Exhibit 10.12


 


SECOND AMENDMENT

TO CREDIT AGREEMENT


 


This Second Amendment to Credit Agreement is entered into
as of October 22, 2003 (the “Amendment”), by and among OCULAR SCIENCES,
INC. (“Borrower”), and COMERICA BANK, a Michigan banking corporation, successor
by merger to Comerica Bank-California, as the Agent for the Lenders (“Bank”).


 


RECITALS


 


Borrower, Bank, and Lenders are parties to that certain
Credit Agreement dated as of April 16, 2002, as amended from time to time,
including by that certain First Amendment to Credit Agreement entered into as
of March 30, 2003 (collectively, the “Agreement”).  The parties desire to amend the Agreement as
set forth herein.


 


NOW, THEREFORE, the parties agree as follows:


 


1.             Section 1.1
of the Agreement hereby is amended by adding and/or amending the following
definitions to the Agreement as follows:


 


“Capitalized Interest Expense” mean interest capitalized in accordance with GAAP.


 


“Earnings Before Interest and Taxes” means
the consolidated earnings (or loss) from the operations of any Person for any
period, after all expenses and other property charges but before payment or
provision for any income taxes or Consolidated Interest Expense for such
period, determined in accordance with GAAP, excluding any extraordinary or
non-recurring gains or losses.


 


“Initial Draw” means the first advance made
to or for the benefit of Ocular Japan under the OSJ Facility.


 


“Interest Coverage Ratio” means the
consolidated Earnings Before Interest and Taxes of any
Person for any period, divided by (i) Consolidated Interest Expense L
(ii) Capitalized Interest Expense of such Person during such period.


 


“Ocular Japan” means Ocular Sciences K.K., a
Japanese corporation, and a wholly-owned Subsidiary of Borrower.


 


“OSJ Facility” means the Yen-denominated
line of credit being provided to Ocular Japan by Wells Fargo, in the maximum principal amount of Fifteen Million Dollars ($15,000,000
(U.S.)) or approximately One Billion Five Hundred Million Yen (¥1,500,000,000),
and on terms and conditions and in form and content reasonably satisfactory to
Lenders.


 


“OSJ Guaranty” means the unsecured guaranty
to be provided by Borrower with respect to the OSJ Facility, which guaranty
shall not expose Borrower to liability in excess of the principal amount of
Fifteen Million Dollars ($15,000,000 (U.S.)) or approximately One Billion Five
Hundred Million Yen (¥1,500,000,000), plus interest at the rate set forth in
the OSJ Facility as of the date of this Amendment, and actual and reasonable
fees incurred in connection therewith, which guaranty shall be on terms and
conditions and in form and content reasonably satisfactory to Lenders.


 
















 


“Wells Fargo” means Wells Fargo HSBC Trade
Bank N.A.


 


2.             Section 2.1(c)(i) of the Agreement hereby is amended and restated in
its entirety to read as follows:


 


“(i)          At
Borrower’s option, upon two (2) Business Days written notice to Agent
prior to the Revolving Maturity Date (the “Term Out Option”), any
Revolving Advances outstanding on the Revolving Maturity Date may be converted
as of the Revolving Maturity Date into a single advance (the “Term Advance”);
provided  that, (i) no Event of Default then exists,
(ii) the amount of Revolving Advances that may be converted to the Term
Advance shall not exceed $40,000,000, and (iii) at the time of Borrower’s
delivery to Agent of Borrower’s intent to exercise the Term Out Option,
Borrower shall provide Bank with (x) a Compliance Certificate
demonstrating compliance with the Cash Flow Coverage Ratio for the Fiscal
Quarter End Date immediately preceding the date of such notice, and (y)
financial statements demonstrating Borrower’s projected pro forma compliance
with the Cash Flow Coverage Ratio for each quarter end during the first full
year of repayment of the Term Advance; in each case (x) and (y), assuming
exercise of the Term Out Option.


 


3.             Section 2.5(f) hereby
is added to the Agreement to read as follows:


 


“(f)          Mandatory
Prepayment.  Subject to
the terms and conditions of Section 2.5(c), above, no later than fifteen
(15) calendar days from the Agreement Date of (and as defined in) the OSJ
Facility, Borrower shall remit to Agent the principal amount of at least Five
Million Dollars ($5,000,000) to repay the then outstanding principal amount of
the Revolving Advances or the Term Advance (as the case may be).


 


4.             Section 5.1(b) of
the Agreement hereby is amended and restated in its entirety to read as
follows:


 


“(b)         Cash
Flow Coverage Ratio.  As
of the Fiscal Quarter End Date immediately preceding the date of Borrower’s
notice to Agent of Borrower’s intent to exercise the Term Out Option, and for
each subsequent quarter end during the term of repayment of the Term Advance,
Borrower’s Cash Flow Coverage Ratio, calculated on a rolling four
(4) Fiscal Quarter basis, shall not be less than 2.00 to 1.00.”


 


5.             A
new Section 5.1(f) hereby is added to the Agreement to read as
follows:


 


“(f)          Interest
Coverage Ratio.  As of
each Fiscal Quarter End Date, Borrower shall not cause, permit or suffer the
Interest Coverage Ratio, calculated on a rolling four (4) Fiscal Quarter
basis, to be less than 2.00 to 1.00.”


 


6.             Section 5.2(c)(v) of the Agreement hereby is amended and restated in
its entirety to read as follows:


 


“(v)         as soon
as available and in any event within forty-five (45) days after the end of each
Fiscal Quarter, a Compliance Certificate signed by an Authorized Officer of the
Borrower in substantially the form of Exhibit D- 1 and setting forth the
information requested therein, and attaching


 


2
















 


thereto
any and all Compliance Certificates (or similar) required to be delivered under
the OSJ Facility for the most recent period ended as of the date of delivery
thereof hereunder;


 


7.             Section 5.2(c)(viii) hereby is added to the Agreement to read as
follows:


 


“(viii)      deliver
to Agent, simultaneously with delivery of the same to Wells Fargo, each of the
items required to be delivered to Wells Fargo under the OSJ Facility, including
but not limited to notices, financial and other statements, and borrowing, compliance
and similar certificates.”


 


8.             Section 5.3(d)(ix) of the Agreement hereby is amended and restated
in its entirety to read as follows:


 


“(ix)         Debt
not exceeding the notional amount of $75,000,000 in the aggregate at any one
time outstanding consisting of foreign exchange contracts on which delivery is
to be effected and settlement allowed at any time (or at a specified time) in
the future (plus related fees, costs and indemnities) entered into between
Borrower and any of the Lenders or any other lender (having a credit rating
similar to that of any of the Lenders);”


 


9.             Section 5.3(d)(xiv) hereby is added to the Agreement to read as follows:


 


“(xiv)      Debt of
Ocular Japan incurred in connection with the OSJ Facility;”


 


10.           Section 5.3(d)(xv) hereby is added to the Agreement to read as follows:


 


“(xv)       Debt not
otherwise permitted hereunder in connection with the OSJ Guaranty.”


 


11.           Section 5.3(e) of
the Agreement hereby is amended and restated in its entirety to read as
follows:


 


“(e)         Capital
Expenditures.  Expend or
incur Consolidated Capital Expenditures greater than $50,000,000 in 2001,
$60,000,000 in 2002, $50,000,000 in 2003 and $55,000,000 in 2004.


 


12.           Section 5.3(f) of
the Agreement hereby is amended and restated in its entirety to read as follows:


 


“(f)          Transactions
with Affiliates.  Subject
to other covenants hereunder, enter or agree to enter into any transaction with
any Affiliate of Borrower or of any of its Subsidiaries except (i) for
infra-company sale/lease back of equipment totaling no more than $55,000,000
(plus any associated value added tax) at any time, (ii) as otherwise
contemplated or permitted under the Loan Documents, (iii) the OSJ Guaranty
and borrowings by the Borrower from OSJ, or (iv) in the ordinary course of
business and pursuant to the reasonable requirements of the business of
Borrower or such Subsidiary and upon fair and reasonable terms no less
favorable to Borrower or such Subsidiary than those that would prevail in a
comparable arm’s-length transaction with a Person not an Affiliate of Borrower
or such Subsidiary; provided, however, that nothing in this
Section 5.3(f) shall be construed to prohibit (A) customary
directors’ and officers’ indemnities; (B) customary directors’ fees;
(C) reasonable compensation to officers (as determined by Borrower’s or
such Subsidiary’s board of directors); and


 


3
















 


(D) administrative
services provided by Borrower to its Subsidiaries in the ordinary course of
business consistent with past practice.


 


13.           Exhibit D-1
Form of Compliance Certificate attached to the Agreement hereby is replaced
with Exhibit D-1 attached hereto.


 


14.           Unless
otherwise defined, all capitalized terms in this Amendment shall be as defined
in the Agreement.  Except as amended, the
Agreement remains in full force and effect. 
The Pledge Agreement remains in full force and effect.


 


15.           Borrower
represents and warrants that the representations and warranties contained in
the Agreement and the Pledge Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred or is continuing.


 


16.           This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one instrument.


 


17.           As
a condition to the effectiveness of this Amendment, Bank shall have received,
in form and substance satisfactory to Bank, the following:


 


this Amendment, duly executed by Borrower;


 


an Affirmation of Guaranty, in the form attached
hereto;


 


an amount equal to all Bank Expenses incurred to date;
and


 


such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.


 


4
















 


IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of the first date above written.


 


	
   

  	
  OCULAR SCIENCES, INC.

  
	
   

  	
   

  
	
   

  	
  By.

  	
  /s/ Steven M. Neil

  
	
   

  	
  Name:

  	
  Steven M. Neil

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMERICA BANK,
  successor by merger

  to Comerica Bank-California, as Agent and

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By.

  	
  /s/ John Esposito

  
	
   

  	
  Name:

  	
  John Esposito

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN TRUST COMPANY,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By.

  	
  /s/ Patricia A. Williams

  
	
   

  	
  Name:

  	
  Patricia A. Williams

  
	
   

  	
  Title:

  	
  Vice President

  
					



 


5
















 


EXHIBIT D-1


FORM OF COMPLIANCE CERTIFICATE


 


This Compliance Certificate is being delivered by the
undersigned, an Authorized Officer of Ocular Sciences, Inc. (referred to herein
as “Ocular Sciences” and, the “Borrower”), on behalf Borrower and
its Subsidiaries, to Comerica Bank (the “Agent”) pursuant to
Section 5.2(c) of that certain Credit Agreement, dated as of
April 16, 2002, by and among the Borrowers, the Lenders (as defined in the
Credit Agreement) and the Agent (as amended or modified from time to time, the
“Credit Agreement”).  Capitalized
terms used herein and not otherwise defined herein shall have the same meanings
as set forth in the Credit Agreement.


 


Borrower hereby certifies and warrants
to the Lenders, on behalf of the Borrower and each Subsidiary, as follows:


 


The representations and
warranties contained in (a) Article IV of the Credit Agreement and
Article III of the Pledge Agreement, and (b) Article 3 of the
OSJ Facility and Section 3 of the OSJ Guaranty, are true and correct in
all material respects on and as of the date of this Compliance Certificate (or,
in the case of representations and warranties stated as having been made only
on the execution date of the Credit Agreement, the Pledge Agreement, the OSJ Facility
or the OSJ Guaranty, on the execution date of such Agreement).


No event has occurred and is
continuing which constitutes an Event of Default or a Potential Default, under
any of the Credit Agreement, Pledge Agreement, IOSJ Facility or the OSJ
Guaranty.


Since [the most recent Fiscal
Quarter End Date], there has been no Material Adverse Change.


All Loan Documents, including
but not limited to the Credit Agreement, Pledge Agreement, OSJ Facility and the
OSJ Guaranty, to the extent they exist, are in full force and effect.


True and correct copies of all
Compliance Certificates (or similar) required to be delivered under the OSJ
Facility and/or the OSJ Guaranty, as of the date hereof, are attached hereto.


The following is a true and
correct computation of the ratios and financial tests contained in the Credit
Agreement as of
            ,
20    (the “Fiscal Quarter End Date”):


 


[The remainder of this page left blank intentionally]


 


2
















 


(a)           Section 5.1
(a) – Total Funded Debt to EBITDA


 


	
  (i)

  	
   

  	
  Total amount of all Debt of
  Ocular Sciences and its consolidated Subsidiaries as of the Fiscal Quarter
  End Date relating to (A) the borrowing of money and letters of credit and (B)
  Capital Leases, all determined in accordance with GAAP:

  	
   

  	
  $

  	
   

  
	
  (ii)

  	
   

  	
  EBITDA (calculated on a rolling
  four (4) Fiscal Quarter basis) determined in accordance with GAAP:

  	
   

  	
  $

  	
   

  
	
  (iii)

  	
   

  	
  Total Funded Debt to EB1 I DA as
  of the Fiscal Quarter End Date [Item (i) divided by Item (ii)]:

  	
   

  	
                  :1.00

  
	
  (iv)

  	
   

  	
  The ratio in Item (iii) must not
  be greater than:

  	
   

  	
  2.00:1.00

  



 


3
















 


(b)           Section 5.1(b)
– Cash Flow Coverage Ratio


 


	
  (i)

  	
   

  	
  Consolidated Net Income for the four consecutive Fiscal
  Quarters ending on the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  
	
  (ii)

  	
   

  	
  To the extent deducted in (i) above, depreciation,
  Consolidated Interest Expense and amortization for the four consecutive
  Fiscal Quarters ending on the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  
	
  (iii)

  	
   

  	
  All non-cash charges of Ocular Sciences and its
  consolidated Subsidiaries required by GAAP relating to dispositions of
  property, plant and equipment for the four consecutive Fiscal Quarters ending
  on the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  
	
  (iv)

  	
   

  	
  Preferred stock dividends paid or payable to a Person not
  in the Ocular Sciences Group by Ocular Sciences or any of its consolidated
  Subsidiaries during the four consecutive Fiscal Quarters ending on the Fiscal
  Quarter End Date:

  	
   

  	
  $

  	
   

  
	
  (v)

  	
   

  	
  Stock repurchases and/or buy backs by Ocular Sciences
  during the four consecutive Fiscal Quarters ending on the Fiscal Quarter End
  Date:

  	
   

  	
  $

  	
   

  
	
  (vi)

  	
   

  	
  Cash Flow for the four consecutive Fiscal Quarters ending
  on the Fiscal Quarter End Date [Item (i) plus Item (ii) plus
  Item (iii) minus Item (iv) minus Item (v)]:

  	
   

  	
  $

  	
   

  
	
  (vii)

  	
   

  	
  The current portion of long term debt and Capital Leases
  as at the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  
	
  (viii)

  	
   

  	
  Cash Flow Coverage Ratio as of
  the Fiscal Quarter End Date [Item (vi) divided by Item (vii)]:

  	
   

  	
                  :1.00

  
	
  (ix)

  	
   

  	
  The ratio in Item (viii) must
  not be less than:

  	
   

  	
  2.00:1.00

  
							



 


4
















 


(c)           Section 5.1(c)
– Minimum Quick Ratio


 


	
  (i)

  	
   

  	
  The sum of unrestricted cash and unrestricted Permitted
  Cash Investments of Ocular Sciences and its consolidated Subsidiaries as of
  the Fiscal Quarter End Date as determined in accordance with GAAP:

  	
   

  	
  $

  
	
  (ii)

  	
   

  	
  Trade accounts receivable (net of applicable reserves
  therefor) of Ocular Sciences and its consolidated Subsidiaries as of the
  Fiscal Quarter End Date as determined in accordance with GAAP:

  	
   

  	
  $

  
	
  (iii)

  	
   

  	
  Item (i) plus Item (ii):

  	
   

  	
  $

  
	
  (iv)

  	
   

  	
  Current liabilities (excluding the aggregate principal
  amount of Revolving Advances or Term Advance outstanding under the Credit
  Agreement) of Ocular Sciences and its consolidated Subsidiaries as of the
  Fiscal Quarter End Date as determined in accordance with GAAP:

  	
   

  	
  $

  
	
  (v)

  	
   

  	
  The aggregate principal amount of Revolving Advances and
  Term Advances outstanding under the Credit Agreement:

  	
   

  	
  $

  
	
  (vi)

  	
   

  	
  Item (iv) plus Item (v):

  	
   

  	
  $

  
	
  (vii)

  	
   

  	
  Quick Ratio as of the Fiscal
  Quarter End Date [Item (iii) divided by Item (vi)]:

  	
   

  	
                  :1.00

  
	
  (viii)

  	
   

  	
  The ratio in Item (vii) must not
  be less than: 

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Closing Date through
  December 31, 2002 

  	
   

  	
  0.75:1.00

  
	
   

  	
   

  	
  (ii) for the quarter ending
  March 31, 2003:

  	
   

  	
  0.65:1.00;

  
	
   

  	
   

  	
  (iii) for the quarter ending
  June 30, 2003:

  	
   

  	
  0.70:1.00

  
	
   

  	
   

  	
  (iv) for the quarter ending
  September 30, 2003 and December 31, 2003:

  	
   

  	
  0.80:1.00

  
	
   

  	
   

  	
  (v) thereafter:

  	
   

  	
  1.00:1.00

  



 


5
















 


(d)           Section 5.1(d)
– Minimum Tangible Effective Net Worth


 


	
  (i)

  	
   

  	
  Base amount:

  	
   

  	
  $

  	
  160,000,000

  
	
  (ii)

  	
   

  	
  Cumulative Consolidated Net Income (but without taking
  into account any losses incurred during any Fiscal Quarter), commencing with
  the Fiscal Quarter ending on December 31, 2001, and ending with the Fiscal
  Quarter ending on the Fiscal Quarter End Date of measurement:

  	
   

  	
  $

  
	
  (iii)

  	
   

  	
  70% of Item (ii):

  	
   

  	
  $

  
	
  (iv)

  	
   

  	
  100% of the net cash proceeds from any Equity Issuance
  after the Closing Date:

  	
   

  	
  $

  
	
  (v)

  	
   

  	
  Item (i) plus Item (iii) plus Item (iv):

  	
   

  	
  $

  
	
  (vi)

  	
   

  	
  Net book value of all assets of Ocular Sciences and its
  consolidated Subsidiaries as of the Fiscal Quarter End Date as determined in
  accordance with GAAP:

  	
   

  	
  $

  
	
  (vii)

  	
   

  	
  Intangible Assets as of the Fiscal Quarter End Date:

  	
   

  	
  $

  
	
  (viii)

  	
   

  	
  Consolidated Total Debt as of the Fiscal Quarter End Date:

  	
   

  	
  $

  
	
  (ix)

  	
   

  	
  Subordinated Debt as of the Fiscal Quarter End Date:

  	
   

  	
  $

  
	
  (x)

  	
   

  	
  Tangible Effective Net Worth as of the Fiscal Quarter End
  Date [Item (vi) minus Item (vii) minus Item (viii) plus
  Item (ix)]:

  	
   

  	
  $

  
	
  (xi)

  	
   

  	
  The amount in Item (x) may not
  be less than the amount in Item (v).

  	
   

  	
  Complies:

  Yes/No

  



 


6
















 


(e)           Section 5.1(e)
– Minimum Assets.


 


	
  (i)

  	
   

  	
  Total value of assets of Ocular Sciences, Inc., determined
  in accordance with GAAP (after excluding any intercompany receivables and any
  Investments in or between Subsidiaries):

  	
   

  	
  $

  
	
  (ii)

  	
   

  	
  Total value of assets of Ocular Sciences Puerto Rico,
  determined in accordance with GAAP (after excluding any intercompany
  receivables and any Investments in or between Subsidiaries):

  	
   

  	
  $

  
	
  (iii)

  	
   

  	
  Total value of assets of SunSoft, Inc., determined in
  accordance with GAAP (after excluding any intercompany receivables and any
  Investments in or between Subsidiaries):

  	
   

  	
  $

  
	
  (iv)

  	
   

  	
  The sum of Item (i) plus
  Item (ii) plus Item (iii) must not be less than:

  	
   

  	
  $

  	
  75,000,000

  



 


7
















 


(f)            Section 5.1(f)
– Interest Coverage Ratio


 


	
  (i)

  	
   

  	
  Consolidated earnings (or loss) from operations, after all
  expenses and other property charges but before payment or provision for any
  income taxes or interest expense, excluding any extraordinary or
  non-recurring gains or losses for the four consecutive Fiscal Quarters ending
  on the Fiscal Quarter End Date:

  	
   

  	
  $

  
	
  (ii)

  	
   

  	
  Total interest expense (including the interest component
  of Capital Leases) of Borrower and its consolidated Subsidiaries excluding
  the amortization or write-off of original issue discount, capitalized debt
  issuance costs and expenses, and non-cash interest payments or accruals for
  the four consecutive Fiscal Quarters ending on the Fiscal Quarter End Date:

  	
   

  	
  $

  
	
  (iii)

  	
   

  	
  Interest Coverage Ratio as of
  the Fiscal Quarter End Date [Item (i) divided by Item (ii)]:

  	
   

  	
                  :1.00

  
	
  (iv)

  	
   

  	
  The ratio in Item (iii) must not
  be less than:

  	
   

  	
  2.00:1.00

  



 


8
















 


The undersigned has reviewed the terms of the Credit
Agreement and has made, or caused to be made under his/her supervision, a
review in reasonable detail of the transactions and condition of the Borrowers
and its Subsidiaries during the Fiscal Quarter covered by this Compliance
Certificate.


 


IN WITNESS WHEREOF, Borrower has caused this Compliance
Certificate to be executed and delivered, and the certifications and warranties
contained herein to be made, as of this      day of
            ,
20   .


 


 


OCULAR SCIENCES, INC.


 


	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 


9