FORBEARANCE AGREEMENT AND CONSENT, WAIVER AND AMENDMENT NO. 1 TO SECOND LIEN CREDIT AND GUARANTY AGREEMENT

Exhibit 10.4

EXECUTION VERSION

FORBEARANCE AGREEMENT

AND

CONSENT, WAIVER AND AMENDMENT NO. 1

TO SECOND LIEN CREDIT AND GUARANTY AGREEMENT

FORBEARANCE AGREEMENT AND CONSENT, WAIVER AND AMENDMENT NO. 1 TO SECOND LIEN CREDIT AND GUARANTY AGREEMENT , dated as of August 20, 2008 (this “ Agreement ”), among X-RITE, INCORPORATED , a Michigan corporation (“ Borrower ”), certain Subsidiaries of Borrower listed on the signature pages hereof under the heading “Other Credit Parties”, as Guarantors, (such Subsidiaries, together with Borrower, are referred to herein each individually as a “ Credit Party ” and collectively as the “ Credit Parties ”), GOLDENTREE CAPITAL SOLUTIONS FUND FINANCING , as sole lead arranger and sole bookrunner (in such capacities, “ Lead Arranger ”), and THE BANK OF NEW YORK MELLON (f/k/a as The Bank of New York) , as administrative agent (in such capacity, together with its permitted successors in such capacity, “ Administrative Agent ”) and as collateral agent (in such capacity, together with its permitted successors in such capacity, “ Collateral Agent ”), in each case for certain financial institutions from time to time party thereto (each a “ Lender ” and collectively the “ Lenders ”), and the LENDERS signatory hereto.

WITNESSETH:

WHEREAS, Borrower, the other Credit Parties, Administrative Agent, Collateral Agent and the Lenders have entered into that certain Second Lien Credit and Guaranty Agreement, dated as of October 24, 2007 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “ Credit Agreement ”; capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Credit Agreement);

WHEREAS, pursuant to the Credit Agreement, (a) the Lenders have made certain Loans to Borrower, (b) Borrower has secured all of the Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a Second Priority Lien on substantially all of its assets, and (c) each Credit Party (other than Borrower) has (i) guaranteed all existing and future Obligations of Borrower and the other Credit Parties and (ii) secured its Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a Second Priority Lien on substantially all of its assets;

WHEREAS, certain Defaults and Events of Default have occurred and are continuing as of the date hereof (or the Credit Parties have informed the Agents and the Lenders that certain other Defaults and Events of Default will occur and be continuing after the date hereof), in each case as set forth in Schedule 1 hereto (such Defaults and Events of Default are referred to herein each individually as a “ Designated Default ” and collectively as the “ Designated Defaults ”);

[Signature Page to Second Lien Forbearance Agreement]

WHEREAS, each Credit Party acknowledges and agrees that, (a) as a result of the existence of the Designated Defaults, the Agents and the Lenders are (or will be) entitled to accelerate the Obligations, to seek immediate repayment in full of the Obligations and to exercise any or all of their respective rights and remedies under the Credit Agreement, each of the other Credit Documents and applicable law; and (b) the Lenders have no obligation to make any further Loans or other extensions of credit to Borrower under the Credit Agreement or otherwise;

WHEREAS, Borrower has further informed the Agents and the Lenders that Borrower intends to enter into (a) an Investment Agreement dated of even date herewith, a true, complete and correct copy of which is attached hereto as Exhibit A-1 (without giving effect to any amendments or supplements thereto, or restatements or modifications thereof, except for any of the foregoing previously consented to by Requisite Lenders (which consent shall not be unreasonably withheld, delayed or conditioned) and copies of which shall have been provided to the Agents and the Lenders, the “ OEP Investment Agreement ”), with OEPX, LLC, a Delaware limited liability company (“ OEP ”), pursuant to which Borrower shall issue to OEP, and OEP shall purchase from Borrower, 28,571,429 shares of the common stock, $0.10 par value per share (the “ Common Stock ”), of Borrower (the “ OEP Equity Issuance ”) for a cash purchase price of at least $100,000,000 (the “ OEP Gross Proceeds ”), and (b) an Investment Agreement dated of even date herewith, a true, complete and correct copy of which is attached hereto as Exhibit A-2 (without giving effect to any amendments or supplements thereto, or restatements or modifications thereof, except for any of the foregoing previously consented to by Requisite Lenders (which consent shall not be unreasonably withheld, delayed or conditioned) and copies of which shall have been provided to the Agents and the Lenders, the “ Additional Investors Investment Agreement ” and, together with the OEP Investment Agreement, the “ Investment Agreements ”) with each of Sagard Capital Partners, L.P., Tinicum Capital Partners II, L.P., Tinicum Capital Partners II Parallel Fund, L.P., and Tinicum Capital Partners II Executive Fund, L.L.C. (collectively, the “ Additional Investors ”, and the Additional Investors, together with OEP, the “ Equity Investors ”), pursuant to which Borrower shall issue to the Additional Investors, and the Additional Investors shall purchase in the aggregate from Borrower, not less than 8,333,334 shares of Common Stock of Borrower (the “ Additional Investors Equity Issuance ” and, together with the OEP Equity Issuance, the “ Required Equity Issuance ”) for a cash purchase price of at least $25,000,000 (the “ Additional Investors Gross Proceeds ” and, together with the OEP Gross Proceeds, the “ Required Gross Proceeds ”);

WHEREAS, Borrower has further informed the Agents and Lenders that Borrower intends to issue 10,000,000 additional shares of Common Stock (the “ Incremental Equity Issuance ” and, together with the Required Equity Issuance, the “ Equity Issuance ”) to certain of the Equity Investors for a cash purchase price of not less than $30,000,000 (the “ Incremental Gross Proceeds ”);

WHEREAS, Borrower has further informed the Agents and Lenders that Borrower desires to use: (a) a portion of the Required Gross Proceeds to (i) pay certain fees and expenses of Borrower and each of the Equity Investors incurred in connection with the Required Equity Issuance, this Agreement and the respective transactions and other documentation related thereto (or reimburse Borrower and each of the Equity Investors in respect of any such fees and expenses paid by such Persons prior to the First Amendment Effective Date (as defined below), in each case set forth in Schedule 2 hereto (or in any revised such Schedule 2 prepared in good faith by Borrower and delivered by Borrower to Lead Arranger at any time and from time to time

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after the date hereof), in an aggregate amount for all such fees and expenses not to exceed $25,000,000 (the “ Initial Equity Issuance Payment ”); provided that any determination of Borrower’s compliance with such limitation on the amount of the Initial Equity Issuance Payment shall exclude (x) the Second Lien Lender Fees (as defined below) and the First Lien Lender Fees (as defined in the Corresponding First Lien Agreement referred to below), (y) the Goldman Hedge Payoff Amount (as defined below), and (z) fees, costs and expenses of Borrower arising as a result of the receipt by Borrower of a Superior Proposal or Acquisition Proposal (as such terms are defined in the Investment Agreements), (ii) pay in full the outstanding principal amount due and owing to Goldman Sachs Capital Markets, L.P. and its Affiliates (collectively, “ Goldman ”) in connection with the Interest Rate Agreements set forth in Schedule 3 hereto (collectively, the “ Existing Hedge Agreements ”) in an aggregate amount not to exceed $12,165,000, plus the aggregate amount of interest accruing thereon pursuant to the Existing Hedge Agreements through the First Amendment Effective Date (collectively, the “ Goldman Hedge Payoff Amount ”), (iii) prepay the Existing Headquarters Loan by an amount equal to $3,500,000 (the “ Existing Headquarters Loan Repayment Amount ” and, together with the Goldman Hedge Payoff Amount, the First Lien Lender Fees, the Second Lien Lender Fees and the portion of the Required Gross Proceeds used to consummate the Initial Equity Issuance Payment, the “ Restructuring Transaction Costs ”) and (iv) pay the First Lien Lender Fees and the Second Lien Lender Fees; and (b) ninety percent (90%) of the Required Gross Proceeds, net of the Restructuring Transaction Costs (such net Required Gross Proceeds, the “ Net Cash Proceeds from Required Equity Issuance ”), to make a mandatory prepayment of the First Lien Term Loans (the “ Required Equity Issuance Mandatory Prepayment ”) in accordance with the terms of the First Lien Credit Agreement; and (c) ten percent (10%) of the Net Cash Proceeds from Required Equity Issuance to voluntarily prepay the Loans and any prepayment premium on the amount prepaid payable pursuant to Section 2.13(b) of the Credit Agreement (the “ Initial Second Lien Prepayment ”);

WHEREAS, Borrower has further informed the Agents and Lenders that Borrower desires to use the Incremental Gross Proceeds to: (a) pay all fees and expenses incurred by Borrower and the Equity Investors in connection with the Incremental Equity Issuance and the respective transactions and documents related thereto (the “ Incremental Equity Issuance Payment ” and, together with the Initial Equity Issuance Payment, the “ Equity Issuance Payment ”), in each case set forth in Schedule 4 hereto (or in any revised such Schedule 4 prepared in good faith by Borrower and delivered by Borrower to Lead Arranger at any time and from time to time after the date hereof); and (b) voluntarily prepay the Loans and any prepayment premium on the amount prepaid payable pursuant to Section 2.13(b) of the Credit Agreement with any portion thereof remaining after payment of the Incremental Equity Issuance Payment, in an amount not exceeding $30,000,000 (the “ Incremental Second Lien Prepayment ” and, together with the Initial Second Lien Prepayment, the “ Second Lien Prepayment ”);

WHEREAS, Borrower has further informed the Agents and Lenders that Borrower desires to enter into an amendment and modification to the Existing Headquarters Mortgage, a true, complete and correct copy of which is attached hereto as Exhibit B (the “ Existing Headquarters Mortgage Modification ”), pursuant to which Borrower shall amend certain terms and provisions of the Existing Headquarters Loan, which Existing Headquarters Mortgage Modification shall become effective on or prior to August 30, 2008 (the “ Existing Headquarters Mortgage Modification Effective Date ”);

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WHEREAS, Borrower has informed the Agents and Lenders that Borrower desires to sell (the “ Life Insurance Policy Sale ”) those certain Key Person Life Insurance Policies set forth in Schedule 5 hereto;

WHEREAS, Borrower has requested that the Agents and Lenders forbear in accordance with the terms and subject to the conditions hereof from accelerating the Obligations and taking action to collect payment of the Obligations;

WHEREAS, Borrower and the other Credit Parties have further requested that Administrative Agent and the Requisite Lenders, in each case effective as of the Forbearance Effective Date (as defined in Section 5 ), consent to (a) the Life Insurance Policy Sale (and (x) subject to the terms and conditions set forth in Section 2(c), waive any mandatory prepayment required pursuant to Section 2.14 of each of the Credit Agreement and the First Lien Credit Agreement as a result thereof, but solely with respect to the Net Asset Sale Proceeds described in clause (y) below, and (y) subject to the terms and provisions contained herein, permit Borrower to retain $7,500,000 of the Net Asset Sale Proceeds thereof), (b) the execution and delivery by Borrower of the Existing Headquarters Mortgage Modification, (c) the Equity Issuance (and waive any mandatory prepayment that would be required pursuant to Section 2.14 of each of the Credit Agreement and the First Lien Credit Agreement as a result thereof), and (d) payment by Borrower of the Equity Issuance Payment, the Goldman Hedge Payoff Amount, the Required Equity Issuance Mandatory Prepayment, the Existing Headquarters Loan Repayment Amount and the Second Lien Prepayment, respectively;

WHEREAS, Borrower and the other Credit Parties have further requested that Administrative Agent and Requisite Lenders, in each case effective as of the First Amendment Effective Date, (a) waive the Designated Defaults and (b) amend the Credit Agreement in certain respects, in each case, in accordance with the terms and subject to the conditions set forth herein; and

WHEREAS, the Agents and Lenders agree to accommodate such requests of Borrower and the other Credit Parties, in each case on the terms and subject to the conditions herein set forth;

NOW, THEREFORE, in consideration of the foregoing, the covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Forbearance; Forbearance Period.

(a) Each of Administrative Agent, Collateral Agent and each of the Lenders signatories hereto agrees that, upon the terms and subject to the conditions set forth herein (and notwithstanding the existence of the Designated Defaults), during the period (the “ Forbearance Period ”) commencing on the Forbearance Effective Date (as defined below) and ending on the date (the “ Forbearance Termination Date ”) that is the earlier to occur of (i) January 1, 2009, and (ii) the date of the occurrence of a Forbearance Termination Event (as defined below), such

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Person shall not exercise or enforce any of its rights and remedies against any Credit Party that such Person would otherwise be entitled to exercise under the Credit Agreement or any of the other Credit Documents or applicable law, including, without limitation, the UCC, by reason (and only by reason) of the existence of the Designated Defaults (the “ Forbearance ”). The occurrence of any of the following events or circumstances shall constitute a termination event with respect to the Forbearance (each a “ Forbearance Termination Event ”):

(i) the OEP Investment Agreement (A) is terminated by any party thereto pursuant to Article V thereof, (B) automatically terminates because Borrower and/or any Subsidiary of Borrower shall have commenced any case, proceeding or other action (x) under any existing or future law of any jurisdiction, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution or composition, or (y) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or (C) terminates because there shall be commenced against Borrower and/or any Subsidiary of Borrower, any case, proceeding or other action of a nature referred to in clause (B) above that results in the entry of an order for relief or any such adjudication or appointment; or

(ii) the later to occur of (A) the occurrence of an event or events, since December 30, 2007, that would have a Material Adverse Effect (as defined in the OEP Investment Agreement) except as was Previously Disclosed (as defined in the OEP Investment Agreement), and (B) the receipt by Borrower and OEP of (x) a written notice from the “Administrative Agent” under and as defined in the First Lien Credit Agreement (the “ First Lien Administrative Agent ”), acting at the direction of the Requisite Lenders (as defined in the First Lien Credit Agreement), or (y) a written notice from Administrative Agent, acting at the direction of the Requisite Lenders, in each case stating that an event has occurred or events have occurred, since December 30, 2007, that would have a Material Adverse Effect (as defined in the OEP Investment Agreement), except as was Previously Disclosed (as defined in the OEP Investment Agreement). No Lender shall have a right to terminate this Agreement as a result of a Forbearance Termination Event under this clause (ii) until the fifth Business Day following the receipt by Borrower and OEP of (x) a written notice from the First Lien Administrative Agent, acting at the direction of the Requisite Lenders (as defined in the First Lien Credit Agreement), or (y) a written notice from Administrative Agent, acting at the direction of the Requisite Lenders, in each case stating that an event has occurred or events have occurred, since December 30, 2007, that would have a Material Adverse Effect (as defined in the OEP Investment Agreement), except as was Previously Disclosed (as defined in the OEP Investment Agreement, and setting forth in good faith and in reasonable detail a description of the applicable event or events.

(b) The Forbearance is temporary and limited in nature and nothing contained herein is intended, or shall be deemed or construed: (i) to preclude or prevent any Agent or Lender from exercising any rights or remedies against any Credit Party under the Credit Agreement, any of the other Credit Documents or applicable law, including, without limitation the UCC, arising on account of (A) any Default or Event of Default other than a Designated

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Default, or (B) any Designated Default from and after the Forbearance Termination Date; (ii) except as otherwise expressly set forth herein, to effect any amendment or other modification of the Credit Agreement or any of the other Credit Documents, all of which shall remain in full force and effect in accordance with their respective terms; (iii) except as otherwise expressly set forth herein, to constitute a waiver of any of the Designated Defaults or any future Defaults or Events of Default or any term or provision of the Credit Agreement or any of the other Credit Documents or applicable law; or (iv) to establish a custom or course of dealing between the Agents and the Lenders, on the one hand, and the Credit Parties, on the other hand. Furthermore, nothing contained herein is intended, or should be deemed or construed, to require any Agent or Lender to extend the Forbearance Termination Date for any reason whatsoever or make any additional extensions of credit under the Credit Agreement.

(c) Notwithstanding anything contained herein to the contrary, on the Forbearance Termination Date, without the requirement of any notice to any Credit Party or any other Person: (i) the Forbearance and all agreements set forth in Section 1(a) of this Agreement shall terminate automatically and be of no further force or effect, and (ii) subject to the terms of the Credit Documents and applicable law, including, without limitation, the UCC, each Agent and Lender shall be free in its sole and absolute discretion without limitation to proceed to enforce any or all of such Person’s rights and remedies set forth in this Agreement, the Credit Agreement, the other Credit Documents and applicable law, including, without limitation, the right to sue, ask for or demand from the Credit Parties payment in full of all Obligations to the extent then permitted pursuant to the Credit Agreement, in whole or in part, and to otherwise enforce any or all of its rights and remedies (including rights of acceleration and foreclosure) under the Credit Documents against any Credit Party or any other Person. In furtherance of the foregoing, and notwithstanding the occurrence of the Forbearance Effective Date, each Credit Party acknowledges and confirms that, subject to the Forbearance, all rights and remedies of the Agents and Lenders under the Credit Documents and applicable law with respect to such Credit Party shall continue to be available to the Agents and Lenders from and after the Forbearance Effective Date.

(d) Administrative Agent and the Lenders signatories hereto hereby agree that:

(i) during the Forbearance Period, in addition to the revolving loans and letters of credit outstanding under the First Lien Credit Agreement as of the Forbearance Effective Date, but in any event subject to the satisfaction of the conditions precedent set forth in Section 3.2(a) of the First Lien Credit Agreement (other than the conditions precedent set forth in Section 3.2(a)(iii) and Section 3.2(a)(iv) thereof), each lender under the First Lien Credit Agreement with a revolving commitment thereunder shall continue to make revolving loans thereunder, and to issue or cause to be issued, and participate in, letters of credit thereunder, in each case to or for the account of Borrower; provided that the aggregate outstanding principal balance of such additional revolving loans plus the aggregate undrawn face amount of all such additional letters of credit shall not exceed $10,000,000 (the “ Maximum Forbearance Amount ”) at any time during the Forbearance Period; provided , further , that (A) only up to $2,000,000 of the Maximum Forbearance Amount shall be available at all times during the Forbearance Period, (ii) only up to $3,000,000 of the Maximum Forbearance Amount shall be available at all

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times during the Forbearance Period for the payment of fees and expenses incurred in connection with this Agreement and the Corresponding First Lien Agreement, the Equity Issuance and the other transactions contemplated by the Corresponding First Lien Agreement, the Investment Agreements and any related documentation, and (iii) the remaining $5,000,000 of the Maximum Forbearance Amount shall be available only to the extent that an equal amount of Cash is held by Foreign Subsidiaries. Notwithstanding anything contained herein or in the First Lien Credit Agreement to the contrary, during the Forbearance Period, (x) no revolving loans under the First Lien Credit Agreement shall be advanced as Eurodollar Rate Loans (as defined in the First Lien Credit Agreement), and (y) no loans under the First Lien Credit Agreement may be converted into or continued as Eurodollar Rate Loans (as defined in the First Lien Credit Agreement);

(ii) during the period beginning on July 1, 2008 until the First Amendment Effective Date, the Applicable Margin shall be equal to (A) with respect to Loans that are Eurodollar Rate Loans, 9.50% per annum, and (B) with respect to Loans that are Base Rate Loans, 8.50% per annum; and

(iii) during the Forbearance Period, Borrower shall not be required to comply with the financial covenants set forth in Section 6.8 of the Credit Agreement with respect to any Fiscal Quarter occurring prior to the Fiscal Quarter ending closest to December 31, 2008.

(e) Each of the Credit Parties hereby agrees that, during the Forbearance Period:

(i) subject to the Forbearance, the waiver of Designated Defaults set forth in Section 3 hereof and the other terms and provisions of this Agreement, all of the Credit Documents shall remain in full force and effect and the Credit Parties shall continue to comply with all covenants and other obligations under the Credit Documents including, but not limited to, the obligation to make any and all scheduled payments of principal or interest on the Loans or pursuant to the Notes and other payments required under the Credit Documents in each case when due and payable;

(ii) Borrower shall deliver to Administrative Agent, Lead Arranger and each of the Lenders within 30 days after the end of each monthly fiscal period of Borrower ending after the Forbearance Effective Date, (A) the consolidated balance sheets of Borrower and its Subsidiaries as at the end of such monthly fiscal period and the related consolidated statements of income and cash flows of Borrower and its Subsidiaries for such monthly fiscal period, and (B) a rolling thirteen (13) week cash flow forecast and cash balance report on a consolidated basis for Borrower and its Subsidiaries, in each case in the form customarily prepared by Borrower; and

(iii) on a date certain to be agreed upon by Borrower and Lead Arranger after the delivery by Borrower of the financial statements referred to the foregoing clause (ii)  with respect to any monthly fiscal period, Borrower shall conduct a single conference call with Lead Arranger and any Lender that desires to participate therein regarding the

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financial results and the financial condition of Borrower and its Subsidiaries, on which conference call shall be present the chief financial officer or such other authorized representative of the Credit Parties as may be reasonably requested by Lead Arranger, each of such conference calls to be held at a time convenient to Lead Arranger, the Requisite Lenders and Borrower.

Section 2. Consents.

(a) Effective as of the Forbearance Effective Date, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Credit Document, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby consent to (i) the Required Equity Issuance (and hereby acknowledge and agree that the Required Equity Issuance shall not constitute a Change of Control and will not result in an Event of Default under Section 8.1(k) of the Credit Agreement), (ii) the Initial Equity Issuance Payment, and (iii) the payment of the Goldman Hedge Payoff Amount, the Existing Headquarters Loan Repayment Amount and the Initial Second Lien Prepayment (and hereby waive the requirements of Section 2.14 of the Credit Agreement, solely with respect to the Net Cash Proceeds from Required Equity Issuance, to the extent such proceeds, substantially contemporaneously with receipt thereof by or for the account of Borrower, are used to pay the Goldman Hedge Payoff Amount, the Required Equity Issuance Mandatory Prepayment, the First Lien Lender Fees, the Second Lien Lender Fees, the Existing Headquarters Loan Repayment Amount and the Initial Second Lien Prepayment); provided that the effectiveness of each of the foregoing consents and waivers is subject to the following conditions:

(A) the Required Equity Issuance (x) is consummated no later than January 1, 2009, (y) results in the concurrent receipt by Borrower in immediately available Dollars of Required Gross Proceeds in an aggregate amount not less than $125,000,000 and (z) is consummated in accordance with the terms and conditions set forth in the respective Investment Agreements and applicable law;

(B) the Required Gross Proceeds are used by Borrower solely to pay the Restructuring Transaction Costs and, substantially contemporaneously with receipt thereof by or for the account of Borrower, to make the Required Equity Issuance Mandatory Prepayment and the Initial Second Lien Prepayment;

(C) on or prior to the First Amendment Effective Date, Borrower shall have delivered to Administrative Agent and Lead Arranger a funds flow describing the sources and uses of the Required Gross Proceeds and the Net Cash Proceeds from Required Equity Issuance, in form and substance reasonably acceptable to Lead Arranger;

(D) with respect to the Goldman Hedge Payoff Amount, on or prior to the First Amendment Effective Date, Borrower shall have delivered to Administrative Agent and Lead Arranger evidence reasonably satisfactory to Lead Arranger that such amount has been applied to payment of Borrower’s obligations in respect of the Existing Hedge Agreements and Borrower shall deliver a payoff letter evidencing the payment in full of all amounts due and owing under the Existing Hedge Agreements and the release of all claims against Borrower and each other Credit Party by Goldman, in form and substance reasonable satisfactory to Lead Arranger; and

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(E) the Existing Headquarters Loan shall have been repaid in an amount equal to $3,500,000.

(b) Effective as of the Forbearance Effective Date, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Credit Document, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby consent to (i) the Incremental Equity Issuance, (ii) the Incremental Equity Issuance Payment and (iii) the Incremental Second Lien Prepayment (and hereby waive the requirements of Section 2.14 of the Credit Agreement solely with respect to the Net Cash Proceeds from the Incremental Equity Issuance to the extent that the Incremental Gross Proceeds substantially contemporaneously with receipt thereof are used to consummate the Incremental Equity Issuance Payment and the Incremental Second Lien Prepayment); provided that the effectiveness of each of the foregoing consents and waivers is subject to the following conditions:

(A) the Incremental Equity Issuance (x) is consummated no later than January 1, 2009 and is consummated substantially contemporaneously with the Required Equity Issuance and (y) is consummated on terms and conditions substantially the same as those set forth in the respective Investment Agreements;

(B) the Incremental Gross Proceeds are used by Borrower, substantially contemporaneously with receipt thereof by or for the account of Borrower, solely to make the Incremental Equity Issuance Payment and the Incremental Second Lien Prepayment;

(C) on or prior to the First Amendment Effective Date, Borrower shall have delivered to Administrative Agent and Lead Arranger a funds flow describing the sources and uses of the Incremental Gross Proceeds and the Net Cash Proceeds from the Incremental Equity Issuance, in form and substance reasonably acceptable to Lead Arranger; and

(D) any Incremental Gross Proceeds in excess of $30,000,000 shall be applied substantially contemporaneously with receipt thereof by or for the account of Borrower as a mandatory prepayment of the Loans in accordance with Section 2.14 of the First Lien Credit Agreement.

(c) Effective as of the Forbearance Effective Date, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Credit Document, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby consent to the Life Insurance Policy Sale so long as the Net Asset Sale Proceeds of the Life Insurance Policy Sale are promptly delivered to the First Lien Administrative Agent to be applied as a mandatory prepayment of the First Lien Term Loans as required pursuant to Section 2.14 of the First Lien Credit Agreement; provided that, notwithstanding the foregoing, (i) the aggregate gross proceeds of the Life Insurance Policy Sale shall be in an amount not less than the cash surrender value of the Key Person Life Insurance Policies set forth in Schedule 5 hereto as of the date on which Borrower enters into a binding agreement providing for the Life Insurance Policy Sale, and (ii)

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Borrower shall be permitted to retain $7,500,000 of such Net Asset Sale Proceeds (the “ Retained Insurance Proceeds ”); provided , further , that until the First Amendment Effective Date, all Retained Insurance Proceeds shall be held by Borrower in a segregated deposit account maintained with the First Lien Collateral Agent or with a bank that has entered into an account control agreement with Collateral Agent, the First Lien Collateral Agent and Borrower in form and substance reasonably satisfactory to Collateral Agent (the “ Insurance Proceeds Control Agreement ”); provided that, on the First Amendment Effective Date, the Insurance Proceeds Control Agreement shall be terminated and the Retained Insurance Proceeds shall be released to Borrower for use by Borrower for general corporate purposes.

(d) Effective as of the Forbearance Effective Date, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Credit Document, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby consent to the Existing Headquarters Mortgage Modification and the transactions contemplated thereby.

(e) Effective as of the Forbearance Effective Date, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Credit Document, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby consent to the Corresponding First Lien Agreement; provided that the effectiveness of such consent is subject to the following: (A) the execution and delivery to Administrative Agent by the First Lien Collateral Agent on or prior to the First Amendment Effective Date of the Intercreditor Reaffirmation and Amendment (as defined below) pursuant to which the “Lenders” under and as defined in the First Lien Credit Agreement (the “ First Lien Lenders ”) shall have agreed that the increase in the Applicable Margin provided for herein shall not apply against the basket of permitted increases therein set forth in the Intercreditor Agreement and (B) the First Lien Administrative Agent, the First Lien Collateral Agent and the First Lien Lenders shall have consented to the transactions contemplated by this Agreement.

Section 3. Waiver of Designated Defaults. Effective as of, and subject to the occurrence of, the First Amendment Effective Date, and in reliance on the representations and warranties of Borrower set forth in this Agreement and in the Credit Agreement, as amended hereby, Administrative Agent, Collateral Agent and the Lenders signatories hereto hereby waive each of the Designated Defaults. The foregoing waiver is not intended and shall not be deemed or construed to constitute a waiver of any other Default or Event of Default existing under the Credit Agreement or that hereafter may occur under the Credit Agreement, as amended, or to establish a custom or course of dealing among Borrower, any other Credit Party, any Agent, the Lenders or any of them. Except as specifically set forth herein, the Agents and the Lenders hereby expressly reserve all of their rights and remedies under the Credit Agreement, as amended, the other Credit Documents and applicable law.

Section 4. Amendments to Credit Agreement. Effective as of, and subject to the occurrence of, the First Amendment Effective Date, and in reliance on the representations and warranties of Borrower set forth in this Agreement and in the Credit Agreement, as amended hereby, the Credit Agreement is hereby amended as follows:

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(a) Section 1.1 of the Credit Agreement is hereby amended by adding thereto the following defined terms and their respective definitions in the correct alphabetical order:

“Cash Election” as defined in Section 2.8(e).

“Control Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Corresponding First Lien Agreement” as defined in the First Amendment Agreement.

“Election” as defined in Section 2.8(e).

“Equity Issuance” as defined in the First Amendment Agreement.

“Existing Headquarters Mortgage Modification” as defined in the First Amendment Agreement.

“Existing Headquarters Mortgage Modification Effective Date” as defined in the First Amendment Agreement.

“First Amendment Agreement” means that certain Forbearance Agreement and Consent, Waiver and Amendment No. 1 to Second Lien Credit and Guaranty Agreement dated as of August 20, 2008 and effective as of the Forbearance Effective Date by and among Borrower, the Guarantors, certain other Credit Parties, Administrative Agent, Collateral Agent and the Requisite Lenders.

“First Amendment Effective Date” as defined in the First Amendment Agreement.

“Forbearance Effective Date” as defined in the First Amendment Agreement.

“Intercreditor Reaffirmation and Amendment” as defined in the First Amendment Agreement.

“Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (a) Consolidated Adjusted EBITDA for the four Fiscal Quarter period then ended to (b) Consolidated Cash Interest Expense for such four Fiscal Quarter period. Notwithstanding the foregoing, for purposes of determining the Interest Coverage Ratio for the Fiscal Quarter (i) ending closest to December 31, 2008, the Consolidated Cash Interest Expense for such Fiscal Quarter (after giving pro forma effect to Borrower’s recapitalization plan and assuming such recapitalization plan was consummated as of the first day of such Fiscal Quarter) shall be multiplied by four, (ii) ending closest to March

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31, 2009, the Consolidated Cash Interest Expense for such Fiscal Quarter shall be multiplied by four, (iii) ending closest to June 30, 2009, the Consolidated Cash Interest Expense for the two most recently ended Fiscal Quarters shall be multiplied by two, and (iv) ending closest to September 30, 2009, the Consolidated Cash Interest Expense for the three most recently ended Fiscal Quarters multiplied by 4/3.

“OEP” means OEPX, LLC, a Delaware limited liability company.

“Permitted Holders” means, collectively, OEP, Sagard Capital Partners, L.P., Tinicum Capital Partners II, L.P., Tinicum Capital Partners II Parallel Fund, L.P. Tinicum Capital Partners II Executive Fund, L.L.C. and their respective Control Investment Affiliates.

“PIK Election” as defined in Section 2.8(e).

“PIK Interest” means interest paid in the form of increasing the outstanding principal amount of the Loans as provided in Section 2.8(e).

“Restructuring Transaction Costs” as defined in the First Amendment Agreement.

(b) Section 1.1 of the Credit Agreement is hereby further amended by substituting the definitions of the terms set forth below in lieu of the current versions of such definitions contained in Section 1.1 of the Credit Agreement:

“Applicable Margin” means from the First Amendment Effective Date with respect to Loans that are Eurodollar Rate Loans, 11.375% per annum (of which up to 2.50% per annum may, at the option of the Borrower, be made as PIK Interest) and with respect to Loans that are Base Rate Loans, 10.375% (of which up to 2.50% per annum may, at the option of the Borrower, be made as PIK Interest).

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for Borrower and its Subsidiaries on a consolidated basis equal to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, (b) Consolidated Interest Expense (including, without duplication and to the extent constituting Consolidated Interest Expense in accordance with GAAP, interest expense relating to the settlement of the Existing Interest Rate Agreements), (c) provisions for taxes based on income, (d) total depreciation expense, (e) total amortization expense, (f) Cash restructuring charges in connection with the Pantone Mergers, the Prior Tender Offer and restructurings occurring after the First Amendment Effective Date of up to $17,500,000 in the aggregate with respect to all such charges, (g) non-Cash charges associated with the cash surrender value of Borrower’s life insurance policy portfolio, (h) fees and expenses incurred in connection with the Equity Issuance to the extent deducted in the calculation of net income (or loss) for such period, (i) property taxes paid prior to the First Amendment Effective Date by Borrower on the Existing Headquarters Asset to the extent (x) deducted in the calculation of net income (or loss) for such period, and (y) all addbacks in respect of property taxes do not exceed $801,000, (j) the amount of non-Cash expenses related to the implementation of changes in accounting methods or

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estimates at the time of such implementation, (k) one-time charges or reserves (including, without limitation, fees and expenses) constituting Restructuring Transaction Costs, (l) fees and expenses payable to any Agent or Lender on the Forbearance Effective Date or the First Amendment Effective Date, (m) fees and expenses payable to the “Administrative Agent” under and as defined in the First Lien Credit Agreement or any “Lender” under and as defined in the First Lien Credit Agreement on the Forbearance Effective Date or First Amendment Effective Date, respectively, (n) one-time fees and expenses relating to Permitted Acquisitions (whether or not consummated), and (o) other non-Cash losses, charges, costs or other items reducing Consolidated Net Income for such period (excluding any such non-Cash loss, charge, cost or other item to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash item that was paid in a prior period), minus (ii) other non-Cash items increasing Consolidated Net Income for such period (excluding any such non-Cash item to the extent it represents the reversal of an accrual or reserve for potential Cash item in any prior period).

“Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period, excluding any amount not payable in Cash and, to the extent constituting Consolidated Interest Expense, payments made in respect of the Existing Interest Rate Agreements.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to: (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital Adjustment, minus (ii) the sum, without duplication, of the amounts for such period of (a) Consolidated Capital Expenditures (net of any proceeds of (x) any related financings with respect to such expenditures and (y) any sales of assets used to finance such expenditures), (b) Consolidated Cash Interest Expense, (c) provisions for current taxes based on income of Borrower and its Subsidiaries and payable in cash with respect to such period, (d) Cash payments for the purchase price paid in connection with Permitted Acquisitions (whether or not consummated), to the extent not paid with the proceeds of any Indebtedness (other than revolving loans under the First Lien Credit Agreement) or from the issuance of, or capital contribution in respect of, any equity securities and (e) transaction costs and expenses paid in Cash in connection with Permitted Acquisitions (whether or not consummated) and added back to net income in the determination of Consolidated Adjusted EBITDA.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases and capitalized interest) of Borrower and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Interest Rate Agreements.

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“Consolidated Net Income” means, for any period, (i) the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, excluding (ii) (a) the income (or loss) of any Person (other than a Subsidiary of Borrower) in which any other Person (other than Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries or that Person’s assets are acquired by Borrower or any of its Subsidiaries, (c) the income of any Subsidiary of Borrower to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (d) any after tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan and (e) (to the extent not included in clauses (a) through (d) above) any net extraordinary gains or net extraordinary losses.

“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Existing Headquarters Asset” means the property commonly known as 3100 44th Street Southwest, Grandville, Michigan.

“Existing Headquarters Asset Sale” means the sale by Borrower of the Existing Headquarters Asset pursuant to an Asset Sale.

(c) The definition of the term “Base Rate” set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the figure “2.00%” appearing at the end thereof and inserting the figure “4.00%” in lieu thereof.

(d) The definition of the term “Change of Control” set forth in Section 1.1 of the Credit Agreement is hereby amended by (i) inserting the words “, other than the Permitted Holders,” immediately after the words “(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act)” appearing therein and (ii) deleting the words “Closing Date” appearing in clause (ii) thereof and substituting the words “First Amendment Effective Date” in lieu thereof.

(e) The definition of the term “Credit Document” set forth in Section 1.1 of the Credit Agreement is hereby amended by inserting the words “the First Amendment Agreement” immediately after the words “the Intercreditor Agreement,” appearing therein.

(f) The definition of the term “Excluded Equity Issuance” set forth in Section 1.1 of the Credit Agreement is hereby amended by (i) deleting the word “and” appearing at the end of clause (b) thereof and (ii) inserting new clauses (d) and (e) at the end thereof as follows: “, (d) Cash proceeds resulting from the issuance of Capital Stock by Borrower to the extent used within one hundred eighty (180) days of receipt thereof by or for the account of Borrower to finance the consummation of a Permitted Acquisition and (e) up to $50,000,000 of Cash proceeds resulting from the issuance of Capital Stock (other than proceeds of the Equity Issuance) by Borrower to the extent used within sixty (60) days of receipt thereof by or for the account of Borrower to finance Capital Expenditures of Borrower and its Subsidiaries and/or any Investment otherwise permitted pursuant to Section 6.7”.

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(g) The definition of the term “Permitted Acquisition” set forth in Section 1.1 of the Credit Agreement is hereby amended by (i) inserting the words “and Cash” after the words “the “Revolving Commitments”“ appearing in clause (vi) thereof, (ii) inserting “)” after the words “in connection therewith” appearing in clause (vi) thereof, (iii) deleting the figure “$15,000,000” appearing in clause (vi) thereof and inserting the figure “$20,000,000” in lieu thereof and (iv) re-designating current clause (vii) thereof as clause (viii) and inserting the following new clause (vii):

“(vii) after giving effect to such acquisition, Consolidated Adjusted EBITDA for the most recent twelve-month period prior to the acquisition date for which financial statements are available shall not be reduced by more than $2,000,000, subject to pro forma adjustments reasonably acceptable to Lead Arranger; and”.

(h) Section 2.8 of t