holdings.

"Investors Merger Agreement" is defined in the second recital.
-------------------------- --------------

"Investors Merger" is defined in the second recital.
---------------- --------------

"IPO" is defined in the sixth recital.
--- -------------

"Issuance Request" means a Letter of Credit request and certificate duly
----------------
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit B-2 hereto.
- -----------

"Issuer" means Scotiabank in its capacity as issuer of the Letters of
------
Credit. At the request of Scotiabank, another Lender or an Affiliate of
Scotiabank may issue one or more Letters of Credit hereunder; provided, however,
-------- -------
that the prior written consent of the Borrower (which consent shall not be
unreasonably withheld or delayed) shall be required as to any such other Lender
and, if the debt rating of such Affiliate is less than that of Scotiabank, as to
any such Affiliate.

"Law Change" is defined in Section 4.6.
---------- -----------

"Lender Assignment Agreement" means a lender assignment agreement
---------------------------
substantially in the form of Exhibit J hereto.
---------

"Lenders" is defined in the preamble and, in addition, shall include any
------- --------
commercial bank or other financial institution that becomes a Lender pursuant to
Section 10.11.1.
- ---------------

"Lender's Environmental Liability" means any and all losses, liabilities,
--------------------------------
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys' fees
at trial and appellate levels and experts' fees and disbursements and expenses
incurred in investigation, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against any Lender or any of such Lender's parent and
subsidiary corporations, and their Affiliates, shareholders, directors,
officers, employees, and agents in connection with or arising from:

(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof;

-20-

<PAGE>

(b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;
------------

(d) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of Hazardous
Material by the Borrower or any of its Subsidiaries, or in connection with
any property owned or formerly owned by the Borrower or any of its
Subsidiaries.

"Letter of Credit" is defined in Section 2.1.2.
---------------- -------------

"Letter of Credit Commitment" means, with respect to an Issuer, such
---------------------------
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
-------------
with respect to each of the other Lenders, the obligations of each such Lender
to participate in such Letters of Credit pursuant to Section 2.6.1.
-------------

"Letter of Credit Commitment Amount" means, on any date, a maximum Dollar
----------------------------------
Equivalent amount of $20,000,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2.
-----------

"Letter of Credit Outstandings" means, on any date, an amount equal to the
-----------------------------
sum of

(a) the then aggregate Dollar Equivalent amount which is undrawn and
available under all issued and outstanding Letters of Credit,

plus
- ----

(b) the then aggregate Dollar Equivalent amount of all unpaid and
outstanding Reimbursement Obligations.

"LIBO Rate" is defined in Section 3.2.1.
--------- -------------

"LIBO Rate Loan" means a Loan bearing interest, at all times during an
--------------
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).

"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
---------------------------- -------------

"LIBOR Office" means, relative to any Lender, the office of such Lender
------------
designated as such below its signature hereto or designated in a Lender
Assignment Agreement, or such other office

-21-

<PAGE>

of a Lender as designated from time to time by notice from such Lender to the
Borrower and the Agent, whether or not outside the United States, which shall be
making or maintaining LIBO Rate Loans of such Lender hereunder.

"LIBOR Reserve Percentage" is defined in Section 3.2.1.
------------------------ -------------

"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation, except for liens arising from the filing of
"precautionary" Uniform Commercial Code financing statements in connection with
obligations under leases that are not Capitalized Lease Liabilities to the
extent that such financing statements relate solely to the property subject to
such lease obligations and where the debtor named on such financing statements
is not the legal or beneficial owner of the described property.

"Loan Documents" collectively means this Agreement, the Notes, the Letters
--------------
of Credit, the Pledge Agreement, each agreement relating to Hedging Obligations
of the Borrower or any of its Subsidiaries to which a Lender is a party (unless
otherwise agreed to by such Lender), each Foreign Pledge Agreement, the
Affirmation and Consent, the Master Subordination Agreement, the Subsidiary
Guaranty, the Fee Letter and each other agreement or certificates executed and
delivered by an Obligor in connection herewith or therewith, whether or not
mentioned herein.

"Loans" means, as the context may require, a Revolving Loan or a Swing Line
-----
Loan, of any type.

"Master Subordination Agreement" means the Master Subordination Agreement,
------------------------------
substantially in the form of Exhibit I hereto.
---------

"Maximum Leverage Ratio" means, at any time, the ratio (expressed as a
----------------------
percentage) of

(a) the sum at such time of the aggregate amount of (i) the
Obligations (including Letter of Credit Outstandings) plus (ii)
----
Indebtedness of the Borrower and its Subsidiaries incurred pursuant to
clause (j) of Section 7.2.2
---------- -------------

to
- --

(b) Total Adjusted Capital at such time.

-22-

<PAGE>

"Merger Agreements" means, collectively, the Investors Merger Agreement and
-----------------
the Sola Merger Agreement.

"Merger Date" is defined in the third recital.
----------- -------------

"Merger Effective Time" is defined in the third recital.
--------------------- -------------

"Mergers" means, collectively, the Investors Merger and the Sola Merger.
-------

"Net Disposition Proceeds" means the excess of
------------------------

(a) the gross cash proceeds received by the Borrower or any of its
Subsidiaries from any Permitted Disposition of the type described in clause
------
(d) of Section 7.2.11 or, subject to the terms thereof, clause (e) of
--- -------------- ----------
Section 7.2.11 (in each case, including from the issuance or sale of
--------------
capital stock of Subsidiaries, whether in an initial public offering,
private placement, or otherwise) and any cash payments received in respect
of promissory notes or other non-cash consideration delivered to the
Borrower or such Subsidiary in respect of any Permitted Disposition,

less
- ----

(b) the sum of

(i) all reasonable and customary fees and expenses with respect
to legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred in connection with such Permitted Disposition which have not
been paid to Affiliates of the Borrower (except as permitted pursuant
to Section 7.2.13),
--------------

(ii) all taxes and other governmental costs and expenses
actually paid or estimated by the Borrower (in good faith) to be
payable in cash in connection with such Permitted Disposition,

(iii) payments made by the Borrower or any of its Subsidiaries
to retire Indebtedness (other than the Loans) of the Borrower or any
of its Subsidiaries where payment of such Indebtedness is required in
connection with such Permitted Disposition, and

(iv) amounts, in the reasonable judgment of the Borrower,
provided by the Borrower or any of its Subsidiaries, as the case may
be, as a reserve against any liabilities associated with such
Permitted Disposition to the extent, but only to the extent, that

-23-

<PAGE>

the amounts so deducted, or for which the Borrower or any Subsidiary
is liable, as the case may be, are, at the time of receipt of such
cash, paid or payable to a Person that is not an Affiliate or, if
payable to an Affiliate, are permitted under Section 7.2.13, of the
--------------
Borrower and are properly attributable to such transaction or to the
asset that is the subject thereof;

provided, however, that if, after the payment of all taxes with respect to such
- -------- -------
Permitted Disposition, (x) the amount of estimated taxes, if any, pursuant to
clause (b)(ii) above exceeded the tax amount actually paid in cash in respect of
- --------------
such Permitted Disposition or (y) the amount reserved, if any, pursuant to
clause (b)(iv) exceeded the actual associated liabilities in respect of such
- --------------
Permitted Disposition, the aggregate amount of such excess shall be immediately
payable, to the extent so required, pursuant to clause (c) of Section 3.1.1, as
---------- -------------
Net Disposition Proceeds. Net Disposition Proceeds shall exclude 100% of
proceeds from Permitted Dispositions of the type permitted pursuant to clause
------
(e) of Section 7.2.11 (the "Retained Amount") to the extent (i) the Retained
- --- -------------- ---------------
Amount is directly generated from the sale or issuance after December 1, 1993 of
any newly issued stock, warrants or options (i.e., other than stock, warrants or
options outstanding on December 1, 1993) of any Designated Subsidiary to any
Person (other than the Borrower or a wholly-owned Subsidiary of the Borrower),
(ii) the Borrower has, prior to such sale or issuance, notified the Agent
thereof and delivered to the Agent copies of all relevant registration
statements, documents and other instruments prepared in connection with such
sale or issuance (or such information relating thereto as the Agent may
otherwise request), and (iii) the Agent shall have received a certificate from
an Authorized Officer of the Borrower certifying as to the proposed reinvestment
of the Retained Amount in such non-U.S. Subsidiary; provided, however, that to
-------- -------
the extent any Retained Amount is not reinvested in such non-U.S. Subsidiary in
the method previously certified to the Agent within twelve months from the date
of receipt of the Retained Amount, then that portion of the Retained Amount not
so reinvested shall constitute Net Disposition Proceeds and 100% of such
unreinvested Retained Amount shall be applied as required pursuant to clause (c)
----------
of Section 3.1.1.
-------------

"Net Equity Proceeds" means with respect to the sale or issuance by the
-------------------
Borrower to any Person of any stock, warrants or options or the exercise of any
such warrants or options, the excess of:
------

(a) the gross cash proceeds received by the Borrower from such sale,
exercise or issuance, over
----

-24-

<PAGE>

(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with
such sale or issuance which have not been paid to Affiliates of the
Borrower in connection therewith.

"Net Income" means, for any period, the aggregate of all amounts (exclusive
----------
of (i) all amounts in respect of any extraordinary gains or losses, (ii) gains
and losses arising from the sale of material assets not in the ordinary course
of business and (iii) earnings and losses from discontinued operations) which,
in accordance with GAAP, would be included as net income on the consolidated
financial statements of the Borrower and its Subsidiaries for such period.

"Net Tangible Assets" means, at any time, the aggregate amount which, in
-------------------
accordance with GAAP, would be included as total assets (less intangible assets)
on the consolidated balance sheet of the Borrower and its Subsidiaries at such
time minus the aggregate amount which, in accordance with GAAP, would be
-----
included as Current Liabilities on the consolidated balance sheet of the
Borrower and its Subsidiaries at such time.

"Net Unrepatriated Disposition Proceeds" means, at any time, the total
--------------------------------------
amount of Net Disposition Proceeds at such time that have not (i) resulted in a
reduction of the Revolving Loan Commitment pursuant to Section 2.2.2 or
-------------
(ii) been deposited in an escrow account pursuant to the terms of an escrow
agreement in accordance with Section 2.2.2.
-------------

"Note" means, as the context may require, a Revolving Note or a Swing Line
----
Note.

"Obligations" means all obligations (monetary or otherwise) of the Borrower
-----------
and each other Obligor arising under or in connection with this Agreement, the
Notes, the Letters of Credit and each other Loan Document.

"Obligor" means, as the context may require, the Borrower, each Subsidiary
-------
Guarantor or any other Person (other than the Agent, each Issuer or any Lender)
to the extent such Person is obligated under this Agreement or any other Loan
Document.

"Organic Document" means, relative to any Obligor, as applicable, its
----------------
certificate of partnership, its partnership agreement, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of such Obligor's authorized shares of
capital stock or partnership agreements.

-25-

<PAGE>

"Participant" is defined in Section 10.11.2.
----------- ---------------

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.

"Percentage" means, relative to any Lender, its percentage relating to
----------
Revolving Loans as set forth opposite its signature hereto or set forth in a
Lender Assignment Agreement as such percentage may be adjusted from time to time
pursuant to Lender Assignment Agreement(s) executed by such Lender and its
Assignee Lender(s) and delivered pursuant to Section 10.11.1.
---------------

"Permitted Acquisition" means an acquisition (whether pursuant to an
---------------------
acquisition of stock, assets or otherwise) by the Borrower or any Subsidiary of
the Borrower from any Person of a business in which all of the following is
satisfied:

(a) such business is, taken as a whole, reasonably related or
reasonably similar to the business of the Borrower and its Subsidiaries as
described in Section 7.2.1;
-------------

(b) immediately before and after giving effect to such acquisition no
Default shall have occurred and be continuing; and

(c) the Borrower shall have delivered to the Agent consolidated
financial projections for the period of four full Fiscal Quarters
immediately following such acquisition (prepared in good faith and in a
manner and using such methodology which is consistent with the most recent
financial statements delivered pursuant to Section 7.1.1) giving effect to
-------------
the consummation of such acquisition and evidencing compliance with the
covenants set forth in Section 7.2.4.
-------------

"Permitted Currency" means U.S. Dollars ($), Singaporean Dollars and such
------------------
other currencies of major industrialized nations as shall be designated by the
Borrower and acceptable to the Agent (and, if different, the Issuer of the
applicable Letter of Credit to be issued in a denomination other than Dollars).

-26-

<PAGE>

"Permitted Disposition" means a disposition of assets by the Borrower or
---------------------
any of its Subsidiaries permitted pursuant to Section 7.2.11.
--------------

"Person" means any natural person, corporation, partnership, joint venture,
------
joint stock company, firm, association, trust or unincorporated organization,
government, governmental agency, court or any other legal entity, whether acting
in an individual, fiduciary or other capacity.

"Plan" means any Pension Plan or Welfare Plan.
----

"Pledge Agreement" means the Pledge Agreement, dated as of December 1,
----------------
1993, executed and delivered by the Borrower and certain U.S. Subsidiaries of
the Borrower pursuant to the Existing Credit Agreement, a conformed copy of
which is attached as Exhibit G hereto, together with any supplemental Foreign
---------
Pledge Agreements delivered pursuant to the terms of this Agreement, in each
case as amended, supplemented, amended and restated or otherwise modified from
time to time with the consent of the Agent.

"Pledged Subsidiary" means, at any time, each Subsidiary of the Borrower in
------------------
respect of which the Agent has been granted, at such time, a security interest
in and to, or a pledge of, (i) any of the issued and outstanding shares of
capital stock of such Subsidiary, or (ii) any intercompany notes of such
Subsidiary owing to the Borrower or another Subsidiary of the Borrower.

"Purchase Agreement" means the Purchase Agreement, dated as of September 1,
------------------
1993, among Pilkington plc, an English public limited company and those
Subsidiaries of Pilkington plc listed on the signature pages thereto, as the
Sellers and Sola Holdings (with the rights and obligations of Sola Holdings
thereunder and under related documents delivered in connection therewith having
been assigned to the Borrower pursuant to the terms of the Assignment
Agreement), pursuant to which the Sellers sold and transferred to the Borrower
and its Subsidiaries the Sola Business, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with Section 7.2.12.
--------------

"Quarterly Payment Date" means the last day of each March, June, September,
----------------------
and December or, if any such day is not a Business Day, the next succeeding
Business Day.

"Recomputation Date" is defined in the last paragraph of Section 3.1.1.
------------------ -------------

"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
------------------------- ---------- -------------

-27-

<PAGE>

"Registration Statement" is defined in the seventh recital.
---------------------- ---------------

"Reimbursement Obligation" is defined in Section 2.6.3.
------------------------ -------------

"Release" means a "release", as such term is defined in CERCLA.
------- -------

"Rentals" means, for any period and determined in accordance with GAAP, all
-------
fixed payments made by the Borrower or any of its Subsidiaries, as lessee or
sublessee under any lease of real or personal property (including as such all
payments that the Borrower or any of its Subsidiaries, as the case may be, is
obligated to make to the lessor on termination of the lease or surrender of the
property), but shall be exclusive of any amounts required to be paid by the
Borrower or any such Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes,
assessments and similar charges. Fixed rents under any so called "percentage
leases" shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the Borrower or any of its Subsidiaries, as the case may
be, regardless of sales or gross revenues.

"Replacement Notice" is defined in Section 4.12.
------------------ ------------

"Required Lenders" means, at any time, Lenders holding at least 51% of the
----------------
then aggregate outstanding principal amount of the Notes then held by the
Lenders, or, if no such principal amount is then outstanding, Lenders having at
least 51% of the Revolving Loan Commitment.

"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
-- ---
time.

"Restricted Subsidiary" means, collectively, any non-wholly-owned U.S.
---------------------
Subsidiary (and Subsidiaries thereof) of the Borrower resulting from an
Investment by the Borrower permitted by clause (k) of Section 7.2.5.
---------- -------------

"Revolving Loan" is defined in Section 2.1.1.
-------------- -------------

"Revolving Loan Commitment" means, relative to any Lender, such Lender's
-------------------------
obligation to make Revolving Loans pursuant to clause (a) of Section 2.1.1.
---------- -------------

"Revolving Loan Commitment Amount" means, on any date, $85,000,000, as such
--------------------------------
amount may be reduced from time to time pursuant to Section 2.2.
-----------

-28-

<PAGE>

"Revolving Loan Commitment Termination Date" means the earliest of
------------------------------------------

(a) December 1, 1999;

(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section 2.2; and
-----------

Upon the occurrence of any event described in the preceding clause (b) or (c),
---------- ---
the Revolving Loan Commitments shall terminate automatically and without any
further action.

"Revolving Note" means a promissory note of the Borrower payable to any
--------------
Lender, in the form of Exhibit A-1 hereto (as such promissory note may be
-----------
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Revolving Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.

"Scotiabank" is defined in the preamble.
---------- --------

"Scotiabank Alternate Base Rate" means, on any date and with respect to all
------------------------------
Base Rate Loans, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/100 of 1%) equal to the higher of

(a) the Scotiabank Rate in effect on such day; and

(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.

The Scotiabank Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by Scotiabank in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Scotiabank Alternate Base Rate. The Agent will give notice promptly to the
Borrower and the Lenders of changes in the Scotiabank Alternate Base Rate.

"Scotiabank Rate" means, at any time, the rate of interest then most
---------------
recently established by Scotiabank in New York, New York as its base rate for
U.S. Dollars loaned in the United States.

"SEC" means the Securities and Exchange Commission.
---

-29-

<PAGE>

"Significant Subsidiary" means, at any date of determination, any
----------------------
Subsidiary of the Borrower that, together with its Subsidiaries, (i) for the
most recent Fiscal Year of the Borrower, accounted for (or, in the case of any
Subsidiary that is acquired following December 1, 1993, would have accounted
for) more than 3% of the consolidated revenues of the Borrower and its
Subsidiaries during such Fiscal Year or (ii) as of the end of the most recent
Fiscal Year of the Borrower, was the owner of (or, in the case of any Subsidiary
that is acquired following December 1, 1993, would have been the owner of) more
than 3% of the consolidated assets of the Borrower and its Subsidiaries at the
end of such Fiscal Year, all as set forth on the most recently available
consolidated financial statements of the Borrower for such Fiscal Year.

"Sola Business" has the meaning assigned to such term in the Purchase
-------------
Agreement.

"Sola Certificate of Merger" means the Certificate of Merger, dated
--------------------------
February 28, 1995, of the Borrower and Sola Investors.

"Sola Holdings" is defined in the second recital.
------------- --------------

"Sola Investors" is defined in the second recital.
-------------- --------------

"Sola Merger" is defined in the third recital.
----------- -------------

"Sola Merger Agreement" is defined in the third recital.
--------------------- -------------

"Stated Amount" of each Letter of Credit means the total Dollar Equivalent
-------------
amount available to be drawn under such Letter of Credit upon the issuance
thereof.

"Stated Expiry Date" is defined in Section 2.6.
------------------ -----------

"Stated Maturity Date" means December 1, 1999.
--------------------

"Subject Lender" is defined in Section 4.12.
-------------- ------------

"Subordinated Notes" means the 9 5/8% Senior Subordinated Notes due 2003 of
------------------
the Borrower issued pursuant to the Subordinated Note Indenture, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with Section 7.2.12.
--------------

"Subordinated Note Indenture" means the Indenture, dated as of December 1,
---------------------------
1993, between the Borrower and NationsBank of Georgia, National Association, as
trustee, as such indenture may hereafter be amended, supplemented, amended and
restated or

-30-

<PAGE>

otherwise modified from time to time in accordance with Section 7.2.12.
--------------

"Subordinated Noteholder" means, at any time, the registered holder of a
-----------------------
Subordinated Note.

"Subordination Provisions" is defined in Section 8.1.11.
------------------------ --------------

"Subsidiary" means, with respect to any Person, any corporation,
----------
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or other ownership interest) of any other class or classes of such entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person.

"Subsidiary Guarantor" means, collectively, each Subsidiary of the Borrower
--------------------
party to the Subsidiary Guaranty on the Effective Date, and thereafter each
Subsidiary of the Borrower that is required, pursuant to clause (a) of Section
---------- -------
7.1.7, to execute and deliver a guaranty in substantially the form of the
- -----
Subsidiary Guaranty.

"Subsidiary Guaranty" means the Guaranty, dated as of December 1, 1993,
-------------------
made by each of the Persons identified on Schedule I thereto, executed and
delivered pursuant to the Existing Credit Agreement, a conformed copy of which
is attached as Exhibit H hereto and each other subsidiary guaranty executed and
---------
delivered by each Subsidiary Guarantor pursuant to the terms of this Agreement
(including clause (a) of Section 7.1.7), substantially in the form of Exhibit H
---------- ------------- ---------
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.

"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
--------------- ---------- -------------

"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.1.
-------------------------- ---------- -------------

"Swing Line Loan Commitment Amount" means, on any date, $15,000,000, as
---------------------------------
such amount may be reduced from time to time pursuant to Section 2.2.
-----------

"Swing Line Loan Commitment Termination Date" means the earliest of
-------------------------------------------

-31-

<PAGE>

(a) December 1, 1999;

(b) the date on which the Swing Line Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section 2.2; and
-----------

Upon the occurrence of any event described in the preceding clause (b) or (c),
---------- ---
the Swing Line Loan Commitment shall terminate automatically and without any
further action.

"Swing Line Note" means a promissory note of the Borrower payable to
---------------
Scotiabank, in the form of Exhibit A-2 hereto (as such promissory note many be
-----------
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to Scotiabank resulting from outstanding
Swing Line Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.

"Taxes" is defined in Section 4.6.
----- -----------

"Term-A Loan" is defined in the Existing Credit Agreement.
-----------

"Term-B Loan" is defined in the Existing Credit Agreement.
-----------

"Total Adjusted Capital" means, on any date, an amount equal to the sum of
----------------------

(a) Consolidated Debt on such date

plus
- ----

(b) Adjusted Net Worth on such date.

"type" means, relative to any Loan, the portion thereof, if any, being
----
maintained as a Base Rate Loan or a LIBO Rate Loan.

"U.C.C." means the Uniform Commercial Code as from time to time in effect
------
in the State of New York.

"United States" or "U.S." means the United States of America, its fifty
------------- ----
States and the District of Columbia.

"U.S. Subsidiary" means a Subsidiary that is incorporated under the laws of
---------------
the United States or a State thereof.

"Welfare Plan" means a "welfare plan", as such term is defined in section
------------ ------------
3(1) of ERISA.

-32-

<PAGE>

"wholly-owned" means, with respect to any direct or indirect Subsidiary of
------------
the Borrower, any Subsidiary all of the outstanding common stock (or similar
equity interest) of which (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws and other than, in
the case of Sola ADC Lenses Ltd., the redeemable preference shares issued by
Sola ADC Lenses Ltd. to certain officers) is owned directly or indirectly by the
Borrower.

SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
--------------------
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document, the
Disclosure Schedule, or any Borrowing Request, Issuance Request, Continuation/
Conversion Notice, Borrowing Base Certificate, Compliance Certificate, notice or
other communications delivered from time to time in connection with this
Agreement or any other Loan Document.

SECTION 1.3. Cross-References. Unless otherwise specified, references in
----------------
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.

SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, and all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, in accordance with,
-------------
those generally accepted accounting principles ("GAAP") applied in the
----
preparation of the financial statements delivered to the Agent and the Lenders
pursuant to clause (a) of Section 5.1.9 of the Existing Credit Agreement;
provided, however, that all financial statements required to be delivered
- -------- -------
hereunder or under any other Loan Document shall be prepared in accordance with
GAAP as in effect from time to time. Unless otherwise expressly provided, all
financial covenants and defined financial terms shall be computed on a
consolidated basis for the Borrower and its Subsidiaries, in each case without
duplication.

-33-

<PAGE>

ARTICLE II

COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT

SECTION 2.1. Commitments. On the terms and subject to the conditions of
-----------
this Agreement (including Sections 2.1.3, 2.1.4 and the occurrence of the
-------------- -----
Effective Date pursuant to Article V),
---------

(a) each Lender severally agrees to make Loans (other than Swing Line
Loans) pursuant to the Revolving Loan Commitment and Scotiabank agrees to
make Swing Line Loans pursuant to the Swing Line Loan Commitment, in each
case as described in this Section 2.1; and
-----------

(b) the Issuer severally agrees that it will issue Letters of Credit
in a Permitted Currency pursuant to Section 2.1.2, and each other Lender
-------------
severally agrees that it will purchase participation interests in such
Letters of Credit pursuant to Section 2.6.1.
-------------

SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment.
--------------------------------------------------------
(a) Subject to compliance by the Borrower with the terms of Section 5.2, from
-----------
time to time on any Business Day occurring from and after the Effective Date but
prior to the Revolving Loan Commitment Termination Date, each Lender will make
loans (relative to such Lender, its "Revolving Loans") to the Borrower equal to
---------------
such Lender's Percentage of the aggregate amount of each Borrowing of the
Revolving Loans requested by the Borrower to be made on such day. All Revolving
Loans outstanding on the Effective Date under the Existing Credit Agreement
shall remain outstanding and shall in each case be a Revolving Loan outstanding
under this Agreement. On the Effective Date each Existing Revolving Note will
be exchanged and replaced in accordance with Section 5.1.5 and the Existing
-------------
Revolving Loan evidenced thereby shall be evidenced by such Lender's new
replacement Revolving Note. The Commitment of each Lender described in this
Section 2.1.1 is herein referred to as its "Revolving Loan Commitment". On the
- ------------- -------------------------
terms and subject to the conditions hereof, the Borrower may from time to time
borrow, prepay and reborrow the Revolving Loans.

(b) Subject to compliance by the Borrower with the terms of Section 5.2,
-----------
from time to time on any Business Day occurring from and after the Effective
Date but prior to the Swing Line Loan Commitment Termination Date, Scotiabank
will make loans (relative to Scotiabank, its "Swing Line Loan") to the Borrower
---------------
equal to the principal amount of the Swing Line Loan requested by the Borrower
to be made on such day. The Commitment of Scotiabank described in this clause
------
(b) is herein referred to as its "Swing Line Loan Commitment". On the terms and
- --- --------------------------
subject to the

-34-

<PAGE>

conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Swing Line Loans. All Swing Line Loans outstanding on the Effective
Date under the Existing Credit Agreement shall remain outstanding and shall in
each case be a Swing Line Loan outstanding under this Agreement. On the
Effective Date the Existing Swing Line Note will be replaced and exchanged in
accordance with Section 5.1.5 and the Existing Swing Line Loan evidenced thereby
-------------
shall be evidenced by the new replacement Swing Line Note.

SECTION 2.1.2. Letter of Credit Commitment. Subject to compliance by the
---------------------------
Borrower with the terms of Section 5.2, from time to time on any Business Day
-----------
occurring from and after the Effective Date but prior to the Revolving Loan
Commitment Termination Date, the Issuer will

(a) issue one or more standby or documentary letters of credit
(relative to such Issuer, its "Letter of Credit", it being acknowledged and
----------------
agreed by the parties hereto that the Existing Letters of Credit are for
all purposes "Letters of Credit" issued pursuant to this Agreement)
denominated in a Permitted Currency for the account of the Borrower or its
Subsidiaries in the Stated Amount requested by the Borrower on such day; or

(b) extend the Stated Expiry Date of an existing Letter of Credit
previously issued hereunder to a date not later than the earlier of (x) the
Revolving Loan Commitment Termination Date and (y) one year from the date
of such extension.

SECTION 2.1.3. Lenders Not Permitted or Required to Make Loans. No Lender
-----------------------------------------------
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of

(a) all Revolving Loans

(i) of all Lenders and the outstanding principal amount of all
Swing Line Loans, together with the aggregate amount of all Letter of
Credit Outstandings, would exceed the then existing Revolving Loan
Commitment Amount;

(ii) of all Lenders and the outstanding principal amount of all
Swing Line Loans, together with the aggregate amount of all Letter of
Credit Outstandings, would exceed the then existing Borrowing Base
Amount;

(iii) of such Lender, together with such Lender's Percentage of
the aggregate amount of all Letter of

-35-

<PAGE>

Credit Outstandings, would exceed such Lender's Percentage of the then
existing Revolving Loan Commitment Amount; or

(iv) of such Lender, together with its Percentage of the
aggregate amount of all Letter of Credit Outstandings, would exceed
such Lender's Percentage of the then existing Borrowing Base Amount;
or

(b) (i) all Swing Line Loans would exceed the then existing Swing
Line Loan Commitment Amount or (ii) all Swing Line Loans and Revolving
Loans made by Scotiabank would exceed the amount determined by multiplying
Scotiabank's Percentage by the then existing Revolving Loan Commitment
Amount.

SECTION 2.1.4. Issuer Not Permitted or Required to Issue Letters of
----------------------------------------------------
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
- ------
if, after giving effect thereto, (a) the aggregate Dollar Equivalent amount of
all Letter of Credit Outstandings would exceed the Letter of Credit Commitment
Amount or (b) the sum of the aggregate Dollar Equivalent amount of all Letter of
Credit Outstandings plus the aggregate principal amount of all Revolving Loans
then outstanding would exceed the lesser of the (x) Revolving Loan Commitment
Amount or (y) the Borrowing Base Amount.

SECTION 2.2. Reduction of the Commitment Amounts. The Commitment Amounts
-----------------------------------
are subject to reduction from time to time pursuant to this Section 2.2.
-----------

SECTION 2.2.1. Optional. The Borrower may, from time to time on any
--------
Business Day occurring after the Effective Date, voluntarily reduce the amount
of the Revolving Loan Commitment Amount, the Swing Line Loan Commitment Amount
or the Letter of Credit Commitment Amount on the Business Day so specified by
the Borrower; provided, however, that all such reductions shall require at least
-------- -------
one Business Day's prior notice to the Agent and be permanent, and any partial
reduction of any Commitment Amount shall be in a minimum amount of $1,000,000
and in an integral multiple of $500,000. Any reduction of the Revolving Loan
Commitment Amount pursuant to this Agreement which reduces the Revolving Loan
Commitment Amount below the then current amount of the Swing Line Loan
Commitment Amount shall result in an automatic and corresponding reduction of
the Swing Line Loan Commitment Amount to the amount of the Revolving Loan
Commitment Amount, as so reduced, without any further action on the part of
Scotiabank or otherwise.

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<PAGE>

SECTION 2.2.2. Mandatory. The Revolving Loan Commitment Amount shall,
---------
without any further action, automatically and permanently be reduced
concurrently with the receipt of any Net Disposition Proceeds in an amount equal
to the lesser of (x) 100% of such Net Disposition Proceeds and (y) the aggregate
Borrowing Base Amount, if any, attributable to all Inventory and Accounts
included in the disposed assets immediately prior to the consummation of the
subject disposition; provided, however, that to the extent any or all of the Net
-------- -------
Disposition Proceeds attributable to dispositions by non-U.S. Subsidiaries are
prohibited or delayed by applicable local law from being repatriated to the
United States, the portion of such Net Disposition Proceeds so affected shall,
so long as no Event of Default has occurred and is continuing, to the extent
permitted by clause (d)(ii) of Section 7.2.11 not be deemed "received" for
-------------- --------------
purposes of clause (x) of this Section, at the time provided above, and may be
----------
(but shall not be required), at the election of the Borrower, deposited in an
escrow account maintained with a Lender and under the sole dominion and control
of the Agent (such account being referred to as an "Escrow Account") pursuant to
--------------
the terms of an escrow agreement satisfactory in form and substance to the
Agent, until such time as the applicable local law will permit repatriation to
the United States (and the Borrower hereby agrees that it will, and will cause
the applicable Subsidiary to, promptly take all action required by the
applicable local law to permit such repatriation). If and when repatriation of
any of such affected Net Disposition Proceeds is permitted under the applicable
local law, such repatriation shall be immediately effected and such repatriated
Net Disposition Proceeds shall be deemed "received" for purposes of clause (x)
----------
of this Section and will be applied in the manner set forth in this Agreement;
provided, that, to the extent the Board of Directors of the Borrower determines,
- --------
in good faith, that repatriation of any or all of the Net Disposition Proceeds
attributable to dispositions by non-U.S. Subsidiaries would have a material
adverse tax consequence, the Net Disposition Proceeds so affected, to the extent
permitted by clause (d)(ii) of Section 7.2.11, shall not be required to be
-------------- --------------
applied as so provided, and may be (but shall not be required), at the election
of the Borrower, deposited in an Escrow Account and under the sole dominion and
control of the Agent pursuant to the terms of an escrow agreement satisfactory
in form and substance to the Agent for so long as such material adverse tax
consequence continues (and the Borrower hereby agrees to promptly deliver to the
Agent a certificate of an Authorized Officer as to such determination, together
with all documents and calculations considered by the Board of Directors in
reaching its conclusion as to the presence of a material adverse tax
consequence). Provided that the Borrower shall have complied with its
obligations under this Agreement (A) in connection with any Permitted
Disposition consisting of the sale of all of the shares of stock of any
Subsidiary that is a party to the

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<PAGE>

Subsidiary Guaranty, the obligations of such Subsidiary that is a party to the
Subsidiary Guaranty under its Subsidiary Guaranty shall automatically be
discharged and released without any further action by the Agent or any Lender
(and the Agent and the Lenders hereby agree, upon the request (and at the
expense) of the Borrower, to execute and deliver any instrument or other
document in a form acceptable to the Agent which may reasonably be required to
evidence such discharge and release) and (B) in connection with the sale or
other disposition of the capital stock of a Subsidiary of the Borrower, the
Agent shall release to the pledgor thereof, without representation, warranty or
recovery, express or implied, the capital stock of such Subsidiary held by it as
pledged stock, if any, under the Pledge Agreement. Notwithstanding the
foregoing, in no event shall the Revolving Loan Commitment Amount be reduced to
less than $30,000,000.

SECTION 2.3. Borrowing Procedures. Revolving Loans shall be made by the
--------------------
Lenders in accordance with Section 2.3.1, and Swing Line Loans shall be made by
-------------
Scotiabank in accordance with Section 2.3.2.
-------------

SECTION 2.3.1. Revolving Loans. In the case of Revolving Loans, by
---------------
delivering a Borrowing Request to the Agent on or before 10:00 a.m., New York
City time, on a Business Day, the Borrower may from time to time irrevocably
request, on not less than one Business Day's notice in the case of Base Rate
Loans, or three Business Days' notice in the case of LIBO Rate Loans, and in
either case not more than five Business Days' notice, that a Borrowing be made,
in the case of LIBO Rate Loans, in a minimum amount of $1,000,000 and an
integral multiple of $500,000, in the case of Base Rate Loans, in a minimum
amount of $200,000 and an integral multiple thereof or, in either case, in the
unused amount of the Revolving Loan Commitment. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day, specified in such Borrowing
Request. In the case of other than Swing Line Loans, on or before 11:00 a.m.
(New York City time) on such Business Day each Lender shall deposit with the
Agent same day funds in an amount equal to such Lender's Percentage of the
requested Borrowing. Such deposit will be made to an account which the Agent
shall specify from time to time by notice to the Lenders. To the extent funds
are received from the Lenders, the Agent shall make such funds available to the
Borrower by wire transfer to the accounts the Borrower shall have specified in
its Borrowing Request. No Lender's obligation to make any Loan shall be
affected by any other Lender's failure to make any Loan.

SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice, promptly
----------------
followed (within one Business Day) by the

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<PAGE>

delivery of a confirming Borrowing Request, to Scotiabank on or before
1:00 p.m., New York City time, on the Business Day the proposed Swing Line Loan
is to be made, the Borrower may from time to time irrevocably request that Swing
Line Loans be made by Scotiabank in an aggregate minimum principal amount of
$200,000 and an integral multiple of $100,000. All Swing Line Loans shall be
made as Base Rate Loans and shall not be entitled to be converted into LIBO Rate
Loans. The proceeds of each Swing Line Loan shall be made available by
Scotiabank, by its close of business on the Business Day telephonic notice is
received by it as provided in this clause (a), to the Borrower by wire transfer
----------
to the account the Borrower shall have specified in its notice therefor.

(b) If

(i) any Swing Line Loan shall be outstanding for more than four
Business Days;

(ii) any Swing Line Loan is or will be outstanding on a date when the
Borrower requests that a Revolving Loan be made; or

(iii) any Default shall occur and be continuing,

each Lender (other than Scotiabank) irrevocably agrees that it will, at the
request of Scotiabank, make a Revolving Loan (which shall initially be funded as
a Base Rate Loan) in an amount equal to such Lender's Percentage of the
aggregate principal amount of all such Swing Line Loans then outstanding (such
outstanding Swing Line Loans hereinafter referred to as the "Refunded Swing Line
-------------------
Loans"). On or before 11:00 a.m. (New York City time) on the first Business Day
- -----
following receipt by each Lender of a request to make Revolving Loans as
provided in the preceding sentence, each such Lender shall deposit in an account
specified by Scotiabank the amount so requested in same day funds and such funds
shall be applied by Scotiabank to repay the Refunded Swing Line Loans. At the
time the aforementioned Lenders make the above referenced Revolving Loans
Scotiabank shall be deemed to have made, in consideration of the making of the
Refunded Swing Line Loans, Revolving Loans in an amount equal to Scotiabank's
Percentage of the aggregate principal amount of the Refunded Swing Line Loans.
Upon the making (or deemed making, in the case of Scotiabank) of any Revolving
Loans pursuant to this clause (b), the amount so funded shall become outstanding
----------
under such Lender's Revolving Note and shall no longer be owed under the Swing
Line Note.

All interest payable with respect to any Revolving Loans made (or deemed
made, in the case of Scotiabank) pursuant to this clause (b) shall be
----------
appropriately adjusted to reflect the period

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<PAGE>

of time during which Scotiabank had outstanding Swing Line Loans in respect of
which such Revolving Loans were made. Each Lender's obligation to make the
Revolving Loans referred to in this clause (b) shall be absolute and
----------
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Scotiabank, the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of any Default;
(iii) any adverse change in the condition (financial or otherwise) of the
Borrower; (iv) the acceleration or maturity of any Loans or the termination of
any Commitment after the making of any Swing Line Loan; (v) any breach of this
Agreement or any other Loan Document by the Borrower or any Lender; or (vi) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

SECTION 2.4. Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., New York
City time, on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than one Business Days' notice in the case of Base Rate
Loans, or three Business Days' notice in the case of LIBO Rate Loans, and in
either case not more than five Business Days' notice, that all, or any portion
in an aggregate minimum amount of $1,000,000 and an integral multiple of
$500,000, in the case of LIBO Rate Loans, or an aggregate minimum amount of
$200,000 and an integral multiple thereof, in the case of Base Rate Loans, be,
in the case of Base Rate Loans, converted into LIBO Rate Loans or be, in the
case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO
Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate Loan at least three Business Days (but not more than
five Business Days') before the last day of the then current Interest Period
with respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that (x) each such conversion
-------- -------
or continuation shall be pro rated among the applicable outstanding Loans of all
Lenders that have made such Loans, and (y) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing.

SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
--------
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
- -------
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless

-40-

<PAGE>

be to such Lender for the account of such foreign branch, Affiliate or
international banking facility; and provided, further, however, that such Lender
-------- ------- -------
shall cause such foreign branch, Affiliate or international banking facility to
comply with the applicable provisions of clause (b) of Section 4.6 with respect
---------- -----------
to such LIBO Rate Loan. In addition, the Borrower hereby consents and agrees
that, for purposes of any determination to be made for purposes of Section 4.1,
-----------
4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender elected to
- --- --- ---
fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office's
interbank eurodollar market.

SECTION 2.6. Letters of Credit Issuance Procedures. By delivering to the
-------------------------------------
Agent an Issuance Request on or before 10:00 a.m., New York City time, on a
Business Day, the Borrower may, from time to time irrevocably request, on not
less than three nor more than ten Business Days' notice, in the case of an
initial issuance of a Letter of Credit, and not less than three days prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a Letter of Credit, that the Issuer issue, or extend the Stated Expiry Date of,
as the case may be, an irrevocable Letter of Credit denominated in a Permitted
Currency in such form as may be requested by the Borrower and approved by the
Issuer, solely for the purposes described in Section 4.10. Each Letter of
------------
Credit shall be denominated in a Permitted Currency (provided, that the Dollar
--------
Equivalent of Letters of Credit denominated in a Permitted Currency other than
Dollars shall not exceed $5,000,000) and shall by its terms be stated to expire
on a date (its "Stated Expiry Date") no later than the earlier to occur of (i)
------------------
the Revolving Loan Commitment Termination Date or (ii) one year from the date of
its issuance. The Issuer will make available to the beneficiary thereof the
original of each Letter of Credit which it issues hereunder.

SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
----------------------------
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) shall be deemed to have irrevocably
purchased, to the extent of its Percentage to make Revolving Loans, a
participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation with respect thereto), and such
Lender shall, to the extent of its Revolving Loan Commitment Percentage, be
responsible for reimbursing promptly (and in any event within one Business Day)
the Issuer for Reimbursement Obligations which have not been reimbursed by the
Borrower in accordance with Section 2.6.3. In addition, such Lender shall, to
-------------
the extent of its Percentage to make Revolving Loans, be entitled to receive a
ratable portion of the Letter of Credit fees payable pursuant to Section 3.3.3
-------------
with respect to each Letter of Credit and of interest payable pursuant to
Section 3.2 with respect to any Reimbursement Obligation. To the extent
- -----------

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<PAGE>

that any Lender has reimbursed any Issuer for a Disbursement as required by this
Section, such Lender shall be entitled to receive its ratable portion of any
amounts subsequently received (from the Borrower or otherwise) in respect of
such Disbursement.
SECTION 2.6.2. Disbursements. The Issuer will notify the Borrower and the
-------------
Agent promptly of the presentment for payment of any Letter of Credit issued by
the Issuer, together with notice of the date (the "Disbursement Date") such
-----------------
payment shall be made (each such payment, a "Disbursement"). Subject to the
------------
terms and provisions of such Letter of Credit and this Agreement, the Issuer
shall make such payment to the beneficiary (or its designee) of such Letter of
Credit. Prior to 11:00 a.m., New York City time, on the first Business Day
following the Disbursement Date, the Borrower will reimburse the Agent, for the
account of the Issuer, for all amounts which the Issuer has disbursed under such
Letter of Credit, together with interest thereon at a rate per annum equal to
the highest rate per annum then in effect pursuant to Section 3.2 for the period
-----------
from the Disbursement Date through the date of such reimbursement.

SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
------------- -------------
Obligation") of the Borrower under Section 2.6.2 to reimburse the Issuer with
- ---------- -------------
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse the Issuer, each Lender's obligation under Section
-------
2.6.1 to reimburse the Issuer, shall be absolute and unconditional under any and
- -----
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or such Lender, as the case may be, may have or have
had against the Issuer or any such Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit (if, in the Issuer's good faith opinion, such Disbursement is determined
to be appropriate) or any non-application or misapplication by the beneficiary
of the proceeds of such Letter of Credit; provided, however, that after paying
-------- -------
in full its Reimbursement Obligation hereunder, nothing herein shall adversely
affect the right of the Borrower or such Lender, as the case may be, to commence
any proceeding against the Issuer for any wrongful Disbursement made by the
Issuer under a Letter of Credit as a result of acts or omissions constituting
gross negligence or wilful misconduct on the part of such Issuer.

SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
--------------------
continuation of any Default of the type described in Section 8.1.9 or, with
-------------
notice from the Agent, upon the occurrence and during the continuation of any
other Event of Default,

(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate

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<PAGE>

amount which is undrawn and available under all Letters of Credit issued
and outstanding for the account of the Borrower shall, without demand upon
or notice to the Borrower, be deemed to have been paid or disbursed by the
Issuer under such Letters of Credit (notwithstanding that such amount may
not in fact have been so paid or disbursed); and

(b) upon notification by the Agent to the Borrower of its obligations
under this Section, the Borrower shall be immediately obligated to
reimburse the Issuer for the amount deemed to have been so paid or
disbursed by such Issuer.

Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash with the Agent and held as collateral security for the
Obligations in connection with the Letters of Credit issued by the Issuers. At
such time when the Defaults or Events of Default giving rise to the deemed
disbursements hereunder shall have been cured or waived, the Agent shall return
to the Borrower all amounts then on deposit with the Agent pursuant to this
Section, together with accrued interest at the Federal Funds Rate, which have
not been applied to the partial satisfaction of such Obligations.

SECTION 2.6.5. Nature of Reimbursement Obligations. The Borrower and, to
-----------------------------------
the extent set forth in Section 2.6.1, each Lender shall assume all risks of the
-------------
acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.
The Issuer (except to the extent of its own gross negligence or wilful
misconduct) shall not be responsible for:

(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;

(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;

(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;

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<PAGE>

(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; or

(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit.

None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Lender. In furtherance and
extension and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon the
Borrower and each such Lender, and shall not put such Issuer under any resulting
liability to the Borrower or any such Lender, as the case may be.

SECTION 2.7. Notes. Each Lender's Loans shall be evidenced by a Note
-----
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Percentage (as of the Effective Date) of the applicable Commitment
Amount. Each Revolving Note and each Swing Line Note issued on the Effective
Date shall be issued in substitution and exchange for, and not in satisfaction
or payment of, the Existing Revolving Note and the Existing Swing Line Note,
respectively, of each Lender, as applicable, and the Indebtedness (together with
the obligation to pay accrued interest thereon) originally owing to such Lender
and to be evidenced by such Lender's replacement Notes delivered pursuant to
this Agreement shall be (and the Borrower hereby acknowledges and agrees that
such Indebtedness is) a continuing Indebtedness, and nothing herein contained
shall be construed to release or terminate any Lien or security interest given
to secure such Indebtedness. The Borrower hereby irrevocably authorizes each
Lender to make (or cause to be made) appropriate notations on the grid attached
to such Lender's Note (or on any continuation of such grid), which notations, if
made, shall evidence, inter alia, the date of, the outstanding principal of, and
----- ----
the interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
-------- -------
notations shall not limit or otherwise affect any Obligations of the Borrower or
any other Obligor. Interest Periods in respect of LIBO Rate Loans made by
Lenders parties to this Agreement outstanding under the Existing Credit
Agreement as of the Effective Date shall be carried forward for the duration of
such Interest Periods under the replacement Notes issued on the Effective Date.

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<PAGE>

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1. Repayments and Prepayments; Application.
---------------------------------------

SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay in
--------------------------
full the unpaid principal amount of each Loan upon the Stated Maturity Date.
Prior thereto, payments and prepayments of Loans shall or may be made as set
forth below:

(a) From time to time on any Business Day, the Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any

(i) Loans (other than Swing Line Loans), provided, however, that
-------- -------

(A) any such prepayment of Revolving Loans shall be made
pro rata among the Revolving Loans of the same type and, if
--- ----
applicable, having the same Interest Period of all Lenders that
have made such Revolving Loans;

(B) all such voluntary prepayments shall require at least
one but no more than five Business Days' prior written notice to
the Agent; and

(C) all such voluntary partial prepayments shall be, in the
case of LIBO Rate Loans, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $500,000 and, in the case
of Base Rate Loans, in an aggregate minimum amount of $250,000
and an integral multiple thereof; and

(ii) Swing Line Loans, provided that
--------

(A) all such voluntary prepayments shall require prior
telephonic notice to Scotiabank on or before 1:00 p.m., New York
City time, on the day of such prepayment (such notice to be
confirmed in writing within 24 hours thereafter); and

(B) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $200,000 and an integral multiple of
$100,000.

(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and

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<PAGE>

Swing Line Loans and (ii) all Letter of Credit Outstandings exceeds the
lesser of (x) the Revolving Loan Commitment Amount (as it may be reduced
from time to time, including pursuant to Section 2.2) and (y) the then
-----------
effective Borrowing Base Amount, the Borrower shall make a mandatory
prepayment of all the Revolving Loans or all Swing Line Loans (or both) in
an aggregate amount equal to such excess.

(c) On each date when any reduction in the Revolving Loan Commitment
Amount shall become effective, including pursuant to Section 2.2 or Section
----------- -------
3.1.2, the Borrower shall make a mandatory prepayment of all Revolving
-----
Loans equal to the excess, if any, of (i) the aggregate, outstanding
principal amount of all Revolving Loans and all Swing Line Loans together
with all Letter of Credit Outstandings over (ii) the Revolving Loan
Commitment Amount as so reduced.

(d) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to Section 8.2 or Section 8.3, repay all the Loans,
----------- -----------
unless, pursuant to Section 8.3, only a portion of all the Loans is so
-----------
accelerated (in which case the portion so accelerated shall be so prepaid).

Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No prepayment of
-----------
principal of any Revolving Loans or Swing Line Loans pursuant to clause (a) or
----------
(b) shall cause a reduction in the Revolving Loan Commitment Amount or the Swing
- ---
Line Loan Commitment Amount, as the case may be.

Notwithstanding any other provision of this Agreement to the contrary, if there
are any Letters of Credit denominated in a Permitted Currency other than Dollars
the Agent may periodically recompute (each such date referred to as a
"Recomputation Date") the Dollar Equivalent of such Letters of Credit, and if
------------------
pursuant to such recomputation the Agent determines that either (i) the
aggregate principal amount of the Revolving Loans and the Swing Line Loans
together with all Letter of Credit Outstandings is greater than the Revolving
Loan Commitment Amount as then in effect, or (ii) the aggregate amount of all
Letter of Credit Outstandings is greater than the Letter of Credit Commitment
Amount as then in effect, then in either case the Agent shall so advise the
Borrower, and the Borrower shall repay such excess (together with accrued
interest on the amount so repaid) within two Business Days of receipt of such
notice with the amount repaid to be applied to repay Revolving Loans or Swing
Line Loans (or both) (until such Loans are repaid in full) and, if no Revolving
Loans and Swing Line Loans are then outstanding, the Borrower shall deposit the
amount in excess of the Letter of Credit Commitment Amount in a cash collateral
account maintained

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<PAGE>

with the Agent to be held as cash collateral for the Obligations until such time
as the Dollar Equivalent of all Letter of Credit Outstandings no longer exceeds
the Letter of Credit Commitment Amount then in effect.

SECTION 3.1.2. Application. Each prepayment or repayment of the principal
-----------
of the Loans shall be applied, to the extent of such prepayment or repayment,
first, to the principal amount thereof being maintained as Base Rate Loans, and
- -----
second, to the principal amount thereof being maintained as LIBO Rate Loans;
- ------
provided, that mandatory prepayments of LIBO Rate Loans made hereunder, if not
- --------
made on the last day of the Interest Period with respect thereto, shall, at the
Borrower's option, so long as no Default has occurred and is continuing, be
prepaid subject to the provisions of Section 4.4, or the amount required to be
-----------
applied to the prepayment of LIBO Rate Loans (after application to any Base Rate
Loans) shall be deposited with the Agent as cash collateral for such Loans on
terms reasonably satisfactory to the Agent and thereafter shall be applied in
the order of the Interest Periods next ending most closely to the date of
receipt of the proceeds in respect of which such prepayment is required to be
made and on the last day of each such Interest Period (together with a payment
of all interest that is due on the last day of each such Interest Period
pursuant to clause (d) of Section 3.2.3). After such application, unless an
---------- -------------
Event of Default shall have occurred and be continuing, any remaining interest
earned on such cash collateral shall be paid to the Borrower.

SECTION 3.2. Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
-----------

SECTION 3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
----- -------------
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:

(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Scotiabank Alternate Base Rate from time to time in
effect plus the Applicable Margin; and

(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin;

provided, that any Existing Revolving Loans that remain outstanding under this
- --------
Agreement on the Effective Date shall

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<PAGE>

accrue interest up to (but not including) the Effective Date at the LIBO Rate
(Reserve Adjusted) plus the Applicable Margin (as defined in the Existing Credit
Agreement) or the Scotiabank Alternate Base Rate plus the Applicable Margin (as
defined in the Existing Credit Agreement).

The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
----------------------------
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:

LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from Scotiabank, two Business Days before the first day of such
Interest Period.

"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
---------
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to Scotiabank's LIBOR Office in the
London, England interbank market as at or about 11:00 a.m. London, England time
two Business Days prior to the beginning of such Interest Period for delivery on
the first day of such Interest Period, and in an amount approximately equal to
the amount of Scotiabank's LIBO Rate Loan and for a period approximately equal
to such Interest Period.

"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
------------------------
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.

All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.

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<PAGE>

SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
-------------------
of any Loan or Reimbursement Obligation is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Scotiabank Alternate Base Rate from time to time in effect plus a margin of
2 1/2%.

SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:

(a) on the Stated Maturity Date therefor;

(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan on the principal amount so paid or
prepaid;

(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
90 days, on the 90th day of such Interest Period);

(e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable pursuant
to clause (c), on the date of such conversion; and
----------

(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
----------- -----------
acceleration.

Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.

SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in this
----
Section 3.3. All such fees shall be non-refundable.
- -----------

SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the Agent
--------------
for the account of each Lender, for the period (including any portion thereof
when any of its Commitments are suspended by reason of the Borrower's inability
to satisfy any condition of Article V) commencing on the Effective Date and
---------

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<PAGE>

continuing through the applicable Commitment Termination Date, a commitment fee
at the Applicable Commitment Fee Rate on such Lender's Percentage of the sum of
the average daily unused portion of the applicable Commitment Amount (net of
Letter of Credit Outstandings, in the case of the Revolving Loan Commitment
Amount, and net of the average daily outstanding principal amount of Swing Line
Loans, when determining the commitment fee payable to Scotiabank on its
Revolving Loan Commitment). Such commitment fees shall be calculated on a year
comprised of 360 days and payable by the Borrower in arrears on the Effective
Date, and thereafter on each Quarterly Payment Date, commencing with the first
Quarterly Payment Date following the Effective Date, and on the Revolving Loan
Commitment Termination Date. The making of Swing Line Loans by Scotiabank shall
constitute the usage of the Revolving Loan Commitment with respect to Scotiabank
only and the commitment fees to be paid by the Borrower to the Lenders (other
than Scotiabank) shall be calculated and paid accordingly.

SECTION 3.3.2. Agency Fee, etc. The Borrower agrees to pay to the Agent,
---------------
for its own account, an annual administrative fee in the amounts and on the
dates set forth in the Fee Letter.

SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to the
--------------------
Agent, for the pro rata account of the Issuer and each other Lender, a Letter of
--- ----
Credit fee in an amount equal to (a) with respect to each standby Letter of
Credit, the then Applicable Margin on LIBO Rate Loans applicable to Revolving
Loans multiplied by the Stated Amount of each such Letter of Credit, and (b)
with respect to each documentary Letter of Credit, 3/4 of 1% per annum
multiplied by the Stated Amount of each such Letter of Credit, such fees being
payable quarterly in advance on each Quarterly Payment Date and on the Revolving
Loan Commitment Termination Date. The Borrower further agrees to pay to the
Issuer on the date of issuance of each Letter of Credit an issuance fee in an
amount equal to the greater of (x) $100 and (y) 1/4 of 1% of the Stated Amount
thereof.

ARTICLE IV

CERTAIN LIBO RATE AND OTHER PROVISIONS

SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
--------------------------
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan, the obligations of such Lender to make, continue, maintain or
convert any such LIBO Rate

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<PAGE>

Loan shall, upon such determination, forthwith be suspended until such Lender
shall notify the Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans shall automatically convert into Base
Rate Loans at the end of the then current Interest Periods with respect thereto
or sooner, if required by such law or assertion.

SECTION 4.2. Deposits Unavailable. If the Agent shall have determined
--------------------
that

(a) Dollar certificates of deposit or Dollar deposits, as the case
may be, in the relevant amount and for the relevant Interest Period are not
available to Scotiabank in its relevant market; or

(b) by reason of circumstances affecting Scotiabank's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans,

then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue
----------- -----------
any Loans as, or to convert any Loans into, LIBO Rate Loans shall forthwith be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
-----------------------------------
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans that arise in connection with any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in after December 1, 1993 of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority, except for such changes
with respect to increased capital costs and taxes which are governed by Sections
--------
4.5 and 4.6, respectively. Such Lender shall promptly notify the Agent and the
- --- ---
Borrower in writing of the occurrence of any such event, such notice to state,
in reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower.

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<PAGE>

Without limiting the foregoing, in the event that, as a result of any such
change, introduction, adoption or the like described above, the LIBOR Reserve
Percentage decreases for any Lender's LIBO Rate Loans, such Lender shall give
prompt notice thereof in writing to the Agent and the Borrower. On the fifth
day following delivery of such notice, the LIBO Rate (Reserve Adjusted)
attributable to such Lender's LIBO Rate Loans shall be adjusted to give the
Borrower the benefit of such decrease (for so long as such decrease shall remain
in effect).

SECTION 4.4. Funding Losses. In the event any Lender shall incur any loss
--------------
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of

(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Section 3.1,
-----------
Section 4.12 or otherwise;
------------

(b) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor; or

(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor,

then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.

SECTION 4.5. Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in good faith but in its sole and
absolute discretion) that the rate of return on its or such controlling Person's
capital as a consequence of the Commitments or the Loans made by such Lender

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<PAGE>

is reduced to a level below that which such Lender or such controlling Person
could have achieved but for the occurrence of any such circumstance, then, in
any such case upon notice from time to time by such Lender to the Borrower, the
Borrower shall immediately pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.

SECTION 4.6. Taxes. (a) All payments by the Borrower of principal of,
-----
and interest on, the Loans and all other amounts payable hereunder (including in
respect of fees and Reimbursement Obligations) shall be made free and clear of
and without deduction for any present or future income, excise or stamp taxes
and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by the United States or any taxing authority or political
subdivision thereof, but excluding franchise taxes and taxes imposed on or
measured by net income, receipts or capital of the Agent or any Lender (such
non-excluded items being "Taxes"). In the event that any withholding or
-----
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will, subject to clauses (b) through (d), inclusive of this Section
----------- --- -------
4.6, Section 4.11 and Section 4.12
- --- ------------ ------------

(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;

(ii) promptly forward to the Agent an official receipt or other
documentation reasonably satisfactory to the Agent evidencing such payment
to such authority; and

(iii) pay to the Agent for its account or the account of the Lenders,
as the case may be, such additional amount or amounts as necessary to
ensure that the net amount actually received by the Agent or any Lender, as
the case may be, will equal the full amount such Person would have received
had no such withholding or deduction been required.

Moreover, subject to clauses (b) through (d), inclusive of this Section
----------- --- -------
4.6, Section 4.11 and Section 4.12, if any Taxes are directly asserted against
- --- ------------ ------------
the Agent or any Lender with respect to any payment received by the Agent or
such Lender hereunder (other than Taxes imposed on payments of the additional
amounts provided for in this paragraph), and such Taxes are then due and payable

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<PAGE>

in accordance with applicable law, the Agent or such Lender, as the case may be,
shall pay such Taxes (and for purposes of this Section 4.6 and the rights of the
-----------
Agent and the Lenders hereunder, a distribution by the Agent or any Lender to or
for the account of the Agent or any Lender shall be deemed a payment by or on
behalf of the Borrower) and the Borrower will promptly pay such additional
amounts (including any penalties, interest or expenses with respect to such
Taxes, together with interest on such Taxes at a rate per annum equal to the
highest rate per annum then in effect pursuant to Section 3.2 for the period
-----------
from the date such Agent or such Lender paid such Taxes through the date of
reimbursement by the Borrower) as is necessary in order that the total net
amount received by such Person after the payment of such Taxes (and,
notwithstanding any provisions to the contrary contained in this Section, any
Taxes imposed on such additional amount) shall equal the amount such Person
would have received had no such Taxes been asserted.

If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for its account or the account of the
respective Lenders, as the case may be, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent or the Lenders, as
the case may be, for any incremental Taxes, interest or penalties that may
become payable by the Agent or any Lender, as the case may be, as a result of
any such failure.

(b) Each Lender and the Agent hereby severally (but not jointly)
represents that, under applicable law and treaties in effect as of December 1,
1993 in the case of the original signatories to the Existing Credit Agreement,
and in effect as of the date of the assignment or other transfer to or the
appointment of a Person that subsequently thereby becomes a Lender or the Agent,
no United States federal taxes will be required to be withheld by the Agent or
the Borrower with respect to any payments to be made to such Person in respect
of this Agreement. Each Lender that was an original signatory to the Existing
Credit Agreement and the Agent agrees severally (but not jointly) that, prior to
December 1, 1993, and each Person which becomes a Lender by assignment or
transfer pursuant to Section 10.11 hereof or becomes an Agent by appointment
-------------
pursuant to Section 9.4 hereof agrees that, prior to such assignment, transfer
-----------
or appointment, it will in each case deliver to the Borrower and the Agent,

(i) if reasonably requested by Borrower, in the case of a Person that
is incorporated under the laws of the United States or a State thereof or
that is lending from a LIBOR Office that is incorporated under the laws of
the United States or a State thereof, two copies of a statement which shall
contain the address of such Person's office or

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<PAGE>

place of business in the United States, and shall be signed by an
authorized officer of such Person, together with two duly completed copies
of United States Internal Revenue Service Forms W-8 and W-9 (or applicable
successor form) (unless it establishes to the reasonable satisfaction of
the Borrower that it is otherwise eligible for an exemption from backup
withholding tax or other applicable withholding tax), or

(ii) if that Person is itself not incorporated under the laws of the
United States or a State thereof or is lending from a LIBOR Office that is
not incorporated under the laws of the United States or a State thereof,
two duly completed copies of United States Internal Revenue Service Form
1001 or 4224 (or applicable successor form) certifying in each case that
such Person is entitled to receive payments under this Agreement and the
Notes payable to it, without deduction or withholding of any United States
federal taxes and, if reasonably requested by the Borrower, two duly
completed copies of United States Internal Revenue Service Form W-8 or Form
W-9 (or applicable successor form).

Each Person who delivers to the Borrower and the Agent a Form W-8, W-9,
1001 or 4224, or applicable successor form, pursuant to this clause (b), further
----------
undertakes to deliver to the Borrower and the Agent two further copies of said
Form 1001 or 4224, or applicable successor form, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower, certifying that such Person is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal taxes,
unless in any such case (i) any change in law, rule, regulation, treaty or
directive, or in the interpretation or application thereof (a "Law Change"), has
----------
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Person from duly completing and delivering any such form with respect to it and
(ii) on or prior to the date occurring six months after the last day of the
Interest Period during which such Law Change shall occur, such Person advises
the Borrower in writing that it is not capable of receiving payments without any
deduction or withholding of United States federal tax. If, as a result of a Law
Change, the Agent or any Lender (i) is unable to furnish the Borrower with an
Internal Revenue Service form otherwise required to be delivered by it pursuant
to this clause (b) or (ii) makes any payment of Taxes, or becomes liable to make
----------
any payment of Taxes, with respect to payments by the Borrower hereunder, the
Borrower's

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<PAGE>

continuing obligation to make payments to the Agent or such Lender under the
terms of clause (a) shall be conditioned on the Agent or such Lender, as the
----------
case may be, prior to the time that the next payment under the Notes is due (and
thereafter as is required by applicable law), having furnished the Borrower with
such certificate and having taken such other steps as may be commercially
reasonably available to it (but in no event shall the Agent or any such Lender
be required to take any action which is inconsistent with its internal policies
or would be otherwise adverse to the Agent or such Lender or its Credit
Extensions hereunder) under applicable tax laws and any applicable tax treaty or
convention to obtain an exemption from, or reduction (to the lowest applicable
rate) of, such Taxes. Notwithstanding any provision of clause (a) to the
----------
contrary, the Borrower shall have no obligation to pay any Taxes (except to the
extent reasonably believed by the Borrower to be required by law in which event
such Taxes may be paid by withholding from amounts otherwise payable to the
Lender or Agent) pursuant to clause (a), or to pay any amount to the Agent or
----------
any Lender pursuant to clause (a), to the extent that such amount results from
----------
(i) the failure of any Lender or the Agent to comply with its obligations
pursuant to this clause (b), Section 2.5 or clause (c)(ii) of Section 10.11.1 or
---------- ----------- -------------- ---------------
(ii) any representation or warranty made or, pursuant to any certificate
required to be delivered hereunder or under any Lender Assignment Agreement,
deemed to be made by any Lender or the Agent pursuant to this clause (b),
----------
Section 2.5 or the parenthetical of clause (d) of Section 10.11.1 proving to
- ----------- ---------- ---------------
have been incorrect when made or deemed to have been made in any material
respect.

(c) If the Agent or any Lender receives a refund in respect of Taxes paid
by the Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to clause (a) in connection with such refunded
----------
Taxes, to the Borrower, provided, however, that the Borrower agrees to promptly
-------- -------
return such refund to the Agent or the applicable Lender, as the case may be,
after it receives notice from the applicable Lender that it is required to repay
such refund.

(d) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.

SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
---------------------------
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Agent for the pro rata account of the Lenders entitled to receive such
--- ----
payment. All such payments required to be made to the Agent shall be made,
without setoff, deduction or counterclaim, not later than 2:00 p.m., New York
City time, on the date due, in same day or

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<PAGE>

immediately available funds, to such account as the Agent shall specify from
time to time by notice to the Borrower. Funds received after that time shall be
deemed to have been received by the Agent on the next succeeding Business Day.
The Agent shall promptly remit in same day funds to each Lender its share, if
any, of such payments received by the Agent for the account of such Lender. All
interest (including interest on LIBO Rate Loans) and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period") be made
---------- ---------------
on the next succeeding Business Day and such extension of time shall be included
in computing interest and fees, if any, in connection with such payment.

SECTION 4.8. Sharing of Payments. If any Lender shall obtain any payment
-------------------
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of Section 4.3, 4.4, 4.5 or 4.6) in excess of its pro rata
----------- --- --- --- --- ----
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Credit Extensions made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
-------- -------
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of

(a) the amount of such selling Lender's required repayment to the
purchasing Lender

to
- --

(b) total amount so recovered from the purchasing Lender)

of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including

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<PAGE>

pursuant to Section 4.9) with respect to such participation as fully as if such
-----------
Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.

SECTION 4.9. Setoff. Each Lender shall, upon the occurrence and during
------
the continuance of any Default described in clauses (a) through (d) of Section
----------- --- -------
8.1.9 with respect to the Borrower or any of its Subsidiaries or, with the
- -----
consent of the Required Lenders, upon the occurrence and during the continuance
of any other Event of Default, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) the Borrower hereby grants to each Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of the Borrower then or thereafter maintained with such
Lender; provided, however, that any such appropriation and application shall be
-------- -------
subject to the provisions of Section 4.8 hereof. Each Lender agrees promptly to
-----------
notify the Borrower and the Agent after any such setoff and application made by
such Lender; provided, however, that the failure to give such notice shall not
-------- -------
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Lender may have.

SECTION 4.10. Use of Proceeds. The Borrower shall apply the proceeds of
---------------
the Credit Extensions for working capital and general corporate purposes
(including the repayment of Indebtedness) of the Borrower and its Subsidiaries.

SECTION 4.11. Lender's Duty to Mitigate. Each Lender agrees that as
-------------------------
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under Section
-------
4.1, 4.2, 4.5 or 4.6 or that would entitle such Lender to receive payments under
- --- --- --- ---
Section 4.3, such Lender will give notice thereof to the Borrower and, to the
- -----------
extent not inconsistent with such Lender's internal policies (or, even if
inconsistent with such internal policies, if at such time or at a time
reasonably near to such time such Lender has taken action similar to the action
contemplated by this Section for the benefit of substantially all of its other
similarly situated commercial borrowers), such Lender shall use all commercially
reasonable efforts to make, fund or maintain its affected LIBO Rate Loans
through another lending office of such

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<PAGE>

Lender if, as a result thereof, the additional moneys which would otherwise be
required to be paid to such Lender pursuant to Section 4.2, 4.3, 4.5 or 4.6, as
----------- --- --- ---
the case may be, would be materially reduced, or the illegality or other adverse
circumstances which would otherwise require a conversion of such Loans pursuant
to Section 4.1 would cease to exist, and if, as determined by such Lender in its
-----------
reasonable discretion, the making, funding or maintaining of such Loans through
such other lending office would not otherwise materially adversely affect such
Loans or such Lender.

SECTION 4.12. Replacement of Lenders. Each Lender hereby severally agrees
----------------------
that if such Lender (a "Subject Lender") makes demand upon the Borrower for (or
--------------
if the Borrower is otherwise required to pay) amounts pursuant to Section 4.2,
-----------
4.3, 4.5 or 4.6, or gives notice pursuant to Section 4.1 requiring a conversion
- --- --- --- -----------
of such Subject Lender's LIBO Rate Loans to Base Rate Loans, the Borrower may,
within 90 days of receipt by the Borrower of such demand or notice (or the
occurrence of such other event causing the Borrower to be required to pay such
compensation), as the case may be, give notice (a "Replacement Notice") in
------------------
writing to the Agent and such Subject Lender of its intention to replace such
Subject Lender with a financial institution designated in such Replacement
Notice. If the Agent shall, in the exercise of its reasonable discretion and
within 30 days of its receipt of such Replacement Notice, notify the Borrower
and such Subject Lender in writing that the designated financial institution is
satisfactory to the Agent, then such Subject Lender shall, so long as no Default
or Event of Default shall have occurred and be continuing (and subject to the
payment of any amounts due pursuant to Section 4.4), assign, in accordance with
-----------
Section 10.11.1, all of its Commitments, Loans, Notes and other rights and
- ---------------
obligations under this Agreement and all other Loan Documents (including,
without limitation, Reimbursement Obligations) to such designated financial
institution; provided, however, that (i) such assignment shall be without
-------- -------
recourse, representation or warranty and shall be on terms and conditions
reasonably satisfactory to such Subject Lender and such designated financial
institution and (ii) the purchase price paid by such designated financial
institution shall be in the amount of such Subject Lender's Loans and its
Percentage of outstanding Reimbursement Obligations, together with all accrued
and unpaid interest and fees in respect thereof, plus all other amounts
(including the amounts demanded and unreimbursed under Sections 4.2, 4.3, 4.5
------------ --- ---
and 4.6), owing to such Subject Lender hereunder. Upon the effective date of
---
such Assignment, the Borrower shall issue a replacement Note or Notes, as the
case may be, to such designated financial institution and such institution shall
become a "Lender" for all purposes under this Agreement and the other Loan
Documents. The Agent agrees to use all commercially reasonable efforts to
assist the Borrower in

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locating a replacement financial institution to replace any Subject Lender;
provided, however, that the Borrower agrees to pay all reasonable costs and
- -------- -------
expenses incurred by the Agent in providing such assistance.

ARTICLE V

CONDITIONS TO EFFECTIVENESS AND BORROWINGS

SECTION 5.1. Conditions to Effectiveness. This Agreement shall become
---------------------------
effective as of the date first above written (the "Effective Date") when the
--------------
Agent shall have received counterparts hereof executed by each of the parties
listed on the signature pages hereto and when the Agent shall be satisfied that
each of the other conditions precedent set forth in this Section 5.1 have been
-----------
fulfilled.

SECTION 5.1.1. Resolutions, etc. The Agent shall have received in form
----------------
and substance satisfactory to the Agent,

(a) certificates of the Secretary or an Assistant Secretary of Sola
Holdings (dated immediately prior to the consummation of the Investors
Merger), Sola Investors (dated immediately after the consummation of the
Investors Merger) and the Borrower (dated the Effective Date) as to

(i) resolutions of Sola Holdings, Sola Investors and the
Borrower's respective Board of Directors, then in full force and
effect, authorizing (as applicable) the Mergers, the IPO, the
execution, delivery and performance of this Agreement, the Investors
Merger Agreement, the Sola Merger Agreement, the applicable
Certificate of Merger, the Notes and each other Loan Document executed
or to be executed by it and all of the transactions contemplated in
connection herewith and therewith,

(ii) the incumbency and signatures of those of its respective
officers authorized to act with respect to the Mergers, this
Agreement, the Investors Merger Agreement, the Sola Merger Agreement,
such Certificate of Merger, the Notes and each other Loan Document
executed or to be executed by it, and

(iii) the full force and validity of each Organic Document of
each such Person,

upon which certificate each Lender may conclusively rely until it shall
have received a further certificate of the Secretary or an Assistant
Secretary of the Borrower cancelling or amending such prior certificate;

(b) a certificate, dated the Effective Date, of the Secretary or an
Assistant Secretary of each Subsidiary Guarantor as to

(i) resolutions of such Obligor's Board of Directors, then in
full force and effect, authorizing the execution, delivery and
performance of the Affirmation and Consent and each other Loan
Document executed or to be executed by it and the related transactions
contemplated in connection herewith and therewith,

(ii) the incumbency and signatures of those of its officers
authorized to act with respect to the Affirmation and Consent and each
other Loan Document executed or to be executed by it, and

(iii) the full force and validity of each Organic Document of
such Subsidiary Guarantor,

upon which certificate each Lender may conclusively rely until it shall
have received a further certificate of the

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Secretary or an Assistant Secretary of any such Obligor cancelling or
amending such prior certificate; and

(c) such other documents (certified if requested) or certificates as
the Agent may reasonably request with respect to this Agreement, the Notes,
the Affirmation and Consent, any other Loan Document, the Investors Merger
Agreement, the Sola Merger Agreement, the transactions contemplated hereby
and thereby (including the Mergers) or any Organic Document or approval.

SECTION 5.1.2. Consummation of Mergers, etc. Each of the Mergers shall
----------------------------
have been (or contemporaneous with the effectiveness hereof, will be)
consummated in accordance with the Investors Merger Agreement or the Sola Merger
Agreement, as the case may be. Each Certificate of Merger, in recordable form,
shall have been executed by the parties thereto, and the Agent shall have
received evidence satisfactory to it that counterparts thereof have been (or
upon the effectiveness hereof, will be) accepted for filing with the Secretary
of State of the State of Delaware. The Agent shall have received a copy of the
Investors Merger Agreement, the Sola Merger Agreement and each Certificate of
Merger, duly executed and delivered by each party thereto.

SECTION 5.1.3. Consummation of IPO. The IPO shall have been consummated
-------------------
and the Net Equity Proceeds received in

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<PAGE>

connection with the IPO applied in each case as set forth in the Registration
Statement and the Borrower shall have received Net Equity Proceeds therefrom in
immediately available funds in the aggregate amount of at least $50,000,000.

SECTION 5.1.4. Closing Date Certificate. The Agent shall have received,
------------------------
with counterparts for each Lender, the Borrower Closing Date Certificate, dated
the Effective Date and duly executed and delivered by the chief executive,
financial or accounting (or equivalent) Authorized Officer of the Borrower in
which certificate the Borrower shall agree and acknowledge that the statements
made therein shall be deemed to be true and correct representations and
warranties of the Borrower made as of such date under this Agreement and, at the
time each such certificate is delivered, such statements shall in fact be true
and correct. All documents and agreements required to be appended to the
Borrower Closing Date Certificate shall be in form and substance satisfactory to
the Agent.

SECTION 5.1.5. Delivery of Notes. The Agent shall have received, for the
-----------------
account of each Lender, such Lender's replacement Notes, each duly executed and
delivered by an Authorized Officer of the Borrower. The execution and delivery
of a replacement Note, and the exchange of such Note for a Lender's Note under
the Existing Credit Agreement (as in effect immediately prior to the Effective
Date), shall be in conformity with the provisions of Sections 2.1 and 2.7.
------------ ---

SECTION 5.1.6. Reliance Letters. The Agent shall, unless it otherwise
----------------
agrees, have received reliance letters, dated the Effective Date and addressed
to each Lender and the Agent, in respect of each of the legal opinions by Fried,
Frank, Harris, Shriver & Jacobson and by Christine Smith, general counsel of AEA
Investors delivered in connection with the Mergers and the IPO.

SECTION 5.1.7. Compliance Certificate. The Agent shall have received,
----------------------
with counterparts for each Lender, a Compliance Certificate on a pro forma basis
--- -----
as if the Mergers and the IPO had been consummated, the Net Equity Proceeds
received in connection with the IPO had been applied to repay Indebtedness of
the Borrower and its Subsidiaries as set forth in the Registration Statement,
the effectiveness of this Agreement had occurred and as to such items therein as
the Agent reasonably requests, dated the Effective Date, duly executed (and with
all schedules thereto duly completed) and delivered by the chief executive,
financial or accounting Authorized Officer of the Borrower.

SECTION 5.1.8. Payment of Outstanding Indebtedness, etc. All Indebtedness
----------------------------------------
identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
-------------
Schedule, including, in any event, all

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principal of and interest, fees and costs (including all breakage costs pursuant
to Section 4.4) in respect of, all Term-A Loans and all Term-B Loans, together
-----------
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall have been paid in full from the Net Equity Proceeds
received by the Borrower from the IPO.

SECTION 5.1.9. Affirmation and Consent. The Agent shall have received,
-----------------------
with counterparts for each Lender, the Affirmation and Consent, dated as of the
Effective Date, duly executed and delivered by an Authorized Officer of each
Subsidiary Guarantor.

SECTION 5.1.10. Borrowing Base Certificate. The Agent shall have
--------------------------
received, with counterparts for each Lender, a Borrowing Base Certificate from
the Borrower, dated the Effective Date and calculated as of a recent date
satisfactory to the Agent, duly executed (and with all schedules thereto
completed) and delivered by an Authorized Officer of the Borrower.

SECTION 5.1.11. Closing Fees, Expenses, etc. The Agent shall have
---------------------------
received for its own account, or for the account of each Lender, as the case may
be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and
------------
10.3, if then invoiced.
- ----

SECTION 5.1.12. Opinions of Counsel. The Agent shall have received
-------------------
opinions, dated the date of the initial Credit Extension and addressed to the
Agent and all Lenders, from

(a) Fried, Frank, Harris, Shriver & Jacobson, counsel to the
Obligors, substantially in the form of Exhibit L-1 hereto; and
-----------

(b) Christine Smith, general counsel of AEA substantially in the form
of Exhibit L-2 hereto.
-----------

SECTION 5.2. All Credit Extensions. The obligation of each Lender and
---------------------
each Issuer to make any Credit Extension (including the Credit Extensions (if
any) on the Effective Date) shall be subject to Sections 2.1.3 and 2.1.4 and the
-------------- -----
satisfaction of each of the conditions precedent set forth in this Section 5.2.
-----------

SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before
-------------------------------------------
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
-------------
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:

(a) the representations and warranties set forth in Article VI
----------
(excluding, however, those contained in

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<PAGE>

Section 6.7), Article III of the Pledge Agreement and Article III of the
-----------
Subsidiary Guaranty shall, in each case, be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and correct
as of such earlier date);

(b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to Section 6.7,
-----------

(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries which would reasonably be expected to have a material
adverse effect on the financial condition, operations, assets,
business or properties of the Borrower or the Borrower and its
Subsidiaries, taken as a whole, or which would adversely affect the
legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document; and

(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to Section 6.7 which would reasonably be
-----------
expected to have a material adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the
Borrower and its Subsidiaries taken as a whole; and

(c) no Default shall have then occurred and be continuing, and
neither the Borrower nor any of its Subsidiaries is in material violation
of any law or governmental regulation or court order or decree, which
violation would, individually or in the aggregate, have a material adverse
effect on the financial condition, operations, assets, business or
properties of the Borrower or the Borrower and its Subsidiaries taken as a
whole.

SECTION 5.2.2. Credit Extension Request, etc. Subject to Section 2.3.2,
----------------------------- -------------
the Agent shall have received a Borrowing Request if Loans are being requested,
or an Issuance Request if a Letter of Credit is being requested or extended.
Each of the delivery of a Borrowing Request or Issuance Request and the
acceptance by the Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by the Borrower that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the statements
made in Section 5.2.1 are true and correct.
-------------

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<PAGE>

SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Agent and its counsel; the Agent and its counsel shall have
received all information, approvals, opinions, documents or instruments as the
Agent or its counsel may reasonably request.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders, each Issuer and the Agent to amend and
restate the Existing Credit Agreement as provided in this Agreement and enter
into this Agreement and to make Credit Extensions hereunder, the Borrower
represents and warrants unto the Agent, each Issuer and each Lender as set forth
in this Article VI.
----------

SECTION 6.1. Organization, etc. The Borrower and each of its Subsidiaries
-----------------
is a corporation validly organized and existing and in good standing under the
laws of the state or jurisdiction of its incorporation, is duly qualified to do
business (as to all U.S. Subsidiaries) and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business requires such
qualification (except where the failure to so qualify would not, individually or
in the aggregate, have a material adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the Borrower and
its Subsidiaries taken as a whole), and has full power and authority and holds
all requisite governmental licenses, permits and other approvals to enter into
and perform its Obligations under (as applicable) this Agreement, the Notes, the
Affirmation and Consent and each other Loan Document to which it is a party and
(except to the extent the failure to have any such license, permit or other
approval would not have a material adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the Borrower and
its Subsidiaries taken as a whole) to own and hold under lease its property and
to conduct its business substantially as currently conducted by it.

SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
-----------------------------------------
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, the execution, delivery
and performance by each other Obligor of the Affirmation and Consent and each
other Loan Document executed or to be executed by it, the Borrower's
participation in the consummation of the Mergers, the IPO and the execution,
delivery and performance by the Borrower, Sola Holdings and Sola Investors of
the Merger Agreements and the

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<PAGE>

Certificates of Merger, are in each case within each such Person's corporate
powers, have been duly authorized by all necessary corporate action, and do not

(a) contravene any such Person's Organic Documents;

(b) contravene any contractual restriction (except for such
contraventions that (x) would not, singly or in the aggregate, have a
material adverse effect on the financial condition, operations, business or
properties of the Borrower or the Borrower and its Subsidiaries taken as a
whole, or (y) would not subject the Agent, the Issuer or any Lender to any
liability) or any law or governmental regulation or court decree or order
binding on or affecting any such Person; or

(c) result in, or require the creation or imposition of, any Lien on
any of such Person's properties (except as expressly permitted by this
Agreement).

SECTION 6.3. Government Approval, Regulation, etc. No authorization or
------------------------------------
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required (other than filings
with and approvals of the SEC and foreign and state blue sky authorities in
connection with the IPO) and routine filings with and notices to governmental
authorities, regulatory bodies or other Persons and the filing of the
Certificates of Merger) for the consummation of the Mergers and the IPO and the
due execution, delivery or performance by the Borrower or any other Obligor (as
applicable) of this Agreement, the Notes, the Affirmation and Consent or any
other Loan Document to which it is a party, or for the due execution, delivery
and performance of the Merger Agreements and each Certificate of Merger by the
parties thereto or the consummation of the Mergers, except for those which have
been duly obtained or made and are in full force and effect. Neither the
Borrower nor any of its Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

SECTION 6.4. Validity, etc. This Agreement, the Sola Merger Agreement and
-------------
the Sola Certificate of Merger constitutes, and the Notes and each other Loan
Document executed by the Borrower will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms; and
each other Loan Document executed

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<PAGE>

pursuant hereto by each other Obligor will, on the due execution and delivery
thereof by such Obligor, constitute the legal, valid and binding obligation of
such Obligor enforceable against such Obligor in accordance with its terms
(except, in any case above, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).

SECTION 6.5. Financial Information. All balance sheets, all statements of
---------------------
operations, shareholders' equity and changes in financial position, and all
other financial information of each of the Borrower and its Subsidiaries
furnished pursuant to the Existing Credit Agreement and Section 7.1.1 have been
-------------
and will for periods following December 1, 1993, be prepared in accordance with
GAAP consistently applied, and do or will present fairly the consolidated
financial condition of the corporations covered thereby as at the dates thereof
and the results of their operations for the periods then ended, except that
quarterly financial statements need not include footnote disclosure and may be
subject to ordinary year-end adjustment.

SECTION 6.6. No Material Adverse Change. There has been no material
--------------------------
adverse change in the consolidated financial condition, results of operations,
assets, business or properties of

(a) the Sola Business, since March 31, 1993, except to the extent
that the incurrence of Indebtedness pursuant to this Agreement and the
Existing Credit Agreement and the Subordinated Note Indenture would be
deemed such a material adverse change; or

(b) the Borrower and its Subsidiaries taken as a whole, as measured
by the Pro Forma Balance Sheet (as defined in the Existing Credit
Agreement).

SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
------------------------------------
or, to the knowledge of the Borrower, threatened litigation, action, proceeding,
or labor controversy (i) affecting the Borrower or any of its Subsidiaries, or
any of their respective properties, businesses, assets or revenues, which would
reasonably be expected to have a material adverse effect on the financial
condition, operations, assets, business or properties of the Borrower or the
Borrower and its Subsidiaries, taken as a whole, except as disclosed in Item 6.7
--------
("Litigation") of the Disclosure Schedule or (ii) which would adversely affect
the legality, validity or enforceability of this Agreement, the Notes, any other
Loan Document, the Merger Agreements, the Mergers, or the IPO.

SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries, except those
------------
Subsidiaries

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<PAGE>

(a) which are identified in Item 6.8 ("Existing Subsidiaries") of the
--------
Disclosure Schedule; or

(b) which are permitted to have been organized or acquired in
accordance with Section 7.2.5 or 7.2.10.
------------- ------

SECTION 6.9. Ownership of Properties. Except as disclosed in Item 6.9
----------------------- --------
("Plant Sites and Property Matters") of the Disclosure Schedule, or as permitted
pursuant to Section 6.13 or Section 7.2.3, the Borrower and each of its
------------ -------------
Subsidiaries owns (except where the failure to own such property as provided in
this Section 6.9 would not reasonably be expected to have a material adverse
-----------
effect on the financial condition, operations, assets, business or properties of
the Borrower or the Borrower and its Subsidiaries, taken as a whole) (i) in the
case of owned real property, good and marketable fee title to, and (ii) in the
case of owned personal property, good and valid title to, or, in the case of
leased real or personal property, valid and enforceable leasehold interests (as
the case may be) in, all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever, free and clear in each case
of all Liens or claims, except for Liens permitted pursuant to Section 7.2.3.
-------------

SECTION 6.10. Taxes. The Borrower and each of its Subsidiaries has filed
-----
all material tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be due and
owing, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.

SECTION 6.11. Pension and Welfare Plans. (a) During the
-------------------------
twelve-consecutive-month period prior to December 1, 1993 and prior to the date
of any Credit Extension hereunder, no formal steps have been taken to terminate
any Pension Plan other than in a standard termination under Section 4041(b) of
ERISA, and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA in either case
which would reasonably be expected to have a material adverse effect on the
financial condition, operations, assets, business or properties of the Borrower
or the Borrower and its Subsidiaries taken as a whole. No condition exists or
event or transaction has occurred with respect to any Pension Plan which
(i) could reasonably be expected to result in the

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<PAGE>

incurrence by the Borrower or any Subsidiary of any liability, fine or penalty
which would have a material adverse effect on the financial condition,
operations, assets, business, or properties of the Borrower or the Borrower and
its Subsidiaries taken as a whole, or (ii) could reasonably be expected to
result in the incurrence by a member of the Borrower's Controlled Group (other
than the Borrower or the Borrower and its Subsidiaries) of any material
liability, fine or penalty which would have a material adverse effect on the
financial condition, operations, assets, business, or properties of the Borrower
or the Borrower and its Subsidiaries taken as a whole. To the extent that the
representations in this clause (a) of Section 6.11 refer to conditions, events
---------- ------------
or transactions occurring prior to the Acquisition, they are based only on the
Borrower's best knowledge after due investigation.

(b) Except for liabilities arising under the terms and conditions, as in
effect on December 1, 1993, of the Plans disclosed in Item 6.11 ("Employee
---------
Benefit Plan") of the Disclosure Schedule, neither the Borrower nor any
Subsidiary has any contingent liability with respect to any post-retirement
benefit under a Welfare Plan in either case which would reasonably be expected
to have a material adverse effect on the financial condition, operations,
assets, business or properties of the Borrower or the Borrower and its
Subsidiaries taken as a whole, other than (i) liability for continuation
coverage described in Part 6 of Title I of ERISA and in Section 4980B of the
Code, (ii) liability for any Plan required by law to be extended to employees
outside of the U.S., or (iii) a modification of, or addition to, the retiree
benefit obligations disclosed in Item 6.11 ("Employee Benefit Plan") of the
---------
Disclosure Schedule which when taken together with any other addition or
modification since December 1, 1993, does not materially increase the Borrower's
and its Subsidiaries annual cost of providing such benefits.

SECTION 6.12. Environmental Warranties. Except as set forth in Item 6.12
------------------------ ---------
("Environmental Matters") of the Disclosure Schedule:

(a) to the best knowledge of the Borrower, all facilities and
property owned or leased by the Borrower or any of its Subsidiaries have
been, and continue to be, owned or leased by the Borrower and its
Subsidiaries in material compliance with all Environmental Laws the
violation of which would reasonably be expected to have a material adverse
effect on the financial condition, operations, assets, business or
properties of the Borrower and its Subsidiaries taken a whole;

(b) as of the date hereof, there are no pending or, to the best
knowledge of the Borrower, threatened

(i) claims, complaints, notices or requests for information
received by the Borrower or any of its

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<PAGE>

Subsidiaries with respect to any alleged violation of any
Environmental Law, or

(ii) complaints, notices or inquiries to the Borrower or any of
its Subsidiaries regarding potential liability under any Environmental
Law that, in the case of clauses (i) and (ii), singly or in the
----------- ----
aggregate would have a material adverse effect on the financial
condition, operations, assets, business or properties of the Borrower
or the Borrower and its Subsidiaries taken as a whole;

(c) to the best knowledge of the Borrower, there have been no
Releases of Hazardous Materials (other than pursuant to permits, licenses,
approvals or other governmental consents or authorization for any such
Releases) at, on or under any property now or previously owned or leased by
the Borrower or any of its Subsidiaries that, singly or in the aggregate,
have, or may reasonably be expected to have, a material adverse effect on
the financial condition, operations, assets, business or properties of the
Borrower or the Borrower and its Subsidiaries, taken as a whole;

(d) to the best knowledge of the Borrower, the Borrower and each of
its Subsidiaries have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary for their businesses,
except for those permits, certificates, approvals, licenses and
authorizations the failure to obtain which or the failure to comply with
which would not reasonably be expected to have a material adverse effect on
the financial condition, operations, assets, business or properties of the
Borrower or the Borrower and its Subsidiaries taken as a whole;

(e) to the best knowledge of the Borrower, after due inquiry, no
property now or previously owned or leased by the Borrower or any of its
Subsidiaries is listed or proposed for listing in a federal or state
official publication (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list of sites requiring investigation or clean-up;

(f) to the best knowledge of the Borrower, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks, on
or under any property now or previously owned or leased by the Borrower or
any of its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a material adverse effect on

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<PAGE>

the financial condition, operations, assets, business or properties of the
Borrower or the Borrower and its Subsidiaries, taken as a whole;

(g) to the best knowledge of the Borrower, neither the Borrower nor
any Subsidiary of the Borrower has directly transported or directly
arranged for the transportation of any Hazardous Material to any location
which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list or which is
the subject of federal, state or local enforcement actions or other
investigations which may reasonably be expected to lead to claims against
the Borrower or such Subsidiary thereof for any remedial work, damage to
natural resources or personal injury, including claims under CERCLA, which,
singly or in the aggregate, has had, or may reasonably be expected to have,
a material adverse effect on the financial condition, operations, assets,
business or properties of the Borrower or the Borrower and its Subsidiaries
taken as a whole;

(h) to the best knowledge of the Borrower, there are no
polychlorinated biphenyls or friable asbestos present at any property now
or previously owned or leased by the Borrower or any Subsidiary of the
Borrower that, singly or in the aggregate, has had, or may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the Borrower
and its Subsidiaries taken as a whole; and

(i) to the best knowledge of the Borrower, no generation,
manufacture, storage, treatment, transportation or disposal of Hazardous
Material has occurred or is occurring on or from any property owned by the
Borrower that, in either case above, singly or in the aggregate, has had,
or would reasonably be expected to have, a material adverse effect on the
financial condition, operations, assets, business or properties of the
Borrower or the Borrower and its Subsidiaries taken as a whole.

SECTION 6.13. Intellectual Property. Each of the Borrower and its
---------------------
Subsidiaries owns and possesses or licenses (as the case may be) all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and copyrights as the Borrower
considers necessary for the conduct of the businesses of the Borrower and its
Subsidiaries as now conducted without, individually or in the aggregate, any
infringement upon rights of other Persons, in each case except as could not
reasonably be expected to result in a material adverse effect on the financial
condition, operations, assets, business or properties of the Borrower or the
Borrower

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<PAGE>

and its Subsidiaries, taken as a whole, and there is no individual patent,
patent right, trademark, trademark right, trade name, trade name right, service
mark, service mark right or copyright the loss of which would result in a
material adverse change in the financial condition, operations, assets, business
or properties of the Borrower or the Borrower and its Subsidiaries, taken as a
whole, except as may be disclosed in Item 6.13 ("Intellectual Property") of the
--------- ---------------------
Disclosure Schedule.

SECTION 6.14. Regulations G, U and X. Neither the Borrower nor any of its
----------------------
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extensions
will be used for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation G, U or X. Terms for which meanings are provided in F.R.S.
Board Regulation G, U or X or any regulations substituted therefor, as from time
to time in effect, are used in this Section with such meanings.

SECTION 6.15. Accuracy of Information. None of the factual information
-----------------------
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Agent, each Issuer or any Lender for purposes of or in connection
with the Existing Credit Agreement, this Agreement or any transaction
contemplated hereby or with respect to the Acquisition, the Mergers or the IPO
or any transaction contemplated by the Merger Agreements or the Registration
Statement (true and complete copies of which were furnished to the Agent, the
Issuer and each Lender in connection with its execution and delivery hereof),
contains any untrue statement of a material fact, and none of the other factual
information hereafter furnished in connection with this Agreement or any other
Loan Document by or on behalf of the Borrower or any other Obligor to the Agent,
the Issuer or any Lender will contain any untrue statement of a material fact on
the date as of which such information is dated or certified and, as of the date
of the execution and delivery of the Existing Credit Agreement and this
Agreement by the Agent and each Lender, the information delivered prior to the
date of execution and delivery of the Existing Credit Agreement and this
Agreement (unless such information specifically relates to a prior date) did not
and does not, and the factual information hereafter furnished shall not on the
date as of which such information is dated or certified, omit to state any
material fact necessary to make any information not misleading. Notwithstanding
the foregoing, all projections prepared or to be prepared by or on behalf of the
Borrower or any other Obligor contained in any documents or materials furnished
by the Borrower or any other Obligor to the Agent, each Issuer or any Lender
(including the financial information delivered to the Lenders as a condition to
the effectiveness of the Existing Credit Agreement and the pro forma Compliance
--- -----
Certificate furnished pursuant to Section 5.1.7 and the budgets to be
-------------

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furnished pursuant to clause (j) of Section 7.1.1) have been or will be prepared
---------- -------------
on the basis of assumptions believed by the Borrower to be reasonable as of the
date of preparation of such financial information, pro forma balance sheet,
--- -----
pro forma Compliance Certificate or projections, it being acknowledged and
- --- -----
agreed, however, that such projections as to future events should not be viewed
as facts and that the Borrower makes no representation or warranty that such
projections will be realized.

SECTION 6.16. Senior Indebtedness, etc. The Borrower had the power and
------------------------
authority to incur the Indebtedness evidenced by the Subordinated Notes as
provided for under the Subordinated Note Indenture and had duly authorized,
executed and delivered the Subordinated Note Indenture. The Borrower has
issued, pursuant to due authorization, the Subordinated Notes under the
Subordinated Note Indenture. The Subordinated Note Indenture constitutes the
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject, as to enforcement, only to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and general equitable principles.
The subordination provisions of the Subordinated Notes and contained in the
Subordinated Note Indenture continue to be enforceable against the holders of
the Subordinated Notes by the holder of any Senior Indebtedness (as defined in
the Subordinated Note Indenture) which has not effectively waived the benefits
thereof. All Obligations, including those to pay principal of and interest
(including post-petition interest) on the Loans and Reimbursement Obligations,
and fees and expenses in connection therewith, constitute Senior Indebtedness
(as defined in the Subordinated Note Indenture) and all such Obligations are
entitled to the benefits of the subordination created by the Subordinated Note
Indenture. The Borrower acknowledges that the Agent and each Lender is entering
into this Agreement, and is extending its Commitments, in reliance upon the
subordination provisions of the Subordinated Note Indenture, the Subordinated
Notes and this Section.

ARTICLE VII

COVENANTS

SECTION 7.1. Affirmative Covenants. The Borrower agrees with the Agent,
---------------------
each Issuer and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform or
cause to be performed the obligations set forth in this Section 7.1.
-----------

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SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Borrower
--------------------------------------------
will furnish, or will cause to be furnished, to each Lender, each Issuer and the
Agent copies of the following financial statements, reports, notices and
information:

(a) as soon as available and in any event within 45 days (or, in the
case of consolidating balance sheets and statements of earnings and cash
flow, 55 days) after the end of each of the first three Fiscal Quarters of
each Fiscal Year of the Borrower, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the end of such Fiscal
Quarter and consolidated and consolidating statements of earnings and cash
flow of the Borrower and its consolidated Subsidiaries for such Fiscal
Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter and, in addition,
comparable information adjusted to reflect any changes at the close of and
for the corresponding Fiscal Quarter for the prior Fiscal Year and for the
corresponding portion of such Fiscal Year, in each case certified as
complete and correct by the chief financial Authorized Officer of the
Borrower;

(b) as soon as available and in any event within 90 days (or, in the
case of consolidating balance sheets and statements of earnings and cash
flow, 100 days) after the end of each Fiscal Year of the Borrower, a copy
of the annual audited financial statements for such Fiscal Year for the
Borrower and its consolidated Subsidiaries, including therein consolidated
and consolidating balance sheets of the Borrower and its consolidated
Subsidiaries as of the end of such Fiscal Year and consolidated and
consolidating statements of earnings and cash flow of the Borrower and its
consolidated Subsidiaries for such Fiscal Year, in each case as audited
(without any Impermissible Qualification) by independent public accountants
acceptable to the Agent, together with a certificate from such accountants
to the effect that, in making the examination necessary for the signing of
such annual report by such accountants, they have not become aware of any
Default or Event of Default that has occurred and is continuing with
respect to the provisions of Sections 7.2.4, 7.2.7, 7.2.8, 7.2.10, 8.1.5
-------------- ----- ----- ------ -----
and 8.1.7 (limited, in the case of Sections 8.1.5 and 8.1.7, to reviewing
----- -------------- -----
the minutes of the board of directors of the Borrower and its
Subsidiaries), or, if they have become aware of such Default or Event of
Default, describing such Default or Event of Default;

(c) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Borrower and within 90

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days after the end of the Fiscal Year of the Borrower, a Compliance
Certificate, executed by the chief executive, financial or accounting
Authorized Officer of the Borrower, showing (in reasonable detail and with
appropriate calculations and computations in all respects reasonably
satisfactory to the Agent) compliance with the financial covenants set
forth in Article VII;
-----------

(d) as soon as possible and in any event within five Business Days
after the Borrower or any of its Subsidiaries obtains knowledge of the
occurrence of each Default, a statement of the chief executive, financial
or accounting Authorized Officer of the Borrower setting forth details of
such Default and the action which the Borrower has taken and proposes to
take with respect thereto;

(e) as soon as possible and in any event within five Business Days
after the Borrower or any of its Subsidiaries obtains knowledge of (x) the
occurrence of any material adverse development with respect to any
litigation, action, proceeding or labor controversy of the type and
materiality described in Item 6.7 ("Litigation") of the Disclosure
--------
Schedule, or (y) the commencement of any litigation, action, proceeding or
labor controversy of the type and materiality described in Item 6.7
--------
("Litigation") of the Disclosure Schedule, notice thereof and, to the
extent the Agent reasonably requests, copies of all documentation relating
thereto (to the extent that such disclosure would not violate attorney-
client privilege or the work product doctrine);

(f) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its securityholders generally and
registration statements which the Borrower or any of its Subsidiaries files
with the SEC or any national securities exchange;

(g) immediately upon becoming aware of (i) the institution of any
steps by the Borrower or any other Person to terminate any Pension Plan,
other than a standard termination, (ii) the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise
to a Lien under Section 302(f) of ERISA and if such failure continues for
at least 30 days, (iii) the taking of any action with respect to a Pension
Plan which could result in the requirement that the Borrower furnish a bond
or other security to the PBGC or such Pension Plan, (iv) the occurrence of
any event with respect to any Pension Plan which could result in the
incurrence by the Borrower of any liability, fine or penalty, or (v) any
material increase in the contingent liability of the

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<PAGE>

Borrower (including the incurrence of any liability described in clause
------
(b)(ii) of Section 6.11) with respect to any post-retirement Welfare Plan
------- ------------
benefit, to the extent the effect of the action, occurrence or event
described in subclause (i), (iv), or (v) would reasonably be expected to
------------- ---- ---
have a material adverse effect on the financial condition, operations,
assets, business on properties of the Borrower or the Borrower and its
Subsidiaries taken as a whole, notice thereof and copies of all
documentation relating thereto;

(h) promptly upon receipt thereof, copies of all detailed management
letters submitted to the Borrower by the independent public accountants
referred to in clause (b) in connection with each audit made by such
----------
accountants of the books of the Borrower or any Significant Subsidiary;

(i) as soon as possible and in any event within 30 days after the
last day of each calendar month, a Borrowing Base Certificate calculated as
of the last day of the immediately preceding calendar month, executed by
the chief financial or accounting Authorized Officer of the Borrower;

(j) promptly when available and in any event within 15 Business days
prior to the last day of each Fiscal Year of the Borrower, a budget for the
next succeeding Fiscal Year of the Borrower, which budget shall be prepared
on a Fiscal Quarter basis and shall contain a projected, consolidated
balance sheet and statement of earnings and cash flow of the Borrower and
its Subsidiaries for such succeeding Fiscal Year, prepared in reasonable
detail by the chief accounting, financial or executive Authorized Officer
of the Borrower;

(k) promptly following the delivery or receipt, as the case may be,
of any material written notice or communication pursuant to or in
connection with the Subordinated Note Indenture, a copy of such notice or
communication; and

(l) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any
Lender or any Issuer through the Agent may from time to time reasonably
request (including information and reports from the chief accounting,
financial or executive Authorized Officer of the Borrower, in such detail
as the Agent or any Lender or Issuer through the Agent may reasonably
request, with respect to the terms of and information provided pursuant to
the Compliance Certificate and the calculation of the Borrowing Base Amount
contained in the Borrowing Base Certificate delivered by the Borrower
pursuant to clause (i)).
----------

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SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders the noncompliance with which
would be reasonably expected to have a material adverse effect on the financial
condition, operations, assets, business or properties of the Borrower or the
Borrower and its Subsidiaries taken as a whole, such compliance to include
(without limitation):

(a) the maintenance and preservation of the Borrower's and its
Subsidiaries' corporate existence and qualification as foreign corporations
in all jurisdictions in which the failure to be so qualified would be
reasonably expected to have a material adverse effect on the financial
condition, operations, assets, business or properties of the Borrower or
the Borrower and its Subsidiaries taken as a whole; provided, however, that
-------- -------
the Subsidiaries of the Borrower may be liquidated, dissolved or merged as
contemplated by Section 7.2.10 or disposed of if permitted by Section
-------------- -------
7.2.11; and, provided, further, however, that nothing in this Section 7.1.2
------ -------- ------- ------- -------------
shall require the preservation of the corporate existence of any Subsidiary
if the board of directors of the Borrower determines in good faith that the
failure to so preserve such corporate existence would not reasonably be
expected to have a material adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the Borrower
and its Subsidiaries taken as a whole; and

(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves, if any, in
accordance with GAAP shall have been set aside on its books.

SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable, it
being understood that any failure to comply with the foregoing shall not result
in a Default hereunder unless such failure to comply would reasonably be
expected to have a material and adverse effect on the financial condition,
operations, assets, business or properties of the Borrower or the Borrower and
its Subsidiaries taken as a whole.

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<PAGE>

SECTION 7.1.4. Insurance. The Borrower shall maintain, and shall cause
---------
each Subsidiary to maintain, with financially sound insurance companies:

(a) physical damage insurance on all real and personal property on an
all-risk basis (including, loss in transit, flood and earthquake insurance)
and public liability insurance against claims for personal injury, death or
property damage suffered by others upon, in or about any premises occupied
by it or occurring as a result of its ownership, maintenance or operation
of any airplanes, automobiles, trucks or other vehicles or other facilities
(including, but not limited to, any machinery used therein or thereupon) or
as the result of the use of products manufactured, constructed or sold by
it or services rendered by it in an amount as is usually carried by Persons
of comparable size engaged in the same or a similar business and similarly
situated;

(b) such other types of insurance with respect to its business as is
usually carried by Persons of comparable size engaged in the same or a
similar business and similarly situated; and

(c) all worker's compensation or similar insurance as may be required
under the laws of any state or jurisdiction in which it may be engaged in
business.

SECTION 7.1.5. Books and Records. The Borrower will, and will cause each
-----------------
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and permit the Agent and each Lender or
any of their respective representatives, at reasonable times and intervals,
during normal business hours and upon reasonable notice, and at the Agent's or
such Lender's expense, to visit all of the Borrower's and such Subsidiaries'
offices, to discuss the Borrower's and such Subsidiaries' financial matters with
the Borrower's and such Subsidiaries' officers and independent public accountant
(and the Borrower hereby authorizes such independent public accountant to
discuss the Borrower's or such Subsidiaries' financial matters with the Agent
and each Lender or any of their respective representatives whether or not any
representative of the Borrower is present, but provided that an officer of the
Borrower or such Subsidiary shall be afforded a reasonable opportunity to be
present at any such discussion) and to examine (and, at the expense of the
Borrower, photocopy extracts from) any of the Borrower's and its Subsidiaries'
books or other corporate records. The Borrower shall pay any fees of such
independent public accountant incurred in connection with the Agent's or any
Lender's exercise of its rights pursuant to this Section.

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SECTION 7.1.6. Environmental Covenant. The Borrower will, and will cause
----------------------
each of its Subsidiaries to,

(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws, except for those permits, approvals,
certificates, licenses and authorizations the failure to keep in effect
would not, or the failure to comply with which would not, or for such
Environmental Laws the failure to comply with which would not, singly or in
the aggregate, reasonably be expected to have a material adverse effect on
the financial condition, operations, assets, business or properties of the
Borrower or the Borrower and its Subsidiaries taken as a whole;

(b) promptly notify the Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries relating to the condition
of its facilities and properties in respect of, or as to compliance with,
Environmental Laws which individually or in the aggregate would have a
material adverse effect on the consolidated operations, assets, business,
properties or financial condition of the Borrower or the Borrower and its
Subsidiaries taken as a whole, and shall promptly resolve any non-
compliance with Environmental Laws and keep its property free of any Lien
(except as disclosed in Item 6.11 ("Environmental Matters") of the
---------
Disclosure Schedule) imposed by any Environmental Law which, in either
case, individually or in the aggregate, would reasonably be expected to
have a material adverse effect on the financial condition, operations,
assets, business or properties of the Borrower or the Borrower and its
Subsidiaries taken as a whole; and

(c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this
Section 7.1.6.
-------------

SECTION 7.1.7. Future Subsidiaries. Upon any Person becoming either a
-------------------
direct or indirect Subsidiary of the Borrower, or upon the Borrower directly or
indirectly acquiring additional capital stock of any existing Subsidiary having
voting rights or contingent voting rights, the Borrower shall notify the Agent
of such acquisition, and, unless otherwise agreed to among the Borrower, the
Agent and the Required Lenders,

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<PAGE>

(a) subject to the last sentence of this Section, such Person shall,
if it is a U.S. Subsidiary (other than a Restricted Subsidiary),
(i) execute and deliver to the Agent a copy of the Subsidiary Guaranty, and
(ii) to the extent such U.S. Subsidiary is required to pledge stock of a
Subsidiary pursuant to clause (b) of Section 7.1.7, become a party to the
---------- -------------
Pledge Agreement, if not already a party thereto as a pledgor, in a manner
satisfactory to the Agent;

(b) subject to the last sentence of this Section, the Borrower and
each U.S. Subsidiary (other than a Restricted Subsidiary) shall, pursuant
to the Pledge Agreement (as supplemented, if necessary, by a Foreign Pledge
Agreement), pledge to the Agent, for its benefit and that of the Lenders
and the Issuer, all of the outstanding shares of capital stock of (i) any
U.S. Subsidiary and (ii) any Significant Subsidiary that is not a U.S.
Subsidiary owned (other than where such ownership is in such U.S.
Subsidiary's capacity as a nominee shareholder) directly by the Borrower or
such U.S. Subsidiary (provided, that, subject to the last sentence of this
--------
Section, not more than 65% of the capital stock of any non-U.S. Subsidiary
shall be so pledged), along with undated stock powers for such
certificates, executed in blank (or, if any such shares of capital stock
are uncertificated, confirmation and evidence satisfactory to the Agent
that the security interest in such uncertificated securities has been
transferred to and perfected by the Agent, for the benefit of the Lenders
and the Issuer, in accordance with Section 8-313 and Section 8-321 of the
U.C.C. or any other similar or local law which may be applicable); and

(c) subject to the last sentence of this Section, the Borrower and
each U.S. Subsidiary shall, pursuant to the Pledge Agreement, pledge to the
Agent for its benefit and that of the Lenders and the Issuer, all
intercompany notes evidencing Indebtedness in favor of the Borrower and
each such U.S. Subsidiary (which shall, unless the Agent shall otherwise
agree, be in the form of Exhibit A to the Pledge Agreement), as the case
may be;

together, in each case, with such opinions of legal counsel for the Borrower
(which may be in-house counsel to the Borrower and shall otherwise be from
counsel reasonably satisfactory to the Agent) relating thereto, which legal
opinions shall be in form and substance satisfactory to the Agent. The Borrower
agrees that if, as a result of a change in law after the date hereof, (i) a non-
U.S. Subsidiary of the Borrower is permitted to execute and deliver the
Subsidiary Guaranty or become a party to the Pledge Agreement as a pledgor or
(ii) the Borrower or any Subsidiary is permitted to pledge more than 65% of the
capital

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stock of any non-U.S. Subsidiary or any intercompany Indebtedness of any direct
and indirect Subsidiary of the Borrower evidenced by a note or other instrument,
in any such case without material adverse tax consequences to the Borrower or
such Subsidiary, then the provisions of clause (a) of this Section 7.1.7 shall
---------- -------------
thereafter apply to any non-U.S. Subsidiary and/or (as the case may be) the
provisions of clause (b) of this Section 7.1.7 shall thereafter apply to 100% of
---------- -------------
the capital stock of such non-U.S. Subsidiary.

SECTION 7.1.8. Additional Pledge. The Borrower hereby agrees that, in
-----------------
addition to the pledges required pursuant to Section 7.1.7, promptly (and in any
-------------
event within 90 days) following a determination that individual non-Significant
Subsidiaries (alone or together with their respective Subsidiaries) when taken
together (i) for the most recent Fiscal Year of the Borrower, accounted for more
than 8% of the consolidated revenues of the Borrower and its Subsidiaries during
such Fiscal Year or (ii) as of the end of the most recent Fiscal Year of the
Borrower, were the owners, in the aggregate, of more than 8% of the consolidated
assets of the Borrower and its Subsidiaries at the end of such Fiscal Year, all
as set forth on the most recently available consolidated financial statements of
the Borrower for such Fiscal Year, the Borrower shall, and shall cause any
applicable U.S. Subsidiary to, pledge to the Agent, for its benefit and that of
the Lenders and the Issuer, pursuant to the Pledge Agreement (as supplemented,
if necessary, by a Foreign Pledge Agreement), all of the outstanding capital
stock of such Subsidiaries so that, after giving effect to such pledge (or
pledges), no more than 8% of such consolidated revenues were generated by, and
no more than 8% of such consolidated assets were owned by, Subsidiaries whose
capital stock is not so pledged (provided, that, subject to the last sentence of
--------
Section 7.1.7, no more than 65% of the capital stock of any non-U.S. Subsidiary
- -------------
shall be so pledged, nor shall any non-U.S. Subsidiary be required to pledge any
shares of capital stock of any of its non-U.S. Subsidiaries, in each case if the
Borrower has submitted evidence reasonably satisfactory to the Agent that such
pledge of capital stock would cause material adverse tax consequences), together
with such opinions of legal counsel for the Borrower (which may be in-house
counsel to the Borrower and shall otherwise be from counsel reasonably
satisfactory to the Agent) relating thereto, which legal opinions shall be in
form and substance satisfactory to the Agent.

SECTION 7.1.9. Pledge Agreement; Foreign Pledge Agreements. Within 90
-------------------------------------------
days following the Effective Date, the Agent shall have received evidence
reasonably satisfactory to it that

(a) the Pledge Agreement, dated as of December 1, 1993, executed and
delivered pursuant to Section 5.1.7 of

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the Existing Credit Agreement remains in full force and effect and that the
perfected first priority security interest of the Agent in the collateral
described therein remains valid; and

(b) each of the Foreign Pledge Agreements remains in full force and
effect, and that a perfected first priority (except to the extent otherwise
consented to by the Agent) security interest of the Agent in the collateral
described therein remains valid,

in each case after giving effect to the Mergers, the IPO, the change of the
Borrower's name to "Sola International Inc.", the amendment and restatement of
the Existing Credit Agreement (as set forth in this Agreement) and the other
transactions contemplated herein.

SECTION 7.2. Negative Covenants. The Borrower agrees with the Agent, each
------------------
Issuer and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.2.
-----------

SECTION 7.2.1. Business Activities. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, engage in any business activity, except the
business of designing, manufacturing, marketing and distributing plastic and
glass eyeglass lenses, including single vision lenses, multifocal lenses, plano
lenses and lens coatings, contact lenses and related products and such
activities as are reasonably incidental, reasonably similar or reasonably
related thereto.

SECTION 7.2.2. Indebtedness. The Borrower will not, and will not permit
------------
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:

(a) Indebtedness in respect of the Credit Extensions and other
Obligations (including Hedging Obligations in respect of such Credit
Extensions) and any other Hedging Obligations incurred in the ordinary
course of business of the Borrower and its Subsidiaries or otherwise;

(b) until the Effective Date, Indebtedness identified in Item
----
7.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule;
--------

(c) Indebtedness incurred in the ordinary course of business of the
Borrower and its Subsidiaries (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and
services, accrued

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liabilities and deferred income taxes, and including Indebtedness in
respect of performance, surety or appeal bonds provided in the ordinary
course of business, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities in respect thereof), and
(without duplication) Contingent Liabilities of the Borrower and its
Subsidiaries in respect thereof;

(d) Indebtedness in respect of (i) Capitalized Lease Liabilities,
(ii) purchase money mortgages, and (iii) industrial revenue bond issues;
provided, that the aggregate amount of all Indebtedness outstanding
--------
pursuant to this clause shall not at any time exceed 5% of Total Adjusted
Capital at such time;

(e) Indebtedness of any Subsidiary of the Borrower owing to the
Borrower or any other Subsidiary (other than a Restricted Subsidiary) of
the Borrower, which Indebtedness

(i) shall (A) be evidenced by one or more promissory notes (such
promissory note to be, unless otherwise agreed to by the Agent, in
substantially the form of Exhibit A to the Pledge Agreement) duly
executed and, if the payee of such promissory note is the Borrower or
a U.S. Subsidiary, delivered to the Agent or (B) if such Indebtedness
is not evidenced by a promissory note that is pledged to the Agent,
not be evidenced by a promissory note or other instrument of any kind;
and

(ii) shall not be forgiven or otherwise discharged for any
consideration other than payment in full or in part (provided, that
--------
only the amount repaid in part shall be discharged) in cash unless the
Agent otherwise consents, such consent not to be unreasonably
withheld;

(f) intercompany Indebtedness (not evidenced by a note or other
instrument) of the Borrower owing to a Subsidiary of the Borrower that has
previously executed and delivered to the Agent the Master Subordination
Agreement, in an aggregate outstanding principal amount not to exceed
$20,000,000 at any time;

(g) Indebtedness of the Borrower owing to the Subordinated
Noteholders under the Subordinated Note Indenture; provided, however, that
-------- -------
the aggregate outstanding principal amount of such Indebtedness shall not
exceed $101,000,000 (net of original issue discount but before fees,
expenses and underwriting commissions) on the Acquisition Date, nor
$116,571,000 (after giving effect to

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<PAGE>

accretion of original issue discount) and in any event the amount of
Indebtedness permitted hereunder in respect of interest payable on the
Subordinated Notes in cash through December 15, 1998 shall not exceed
$7,250,000 per annum, and thereafter shall not exceed $11,250,000 per
annum;

(h) Indebtedness of a Person existing at the time such Person became
a Subsidiary of the Borrower to the extent such Indebtedness was not
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary, in an amount not to exceed $7,500,000;

(i) Indebtedness of the Borrower incurred for the purpose of
renewing, extending or refinancing Indebtedness permitted by clause (d) or
----------
(g); provided, however, that the principal amount of such Indebtedness may
--- -------- -------
not exceed the principal amount of the Indebtedness being renewed or
refinanced and, in the case of Indebtedness permitted by clause (g) of this
----------
Section, any such renewal or refinancing is upon terms and provisions which
are, in the reasonable judgment of the Required Lenders, no less favorable
to the Borrower in the aggregate than such Indebtedness being so renewed or
refinanced, taking into account, in each case, prevailing credit conditions
at the time of such renewal or refinancing; provided, that in any event in
--------
the case of any Indebtedness that renews, extends or refinances the
Subordinated Notes (or any refinancings thereof), such Indebtedness shall
be subordinated to the Senior Indebtedness (as defined in the Note
Indenture) to the same extent and degree as the Subordinated Notes;

(j) other Indebtedness of (i) the Borrower and U.S. Subsidiaries of
the Borrower (not payable to a Restricted Subsidiary) in an aggregate
amount at any time outstanding not to exceed $5,000,000; (ii) non-U.S.
Subsidiaries of the Borrower (not payable to a Restricted Subsidiary) in an
aggregate amount at any time outstanding not to exceed $35,000,000; (iii)
the Borrower under "letters of comfort" issued by the Borrower in respect
of the Indebtedness described in clause (j)(ii) above in the form of
--------------
Exhibit M attached hereto, or in such other form satisfactory to the Agent;
---------
and (iv) the Borrower in the form of Contingent Liabilities relating to
Indebtedness of Subsidiaries of the Borrower (other than Restricted
Subsidiaries) in an aggregate amount at any time outstanding not to exceed
$15,000,000; and

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<PAGE>

(k) any government grant by a foreign authority to the extent that at
any time of determination such grant is not, at such time, required to be
repaid by the Borrower or any of the Subsidiaries pursuant to the terms
thereof and any Contingent Liability in respect thereof;

provided, however, that no Indebtedness otherwise permitted by clause (d), (h),
- -------- ------- ---------- ---
(i) or (j) shall be permitted to be incurred if such incurrence would result in
- --- ---
a Default hereunder.

SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of
-----
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:

(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;

(b) until the Effective Date, Liens (if any) securing payment of
Indebtedness of the type permitted and described in clause (b) of Section
---------- -------
7.2.2;
-----

(i) payment of foreign currency exchange, or rate swap and
similar agreements referred to in clause (a) of Section 7.2.2, in each
---------- -------------
case to the extent the counterparty to any such agreement is a Lender;

(ii) Indebtedness of the type permitted and described in clause
------
(d) of Section 7.2.2; and
--- -------------

(iii) up to $17,500,000 of the Indebtedness of non-U.S.
Subsidiaries of the Borrower permitted and described in clause (j)(ii)
--------------
of Section 7.2.2;
-------------

and renewals, extensions and refinancings of such Indebtedness; provided,
--------
that the Liens permitted by this clause with respect to clause (d) of
----------
Section 7.2.2 shall only cover the same assets which originally secured the
-------------
Indebtedness renewed, extended or refinanced pursuant to such clause;

(d) Liens existing as of the Effective Date and disclosed in Item
----
7.2.3(d) ("Existing Liens") of the Disclosure Schedule and Liens securing
--------
any extension, renewal or replacement of any obligations secured by any
such Lien; provided, however, that such Lien shall only cover the same
-------- -------
assets which originally secured the obligations being extended, renewed or
replaced;

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<PAGE>

(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves, if any, in accordance with GAAP shall have been
set aside on its books;

(f) Liens of carriers, warehousemen, mechanics, materialmen and
landlords and similar Liens incurred in the ordinary course of business for
sums not overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves, if any, in accordance with
GAAP shall have been set aside on its books;

(g) Liens incurred or deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment insurance
or other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory and regulatory obligations, bids, leases
and contracts or other similar obligations (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds or performance or return-of-money bonds;

(h) judgment Liens in existence less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies or which do not
otherwise result in an Event of Default under Section 8.1.6;
-------------
(i) easements, rights-of-way, municipal and zoning ordinances or
similar restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of the Borrower or its
Subsidiaries or the value or utility of the property to which such Lien is
attached;

(j) any interest or title of a lessor under any lease of property to,
or of any consignor of goods consigned to, or of any creditor of any
consignee in goods consigned to such consignee by, the Borrower or any of
its Subsidiaries;

(k) Liens in favor of the Borrower or any Subsidiary (other than, in
the case of any Subsidiary (and notwithstanding any other provision of this
Agreement (including Section 7.2.2) to the contrary), any Lien on any
-------------
assets of the Borrower);

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<PAGE>

(l) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Borrower and its
Subsidiaries, taken as a whole;

(m) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payments of customs duties in connection with the
importation of goods;

(n) Liens on the property of, or securing Indebtedness to the extent
permitted by clause (h) of Section 7.2.2 of, any Person which becomes a
---------- -------------
Subsidiary after the date hereof; provided, that such Liens exist at the
--------
time such Person becomes a Subsidiary and are not created in anticipation
thereof and such Liens attach only to a specific tangible asset of such
Person and not assets of such Person generally; and

(o) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of letters of credit which are commercial
letters of credit.

SECTION 7.2.4. Financial Condition and Operations. The Borrower will not
----------------------------------
permit to occur any of the events set forth below.

(a) Adjusted Net Worth. The Borrower will not permit Adjusted Net
------------------
Worth at any time during any period set forth below to be less than the
amount set forth opposite such period:

Minimum Adjusted
Period Net Worth
------ ----------------

10/01/94 through (and
including) 12/31/94 $88,250,000
01/01/95 through (and
including) 03/31/95 $157,568,500
04/01/95 through (and
including) 06/30/95 $158,818,500
07/01/95 through (and
including) 09/30/95 $159,818,500
10/01/95 through (and
including) 12/31/95 $161,318,500
01/01/96 through (and
including) 03/31/96 $162,568,500
04/01/96 through (and
including) 06/30/96 $163,818,500
07/01/96 through (and
including) 09/30/96 $165,068,500
10/01/96 through (and
including) 12/31/96 $166,318,500

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<PAGE>

01/01/97 through (and
including) 03/31/97 $167,568,500
04/01/97 through (and
including) 06/30/97 $168,818,500
07/01/97 through (and
including) 09/30/97 $170,068,500
10/01/97 through (and
including) 12/31/97 $171,318,500
01/01/98 through (and
including) 03/31/98 $172,568,500
04/01/98 through (and
including) 06/30/98 $173,818,500
07/01/98 through (and
including) 09/30/98 $175,068,500
10/01/98 through (and
including) 12/31/98 $176,318,500
01/01/99 through (and
including) 03/31/99 $177,568,500
04/01/99 through (and
including) 06/30/99 $180,068,500
07/01/99 through (and
including) 09/30/99 $182,568,500
10/01/99 through (and
including) 12/31/99 $185,068,500;

provided, however, that if the underwriters exercise their overallotment option
- -------- -------
to purchase additional shares of common stock of the Borrower in the IPO, the
"Minimum Adjusted Net Worth" set forth above shall be increased for the period
in which such option is exercised and for every period thereafter by the Net
Equity Proceeds attributable to the exercise of such overallotment option, as
certified to the Agent by an Authorized Officer of the Borrower.

(b) Maximum Leverage Ratio. The Borrower will not permit the Maximum
----------------------
Leverage Ratio at any time occurring during any period set forth below to
be greater than the ratio set forth opposite such period:

Maximum Leverage
Period Ratio
------ ----------------

12/31/93 through (and
including) 12/31/94 40%
01/01/95 through (and
including) 12/31/95 39%
01/01/96 through (and
including) 12/31/96 37%
01/01/97 through (and
including) 12/31/97 35%

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<PAGE>

01/01/98 through (and
including)12/31/98 32%
01/01/99 through (and
including) 12/31/99 29%.

(d) Interest Coverage Ratio. The Borrower will not permit the
-----------------------
Interest Coverage Ratio as of the end of any Fiscal Quarter set forth below
to be less than the ratio set forth opposite such Fiscal Quarter:

Interest Coverage
Fiscal Quarter Ratio
-------------- --------------

12/31/94 1.80:1.0
03/31/95 1.85:1.0
06/30/95 1.90:1.0
09/30/95 1.95:1.0
12/31/95 2.00:1.0
03/31/96 2.05:1.0
06/30/96 2.10:1.0
09/30/96 2.15:1.0
12/31/96 2.20:1.0
03/31/97 2.25:1.0
06/30/97 2.30:1.0
09/30/97 2.35:1.0
12/31/97 2.40:1.0
03/31/98 through (and
including) 12/31/98 2.50:1.0
03/31/99 2.25:1.0
06/30/99 2.00:1.0
09/30/99 2.05:1.0
12/31/99 2.10:1.0.

SECTION 7.2.5. Investments. The Borrower will not, and will not permit
-----------
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:

(a) Investments existing on December 1, 1993 and identified in Item
----
7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
--------

(b) Cash Equivalent Investments;

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<PAGE>

(d) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 7.2.7;
-------------

(e) Investments (other than by way of Indebtedness (except
Indebtedness otherwise permitted by clause (c) above)) by way of
----------
contributions to capital or purchases of equity (i) by the Borrower in any
of its Subsidiaries (other than a Restricted Subsidiary) or by such
Subsidiary in any of its Subsidiaries (other than a Restricted Subsidiary),
or (ii) by any such Subsidiary in the Borrower;

(f) Investments constituting accounts receivable arising, and trade
debt granted, in the ordinary course of business (provided, that nothing in
--------
this clause shall prevent the Borrower or any Subsidiary of the Borrower
from offering such concessionary trade terms, or from receiving such
Investments in connection with the bankruptcy or reorganization of their
respective suppliers or customers or the settlement of disputes with such
customers or suppliers arising in the ordinary course of business, as
officers of the Borrower deem reasonable in the circumstances);

(g) Investments constituting Permitted Acquisitions in an aggregate
amount not to exceed (i) $15,000,000 in any Fiscal Year and (ii) since
December 1, 1993, 25% of Adjusted Net Worth, measured as of the last day of
the Fiscal Quarter prior to the date such Investment was made, whether or
not such Investment is made in a Person that immediately thereafter becomes
a Subsidiary of the Borrower;

(h) Investments constituting loans or advances made by the Borrower
or a Subsidiary of the Borrower in an aggregate amount not in excess of
$1,700,000 outstanding at any one time to its employees to enable such
employees to purchase the capital stock of the Borrower;

(i) Investments made in connection with Permitted Dispositions
pursuant to clause (d) of Section 7.2.11; provided, that to the extent the
---------- -------------- --------
amount or value (as determined by the Board of Directors of the Borrower in
good faith) of any such Investment exceeds $1,000,000, the Borrower shall
use its best efforts to (x) cause such Investment to be made in such a form
that such Investment can be pledged to the Agent for the ratable benefit of
the Lenders and the Issuer, and (y) if such Investment is in such form, to
pledge such Investment to the Agent for the ratable benefit of the Lenders
and the Issuer, on terms reasonably satisfactory to the Agent;

(j) Investments constituting payroll advances and travel and
entertainment advances and relocation loans to

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<PAGE>

officers and employees of the Borrower or any of its Subsidiaries in the
ordinary course of business;

(k) Investments made by the Borrower in an aggregate amount since
December 1, 1993 not to exceed $3,000,000 in a Person that, after giving
effect to such Investment, becomes a non-wholly-owned U.S. Subsidiary of
the Borrower and on or prior to the date of such Investment is designated
as a "Restricted Subsidiary" by the Borrower to the Agent; and

(l) Investments made in connection with any payment, redemption,
purchase or defeasance permitted pursuant to clause (f) of Section 7.2.6;
---------- -------------

provided, however, that
- -------- -------

(m) any Investment which when made complies with the requirements of
clauses (a), (b) or (c) of the definition of the term "Cash Equivalent
----------- --- --- ---------------
Investment" may continue to be held notwithstanding that such Investment if
----------
made thereafter would not comply with such requirements; and

(n) no Investment otherwise permitted by clauses (g), (k) or (l)
----------- --- ---
shall be permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.

SECTION 7.2.6. Restricted Payments, etc. Except as otherwise permitted
------------------------
pursuant to the proviso set forth in this Section, on and at all times after the
Effective Date:

(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower or on any
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable solely in its common stock or warrants
to purchase its common stock or splitups or reclassifications of its stock
into additional or other shares of its common stock) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets to
the purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower or
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower;

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<PAGE>

(b) the Borrower will not, and will not permit any of its
Subsidiaries to, pay, prepay or repay any principal of, or redeem, purchase
or defease any principal in respect of, any Subordinated Notes; and

(c) the Borrower will not, and will not permit any of its
Subsidiaries to, make any deposit for any of the foregoing purposes;

provided, however, this Section 7.2.6 shall not prohibit:
- -------- ------- -------------

(d) (in addition to any such transaction permitted pursuant to clause
------
(e) of this Section) the purchase, redemption, acquisition, cancellation or
---
other retirement for value of shares of capital stock of the Borrower or
options on any such shares or related stock appreciation rights or similar
securities owned by officers or employees (or their estates or
beneficiaries under their estates), in all cases only upon death,
disability, retirement, termination of employment or pursuant to the terms
of such stock option plan or any other agreement under which such shares of
capital stock, options, related rights or similar securities were issued;
provided, however, that the aggregate cash consideration paid for such
-------- -------
purchase, redemption, acquisition, cancellation or other retirement for
value of such shares of capital stock, options, related rights or similar
securities shall not exceed (i) $4,000,000 since December 1, 1993 and (ii)
$1,000,000 during any Fiscal Year; provided, further, that any purchase,
-------- -------
redemption, acquisition, cancellation or other retirement for value by Sola
Investors prior to the Effective Date and using its available cash of any
shares of capital stock of Sola Investors or options on any such shares or
related stock appreciation rights or similar securities shall not be
considered a purchase, redemption, acquisition or other retirement of
securities of the Borrower for purposes of this Section;

(e) so long as no Default has occurred and is continuing or would
result therefrom, the Borrower or any of its Subsidiaries from making any
payment or distribution or taking any other action otherwise restricted by
clauses (a) or (c) of Section 7.2.6 in an aggregate amount not to exceed in
----------- --- -------------
any Fiscal Year 50% of the Borrower's Net Income for the preceding Fiscal
Year; and

(f) so long as no Default has occurred and is continuing or would
result therefrom, the Borrower from prepaying the principal of, or
redeeming, purchasing or defeasing the principal in respect of, the
Subordinated Notes, but only in an aggregate amount not to exceed

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<PAGE>

$43,919,525 (provided, that if the underwriters exercise their
--------
overallotment option to purchase additional shares of common stock of the
Borrower in the IPO, such aggregate amount shall be increased by an amount
equal to 65% of the Net Equity Proceeds attributable to the exercise of
such overallotment option, as certified to the Agent by an Authorized
Officer of the Borrower).

SECTION 7.2.7. Capital Expenditures, etc. The Borrower will not, and will
-------------------------
not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except

(a) Capital Expenditures which do not aggregate in excess of the
amount set forth below opposite such Fiscal Year:

Fiscal Year Maximum Amount
----------- --------------

1995 $23,000,000
1996 $25,000,000
1997 $28,000,000
1998 $31,000,000
1999 $32,000,000
2000 $32,000,000;

provided, however, that
-------- -------

(i) to the extent Capital Expenditures are made or committed to
be made in any Fiscal Year in an amount less than the maximum amount
permitted for such Fiscal Year as provided in this clause, the maximum
amount of Capital Expenditures which the Borrower or its Subsidiaries
may make or commit to make in the next following Fiscal Year shall be
increased by 50% of the amount of the permitted Capital Expenditures
not so made or committed to be made in the immediately preceding
Fiscal Year (the "Carry-Forward Amount");
--------------------

(ii) if all or a part of the Carry-Forward Amount is not used in
full in the immediately succeeding Fiscal Year, up to 25% of such
original Carry-Forward Amount may be carried forward to the second
immediately succeeding Fiscal Year, but no further carry forward of
such Carry-Forward Amount to any other succeeding Fiscal Year shall be
permitted; and

(iii) no portion of any Carry-Forward Amount shall be used in
any Fiscal Year until the entire amount of the Capital Expenditures
permitted to be made or committed to be made in such Fiscal Year as
provided in this clause (a) shall have been used; and
----------

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<PAGE>

(b) Capitalized Lease Liabilities to the extent permitted as
Indebtedness pursuant to clause (d) of Section 7.2.2.
---------- -------------

SECTION 7.2.8. Rental Obligations. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, enter into at any time any arrangement which
does not create a Capitalized Lease Liability and which involves the leasing by
the Borrower or any of its Subsidiaries from any lessor of any real or personal
property (or any interest therein), except arrangements which, together with all
other such arrangements which shall then be in effect, will not require the
payment of an aggregate amount in any year of Rentals by the Borrower and its
Subsidiaries in excess of 4% of Total Adjusted Capital of the immediately
preceding Fiscal Year.

SECTION 7.2.9. Take or Pay Contracts. The Borrower will not, and will not
---------------------
permit any of its Subsidiaries to, enter into or be a party to any arrangement
for the purchase of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made by the Borrower
or such Subsidiary regardless of whether such materials, supplies, other
property or services are delivered or furnished to it.

SECTION 7.2.10. Consolidation, Merger, etc. The Borrower will not, and
--------------------------
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any division
thereof) except

(a) any such Subsidiary of the Borrower may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any other
Subsidiary (other than a Restricted Subsidiary), and the assets or stock of
any Subsidiary may be purchased or otherwise acquired by the Borrower or
any other Subsidiary (other than a Restricted Subsidiary); provided,
--------
however, that in no event shall any Pledged Subsidiary merge with and into
-------
any Subsidiary other than another Pledged Subsidiary unless (i) the
Required Lenders shall have given their prior written consent thereto, or
(ii) after giving effect thereto, the Agent shall have a perfected pledge
of, and security interest in and to, all (or, in the case of a non-U.S.
Subsidiary (and subject to the last sentence of Section 7.1.7), 65%) of the
-------------
issued and outstanding shares of capital stock of the surviving Person in
form and substance satisfactory to the Agent and its counsel, pursuant to
such documentation and opinions as shall be necessary and appropriate in
the opinion of the Agent and its counsel to create, perfect or

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<PAGE>

maintain the collateral position of the Agent and the Lenders therein as
contemplated by this Agreement;

(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its Subsidiaries
may (to the extent permitted by clause (g) of Section 7.2.5) purchase all
---------- -------------
or substantially all of the assets or stock of any Person (or any division
thereof), or acquire such Person by merger;

(c) the Borrower may merge with Sola Investors pursuant to the terms
of the Sola Merger Agreement, and thereafter the Borrower may merge with
another Person so long as (i) the Borrower is the surviving corporation of
such merger, (ii) after giving effect to such merger, the Borrower is
organized under the laws of a State of the United States and (iii) no
Default shall exist before and after giving effect to such merger; and

(d) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, any corporation which is not a Subsidiary of
the Borrower; provided, that (i) such transaction is a Permitted
--------
Disposition or (ii) the following conditions are satisfied: (A) the
surviving corporation shall be a Subsidiary of the Borrower, (B) the
Borrower shall own at least the same percentage of the outstanding voting
stock of the surviving corporation as the Borrower owned of such Subsidiary
prior to such merger, liquidation or consolidation, (C) after giving effect
thereto, no Default would occur or be continuing and (D) the surviving
corporation complies with the provisions of Section 7.1.7.
-------------

SECTION 7.2.11. Permitted Dispositions. The Borrower will not, and will
----------------------
not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any part of the Borrower's or such Subsidiaries' assets (including
accounts receivable or capital stock of Subsidiaries (by way of the sale or
issuance in an initial public offering, private placement or other conveyance of
such capital stock)) to any Person unless,

(a) such disposition is in the ordinary course of its business or is
permitted by Section 7.2.10;
--------------

(b) such disposition is made by a Subsidiary of the Borrower to
either the Borrower or another Subsidiary (other than a Restricted
Subsidiary) of the Borrower;

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<PAGE>

(c) such disposition is in respect of assets acquired within six
months of such disposition pursuant to or as a result of a Permitted
Acquisition;

(d) after giving effect to such disposition,

(i) the aggregate of all Disposition Percentages in respect of
all dispositions of Net Tangible Assets other than pursuant to clause
------
(a), (b) or (c) (and for purposes of this clause, "Net Tangible
--- --- ---
Assets" shall include the fair market value of capital stock of
Subsidiaries of the Borrower that are, other than pursuant to clause
------
(e) below, issued, sold or otherwise conveyed in an initial public
---
offering, private placement or otherwise), (A) since December 1, 1993
would not exceed 15% and (B) during any Fiscal Year would not exceed
7.5%, and

(ii) the aggregate amount of Net Unrepatriated Disposition
Proceeds (including any Net Unrepatriated Disposition Proceeds that
arise as a result of such disposition) does not exceed 6% of Net
Tangible Assets at the time of such disposition.

For purposes of dispositions pursuant to this clause, "Disposition Percentage"
shall mean for any disposition a fraction (expressed as a percentage), the
numerator of which shall be the amount of Net Tangible Assets subject to such
disposition (determined as of the date of such disposition) and the denominator
of which shall be Net Tangible Assets (determined as of the date of such
disposition);

(e) such disposition is in respect of the issuance or sale (by way of
an initial public offering, private placement or otherwise) of the capital
stock of a Designated Subsidiary; provided, that after such issuance or
--------
sale, the Borrower shall continue to own, directly or indirectly, at least
51% (on a fully diluted basis) of such Designated Subsidiary (and each of
its Subsidiaries); or

(f) such disposition is otherwise approved by the Required Lenders.

SECTION 7.2.12. Modification of Certain Agreements.
----------------------------------

(a) The Borrower will not, and will not permit any of its Subsidiaries to,
consent to any amendment, supplement, amendment and restatement, waiver or other
modification of any of, or forbear to exercise any rights with respect to, the
terms or provisions contained in, or applicable to, the Merger Agreement, any
Certificate of Merger, the Purchase Agreement or the

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Registration Statement or any schedules, exhibits or agreements related thereto,
in each case which would adversely affect the Borrower's ability to perform
hereunder or which would increase the Borrower's or any of its Subsidiaries'
obligations or liabilities, contingent or otherwise (other than adjustments made
pursuant to the terms of the Purchase Agreement), except for such amendments,
supplements, amendments and restatements, waivers, modifications or acts of
forbearance which would not cause the Borrower or any of its Subsidiaries to
breach any of their obligations set forth herein or in any other Loan Document
or which, in the reasonable judgment of the Required Lenders, would not be
likely to detrimentally and materially affect the Borrower or any of its
Subsidiaries, or the rights, benefits or interests of the Agent, any Issuer or
the Lenders.

(b) The Borrower will not, and will not permit any of its Subsidiaries to,
consent to any amendment, supplement, amendment and restatement, waiver or other
modification of, or forbearance from exercising rights with respect to, any of
the terms or provisions contained in or applicable to the Subordinated Note
Indenture or the Subordinated Notes, or any other Subordinated Loan Agreement,
except for such amendments, supplements, amendments and restatements, waivers,
modifications or acts of forbearance which, in the reasonable judgment of the
Required Lenders, would not be likely to detrimentally and materially affect the
rights, benefits or interests of the Agent, any Issuer or the Lenders.

SECTION 7.2.13. Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is on fair and reasonable terms and is an
arrangement or contract of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Subsidiary with a Person which is
not one of its Affiliates; provided, however, that the foregoing shall not
-------- -------
prohibit

(a) transactions between the Borrower and any of its Subsidiaries, or
between such Subsidiaries, otherwise not prohibited herein;

(b) the Borrower or its Subsidiaries from paying (i) to AEA Investors
prior to the Effective Date, management and consulting fees in an aggregate
amount not to exceed $1,000,000 plus reimbursement of reasonable expenses
or (ii) to AEA Investors, a one-time fee in an amount not to exceed
$3,000,000 in respect of the termination of its management agreement with
AEA Investors; or

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SECTION 7.2.14. Negative Pledges, Restrictive Agreements, etc. The
---------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding (i) this Agreement and any other Loan Document,
(ii) any agreement governing any Indebtedness permitted either by clause (b) of
----------
Section 7.2.2 as in effect on December 1, 1993 or by clause (d) of Section 7.2.2
- ------------- ---------- -------------
as to the assets financed with the proceeds of such Indebtedness, or (iii) in
the case of clause (a) below, any agreement governing any Indebtedness permitted
----------
by clauses (j)(ii) and (k) of Section 7.2.2) prohibiting
--------------- --- -------------

(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, to the extent
that any such negative pledge would effectively prohibit the creation or
first priority perfection of any Liens of the type described in clause (a)
----------
of Section 7.2.3;
-------------

(b) the ability of the Borrower or any other Obligor to amend or
otherwise modify this Agreement or any other Loan Document; or

(c) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to the Borrower.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.1. Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Section 8.1 shall constitute an "Event of
----------- --------
Default".
- -------

SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in
--------------------------
the payment or prepayment when due of (a) any Reimbursement Obligation or any
deposit of cash for collateral purposes pursuant to Section 2.6.2 or Section
------------- -------
2.6.4, as the case may be, (b) any principal of or interest on any Loan, except
- -----
that, with respect to any Default in the payment of principal required as a
result of the operation of clause (b) of Section 3.1.1 as it relates to the
---------- -------------
prepayment of Loans with respect to the Borrowing Base Amount or in the payment
of interest, such Default may continue unremedied for a period of two Business
Days before an Event of Default shall exist

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hereunder as a result thereof, or (c) of any fee described in Article III or of
-----------
any other Obligation and such default shall continue unremedied for a period of
five days.

SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the
------------------
Borrower any Subsidiary Guarantor or any other Obligor made or deemed to be made
hereunder or in any other Loan Document executed by it or any other writing or
certificate furnished by or on behalf of the Borrower or any other Obligor to
the Agent, any Issuer or any Lender for the purposes of or in connection with
this Agreement or any such other Loan Document (including any certificates
delivered pursuant to Article V), is or shall be incorrect when made or deemed
---------
to have been made in any material respect.

SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The
----------------------------------------------------
Borrower shall default in the due performance and observance of any of its
obligations under Section 7.2 other than (x) clause (a) or (b) of Section 7.2.4
----------- ---------- --- -------------
or (y) Section 7.2.5; or the Borrower shall default, and such default shall
-------------
continue unremedied for a period of 30 days or more, in the due performance or
observance of any of its obligations under clause (a) or (b) of Section 7.2.4 or
---------- --- -------------
Section 7.2.5.
- -------------

SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. The
--------------------------------------------------
Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of
30 days after notice thereof shall have been given to the Borrower by the Agent
or any Lender.

SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in
-----------------------------
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries having a
-------------
principal amount, individually or in the aggregate, in excess of $2,500,000, or
a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness (subject to any applicable grace
period) if the effect of such default is to accelerate the maturity of any such
Indebtedness or such default shall continue unremedied for any applicable period
of time sufficient to permit the holder or holders of such Indebtedness, or any
trustee or agent for such holders, to cause or declare such Indebtedness to
become due and payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or to cause an offer to purchase or defease such
Indebtedness to be required to be made, prior to its expressed maturity.

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SECTION 8.1.6. Judgments. Any judgment or order for the payment of money
---------
in excess of $2,500,000 (exclusive of any amounts fully covered by insurance
(less any applicable deductible) or indemnification and as to which the insurer
or the indemnifying party, as the case may be, has acknowledged its
responsibility to cover such judgment or order) shall be rendered against the
Borrower or any of its Subsidiaries and such judgment shall not have been
vacated or discharged or stayed or bonded pending appeal within 45 days after
the entry thereof.

SECTION 8.1.7. Pension Plans. Any of the following events shall occur
-------------
with respect to any Pension Plan

(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of $2,500,000; or

(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA and such
failure continues for 30 days or more.

SECTION 8.1.8. Control of the Borrower. Any Change in Control shall
-----------------------
occur.

SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of its
---------------------------
Subsidiaries (which, either singly is or in the aggregate would be, a
Significant Subsidiary), shall

(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness generally to pay, debts as they become due;

(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;

(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days, provided that the Borrower, and
each such Subsidiary hereby expressly authorizes the Agent and each Lender
to appear in any court conducting any

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relevant proceeding during such 60-day period to preserve, protect and
defend their rights under this Agreement and the other Loan Documents;

(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any such Subsidiary, or such case or proceeding
shall be consented to or acquiesced in by the Borrower or such Subsidiary,
as the case may be, or shall result in the entry of an order for relief or
shall remain for 60 days undismissed, provided that the Borrower and each
Subsidiary hereby expressly authorizes the Agent and each Lender to appear
in any court conducting any such case or proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan
Documents; or

(e) take any corporate action authorizing, or in furtherance of, any
of the foregoing.

SECTION 8.1.10. Impairment of Security, etc. Any Loan Document, or any
---------------------------
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; the Borrower,
any other Obligor or any other party shall, directly or indirectly, contest in
any manner such effectiveness, validity, binding nature or enforceability; or
any Lien securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien.

SECTION 8.1.11. Subordinated Notes. The subordination provisions relating
------------------
to the Subordinated Note Indenture or any other Subordinated Loan Agreement (the
"Subordination Provisions") shall fail to be enforceable by the Lenders (which
------------------------
have not effectively waived the benefits thereof) in accordance with the terms
thereof, or the principal or interest on any Loan, Reimbursement Obligation or
other Obligations shall fail to constitute Senior Indebtedness (as defined in
the Subordinated Note Indenture (or similar term in any other Subordinated Loan
Agreement)); or the Borrower or any of its Subsidiaries shall, directly or
indirectly, disavow or contest in any manner (i) the effectiveness, validity or
enforceability of any of the Subordination Provisions, (ii) that any of such
Subordination Provisions exist for the benefit of the Agent, each Issuer and the
Lenders or (iii) that all payments of principal or interest with respect to any
such Subordinated Loan Agreement made by the Borrower, or realized from the
liquidation of any property of the

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Borrower, shall be subject to any of such Subordination Provisions.

SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
- ----------- --- -------------
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.

SECTION 8.3. Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (d) of Section
----------- --- -------
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
- -----
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
Commitments (if not theretofore terminated) to be terminated, whereupon the full
unpaid amount of such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments shall
terminate.

ARTICLE IX

THE AGENT

SECTION 9.1. Actions. Each Lender hereby appoints Scotiabank as its Agent
-------
under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the absence
of other written instructions from the Required Lenders received from time to
time by the Agent (with respect to which the Agent agrees that it will comply,
except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro rata according to such Lender's Percentage, from and against any
--- ----
and all liabilities, obligations, losses, damages, claims, costs or expenses of
any kind or nature whatsoever which may at any time be imposed on, incurred by,
or asserted against, the Agent in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Agent is not reimbursed by the Borrower;

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<PAGE>

provided, however, that no Lender shall be liable for the payment of any portion
- -------- -------
of such liabilities, obligations, losses, damages, claims, costs or expenses
which are determined by a court of competent jurisdiction in a final proceeding
to have resulted solely from the Agent's gross negligence or wilful misconduct.
The Agent shall not be required to take any action hereunder, under the Notes or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of the Agent shall be
or become, in the Agent's determination, inadequate, the Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.

SECTION 9.2. Funding Reliance, etc. Unless the Agent shall have been
---------------------
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
New York City time, on the Business Day prior to a Borrowing that such Lender
will not make available the amount which would constitute its Percentage of
such Borrowing on the date specified therefor, the Agent may assume that such
Lender has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Borrower severally agree to repay the Agent forthwith
on demand such corresponding amount together with interest thereon, for each day
from the date the Agent made such amount available to the Borrower to the date
such amount is repaid to the Agent, at the interest rate applicable at the time
to Loans comprising such Borrowing (in the case of the Borrower) and (in the
case of a Lender), at the Federal Funds Rate (for the first two Business Days
after which such amount has not been repaid, and thereafter at the interest rate
applicable to Loans comprising such Borrowing.

SECTION 9.3. Exculpation. Neither the Agent nor any of its directors,
-----------
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it under this Agreement or any other Loan Document, or
in connection herewith or therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution of
this Agreement or any other Loan Document, nor for the creation, perfection or
priority of any Liens purported to be created by any of the Loan Documents, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
the Borrower of its obligations hereunder or under any other Loan Document. Any
such inquiry which may be made by the Agent shall not obligate it to make any

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further inquiry or to take any action. The Agent shall be entitled to rely upon
advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Agent believes to be genuine and to
have been presented by a proper Person.

SECTION 9.4. Successor. The Agent may resign as such at any time upon at
---------
least 30 days' prior notice to the Borrower and all Lenders. If the Agent at
any time shall resign, the Required Lenders may, with the consent of the
Borrower (such consent not to be unreasonably withheld and, if the Borrower
withholds its consent, stating the reasons therefor in reasonable detail),
appoint another Lender as a successor Agent which shall thereupon become the
Agent hereunder. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving notice of resignation, then the retiring Agent may,
with the consent of the Borrower (such consent not to be unreasonably withheld
and, if the Borrower withholds its consent, stating the reasons therefor in
reasonable detail) and on behalf of the Lenders, appoint a successor Agent,
which shall be one of the Lenders or a commercial banking institution organized
under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of
a commercial banking institution, and having (x) a combined capital and surplus
of at least $250,000,000 and (y) a credit rating of AA or better by Moody's
Investors Service, Inc. or a comparable rating by Standard and Poor's
Corporation; provided, however, that if, after expending all reasonable
-------- -------
commercial efforts, such retiring Agent is unable to find a commercial banking
institution which is willing to accept such appointment and which meets the
qualifications set forth in clause (y) above, such retiring Agent, shall be
----------
permitted to appoint as its successor from all available commercial banking
institutions willing to accept such appointment such institution having the
highest credit rating of all such available and willing institutions. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as the Agent, the provisions of

(a) this Article IX shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was the Agent under this
Agreement; and

(b) Section 10.3 and Section 10.4 shall continue to inure to its
------------ ------------
benefit.

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SECTION 9.5. Loans by Scotiabank. Scotiabank shall have the same rights
-------------------
and powers with respect to (x) the Credit Extensions made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. Scotiabank and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if Scotiabank were not the Agent hereunder.

SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of the Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.

SECTION 9.7. Copies, etc. The Agent shall give prompt notice to each
-----------
Lender of each notice or request required or permitted to be given to the Agent
by the Borrower pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by the Borrower). The Agent will distribute to each
Lender each document or instrument received for its account and copies of all
other communications received by the Agent from the Borrower for distribution to
the Lenders by the Agent in accordance with the terms of this Agreement or any
other Loan Document.

ARTICLE X

MISCELLANEOUS PROVISIONS

SECTION 10.1. Waivers, Amendments, etc. The provisions of this Agreement
------------------------
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided, however, that no such
-------- -------
amendment, modification or waiver shall:

(a) extend any Commitment Termination Date or modify this Section
-------
10.1 without the consent of all Lenders;
----

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(b) increase the aggregate amount of any Lender's pro rata share of
--------
any Commitment Amount or reduce any fees described in Article III payable
-----------
to any Lender without the consent of such Lender;

(c) extend the Stated Maturity Date for any Lender's Loan, or reduce
the principal amount of or rate of interest on any Lender's Loan, without
the consent of such Lender (it being understood and agreed, however, that
any vote to rescind any acceleration made pursuant to Section 8.2 and
-----------
Section 8.3 of amounts owing with respect to the Loans and other
-----------
Obligations shall only require the vote of the Required Lenders);

(d) change the definition of "Required Lenders" or any requirement
hereunder that any particular action be taken by all Lenders without the
consent of all Lenders;

(e) increase the Stated Amount of any Letter of Credit unless
consented to by each Issuer;

(f) release any of (i) the guarantees of any Subsidiary Guarantor or
(ii) the collateral (including any Pledged Notes (except as provided in
clause (e)(ii) of Section 7.2.2) or Pledged Shares, as such terms are
-------------- -------------
defined in the Pledge Agreement), in either case without the consent of all
Lenders (it being understood that no consent of the Lenders is required for
a Permitted Disposition);

(g) change any of the terms of clause (b) of Section 2.1.3 or Section
---------- ------------- -------
2.3.2 without the consent of Scotiabank; or
-----

(h) affect adversely the interests, rights or obligations of the
Agent qua the Agent, or any Issuer, unless consented to by the Agent or
---
such Issuer, as the case may be.

No failure or delay on the part of the Agent, any Issuer or any Lender in
exercising any power or right under this Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Borrower in
any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Agent, any Issuer or any Lender
under this Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.

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SECTION 10.2. Notices. All notices and other communications provided to
-------
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter.

SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay
-----------------------------
on demand all reasonable expenses of the Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agent and of local counsel, if any,
who may be retained by counsel to the Agent) in connection with

(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated, and

(b) the filing, recording, refiling or rerecording of the Pledge
Agreement and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements, amendments and restatements and
other modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or the Pledge Agreement, and

(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.

The Borrower further agrees to pay, and to save the Agent, each Issuer and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Credit Extensions hereunder, or the issuance of the Notes, Letters of Credit or
any other Loan Documents. The Borrower also agrees to reimburse the Agent, each
Issuer and each Lender upon demand for all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and legal expenses of counsel to the
Agent, each Issuer and the Lenders, and, based upon the written advice of legal
counsel, a

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copy of which shall be provided to the Borrower, that in such counsel's judgment
having a common counsel for the Agent, each Issuer and the Lenders would present
such counsel with a conflict of interest, of one other counsel selected by the
Required Lenders (other than the Agent)) incurred by the Agent, each Issuer or
such Lenders in connection with (x) the negotiation of any restructuring or
"work-out" with the Borrower, whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.

SECTION 10.4. Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Agent, each Issuer and
each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
-------------------
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements, whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third parties (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
-----------------------
as a result of, or arising out of, or relating to

(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension;

(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Credit
---------
Extension), provided that any such action is resolved in favor of such
Indemnified Party;

(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not the Agent, any Issuer or any Lender is party thereto;

(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material;

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<PAGE>

(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary; or

(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the Notes and any transfer of the property of
the Borrower or any of its Subsidiaries by foreclosure or by a deed in lieu
of foreclosure for any Lender's Environmental Liability, regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary),

except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any cost recovery
action against, the Agent, any Issuer or any Lender under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted. It is
expressly understood and agreed that to the extent that any of such Persons is
strictly liable under any Environmental Laws, the Borrower's obligation to such
Person under this indemnity shall likewise be without regard to fault on the
part of the Borrower with respect to the violation or condition which results in
liability of such Person. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

SECTION 10.5. Survival. The obligations of the Borrower under Sections
-------- --------
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
- --- --- --- --- ---- ----
Section 9.1, shall in each case survive any termination of this Agreement, the
- -----------
payment in full of all the Obligations and the termination of all the
Commitments. The representations and warranties made by the Borrower and each
other Obligor in this Agreement and in each other Loan Document shall survive
the execution and delivery of this Agreement and each such other Loan Document.

SECTION 10.6. Severability. Any provision of this Agreement or any other
------------
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the

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<PAGE>

remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.

SECTION 10.7. Headings. The various headings of this Agreement and of
--------
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.

SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
---------------------------------------------
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective upon satisfaction
of the conditions set forth in Section 5.1 and when counterparts hereof executed
-----------
on behalf of the Borrower, the Agent and each Lender (or notice thereof
satisfactory to the Agent) shall have been received by the Agent and notice
thereof shall have been given by the Agent to the Borrower and each Lender.

SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
-------------------------------
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the
Notes, the other Loan Documents and the Fee Letter constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto.

SECTION 10.10. Successors and Assigns. This Agreement shall be binding
----------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
-------- -------

(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agent and all Lenders;
and

(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
-------------

SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
-------------------------------------------------------
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
- ---------------
Letters of Credit and Commitments to one or more other Persons in accordance
with this Section 10.11.
-------------

SECTION 10.11.1. Assignments. Upon prior notice to the Borrower and the
-----------
Agent, any Lender,

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<PAGE>

(a) with the consent of the Borrower and the Agent (which consents
shall not be unreasonably delayed or withheld) may at any time assign and
delegate to one or more commercial banks or other financial institutions,
and

(b) with notice to the Borrower and the Agent, but without the
consent of the Borrower or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender

(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans,
---------------
Letter of Credit Outstandings and Commitments in a minimum aggregate amount of
$5,000,000 (or, if less, the entire remaining amount of such Lender's Loans,
Letter of Credit Outstandings and Commitments); provided, however, that (i) the
-------- -------
assigning Lender, to the extent it retains any Loans and/or Revolving Loan
Commitments, shall retain at least $10,000,000 (less any reductions of the
Revolving Loan Commitment pursuant to the terms of this Agreement) in the
aggregate of Revolving Loan Commitments and (ii) the assigning Lender must
assign a pro-rata portion of each of its Revolving Loan Commitments, Revolving
Loans and interest in Letters of Credit Outstanding; provided, further, that
-------- -------
each Assignee Lender will comply, if applicable, with the provisions contained
in Sections 4.11 and 4.12; provided, further, however, that the Borrower and
------------- ---- -------- ------- -------
each other Obligor and the Agent shall be entitled to continue to deal solely
and directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until

(c) notice of such assignment and delegation, together with
(i) payment instructions, (ii) the Internal Revenue Service Forms or other
statements contemplated by clause (b) of Section 4.6, if applicable, and
---------- -----------
(iii) addresses and related information with respect to such Assignee
Lender, shall have been delivered to the Borrower and the Agent by such
Lender and such Assignee Lender;

(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement (which shall include,
inter alia, the Assignee Lender's representations contemplated by clause
----- ---- ------
(b) of Section 4.6), accepted by the Agent; and
--- -----------

(e) the processing fees described below shall have been paid.

From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the

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<PAGE>

extent that rights and obligations hereunder have been assigned and delegated to
such Assignee Lender in connection with such Lender Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights and
obligations hereunder have been assigned and delegated by it in connection with
such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. Within five Business Days after
its receipt of notice that the Agent has received and accepted an executed
Lender Assignment Agreement, but subject to clause (d) above, the Borrower shall
----------
execute and deliver to the Agent (for delivery to the relevant Assignee Lender)
a new Note evidencing such Assignee Lender's assigned Loans and Commitments and,
if the assignor Lender has retained Loans and Commitments hereunder, a
replacement Note in the principal amount of the Loans and Commitments retained
by the assignor Lender hereunder (such Note to be in exchange for, but not in
payment of, the Note then held by such assignor Lender). Each such Note shall
be dated the date of the predecessor Note. The assignor Lender shall mark each
predecessor Note "exchanged" and deliver each of them to the Borrower. Accrued
interest on that part of each predecessor Note evidenced by a new Note, and
accrued fees, shall be paid as provided in the Lender Assignment Agreement.
Accrued interest on that part of each predecessor Note evidenced by a
replacement Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee in the amount of $3,000 to the Agent upon delivery of
any Lender Assignment Agreement. Any attempted assignment and delegation not
made in accordance with this Section 10.11.1 shall be null and void.
---------------
Notwithstanding any other term of this Section 10.11.1, the agreement of
---------------
Scotiabank to provide the Swing Line Loan Commitment shall not impair or
otherwise restrict in any manner the ability of Scotiabank to make any
assignment of its Loans or Commitments, it being understood and agreed that
Scotiabank may terminate its Swing Line Loan Commitment, either in whole or in
part, in connection with the making of any assignment; provided, that the
--------
Assignee Lender assumes the Swing Line Loan Commitment of Scotiabank; and,
provided, further, that if the Revolving Loan Commitment Amount of Scotiabank is
- -------- -------
equal to or greater than $10,000,000, Scotiabank agrees to continue to provide
the Swing Line Loan Commitment. Notwithstanding anything to the contrary set
forth above, any Lender may (without requesting the consent of the Borrower or
the Agent) pledge its Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank.

SECTION 10.11.2. Participations. Any Lender may at any time sell to one
--------------
or more commercial banks or other Persons (each

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<PAGE>

of such commercial banks and other Persons being herein called a "Participant")
-----------
participating interests in any of the Loans, Commitments, or other interests of
such Lender hereunder; provided, however, that
-------- -------

(a) no participation contemplated in this Section 10.11 shall relieve
-------------
such Lender from its Commitments or its other obligations hereunder or
under any other Loan Document;

(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations;

(c) the Borrower and each other Obligor and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other
Loan Documents;

(d) no Participant, unless such Participant is an Affiliate of such
Lender or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in clause (a), (b), (e), (f) or, to the extent requiring
---------- --- --- ---
the consent of each Lender, clause (c) of Section 10.1; and
---------- ------------

(e) the Borrower shall not be required to pay any amount under this
Agreement that is greater than the amount which it would have been required
to pay had no participating interest been sold.

The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
- ------------ --- --- --- --- --- ---- ----
Lender. Each Participant shall only be indemnified for increased costs pursuant
to Section 4.3, 4.5 or 4.6 if the Lender which sold such participating interest
----------- --- ---
to such Participant concurrently makes a claim on the Borrower for such
increased costs.

SECTION 10.12. Other Transactions. Nothing contained herein shall
------------------
preclude the Agent, any Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Affiliates in which the Borrower
or such Affiliate is not restricted hereby from engaging with any other Person.

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<PAGE>

SECTION 10.13. Execution on Behalf of Corporation. Any signature by any
----------------------------------
Authorized Officer on this Agreement, any Loan Document and any other instrument
and certificate executed or to be executed pursuant to or in connection with
this Agreement or such other Loan Documents is provided only in such Authorized
Officer's capacity as a corporate officer, and not in any way in such Authorized
Officer's personal capacity.

SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS, ANY ISSUER OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
- -------- -------
OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION, SUBJECT TO THE BORROWER'S RIGHT TO CONTEST
SUCH JUDGMENT BY MOTION OR APPEAL ON ANY GROUNDS NOT EXPRESSLY WAIVED IN THIS
SECTION 10.14. THE BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEMS
- -------------
(THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY,
-------------
NEW YORK, NEW YORK 10019, UNITED STATES, AS ITS AGENT TO RECEIVE, ON THE
BORROWER'S BEHALF AND ON BEHALF OF THE BORROWER'S PROPERTY, SERVICE OF COPIES OF
THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY
OF SUCH PROCESS TO THE BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ABOVE ADDRESS, AND THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND
DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN
ALTERNATIVE METHOD OF SERVICE, THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO

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<PAGE>

ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

SECTION 10.15. Waiver of Jury Trial. THE AGENT, THE LENDERS, EACH ISSUER
--------------------
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, EACH ISSUER OR
THE BORROWER IN CONNECTION HEREWITH OR THEREWITH. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT, THE LENDERS AND
EACH ISSUER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

SECTION 10.16. Global Amendment to Loan Documents. Effective as of the
----------------------------------
Effective Date, each Loan Document is hereby amended by deleting each reference
to "Sola Group Ltd." appearing in each such Loan Document and inserting in place
thereof the following:

"Sola International Inc. (formerly known as Sola Group Ltd.)".

SECTION 10.17. Termination of Sola Holdings Undertaking Agreement. The
--------------------------------------------------
Agent and the Lenders hereby terminate that certain Sola Holdings Undertaking
Agreement, dated as of December 1, 1993, made by Sola Holdings in favor of The
Bank of Nova Scotia as Agent for the Lenders, and hereby release, waive and
discharge Sola Holdings from any and all obligations thereunder. The release,
waiver and discharge set forth in this Section shall be deemed to have occurred
immediately prior to the consummation of the Investors Merger.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

SOLA INTERNATIONAL INC.
(formerly known as Sola
Group Ltd.)

By
------------------------------------------------
Title:

Address: 2420 Sand Hill Road
Menlo Park, California 94025

Facsimile No.: (415) 324-6850

Attention: Chief Executive Officer

with a copy to:

AEA Investors, Inc.
65 East 55th Street, 27th Floor
New York, New York 10622

Facsimile No.: (212) 888-1459

Attention:

THE BANK OF NOVA SCOTIA,
as the Agent

By
------------------------------------------------
Title:

Address: One Liberty Plaza
New York, New York 10006

Facsimile No.: (212) 225-5090

Attention: Todd S. Meller

-116-

<PAGE>

Revolving Loan THE BANK OF NOVA SCOTIA
Commitment: 18.421053%

By
-----------------------------
Title:

Domestic Office:
---------------
One Liberty Plaza
New York, NY 10006

Facsimile No.: (212) 225-5091

Attention: Todd S. Meller

LIBOR Office:
------------
One Liberty Plaza
New York, NY 10006

Facsimile No.: (212) 225-5090

Attention: Todd S. Meller

-117-

<PAGE>

Revolving Loan BANK OF AMERICA NATIONAL TRUST
Commitment: 14.473684% & SAVINGS ASSOCIATION

By
-----------------------------
Title:

Domestic Office:
---------------
231 South LaSalle Street
Chicago, Illinois 60697

Facsimile No.: 312-828-3864

Attention: Linda A. Carper

LIBOR Office:
------------
231 South LaSalle Street
Chicago, Illinois 60697

Facsimile No.: 312-828-3864

Attention: Rose Cook

-118-

<PAGE>

Revolving Loan DEUTSCHE BANK AG NEW YORK
Commitment: 14.473684% BRANCH AND/OR CAYMAN
ISLANDS BRANCH

By
-----------------------------
Title:

Domestic Office:
---------------
31 West 52nd Street
New York, NY 10019

Facsimile No.: (212) 474-8212

Attention: Frederick W. Laird

LIBOR Office:
------------
Deutsche Bank AG
Cayman Islands Branch
c/o Deutsche Bank AG
New York Branch
31 West 52nd Street
New York, NY 10019

Facsimile No.: (212) 474-8212

Attention: Frederick W. Laird

-119-

<PAGE>

Revolving Loan THE FIRST NATIONAL BANK
Commitment: 14.473684% OF BOSTON

By
-----------------------------
Title:

Domestic Office:
---------------
100 Federal Street
Mail Stop: 01-21-01
Boston, MA 02110

Facsimile No.: (617) 434-0630

Attention: Lisa S. Marshall

LIBOR Office:
------------
100 Federal Street
Mail Stop: 01-21-01
Boston, MA 02110

Facsimile No.: (617) 434-0630

Attention: Lisa S. Marshall

-120-

<PAGE>

Revolving Loan LONG-TERM CREDIT BANK OF JAPAN,
Commitment: 14.473684% LTD., LOS ANGELES AGENCY

By
-----------------------------
Title:

Domestic Office:
---------------
444 South Flower Street
Suite 3700
Los Angeles, CA 90071-2938

Facsimile No.: (213) 622-6908

Attention: Morgan Edwards

LIBOR Office:
------------
444 South Flower Street
Suite 3700
Los Angeles, CA 90071-2938

Facsimile No.: (213) 626-1067

Attention: Diane Huynh

-121-

<PAGE>

Revolving Loan BANQUE PARIBAS
Commitment: 7.894737%

By
----------------------------
Title:

By
-----------------------------
Title:

Domestic Office:
---------------
787 Seventh Avenue
New York, NY 10019

Facsimile No.: (212) 841-2363

Attention: David Buseck

LIBOR Office:
------------
787 Seventh Avenue
New York, NY 10019

Facsimile No.: (212) 841-2363

Attention: David Buseck

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<PAGE>

Revolving Loan LASALLE NATIONAL BANK
Commitment: 7.894737%

By
-----------------------------
Title:

Domestic Office:
---------------
120 South LaSalle Street
Chicago, Illinois 60610

Facsimile No.: (312) 904-6546

Attention: Betty Latson

LIBOR Office:
------------
120 South LaSalle Street
Chicago, Illinois 60610

Facsimile No.: (312) 904-6546

Attention: Betty Latson

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<PAGE>

Revolving Loan NATIONSBANK, N.A. (CAROLINAS)
Commitment: 7.894737%

By
-----------------------------
Title:

Domestic Office:
---------------
767 Fifth Avenue
Fifth Floor
New York, NY 10153

Facsimile No.: (212) 593-1083

Attention: Eric C. Stephenson

LIBOR Office:
------------
101 North Tryon Street
NC1-001-15-03
Charlotte, NC 28255

Facsimile No.: (704) 386-8694

Attention: Lisa McClelland

-124-

EXHIBIT 99(C)(1)

EXECUTION COPY

PREFERRED AND COMMON STOCK AGREEMENT

Preferred and Common Stock Agreement (this "Agreement"), dated as of May
28, 1996, between Sola International Inc., a Delaware corporation ("Purchaser"),
and Norman Davidson ("Stockholder").

WHEREAS, Stockholder owns (both beneficially and of record) 12,000 shares
of Series B Convertible Preferred Stock ("Series B Preferred"), of Neolens,
Inc., a Florida corporation (the "Company") and 495,975 shares of Common Stock
("Common Stock") of the Company;

WHEREAS, each share of Series B Preferred is convertible, at the option of
the holder, into 20 shares of Common Stock;

WHEREAS, concurrently herewith, Purchaser and a wholly owned subsidiary of
Purchaser ("Sub") are entering into an agreement and plan of merger with the
Company, dated as of May 28, 1996 (the "Merger Agreement"), pursuant to which
Sub has agreed to make a tender offer (the "Offer") for, among other things, all
outstanding shares of Common Stock at $1.14 per share (the "Common Stock Offer
Price"), net to the seller in cash, and all outstanding shares of Series B
Preferred at $41.09 per share (the "Series B Preferred Offer Price"), net to the
seller in cash, to be followed by a merger of Sub with and into the Company (the
"Merger"); and

WHEREAS, as a condition to the willingness of Purchaser to enter into the
Merger Agreement, Purchaser has required that Stockholder agree, and in order to
induce Purchaser to enter into the Merger Agreement, Stockholder has agreed,
among other things, (i) to tender all of the shares of Common Stock and Series B
Preferred now owned by Stockholder (collectively, the "Shares"), (ii) to grant
Purchaser the option to purchase the Shares, (iii) to appoint Purchaser as
Stockholder's proxy to vote the Shares, and (iv) with respect to certain
questions put to stockholders of the Company for a vote, to vote the Shares, in
each case, in accordance with the terms and conditions of this Agreement.

<PAGE>

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:

1. Tender of Shares. Stockholder agrees to tender and sell to Purchaser
pursuant to the Offer all of the Shares. Stockholder agrees that Stockholder
shall deliver to the depository for the Offer, no later than the tenth Business
Day (as hereinafter defined) following the commencement of the Offer, either a
letter of transmittal together with the certificates for the Shares, if
available, or a "Notice of Guaranteed Delivery", if the Shares are not
available. Stockholder agrees not to withdraw any Shares tendered into the
Offer.

2. Stock Option.

2.1. Grant of Stock Option. Stockholder hereby grants to Purchaser an
irrevocable option (the "Stock Option") to purchase all, but not less than
all, of the Shares at such time as Purchaser may exercise the Stock Option
at a per share purchase price equal to the Common Stock Offer Price in
respect of the Common Stock and the Series B Preferred Offer Price in
respect of the Series B Preferred.

2.2. Exercise of Stock Option. (a) The Stock Option may be exercised
by Purchaser at any time prior to the earlier of (i) the date upon which
the Effective Time (as defined in the Merger Agreement) occurs and (ii) the
date forty-five days after the date of termination of the Merger Agreement.

(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") to
Stockholder specifying the date, which shall be a Business Day not
more than ten days after the date of the Exercise Notice and a place
for the closing of such purchase (a "Stock Option Closing").

(c) Upon receipt of an Exercise Notice, Stockholder shall be
obligated to deliver to Purchaser a certificate or certificates
representing the number of Shares specified in such Exercise Notice,
in accordance with the terms of this Agreement, on the date

-2-
<PAGE>

specified in such Exercise Notice. The date specified in such
Exercise Notice may be as early as two Business Days after the date of
such Exercise Notice.

(d) For the purposes of this Agreement, the term "Business Day"
shall mean a day on which banks are not required or authorized to be
closed in the City of New York.

2.3. Condition to Delivery of the Shares. The obligation of
Stockholder to deliver the Shares upon any exercise of a Stock Option is
subject to the following condition: There shall be no preliminary or
permanent injunction or other order by any court of competent jurisdiction
restricting, preventing or prohibiting such exercise of such Stock Option
or the delivery of the Shares subject to such Stock Option in respect of
such exercise.

2.4. Stock Option Closing. At the Stock Option Closing, Stockholder
will deliver to Purchaser a certificate or certificates evidencing all of
the Shares, each such certificate being duly endorsed in blank and
accompanied by such stock powers and such other documents as may be
necessary in Purchaser's judgment to transfer record ownership of the
Shares into Purchaser's name on the stock transfer books of the Company and
Purchaser will purchase the delivered Shares at a purchase price equal to
the Common Stock Offer Price in the case of the Common Stock and the Series
B Preferred Offer Price in the case of the Series B Preferred. All payments
made by Purchaser to Stockholder pursuant to this Section 2.4 shall be made
by wire transfer of immediately available funds to an account designated by
Stockholder or by certified bank check payable to Stockholder, in an amount
equal to the sum of (A) the product of (a) the Common Stock Offer Price and
(b) the total number of shares of Common Stock delivered at the Stock
Option Closing and (B) the product of (a) the Series B Preferred Offer
Price and (b) the total number of shares of Series B Preferred delivered at
the Stock Option Closing.

2.5. Adjustments Upon Changes in Capitalization. In the event of any
change in the number of issued and outstanding shares of Common Stock or
Series B Preferred by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion

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<PAGE>

or exchange of shares, or any other change in the corporate or capital
structure of the Company (including, without limitation, the declaration or
payment of an extraordinary dividend of cash or securities) which would
have the effect of diluting or otherwise adversely affecting Purchaser's
rights and privileges under this Agreement, the number and kind of the
Shares and the consideration payable in respect of the Shares shall be
appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the
foregoing, in any such event, at the option of Purchaser, the Stock Option
shall represent the right to purchase, in addition to the number and kind
of Shares which Purchaser would be entitled to purchase pursuant to the
immediately preceding sentence, whatever securities, cash or other property
the Shares subject to the Stock Option shall have been converted into or
otherwise exchanged for, together with any securities, cash or other
property which shall have been distributed with respect to such Shares.

3. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Purchaser as follows:

3.1. Title to the Shares. Stockholder is the owner (both beneficially
and of record) of 12,000 shares of Series B Preferred and 495,975 shares of
Common Stock and, other than the right to convert each share of Series B
Preferred into 20 shares of Common Stock and ownership of Series M Warrants
(the "Warrants") entitling Stockholder to purchase an aggregate of 60,000
shares of Common Stock at an exercise price of $1.875 per share,
Stockholder does not have any other rights of any nature to acquire any
additional shares of Common Stock or Series B Preferred. Stockholder owns
all of the Shares free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on
Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever, and, except as provided in this Agreement, Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to any of the Shares. Upon the exercise of the
Stock Option and the delivery to Purchaser by Stockholder of a certificate
or certificates evidencing the Shares, Purchaser will receive good, valid
and marketable title to the Shares, free

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<PAGE>

and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on Purchaser's voting
rights, charges and other encumbrances of any nature whatsoever.

3.2. Authority Relative to This Agreement. Stockholder has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Stockholder and, assuming the due authorization, execution and
delivery by Purchaser, constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms.

3.3. No Conflict. The execution and delivery of this Agreement by
Stockholder does not, and the performance of this Agreement by Stockholder
will not, conflict with, violate or result in any breach of or constitute a
default under (or an event which with notice or lapse of time or both would
become a default under) any agreement, judgment, injunction, order, law,
regulation or arrangement to which Stockholder is a party or is bound,
except in each case to the extent any such breach or default, whether taken
singly or in the aggregate, would not have a material adverse effect on
Stockholder's ability to vote the Shares, perform his obligations
hereunder, and consummate the transactions contemplated hereby.

3.4. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of Stockholder.

4. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Stockholder as follows:

4.1. Authority Relative to This Agreement. Purchaser has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part
of

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<PAGE>

Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser and, assuming the due authorization, execution and
delivery by Stockholder, constitutes a legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms.

4.2. No Conflict. The execution and delivery of this Agreement by
Purchaser does not, and the performance of this Agreement by Purchaser will
not, (a) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except for requirements of federal and state
securities laws, (b) conflict with or violate the certificate of
incorporation or bylaws or equivalent organizational documents, if any, of
Purchaser, (c) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Purchaser or by which any property or
asset of Purchaser is bound or affected, or (d) result in any breach of or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance of any nature whatsoever on any
property or asset of Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which
Purchaser or any property or asset of Purchaser is bound or affected,
except in each case to the extent any such breach or default, whether taken
singly or in the aggregate, would not have a material adverse effect on
Purchaser or its ability to consummate the transactions contemplated
hereby.

4.3. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission from Stockholder in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Purchaser.

4.4. Investment Intent. Purchaser hereby represents that any
securities it purchases pursuant to this Agreement are being purchased for
its own account for investment and not with a view to, or for sale in
connection with, any public distribution thereof.

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<PAGE>

5. Covenants of Stockholder.

5.1. No Disposition or Encumbrance of Shares; No Conversion of Shares;
Acquisition of Additional Shares; No Exercise of Warrants. (a) Stockholder
hereby covenants and agrees that, except as contemplated by this Agreement,
Stockholder shall not, and shall not offer or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of, or create or permit to
exist any security interest, lien, claim, pledge, option, right of first
refusal, agreement, limitation on Stockholder's voting rights, charge or
other encumbrance of any nature whatsoever with respect to the Shares now
owned or that may hereafter be acquired by Stockholder. Stockholder hereby
covenants and agrees not to exercise the Warrants.

(b) Stockholder hereby covenants and agrees that, without the
prior written consent of Purchaser, Stockholder shall not, and shall
not offer to agree to, convert the Series B Preferred into Common
Stock or cause the Series B Preferred to be converted into Common
Stock or to exercise the Warrants.

(c) Stockholder hereby covenants and agrees that any additional
shares of Series B Preferred, Common Stock, warrants, options or other
securities or rights exercisable for, exchangeable for or convertible
into shares of Series B Preferred or Common Stock shall be subject to
this Agreement and shall, for all purposes of this Agreement, be
deemed to be "Shares".

5.2. No Solicitation of Transactions. Stockholder shall not, directly
or indirectly, through any agent or representative or otherwise, solicit,
initiate or encourage the submission of any proposal or offer from any
individual, corporation, partnership, limited partnership, syndicate,
person (including, without limitation, a "person" as defined in section
13(d)(3) of the Securities Exchange Act of 1934, as amended), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government (collectively, other than Purchaser and any
affiliate of Purchaser, a "Person") relating to (i) any acquisition or
purchase of all or any of the Shares or (ii) any acquisition or purchase of
all or (other than in the ordinary course of business) any portion of the
assets of, or any equity interest in, the Company

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<PAGE>

or any business combination, whether by merger, consolidation, or
otherwise, with the Company or participate in any negotiations regarding,
or furnish to any Person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in or facilitate or
encourage, any effort or attempt by any Person to do or seek any of the
foregoing. Stockholder hereby represents that neither it nor its agents or
representatives is now engaged in any discussions or negotiations with any
Person with respect to any of the foregoing.

5.3. Compliance of Stockholder with This Agreement. Stockholder shall
take all actions and forbear from all actions, in each case, necessary in
order that (a) all of Stockholder's representations and warranties
hereunder are true and correct and (b) Stockholder fulfills all of its
obligations hereunder.

6. Covenants and Acknowledgment of Purchaser.

6.1. No Exercise of Stock Option During Tender Offer. Purchaser hereby
covenants and agrees that, during the pendency of the Offer, Purchaser
shall not exercise the Stock Option.

6.2. Increased Price. Purchaser hereby acknowledges and agrees that if
the Common Stock Offer Price or Series B Preferred Offer Price for the
Offer is increased, Stockholder shall be entitled to tender and sell to
Purchaser pursuant to the Offer all of the Shares at such relevant
increased prices.

7. Voting Agreement; Proxy of Stockholder.

7.1. Voting Agreement. Stockholder hereby agrees that, during the time
this Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the
stockholders of the Company, Stockholder shall, to the extent applicable,
(a) vote (or execute a consent in respect of) all of the Shares in favor of
the Merger, the Merger Agreement (as amended from time to time) and any of
the transactions contemplated by the Merger Agreement; (b) vote (or execute
a consent in respect of) the Shares against any action or agreement that
would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation of the Company under the

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<PAGE>

Merger Agreement; and (c) vote (or execute a consent in respect of) the
Shares against any action or agreement that would reasonably be expected to
impede, interfere with, delay or attempt to discourage the Offer or the
Merger, including, but not limited to: (i) any extraordinary corporate
transaction (other than the Merger), such as a merger, reorganization,
recapitalization or liquidation involving the Company or any proposal made
in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed
to in writing by Purchaser; (iv) any material change in the present
capitalization or dividend policy of the Company; or (v) any other material
change in the Company's corporate structure or business.

7.2. Irrevocable Proxy. Stockholder agrees that, in the event
Stockholder shall fail to comply with the provisions of Section 7.1 hereof
as determined by Purchaser in its sole discretion, such failure shall
result, without any further action by Stockholder, in the irrevocable
appointment of Purchaser as the attorney and proxy of Stockholder pursuant
to the provisions of section 607.0722 of the Florida Business Corporation
Act, with full power of substitution, to vote, and otherwise act (by
written consent or otherwise) with respect to all shares of Common Stock,
including the Shares, that Stockholder is entitled to vote at any meeting
of stockholders of the Company (whether annual or special and whether or
not an adjourned or postponed meeting) or consent in lieu of any such
meeting or otherwise, on the matters and in the manner specified in Section
7.1 hereof. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED
WITH AN INTEREST. Stockholder hereby revokes, effective upon the execution
and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Stockholder
may have heretofore appointed or granted, and no subsequent proxy or power
of attorney (except in furtherance of Stockholder's obligations under
Section 7.1 hereof) shall be given or written consent executed (and if
given or executed, shall not be effective) by Stockholder with respect
thereto so long as this Agreement remains in effect.

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<PAGE>

8. Termination. Other than the Stock Option, the termination of which shall
be governed by Section 2.2(a), this Agreement shall terminate on the date (the
"Termination Date") that is the earliest of (i) the date upon which the Merger
is consummated, (ii) one year after the date hereof, and (iii) the termination
of the Merger Agreement if and only if the Merger Agreement is terminated solely
for reasons that are not directly or indirectly related to the making of a
proposal for, or indication of an interest in, a merger or consolidation with
the Company or an acquisition of a substantial portion of the assets or equity
of the Company (by a person other than Purchaser).

9. Miscellaneous.

9.1. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.

9.2. Further Assurances. Stockholder and Purchaser shall execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the transactions
contemplated hereby.

9.3. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.

9.4. Entire Agreement. This Agreement constitutes the entire agreement
between Purchaser and Stockholder with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and
oral, between Purchaser and Stockholder with respect to the subject matter
hereof.

9.5. Assignment. This Agreement shall not be assigned by operation of
law or otherwise, except that Purchaser may assign all or any of its rights
and obligations hereunder to any affiliate of Purchaser, provided that no
such assignment shall relieve Purchaser of its obligations hereunder if
such assignee does not perform such obligations.

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<PAGE>

9.6. Parties in Interest. This Agreement shall be binding upon, inure
solely to the benefit of, and be enforceable by, the parties hereto and
their successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

9.7. Amendment; Waiver. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto. Any party hereto may
(a) extend the time for the performance of any obligation or other act of
any other party hereto, (b) waive any inaccuracy in the representations and
warranties contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any agreement or condition contained herein.
Any such extension or waiver shall be valid if set forth in an instrument
in writing signed by the party or parties to be bound thereby.

9.8. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated to the fullest extent possible.

9.9. Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 9.9):

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<PAGE>

if to Purchaser:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, California 94025
Attention: John Heine
Facsimile: (415) 324-6870
Telephone: (415) 324-6868

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attention: Peter Golden, Esq.
Facsimile: (212) 859-4000
Telephone: (212) 859-8000

if to Stockholder:

Norman Davidson
1800 N.E. 114th Street
Apt. 1203
Miami, FL 33181
Facsimile:
Telephone: (305) 895-1968

9.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in Delaware without regard to
any principles of choice of law or conflicts of law of such State. All
actions and proceedings arising out of or relating to this Agreement shall
be heard and determined in any state or federal court sitting in Delaware.

9.11. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.

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<PAGE>

9.12. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first written above.

By:/s/ Norman Davidson
----------------------------
Norman Davidson

SOLA INTERNATIONAL INC.

By: /s/ John E. Heine
---------------------------
Name: John E. Heine
Title: Chief Executive Officer

EXHIBIT 99(C)(2)

EXECUTION COPY

STOCK OPTION AGREEMENT dated as of May 28, 1996, among
NEOLENS, INC. a Florida corporation (the "Company"), SOLA
ACQUISITION CORP., a Delaware corporation ("Sub"), and SOLA
INTERNATIONAL INC., a Delaware corporation (the "Parent").

WHEREAS, Parent, Sub and the Company propose to enter into an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement") providing for the
making of a cash tender offer (the "Offer") for all the outstanding shares of
capital stock of the Company and the merger of the Company with Sub; and

WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Company agree, and the Company
has agreed, to grant to Parent and Sub an irrevocable option as set forth
herein;

NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements herein
contained and contained in the Merger Agreement, the parties hereto agree as
follows:

1. Grant of Option. The Company hereby grants to Parent and Sub an
irrevocable option (the "Option") to purchase an aggregate of 8,771,625 units
(the "Optioned Units") of one one-hundredth of a share of the Company's Series C
Junior Participating Preferred Stock (the "Series C Preferred Stock") at a price
per unit of $.65 per unit (the "Per Unit Price"). The Series C Preferred Stock
shall have the relative rights, preferences and limitations set forth in the
Articles of Amendment to the Articles of Incorporation of the Company attached
hereto as Exhibit A. The Option may be exercised by Parent or Sub, for all or
part of the Optioned Units at any time, or from time to time, prior to the
earlier of (i) the date upon which the Effective Time (as defined in the Merger
Agreement) occurs and (ii) the date forty-five days after the date of
termination of the Merger Agreement.

2. Exercise of Option. Parent or Sub may exercise the Option in whole or in
part at any time or from time to time prior to the expiration of the Option. In
the event that Parent or Sub wishes to exercise the Option, Parent or Sub shall
give written notice (the date of such notice being herein called the "Notice
Date") to the Company specifying the number of Optioned Units it will purchase
pursuant to such exercise and a place and date (not later than the later of ten
business days from the Notice Date) for the closing of such purchase.

<PAGE>

3. Payment of Purchase Price and Delivery of Certificates for Optioned
Units. At any closing hereunder, (a) Parent or Sub will make payment to the
Company of the full purchase price for the Optioned Units in New York Clearing
House funds by certified or official bank check payable to the order of the
Company, in an amount equal to the product of the Per Unit Price multiplied by
the number of Optioned Units being purchased at such closing and (b) the Company
will deliver to Parent a duly executed certificate or certificates representing
the number of Optioned Units so purchased, registered in the name of Parent or
Sub or its nominee, in the denominations designated by Parent or Sub in its
notice of exercise.

4. Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent and Sub as follows:

(a) Authority. The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefor
may be brought. The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby, and compliance
with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration
of any obligation or to loss of a material benefit under, any provision of
the Certificate of Incorporation or By-laws of the Company or any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
the Company or its properties or assets, other than any such conflicts,
violations or defaults which individually or in the aggregate do not have a
material adverse effect on the Company. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, is required by or with respect to the
Company in connection with the execution

2
<PAGE>

and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby.

(b) The Optioned Units. The Company has taken all necessary corporate
action to authorize and reserve for issuance upon exercise of the Option,
the Optioned Units.

5. Further Assurances. If Parent or Sub shall exercise the Option in whole
or in part in accordance with the terms of this Agreement, from time to time and
without additional consideration, the Company will execute and deliver, or cause
to be executed and delivered, such additional or further transfers, assignments,
endorsements, consents and other instruments as Parent or Sub may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement, including the transfer of any and all of the
Optioned Shares to Parent or Sub and the release of any and all liens, claims
and encumbrances with respect thereto.

6. Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned by any of the parties hereto
without the prior written consent of the other parties, except that Parent and
Sub may assign, in their respective sole discretion, any or all of their
respective rights, interests and obligations under this Agreement to any
affiliate of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.

7. General Provisions.

(a) Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for any breach of the provisions of this
Agreement and agree that the obligations of the parties hereunder shall be
specifically enforceable.

(b) Expenses. Whether or not the Option is exercised, all costs and
expenses incurred in connection with the Option, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.

(c) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.

(d) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested), to the parties at
the addresses set forth in Section 10.2

3
<PAGE>

of the Merger Agreement or at such other address as any party may have
furnished to the others in accordance therewith.

(e) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words 'without limitation".

(f) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties hereto and delivered to the other parties, it
being understood that all parties hereto need not sign the same
counterpart.

(g) Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i)
constitutes the entire agreement with respect to the subject matter
specified herein and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (ii) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.

(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware (without
regard to conflict of law principles). All actions and proceedings arising
out of or relating to this Agreement shall be heard or determined in any
state or federal court sitting in the State of Delaware.

(i) Partial Invalidity. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as
is enforceable.

4
<PAGE>

EXECUTION COPY

IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.

NEOLENS, INC.

By: /s/ Jon E. Haglund
---------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

SOLA ACQUISITION CORP.

By: /s/ John E. Heine
----------------------------
Name: John E. Heine
Title: President

SOLA INTERNATIONAL, INC.

By: /s/ John E. Heine
----------------------------
Name: John E. Heine
Title: Chief Executive Officer

<PAGE>
EXHIBIT A

ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
of
NEOLENS, INC.
DESIGNATING THE PREFERENCES AND RIGHTS
OF SERIES C JUNIOR PARTICIPATING PREFERRED STOCK

Pursuant to Section 607.0602 of the Florida Business Corporation Act

We, Jon Haglund, President, and Philip G. Heinemann, Secretary, of
NEOLENS, INC., a corporation organized and existing under the Florida Business
Corporation Act, in accordance with the provisions of Section 607.0602 thereof,
DO HEREBY CERTIFY:

FIRST: The Name of the corporation is Neolens, Inc. (the
"Corporation").

SECOND: That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation,
the said Board of Directors on May 23, 1996, adopted the following amendment to
the Articles of Incorporation creating a series of 88,000 shares of Preferred
Stock designated as Series C Junior Participating Preferred Stock:

Article III of the Articles of Incorporation of the Corporation is
hereby amended by adding at the end of such Article a new Section C as follows:

C. Series C Junior Participating Preferred Stock.
---------------------------------------------

Section 1. Designation and Amount. The shares of such series shall
----------------------
be designated as "Series C Junior Participating Preferred Stock," par value
$.001 per share, and the number of shares constituting such series shall be
88,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series C Junior Preferred Stock to a number less than that of the
shares then outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.

Section 2. Dividends and Distributions. Whenever the Corporation
---------------------------
shall declare a dividend on shares of Common Stock following the first date of
issuance of any

108335.03

<PAGE>

shares of Series C Preferred Stock, the Corporation shall at the same time
declare a dividend on shares of Series C Preferred Stock in a per share amount
equal to 100 times (as appropriately adjusted to reflect stock splits, stock
dividends and recapitalizations with respect to the Common Stock) the per share
amount of cash and/or the per share amount (payable in kind) of all noncash
dividends or other distributions declared on each share of Common Stock (by
reclassification or otherwise), payable at the same time as any such dividend on
the Common Stock. In the event the Corporation shall at any time on or after
May 23, 1996 (the "Initial Issuance Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series C
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event. The declaration date, the record date and the payment date for any such
dividends or other distributions of the Series C Preferred Stock shall be the
same as those for the Common Stock. No other dividends shall be required to be
paid on shares of the Series C Preferred Stock. If, at any time when shares of
Series C Preferred Stock are outstanding, the Corporation shall repurchase or
offer to repurchase shares of Common Stock, then the Corporation shall offer to
repurchase shares of Series C Preferred Stock in such amounts which are in the
same proportion to the amount of Common Stock repurchased or offered to be
repurchased as the number of then outstanding shares of Series C Preferred Stock
bears to the number of then outstanding shares of Common Stock and at such per
share prices as are equal to that offered to the holders of Common Stock (after
taking into account equitable adjustments necessary to reflect changes in the
Common Stock arising from stock dividends, recapitalizations, splits or similar
events after the Initial Issuance Date).

Section 3. Voting Rights. The holders of shares of Series C Junior
-------------
Participating Preferred Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series C Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Initial Issuance Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the number of votes per share to which holders of shares of
Series C Junior Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding

- 2 -

<PAGE>

immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein or by law, the holders of
shares of Series C Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.

(C) Except as set forth herein or as required by law, holders of
Series C Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.

Section 4. Certain Restrictions.
--------------------

(A) Whenever any dividend or distribution payable on the Series C
Junior Participating Preferred Stock shall not have been declared and paid as
provided in Section 2 hereof, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series C
Junior Participating Preferred Stock outstanding shall have been declared and
paid in full, the Corporation shall not

(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series C Junior Participating Preferred Stock;

(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Junior Participating Preferred Stock, except dividends paid
ratably on the Series C Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;

(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series C Junior
Participating Preferred Stock;

- 3 -

<PAGE>

(iv) purchase or otherwise acquire for consideration any
shares of Series C Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series C Junior Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.

(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

Section 5. Reacquired Shares. Any shares of Series C Junior
-----------------
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.

Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
--------------------------------------
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series C Junior Participating Preferred Stock
shall have received $65.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series C Liquidation Preference"). Following the payment of
the full amount of the Series C Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series C Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series C Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Series C Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series C Junior Participating Preferred Stock
and holders of shares of Common Stock

- 4 -

<PAGE>

shall receive their ratable and proportionate share of the remaining assets to
be distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.

(B) In the event there are not sufficient assets available to permit
payment in full of the Series C Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Series C Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event
there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.

(C) In the event the Corporation shall at any time after the Initial
Issuance Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

Section 7. Consolidation, Merger, etc. In case the Corporation shall
---------------------------
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series C Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Initial
Issuance Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series C Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.

- 5 -

<PAGE>

Section 8. Conversion. (a) At any time after the Corporation has
----------
sufficient authorized and reserved shares of its Common Stock to permit the
conversion contemplated hereby, each record holder of Series C Preferred Stock
will be entitled to convert all or any portion of the shares of such holder's
Series C Preferred Stock into fully paid, non-assessable shares of Common Stock
at such holder's election at the rate of 100 shares of Common Stock for each
share of Series C Preferred Stock (or one share of Common Stock for each one
one-hundredth of a share of Series C Preferred Stock). In the event the
Corporation shall at any time on or after the Initial Issuance Date (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the number of fully paid,
nonassessable shares of Common Stock into which shares of Series C Preferred
Stock are convertible immediately prior to such event under the preceding
sentences shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(In no event shall the Corporation be required to issue fractional shares of
Common Stock in connection with any conversion and, in lieu thereof, the number
of shares of Common Stock issuable upon conversion of Series C Preferred Stock
shall be rounded down to the nearest whole number.) In addition the foregoing,
the number of shares of Common Stock into which the Series C Preferred Stock may
be converted shall be subject to adjustment as set forth in Article III,
Section B,5, subparagraphs (d) and (i), and such provisions shall be deemed
repeated herein.

(b) Each conversion of shares of Series C Preferred Stock into shares
of Common Stock will be effected by the surrender of the certificate or
certificates representing the shares to be converted at the principal office of
the Corporation (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holder or holders of the
Series C Preferred Stock) at any time during normal business hours, together
with a written notice by the holder of such Series C Preferred Stock stating
that such holder desires to convert the shares, or a stated number of the
shares, of Series C Preferred Stock represented by such certificate or
certificates into Common Stock (and such statement will obligate the Corporation
to issue such Common Stock). Such conversion will be deemed to have been
effected as of the close of business on the date on which such certificate or
certificates have been surrendered and such notice has been received, and at
such time the rights of the holder of the converted Series C Preferred Stock as
such holder will cease and the person or persons in whose name or names the
certificate or certificates for shares of Common Stock are to be issued upon
such conversion will be deemed to have become the holder or holders of record of
the shares of Common Stock represented thereby.

- 6 -

<PAGE>

(c) As promptly as practicable after such surrender and the receipt
of such written notice, the Corporation will issue and deliver in accordance
with the surrendering holder's instructions (i) the certificate or certificates
for the Common Stock issuable upon such conversion and (ii) a certificate
representing any Series C Preferred Stock which was represented by the
certificate or certificates delivered to the Corporation in connection with such
conversion but which was not converted.

(d) Shares of Series C Preferred Stock which are converted into
shares of Common Stock as provided herein shall not be reissued.

(e) The issuance of certificates for Common Stock upon the conversion
of Series C Preferred Stock will be made without charge to the holders of such
shares for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
Common Stock issued or issuable upon the conversion of Series C Preferred Stock
in any manner which would interfere with the timely conversion of Series C
Preferred Stock. However, if any such certificate is to be issued in a name
other than that of the record holder of the share or shares of Series C
Preferred Stock converted, the person or persons requesting the issuance thereof
shall pay to the Corporation the amount of any tax which may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.

Section 9. No Redemption. The shares of Series C Junior
-------------
Participating Preferred Stock shall not be redeemable.

Section 10. Ranking. The Series C Junior Participating Preferred
-------
Stock shall rank junior to all other series of the Corporation's Preferred
Stock, including the Series A Preferred Stock and all the Series B Preferred
Stock, as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.

Section 11. Amendment. The Restated Certificate of Incorporation of
---------
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series C Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series C Junior Participating Preferred Stock, voting
separately as a class.

Section 12. Fractional Shares. Series C Junior Participating
-----------------
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in

- 7 -

<PAGE>

distributions and to have the benefit of all other rights of holders of Series C
Junior Participating Preferred Stock.

THIRD: The foregoing amendment was adopted on May 23, 1996.

FOURTH: The foregoing amendment was duly adopted by the Board of
Directors of the Corporation.

IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 23rd day
of May, 1996.

-----------------------------
President

Attest:

- ------------------------------------
Secretary

- 8 -

EXHIBIT (c)(3)

REVISED EXECUTION COPY

CANCELLATION AGREEMENT

Cancellation Agreement (this "Agreement"), dated as of May 28,
1996 between Neolens, Inc., a Florida corporation (the "Company"), Sola
International Inc., a Delaware corporation ("Purchaser"), and Strategica Capital
Corporation d/b/a Strategica Group, a Delaware Corporation ("Strategica").

WHEREAS, the Company has engaged Strategica to provide certain
financing and services to the Company, pursuant to a Consulting Agreement by and
between the Company and Strategica, dated August 23, 1995, as amended on
February 29, 1996 (as amended, the "Consulting Agreement") and an Advisory
Agreement by and between the Company and Strategica, dated December 21, 1995
(the "Advisory Agreement" and, collectively with the Consulting Agreement, the
"Strategica Agreements");

WHEREAS, the Strategica Agreements provide for certain payments
and fees by the Company to Strategica, and certain additional payments and
penalties to be paid by the Company to Strategica in the event that the
Company's stockholders do not approve an increase of the Company's common stock
to at least 35,000,000 shares (the "Share Authorization") by May 8, 1996 (all of
such payments, fees and penalties, collectively, the "Payments");

WHEREAS, Strategica holds vested and unvested Series Q Warrants
(the "Series Q Warrants") of the Company representing the right to purchase an
aggregate of 8,720,767 shares of common stock of the Company (the "Common
Stock") at a price of $.65 per share;

WHEREAS, concurrently herewith, the Purchaser and a wholly owned
subsidiary of Purchaser ("Sub") are entering into an agreement and plan of
merger with

<PAGE>

the Company (the "Merger Agreement") providing for the merger of Sub with and
into the Company (the "Merger");

WHEREAS, Purchaser has agreed to make certain payments, or to
cause the Surviving Corporation (as defined in the Merger Agreement) to make
certain payments, in respect of the Series Q Warrants, on the terms and subject
to the conditions set forth herein; and

WHEREAS, as a condition to the willingness of the Purchaser and
the Company to enter into the Merger Agreement, the Company has required that
Strategica agree, and, in order to induce the Purchaser and the Company to enter
into the Merger Agreement, Strategica has agreed, to the terms of this
Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and
premises provided herein, the parties hereby agree as follows:

1. Termination of the Strategica Agreements. The parties agree to
terminate the Strategica Agreements effective as of the date payment is made to
Strategica of the amounts specified in Section 2 of this Agreement (the "Payment
Date").

2. Consideration for Termination. In consideration for the
termination of the Strategica Agreements in full satisfaction of the Company's
obligations thereunder, the Company agrees to pay Strategica an aggregate of
$440,000 payable by certified check upon the earlier to occur of (i) the
Effective Time (as defined in the Merger Agreement) and (ii) the date 150 days
after the date on which Purchaser or Sub purchases any shares pursuant to the
Offer.

3. Waiver of Payments. At all times while this Agreement remains
in effect, Strategica agrees not to request payment of all or any portion of the
Payments or institute any action or otherwise seek damages or other remedies for
the failure of the Company to obtain authorization of sufficient shares of the
Company's common stock to permit exercise of the Series Q Warrants, the Share
Authorization or the breach by the

-2-

<PAGE>

Company, or failure to satisfy any other non-monetary obligation of the Company
to Strategica pursuant to, any agreement or understanding. Effective as of the
Payment Date, and provided that all payments required to be paid to Strategica
pursuant to Sections 2 and 10 have been paid, Strategica waives and renounces
all claims to any of the Payments and to release the Company, Purchaser and Sub
(and any successor person or legal entity to the Company, Purchaser or Sub) from
the obligation to make the Payments from and after the Payment Date, including,
without limitation, (i) payments of consulting fees, (ii) payments of advisory
fees, (iii) payments of additional consulting fees in the event that the
Company's stockholders do not approve the Share Authorization by May 8, 1996,
(iv) additional cash payments in the event that the Company's stockholders do
not approve the Share Authorization by May 8, 1996, and (v) any damages or
remedies in respect of the failure to obtain the Share Authorization or any
breach or non-performance under the Series Q Warrants or any agreement or
understanding (other than this Agreement, the Merger Agreement, or the Credit
and Loan Agreement dated as of August 23, 1995, as amended). For the period from
the date hereof through the earlier to occur of (i) the Effective Time and (ii)
the termination of this Agreement, Strategica agrees to defer the Company's
obligation to make payment to Strategica of any amounts of the type described in
clauses (i) through (v) of the immediately preceding sentence due to Strategica
and, the timely payment to Strategica pursuant to Section 2 and Section 10 shall
be, in addition for termination of the Strategica Agreements, in lieu of any
such payments which may become due.

4. Confidentiality. Strategica shall hold in confidence and not
directly or indirectly disclose or use any and all secret or confidential or
proprietary information, knowledge or data relating to the Company and its
businesses that shall have been or be in the possession of Strategica during its
provision of consulting and advisory services to, or affiliation with, the
Company, its predecessors, subsidiaries or affiliates; and Strategica
acknowledges that such proprietary information includes the Company's plan for
future

-3-

<PAGE>

developments and information about costs, customers, profits, markets, sales,
products, key personnel, pricing policies, operational methods, software,
know-how, technology, technical processes and strategies. Strategica shall not,
directly or indirectly, without the prior written consent of the Company,
communicate or divulge any such information, knowledge, data, documents, records
and materials to anyone other than the Company and those designated by it in
writing, subject to Section 8 of this Agreement. Strategica will not, directly
or indirectly, use or assist any person or entity to use any such information,
knowledge or data, subject to Section 8 of this Agreement. This Section shall
not apply to any information that becomes public knowledge (other than by acts
of Strategica or its agents or representatives). In addition to and without
limiting the foregoing, Strategica agrees not to use any information or
knowledge acquired in connection with its consultant and/or advisor relationship
with the Company) whether or not confidential or proprietary, in any manner
detrimental to the interests of the Company, including any manner which would
disadvantage the Company vis a vis its competitors, subject to Section 8 of this
Agreement.

5. Release. (a) Effective as of the Effective Time and subject to
the receipt by Strategica of amounts to be paid to Strategica pursuant to
Sections 2 and 10 of this Agreement, Strategica, its affiliates, directors,
officers and assigns hereby release and discharge Purchaser and the Company and
their respective subsidiaries, successors, assigns, directors, officers and
affiliates and their advisors and counsel (the "Company Released Parties") from
all suits, claims, charges and causes of action, in law or equity or otherwise,
whether known or unknown, which any of them may have, now or in the future,
against any of the Company Released Parties arising out of, relating to, or in
connection with the Strategica Agreements, Strategica's provision of advisory or
consulting services to the Company or any other relationship with the Company,
and all actions prior to the date of this Agreement, except for claims relating
to the Company's or the Purchaser's obligations under this Agreement.

-4-

<PAGE>

(b) Effective as of the Effective Time, the Company and Purchaser
and their respective affiliates, directors, officers and assigns hereby release
and discharge Strategica and its subsidiaries, successors, assigns, directors,
officers and affiliates and their advisors and counsel (the "Strategica Released
Parties") from all suits, claims, charges and causes of action, in law or equity
or otherwise, whether known or unknown, which any of them may have, now or in
the future, against any of the Strategica Released Parties arising out of,
relating to, or in connection with the Strategica Agreements, Strategica's
provision of advisory or consulting services to the Company or any other
relationship with the Company, the Credit Loan Agreement dated as of August 23,
1995, as amended, between Strategica and the Company and all actions prior to
the date of this Agreement, except for claims relating to Strategica's
obligations under this Agreement.

6. Taxes. Strategica agrees to pay all taxes which are determined
by any taxing authority, to be properly payable by Strategica ( or would have
been properly payable by Strategica had they been assessed timely) with respect
to any payments hereunder. To the extent that Strategica fails to pay any such
taxes, whether or not assessed against Strategica, Strategica will hold the
Company harmless for any such taxes, interest and penalties imposed upon the
Company as a result of such failure or the failure to withhold such taxes (other
than penalties imposed upon the Company as a result of the failure to withhold).

7. Non-Interference. Strategica agrees that during the two year
period following the Effective Time (the "Covered Period"), it will not directly
or indirectly interfere with the Company's relationship with, or endeavor to
entice away from the Company, any person, firm, corporation, or other business
organization who or which at any time (whether before or during the Covered
Period) was a customer, officer, employee or supplier of the Company or any of
its affiliates or their predecessors. Strategica further agrees that during the
Covered Period it shall not, directly or indirectly, (i) solicit or induce any
officer or employee of the Company or any of its subsidiaries to

-5-

<PAGE>

leave the employment of the Company or any of its subsidiaries, (ii) employ any
employee who leaves the employment of the Company or any of its subsidiaries
within three months after the termination of the employment of such employee
with such company, or (iii) subject to Section 8 of this Agreement, take any
action which would interfere with contractual or other relationships of the
Company with customers, suppliers, employees, governmental agencies, regulators,
or others, or any action which disparages or diminishes the reputation of the
Company or any of its affiliates, or any action which diverts customers of the
Company or otherwise adversely affects its business.

8. Conduct. On and after the date hereof, Strategica will not
make public statements or publish or make (under circumstances reasonably likely
to result in such statement being published or receiving widespread circulation)
any statement, whether public or private, about the Company or any of its
affiliates, or any officer, director, employee, counsel or advisor of the
Company or any of its affiliates which is critical of, or adversely affects or
otherwise maligns, the business or reputation of the Company or any of its
affiliates, including, but not limited to, statements to regulatory and
governmental agencies. Strategica shall promptly advise the Company if
Strategica (or any of its employees) is requested, by subpoena or otherwise, by
any third party, including, but not limited to, any governmental agency, or
regulatory authority, or party involved in litigation against the Company, to
provide information regarding the Company, its business, affairs, conduct and
activities, officers, directors or affiliates and shall consult with the Company
and its counsel prior to providing any such information. The Company shall be
free, at its expense, to seek to prevent any such disclosure in any court action
relating to such third party request or seek a protective order in connection
therewith. Nothing herein shall prevent Strategica from providing truthful
testimony to any governmental agency or regulatory authority or third party if
it is compelled to do so by subpoena or similar process under applicable law and
if it has complied with the

-6-

<PAGE>

foregoing. The Company agrees (i) not to make (under circumstances reasonably
likely to result in such statement being published or receiving widespread
circulation), and shall use its best efforts to cause its officers, directors
and employees not to so make, any statement which is critical of, or adversely
affects or otherwise maligns, the business or reputation of Strategica, (ii) to
advise Strategica if it receives a request, by subpoena or otherwise by any
third party to provide information relating to Strategica or its affiliates, and
(iii) shall consult with Strategica before providing any such information.
Nothing herein shall prevent the Company from providing truthful testimony to
any governmental agency or regulatory authority or third party if it is
compelled to do so by subpoena or similar process under applicable law and if it
has complied with the foregoing.

9. Certain Agreements.

9.1. No Exercise of Warrants; No Disposition or Encumbrance of
Warrants; Acquisition of Additional Warrants; No Solicitation of Transactions.
(a) Until the earlier of the Effective Time and the termination of this
Agreement, Strategica hereby covenants and agrees that it shall not, and shall
not offer to agree to, exercise any of the Series Q Warrants or cause any of the
Series Q Warrants to be exercised, without the prior written consent of
Purchaser.

(b) Strategica hereby covenants and agrees that, except as
contemplated by the Merger Agreement, Strategica shall not, and shall not offer
or agree to, sell, transfer, tender, assign, hypothecate or otherwise dispose
of, or create or permit to exist any security interest, lien, claim, pledge,
option, right of first refusal, agreement, charge or other encumbrance of any
nature whatsoever with respect to the Series Q Warrants now owned or that may
hereafter be acquired by Strategica, except that transfers permitted by the
Participation Agreement among the Participants and Strategica shall be permitted
if the transferee or assignee is bound by the terms of this Agreement in respect
of the Warrants in which it has an interest.

-7-

<PAGE>

(c) Until the earlier of the consummation of the Merger or the
termination of this Agreement, Strategica shall not, directly or indirectly,
through any agent or representative or otherwise, solicit, initiate or encourage
the submission of any proposal or offer from any individual, corporation,
partnership, limited partnership, syndicate, person (including, without
limitation, a "person" as defined in section 13(d)(3) of the Securities Exchange
Act of 1934, as amended), trust, association or entity or government, political
subdivision, agency or instrumentality of a government (collectively, other than
Purchaser and any affiliate of Purchaser, a "Person") relating to (i) any
acquisition or purchase of all or any of the Series Q Warrants or (ii) any
acquisition or purchase of all or (other than in the ordinary course of
business) any portion of the assets of, or any equity interest in, the Company
or any business combination, whether by merger, consolidation or otherwise, with
the Company or participate in any negotiations regarding, or furnish to any
Person any information with respect to, or otherwise cooperate in any way with,
or assist or participate in or facilitate or encourage, any effort or attempt by
any Person to do or seek any of the foregoing or enter into any agreement,
understanding or commitment with any Person relating to the foregoing.
Strategica hereby represents that neither it nor its agents or representatives
is now engaged in any discussions or negotiations with any Person with respect
to any of the foregoing. Notwithstanding the foregoing, if Strategica is
required by valid subpoena to provide information to any Person, it shall be
permitted to do so.

(d) Strategica shall take all actions and forbear from all
actions, in each case, necessary in order that (a) all of Strategica's
representations and warranties hereunder are true and correct and (b) Strategica
fulfills all of its obligations hereunder.

(e) Strategica represents and warrants to the Purchaser and the
Company that its participants in the Series Q Warrants have

-8-

<PAGE>

granted Strategica full authority to bind all such participants by the terms of
this Agreement with respect to all of the Series Q Warrants in which they have
an interest, and this Agreement shall be binding upon such participants in
respect of such Warrants as if they had executed this Agreement.

(f) Each of Strategica, Purchaser and Sub hereby covenants and
agrees (with respect to each such person, with respect to the matters specified
in this paragraph (f) to be performed by each such person) that (i) within two
business days after the date on which Purchaser or Sub purchases any shares
pursuant to the Offer (as defined in the Merger Agreement), Purchaser or Sub
shall purchase, and Strategica shall deliver to Purchaser, 80% of the
outstanding Series Q Warrants and assign its rights under such Series Q Warrants
to Purchaser in exchange for 80% of the amount to be paid to Strategica as the
holder of the Series Q Warrants pursuant to the terms of Section 7.5(a) of the
Merger Agreement (but not less than 80% of $4,273,176) and (ii) upon the earlier
to occur of (A) the Effective Time and (B) the date 60 days after the date on
which Purchaser or Sub purchases any shares pursuant to the Offer, Purchaser or
Sub shall purchase, and Strategica shall deliver to Purchaser or Sub, 20% of the
outstanding Series Q Warrants in exchange for 20% of the amount to be paid to
Strategica as the holder of the Series Q Warrants pursuant to the terms of
Section 7.5(a) of the Merger Agreement (but not less than 20% of $4,273,176).

10. Certain Agreements of Purchaser. Notwithstanding anything to
the contrary in the Merger Agreement, in the event Purchaser or Sub purchases
any shares pursuant to the Offer, Purchaser shall, or shall cause Sub or the
Surviving Corporation (as such term is defined in the Merger Agreement) to:

(i) pay to the holder of the Series Q Warrants 80% of the amount
due to such holder pursuant to Section 7.5(a) of the Merger Agreement as
promptly as practicable after the purchase of any shares pursuant to the Offer
in

-9-

<PAGE>

consideration of such holder's agreement to assign its rights under 80% of such
Series Q Warrants to Purchaser;

(ii) pay to the holder of the Series Q Warrants 20% of the amount
due to the holders of Series Q Warrants pursuant to the terms of Section 7.5(a)
of the Merger Agreement upon the delivery of such Series Q Warrants for
cancellation on the earlier to occur of (i) the Effective Time and (ii) the date
60 days after the date on which Purchaser or Sub purchases any shares pursuant
to the Offer;

(iii) repay all amounts, indebtedness and obligations owed to
Strategica by the Company pursuant to the Strategica Credit Agreement (as such
term is defined in the Merger Agreement) upon the earlier to occur of (i) the
Effective Time and (ii) the date 60 days after the date on which Purchaser or
Sub purchases shares pursuant to the Offer; and

(iv) pay to Strategica the amounts specified in Section 2 of this
Agreement at the time specified in such Section 2.

11. Miscellaneous.

11.1. Expenses. Except as otherwise provided herein, all costs
and expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.

11.2. Further Assurances. Strategica, the Purchaser and the
Company shall execute and deliver all such further documents and instruments and
take all such further action as may be necessary in order to consummate the
transactions contemplated hereby.

11.3. Entire Agreement. This Agreement constitutes the entire
agreement between Strategica, the Purchaser and the Company with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Strategica and the Company with respect to the
subject matter hereof.

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<PAGE>

11.4. Parties in Interest. This Agreement shall not be assigned
by operation of law or otherwise, and shall be binding upon, inure solely to the
benefit of, and be enforceable by, the parties hereto and their
successors-in-interest. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

11.5 Amendment; Waiver. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto. Any party hereto may
(a) extend the time for the performance of any obligation or other act of any
other party hereto and (b) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.

11.6. Specific Performance. If either Strategica, the Purchaser
or the Company breaches, or threatens to commit a breach of, any of the
provisions of this Agreement applicable to it (the "Restrictive Covenants"), the
Company, the Purchaser or Strategica, as the case may be, shall have the right
and remedy to have the Restrictive Covenants specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company, the
Purchaser or Strategica, as the case may be, and that money damages will not
provide adequate remedy to the Company, the Purchaser or Strategica, as the case
may be, for any loss and that any defense in any action for specific performance
that a remedy at law would be adequate is waived. It is agreed that the
foregoing right and remedy of specific performance shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company, the
Purchaser or Strategica, as the case may be, under law or in equity.

11.7. Severability. If any portion of the Restrictive Covenants
or the application of any portion of the Restrictive Covenants to any
Jurisdiction or time period, shall be held invalid or unenforceable, the
remaining portion of the Restrictive

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<PAGE>

Covenants or the application of such portion of the Restrictive Covenants as is
held invalid or unenforceable to jurisdictions or time periods other than those
as to which it is held invalid or unenforceable, shall not be affected thereby.
If any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.

11.8. Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person, by cable, facsimile transmission, telegram or telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
11.8):

(a) if to the Company, to:

Neolens, Inc.
18963 N.E. Fourth Court
Miami, Florida 33179
Fax: (305) 651-5092
Attention: President

with a copy to:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, California 94025
Fax: (415) 324-6870
Attention: President

and a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Fax: (212) 859-4000
Attention: Peter Golden, Esq.

-12-

<PAGE>

(b) if to Purchaser to:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, California 94025
Fax: (415) 324-6870
Attention: President

and a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Fax: (212) 859-4000
Attention: Peter Golden, Esq.

Strategica Capital Corporation
1221 Brickell Avenue, Suite 2600
Miami, Florida 33131
Attention: Steven R. Cook, Executive Vice President
Facsimile: (305) 536-1486

Telephone: (305) 536-1414

with a copy of all communications to Strategica to:

Hornsby Sacher Zelman & Stanton, P.A.
1401 Brickell Avenue
Suite 700
Miami, Florida 33131
Fax: (305) 574-2605
Attention: Walter Stanton III, Vice President

11.9. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in Delaware without regard to any
principles of choice of law or conflicts of law of such State. All actions and
proceedings arising out of or

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<PAGE>

relating to this Agreement shall be heard and determined in any state or federal
court sitting in Delaware.

11.10. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.

11.11. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

11.12. Termination. The Agreement shall terminate and be of no
further force and effect upon termination of the Merger Agreement. In addition,
this Agreement may be terminated in Strategica's sole discretion by written
notice to Purchaser if the Purchaser of Sub shall not have purchased any shares
of capital stock of the Company pursuant to the Offer (i) within sixty days
after commencement of the Offer if there shall not have been proposed by any
person other than Parent or Sub the acquisition or purchase of all or (other
than the ordinary course of business) any significant portion of the assets of,
or equity in, the Company or any business combination, whether by merger,
consolidation, or otherwise with the Company (an "Alternative Transaction") or
(ii) if an Alternative Transaction has been proposed and Purchaser has not
breached its obligation hereunder or under the Merger Agreement, any time after
the earlier of (x) November 15, 1996 and (y) the later of (1) sixty days after
commencement of the Offer and (2) the date the Company shall be adjudicated a
bankrupt or insolvent or a petition proposing the adjudication of the Company as
bankrupt shall be filed pursuant to Title 11 of the United States Code and the
Company is not diligently seeking discharge of such petition.

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<PAGE>

11.13. Certain Agreements. The Company acknowledges and agrees
that each of the Strategica Agreements, the Strategica Credit Agreement and the
Series Q Warrants are in full force and effect and are legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally, and that the obligations of the Company under such
agreements are not subject to any defenses, claims or rights of set-off by the
Company.

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<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first written above.

NEOLENS, INC.

By: /s/ Jon E. Haglund
----------------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

STRATEGICA CAPITAL CORPORATION

By: /s/ Stephen R. Cook
----------------------------------
Name: Stephen R. Cook
Title: Executive Vice President

SOLA INTERNATIONAL, INC.

By: /s/ John E. Heine
----------------------------------
Name: John E. Heine
Title: Chief Executive Officer

EXHIBIT 99(c)(4)

TERMINATION AGREEMENT

Termination Agreement (this "Agreement"), dated as of May 28, 1996 between
Neolens, Inc., a Florida corporation (the "Company"), and Jon E. Haglund (the
"Employee").

WHEREAS, Employee is employed as Chairman of the Board, Chief Executive
Officer and acting President of the Company, pursuant to an Employment Agreement
dated September 1, 1995, between Employee and the Company (the "Employment
Agreement");

WHEREAS, concurrently herewith, Sola International Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Purchaser ("Sub") are
entering into an agreement and plan of merger with the Company (the "Merger
Agreement"), pursuant to which Sub will be merged with and into the Company (the
"Merger");

WHEREAS, the parties desire to terminate the Employment Agreement before
the expiration of its term upon the terms and conditions set forth herein; and

NOW, THEREFORE, in consideration of the mutual covenants and premises
provided herein, the parties hereby agree as follows:

1. Termination of Employment. The parties agree to terminate the Employment
Agreement effective as of the Effective Time (as defined in the Merger
Agreement) and the Employee agrees that as of the Effective Time he is
resigning, and will no longer serve, as an officer, director and employee of the
Company.

2. Severance and Termination Payments. (a) In consideration for the
termination of the Employment Agreement and in full satisfaction of the
Company's obligations thereunder, the Company agrees to pay Employee by
certified check on the Effective Time $400,000, subject to appropriate
withholding for income and similar taxes as required to be withheld pursuant to
any applicable law or regulation. In consideration

<PAGE>

of the agreements and covenants set forth herein, the Employee hereby waives,
effective as of the Effective Time, any rights or remedies which he may have by
reason of his employment by the Company or under the Employment Agreement or any
other employment, consulting, severance or similar plan or agreement (whether or
not in writing) between the Employee and the Company or any of its affiliates
(as defined below), all of which are hereby expressly terminated and of no
further force or effect. "Affiliate" and "associate" shall have the meanings set
forth in Rule 12b-2 promulgated under the Securities Act of 1934, as amended.
Without limiting the foregoing, the Employee is hereby waiving, effective as of
the Effective Time, all rights, claims or benefits under the Company's employee
benefit, health, insurance and similar plans, except (i) in respect of options
or warrants to acquire common stock granted to the Employee by the Company under
its stock option plans or otherwise and (ii) as is not permitted by applicable
law.

(b) Employee will continue to be paid his current salary from the Company
for the period from the date hereof through the Effective Time.

3. Cooperation and Consulting Services; Covenant Not to Compete;
Confidentiality. (a) For a period of 90 days after the Effective Time, the
Employee shall act as a consultant to the Company and during normal working
hours shall assist the Company in transferring responsibility for those matters
in which the Employee was involved or has special knowledge. In that connection,
during this 90-day period, the Employee shall be available to devote such of his
time, services, skill and ability as the Company and its affiliates may
reasonably request in order to provide for an orderly transition and the
continuation without disruption of the management and operation of the Company's
business. Upon completion of the 90-day period and subject to the Employee's
compliance with his obligations hereunder, the Company shall pay the Employee
$151,469. During such 90-day period, the Company will reimburse the Employee for
all reasonable out-of-pocket expenses incurred by the Employee in

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<PAGE>

connection with providing services to the Company which are requested by the
Company. The Company and the Employee hereby expressly acknowledge that the
relationship between them after the Effective Time shall not be that of an
employer and employee.

(b) The Employee hereby agrees that, from the date hereof through the
second anniversary of the Effective Time (the "Covered Period"), he will not,
directly or indirectly, either as principal, agent, stockholder, trustee,
partner, consultant, officer, director, joint venturer, employee or in any other
capacity, conduct, participate in or engage in any activity, or be employed by,
promote, assist or have an equity interest in, any business or other entity,
that competes in any material respect with any of the businesses of the Company
or any of its subsidiaries or affiliates in any geographical area within or
outside the United States in which the Company engages in or solicits, or
expects to engage in or solicit business (to the extent such expectations should
reasonably be within the knowledge of the Employee); provided, however, that
such prohibited activity shall not include the ownership of less than 1% of the
voting securities of any publicly traded corporation regardless of the business
of such corporation, provided, however, that notwithstanding the foregoing, this
provision shall not prohibit the Employee from having an ownership interest in,
or working with, Computer Lens Corporation. Furthermore, this provision shall
not preclude the Employee from the marketing and/or sale of electrochromic
products that may use polycarbonate as a lens material excluding the molding of
such products.

(c) The Employee shall hold in a fiduciary capacity for the benefit of the
Company and shall hold in confidence and not directly or indirectly disclose or
use any and all secret or confidential or proprietary information, knowledge or
data relating to the Company and its businesses that shall have been or be in
the possession of the Employee during his employment by or affiliation with the
Company, its predecessors, subsidiaries or affiliates; and the Employee
acknowledges that such proprietary information includes the Company's plan for
future developments and information about costs, customers,

- 3 -
<PAGE>

profits, markets, sales, products, key personnel, pricing policies, operational
methods, software, know-how, technology, technical processes and strategies. The
Employee acknowledges that all written materials, documents and records (of any
kind) created by the Employee or coming into his possession during such
employment or affiliation concerning the business and affairs of the Company and
its affiliates are the sole property of the Company and the Employee shall
promptly return all such materials, documents and records to the Company. The
Employee shall not, directly or indirectly, without the prior written consent of
the Company, communicate or divulge any such information, knowledge, data,
documents, records and materials to anyone other than the Company and those
designated by it in writing. The Employee will not, directly or indirectly, use
or assist any person or entity to use any such information, knowledge or date.
This Section 3(c) shall not apply to any information that becomes public
knowledge (other than by acts of the Employee or his agents or representatives).
In addition to and without limiting the foregoing, the Employee agrees not to
use any information or knowledge acquired in connection with his employment by
the Company) whether or not confidential or proprietary, in any manner
detrimental to the interests of the Company, including any manner which would
disadvantage the Company vis a vis its competitors.

4. Release. (a) The Employee, his affiliates, heirs and assigns hereby
release and discharge Purchaser and the Company and their respective
subsidiaries, successors, assigns, directors, officers and affiliates and their
advisors and counsel (the "Company Released Parties") from all suits, claims,
charges and causes of action, in law or equity or otherwise, whether known or
unknown, which any of them may have, now or in the future, against any of the
Company Released Parties arising out of, relating to, or in connection with the
Employment Agreement, the Employee's service as an officer, director and
employee of the Company, the termination of the Employee's employment
relationship with the Company and all actions prior to the date of this
Agreement, except for claims relating to this Agreement or the Merger Agreement.

- 4 -
<PAGE>

(b) The Company hereby releases and discharges Employee, his heirs and
assigns, and their advisors and counsel (the "Employee Released Parties") from
all suits, claims, charges and causes of action, in law or equity or otherwise,
whether known or unknown, which any of them may have, now or in the future,
against any of the Employee Released Parties arising out of, relating to, or in
connection with the Employment Agreement, the Employee's service as an officer,
director and employee of the Company, the termination of the Employee's
relationship with the Company and all actions prior to the date of this
Agreement, except for claims relating to this Agreement or the Merger Agreement.

5. Taxes. The Employee agrees to pay all taxes which are determined by any
taxing authority, to be properly payable by the Employee ( or would have been
properly payable by the Employee had they been assessed timely) with respect to
any payments hereunder. To the extent that the Employee fails to pay any such
taxes, whether or not assessed against the Employee, the Employee will hold the
Company harmless for any such taxes, interest and penalties imposed upon the
Company as a result of such failure or the failure to withhold such taxes (other
than penalties imposed upon the Company as a result of the failure to withhold).

6. Non-Interference. The Employee agrees that during the Covered Period,
he will not directly or indirectly interfere with the Company's relationship
with, or endeavor to entice away from the Company, any person, firm,
corporation, or other business organization who or which at any time (whether
before or during the Covered Period) was a customer, officer, employee or
supplier of, or maintained a business or contractual relationship with, the
Company or any of its affiliates or their predecessors. The Employee further
agrees that during the Covered Period he shall not, directly or indirectly, (i)
solicit or induce any officer or employee of the Company or any of its
subsidiaries to leave the employment of the Company or any of its subsidiaries,
(ii) employ any employee who leaves the employment of the Company or any of its

- 5 -
<PAGE>

subsidiaries within three months after the termination of the employment of such
employee with such company, or (iii) take any action which would interfere with
contractual or other relationships of the Company or any of its affiliates with
customers, suppliers, employees, governmental agencies, regulators, or others,
any action which disparages or diminishes the reputation of the Company or any
of its affiliates, or any action which diverts customers or potential customers
of the Company or any of its affiliates or otherwise adversely affects their
business.

7. Executive Conduct. On and after the date hereof, the Employee will not
make public statements or publish or make (under circumstances reasonably likely
to result in such statement being published or receiving widespread circulation)
any statement, whether public or private, about the Company or any of its
affiliates, or any officer, director, employee, counsel or advisor of the
Company or any of its affiliates which is critical of, or adversely affects or
otherwise maligns, the business or reputation of the Company or any of its
affiliates, including, but not limited to, statements to regulatory and
governmental agencies. Unless otherwise prohibited by law, the Employee shall
promptly advise the Company if the Employee is requested, by subpoena or
otherwise, by any third party, including, but not limited to, any governmental
agency, or regulatory authority, or party involved in litigation against the
Company, to provide information regarding the Company, its business, affairs,
conduct and activities, officers, directors or affiliates and shall consult with
the Company and its counsel prior to providing any such information. The Company
shall be free, at its expense, to seek to prevent any such disclosure in any
court action relating to such third party request or seek a protective order in
connection therewith. Nothing herein shall prevent the Employee from providing
truthful testimony to any governmental agency or regulatory authority or third
party if he is compelled to do so by valid subpoena or similar process under
applicable law and if he has complied with the foregoing. The Company agrees not
to make (under circumstances reasonably likely to result in such statement being
published

- 6 -
<PAGE>

or receiving widespread circulation), and shall use its best efforts
to cause its officers, directors and employees not to so make, any statement
which is critical of, or adversely affects or otherwise maligns, the business or
reputation of the Employee. If any prospective employer or business associate of
the Employee contacts the Company with respect to the Executive, the Company
shall not comment other than to provide the publicly available information with
respect to the Employee's employment at the Company.

8. Miscellaneous.

8.1 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.

8.2 Further Assurances. The Company and Employee shall execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the transactions
contemplated hereby.

8.3 Entire Agreement . This Agreement constitutes the entire agreement
between the Company and Employee with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and
oral, between the Company and Employee with respect to the subject matter
hereof. Nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

8.4 Successors and Assigns. This Agreement is binding on and inures to
the benefit of the parties and the successors and assigns of the Company
and the heirs and legal representatives of Employee.

8.5 Amendment; Waiver. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto. Any party hereto may
(a) extend the time for the performance of any obligation or other act of
any other party hereto, and (b) waive compliance with any agreement or
condition contained herein. Any

- 7 -
<PAGE>

such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be
bound thereby.

8.6 Specific Performance. If either the Employee or the Company
breaches, or threatens to commit a breach of, any of the provisions of this
Agreement applicable to him or it, as the case may be, (the "Restrictive
Covenants"), the Company or the Employee, as the case may be, shall have
the right and remedy to have the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable
injury to the Company or the Employee, as the case may be, and that money
damages will not provide adequate remedy to the Company or the Employee, as
the case may be, for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. It
is agreed that the foregoing right and remedy of specific performance shall
be in addition to, and not in lieu of, any other rights and remedies
available to the Company or the Employee, as the case may be, under law or
in equity.

8.7 Severability. If any portion of the Restrictive Covenants or the
application of any portion of the Restrictive Covenants to any jurisdiction
or time period, shall be held invalid or unenforceable, the remaining
portion of the Restrictive Covenants or the application of such portion of
the Restrictive Covenants as is held invalid or unenforceable to
jurisdictions or time periods other than those as to which it is held
invalid or unenforceable, shall not be affected thereby. If any provision
of this Agreement is so broad as to be unenforceable, such provision shall
be interpreted to be only so broad as is enforceable.

8.8 Notices. Except as otherwise provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by cable, facsimile transmission,
telegram or telex or by registered or certified

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<PAGE>

mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 8.8):

(a) if to the Company, to:

Neolens, Inc.
18963 N.E. Fourth Court
Miami, Florida 33179
Fax: (305) 651-5092
Attention: President

with a copy to:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, California 94025
Fax: (415) 324-6870
Attention: President

and a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Fax: (212) 859-4000
Attention: Peter Golden, Esq.

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<PAGE>

(b) if to Employee, to:

Jon E. Haglund
c/o Neolens, Inc.
18963 N.E. Fourth Court
Miami, Florida 33179
Fax: (305) 651-5092

with a copy to:

Gunster, Yoakley, Valdes-Fauli & Stewart
Suite 3400 - One Biscayne Tower
Two South Biscayne Blvd.
Miami, Florida 33131-1897

Fax: 305-376-6010
Attention: Robert S. Turk, Esq.

8.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in Delaware without regard to any
principles of choice of law or conflicts of law of such State. All actions
and proceedings arising out of or relating to this Agreement shall be heard
and determined in any state or federal court sitting in Delaware.

8.10 Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.

8.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.

8.12 Termination . This Agreement shall terminate and be of no further
force and effect upon termination of the Merger Agreement.

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<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first written above.

By: /s/ Jon E. Haglund
---------------------------
Jon E. Haglund

NEOLENS, INC.

By: /s/ Philip G. Heinemann
---------------------------
Name: Philip G. Heinemann
Title:Chief Financial Officer

EXHIBIT 99(C)(5)

EXECUTION COPY
- --------------------------------------------------------------------------------

CREDIT AGREEMENT

dated as of May 28, 1996

between

Sola International Inc.
lender

and

Neolens, Inc.,
Borrower

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

CREDIT AGREEMENT

This CREDIT AGREEMENT, dated as of May 28, 1996, between Neolens, Inc.,
a Florida corporation (herein called "Borrower"), and Sola International Inc., a
Delaware corporation (herein, together with any successors and assigns, called
the "Lender"),

W I T N E S S E T H:

WHEREAS, the Borrower desires that the Lender extend financing to the
Borrower pursuant to the terms of this Agreement; and

WHEREAS, the Lender is willing to extend financing to the borrower
pursuant to the terms of this Agreement for the purposes specified herein;

NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, the parties hereto agree
as follows:

SECTION 1. DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

"Agreement" shall mean this Credit Agreement, as hereafter amended,
modified, restated, refinanced, refunded or renewed from time to time in whole
or in part.

"Borrower" - see Preamble.

"Business Day" shall mean any day except a Saturday, Sunday or other
day on which banks in New York City are required or authorized by law to close.

"Commitment" shall mean the Lender's commitment to make the Loans.

"Commitment Amount" shall be equal to (i) a maximum of $100,000 for
each 30-day period following the date hereof up to a maximum of $300,000, as
such amount may be reduced or terminated from time to time pursuant to Sections
4.1, 4.3 or 9.1, respectively, and as such amount may be increased by the mutual
written agreement of Lender and Borrower; provided, however, that if Lender (or
a subsidiary of Lender) purchases equity securities of Borrower, pursuant to the
tender offer being made in accordance with the Merger Agreement, then the
Commitment Amount will be increased by such amounts as Lender and Borrower agree
are reasonably necessary to fund the operations of Borrower pending completion
of the merger contemplated by the Merger Agreement, (ii) up to $100,000 or such
lesser amount equal to the Furman Selz Fee (as

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defined in Section 6.8), and (iii) up to $50,000 or such lesser amount equal to
the Legal Fees (as defined in Section 6.8).

"Dollars" and the sign "$" shall mean lawful money of the United States
of America.

"Event of Default" shall mean any of the events described in Section
9.1.

"Indebtedness" shall mean, with respect to any Person at any date,
without duplication; (i) all obligations of such Person for borrowed money or in
respect of loans or advances; (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations in
respect of letters of credit, whether or not drawn, and bankers' acceptances
issued for the account of such Person; (iv) all capitalized lease liabilities of
such Person; (v) all interest rate protection agreements of such Person; (vi)
all obligations of such Person secured by a contractual lien; and (vii) all
contingent obligations of such Person whether or not in connection with any of
the foregoing.

"Liens" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.

"Loan" or "Borrowing" shall mean a borrowing hereunder consisting of
loans made to the Borrower by the Lender pursuant to Section 2.1.

"Material Adverse Change" shall mean an event or series of related
events taken as a whole that has resulted in or would be reasonably likely to
result in a material adverse change in the business, assets, operations, or
condition (financial or other) of the Borrower and/or its subsidiaries taken as
a whole.

"Merger Agreement" shall mean the Agreement and Plan of Merger among
Lender, a wholly owned subsidiary of Lender, and Borrower dated as of May 28,
1996.

"Note" shall mean the promissory note of the Borrower payable to the
Lender, substantially in the form of Exhibit A attached hereto.

"Permitted Liens" shall mean

(a) Liens for current taxes not delinquent or for taxes being
contested in good faith and by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;

(b) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits or to secure performance of tenders,
statutory obligations,

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leases and contracts (other than for borrowed money) entered into in
the ordinary course of business or to secure obligations on surety or
appeal bonds;

(c) Liens of mechanics, carriers, materialmen and other like Liens
arising in the ordinary course of business in respect of obligations which
are not delinquent or which are being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP;

(d) Liens arising in the ordinary course of business for sums being
contested in good faith and by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP, or
for sums not due, and in either case not involving any deposits or advances
for borrowed money or the deferred purchase price of property or services;

(e) Purchase-money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such
acquisition, or a Lien incurred in connection with any conditional sale or
other title retention agreement or a capital lease;

(f) Liens constituting easements on real property arising in the
ordinary course of business; and

(g) Other Liens securing Indebtedness in an aggregate principal amount
at any time outstanding not to exceed $100,000.

(h) Any lien created by the Borrower's outstanding indebtedness
borrowed from Strategica Capital Corporation or Leroy Meshel, M.D. and by
loans made after the date hereof by Strategica as permitted by the Merger
Agreement or the Subordination Agreement dated the date hereof.

"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

"Termination Date" shall mean the date on which the termination of the
Merger Agreement occurs.

"Transferee" - see Section 10.3.

"Unmatured Event of Default" shall mean any event which if it continues
uncured would, with lapse of time or notice, or both, constitute an Event of
Default.

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SECTION 1.2 Other Definition Provisions.

(i) All terms defined in this Agreement shall have the above-defined
meanings when used in any certificate, report or other document made or
delivered pursuant to this Agreement, unless the context therein shall clearly
otherwise require.

(ii) The words "hereof", "herein", "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

(iii) The words "amended or modified" when used in this Agreement shall
mean with respect to this Agreement as from time to time, in whole or in part,
amended, modified, supplemented, restated, refinanced, refunded or renewed.

(iv) In the computation of periods of time in this Agreement from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".

SECTION 2. THE LOANS

SECTION 2.1 Loans. Subject to the terms and conditions of this
Agreement, the Lender agrees to make loans to the Borrower (herein collectively
called the "Loans", and individually called a "Loan"), from time to time from
the date hereof, to, but not including the Termination Date, at such times and
in such amounts, not to exceed at any time outstanding an aggregate principal
amount equal to the Commitment Amount, as the Borrower may request. The
commitment by the Lender to make Loans is not revolving in nature, and amounts
borrowed under this Section 2 and repaid or prepaid may not be reborrowed.

SECTION 2.2 Borrowing Request. The Borrower shall give an irrevocable
notice (herein called a "Borrowing Request") to the Lender of each proposed
Borrowing by 9:30 A.M. (New York City time) on the Business Day which is at
least five Business Days before the date of such proposed Borrowing. Each
Borrowing Request shall be in writing substantially in the form of Exhibit B,
including all required attachments thereto, and shall specify the date and
amount of Borrowing.

SECTION 2.3 Funding. The Lender shall pay over and deliver the amount
of funds specified in the related Borrowing Request to the Borrower on the
requested date of Borrowing specified in the Borrowing Request. Each Borrowing
shall be on a Business Day and shall be in an aggregate principal amount of at
least $25,000.

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SECTION 2.4 Note. The Loans shall be evidenced by the Note dated as of
the date hereof, which the Borrower shall execute and deliver to the Lender upon
execution of the Agreement.

SECTION 2.5 Recordkeeping. The Lender shall, and is hereby authorized
by the Borrower to, record on the schedule attached to the Note, the date and
amount of each Borrowing made by the Borrower and each repayment thereof. The
information so recorded shall be rebuttable presumptive evidence of the accuracy
thereof. The failure to so record any such information or any error in so
recording any such information shall not, however, limit or otherwise affect the
obligations of the Borrower hereunder or under the Note to repay the principal
amount of the Loans together with all interest accruing thereon.

SECTION 3. INTEREST

SECTION 3.1 Loan Interest Rates. With respect to each Loan, the
Borrower hereby agrees to pay interest on the unpaid principal amount thereof,
for the period commencing on the date such Loan is made until the date on which
such Loan is paid in full at the rate per annum equal to 10%.

SECTION 3.2 Default Interest Rate. In the event that any principal of,
or interest on, any Loan is not paid when due (by acceleration or otherwise) the
Borrower hereby promises to pay interest on the unpaid principal amount of such
Loan for the period commencing on the date such principal or interest is due
until such Loan is paid in full at the rate per annum equal to 14% per annum.

SECTION 3.3 Interest Payment Dates. Accrued interest on each Loan shall
be payable in arrears at maturity. After maturity, accrued interest on all Loans
shall be payable on demand.

SECTION 3.4 Computation of Interest. Interest on all Loans shall be
computed for the actual number of days elapsed on the basis of a 365-day year.

SECTION 3.5 Permitted Interest. Notwithstanding any provision to the
contrary, it is the intent of the Lender and the Borrower, that neither the
Lender nor any subsequent assignee or participant shall be entitled to receive,
collect, reserve, or apply, as interest, any amount in excess of the maximum
lawful rate of interest permitted to be charged by applicable law or
regulations, as amended or enacted from time to time. In the event the Loans
call for an interest payment that exceeds the maximum lawful rate of interest
then applicable, such interest shall not be received, collected, charged, or
reserved until such time as that interest, together with all other interest then
payable, falls within the then applicable maximum lawful

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<PAGE>

rate of interest. In the event the Lender, or any assignee or participant
receives any such interest in excess of the then maximum lawful rate of
interest, such amount that would be excessive interest shall be deemed a partial
prepayment of principal and treated under the Loans as such, or, if the
principal indebtedness evidenced by the Loans is paid in full, any remaining
excess funds shall immediately be paid to the Borrower. In determining whether
or not the interest paid or payable, under any specific contingency, exceeds the
maximum lawful rate of interest, the Borrower and the Lender shall, to the
maximum extent permitted under applicable law, (a) exclude voluntary prepayments
and the effects thereof, and (b) amortize, prorate, allocate, and spread, in
equal parts, the total amount of interest throughout the entire term of the
indebtedness; provided that if the indebtedness is paid in full prior to the end
of the full contemplated term of the Loans, and if the interest received for the
actual period of existence of the Loans exceeds the maximum lawful rate of
interest, the holder of the Loans shall refund to the Borrower the amount of
such excess or credit the amount of such excess against principal portion of the
indebtedness as of the date it was received, and, in such event, the Lender
shall not be subject to any penalties provided by any laws for contracting or,
charging, reserving, collecting, or receiving interest excess of the maximum
lawful rate of interest.

SECTION 4. REDUCTION OR TERMINATION OF THE COMMITMENT; PAYMENTS AND
PREPAYMENTS

SECTION 4.1 Voluntary Reduction or Termination of the Commitment. The
Borrower may from time to time prior to the Termination Date on at least one
Business Day's prior written notice received by the Lender permanently reduce
the Commitment Amount to an amount not less than the aggregate unpaid principal
amount of the Loans then outstanding. Any such reduction shall be in an
aggregate amount of $10,000 or an integral multiple thereof. The Borrower may at
any time on like notice prior to the Termination Date terminate the Loan
Commitment upon payment in full of the Loans and other obligations of the
Borrower hereunder pertaining to the Loans.

SECTION 4.2 Voluntary Prepayments. The Borrower may from time to time
prepay the Loans in whole or in part, provided that (a) the Borrower shall give
the Lender not less than one Business Day's prior notice thereof, specifying the
Loans to be prepaid, and the date and amount of prepayment, (b) each partial
prepayment shall be in a principal amount of $10,000 or a higher integral
multiple thereof, and (c) any prepayment of the entire principal amount of all
Loans shall include accrued interest to the date of prepayment.

SECTION 4.3 Mandatory Prepayments. (a) Upon termination of the Merger
Agreement under any of the circumstances described in Section 7.3(b) of the
Merger Agreement, the Commitment shall terminate and the Loans, plus accrued but

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unpaid interest thereon, shall become immediately due and payable and the
Borrower shall immediately prepay all outstanding Loans.

(b) If the Merger Agreement is terminated for any reason other than (i)
as set forth in Section 4.3(a) of this Agreement or (ii) a termination by
Borrower pursuant to Section 9.1(b)(iii) or (iv) of the Merger Agreement, then
the Commitment shall terminate and all outstanding principal amounts of the
Loans, plus all accrued but unpaid interest thereon, shall be due and payable
within thirty (30) days after such event and Borrower may satisfy its payment
obligations through either the delivery of inventory meeting the specifications
of the Distribution Agreement dated March 16, 1995 by and between Lender and
Borrower (the "Supply Agreement") (and the vesting in Parent of clean title in
such inventory) valued in accordance with the Supply Agreement or the setoff of
amounts owed by Lender to Borrower under the Supply Agreement which are not
disputed by Lender.

(c) If the Merger Agreement is terminated by Borrower pursuant to
Section 9.1(b)(iii) or (iv) of the Merger Agreement, then the Commitment shall
terminate and, without any action by the parties hereto, all principal amounts
of the Loan, plus accrued but unpaid interest thereon, shall be forgiven by
Lender and the Borrower shall have no obligation to make any payments to the
Lender in respect thereof.

SECTION 4.4 Making of Payments. Except as otherwise provided, all
payments in respect of the Loans shall be made by the Borrower to the Lender in
immediately available funds. All such payments shall be made to the Lender at
its address listed on the signature page hereto, not later than 12:00 P.M. (New
York City time), on the date due; and funds received after that hour shall be
deemed to have been received by the Lender on the next following Business Day.

SECTION 4.5 Due Date Extension. If any payment provided for hereunder
falls due on a Saturday, Sunday or other day which is not a Business Day, then
such due date shall be extended to the next following Business Day, and
additional interest shall accrue and be payable for the period of such
extension.

SECTION 5. REPRESENTATIONS AND WARRANTIES.

To induce the Lender to enter into this Agreement and to make Loans
hereunder, and in recognition of the fact that the Lender is acting in reliance
thereupon, the Borrower represents and warrants to the Lender that, except as
specified in the Company Disclosure Letter (as such term is defined in the
Merger Agreement):

SECTION 5.1 Organization, etc. The Borrower is a corporation validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated; and the Borrower is duly qualified to transact business and in
good standing

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as a foreign corporation authorized to do business in each jurisdiction where
the failure to so qualify would have a material adverse effect on the business
of the Borrower.

SECTION 5.2 Authorization. The Borrower (a) has the corporate power and
authority to execute, deliver and perform this Agreement and the Note, and (b)
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of this Agreement and the Note.

SECTION 5.3 No Conflict. The execution, delivery and performance by the
Borrower of this agreement and the Note does not and will not (a) contravene or
conflict with any material provision of any law, statute, rule or regulation,
(b) contravene or conflict with, result in any breach of, or constitute a
default under, any material agreement or instrument binding on it, (c) result in
the creation or imposition of or the obligation to create or impose any Lien
(except for Permitted Liens) upon any of the material property or assets of the
Borrower or any subsidiary, or (d) contravene or conflict with any material
provision of the articles of incorporation or by-laws of the Borrower, where
such contravention or conflict would have a material adverse effect on the
Borrower.

SECTION 5.4 Validity. The Borrower has duly executed and delivered this
Agreement and the Note, and this Agreement and the Note constitute the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.

SECTION 5.5 Litigation and Contingent Obligations. There is no
litigation, investigation or governmental proceeding pending, or to the
knowledge of the Borrower threatened, against the Borrower which if adversely
determined would result in a Material Adverse Change.

SECTION 5.6 Accuracy of Information. All factual information heretofore
or contemporaneously furnished by or on behalf of the Borrower in writing to the
Lender for purposes of or in connection with this Agreement is, and all other
such factual information hereafter furnished by or on behalf of the Borrower to
the Lender will be, true and accurate in every material respect on the date as
of which such information is dated or certified, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading.

SECTION 5.7 Governmental Authorizations. The Borrower has all material
licenses, franchises, permits (including permits and licenses required by

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environmental, health and safety statutes, regulations and rules) and other
governmental authorizations necessary for all businesses presently carried on by
it (including ownership and leasing of the real and personal property owned and
leased by it).

SECTION 5.8 Margin Regulation. The Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation G or Regulation U of the Board of Governors of the Federal Reserve
System).

SECTION 5.9 Merger Agreement. The representations and warranties made
by Borrower in the Merger Agreement were true and correct in all material
respects when made and remain true and correct in all material respects and
Borrower has performed in all material respects each obligation and agreement to
be performed by it under the Merger Agreement.

SECTION 6. COVENANTS.

The Borrower agrees that, for so long as the Commitment remains
outstanding or any Loan remains unpaid or outstanding, the Borrower shall:

SECTION 6.1 Maintenance of Existence. Preserve and maintain its
corporate existence and all franchises, rights and privileges material for the
proper conduct of its business.

SECTION 6.2 Conduct of Business. Continue to engage in business of the
same or related type as conducted by it on the date of this Agreement.

SECTION 6.3 Maintenance of Properties. Maintain, keep and preserve all
material properties (tangible and intangible), necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted.

SECTION 6.4 Maintenance of Records. Keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP,
reflecting all financial transactions of the Borrower.

SECTION 6.5 Maintenance of Insurance. Maintain insurance with
financially sound insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof.

SECTION 6.6 Compliance with Laws. Comply in all material respects with
all applicable laws, rules, regulations and orders, such compliance to include,

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without limitation, paying before the same shall become delinquent all taxes,
assessments and governmental charges imposed upon them, their income or upon
their property except as contested in good faith and by appropriate proceedings
and for which adequate reserves have been established and are being maintained
in accordance with GAAP.

SECTION 6.7 Right of Inspection. At any reasonable time and from time
to time during normal business hours, permit the Lender or any agent or
representative thereof, to examine and make copies and abstracts from the
records and books of account of, and visit the properties of, the Borrower, and
to discuss the affairs, finances and accounts of the Borrower with any of their
respective officers and the Borrower's independent accountants. Lender
acknowledges that Borrower is a publicly held company and that certain
information made available to Lender by Borrower pursuant to this Section 6.7,
will be confidential and considered insider information, and that without the
written consent of Borrower, such information may not be discussed or in any way
disseminated to others except to the extent required by applicable law.

SECTION 6.8 Proceeds. The proceeds of the Loans will be used for normal
recurring expenses incurred by the Borrower in connection with its day-to-day
operations conducted in a manner consistent with past practice (including paying
interest on debt obligations) and other expenses incurred in the ordinary course
of business; provided, however, that up to $100,000 of the proceeds of the Loans
may be used to pay Furman Selz LLC for its services rendered in connection with
the transactions contemplated by the Merger Agreement (the "Furman Selz Fees")
and up to $50,000 may be used in connection with any reasonable legal fees and
expenses incurred by the Company after the date hereof in connection with the
defense of litigation against the Company or its directors relating to the
transactions contemplated by the Merger Agreement and the other agreements
executed in connection therewith initiated after the first public announcement
of the Merger Agreement ("Legal Fees"). Such expenses shall be evidenced by
invoices or other appropriate documentation evidencing such expenses, which
shall accompany any Borrowing Request. Borrower may use the proceeds of the
Loans for other purposes only with the prior written consent of the Lender, such
consent to be given at the sole discretion of the Lender. Without limiting the
foregoing, except as specified in the first sentence of this Section 6.8,
extraordinary expenses incurred by Borrower in connection with the transactions
contemplated by the Merger Agreement shall not be funded with the proceeds of
the Loans.

SECTION 6.9 Liens. Not create, assume or suffer to exist any Lien that
would be reasonable likely to result in a Material Adverse Change.

SECTION 6.10 Consolidations, Mergers and Sale of Assets. The Borrower
will not (i) dissolve or liquidate, (ii) merge with or into, or consolidate
with, any other Person except as contemplated by the Merger Agreement, or (iii)
sell, convey or

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transfer all or substantially all of its property and assets to any other
Person, unless either (x) the Board of Directors of the Borrower shall determine
that any such transaction is in the best interests of the Borrower and such
transaction will not cause an Event of Default or (y) the Borrower terminates
the Commitment prior to such transaction in accordance with Section 4.1 and
prepays the Loans and any accrued interest as provided in Sections 4.1 and/or
4.2 and/or 4.3.

SECTION 7. CONDITIONS

The effectiveness of this Agreement and the obligation of the Lender to
make its Loans hereunder is subject to the performance by the Borrower of all of
its obligations under this Agreement and to the satisfaction of the following
conditions precedent:

SECTION 7.1 Initial Borrowing. In the case of the initial Borrowing,
the Lender shall have received all of the following, each, except to the extent
otherwise specified below, duly executed by an authorized officer of the
Borrower, dated the date hereof (or such earlier date as shall be satisfactory
to the Lender), in form and substance satisfactory to the Lender:

(i) An executed copy of this Agreement and the Note;

(ii) Borrower shall have executed and delivered to Lender a copy of
the Security Agreement (the "Security Agreement") substantially in the
form of Exhibit C;

(iii) Lender shall have received an opinion in form and substance
reasonably satisfactory to it from counsel to Borrower, Cantor and
Morante, P.A., to the effect that this Agreement and the related security
agreement are valid and binding obligations of Borrower and that the
security interests granted under the security agreement give Lender a
perfected security interest in the collateral referred to therein;

(iv) all UCC-1 Financing Statements and other filings necessary to
perfect Lender's security interests in the collateral granted under the
security agreement shall have been validly filed in order to properly
perfect Lender's security interest; and

(v) a Subordination Agreement in the form of Exhibit C hereto shall
have been executed by each of Leroy Meshel, M.D., Strategica Capital
Corporation, and the borrower and delivered to the Lender.

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SECTION 7.2 All Loans. In addition to the satisfaction of the
conditions precedent set forth in Section 7.1, the obligation of the Lender to
make each Loan is subject to the following further conditions precedent that:

(i) The Lender shall have received a Borrowing Request;
and

(ii) No Event of Default or Unmatured Event of Default exists or
will result from the making of such Loan.

SECTION 8. EVENTS OF DEFAULT AND THEIR EFFECT

SECTION 8.1 Events of Default. An "Event of Default" shall exist if any
one or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:

(i) Non-Payment of Loans, etc. (a) Default, and continuance thereof
for five Business Days, in the payment when due of any principal or
interest of any Loan; or (b) default, and continuance for ten Business
Days after notice thereof to the Borrower by the Lender, in the payment
when due of any other amount owing by the Borrower pursuant to this
Agreement.

(ii) Non-Payment of Other Indebtedness. Default in the payment when
due (subject to any applicable grace period), whether by acceleration or
otherwise, of any Indebtedness of the Borrower in an amount in excess of
$100,000 or default in the performance or observance of any obligation or
condition with respect to any such Indebtedness if the effect of such
default is to accelerate the maturity of any such Indebtedness in excess
of $100,000 or to permit the holder or holders thereof, or any trustee or
agent for such holders, to cause such Indebtedness in excess of $100,000
to become due and payable prior to its expressed maturity.

(iii) Bankruptcy, Insolvency, etc. The Borrower becomes insolvent or
generally fails to pay, or admits in writing its inability to pay, debts
as they become due; or the Borrower applies for, consents to, or
acquiesces in the appointment of, a trustee, receiver or other custodian
for the Borrower, or any property thereof, or makes a general assignment
for the benefit of creditors; or, in the absence of such application,
consent or acquiescence, a trustee, receiver or other custodian is
appointed for the Borrower or for a substantial part of the property
thereof and is not discharged within 90 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation
proceeding, is commenced in respect of the Borrower and if such case or
proceeding is not commenced by the Borrower, it is consented to or
acquiesced in by the Borrower

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<PAGE>

or remains for 90 days undismissed; or the Borrower takes any corporate
action to authorize, or in furtherance of, any of the foregoing.

(iv) Other Noncompliance with this Agreement and Security Agreement.
Failure by the Borrower to comply with or perform in any material respect
any other provision of this Agreement or the Security Agreement and
continuance of such failure for 10 days after notice thereof to the
Borrower by the Lender.

(v) Representation and Warranties. Any representation or warranty
made by the Borrower herein or in the Security Agreement is false or
misleading in any material respect as of the date hereof and continues to
be false or misleading for 10 days after receipt of notice thereof to the
Borrower by the Lender; or any schedule, certificate, financial statement,
report notice, or other writing furnished by the Borrower to the Lender is
false or misleading in any material respect on the date as of which the
facts therein set forth are stated or certified.

(vi) Judgments. One or more judgments or decrees shall be entered
against the Borrower involving, individually or in the aggregate, a
liability of $100, 000 or more and all such judgments or decrees shall not
have been vacated, discharged, satisfied or stayed pending appeal within
forty-five days from the entry thereof.

SECTION 8.2 Effect of Event of Default. If any Event of Default
described in Section 8.1(iii) occur and be continuing, the Commitment (if it has
not theretofore terminated) shall immediately terminate and all amounts due and
owing pursuant to this Agreement shall become immediately due and payable, all
without notice of any kind; and, in the case of any other Event of Default, the
Lender may declare the Commitment (if it has not theretofore terminated) to be
terminated and all amounts due and owing pursuant to this Agreement to be due
and payable, whereupon the Commitment (if it has not theretofore terminated)
shall immediately terminate and all amounts due and owing pursuant to this
Agreement shall become immediately due and payable, all without presentment,
demand, protest or notice of any kind.

SECTION 9. MISCELLANEOUS

SECTION 9.1 Waivers and Amendments. The provision of this Agreement may
from time modified or waived, if such amendment, modification or waiver is in
writing and consented to by the Borrower and the Lender.

SECTION 9.2 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
or similar writing) and shall be given to such party at its address or
telex/facsimile number set forth on the signature pages hereof or such other
address or telex/facsimile number as such

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<PAGE>

party may hereafter specify for the purpose of notice to the other party. Each
such notice, request or other communication shall be effective (a) if given by
telex or facsimile, when such telex or facsimile is transmitted to the
telex/facsimile number specified in this Section and the appropriate answerback
is received, (b) if given by mail, four days after such communication is
deposited in the mail with first class postage prepaid, addressed as aforesaid
or (c) if given by any other means, when delivered at the address specified
pursuant to this Section.

SECTION 9.3 Subsidiaries. The provisions of this Agreement shall apply
to any subsidiaries which the Borrower may acquire or form during the term of
this Agreement.

SECTION 9.4 Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.

SECTION 9.5 Governing Law. This Agreement, the Note and each Loan shall
be a contract made under and governed by the laws of the State of Delaware,
without regard to conflict of laws principles. All obligations of the Borrower
and rights of the Lender expressed herein shall be in addition to and not
limitation of those provided by applicable law.

SECTION 9.6 Counterparts. This Agreement may be executed in any number
of counterparts and by the different, parties on separate counterparts and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.

SECTION 9.7 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the parties hereto may not
assign or transfer their respective rights or obligations hereunder without the
prior written consent of the other party hereto.

SECTION 9.8 Right of Set-Off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the acceleration of the Note
pursuant to the provisions of Section 8.2, the Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by law to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by the Lender, irrespective of whether or not the
Lender shall have made any demand under this Agreement and such Note and of
whether or not such obligations may be matured. The Lender agrees promptly to
notify

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<PAGE>

the Borrower after any such setoff and application made by the Lender,
but the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender under this Section 9.8 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lender may have.

-15-
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.

NEOLENS, INC.

By: /s/ Jon E. Haglund
----------------------------------
Name: Jon E. Haglund
Title: President and Chief Executive
Officer
Address: 18963 Northeast 4th Court
Miami, Florida 33179
Attention: Jon E. Haglund
Telephone: (305)
Facsimile: (305)

SOLA INTERNATIONAL, INC.

By: /s/ John Heine
----------------------------------
Name: John Heine
Address: 2420 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Attention: John Heine
Telephone: (415) 324-6868
Facsimile: (415) 324-6850

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<PAGE>

EXHIBIT A

SENIOR SECURED NOTE

$450,000 May 28, 1996

FOR VALUE RECEIVED, the undersigned promises to pay to the order of
Sola International Inc. (the "Lender") at its principal office, the sum of FOUR
HUNDRED AND FIFTY THOUSAND DOLLARS ($450,000) or so much thereof or such greater
amount as may from time to time represent the aggregate unpaid principal amount
of all Loans (as defined in the Credit Agreement hereinafter referenced)
outstanding, on or before the Termination Date (as defined in the Credit
Agreement hereinafter referenced) or such later date as provided in the Credit
Agreement.

The undersigned also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.

Payments of both principal and interest are to be made in lawful money
of the United States of America in same day or immediately available funds.

This Note is the Note described in, and is subject to the terms and
provisions of, a Credit Agreement, dated as of May 28, 1996 (as the same may at
any time be amended, modified or supplemented from time to time, the "Credit
Agreement") among the undersigned and the Lender. Terms used herein and not
otherwise defined herein are used herein as defined in the Credit Agreement.
Payment and performance of this Note is secured by a Security Agreement, dated
as of May 28, 1996 (as the same may at any time be amended, modified or
supplemented from time to time), among the undersigned and the Lender.

Reference is hereby made to the Credit Agreement for a statement of the
prepayment rights and obligations of the undersigned and for a statement of the
terms and conditions under which the due date of this Note may be accelerated.
Upon the occurrence of any Event of Default as specified in the Credit
Agreement, the principal balance hereof and the interest accrued hereon may be
declared to be forthwith due and payable, and any indebtedness of the holder
hereof to the undersigned may be appropriated and applied hereon.

The provisions of the Credit Agreement are hereby incorporated in this
Note to the same extent as if set forth at length herein.

A-1-
<PAGE>

Annexed hereto and made a part hereof is a schedule (the "Loan and
Repayment Schedule") on which shall be shown all Loans made by the Lender to the
undersigned pursuant to the Credit Agreement, all accrued interest added to the
outstanding principal balance hereof, repayments of principal made by the
undersigned to the Lender hereunder and other information provided for on such
Loan and Repayment Schedule. The undersigned hereby appoints the Lender as its
agent to make an appropriate notation on the Loan and Repayment Schedule (or on
a continuation of such Loan and Repayment Schedule) evidencing the date and the
amount of each Loan, the date and amount of accrued interest added to the
outstanding principal balance hereof, the date and amount of any principal
repayment made hereunder or other information provided for on the Loan and
Repayment Schedule. Such endorsement shall constitute prima facie evidence of
the accuracy of the information set forth thereon; provided, however, that the
failure of the Lender to make such a notation or any error in such notation
shall not affect the obligations of the undersigned to repay this Note in
accordance with its terms.

In addition to and not in limitation of the foregoing and the
provisions of the Credit Agreement, the undersigned further agrees, subject only
to any limitation imposed by applicable law, to pay all expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Note in endeavoring to collect any amounts payable hereunder which are not paid
when due, whether by acceleration or otherwise.

This Note evidences senior indebtedness of the undersigned and is
entitled to the benefits of a Subordination Agreement by and among the
undersigned, the Lender, Leroy Meshel, M.D., and Strategica Capital Corporation.

All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.

THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF DELAWARE.

NEOLENS, INC.

By: /s/ Jon E. Haglund
----------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

A-2-
<PAGE>

LOAN AND REPAYMENT
SCHEDULE TO SENIOR SECURED NOTE

Accrued
Interest to
be Added to
Amount Outstanding Aggregate
Amount of Principal Principal Notation
of Loan Date Principal Paid Balance Balance Made By
- ---------- ------ ------------- ----------- --------- -----------

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

NOTE: Additional pages of this Loan and Repayment Schedule to Senior Secured
Note may be attached to the Senior Secured Note by the holder as may be
necessary to record certain information regarding each Loan.

A-3-
<PAGE>

EXHIBIT B

FORM OF BORROWING REQUEST

Sola International, Inc.
2420 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Attention: John Heine

Gentlemen:

This Committed Borrowing Request is delivered to you pursuant to
Section 2.2 of the Credit Agreement, dated as of May __, 1996 (as amended,
modified or supplemented, the "Credit Agreement"), between Neolens, Inc. (the
"Borrower"), and Sola International Inc. (the "Lender"). Unless otherwise
defined herein, capitalized terms used herein have the meanings provided in the
Credit Agreement.

The Borrower hereby requests that a Loan be made in the aggregate
principal amount of $___________________ on __________________, 1996.

The Borrower hereby certifies and warrants that on the date the
Borrowing requested hereby is made, after giving effect to the making of such
Borrowing:

(a) No Event of Default or Unmatured Event of Default has occurred and
is continuing or will result from the making of such Loan;

(b) The representations and warranties of the Borrower contained in
Section 6 of the Credit Agreement are true and correct with the same effect as
though made on the date hereof; and

(d) The amount of the requested Loan does not exceed the aggregate
amount payable in respect of the attached invoices or other evidences of
obligations. The obligations in respect of such invoices and evidences have been
incurred by the Borrower in the ordinary course of business consistent with past
practice and is currently due and payable by the Borrower.

Except to the extent, if any, that prior to the time of the Borrowing
requested hereby the Lender shall receive written notice to the contrary from
the

B-1
<PAGE>

Borrower, each matter to which Borrower has herein certified shall be deemed
once again to be certified as true and correct at the date of such Borrowing as
if then made.

Please wire transfer the proceeds of the Borrowing to the account of
the Borrower as set forth on Annex I attached hereto.

The Borrower has caused this Borrowing Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
a responsible officer this ___________ day of ________________, 1996.

NEOLENS, INC.

By: _______________________________
Name:_______________________________
Title:_______________________________

B-2

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Security Agreement"), dated as of May
28, 1996, made by NEOLENS, INC., a Florida corporation (the "Grantor"), in favor
of SOLA INTERNATIONAL, INC., a Delaware corporation (the "Lender").

W I T N E S S E T H:

WHEREAS, pursuant to a Credit Agreement, dated as of the date hereof
(as amended, supplemented, amended and restated, restructured or otherwise
modified from time to time, including any refinancing in whole or in part
thereof, the "Credit Agreement"), between the Grantor and the Lender, the Lender
has loaned and will lend to the Grantor amounts evidenced by a promissory note
of the Grantor, dated the date hereof (the "Note");

WHEREAS, the Lender wishes to secure (i) the payment of the
indebtedness evidenced by the Note and any promissory note taken in renewal,
exchange or substitution thereof or therefor, including interest on such notes
and (ii) the performance and payment of Grantor's other obligations and
liabilities under the Credit Agreement and has therefore required the Grantor to
execute and deliver this Security Agreement; and

WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lender
to make the loans contemplated by the Credit Agreement as evidenced by the Note,
the Grantor agrees, for the benefit of the Lender, as follows.

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

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<PAGE>

"Bailee Letter" means a letter executed and delivered by a Bailee
Supplier in form and substance satisfactory to the Lender relating to such
Bailee Supplier's possession of Inventory or Equipment of the Grantor.

"Bailee Supplier" is defined in Section 3.1.3.

"Collateral" is defined in Section 2.l.

"Credit Agreement" is defined in the first recital.

"Grantor" is defined in the preamble.

"Inventory" is defined in clause (a) of Section 2.1.

"Loan Documents" collectively, means this Security Agreement, the
Credit Agreement, the Note, and each other agreement, certificate, document or
instrument delivered in connection with this Security Agreement, and such other
agreements, whether or not specifically mentioned herein or therein.

"Lender" is defined in the preamble.

"Obligations" - means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured, direct or indirect, choate or
inchoate, sole, joint, several or joint and several, due or to become due,
heretofore or hereafter contracted or acquired) of the Grantor and each other
Obligor arising under or in connection with this Security Agreement, the Note,
and each other Loan Document including (i) all obligations for principal or
interest (including post-petition interest) under the Note, whether incurred on
the date hereof, (ii) all other obligations of each Obligor, either incurred on
or after costs, indemnification or otherwise, arising hereunder or under any
other Loan Document, (iii) all out-of-pocket costs and expenses, including
attorneys' fees and legal expenses, incurred by the Lender to the extent set
forth in the Credit Agreement in connection with such Indebtedness, obligations
and liabilities, and (iv) following the occurrence and during the continuance of
an Event of Default, all advances made by the Lender for the maintenance,
protection, preservation or enforcement of, or realization upon, the collateral
in which the Lender has been granted a security interest pursuant to a Loan
Document (or any portion thereof) including advances for storage, transportation
charges, taxes, insurance, repairs and the like.

"Obligor" means, as the context may require, the Grantor and any other
Person (other than the Lender) to the extent such Person is obligated under this
Security Agreement or any other Loan Document.

"Security Agreement" is defined in the preamble.

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<PAGE>

"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective or whether at the time capital
stock (or other ownership interest) of any other class or classes of such entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, or by one or more other
Subsidiaries of such Person.

"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of Florida or, as the context may require, in any other
jurisdiction the laws of which may apply to all or a portion of the Collateral
in which a security interest is granted hereunder.

SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.

SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.

ARTICLE II

SECURITY INTEREST

SECTION 2.1. Grant of Security. The Grantor hereby assigns and pledges
to the Lender, and hereby grants to the Lender, a continuing security interest
in all of the personal property of Grantor, whether tangible or intangible,
whether now or hereafter existing or acquired (the "Collateral") including, but
not limited to:

(a) all inventory in all of its forms of the Grantor, wherever
located, including

(i) all raw materials and work in process therefor, finished
goods thereof, and materials used or consumed in the manufacture or
production thereof,

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<PAGE>

(ii) all goods in which the Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in which
the Grantor has an interest or right as consignee), and

(iii) all goods which are returned to or repossessed by the
Grantor, and all accessions thereto, products thereof and documents
therefor (any and all such inventory, materials, goods, accessions,
products and documents being the "Inventory");

(b) All of the machinery, equipment, tools, dyes, fixtures, furniture,
furnishings, accessories, plant and office equipment, delivery equipment
and selling equipment of the Grantor, and all vehicles owned by Grantor,
together with any manufacturers' warranties with respect to any of the
foregoing, and all of Grantor's rights as lessee, to the extent that a
security interest therein can be granted, under leases from third parties
respecting equipment, fixtures, leasehold improvements, tooling, office
setups and furniture;

(c) Any and all of Grantor's cash (including that held in banks and
bank accounts and as petty cash), notes, deposits and prepaid expenses,
funds held in escrow, and refund claims of Grantor and all accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles (including tax refunds) of the Grantor, whether or not
arising out of or in connection with the sale or lease of goods or the
rendering of services, and all rights of the Grantor now or hereafter
existing in and to all security agreements, guaranties, leases and other
contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general
intangibles (any and all such accounts, contracts, contract rights, chattel
paper, documents, instruments, and general intangibles being the
"Receivables", and any and all such security agreements, guaranties, leases
and other contracts being the "Related Contracts");

(d) All of Grantor's rights to the extent that a security interest
therein can be granted under all lease agreements respecting the premises
located at 18963 N.E. 4th Court, Miami, Florida 33179 and utilized by
Grantor;

(e) Any and all insurance policies, proceeds or benefits thereof
related to the Collateral, provided that such policies do not expressly
prohibit the grant of such security interest; and

(f) all products, offspring, rents, issues, profits, returns, income
and proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in clause (a) and
proceeds, and, to

C-4
<PAGE>

the extent not otherwise included, all payments under
insurance (whether or not the Lender is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).

Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained. The
Grantor agrees to use commercially reasonable efforts to obtain any such
required consent with respect to any material items of such Collateral.

SECTION 2.2. Security for Obligations. This Security Agreement secures
the payment of all Obligations now or hereafter existing under the Credit
Agreement, the Note, and each other Loan Document to which the Grantor is or may
become a party, whether for principal, interest, costs, fees, expenses or
otherwise.

SECTION 2.3. Continuing Security Interest; Transfer of Note. This
Security Agreement shall create a continuing security interest in the Collateral
and shall

(a) remain in full force and effect until payment in full of all
Obligations;

(b) be binding upon the Grantor, its successors, transferees and
assigns; and

Without limiting the generality of the foregoing clause (c), the Lender may
assign or otherwise transfer (in whole or in part) the Note held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all the rights and benefits in respect thereof granted to the Lender
under any Loan Document (including this Security Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer.
Upon the payment in full of all Obligations, the security interest granted
herein shall terminate and all rights to the Collateral shall revert to the
Grantor. Upon any such termination, the Lender will, at the Grantor's sole
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.

C-5
<PAGE>

SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding

(a) the Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;

(b) the exercise by the Lender of any of its rights hereunder shall
not release the Grantor from any of its duties or obligations under any
such contracts or agreements included in the Collateral; and

(c) the Lender shall not have any obligation or liability under any
such contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall the Lender be obligated to perform any of
the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1. Representations and Warranties. The Grantor represents and
warrants unto the Lender as set forth in this Article that, except as set forth
in the Company Disclosure Letter (as such term is defined in the Credit
Agreement):

SECTION 3.1.1. Location of Collateral, etc. All of the Equipment and
Inventory of the Grantor is located at the places specified in Item A of
Schedule I hereto (other than Inventory of the Grantor with an aggregate value
at any one location not so listed on Schedule I hereto of less than $50,000;
provided, that no more than $100,000 in the aggregate of such Collateral shall
be located in places other than those specified in Item A). The place of
business and chief executive office of the Grantor and the office where the
Grantor keeps its records concerning the Receivables and all originals of all
chattel paper which evidence Receivables are located at the address set forth in
Item B of Schedule I hereto. The Grantor has not been known by any legal name
different from the one set forth on the signature page hereto, nor has the
Grantor been the subject of any merger or other corporate reorganization. If the
Collateral includes any Inventory located in the State of California, the
Grantor with respect to such Collateral is not a "retail merchant" within the
meaning of Section 9.102 of the Uniform Commercial Code - Secured Transactions
of the State of California. The Grantor is not a party to any federal,

C-6
<PAGE>

state or local government contract except as may be disclosed to the Lender on
15 days' prior notice.

SECTION 3.1.2. Ownership, No Liens, etc. The Grantor owns the
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of (a) the Lender relating to this Security
Agreement, (b) parties holding security interests permitted by the Credit
Agreement or (c) parties holding security interests who are party to a
Subordination Agreement subordinating their interests to those granted to the
Lender hereunder pursuant to the terms of said Subordination Agreement.

SECTION 3.1.3. Possession and Control. The Grantor has exclusive
possession and control of the Equipment and Inventory except, to the extent
permitted by clause (d) of Section 4.1.1, as to Equipment and Inventory which in
the ordinary course of business is under the control of third-parties for the
purpose of manufacturing and/or processing goods for the Grantor and warehousing
such goods (such third parties referred to as "Bailee Suppliers").

SECTION 3.1.4. Perfection, etc. This Security Agreement creates a valid
first priority security interest, subject only to Liens specified in Schedule
3.1.2 of the Company Disclosure Letter, in the Collateral, securing the payment
of the Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest in the United States under the U.C.C.
have been duly taken.

SECTION 3.1.5. Authorization, Approval, etc. No authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either

(a) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery and performance of this Security
Agreement by the Grantor; or

(b) except for filings which have been made, for the exercise by the
Lender of its rights and remedies hereunder.

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SECTION 3.1.6. Compliance with Laws. The Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which might reasonably be expected to have a
materially adverse effect on the worth of the Collateral as collateral security.

ARTICLE IV

COVENANTS

SECTION 4.1. Certain Covenants. The Grantor covenants and agrees that,
so long as any portion of the Obligations shall remain unpaid, the Grantor will,
unless the Lender shall otherwise consent in writing, perform the obligations
set forth in this Section.

SECTION 4.1.1. As to Equipment and Inventory. The Grantor hereby agrees
that it shall

(a) keep all Equipment and Inventory at the places therefor specified
in Section 3.1.1 (other than (i) Inventory sold in the ordinary course of
business and Equipment which is obsolete or disposed of in the ordinary
course of business, (ii) Equipment and Inventory not located at a place
listed in Item A of Schedule I hereto with a value (A) at any one location
not so listed in an amount not to exceed $50,000 and (B) in the aggregate
in an amount not to exceed $100,000 and (iii) to the extent that the Lender
shall have received no less than 15 days' prior written notice thereof,
Inventory located at such other places in one or more locations in a
jurisdiction where all representations and warranties set forth in Article
III (including Section 3.1.4) shall be true and correct, and all action
required pursuant to the first sentence of Section 4.1.6 shall have been
taken with respect to the Equipment and Inventory;

(b) cause all material Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with any manufacturer's manual; and
forthwith, or in the case of any loss or damage to such material Equipment,
as quickly as practicable after the occurrence thereof, make or cause to be
made all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end; and promptly
furnish to the Lender a statement respecting any loss or damage to any of
such material Equipment;

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<PAGE>

(c) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Inventory, except to
the extent the validity thereof is being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP have been set aside; and

(d) cause each Bailee Supplier that is in possession in the United
States of Equipment and/or Inventory of the Grantor and its U.S.
Subsidiaries with a value (individually or in the aggregate) in excess of
$25,000 to execute and deliver to the Lender a letter in form and substance
satisfactory to the Lender relating to such Bailee Supplier's possession of
Inventory; provided, that in no event shall the value of all Inventory of
the Grantor and its Subsidiaries in the possession of Bailee Suppliers that
have not executed and delivered to the Lender a Bailee Letter exceed
$50,000.

SECTION 4.1.2. As to Receivables.. The Grantor shall keep its place(s)
of business and chief executive office and the office(s) where it keeps its
records concerning the Receivables, and all originals of all chattel paper which
evidenced Receivables, located at the applicable address set forth in Item B of
Schedule I hereto, or, upon 30 days' prior written notice to the Lender, at such
other locations in a jurisdiction where all actions required by the first
sentence of Section 4.1.6 shall have been taken with respect to the Receivables;
not change its name except upon 30 days' prior written notice to the Lender;
hold and preserve such records and chattel paper; and permit representatives of
the Lender at reasonable times and intervals, during normal business hours and
upon reasonable notice, to inspect and make abstracts from such records and
chattel paper.

SECTION 4.1.3. As to Collateral.

(a) Until the occurrence and continuance of any Event of Default
under the Credit Agreement or any breach of the Grantor's obligations
hereunder and such time as the Lender shall notify the Grantor of the
revocation of such power and authority, the Grantor (i) may in the
ordinary course of its business (and except as otherwise permitted under
the Credit Agreement), at its own expense, sell, lease or furnish under
the contracts of service any of the Inventory normally held by the Grantor
for such purpose, and use and consume, in the ordinary course of its
business (except as otherwise permitted under the Credit Agreement), any
raw materials, work in process or materials normally held by the Grantor
for such purpose, (ii) will, at its own expense, endeavor, to the extent
commercially reasonable, to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such action with
respect to such collection as the

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Lender may reasonably request following the occurrence and continuance
of an Event of Default or, in the absence of such request, as the Grantor
may deem advisable, and (iii) may grant, in the ordinary course of business
(except as otherwise permitted in the Credit Agreement), to any party
obligated on any of the Collateral, any rebate, refund or allowance to
which such party may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have given
rise to such Collateral. The Lender, however, may, at any time following
the occurrence and continuance of an Event of Default, whether before or
after any revocation of such power and authority or the maturity of any of
the Obligations, notify any parties obligated on any of the Collateral to
make payment to the Lender of any amounts due or to become due thereunder
and enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder or evidenced thereby. Upon request of
the Lender following the occurrence and continuance of an Event of Default,
the Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Lender of any amounts due or to
become due thereunder.

(b) The Lender is authorized to endorse, in the name of the Grantor,
any item, howsoever received by the Lender, representing any payment on or
other proceeds of any of the Collateral.

SECTION 4.1.4. Insurance. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to the
Equipment and Inventory against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon the request of the Lender, furnish a certificate of a reputable
insurance broker setting forth the nature and extent of all insurance maintained
by the Grantor in accordance with this Section. Without limiting the foregoing,
the Grantor further agrees as follows:

(a) Each policy for property insurance shall show the Lender as loss
payee.

(b) Each policy for liability insurance shall show the Lender as an
additional insured.

(c) Each insurance policy shall provide that payments thereunder shall
not be affected by any breach of representation or warranty by the Grantor
and that at least 30 days' prior written notice of cancellation or of lapse
shall be given to the Lender by the insured.

C-10
<PAGE>

(d) The Grantor shall, if so requested by the Lender, deliver to the
Lender a copy of each insurance policy.

SECTION 4.1.5. Transfers and Other Liens. The Grantor shall not:

(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except (i) Inventory in the ordinary
course of business, (ii) to a wholly-owned Subsidiary of the Grantor,
provided such Subsidiary executes a Security Agreement in the form of this
Security Agreement prior to such sale, assignment or disposition or (iii)
as permitted by the Credit Agreement; or

(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral, except for the security
interest created by this Security Agreement and except as permitted by the
Credit Agreement or the Agreement and Plan of Merger among Lender, a
subsidiary of Lender, and Grantor dated as of May 28, 1996.

SECTION 4.1.6. Further Assurances, etc. The Grantor agrees that, from
time to time at its own expense, the Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Lender may request, in order to perfect,
preserve, maintain and protect any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor will execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to the federal
assignment of claims statute, 31 U.S.C. ss. 3726, any successor or amended
version thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or desirable, or as the Lender may request, in
order to perfect and preserve the security interests and other rights granted or
purported to be granted to the Lender hereby.

With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Lender to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of the Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

C-11
<PAGE>

The Grantor will (i) keep records concerning Collateral, which records will be
of such character as will enable the Lender or its designees to determine at any
time the status thereof, and the Grantor will not, unless the Lender shall
otherwise consent in writing, duplicate any such records at any other address;
(ii) furnish the Lender such information concerning the Grantor, the Collateral
as the Lender may from time to time reasonably request; (iii) comply with all
laws, rules and regulations relating to, and promptly pay when due all license
fees, registration fees, taxes, assessments and other charges which may be
levied upon or assessed against, the ownership, operation, possession,
maintenance or use of its Equipment and Inventory (as applicable); provided,
however, that the Grantor shall not be required to comply with any such law,
rule ) or regulation, or to pay any such fee, tax, assessment or other charge,
the validity of which is being contested by the Grantor in good faith by
appropriate proceedings, so long as forfeiture of any part of its Equipment or
Inventory will not result from the failure of the Grantor to comply with any
such law, rule or regulation, or to pay any such fee, tax, assessment or other
charge, during the period of such contest.

ARTICLE V

REMEDIES

SECTION 5.1. Certain Remedies. If any Event of Default under the Credit
Agreement shall have occurred and be continuing:

(a) The Lender may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the
U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and
also may:

(i) require the Grantor to, and the Grantor hereby agrees that it
will, at its expense and upon request of the Lender forthwith, assemble all
or part of the Collateral as directed by the Lender and make it available
to the Lender at a place to be designated by the Lender which is reasonably
convenient to both parties; and

(ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at
any of the Lender's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Lender may deem
commercially reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior notice to the
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
The Lender shall

C-12
<PAGE>

not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

(b) All cash proceeds received by the Lender in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Lender, be held by the Lender as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Lender pursuant to Section 5.2) in
whole or in part by the Lender against, all or any part of the Obligations
in such order as the Lender shall elect. Any surplus of such cash or cash
proceeds held by the Lender and remaining after payment in full of all the
Obligations shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive such surplus.

SECTION 5.2. Indemnity and Expenses.

(a) The Grantor agrees to indemnify the Lender (and Strategica, if it
becomes an assignee of Lender or pays off the Obligations) from and against
any and all claims, losses and liabilities arising out of or resulting from
this Security Agreement (including enforcement of this Security Agreement),
except claims, losses or liabilities resulting from the Lender's gross
negligence or willful misconduct.

(b) The Grantor will upon demand pay to the Lender the amount of any
and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the
Lender may incur in connection with:

(i) the administration of this Security Agreement;

(ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;

(iii) the exercise or enforcement of any of the rights of the Lender
hereunder; or

(iv) the failure by the Grantor to perform or observe any of the
provisions hereof.

(c) Notwithstanding anything to the contrary under this Agreement, in
the event the Lender shall determine to exercise remedies pursuant to the
terms of

C-13
<PAGE>

this Agreement, the Lender shall exercise remedies in the following
order of priorities:

First, with respect to cash and cash equivalents of the Grantor;

Second, Lender shall exercise foreclosure rights with respect to
Inventory, provided, that to the extent Grantor shall have title
to, at the time of such foreclosure, to Inventory meeting the
specifications of the Supply Agreement, Lender shall foreclose
and take title to such Inventory valued in accordance with the
Supply Agreement;

Third, Lender shall foreclose on receivables of Grantor;

Fourth, Lender shall foreclose on equipment of Lender; and

Fifth, Lender shall foreclose on other Collateral.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 6.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.

SECTION 6.2. Amendments; etc. No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure by the Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

SECTION 6.3. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing or by facsimile and
mailed or telecopied or delivered to the Grantor or the Lender, as applicable,
at the address or facsimile number set forth in the Credit Agreement or, with
respect to the Grantor or the Lender, at such other address or facsimile number
as shall be designated by such party in a written notice to each other party
complying as to delivery with the terms of this Section. Any notice, if mailed
and properly addressed with postage prepaid, or if properly addressed and sent
by prepaid courier service, shall be deemed given when

C-14
<PAGE>

received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission is received by the transmitter.

SECTION 6.4. Section Captions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.

SECTION 6.5. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.

SECTION 6.6. Counterparts. This Security Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
Agreement.

SECTION 6.7. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF DELAWARE. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH
RESPECT THERETO.

C-15
<PAGE>

IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

NEOLENS, INC.

By: /s/ Jon E. Haglund
-------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

SOLA INTERNATIONAL, INC.

By: /s/ John E. Heine
-------------------------
Name: John E. Heine
Title: Chief Executive Officer

<PAGE>

SCHEDULE I
to
Security Agreement

Item A. Location of Inventory and Equipment

All inventory and equipment of the Grantor are located at
18963 N.E. Fourth Court
Miami, Florida 33179

Item B. Place of Business; Chief Executive Office, etc.

18963 N.E. Fourth Court
Miami, Florida 33179

EXHIBIT 99(C)(7)

EXECUTION COPY

SUBORDINATION AGREEMENT

This Subordination Agreement (this "Agreement") is made as of May 28, 1996
among Leroy Meshel, M.D., an individual resident in the State of California
("Meshel"), Strategica Capital Corporation d/b/a Strategica Group, a Delaware
Corporation ("Strategica" and, together with Meshel, the "Subordinating
Creditors"), Neolens, Inc., a Florida corporation ("Borrower"), and Sola
International Inc., a Delaware corporation ("Lender").

WHEREAS, Lender has been requested by Borrower to make loans to Borrower
pursuant to a Credit Agreement (the "Credit Agreement") dated as of the date
hereof;

WHEREAS, Borrower is indebted to the Subordinating Creditors;

WHEREAS, Lender is unwilling to enter into the Credit
Agreement and to make loans thereunder unless Lender first receives the
Subordinating Creditors' agreement as herein contained; and

WHEREAS, the Subordinating Creditors acknowledge that the Credit Agreement
and the loans thereunder are of value to the Subordinating Creditors and that
adequate consideration for this Agreement has been received by the Subordinating
Creditors;

1. Definition of Indebtedness. As used herein the term "Indebtedness" shall
mean all present and future indebtedness, liabilities and other obligations
whatsoever of Borrower to the Subordinating Creditors from time to time directly
or indirectly incurred, created or existing, whether owing or payable now or in
the future, whether for principal, interest, fees, charges, indemnities,
premiums, causes of action, claims, judgment amounts or otherwise, including
without limitation all instruments and securities evidencing the same,
including, but not limited to, the amounts owed to Meshel under the Credit
Agreement dated April 5, 1995 between Borrower and Meshel, as it may have been
amended from time to time (the "Meshel Credit Agreement"), and amounts owed to
Strategica under the Credit and Loan Agreement dated as of August 23, 1995

<PAGE>

between the Borrower and Strategica, as it may have been amended from time to
time (the "Strategica Credit Agreement") and any loans made by Strategica as
permitted by the Merger Agreement dated as of May 28, 1996 among Borrower,
Lender, and a subsidiary of Lender.

2. Amount of Indebtedness; Interest. Strategica represents that, as of the
date hereof, the aggregate amount owed by Borrower to it under the Strategica
Credit Agreement is $1,810,000 plus accrued but unpaid interest thereon and no
other amounts have been loaned to Borrower by Strategica. Meshel represents
that, as of the date hereof, the aggregate amount owed by Borrower to him under
the Meshel Credit Agreement is $300,000 plus any accrued but unpaid interest
thereon and no other amounts have been loaned to Borrower by Meshel. Strategica
hereby represents and warrants that by Strategica executing and delivering this
Agreement, the terms of this Agreement are legal, valid, binding and enforceable
against all assignees and participants of Strategica under the Strategica Credit
Agreement. Borrower acknowledges that the foregoing amounts owed by Borrower to
Strategica and Meshel are valid and enforceable obligations of Borrower and,
subject to this Agreement, the Meshel Credit Agreement and the Strategica Credit
Agreement remain in full force and effect and are enforceable against Borrower
pursuant to applicable law, and that the obligations of Borrower to Strategica
and Meshel under the Strategica Credit Agreement and the Meshel Credit
Agreement, as applicable, are not subject to any claims, defenses, decreases or
right of set-off by the Company. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement.

3. Consent. Each Subordinating Creditor hereby consents to Borrower
entering into the Credit Agreement, the related security agreement, and the
borrowing of amounts and the creation of liens in connection therewith and such
actions shall not result in any breach of the agreements relating to each of the
Subordinating Creditor's Indebtedness.

4. Indebtedness Owed Only to Subordinating Creditors. Each Subordinating
Creditor warrants and represents to Lender that it has not assigned any interest
in the Indebtedness owed to it to any party who would not be bound by this
Agreement,, that no other party owns an interest in its Indebtedness other than
Subordinating Creditors and other parties who would be bound by this Agreement
and that the entire Indebtedness owed to it is and shall continue to be owing
only to Subordinating Creditors or by a person who has acknowledged to Lender in
writing that he has taken such indebtedness subject to the terms of this
Subordination Agreement.

5. Subordination. Neither Subordinating Creditor shall ask for, demand, sue
for, take, or receive from Borrower, or from any successor or assign of

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<PAGE>

Borrower (including, without limitation, a receiver, trustee, or debtor in
possession (the term "Borrower" hereinafter shall include any such successor or
assign of Borrower)) or from any entity acting on behalf of or for the benefit
of Borrower (including without limitation any co-obligor, surety or guarantor),
by payment, judgment, setoff or in any other manner, and Borrower shall not pay,
or make any payment in respect of, or set aside any money or assets for payment
of, the whole or any part of the Indebtedness owed by it (other than the payment
of interest on amounts borrowed under the Meshel Credit Ageement and the
Strategica Credit Agreement paid in accordance with the existing terms of such
agreements) unless and until all obligations, liabilities, and indebtedness of
Borrower to Lender pursuant to the Credit Agreement up to $500,000, whether now
existing or hereafter arising, shall have been irrevocably and fully paid and
satisfied with interest (all such obligations, indebtedness and liabilities of
Borrower to Lender are hereinafter referred to as the "Liabilities") and all
financing arrangements between Borrower and Lender shall have been terminated.
All rights, liens, and security interests of each of the Subordinating
Creditors, whether now or hereafter arising and howsoever existing, in any asset
of Borrower or any other assets securing the Indebtedness owed to it shall be
and hereby are subordinated to the rights and interests of Lender in those
assets. Neither Subordinating Creditor shall have, nor shall exercise, any right
to possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, or to otherwise exercise any remedies available to
such subordinated creditor as a result of a default or event of default, unless
and until the Liabilities up to $500,000 shall have been irrevocably and fully
paid and satisfied. Without limiting the foregoing, each of the Subordinating
Creditors expressly consents to Borrower entering into a Security Agreement with
Lender pursuant to which a security interest in certain of Borrower's assets is
being granted to Lender to secure borrowings made under the Credit Agreement and
the Subordinating Creditors hereby agree that such security interest shall be
senior and prior to any security interest the Subordinating Creditors have in
such assets.

6. Payments Received by Subordinating Creditors. Other than
interest payments on amounts borrowed under the Meshel Credit Agreement and the
Strategica Credit Agreement paid in accordance with the existing terms of such
agreements, should any payment or distribution or security or instrument be
received by any Subordinating Creditor with respect to the Indebtedness prior to
the irrevocable payment and satisfaction of the Liabilities up to $500,000,
including any payment made to a lockbox or other similar type account
established for the benefit of any Subordinating Creditor pursuant to the terms
of applicable loan documents, such Subordinating Creditor shall receive and hold
the same in trust, as trustee, for the benefit of Lender and shall forthwith
deliver the same to Lender and/or cause the delivery to Lender in precisely the
form received (except for endorsement or assignment where necessary), for
application to payment or satisfaction of any of the Liabilities in such order
as Lender shall determine. In the event

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<PAGE>

of the failure of such Subordinating Creditor to make any such endorsement or
assignment to Lender, Lender, or any of its officers or employees, is hereby
irrevocably authorized to make the same.

7. No Inconsistent Actions. Borrower and Subordinating Creditors shall take
no action inconsistent with the provisions or intent of this Agreement.

8. Lender Priority. In the event of any distribution of the assets or
readjustment of the obligations and indebtedness of Borrower, whether by reason
of liquidation, bankruptcy, reorganization, receivership, assignment for the
benefit of creditors or any action or proceeding involving the readjustment of
all or any of the Indebtedness hereby subordinated, Lender shall be entitled to
receive payment of any and all of the Liabilities up to $500,000 (inclusive of
all sums paid to Lender by either the Borrower or Strategica with respect to the
Liabilities) then owing prior to the payment of all or any part of the
Indebtedness hereby subordinated, and in order to enable Lender to enforce its
rights hereunder in any such action or proceeding, Lender is hereby irrevocably
authorized and empowered in its discretion to make and present for and on behalf
of Subordinating Creditors such proofs of claims against Borrower on account of
the Indebtedness hereby subordinated up to $500,000 as Lender may deem expedient
or proper and to vote such proofs of claims in any such proceeding and to
receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued and to apply the
same to payment or satisfaction of any of the Liabilities in such order as
Lender shall determine.

9. Information Concerning Financial Condition of Borrower. (a) Each
Subordinating Creditor hereby assumes full responsibility for keeping itself
informed of the financial condition of Borrower, any and all endorsers and
sureties and any and all guarantors of the Liabilities and of all other
circumstances bearing upon the risk of nonpayment of the Liabilities and/or
Indebtedness that diligent inquiry would reveal, and each Subordinating Creditor
hereby agrees that Lender shall have no duty to advise either Subordinating
Creditor of information known to Lender regarding such condition or any such
circumstances. In the event Lender, in its sole discretion, undertakes, at any
time or from time to time, to provide any such information to Subordinating
Creditors, Lender shall be under no obligation to undertake any investigation
not a part of its regular business routine and shall be under no obligation to
disclose any information which, pursuant to accepted or reasonable commercial
finance practice, Lender wishes to maintain confidential. Each Subordinating
Creditor hereby assents to any extension or postponement of the time of payment
of the Liabilities or to any other indulgence with respect thereto, to any
substitution, exchange, or release of collateral which may at any time secure
the Liabilities and/or to the addition or release of any other party or person
primarily or secondarily liable therefor.

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<PAGE>

(b) The Borrower hereby agrees that it will promptly provide Strategica
with notice of any borrowings under the Credit Agreement or the occurrence of
any event of default under the Credit Agreement. The failure by the Borrower to
provide any notice pursuant to the immediately preceding sentence shall not
affect any of the other rights or obligations of the parties to this Agreement.

(c) Borrower and Lender agree to notify Strategica as promptly as
practicable of the occurrence of any Event of Default under the Credit
Agreement. The failure by the Borrower and/or Lender to provide any notice
pursuant to the immediately preceding sentence shall not affect any of the other
rights or obligations of the parties to this Agreement. Strategica shall have
the right (but not the obligation) to (i) at any time repay all amounts owed by
Borrower under the Credit Agreement or (ii) cure the Event of Default. Borrower
agrees that any amounts Strategica pays to Lender pursuant to this paragraph (c)
shall be deemed to be advanced under and secured by the Strategica Credit
Agreement, related security agreement and the security interests and collateral
granted pursuant thereto. Notwithstanding anything to the contrary herein, upon
receipt by Lender of all amounts up to $500,000 owed to it by Borrower pursuant
to the Credit Agreement (whether from Borrower or Strategica or any combination
thereof) and either assumption by Strategica of any remaining funding
commitments of Lender under the Credit Agreement (up to an amount equal to
$500,000 less the amount owed to Lender pursuant to the Credit Agreement) or
termination of the Credit Agreement by Borrower in accordance with its terms,
this Agreement shall terminate and be null and void, and the lien of Lender on
the Borrower's collateral shall be deemed satisfied.

10. Instrument Legend. Any instrument evidencing the Indebtedness or any
part thereof, shall, on the date hereof or promptly hereafter, be either
delivered to Lender or inscribed with a legend satisfactory in form and
substance to Lender conspicuously indicating that payment thereof is
subordinated to the Liabilities owing to Lender as herein provided. Any
instrument evidencing any of the Indebtedness, or any part thereof, which is
hereafter executed by Borrower, will on the date thereof, or promptly
thereafter, be delivered to Lender as inscribed with the aforesaid legend.

11. Lender's Waiver. No waiver shall be deemed to be made by any party of
any of its rights hereunder, unless the same shall be in writing signed on
behalf of such party and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of any party or the obligations of any party in any other respect at any other
time.

12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of Delaware applicable to contracts executed in and to
be performed in Delaware without regard to any principles of choice of law or

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<PAGE>

conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any state or federal
court sitting in Delaware.

13. Mutual Waiver of Jury Trial. Because disputes arising in connection
with financing transactions are most quickly and economically resolved by
experts and Lender, Borrower and Subordinating Creditors desire applicable laws
to apply, rather than arbitration rules, Lender, Borrower and Subordinating
Creditor desire to have their disputes resolved by a judge applying applicable
laws. Therefore, in order to achieve the best combination of the benefits of the
judicial system and arbitration, Lender, Borrower and Subordinating Creditors
waive all right to trial by jury in any action, suit, or proceeding to enforce,
construe, or defend any rights or remedies under this Agreement.

14. Notices. Except as otherwise provided herein, all notices, requests,
claims, demands and other communications hereunder shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, facsimile transmission, telegram or telex or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 14):

(a) if to Lender:

Sola International Inc.
2420 Sand Hill Road
Menlo Park, CA 94025
Attention: John Heine
Facsimile: (415) 324-6870
Telephone: (415) 324-6868

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attention: Peter Golden, Esq.
Facsimile: (212) 859-4000
Telephone: (212) 859-8112

(b) if to Borrower:

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<PAGE>

Neolens, Inc.
18963 N.E. Fourth Court
Miami, Florida 33179
Facsimile: (305) 651-5092
Telephone: (305) 651-0003
Attention: Jon E. Haglund

with a copy to:

Leroy Meshel, M.D.
1850 Sullivan Avenue, Suite 500
Daly City, California 94015-2204
Telephone: (415) 992-9221
Facsimile: (415) 992-9220

(d) if to Strategica:

Strategica Capital Corporation
1221 Brickell Avenue, Suite 2600
Miami, Florida 33131
Telephone: (305) 651-0003
Facsimile: (305) 536-1486
Attention: Steven R. Cook

with a copy to:

Hornsby Sacher Zelman & Stanton, P.A.
1401 Brickell Avenue

Suite 700
Miami, Florida 33131
Facsimile: (305) 574-2605
Telephone: (305) 371-8797
Attention: Walter Stanton III, Vice President

15. Section Titles. The section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.

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<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.

SOLA INTERNATIONAL INC.

By: /s/ John E. Heine
-----------------------------------
Name: John E. Heine
Title: Chief Executive Officer

NEOLENS, INC.

By: /s/ Jon E. Haglund
-----------------------------------
Name: Jon E. Haglund
Title: Chief Executive Officer

STRATEGICA CAPITAL CORPORATION

By: /s/ Steven R. Cook
-----------------------------------
Name: Steven R. Cook
Title: Executive Vice President

By: /s/ Leroy Meshel, M.D.
-----------------------------------
Leroy Meshel, M.D.