Exhibit 10.27




 





 


 


$15,000,000 Yen Denominated


 


CREDIT AGREEMENT


 


Dated as of December 29, 2003


 


Between


 


OCULAR SCIENCES K.K.


 


and


 




WELLS FARGO
HSBC TRADE BANK N.A.


 


 





 
















 


TABLE OF CONTENTS


 


	
  ARTICLE 1 CREDIT FACILITY

  	
   

  
	
   

  	
   

  
	
  Section
  1.01

  	
  Commitment
  to Lend

  	
   

  
	
  Section
  1.02

  	
  Manner
  of Borrowing

  	
   

  
	
  Section
  1.03

  	
  Interest

  	
   

  
	
  (a)

  	
  Rates

  	
   

  
	
  (b)

  	
  Payment

  	
   

  
	
  (c) 

  	
  Maximum
  Interest Rate

  	
   

  
	
  Section
  1.04

  	
  Repayment

  	
   

  
	
  Section
  1.05

  	
  Prepayments

  	
   

  
	
  Section
  1.06

  	
  Evidence of Indebtedness

  	
   

  
	
  Section
  1.07

  	
  Facility Fee

  	
   

  
	
  Section
  1.08

  	
  Computation of Interest

  	
   

  
	
  Section
  1.09

  	
  Payments by the Borrower

  	
   

  
	
  (a)

  	
  Time, Place and
  Manner

  	
   

  
	
  (b)

  	
  No
  Reductions

  	
   

  
	
  (c)

  	
  Grossing-up
  of Payments

  	
   

  
	
  (d)

  	
  Authorization
  to Charge Accounts

  	
   

  
	
  (e)

  	
  Extension
  of Payment Dates

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2 CONDITIONS TO
  LOANS

  	
   

  
	
   

  	
   

  
	
  Section
  2.01

  	
  Conditions to Initial Loan

  	
   

  
	
  Section
  2.02

  	
  Conditions to Each Loan

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  3 CERTAIN REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section
  3.01

  	
  Organization; Power; Qualification

  	
   

  
	
  Section
  3.02

  	
  Subsidiaries

  	
   

  
	
  Section
  3.03

  	
  Authorization; Enforceability; Required
  Consents; Absence of Conflicts

  	
   

  
	
  Section
  3.04

  	
  Litigation

  	
   

  
	
  Section
  3.05

  	
  Burdensome Provisions

  	
   

  
	
  Section
  3.06

  	
  No Adverse Change or Event

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4 CERTAIN
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section
  4.01

  	
  Preservation of Existence and Properties,
  Scope of Business, Compliance with Law, Payment of Taxes and Claims,
  Preservation of Enforceability

  	
   

  
	
  Section
  4.02

  	
  Insurance

  	
   

  
	
  Section
  4.03

  	
  Use of Proceeds

  	
   

  
	
  Section
  4.04

  	
  Guaranties

  	
   

  
	
  Section
  4.05

  	
  Liens

  	
   

  
	
  Section
  4.06

  	
  Restricted Payments

  	
   

  
				



 


i
















 


	
  Section
  4.07

  	
  Merger or Consolidation; Sale of Assets

  	
   

  
	
  Section
  4.08

  	
  Minimum Net Profit

  	
   

  
	
  Section
  4.09

  	
  Minimum Quick Ratio

  	
   

  
	
  Section
  4.10

  	
  Investments

  	
   

  
	
  Section
  4.11

  	
  Limitation on Indebtedness

  	
   

  
	
  Section
  4.12

  	
  Capital Expenditures

  	
   

  
	
  Section
  4.13

  	
  Benefit Plans

  	
   

  
	
  Section
  4.14

  	
  Transactions with Affiliates

  	
   

  
	
  Section
  4.15

  	
  Issuance or Disposition of Capital
  Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5 FINANCIAL STATEMENTS AND INFORMATION

  	
   

  
	
   

  	
   

  
	
  Section
  5.01

  	
  Financial Statements and Information to Be
  Furnished

  	
   

  
	
  (a)

  	
  Quarterly
  Financial Statements; Director’s Certificate

  	
   

  
	
  (b)

  	
  Year-End Financial Statements; Accountants’ and Director’s
  Certificates

  	
   

  
	
  (c)

  	
  Requested
  Information

  	
   

  
	
  (d)

  	
  Notice of Defaults, Material Adverse
  Changes and Other Matters

  	
   

  
	
  Section
  5.02

  	
  Accuracy of Financial Statements and
  Information

  	
   

  
	
  (a)

  	
  Historical Financial
  Statements

  	
   

  
	
  (b)

  	
  Future Financial Statements

  	
   

  
	
  (c)

  	
  Historical Information

  	
   

  
	
  (d)

  	
  Future Information

  	
   

  
	
  Section
  5.03

  	
  Additional Covenants Relating to
  Disclosure

  	
   

  
	
  (a)

  	
  Accounting
  Methods and Financial Records

  	
   

  
	
  (b)

  	
  Fiscal
  Year

  	
   

  
	
  (c)

  	
  Visits,
  Inspections and Discussions

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6 DEFAULT

  	
   

  
	
   

  	
   

  
	
  Section
  6.01

  	
  Events of Default

  	
   

  
	
  Section
  6.02

  	
  Remedies upon Event of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7 ADDITIONAL CREDIT FACILITY PROVISIONS

  	
   

  
	
   

  	
   

  
	
  Section
  7.01

  	
  Mandatory Suspension of Loans

  	
   

  
	
  Section
  7.02

  	
  Regulatory Changes

  	
   

  
	
  Section
  7.03

  	
  Capital Requirements

  	
   

  
	
  Section
  7.04

  	
  Funding Losses

  	
   

  
	
  Section
  7.05

  	
  Determinations

  	
   

  
	
  Section
  7.06

  	
  Change of Lending Office

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section
  8.01

  	
  Notices and Deliveries

  	
   

  
	
  (a)

  	
  Manner
  of Delivery

  	
   

  
	
  (b)

  	
  Addresses

  	
   

  
	
  (c)

  	
  Effectiveness

  	
   

  
				



 


ii
















 


	
  (d)

  	
  Reasonable
  Notice

  	
   

  
	
  Section
  8.02

  	
  Expenses; Indemnification

  	
   

  
	
  Section
  8.03

  	
  Amounts Payable Due upon Request for
  Payment

  	
   

  
	
  Section
  8.04

  	
  Remedies of the Essence

  	
   

  
	
  Section
  8.05

  	
  Rights Cumulative

  	
   

  
	
  Section
  8.06

  	
  Confidentiality

  	
   

  
	
  Section
  8.07

  	
  Amendments; Waivers

  	
   

  
	
  Section
  8.08

  	
  Set-Off; Suspension of Payment and
  Performance

  	
   

  
	
  Section
  8.09

  	
  Assignments and Participations

  	
   

  
	
  (a)

  	
  Assignments

  	
   

  
	
  (b)

  	
  Participations

  	
   

  
	
  (c)

  	
  Rights of Assignees and
  Participants

  	
   

  
	
  Section
  8.10

  	
  Governing Law

  	
   

  
	
  Section
  8.11

  	
  Judicial Proceedings; Waiver of Jury Trial

  	
   

  
	
  Section
  8.12

  	
  LIMITATION OF LIABILITY

  	
   

  
	
  Section
  8.13

  	
  Severability of Provisions

  	
   

  
	
  Section
  8.14

  	
  Counterparts

  	
   

  
	
  Section
  8.15

  	
  Survival of Obligations

  	
   

  
	
  Section
  8.16

  	
  Entire Agreement

  	
   

  
	
  Section
  8.17

  	
  Successors and Assigns

  	
   

  
	
  Section
  8.18

  	
  Currency of Payment

  	
   

  
	
  Section
  8.19

  	
  Process Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 INTERPRETATION

  	
   

  
	
   

  	
   

  
	
  Section
  9.01

  	
  Definitional Provisions

  	
   

  
	
  (a)

  	
  Defined
  Terms

  	
   

  
	
  (b)

  	
  Other Definitional Provisions

  	
   

  
	
  Section
  9.02

  	
  Accounting Matters

  	
   

  
	
  Section
  9.03

  	
  Representations and Warranties

  	
   

  
	
  Section
  9.04

  	
  Captions

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.02

  	
  Notice of Borrowing

  	
   

  
	
  Schedule
  2.01(a)

  	
  Director’s Certificate of Borrower

  	
   

  
	
  Schedule
  2.01(b)

  	
  Officer’s Certificate of Guarantor

  	
   

  
	
  Schedule
  2.01(c)

  	
  (Director’s/Officer’s) Certificate of
  (Borrower/ Guarantor)

  	
   

  
	
  Schedule
  2.01(d)

  	
  Form of Opinion of Counsel for the
  Borrower and the Guarantor

  	
   

  
	
  Schedule
  2.01(e)

  	
  Form of Opinion of Counsel for the
  Borrower

  	
   

  
	
  Schedule
  2.01(f)

  	
  Certificate of Negotiating Officer

  	
   

  
	
  Schedule
  3.03

  	
  Schedule of Required Consents and
  Governmental Approvals

  	
   

  
	
  Schedule
  3.04

  	
  Schedule of Material Litigation

  	
   

  
						



 


iii
















 


	
  Schedule
  4.04

  	
  Schedule of Existing Guaranties

  	
   

  
	
  Schedule
  4.05

  	
  Schedule of Existing Liens

  	
   

  
	
  Schedule
  4.10

  	
  Schedule of Existing Investments

  	
   

  
	
  Schedule
  4.11

  	
  Schedule of Existing Indebtedness

  	
   

  
	
  Schedule
  4.14

  	
  Transactions with Affiliates

  	
   

  
	
  Schedule
  5.01(a)

  	
  Ocular
  Sciences K.K.

  Certificate as to Quarterly Financial Statements

  	
   

  
	
  Schedule
  5.01(b)

  	
  Ocular Sciences K.K.

  Certificate as to Year-End Financial Statements

  	
   

  
	
  Schedule
  5.02(a)

  	
  Schedule of Historical Financial
  Information

  	
   

  
	
  Exhibit A

  	
  Promissory Note

  	
   

  
	
  Exhibit B

  	
  Form of Second Amendment to The Parent Credit
  Agreement

  	
   

  
	
  Exhibit C

  	
  Form of Third Amendment to The Parent Credit
  Agreement

  	
   

  



 


iv
















 


CREDIT AGREEMENT



Dated as of December 29, 2003


 


OCULAR SCIENCES K.K., a Japanese
corporation, and WELLS FARGO HSBC TRADE BANK N.A. agree as follows (with
certain terms used herein being defined in Article 9):


 


ARTICLE 1



CREDIT FACILITY


 


Section
1.01           Commitment
to Lend.  Upon the terms and subject
to the conditions of this Agreement, the Bank agrees to make, from time to time
during the period from the Agreement Date through the Termination Date, one or
more Loans to the Borrower in an aggregate unpaid principal amount not
exceeding at any one time outstanding the Commitment at such time.


 


Section
1.02           Manner of Borrowing.


 


(a)           The
Borrower shall give the Bank notice (which shall be irrevocable) no later than
2:00 p.m. (California time) on the third Business Day before the requested date
for the making of any Loan (such third Business Day being called the “Notification
Date”).  Each such notice of
borrowing shall be in the form of Schedule 1.02 and shall specify (a) the
requested date for the making of the requested Loan, which shall be a Business
Day, (b) the account to which proceeds of the Loan will be remitted, (c) the
Maturity Date for such Loan requested pursuant to Section 1.04, and (d) the
amount of such Loan, the Dollar Equivalent of which (determined as of the
Notification Date) shall not be less than $500,000 (unless the requested Loan
is for the entire undrawn amount of the Commitment then available for borrowing
hereunder).  Not later than the second
Business Day before the requested date for the making of such Loan, the Bank
will determine the Dollar Equivalent of the amount of the requested Loan as of
the Notification Date, and notify the Borrower if (i) the requested amount of
the Loan would exceed the undrawn Commitment (determined as of the Notification
Date, but assuming that all other Loans which are scheduled to mature on or
prior to the date requested for the making of such Loan will be duly repaid),
whereupon the amount of the requested Loan will be reduced to the undrawn
Commitment, and (ii) the Bank is unable to accept the Borrower’s requested
Maturity Date due to its inability to obtain funding for the relevant maturity
on commercially reasonable terms, the Bank shall promptly inform the Borrower of
such fact and shall provide Borrower with information respecting the terms that
the Bank could in fact obtain with respect to the proposed Loan (which terms
Borrower may accept or reject in the exercise of its reasonable discretion).


 


(b)           Each
Loan so requested shall be disbursed by the Bank not later than the requested
date therefor (Tokyo time) in Yen in funds immediately available to the
Borrower by credit to an account of the Borrower as shall have been specified
in the applicable notice of borrowing and as shall be acceptable to the Bank; provided
that the Borrower hereby irrevocably directs the Bank to apply the proceed of
any Loan to any amounts then due hereunder (including 


 
















 


any
unpaid principal amount of and interest accrued on any other Loan maturing on
or prior to the date of disbursement of such Loan).


 


Section
1.03           Interest.


 


(a)           Rates.  Unless an Event of Default is continuing,
each Loan and each other amount due and payable under the Borrower Loan
Documents shall bear interest on the outstanding principal amount thereof at a
rate per annum equal to the applicable Adjusted Euroyen Rate for the Interest
Period plus 0.95%.  Any principal or
interest on any Loan, and any other amount payable under the Loan Documents,
which is not paid when due, and during an Event of Default, shall bear interest
at a rate per annum equal to the applicable Post-Default Rate (whether before
or after judgment).


 


(b)           Payment.  Interest shall be payable, (a) in the case of
any Loan, (i) on the last day of the Interest Period (and, if the duration of
an Interest Period is longer than three months, at intervals of three months
after the first day of such Interest Period), (ii) when such Loan shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise), but only to the extent then accrued on the amount then so due, and
(b) in the case of all other amounts due and payable under the Borrower Loan
Documents, promptly on demand.  Interest
at the Post-Default Rate shall be payable on demand.


 


(c)           Maximum
Interest Rate.  Nothing contained
in the Loan Documents shall require the Borrower at any time to pay interest at
a rate exceeding the Maximum Permissible Rate. If interest payable by the
Borrower on any date would exceed the maximum amount permitted by the Maximum
Permissible Rate, such interest payment shall automatically be reduced to such
maximum permitted amount, and interest for any subsequent Loans, to the extent
less than the maximum amount permitted for such Loans by the Maximum Permissible
Rate, shall be increased by the unpaid amount of any other Loan.  Any interest actually received for any Loan
in excess of such maximum amount permitted for such period shall be deemed to
have been applied as a prepayment of the Loans in the inverse order of
maturity.


 


Section
1.04           Repayment.  Unless required to be repaid earlier pursuant
to the terms of this Agreement, each Loan shall be repaid by Borrower in full
on the Maturity Date.  The Maturity Date
for each Loan shall be approximately the same day as the date of making the
Loan in the first, second, third, or sixth calendar months after the date of
the making of such Loan as may be requested by the Borrower in a notice of
borrowing; provided that if the Maturity Date would not otherwise be a
Business Day, such day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
Maturity Date shall be the next preceding Business Day.


 


Section
1.05           Prepayments.  The Borrower acknowledges that the Bank may
enter into currency and/or interest rate swap agreements in order to fund the
Loans, the termination of which may result in substantial costs.  Accordingly, the Borrower agrees that it
shall have no voluntary right to repay or prepay any Loan in whole or in part
prior to the Maturity Date, and that in the event any Loan is repaid or prepaid
(whether by acceleration prior to the maturity or any other reason) in whole or
in part prior to the Maturity Date, the Borrower shall compensate the Bank for
any losses, costs, or expenses pursuant to Section 7.04.


 


2
















 


Section 1.06           Evidence of Indebtedness.  The Loans and the Borrower’s obligation to
repay the Loans with interest in accordance with the terms of this Agreement
shall be evidenced by this Agreement, a single Note, and the records of the
Bank.  The Bank shall be authorized to
make notations on the Note to reflect borrowings and payments (and shall
provide Borrower with copies of such notations promptly after making the
same).  The notations and records of the
Bank shall be conclusive evidence of the Loans and accrued interest thereon and
of all payments made in respect thereof, absent manifest error.


 


Section
1.07           Facility Fee.  The Borrower shall pay the Bank a facility
fee of $20,000 on the closing date of the initial Loan under this Agreement.


 


Section
1.08           Computation of
Interest.  Interest shall be computed
on the basis of a year of 360 days and paid for the actual number of days elapsed.
Interest for any period shall be calculated from and including the first day
thereof to and including the last day thereof.


 


Section
1.09           Payments by the
Borrower.


 


(a)           Time,
Place and Manner.  All payments due
to the Bank under the Borrower Loan Documents shall be made to the Bank at the
Bank’s Office or at such other address as the Bank may designate by notice to
the Borrower.  All such payments shall be
made for the account of the Lending Office. 
A payment shall not be deemed to have been made on any day unless such
payment has been received by the Bank, at the required place of payment, in Yen
(or such other currency as may be specified herein) in funds immediately
available to the Bank on such day.


 


(b)           No Reductions.  The Borrower represents and warrants to the
Bank that all payments by the Borrower will be paid free and clear of and
(except to the extent required by law) without any deduction or withholding on
account of any tax imposed, levied, collected, withheld or assessed by or
within the United States of America or any political subdivisions in or of the
United States of America, Japan, or any other jurisdiction from or to which a
payment is made by or on behalf of the Borrower or by any federation or
organization of which the United States of America or such other jurisdiction
is a member at the time of payment, except for any Japanese withholding Taxes
imposed at a rate not exceeding 10% on each payment of the facility fee and
interest to the extent required to be withheld or deducted under Applicable
Law.


 


(c)           Grossing-up
of Payments.  If the Borrower, the
Bank or any other person or entity is required by law to make any deduction or
withholding on account of any such tax from any sum paid or payable by the
Borrower to the Bank hereunder (excluding,
in the case of the Bank, taxes that would not be imposed in respect of a
payment under this Agreement but for a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and Bank
(including, without limitation, a connection arising from Bank being or having
been a citizen or resident of such jurisdiction or being or having been treated
as a resident of such jurisdiction, or being or having been organized, present
or engaged in a trade or business in such jurisdiction, or having or having had
a permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from Bank having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement):


 


3
















 


(i)            the Borrower shall notify the Bank of any such requirement
or any change in any requirement as soon as the Borrower becomes aware of it;


 


(ii)           the
Borrower shall pay any such tax before the date on which penalties attach
thereto, such payment to be made (if the liability to pay is imposed on the
Borrower) for its own account or (if that liability is imposed on the Bank on
behalf of and in the name of Bank) for the Bank’s account;


 


(iii)          The
sum payable by the Borrower in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary
to ensure that, after the making of that deduction, withholding or payment, the
Bank receives on the due date and retains (free from any liability in respect
of any such deduction, withholding or payment) a net sum equal to what it would
have received and so retained had no such deduction, withholding or payment
been required or made; and


 


Within thirty (30) days
after payment of any sum from which it is required by law to make any
deductions or withholding and within thirty (30) days after the due date of
payment of any tax which it is required by Applicable Law to pay, the Borrower
shall deliver to the Bank any original vouchers or receipts, or certified
copies of such vouchers or receipts, evidencing payment of such withholding tax
and any other documents or information relating to such payments received by
the Borrower from governmental authorities in the country levying such
withholding taxes.


 


(iv)          Notwithstanding
the foregoing, (i) the Borrower shall not be required to gross up any Japanese
withholding Taxes imposed at a rate not exceeding 10% on each payment of
interest and the facility fee to the extent required to be withheld or deducted
under Applicable Law, provided that the Borrower has complied with all
of the requirements of the foregoing clauses of this Section 1.09(c), and (ii)
Borrower shall not be required to gross up or pay any amount with respect to
any interest and penalties to the extent any such interest and penalties arise
from the Bank’s failure to notify Borrower within a reasonable period of time
after receiving final notification from a taxing authority that Taxes are due.


 


(v)           If Borrower is required to pay additional amounts to or for the account
of Bank pursuant to this Section 1.09(c),  then the Bank will, at the request of
the Borrower, change the jurisdiction of its applicable lending office if such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not materially disadvantageous to, and will not
cause unreasonable hardship to, the Bank.


 


(d)           Authorization
to Charge Accounts.  The
Borrower hereby authorizes the Bank, if and to the extent any amount payable by
the Borrower under the Borrower Loan Documents is not otherwise paid when due,
to charge such amount against any or all of the accounts of the Borrower with
the Bank or any of its Affiliates (whether maintained at a branch or office
located within or without the United States), with the Borrower remaining
liable for any deficiency.


 


4
















 


(e)           Extension
of Payment Dates.  Whenever any
payment to the Bank under the Borrower Loan Documents would otherwise be due
(except by reason of acceleration) on a day that is not a Business Day, such
payment shall instead be due on the next succeeding Business Day, unless such
extension would cause payment to be due in the next succeeding calendar month,
in which case such due date shall be advanced to the next preceding Business
Day.  If the date any payment under the
Borrower Loan Documents is due is extended (whether by operation of any
Borrower Loan Document, Applicable Law or otherwise), such payment shall bear
interest for such extended time at the rate of interest applicable hereunder.


 


ARTICLE 2



CONDITIONS TO LOANS


 


Section
2.01           Conditions to
Initial Loan.  The obligation of the
Bank to make the initial Loan is subject to its receipt of each of the
following, and, in the case of the materials referred to in clauses (a), (b),
(c), (f), (g) and (j), certified in a manner satisfactory to the Bank:


 


(a)           Copies
of the Articles of Incorporation of the Borrower (or copies of the analogous
documents from the Borrower’s jurisdiction of organization) and minutes of the
meeting of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement, in form and substance satisfactory
to the Bank (See Schedule 2.01(a));


 


(b)           Incumbency
certificates and certified resolutions, articles of incorporation and bylaws
from the Secretary or Assistant Secretary of Guarantor, in form and substance
satisfactory to the Bank (See Schedule 2.01(b));


 


(c)           Certificate
from a Director of the Borrower and Certificate from an officer of the
Guarantor, in the form of Schedule 2.01(c);


 


(d)           an opinion of Fenwick and West LLP, counsel for the Borrower
and the Guarantor, in the form of Schedule 2.01(d);


 


(e)           an opinion of Anderson Mori, counsel to the Borrower, in the
form of Schedule 2.01(e);


 


(f)            Certificate
in the form of Schedule 2.01(f) from the appropriate officer of each
Loan Party;


 


(g)           Unqualified
good standing certificates from the Delaware and California Secretaries of
State certifying that Guarantor is in good standing and has paid all franchise
and other taxes;


 


(h)           the duly executed Note and the duly executed Guaranty and
each of the other Loan Documents, each of which shall have been duly entered
into and be in full force and effect;


 


5
















 


(i)            a
copy of the duly executed Second Amendment to the Parent Credit Agreement in
the form of Exhibit B attached hereto, which shall have been duly entered into
and be in full force and effect;


 


(j)            a
copy of the duly executed Third Amendment to the Parent Credit Agreement in the
form of Exhibit C attached hereto, which shall have been duly entered into and
be in full force and effect;


 


(k)           Fax
Transmission and Acceptance of Requests, Instructions, Documents and
Information, duly executed by the Borrower.


 


(l)            payment of  the
facility fee in accordance with Section 1.07.


 


Section
2.02           Conditions to Each
Loan.  The obligation of the Bank to
make each Loan, including the initial Loan, is subject to the determination of
the Bank, in its sole and absolute discretion, that each of the following
conditions has been fulfilled to the reasonable satisfaction of the Bank:


 


(a)           the Bank shall have received a notice of borrowing with respect
to such Loan complying with the requirements of Section 1.02;


 


(b)           each
Loan Document Representation and Warranty shall be true and correct at and as
of the time such Loan is to be made, both with and without giving effect to
such Loan and all other Loans to be made at such time and to the application of
the proceeds thereof;


 


(c)           no
Default shall have occurred and be continuing at the time such Loan is to be
made or would result from the making of such Loan and all other Loans to be
made at such time or from the application of the proceeds thereof;


 


(d)           the Bank shall have received such materials as it may have
requested pursuant to Section 5.01(c);


 


(e)           such Loan will not contravene any Applicable Law;


 


(f)            all
legal matters incident to such Loan and the other transactions contemplated by
the Loan Documents shall be reasonably satisfactory to the Bank and its legal
counsel, in each case acting in good faith; and


 


(g)           upon the making of such Loan, the aggregate unpaid principal
of all Loans will not exceed the Commitment.


 


(h)           the Guaranty Agreement is in full force and effect and the
Guarantor is in full compliance with all of the covenants thereunder.


 


(i)            the unpaid principal and interest of any Loan hereunder
maturing on or prior to the date of disbursement of such Loan has been paid in
full.


 


6
















 


Except to the extent that the Borrower
shall have disclosed in the notice of borrowing, or in a subsequent notice
given to the Bank prior to 5:00 p.m. (California time) on the Business Day
before the requested date for the making of the requested Loans, that a
condition specified in clause (b) or (c) above will not be fulfilled as of the
requested time for the making of such Loans, the Borrower shall be deemed to
have made a Representation and Warranty as of the time of the making of such
Loans that the conditions specified in such clauses have been fulfilled as of
such time.  No such disclosure by the
Borrower that a condition specified in clause (b) or (c) above will not be
fulfilled as of the requested time for the making of the requested Loans shall
affect the right of the Bank to not make the Loans requested to be made by it
if, in the Bank’s determination, such condition has not been fulfilled at such
time.


 


ARTICLE 3



CERTAIN REPRESENTATIONS AND WARRANTIES


 


In order to induce the Bank to enter into
this Agreement and to make each Loan, the Borrower represents and warrants as
of the date hereof and on each day of subsequent borrowing, as follows:


 


Section 3.01           Organization; Power; Qualification.  The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
incorporation, and has the corporate power and authority to own its properties
and to carry on its businesses as now being and hereafter proposed to be
conducted.  The principal place of
business of the Borrower is located at 1-3 Marunouchi 1-chome, Chiyoda-ku,
Tokyo,  Japan.


 


Section
3.02           Subsidiaries.  As of the Agreement Date, the Borrower has no
Subsidiary.  Any references to Borrower
in Articles 3, 4, 5 and 6 of this Agreement shall be read as references to the
Borrower and any Subsidiaries of the Borrower that may from time to time exist.


 


Section
3.03           Authorization;
Enforceability; Required Consents; Absence of Conflicts.  The Borrower has the power, and has taken all
necessary action (including, if a corporation, any necessary stockholder
action) on the part of the Borrower to authorize it, to execute, deliver and
perform in accordance with their respective terms the Borrower Loan Documents
and to borrow hereunder in the unused amount of the Commitment.  This Agreement has been, and each of the
other Borrower Loan Documents when delivered to the Bank will have been, duly
executed and delivered by the Borrower and is, or when so delivered will be, a
legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally or by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).  The execution, delivery and performance
in accordance with their respective terms by the Borrower of the Borrower Loan
Documents, and each borrowing hereunder, whether or not in the amount of the
unused Commitment, do not and (absent any change in any Applicable Law or
applicable Contract) will not (a) require any Governmental Approval or any
other consent or approval, including any consent or approval of any Subsidiary
or any consent or approval of the 


 


7
















 


stockholders of the Borrower, other than
Governmental Approvals and other consents and approvals that have been
obtained, are final and not subject to further review or appeal, are in full
force and effect and, in the case of any such required under any Applicable Law
or Contract as in effect on the Agreement Date, are listed on Schedule 3.03,
or (b) violate, conflict with, result in a breach of, constitute a default
under, or result in or require the creation of any Lien upon any assets of any
of the Loan Party under, (i) any Contract to which any Loan Party is a party or
by which the any Loan Party or any of their respective properties may be bound
or (ii) any Applicable Law binding upon any Loan Party or any of their
respective properties.


 


Section 3.04           Litigation.  Except as set forth on Schedule 3.04,
there are not, in any court or before any arbitrator of any kind or before or
by any governmental or non-governmental body, any actions, suits or proceedings
pending or threatened (nor, to the knowledge of the Borrower, is there any
basis therefor) against or in any other way relating to or affecting (a) any
Loan Party or any of such Loan Party’s businesses or properties or (b) any Loan
Document, except actions, suits or proceedings that, if adversely determined,
would not singly or in the aggregate, have a Materially Adverse Effect on (x)
any Loan Party or (y) any Loan Document.


 


Section
3.05           Burdensome
Provisions.  The Borrower is not a
party to or bound by any Contract or Applicable Law, compliance with which
would reasonably be expected to have a Materially Adverse Effect on (a) any
Loan Party or  (b)
any Loan Document.


 


Section
3.06           No Adverse Change or
Event.  Since December 31, 2002, no
change in the business, assets, Liabilities, financial condition, results of
operations or business prospects of the Borrower has occurred, and no other
event has occurred or failed to occur, in any case that has had, or would
reasonably be expected to have, either alone or in conjunction with all other
such changes, events and failures, a Materially Adverse Effect on (a) any Loan
Party or (b) any Loan Document.


 


ARTICLE 4



CERTAIN COVENANTS


 


From the Agreement Date and until the
Repayment Date,


 


A.            THE
BORROWER SHALL:


 


Section 4.01           Preservation of Existence and
Properties, Scope of Business, Compliance with Law, Payment of Taxes and
Claims, Preservation of Enforceability.


 


(a)           Preserve
and maintain its corporate existence and all of its other franchises, licenses,
rights and privileges necessary or desirable in the normal conduct of its
business, (b) preserve and protect all Intellectual Property, and preserve and
maintain in good repair, working order and condition all other properties,
required for the conduct of its business, (c) engage only in businesses in
substantially the same fields as the businesses conducted on the Agreement
Date, and in reasonably related fields, (d) comply with Applicable Law, (e) pay
or discharge when due all Taxes and all Liabilities that would reasonably be
expected to become a Lien on any of its properties, and (f) take all action and
obtain all consents and Governmental 


 


8
















 


Approvals
required so that its obligations under the Loan Documents will at all times be
legal, valid and binding and enforceable in accordance with their respective
terms, except that this Section 4.01 (other than clauses (a), in so far as it
requires any Loan Party to preserve its corporate existence, (c) and (f)) shall
not apply in any circumstance where noncompliance, together with all other
noncompliances with this Section 4.01, would not have a Materially Adverse
Effect on (x) any Loan Party or (y) any Loan Document.


 


Section 4.02           Insurance.  Maintain insurance with responsible insurance
companies against at least such risks and in at least such amounts as is
customarily maintained by similar businesses owning similar properties in
localities where the Borrower operates, or as may be required by Applicable
Law.


 


Section 4.03           Use of Proceeds.  Use the proceeds of the Loans only for
general working capital and for loans to the Guarantor or other direct or
indirect wholly-owned Subsidiaries of the Guarantor.  None of the proceeds of any of the Loans
shall be used to purchase or carry, or to reduce or retire or refinance any
credit incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System) or
to extend credit to others for the purpose of purchasing or carrying any margin
stock.  If requested by the Bank, the
Borrower shall complete and sign Part I of a copy of Federal Reserve Form U-1
referred to in Regulation U and deliver such copy to the Bank.


 


B.            THE
BORROWER SHALL NOT, DIRECTLY OR INDIRECTLY:


 


Section
4.04           Guaranties.  Be obligated, at any time, in respect of any
Guaranty, except that this Section 4.04 shall not apply to (a) Existing
Guaranties and (b) Permitted Guaranties.


 


Section
4.05           Liens.  Permit to exist, at any time, any Lien upon
any of its accounts receivables or its other properties or assets of any
character, whether now owned or hereafter acquired, or upon any income or
profits therefrom, except that this Section 4.05 shall not apply to Permitted
Liens, provided, however, that if, notwithstanding this Section
4.05, any Lien to which this Section is applicable shall be created or arise,
each relevant Loan Party shall automatically be deemed to have granted to the
Bank a Lien equally and ratably with the other Liabilities secured thereby; provided
further, however, that notwithstanding such equal and ratable
securing, the existence of such Lien shall constitute a default by the Borrower
in the performance or observance of this Section 4.05.  The Borrower shall deliver to the Bank from
time to time upon the Bank’s reasonable request, an updated extract from the land
or such other register, evidencing the absence of any recorded mortgage,
charge, pledge, security interest, lien or other encumbrance pertaining to the
Borrower’s accounts receivables or other properties or assets.


 


Section
4.06           Restricted Payments.  Make or declare or otherwise become obligated
to make any Restricted Payment, except that this Section 4.06 shall not apply
to any Restricted Payment to the Guarantor or any wholly owned Subsidiary of
the Guarantor if (a) at both the time of the declaration or other incurrence of
the obligation to make such Restricted Payment, if any, and the time of the
making thereof, and immediately after giving effect thereto, a Default would
not exist and (b) the amount thereof, together with the amounts of all
Restricted Payments that the Borrower and its Subsidiaries have made or
declared or otherwise become obligated to 


 


9
















 


make since the
beginning of the Fiscal Year, would not exceed the annual Net Profit of the
Borrower and its Subsidiaries.  This
Section 4.06 shall not prohibit the payment of a dividend that constitutes a
Restricted Payment if such Restricted Payment is made within 45 days of the
declaration thereof and if this Section 4.06 did not apply to such Restricted
Payment at the time of its declaration.


 


Section
4.07           Merger
or Consolidation; Sale of Assets. 
Merge into or consolidate with any other entity,  make any substantial change in the
nature of the Borrower’s business as conducted as of the date hereof, nor sell,
lease, transfer or otherwise dispose of all or a substantial portion of the
Borrower’s property or  assets (other
than sales or dispositions of inventory and obsolete equipment).


 


Section 4.08           Minimum Net Profit.  Permit Net Profit for any Fiscal Year
(beginning with the Fiscal Year ended December 31, 2003, to be less than $1.


 


Section 4.09           Minimum Quick Ratio.  Permit the Quick Ratio as of each Fiscal
Quarter End Date to be less than 0.5 to 1.0.


 


Section
4.10           Investments.  Directly or indirectly make, acquire, carry
or maintain any Investment or become or remain bound by any agreement to make,
acquire, carry or maintain any Investment, except:


 


(i)            existing Investments described in Schedule 4.10;


 


(ii)           Permitted
Cash Investments;


 


(iii)          other Investments so long as the unrecovered Investments
made by the Borrower shall not exceed $100,000 in the aggregate at any one time
outstanding;


 


(iv)          loans made by Borrower to Guarantor or to a direct or
indirect wholly-owned Subsidiary of Guarantor;


 


(v)           loans and advances to employees of Borrower not exceeding
$100,000 in the aggregate at any time outstanding; and


 


(vi)          Investments
consisting of accounts receivable from customers or amounts received in
settlement of delinquent obligations of and other disputes with customers and
suppliers, in each case arising in the ordinary course of business.


 


Section
4.11           Limitation on
Indebtedness.  Directly or
indirectly create, incur, assume, or suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness other
than:


 


(i)            Indebtedness
under the Loan Documents;


 


(ii)           existing Indebtedness described in Schedule 4.11; and


 


10
















 


(iii)          unsecured Indebtedness incurred in the ordinary course of
business, not exceeding $500,000 in the aggregate principal amount at any one
time outstanding.


 


Section 4.12           Capital Expenditures.  Expend or incur Capital Expenditures greater
than $2,000,000 in any Fiscal Year.


 


Section
4.13           Benefit Plans.  Have any pension plan other than those that
have been disclosed to and approved by the Bank prior to the Agreement Date.


 


Section
4.14           Transactions with
Affiliates.  Effect any transaction
with any Affiliate on a basis less favorable than would at the time be obtainable for a comparable transaction in arms-length
dealing with an unrelated third party except (i) transactions with the
Guarantor, and (ii) as set forth on Schedule 4.14.


 


Section 4.15           Issuance or Disposition of Capital
Securities.  Issue any of its
Capital Securities to any Person other than the Guarantor, or sell, transfer or
otherwise dispose of any Capital Securities of any Subsidiary, without the
prior written consent of the Bank.


 


ARTICLE 5



FINANCIAL STATEMENTS AND INFORMATION


 


Section
5.01           Financial Statements
and Information to Be Furnished. 
From the Agreement Date and until the Repayment Date, the Borrower shall
furnish to the Bank:


 


(a)           Quarterly
Financial  Statements; Director’s Certificate.  As soon as available and in any event within
45 days after the close of each of the first three Fiscal Quarters in each
Fiscal Year of the Borrower, commencing with the Fiscal Quarter ended September
30, 2003, balance sheets of the Borrower as at the end of such Fiscal Quarter
and the related statements of income and retained earnings of the Borrower for
such Fiscal Quarter and for the elapsed portion of the Fiscal Year ended with
the last day of such Fiscal Quarter, setting forth in each case in comparative
form the figures for the corresponding periods of the previous Fiscal Year, and
accompanied by a certificate with respect thereto of a Representative  Director of the Borrower in the form of Schedule
5.01(a).Year-End Financial Statements; Accountants’ and Director’s
Certificates.  As soon as available
and in any event within 90 days after the end of each Fiscal Year of the
Borrower, commencing with the Fiscal Year ending December 31, 2003:


 


(i)            balance
sheets of the Borrower as at the end of such Fiscal Year and the related
statements of income and retained earnings of the Borrower for such Fiscal
Year, setting forth in comparative form the figures as at the end of and for
the previous Fiscal Year;


 


(ii)           consolidating financial statements of the Guarantor, which
statements shall be audited if audited statements are available, as well as
copies of all tax returns filed by the Borrower, which returns shall be
provided no later than the earlier of


 


11
















 


(A) thirty (30) days
after the date on which any such tax returns are filed, or (B) April 30 of any
Fiscal Year;


 


(iii)          a certificate of a Director of the Borrower in the form of Schedule
5.01(b).


 


(c)           Requested Information.  From time to time and promptly upon
reasonable request of the Bank, such Information regarding the Borrower Loan
Documents, the Loans or the business, assets, Liabilities, financial condition,
results of operations or business prospects of any Loan Party as the Bank may
request, in each case in form and substance and certified in a manner
satisfactory to the Bank.


 


(d)           Notice of
Defaults, Material Adverse Changes and Other Matters.  Prompt notice of: (i) any Default, (ii) the
acquisition or formation of a new Subsidiary and, in the case of each such new
Subsidiary, its name, jurisdiction of incorporation, the percentages of the
various classes of its Capital Securities owned by the Borrower and whether or
not such new Subsidiary is a Consolidated Subsidiary, (iii) any change in the
name of any Subsidiary, its jurisdiction of incorporation, the percentages of
the various classes of its Capital Securities owned by the Borrower or its
status as a Consolidated or non-Consolidated Subsidiary, (iv) the threatening
or commencement of, or the occurrence or nonoccurrence of any change or event
relating to, any action, suit or proceeding that would cause the Representation
and Warranty contained in Section 3.04 to be incorrect if made at such time,
(v) the occurrence or nonoccurrence of any change or event that would cause the
Representation and Warranty contained in Section 3.06 to be incorrect if made
at such time, (vi) any amendment of the articles of incorporation of the
Borrower, and (vii) any transaction referred to in Section 4.07.


 


Section 5.02           Accuracy of Financial Statements
and Information.


 


(a)           Historical Financial Statements.  The Borrower hereby represents and warrants
that (i) Schedule 5.02(a) sets forth a complete and correct list of the
financial statements submitted by the Borrower to the Bank in order to induce
it to execute and deliver this Agreement, (ii) such financial statements are
complete and correct and present fairly, in accordance with Generally Accepted
Accounting Principles (subject, in the case of unaudited statements, to good
faith year-end audit adjustments and the absence of auditor’s footnotes), the
financial position of the Borrower as at their respective dates and the results
of operations, retained earnings and, as applicable, changes in financial
position of the Borrower for the respective periods to which such statements
relate, and (iii) except as disclosed or reflected in such financial
statements, as at December 31, 2002, the Borrower did not have any Liability,
contingent or otherwise, or any unrealized or anticipated loss, that, singly or
in the aggregate, has had or might have a Materially Adverse Effect on the
Borrower.


 


(b)           Future
Financial Statements.  The
financial statements delivered pursuant to Section 5.01(a) or (b) shall be
complete and correct and present fairly, in accordance with Generally Accepted
Accounting Principles (except for changes therein or departures therefrom that
are described in the certificate or report accompanying such statements and
that have been approved in writing by the Borrower’s then current independent
certified public accountants)(subject, in the case of
unaudited statements, to good faith year-end audit 


 


12
















 


adjustments and the absence of auditor’s
footnotes), the financial position of the Borrower as at that date and the
results of operations and retained earnings of the Borrower for the respective
periods to which such statements relate, and the furnishing of the same to the
Bank shall constitute a representation and warranty by the Borrower made on the
date the same are furnished to the Bank to that effect and to the further
effect that, except as disclosed or reflected in such financial statements, as
at the respective dates thereof, the Borrower did not have any Liability,
contingent or otherwise, or any unrealized or anticipated loss, that, singly or
in the aggregate, has had, or would reasonably be expected to have a Materially
Adverse Effect on the Borrower.


 


(c)           Historical
Information.  The Borrower hereby
represents and warrants that all Information furnished to the Bank by or on
behalf of the Borrower prior to the Agreement Date in connection with or
pursuant to the Loan Documents and the relationships established thereunder, at
the time the same was so furnished, but in the case of Information dated as of
a prior date, as of such date, (i) in the case of any Information prepared in
the ordinary course of business, was complete and correct in the light of the
purpose prepared, and, in the case of any Information the preparation of which
was requested by the Bank, was complete and correct in light of the circumstances
under which the Information was given to the extent necessary to give the Bank
true and accurate knowledge of the subject matter thereof, (ii) did not contain
any untrue statement of a material fact in light of the circumstances under
which the Information was given, and (iii) did not omit to state a material
fact necessary in order to make the statements contained therein not misleading
in the light of the circumstances under which they were made.


 


(d)           Future
Information.  All Information
furnished to the Bank by or on behalf of any Loan Party on or after the
Agreement Date in connection with or pursuant to the Loan Documents or in
connection with or pursuant to any amendment or modification of, or waiver of
rights under, the Loan Documents, shall, at the time the same is so furnished,
but in the case of Information dated as of a prior date, as of such date, (i)
in the case of any Information prepared in the ordinary course of business, be
complete and correct in the light of the purpose prepared, and, in the case of
any Information required by the terms of the Loan Documents or the preparation
of which is requested by the Bank, be complete and correct in light of the
circumstances under which the Information is delivered to the extent necessary
to give the Bank true and accurate knowledge of the subject matter thereof,
(ii) not contain any untrue statement of a material fact` in light of the
circumstances under which the Information is delivered, and (iii) not omit to
state a material fact necessary in order to make the statements contained
therein not misleading in the light of the circumstances under which they are
made, and the furnishing of the same to the Bank shall constitute a
representation and warranty by the Borrower made on the date the same are so
furnished to the effect specified in clauses (i), (ii). and
(iii).


 


Section
5.03           Additional Covenants
Relating to Disclosure.  From the
Agreement Date and until the Repayment Date, the Borrower shall:


 


(a)           Accounting Methods and Financial
Records.  Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or necessary to permit (i) the preparation of
financial statements required to be delivered pursuant to Section 5.01(a) and
(b) and (ii) the determination of the compliance of the Borrower with the terms
of the Loan Documents.


 


13
















 


(b)           Fiscal Year.  Maintain the same opening and closing dates
for each Fiscal Year as for the Fiscal Year reflected in the Base Financial
Statements or, if the opening and closing dates for the Fiscal Year reflected
in the Base Financial Statements were determined pursuant to a formula,
determine the opening and closing dates for each Fiscal Year pursuant to the
same formula.


 


(c)           Visits,
Inspections and Discussions.  Permit,
or, in the case of premises, property, books, records or Persons not within its
immediate control, promptly take such actions as are necessary or desirable in
order to permit, representatives (whether or not officers or employees) of the
Bank, from time to time, as often as may be reasonably requested during regular
business hours, to (i) visit any of its premises or property or any premises or
property of others on which any of its property or books and records (or books
and records of others relating to it) may be located, (ii) inspect, and verify
the amount, character and condition of, any of its property, (iii) review and
make extracts from its books and records and books and records of others
relating to it, including management letters prepared by its independent
certified public accountants, and (iv) discuss with any principal officers and
independent certified public accountants, its business, assets, Liabilities,
financial condition, and results of operation. The Borrower hereby authorizes
and directs all principal officers and independent certified public accountants
(i) to permit representatives of the Bank to make such visits, inspections,
reviews and extracts of premises, property, books and records of the Borrower
within their possession or control and (ii) to discuss such matters with such
representatives.


 


ARTICLE 6



DEFAULT


 


Section
6.01           Events of Default.  Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrower or
any other Loan Party, or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:


 


(a)           Any
payment of principal of or interest on any of the Loans or of any other amount
payable hereunder shall not be made when and as due (whether at maturity, by
reason of notice of prepayment or acceleration or otherwise) and in accordance
with the terms of this Agreement, which failure continues, in the case of
interest, for more than three (3) Business Days;


 


(b)           Any
Loan Document Representation and Warranty shall at any time prove to have been
incorrect or misleading in any material respect when made;


 


(c)           (i)            The
Borrower shall default in the performance or observance of


 


(A)          any
term, covenant, condition or agreement contained in Section 4.01(a) (insofar as
such Section requires the preservation of the corporate existence of the
Borrower), 4.01(f), 4.03 through 4.15, 5.01(d)(i), 5.03(b) or 5.03(c); or


 


14
















 


(B)           any
term, covenant, condition or agreement contained in this Agreement (other than
a term, covenant, condition or agreement a default in the performance or
observance of which is elsewhere in this Section specifically dealt with) and,
if capable of being remedied, such default shall continue unremedied for a
period of 30 days after notice shall have been given by the Bank to the
Borrower requiring that such default be cured; or


 


(ii)           Any
Loan Party shall default in the performance or observance of:


 


(A)          Section
4 of the Guaranty Agreement; or


 


(B)           any
term, covenant, condition or agreement contained in any Loan Document (other
than any term, covenant, condition or agreement a default in the performance or
observance of which is elsewhere in this Section specifically dealt with) and,
if capable of being remedied, such default shall continued unremedied for a
period of 30 days after notice shall have been given by the Bank to the
Borrower such Loan Party requiring that such default be cured;


 


(d)           An
“Event of Default” shall occur and be continuing under the Parent Credit
Agreement;


 


(e)           (i)            The Borrower or any other Loan Party
shall fail to pay, in accordance with its terms and when due and payable, any
of the principal of or interest on any Indebtedness (other than the Loans)
having a then outstanding principal amount in excess of $250,000 (or the
equivalent in other currencies), in the case of the Borrower, or $1,000,000 (or
the equivalent in other currencies), in the case of the Guarantor, (ii) the
maturity of any such Indebtedness shall, in whole or in part, have been
accelerated, or any such Indebtedness shall, in whole or in part, have been
required to be prepaid prior to the stated maturity thereof, in accordance with
the provisions of any Contract evidencing, providing for the creation of or
concerning such Indebtedness, or (iii) (A) any event shall have occurred and be
continuing that permits (or, with the passage of time or the giving of notice
or both, would permit) any holder or holders of such Indebtedness, any trustee
or agent acting on behalf of such holder or holders or any other Person so to
accelerate such maturity or require any such prepayment and (B) if the Contract
evidencing, providing for the creation of or concerning such Indebtedness
provides for a cure period for such event, such event shall not be cured prior
to the end of such cure period.


 


(f)            An
event or series of events shall occur which shall have a Materially Adverse
Effect on (i) the Borrower or any other Loan Party or (ii) any Loan Document;


 


(g)           (i)            The Borrower or any other Loan Party
shall (A) commence a voluntary case under the U.S. Federal or Japanese
bankruptcy laws (as now or hereafter in effect), (B) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debts,
(C) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (D) apply for, or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or the like of itself or of a
substantial 


 


15
















 


part of its assets, domestic or foreign, (E)
admit in writing its inability to pay, or generally not be paying, its debts
(other than those that are the subject of bona fide disputes) as they become
due, (F) make a general assignment for the benefit of creditors, or (G) take
any corporate action for the purpose of effecting any of the foregoing; or


 


(ii)           (A) A
case or other proceeding shall be commenced against the Borrower or any other
Loan Party seeking (1) relief under the U.S. Federal or Japanese bankruptcy
laws (as now or hereafter in effect) or under any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, or (2) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Borrower or any other Loan
Party, or of all or any substantial part of the assets, domestic or foreign, of
the Borrower or any other Loan, and such case or proceeding shall continue
undismissed or unstayed for a period of 60 days, or (B) an order granting
the relief requested in such case or proceeding the Borrower or any other Loan
Party (including an order for relief under such Federal bankruptcy laws) shall
be entered;


 


(h)           A
judgment or order shall be entered against the Borrower or any other Loan Party
by any court, and (i) in the case of a judgment or order for payment of money,
either (A) such judgment or order shall continue undischarged and unstayed for
a period of 60 days in which the aggregate amount of all such judgments and
order exceeds $250,000 (or equivalent in other currencies), in the case of the
Borrower, or $1,000,000 (or equivalent in other currencies), in the case of the
Guarantor, or (B) enforcement proceedings shall have been commenced upon such
judgment or order and (ii) in the case of any judgment or order for other than
the payment of money, such judgment or order wcould, in the reasonable judgment
of the Bank, together with all other such judgments or orders, have a Material
Adverse Effect on the Borrower or any other Loan Party;


 


(i)            Any
Loan Party or any Affiliate of any Loan Party asserts, or any Loan Party or any
Affiliate of any Loan Party or any other Person institutes any proceedings
seeking to establish, that any provision of the Loan Documents is invalid, not
binding or unenforceable.


 


Section
6.02           Remedies upon Event
of Default.  During the continuance
of any Event of Default (other than one specified in Section 6.01(g)) and in
every such event, the Bank may do either or both of the following: (a) declare,
in whole or, from time to time, in part, the principal of and interest on the
Loans and all other amounts owing under the Borrower Loan Documents to be, and
the Loans and all such other amounts shall thereupon and to that extent become,
due and payable and (b) terminate, in whole or, from time to time, in part, the
Commitment. Upon the occurrence of an Event of Default specified in Section
6.01(g), automatically and without any notice to the Borrower, (a) the
principal of and interest on the Loans and all other amounts owing under the
Borrower Loan Documents shall be due and payable and (b) the Commitment shall
terminate. Presentment, demand, protest or notice of any kind
(other than the notice provided for in the first sentence of this Section 6.02)
are hereby expressly waived.


 


16
















 


ARTICLE 7



ADDITIONAL CREDIT FACILITY PROVISIONS


 


Section 7.01           Mandatory Suspension of Loans.  The Bank’s obligations to make or continue
Loans shall be suspended if:


 


(a)           on
or prior to the determination of an interest rate for any Interest Period, the
Bank determines in good faith that for any reason appropriate quotations are
not available to it (including, in the case of the Yen COF Rate, quotations in
the interbank market selected by it for deposits with it) for purposes of
determining the Yen COF Rate for such Interest Period or that such Rate would
not accurately reflect the cost to the Bank of making or continuing a Loan for
such Interest Period;


 


(b)           at
any time the Bank determines in good faith that any Regulatory Change makes it
unlawful or impracticable for the Bank or the Lending Office to make or
continue any Loan or to comply with its obligations hereunder in respect
thereof; or


 


(c)           the
Bank determines in good faith that, by reason of any Regulatory Change, the
Bank or the Lending Office is restricted, directly or indirectly, in the amount
that it may hold of (i) a category of liabilities that includes deposits by
reference to which, or on the basis of which, the interest rate applicable to
Loans is directly or indirectly determined or (ii) the category of assets that
includes Loans.


 


The Bank shall promptly notify the Borrower
of any circumstance that would make the provisions of this Section 7.01
applicable, but the failure to give any such notice shall not affect the Bank’s
rights hereunder.


 


Section
7.02           Regulatory Changes.  If in the good faith determination of the
Bank (a) any Regulatory Change shall directly or indirectly (i) reduce the
amount of any sum received or receivable by the Bank with respect to any Loan
or the return to be earned by the Bank on any Loan, (ii) impose a cost on the
Bank or any Affiliate of the Bank that is attributable to the making or
maintaining of, or the Bank’s commitment to make, any Loan, (iii) require the
Bank or any Affiliate of the Bank to make any payment on or calculated by
reference to the gross amount of any amount received by the Bank under any Loan
Document or (iv) reduce, or have the effect of reducing, the rate of return on
any capital of the Bank or any Affiliate of the Bank that the Bank or such
Affiliate is required to maintain on account of any Loan or the Bank’s
commitment to make any Loan and (b) such reduction, increased cost or payment
shall not be fully compensated for by an adjustment in the applicable rates of
interest payable under the Loan Documents, then the Borrower shall pay to the
Bank such additional amounts as the Bank reasonably determines will, together
with any adjustment in the applicable rates of interest payable hereunder,
fully compensate for such reduction, increased cost or payment.  Such additional amounts shall be payable, in
the case of those applicable to prior periods, within 15 days after request by
such Bank for such payment and, in the case of those applicable to future
periods, on the dates specified, or determined in accordance with a method
specified, by the Bank.  The Bank will
promptly notify the Borrower of any determination made by it referred to


 


17
















 


in clauses (a) and
(b) above, but the failure to give such notice shall not affect the Bank’s
right to compensation.


 


Section
7.03           Capital Requirements.  If, in the determination of the Bank, the
Bank or any Affiliate of the Bank is required, under Applicable Law,
interpretations, directives, requests and guidelines (whether or not having the
force of law) to maintain capital on account of any Loan or the Bank’s
commitment to make any Loan, then, upon reasonable request by the Bank, the
Borrower shall from time to time thereafter pay to the Bank such additional
amounts as the Bank determines will fully compensate for any reduction in the
rate of return on the capital that the Bank or such Affiliate is so required to
maintain on account of such Loan or commitment suffered as a result of such
capital requirement. Such additional amounts shall be payable, in the case of
those applicable to prior periods, within 15 days after request by the Bank for
such payment and, in the case of those relating to future periods, on the dates
specified, or determined in accordance with a method specified, by the Bank.


 


Section
7.04           Funding Losses.  The Borrower shall pay to the Bank, upon
request, such amount or amounts as the Bank reasonably determines are necessary
to compensate it for any loss, cost or expense incurred by it as a result of
(a) any payment or prepayment of a Loan on a date other than the last day of an
Interest Period for such Loan or (b) a Loan not being made for any reason after
the Borrower has given a notice of borrowing, including for Borrower’s failure
to fulfill the conditions specified in this Agreement, or any payment of
principal thereof or interest thereon not being made, on the date therefor
determined in accordance with the applicable provisions of this Agreement.  At the election of the Bank, and without
limiting the generality of the foregoing, but without duplication, such
compensation on account of the Bank’s lost profits only may include an amount
not to exceed the product of 23.75 basis points (0.2375%) and any amounts to be
reemployed by the Bank during an Interest Period or its remaining portion.


 


Section
7.05           Determinations.  In making the determinations contemplated by
Sections 7.01, 7.02, 7.03, and 7.04, the Bank may make such reasonable
estimates, assumptions, allocations and the like that the Bank in good faith
determines to be appropriate, and the Bank’s selection thereof in accordance
with this Section 7.05, and the determinations made by the Bank on the basis
thereof, shall be final, binding and conclusive upon the Borrower, except, in
the case of such determinations, for manifest errors in computation or
transmission.  The Bank shall furnish to
the Borrower upon request a certificate outlining in reasonable detail the computation
of any amounts claimed by it under this Article 7 and the assumptions
underlying such computations.


 


Section 7.06           Change of Lending Office.  If an event occurs with respect to a Lending
Office that obligates the Borrower to pay any amount under Section 1.09(c),
makes operable the provisions of clause (b) or (c) of Section 7.01 or entitles
the Bank to make a claim under Section 7.02 or 7.03, the Bank shall, if
requested by the Borrower, use reasonable efforts to designate another Lending
Office or Offices the designation of which will reduce the amount the Borrower
is so obligated to pay, eliminate such operability or reduce the amount the
Bank is so entitled to claim, provided that such designation would not, in the
sole and absolute discretion of the Bank, be disadvantageous to the Bank in any
manner or contrary to Bank policy.  The
Bank may at any time and from time to time change any Lending Office and shall
give notice of any such change 


 


18
















 


to the Borrower.  Except in the case of a change in Lending
Offices made at the request of the Borrower, the designation of a new Lending
Office by the Bank shall not obligate the Borrower to pay any amount to the
Bank under Section 1.09(c), make operable the provisions of clause (b) or (c)
of Section 7.01 or entitle the Bank to make a claim under Section 7.02 or 7.03
if such obligation, the operability of such clause or such claim results solely
from such designation and not from a subsequent Regulatory Change.


 


ARTICLE 8



MISCELLANEOUS


 


Section
8.01           Notices and Deliveries.


 


(a)           Manner
of Delivery.  All notices,
communications and materials (including all Information) to be given or
delivered pursuant to the Borrower Loan Documents shall, except in those cases
where giving notice by telephone is expressly permitted, be given or delivered
in writing (which shall include telecopy transmissions). Notices under Sections
1.02, 1.07 and 6.02 may be by telephone, promptly, in the case of each notice
other than one under Section 6.02, confirmed in writing. In the event of a
discrepancy between any telephonic notice and any written confirmation thereof,
such written confirmation shall be deemed the effective notice except to the
extent that the Bank has acted in reliance on such telephonic notice.


 


(b)           Addresses.  All notices, communications and materials to
be given or delivered pursuant to the Borrower Loan Documents shall be given or
delivered at the following respective addresses and telecopier
and telephone numbers and to the attention of the following individuals or
departments:


 


(A)          if to the
Borrower, to it at:


 


Ocular Sciences K.K.


Hiroo-SK
Bldg.


2-36-13
Ebisu, Shibuya-ku


Tokyo
150-0013


Japan


 


 


Telecopier No.: 81-03-5449-6512


Telephone No.: 81-03-5449-6511


 


 


Attention:  President / Chief Executive Officer


 


19
















 


(B)           if to the
Guarantor, to it at:


 


Ocular
Sciences, Inc.


1855 Gateway
Drive, Suite 700


Concord, CA
94520-3200


 


 


Telecopier No.: 925-969-7118


Telephone No.: 925-969-7000


 


 


Attention:
Steven M. Neil


 


(C)           if to the
Bank, to it at:


 


Wells
Fargo HSBC Trade Bank N.A.


One
Front Street, 21st Floor


San Francisco, CA 94109 U.S.A.


 


 


Telecopier No.: 415-974-3695


Telephone No.: 415-396-1011 and 415-396-8150


 


 


Attention:  Juan J. Sanchez and Lynette Chee


 


 


or at such other address or telecopier or
telephone number or to the attention of such other individual or department as
the party to which such information pertains may hereafter specify for the
purpose in a notice to the other specifically captioned “Notice of Change of
Address”.


 


(c)           Effectiveness.  Each notice and communication and any
material to be given or delivered pursuant to the Borrower Loan Documents shall
be deemed so given or delivered (A) if sent by registered or certified mail,
postage prepaid, return receipt requested, on the third Business Day after such
notice, communication or material, addressed as above provided, is delivered to
a United States post office and a receipt therefor is issued thereby, (B) if
sent by any other means of physical delivery, when such notice, communication
or material is delivered to the appropriate address as above provided, (C) if
sent by telecopier, when such notice, communication or material is transmitted
to the appropriate telecopier number as above provided and is received at such
number and (D) if given by telephone, when communicated to the individual or
any member of the department specified as the individual or department to whose
attention notices, communications and materials are to be given or delivered, or,
in the case of notice by the Bank to the Borrower under Section 6.02 given by
telephone as above provided, if any individual or any member of the department
to whose attention notices, communications and materials are to be given or
delivered is unavailable at the time, to any other officer or employee of the
Borrower, except that (x) notices of a change of address, telecopier or
telephone number or individual or department to whose attention notices,
communications and materials are to be given or delivered shall not be deemed
given until received and (y) notices, communications and materials to be given
or delivered to the Bank pursuant to Sections 1.02, 1.07 and Article 5 shall
not be deemed given or delivered until received by the officer of the Bank responsible,
at the time, for the administration of the Loan Documents.


 


20
















 


(d)           Reasonable
Notice.  Any requirement under
Applicable Law of reasonable notice by the Bank to the Borrower of any event in
connection with, or in any way related to, the Loan Documents or the exercise
by the Bank of any of its rights thereunder shall be met if notice of such
event is given to the Borrower in the manner prescribed above at least 10 days
before (A) the date of such event or (B) the date after which such event will
occur.


 


Section 8.02           Expenses; Indemnification.  Whether or not any Loans are made hereunder,
the Borrower shall:


 


(a)           pay
or reimburse the Bank for all transfer, documentary, stamp and similar taxes,
and all recording and filing fees and taxes, payable in connection with,
arising out of, or in any way related to, the execution, delivery, performance
or enforcement of the Loan Documents or the making of the Loans;


 


(b)           pay
or reimburse the Bank for all costs and expenses (including reasonable fees and
disbursements of legal counsel, appraisers, accountants and other experts
employed or retained by the Bank) incurred by the Bank in connection with,
arising out of, or in any way related to (i) the negotiation, preparation,
execution and delivery of the Loan Documents and any waiver, amendment or
consent thereunder or thereto, whether or not executed, (ii) the administration
of and any operations under the Loan Documents, (iii) consulting with respect
to any matter in any way arising out of, related to, or connected with, the
Loan Documents, including (A) the 
protection, preservation, exercise or enforcement of any of its rights
under or related to the Loan Documents or (B) the performance of any of its
obligations under or related to the Loan Documents, or (iv) protecting,
preserving, exercising or enforcing any of its rights under or related to the
Loan Documents; and


 


(c)           indemnify
and hold each Indemnified Person harmless from and against all losses
(including judgments, penalties and fines) suffered, and pay or reimburse each
Indemnified Person for all costs and expenses (including fees and disbursements
of legal counsel and other experts employed or retained by such Indemnified
Person) incurred, by such Indemnified Person in connection with, arising out
of, or in any way related to (i) any Loan Document Related Claim (whether
asserted by such Indemnified Person or the Borrower or any other Person),
including the prosecution or defense thereof and any litigation or proceeding
with respect thereto (whether or not, in the case of any such litigation or
proceeding, such Indemnified Person is a party thereto), or (ii) any
investigation, governmental or otherwise, arising out of, related to, or in any
way connected with, the Loan Documents or the relationships established
thereunder, except that the foregoing indemnity shall not be applicable to any
loss suffered by any Indemnified Person to the extent such loss is determined
by a judgment of a court that is binding on the Borrower and such Indemnified
Person, final and not subject to review on appeal, to be the result of acts or
omissions on the part of such Indemnified Person constituting (x) willful
misconduct or gross negligence, (y) knowing violations of law or (z) in the
case of claims by the Borrower against such Indemnified Person, such
Indemnified Person’s failure to observe any other standard applicable to it
under any of the other provisions of the Loan Documents or, but only to the
extent not waivable thereunder, Applicable Law.


 


21
















 


Section 8.03           Amounts Payable Due upon Request
for Payment.  All amounts
payable by the Borrower under Section 8.02 and under the other provisions of
the Borrower Loan Documents shall, except as otherwise expressly provided, be
due reasonably promptly upon request for the payment thereof (together with
such supporting documentation as may be reasonably requested by Borrower).


 


Section
8.04           Remedies of the
Essence.  The various rights and
remedies of the Bank under the Borrower Loan Documents are of the essence of
those agreements, and the Bank shall be entitled to obtain a decree requiring
specific performance of each such right and remedy.


 


Section
8.05           Rights Cumulative.  Each of the rights and remedies of the Bank
under the Loan Documents shall be in addition to all of its other rights and
remedies under the Loan Documents and Applicable Law, and nothing in the Loan
Documents shall be construed as limiting any such rights or remedies.


 


Section 8.06           Confidentiality.  The
Bank agrees to take and to cause its Affiliates to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
non-public information provided to it by the Borrower, the Guarantor or any
Subsidiary, under this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information other than in connection
with the administration or enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Borrower, the Guarantor or any Subsidiary; except to the
extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Borrower or
the Guarantor, provided that such source is not bound by a confidentiality
agreement with the Borrower or the Guarantor; provided, however, that any
Lender may disclose such information (A) pursuant to any requirement of any
governmental authority to which the Bank is subject or in connection with an
examination of the Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of Applicable Law; (D) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document; (E) to the Bank’s independent auditors, legal counsel and other
professional advisors; and (F) to any participant or Assignee, actual or
potential, or any actual or proposed contractual counterparty (or its advisors)
to any securitization, hedge, or other derivative transaction relating to the
parties’ obligations hereunder, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Banks
hereunder; and provided, further, however, that the parties hereto (and each
employee, representative or other agent thereof) may disclose to any and all
persons, without limitation of any kind, the “structure” and “tax aspects” (in
each case, within the meaning of Treasury Regulation section 1.6011-4T) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to such Person
relating to such structure and tax aspects, except that, with respect to any
document or similar item that in either case contains information concerning such
tax structure or tax aspects of the transactions contemplated hereby as well as
other information, this proviso shall only apply to such portions of the
document or similar item that relate to such 
tax structure or tax aspects of the transactions contemplated hereby.


 


22
















 


Section 8.07           Amendments; Waivers.  Any term, covenant, agreement or condition of
the Borrower Loan Documents may be amended, and any right under the Borrower
Loan Documents may be waived, if, but only if, such amendment or waiver is in
writing and is signed by the Bank and, in the case of an amendment, by the
Borrower.  Unless otherwise specified in
such waiver, a waiver of any right under the Borrower Loan Documents shall be
effective only in the specific instance and for the specific purpose for which
given.  No election not to exercise,
failure to exercise or delay in exercising any right, nor any course of dealing
or performance, shall operate as a waiver of any right of the Bank under the
Borrower Loan Documents or Applicable Law, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or
the exercise of any other right of the Bank under the Borrower Loan Documents
or Applicable Law.


 


Section
8.08           Set-Off; Suspension
of Payment and Performance.  The Bank
is hereby authorized by the Borrower, at any time and from time to time,
without notice, (a) during any Event of Default, to set off against, and to
appropriate and apply to the payment of, the Liabilities of the Borrower under
the Borrower Loan Documents (whether matured or unmatured, fixed or contingent
or liquidated or unliquidated) any and all Liabilities owing by the Bank or any
of its Affiliates to the Borrower (whether payable in Yen or any other
currency, whether matured or unmatured and, in the case of Liabilities that are
deposits, whether general or special, time or demand and however evidenced and
whether maintained at a branch or office located within or without the United
States) and (b) during any Event of Default, to suspend the payment and
performance of such Liabilities owing by the Bank or its Affiliates and, in the
case of Liabilities that are deposits, to return as unpaid for insufficient
funds any and all checks and other items drawn against such deposits.


 


Section 8.09           Assignments and Participations.


 


(a)           Assignments.


 


(i)            The
Borrower may not assign any of its rights or obligations under the Borrower
Loan Documents without the prior written consent of the Bank, and no assignment
of any such obligation shall release the Borrower therefrom unless the Bank
shall have consented to such release in a writing specifically referring to the
obligation from which the Borrower is to be released.


 


(ii)           The
Bank may from time to time with the consent of the Borrower, which consent
shall not be unreasonably withheld, assign any or all of its rights and
obligations under the Borrower Loan Documents to one or more Persons; provided,
however, that the consent of the Borrower shall not be required with respect to
any assignment effected with respect to any affiliate of the Bank, Wells Fargo,
N.A., or HSBC Holdings plc.  Any
assignment by the Bank of any or all of its obligations under the Borrower Loan
Documents shall release the Bank therefrom. 
In connection therewith, the Bank may disclose any information relating
to the Loan Documents, Borrower or its business, or the Guarantor or its
business; provided that the Person to whom such information is disclosed shall
have agreed to maintain the confidentiality thereof to the extent required by
Section 8.06.


 


23
















 


(b)           Participations.  The Bank may from time to time sell or
otherwise grant participations in any or all of its rights and obligations
under the Borrower Loan Documents without the consent of the Borrower.


 


(c)           Rights
of Assignees and Participants. 
Each assignee of, and each holder of a participation in, the rights of
the Bank under the Borrower Loan Documents, if and to the extent the applicable
assignment or participation agreement so provides, (i) shall, with respect to
its assignment or participation, be entitled to all of the rights of the Bank
(as fully, in the case of a holder of a participation, as though it were the
Bank) and (ii) may exercise any and all rights of set-off or banker’s lien with
respect thereto (as fully, in the case of a holder of a participation, as
though the Borrower were directly indebted to such holder for amounts payable
under the Borrower Loan Documents to which such holder is entitled under the
applicable participation agreement); provided, however, that no assignee or
holder of a participation shall be entitled to any amounts that would otherwise
be payable to it with respect to its assignment or participation under Section
1.09(b) or (c) or Section 7.02 unless such amounts would have been payable to
the Bank that made such assignment or granted such participation if such
assignment had not been made or such participation had not been granted.


 


Section
8.10           Governing Law.  This Agreement and the Note shall be
construed in accordance with and governed by the law of the State of California
(without giving effect to its choice of law principles).


 


Section 8.11           Judicial Proceedings; Waiver of
Jury Trial.  Any judicial
proceeding brought against the Borrower with respect to any Loan Document
Related Claim may be brought in any court of competent jurisdiction in the
State of California or in Japan as selected by the Bank, and, by execution and
delivery of this Agreement, the Borrower (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with any Loan Document Related Claim and (b) irrevocably
waives any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum.  The Borrower hereby waives personal
service of process and consents that service of process upon it may be made by
certified or registered mail, return receipt requested, at its address
specified or determined in accordance with the provisions of Section 8.01, and
service so made shall be deemed completed on the third Business Day after such
service is deposited in the mail. Nothing herein shall affect the right of the
Bank or any other Indemnified Person to serve process in any other manner
permitted by law or shall limit the right of the Bank or any other Indemnified
Person to bring proceedings against the Borrower in the courts of any other
jurisdiction. Any judicial proceeding by the Borrower against the Bank
involving any Loan Document Related Claim shall be brought only in a court
located in the State of California. THE BORROWER AND THE BANK HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES
INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.


 


Section
8.12           LIMITATION OF
LIABILITY.  NEITHER THE BANK NOR ANY
OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE
BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE 


 


24
















 


FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH ANY LOAN DOCUMENT RELATED
CLAIM.


 


Section 8.13           Severability of Provisions.  Any provision of the Borrower Loan Documents
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions thereof or affecting the validity
or enforceability of such provision in any other jurisdiction. To the extent
permitted by Applicable Law, the Borrower hereby waives any provision of
Applicable Law that renders any provision of the Borrower Loan Documents
prohibited or unenforceable in any respect.


 


Section
8.14           Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.


 


Section 8.15           Survival of Obligations.  Except as otherwise
expressly provided therein, the rights and obligations of the Borrower, the
Bank and the other Indemnified Persons under the Borrower Loan Documents shall
survive the Repayment Date.


 


Section 8.16           Entire Agreement.  This Agreement and the Note embody the entire
agreement between the Borrower and the Bank relating to the subject matter
hereof and supersede all prior agreements, representations and understandings,
if any, relating to the subject matter hereof.


 


Section
8.17           Successors and
Assigns.  All of the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.


 


Section 8.18           Currency of Payment.  The obligation of the Borrower to pay in Yen
(or  such other currency as may be
specified herein) under this Agreement or the Loan Documents shall not be
deemed to have been novated, discharged or satisfied by any tender of (or
recovery under judgement expressed in) any currency other than Yen (or other
than such specified currency), except to the extend to which such tender (or
recovery) shall result in the effective payment of such aggregate amount in Yen
(or such other currency) at the place where such payment is to be made and,
accordingly, the amount (if any) by which any such tender (or recovery) shall
fall short of such amount shall be and remain due to the Bank as a separate
obligation, unaffected by judgement having been obtained (if such is the case)
for any other amounts due or in respect of this Agreement of the Loan
Documents.  For the avoidance of doubt,
it is understood that the exchange rate used for this purpose may be less
favorable to the Borrower than the definition of the Applicable Currency
Exchange Rate.


 


Section 8.19           Process Agent.  The Borrower irrevocably designates,
appoints, and empowers the Guarantor to receive for it and on its behalf,
service of process issued out of a court of competent jurisdiction in the State
of California in any proceedings arising out of or in connection with Loan
Document Related Claim.  If at any time
such process agent shall cease for any reason to act as such, the Borrower
shall irrevocably appoint and designate without delay another reputable person
to act as such agent and shall promptly deliver to the Bank evidence in 


 


25
















 


writing of such other
agent’s acceptance of such appointment and designation.  Failing any such appointment and designation
within seven (7) days after written demand therefor by the Bank, the Bank shall
be entitled at the cost of the Borrower irrevocably to appoint and designate
another such agent on behalf of the Borrower, and the Borrower hereby appoints
the Bank its duly authorized attorney for this purpose.  The Borrower agrees that service on any such
person in the State of California shall be deemed due service for the purpose
of the Proceedings in courts therein without prejudice to any other mode of
service and agrees that the failure of the person authorized in the State of
California to give any notice of any such service to it shall not impair or
affect the validity of such service or of any judgment rendered in any
proceeding based thereon.


 


ARTICLE 9



INTERPRETATION


 


Section
9.01           Definitional
Provisions.


 


(a)           Defined Terms.  For the purposes of this Agreement:


 


“Adjusted Euroyen Rate” means, for
any Interest Period, a rate per annum (rounded upward, if necessary, to the
next higher 1/16 of 1%) equal to the rate obtained by dividing (i) the Yen COF
Rate for such Interest Period by (ii) a percentage equal to 1 minus the Reserve
Requirement in effect from time to time during such Interest Period.


 


“Affiliate” means, with respect to
a Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person; unless otherwise specified, “Affiliate” means an Affiliate
of the Borrower.


 


“Agreement” means this Agreement,
including all schedules, annexes and exhibits hereto.


 


“Agreement Date” means the date set
forth as such on the last signature page hereof.


 


“Applicable Currency Exchange Rate”
means, as of any date of determination and as the context may require, the
telegraphic transfer mean rate of exchange (net of all fees and commissions)
then applicable to: (a) the conversion of Dollars to Yen or (b) the conversion
of Yen to Dollars, as the context may require. 
The applicable rate of exchange shall be the spot mid rate or the TTM
rate at 10:00 a.m. in Tokyo indicated on Reuter’s page TKFF on the relevant
date (or, if no such quotations shall be available on such date, on the date
closest to such date).  For the avoidance
of doubt, this rate will apply only for the notional currency conversions
expressly provided for herein.


 


“Applicable Law” means, anything in
Section 8.10 to the contrary notwithstanding, (i) all applicable common law and
principles of equity and (ii) all applicable provisions of all (A) constitutions,
statutes, rules, regulations and orders of governmental bodies, (B)
Governmental 


 


26
















 


Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or admiralty)
and arbitrators.


 


“Bank” means (i) Wells Fargo HSBC
Trade Bank N.A. and (ii) any Person that has been assigned any or all of the
rights or obligations of the Bank pursuant to Section 8.09(a).


 


“Bank’s Office” means the address
of the Bank specified in or determined in accordance with the provisions of
Section 8.01(a)(ii).


 


“Base Financial Statements” means
the most recent, audited balance sheet of the Borrower referred to in Schedule
5.02(a) and the related statements of income and retained earnings and for the
Fiscal Year ended with the date of such balance sheet.


 


“Borrower” means Ocular Sciences
K.K., a Japanese corporation.


 


“Borrower Loan Documents” means the
Loan Documents to which the Borrower is a party.


 


“Business Day” means any day other
than a Saturday, Sunday or other day on which banking institutions are
authorized or required by law or regulation to be closed in: (a) London,
England for the purposes of determining Yen COF Rate, and (b) New York, San
Francisco or Tokyo for all other purposes.


 


“Capital Expenditures” means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as a liability (but without
duplication) during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of Borrower and its Consolidated
Subsidiaries) made or incurred during such period which, in accordance with
Generally Accepted Accounting Principles, are required to be included in or
reflected by the fixed asset accounts of the Borrower and its Consolidated
Subsidiaries in any of their balance sheets (including (i) the value of
acquisitions of any interest in any business or Person, whether by sale, lease
or otherwise and (ii) expenditures for equipment purchased within one hundred
eighty (180) days of the trade-in or sale of existing equipment owned by the
Borrower but only to the extent that the gross amount of such purchase price
exceeds the book value of the equipment being traded in or sold, but excluding
expenditures made in connection with the replacement or restoration of assets
to the extent reimbursed or financed from insurance proceeds or condemnation
awards).


 


“Capital Lease” means, with respect to any Person, any lease
of any property by that Person as lessee which, in accordance with Generally
Accepted Accounting Principles, is required to be accounted for as a capital
lease on the balance sheet of that Person.


 


“Capital Security” means, with
respect to any Person, (i) any share of capital stock of such Person or (ii)
any security convertible into, or any option, warrant or other right to
acquire, any share of capital stock of such Person.


 


“Certificate” means, an Officer’s
or Director’s certificate substantially in the form of Schedule 2.01 (c).


 


27
















 


“Commitment” means (i) an amount of
Yen the Dollar Equivalent of which as of five Business Days prior to making
each Loan hereunder is $15,000,000, or (ii) as the context may require, the
obligation of the Bank to make Loans in an aggregate unpaid principal amount
not exceeding such amount.


 


“Consolidated Subsidiary”  means, with respect to any Person at any
time, any Subsidiary or other Person the accounts of which would be
consolidated with those of such first Person in its consolidated financial
statements as of such time; unless otherwise specified, “Consolidated
Subsidiary” means a Consolidated Subsidiary of the Borrower, if any should
exist from time to time.


 


“Contract” means (i) any agreement
(whether bi-lateral or uni-lateral or executory or non-executory and whether a
Person entitled to rights thereunder is so entitled directly or as a
third-party beneficiary), including an indenture, lease or license, (ii) any
deed or other instrument of conveyance, (iii) any certificate of incorporation
or charter and (iv) any bylaw.


 


“Default” means any condition or
event that constitutes an Event of Default or that with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.


 


“Dollars” and the sign “$”
mean lawful money of the United States of America.


 


“Dollar Equivalent” means the
amount in Dollars obtainable by converting the amount of Yen involved in such
computation into Dollars at the Applicable Currency Exchange Rate at
approximately 10:00 a.m. (Tokyo time) on the date of determination thereof.


 


“Event of Default” means any of the
events specified in Section 6.01.


 


“Existing Guaranty” means (i) any
Guaranty outstanding on the Agreement Date, to the extent set forth on Schedule
4.04, and (ii) any Guaranty that constitutes a renewal, extension ,or
replacement of an Existing Guaranty, but only if (A) at the time such Guaranty
is entered into and immediately after giving effect thereto, no Default would
exist, (B) such Guaranty is binding only on the obligor or obligors under the
Guaranty so renewed, extended or replaced, (C) the principal amount of the
obligations Guaranteed by such Guaranty does not exceed the principal amount of
the obligations Guaranteed by the Guaranty so renewed, extended, or replaced
and (D) the obligations Guaranteed by such Guaranty bear interest at a rate per
annum not exceeding the rate borne by the obligations Guaranteed by the
Guaranty so renewed, extended or replaced except for any increase that is
commercially reasonable at the time of such increase.


 


“Fiscal Quarter” means a fiscal quarter of the Borrower.


 


“Fiscal Quarter End Date” means
the last day of a Fiscal Quarter.


 


“Fiscal Year”  means a fiscal year of the Borrower.


 


“Generally Accepted Accounting
Principles” means generally accepted accounting principles in the United
States of America from time to time, applied in a manner consistent with the
accounting principles followed in Japan in the preparation of the Base
Financial Statements.


 


28
















 


“Governmental Approval” means any
authorization, consent, approval, license or exemption of, registration or
filing with, or report or notice to, any governmental unit.


 


“Guarantor” means Ocular Sciences,
Inc., a Delaware corporation.


 


“Guaranty” of any Person means any
obligation, contingent or otherwise, of such Person (i) to pay any Liability of
any other Person or to otherwise protect, or having the practical effect of
protecting, the holder of any such Liability against loss (whether such
obligation arises by virtue of such Person being a partner of a partnership or
participant in a joint venture or by agreement to pay, to keep well, to
purchase assets, goods, securities or services or to take or pay, or otherwise)
or (ii) incurred in connection with the issuance by a third Person of a
Guaranty of any Liability of any other Person (whether such obligation arises
by agreement to reimburse or indemnify such third Person or otherwise).  The word “Guarantee” when used as a verb has
the correlative meaning.


 


“Guaranty Agreement” means the
Parent Guaranty, dated as of even date herewith, between the Guarantor and  the Bank.


 


“Indebtedness” of any Person means
(in each case, whether such obligation is with full or limited recourse) (i)
any obligation of such Person for borrowed money, (ii) any obligation of such
Person evidenced by a bond, debenture, note or other similar instrument, (iii)
any obligation of such Person to pay the deferred purchase price of property or
services, except a trade account payable that arises in the ordinary course of
business, (iv) any obligation of such Person as lessee under a Capital Lease,
(v) any Mandatorily Redeemable Stock of such Person owned by any Person other
than such Person or an Indebtedness-Free Subsidiary of such Person (the amount
of such Mandatorily Redeemable Stock to be determined for this purpose as the
higher of the liquidation preference of and the amount payable upon redemption
of such Mandatorily Redeemable Stock), (vi) any obligation of such Person to
purchase securities or other property that arises out of or in connection with
the sale of the same or substantially similar securities or property, (vii) any
non-contingent obligation of such Person to reimburse any other Person in respect
of amounts paid under a letter of credit or other Guaranty issued by such other
Person to the extent that such reimbursement obligation remains outstanding
after it becomes non-contingent, (viii) any obligation with respect to an
interest rate or currency swap or similar obligation obligating such Person to
make payments, whether periodically or upon the happening of a contingency,
except that if any agreement relating to such obligation provides for the
netting of amounts payable by and to such Person thereunder or if any such
agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount thereof, (ix) any Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien on any asset of such Person and (x) any Indebtedness of
others Guaranteed by such Person.


 


“Indemnified Person” means any
Person that is, or at any time was, the Bank, an Affiliate of the Bank or a
director, officer, employee or agent of any such Person.


 


“Information” means data,
certificates, reports, statements (including financial statements), opinions of counsel, documents and other information.


 


29
















 


“Intellectual Property” means (i)
(A) patents and patent rights, (B) trademarks, trademark rights, trade names,
trade name rights, corporate names, business names, trade styles, service
marks, logos and general intangibles of like nature and (C) copyrights, in each
case whether registered, unregistered or under pending registration and, in the
case of any such that are registered or under pending registration, whether
registered or under pending registration under the laws of the United States or
any other country, (ii) reissues, continuations, continuations-in-part and
extensions of any Intellectual Property referred to in clause (i), and (iii)
rights relating to any Intellectual Property referred to in clause (i) or (ii),
including rights under applications (whether pending under the laws of the
United States or any other country) or licenses relating thereto.


 


“Interest Period” means, with
respect to each Loan, the period commencing on the date of the making of such
Loan and ending on the Maturity Date for such Loan.


 


“Investment” means (i) the acquisition of any interest in any business or Person,
whether by sale, lease or otherwise, (ii) the funding of any loan, extension of
credit, guarantee, advance, accommodation or capital contribution to or for the
benefit of any Person, and (iii) the acquisition of any debt or equity
securities of or claim against or interest in any Person, whether upon original
issuance, by purchase or otherwise or any other items that are or would be
classified as investments on a balance sheet prepared in accordance with
Generally Accepted Accounting Principles.


 


“Lending Office” means the San
Francisco office or such other branch or office of the Bank designated by the
Bank from time to time as the branch or office at which Loans are to be made or
maintained.


 


“Liability” of any Person means (in
each case, whether with full or limited recourse) any indebtedness, liability,
obligation, covenant or duty of or binding upon, or any term or condition to be
observed by or binding upon, such Person or any of its assets, of any kind,
nature or description, direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, whether arising under
Contract, Applicable Law, or otherwise, whether now existing or hereafter
arising, and whether for the payment of money or the performance or
non-performance of any act.


 


“Lien” means, with respect to any
property or asset (or any income or profits therefrom) of any Person (in each
case whether the same is consensual or nonconsensual or arises by Contract,
operation of law, legal process or otherwise) (i) any mortgage, lien, pledge,
attachment, levy or other security interest of any kind thereupon or in respect
thereof or (ii) any other arrangement, express or implied, under which the same
is subordinated, transferred, sequestered or otherwise identified so as to
subject the same to, or make the same available for, the payment or performance
of any Liability in priority to the payment of the ordinary, unsecured
creditors of such Person. For the purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any asset that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.


 


“Loan” means any amount advanced by
the Bank pursuant to Section 1.01.


 


30
















 


“Loan Document Related Claim” means
any claim (whether civil, criminal or administrative and whether sounding in
tort, contract or otherwise) in any way arising out of, related to, or
connected with, the Loan Documents or the relationships established thereunder,
whether such claim arises or is asserted before or after the Agreement Date or
before or after the Repayment Date.


 


“Loan Document Representation and
Warranty” means any “Representation and Warranty” as defined in any Loan
Document and any other representation or warranty made or deemed made under any
Loan Document.


 


“Loan Documents” means (i) this
Agreement, the Note and the Guaranty Agreement, and (ii) all other agreements,
documents and instruments relating to, arising out of, or in any way connected
with (A) any agreement, document or instrument referred to in clause (i), (B)
any other agreement, document or instrument referred to in this clause (ii) or
(C) any of the transactions contemplated by any agreement, document or
instrument referred to in clause (i) or in this clause (ii).


 


“Loan Party” means any Person
(other than the Bank) that is a party to a Loan Document.


 


“Mandatorily Redeemable Stock”
means, with respect to any Person, any share of such Person’s capital stock to
the extent that it is (i) redeemable, payable or required to be purchased or
otherwise retired or extinguished, or convertible into any Indebtedness or
other Liability of such Person, (A) at a fixed or determinable date, whether by
operation of a sinking fund or otherwise, (B) at the option of any Person other
than such Person or (C) upon the occurrence of a condition not solely within
the control of such Person, such as a redemption required to be made out of
future earnings or (ii) convertible into Mandatorily Redeemable Stock.


 


“Materially Adverse Effect” means,
(i) with respect to any Loan Party, a material adverse effect on the business,
assets, Liability, financial condition, results of operations or business
prospects of such Loan Party taken as a whole, and (ii) with respect to any
Loan Document, any material adverse effect on the binding nature, validity or
enforceability thereof as an obligation of any Loan Party that is a party
thereto.


 


“Maturity Date” means
,with respect to a Loan, such date as shall be specified in the relevant
notice of borrowing subject to Section 1.04.


 


“Maximum Permissible Rate” means,
with respect to interest payable on any amount, the rate of interest on such
amount that, if exceeded, could, under Applicable Law, result in (i) civil or
criminal penalties being imposed on the payee or (ii) the payee’s being unable
to enforce payment of (or, if collected, to retain) all or any part of such
amount or the interest payable thereon.


 


“Net Profit” means net profit as
determined under Generally Accepted Accounting Principles and in a manner
reasonably acceptable to the Bank, acting in good faith.


 


“Note” means the promissory note in
the form of Exhibit A.


 


31
















 


“Notification Date” means such date
as shall be determined in accordance with Section 1.02.


 


“Parent Credit Agreement” means the
Credit Agreement dated as of April 16, 2002, among Ocular Sciences, Inc. as
borrower, Comerica Bank-California as agent and the lenders referred to
therein, as the same may be amended from time to time.


 


“Permitted Cash Investments” means (i) certificates of deposit or money
market securities with maturities of three years or less issued by any United
States, Australian, Canadian, Japanese or European commercial bank with
capital, surplus and undivided profits of $500,000,000 or more; (ii)
obligations issued by, or guaranteed by, the United States or Japanese
government and maturing within three years from the date of acquisition
thereof; (iii) commercial paper, municipal bonds and similar instruments with
maturities of three years or less rated at least P-1 or A-3, respectively, by
Moody’s Investors Service, Inc., or rated at least A-1 or A, respectively, by
Standard & Poor’s Corporation, or receiving an equivalent rating from any
other nationally recognized rating agency; (iv) repurchase or reverse
repurchase agreements issued by any United States or Japanese commercial bank
with capital surplus and undivided profits of $500,000,000 or more; and (v)
investments in money market funds or mutual funds that invest solely in
investments described in clauses (i) through (iv).


 


“Permitted Guaranty” means any
Guaranty that is (i) endorsement of instruments for deposit into Borrower’s
account in the ordinary course of the Borrower’s business and (ii) other unsecured
guaranties in an aggregate principal amount not to exceed $100,000.


 


“Permitted Lien” means:


 


(a)                                  Minor
imperfections of title and encumbrances which do not, singly or in the
aggregate, materially interfere with the value or prevent use of Borrower’s
property or transfer of title thereto;


 


(b)                                 Liens
that may be from time to time created in favor of the Bank;


 


(c)                                  existing Liens disclosed on Schedule 4.05 attached hereto
and made a part hereof (and any replacement thereof);


 


(d)                                 inchoate
Liens for  Taxes, fees, assessments or
other governmental charges which are not delinquent and remain payable without
penalty or (i) which are being contested in good faith, and (ii) for which
adequate reserves have been established to the extent required by GAAP and other
adequate provision for the payment thereof has been made.


 


(e)                                  suppliers’,
carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s,
or other similar Liens arising in the ordinary course of business which are not
delinquent for a period of more than thirty days.


 


(f)                                    Liens
securing obligations of the Borrower with respect to an interest rate or
currency swap or similar obligation entered into for hedging purposes in favor
of the Bank or any Affiliate thereof;


 


32
















 


(g)                                 any Lien
on the property of Borrower made to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business (exclusive of obligations in
respect of the payment for borrowed money) not exceeding $750,000 in the
aggregate at any one time outstanding;


 


(h)                                 any easement, right-of-way, restriction and other similar
encumbrance incurred in the ordinary course of business if, in the aggregate,
such items are not substantial in amount;


 


(i)                                     any
Lien arising out of any judgment or award against it if (A) such Lien is
being contested in good faith; (B) there is no material likelihood of the
sale, forfeiture or loss of any part of its properties; and (C) such Lien
does not materially interfere with the use of any material part of its
properties;


 


(j)                                     Liens
which constitute rights of set-off of a customary nature or bankers’ Liens with
respect to amounts on deposit, whether arising by operation of law or by
contract, in connection with arrangements entered into with banks in the
ordinary course of business; and


 


(k)                                  rights of consignees of inventory in the ordinary course of
business not exceeding $2,000,000 in the aggregate at any one time outstanding
for the Borrower and its Subsidiaries.


 


“Person” means any individual, sole
proprietorship, corporation, partnership, trust, unincorporated organization,
mutual company, joint stock company, estate, union, employee organization,
government or any agency or political subdivision thereof.


 


“Post-Default Rate” means a rate
per annum equal to 3.5% plus the Adjusted Euroyen Rate (determined for interest
periods not less than one day nor more than six
months) selected by the Bank from time to time.


 


“Quick Ratio” means, as of any Fiscal Quarter End Date for
the Borrower and its Consolidated Subsidiaries, the ratio of (i) the sum of
unrestricted cash, PLUS unrestricted Permitted Cash Investments, PLUS trade
accounts receivable (net of applicable reserves therefor), DIVIDED BY (ii) the
sum of current liabilities, PLUS (without duplication) the aggregate principal
amount of the Loans outstanding under the Loan Documents, in each case as of
such Fiscal Quarter End Date, as determined in accordance with U.S. GAAP.


 


“Regulation D” means Regulation D
of the Board of Governors of the Federal Reserve System.


 


“Regulatory Change” means any
Applicable Law, interpretation, directive, request or guideline (whether or not
having the force of law), or any change therein or in the administration or
enforcement thereof, that becomes effective or is implemented or first required
or expected to be complied with after the Agreement Date, whether the same is
(i) the result of an enactment by a government or any agency or political
subdivision thereof, a determination of a court or 


 


33
















 


regulatory authority, or otherwise or (ii)
enacted, adopted, issued or proposed before or after the Agreement Date,
including any such that imposes, increases or modifies any Tax, reserve
requirement, insurance charge, special deposit requirement, assessment or
capital adequacy requirement, but excluding any such that imposes, increases or
modifies any income or franchise tax imposed upon the Bank by any jurisdiction
(or any political subdivision thereof) in which the Bank or any Lending Office
is located.


 


“Repayment Date” means the later of
(i) the termination of the Commitment (whether as a result of the occurrence of
the Termination Date or termination pursuant to Section 6.02) and (ii) the
payment in full of the Loans and all other amounts payable or accrued
hereunder.


 


“Representation and Warranty” means
any representation or warranty made pursuant to or under (i) Section 2.02,
Article 3, Section 5.02 or any other provision of this Agreement or (ii) any
amendment to, or waiver of rights under, this Agreement, WHETHER OR NOT, IN THE
CASE OF ANY REPRESENTATION OR WARRANTY REFERRED TO IN CLAUSE (i) OR (ii) OF
THIS DEFINITION (EXCEPT, IN EACH CASE, TO THE EXTENT OTHERWISE EXPRESSLY
PROVIDED), THE INFORMATION THAT IS THE SUBJECT MATTER THEREOF IS WITHIN THE
KNOWLEDGE OF THE BORROWER.


 


“Reserve Requirement” means, at any
time, the then current maximum rate for which reserves (including any marginal,
supplemental or emergency reserve) are required to be maintained under
Regulation D by member banks of the Federal Reserve System in California with
deposits comparable in amount to those of the Bank against “Eurocurrency
liabilities” as that term is used in Regulation D. Adjusted Euroyen Rates shall
be adjusted automatically on and as of the effective date of any change in the
applicable Reserve Requirement.


 


“Restricted Payment” means (i) any
dividend or other distribution on account of any shares of the Borrower’s
capital stock (other than dividends payable solely in shares of any of its
capital stock other than Mandatorily Redeemable Stock), (ii) any payment on
account of the principal of or premium, if any, on any Indebtedness convertible
into shares of the Borrower’s capital stock or (iii) any payment on account of
any purchase, redemption, retirement, exchange or conversion of any of the
Borrower’s Capital Securities.  For the
purposes of this definition a “payment” shall include the transfer of any asset
or the issuance of any Indebtedness or other obligation (the amount of any such
payment to be the fair market value of such asset or the amount of such
obligation, respectively) but shall not include the issuance of any capital
stock other than Mandatorily Redeemable Stock.


 


“Subsidiary” means, with respect to
any Person, any other Person (i) securities of which having ordinary voting
power to elect a majority of the board of directors (or other persons having
similar functions) or (ii) other ownership interests of which ordinarily
constituting a majority voting interest, are at the time, directly or
indirectly, owned or controlled by such first Person, or by one or more of its
Subsidiaries, or by such first Person and one or more of its Subsidiaries;
unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.


 


“Tax” means any national, federal,
state or local tax, assessment or other governmental charge or levy (including
any withholding tax) imposed by any Japanese, U.S. or other governmental
authority upon a Person or upon its assets, revenues, income or profits.


 


34
















 


“Termination Date” means the first
anniversary of the closing of the initial Loan under this Agreement,
as such date may from time to time be extended by mutual agreement of the
Borrower and the Bank.


 


“U.S. GAAP” means generally
accepted accounting principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession), which
are applicable to the circumstances as of the date of determination.


 


“Yen” and “¥” means the
lawful currency of Japan.


 


“Yen COF Rate” means, for any
Interest Period, the Euroyen London Libor rate as reported on Reuters Page
LIBOR01 as of 11:00 a.m. London time on the second Business Day prior to the
beginning of such Interest Period for a period equal to the duration of such
Interest Period as determined by the Bank.


 


(b)           Other
Definitional Provisions.


 


(i)            Except
as otherwise specified herein, all references herein (A) to any Person shall be
deemed to include such Person’s successors and assigns, (B) to any Applicable
Law defined or referred to herein shall be deemed references to such Applicable
Law or any successor Applicable Law as the same may have been or may be amended
or supplemented from time to time and (C) to any Loan Document or Contract
defined or referred to herein shall be deemed references to such Loan Document
or Contract (and, in the case of the Note or any instrument, any instrument
issued in substitution therefor) as the terms thereof may have been or may be
amended, supplemented, waived or otherwise modified from time to time.


 


(ii)           When
used in this Agreement, the words “herein”, “hereof” and “hereunder” and words
of similar import shall refer to this Agreement as a whole and not to any
provision of this Agreement, and the words “Article”, “Section”, “Annex”,
“Schedule” and “Exhibit” shall refer to Articles and Sections of, and Annexes,
Schedules and Exhibits to, this Agreement unless otherwise specified.


 


(iii)          Whenever
the context so requires, the neuter gender includes the masculine or feminine,
the masculine gender includes the feminine, and the singular number includes
the plural, and vice versa.


 


(iv)          Any
item or list of items set forth following the word “including”, “include” or
“includes” is set forth only for the purpose of indicating that, regardless of
whatever other items are in the category in which such item or items are “included”,
such item or items are in such category, and shall not be construed as
indicating that the items in the category in which such item or items are
“included” are limited to such items or to items similar to such items.


 


35
















 


(v)           Each
authorization in favor of the Bank or any other Person granted by or pursuant
to this Agreement shall be deemed to be irrevocable and coupled with an
interest.


 


(vi)          Except
as otherwise specified herein, all references herein to the Bank or any Loan
Party shall be deemed to refer to such Person however designated in Loan
Documents, so that (A) a reference to rights of the Bank under the Loan
Documents shall be deemed to include the rights of such Person as the
Guaranteed Party under the Guaranty Agreement, (B) a reference to costs
incurred by the Bank in connection with the Loan Documents shall be deemed to
include costs incurred by such Person as the Guaranteed Party under the
Guaranty Agreements.


 


(vii)         Except
as otherwise specified therein, all terms defined in this Agreement shall have
the meanings herein ascribed to them when used in the Note or any certificate,
opinion or other document delivered pursuant hereto or thereto.


 


Section
9.02           Accounting Matters.  Unless otherwise specified herein, all
accounting determinations hereunder and all computations utilized by the
Borrower in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with U.S.
GAAP, except, in the case of such financial statements, for departures from
Generally Accepted Accounting Principles that may from time to time be approved
in writing by the independent certified public accountants who are at the time,
in accordance with Section 5.01(b), reporting on the Borrower’s financial
statements.


 


Section
9.03           Representations and
Warranties.  All Representations and
Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any
Representation and Warranty contained in this Agreement or any other document
at the time any Loan is made, at and as of such time and (c) in the case of any
particular Representation and Warranty, wherever contained, at such other time
or times as such Representation and Warranty is made or deemed made in
accordance with the provisions of this Agreement or the document pursuant to,
under or in connection with which such Representation and Warranty is made or
deemed made.


 


Section
9.04           Captions.  Captions to Articles, Sections and
subsections of, and Annexes, Schedules and Exhibits to, this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.


 


 


[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]


 


36
















 


IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their duly authorized officers all
as of the Agreement Date, and acknowledge that this Agreement has been made and
delivered in the City of San Francisco, the last signature hereto having been
affixed in said City, and this Agreement having become effective only upon such
execution and delivery.


 


	
   

  	
  OCULAR SCIENCES K.K.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Steven M. Neil

  	
   

  
	
   

  	
   

  	
  Name:  Steven
  M. Neil

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO HSBC TRADE BANK N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Virginia Adams

  	
   

  
	
   

  	
   

  	
  Name: Virginia Adams

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Agreement Date: December
  29, 2003

  
						



 
















 


Schedule 1.02


 


NOTICE OF BORROWING


 


[Name and address


of Bank in accordance with


Section 8.01(a)(ii)]


 


Date:


 


Gentlemen:


 


Reference is made to the Credit Agreement
(the “Credit Agreement”), dated as of December 26, 2003, between Ocular
Sciences K.K. (“Borrower”) and Wells Fargo HSBC Trade Bank N.A. (the “Bank”).
The Borrower hereby gives notice pursuant to Section 1.02 of the Credit
Agreement of its request to have the following Loan made to it on [insert
requested date of borrowing] (the “Borrowing Date”):


 




	
  Loan Amount

  	
   

  	
  ¥

  	
   

  	
   

  
	
  Maturity Date

  	
   

  	
   

  	
   

  	
   

  
	
  Interest Period

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  We request that the proceeds of
  the Loan be remitted to:

  






 




	
  Account Name (Beneficiary):

  	
   

  	
   

  
	
  Bank:

  	
   

  	
   

  
	
  Bank Name:

  	
   

  	
   

  
	
  Bank Address:

  	
   

  	
   

  
	
  SWIFT Number:

  	
   

  	
   

  
	
  Account Number:

  	
   

  	
   

  






 


The aggregate amount of other Loans that
are scheduled to mature on or prior to the Borrowing Date is ¥[                    ].  If such amount is duly repaid, then the
aggregate unpaid principal amount of all Loans will be ¥[                    ].


 


Each Loan Document Representation and
Warranty is true and correct at and as of the date hereof and will be true and
correct at and as of the time the Loans are made, in each case both with and
without giving effect to the Loans and the application of the proceeds hereof.


 


No Default has occurred and is continuing
as of the date hereof or would result from the making of the Loans or from the
application of the proceeds thereof if the Loan was made on the date hereof,
and no Default will have occurred and be continuing at the time the Loan is to
be made or would result from the making of the Loan or from the application of
the proceeds thereof.


 
















 


This notice of borrowing may be executed
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.


 


	
   

  	
  OCULAR SCIENCES K.K.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 
















 


Schedule
2.01(a)


 


DIRECTOR’S CERTIFICATE OF BORROWER


 


I, Masakazu
Niwa, Representative Director of Ocular Sciences K.K., a Japanese
corporation (the “Company”), do hereby certify that:


 


1.             Attached
hereto as Exhibit A is a true and complete copy of the Articles of
Incorporation of the Company, as in full force and effect on November 20, 2003, and at all times
since said date, to and including the date hereof;


 


2.             Attached
hereto as Exhibit B is a true and complete copy of the Resolutions of
the Board of Directors of the Company authorizing the execution, delivery and
performance of the Credit Agreement dated as of December 26, 2003 by and
between the Company and Wells Fargo HSBC Trade Bank N.A. (the “Credit
Agreement”), and the documents related thereto;


 


3.             The
President/CEO of the Company has
full authority given to him by the Board of Directors of the Company to enter
into the transactions contemplated by the Credit Agreement without express
Board approval;


 


4.             The
following people are duly elected or appointed, qualified and acting officers
of the Company holding the office set forth opposite each such officers’
respective names below, the signature appearing opposite each such name below
is the genuine signature of such person and each such person is authorized to
execute the Credit Agreement and the documents related thereto:


 


	
  NAME

  	
   

  	
  OFFICE

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Steven M. Neil

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James M. Welch

  	
   

  	
  Director

  	
   

  	
   

  



 


IN WITNESS WHEREOF, I have hereunto set my
hand this 19th day of December,
2003.


 


 


	
   

  	
   

  
	
   

  	
  Masakazu Niwa

  
	
   

  	
  Representative
  Director

  



 
















 


I, the undersigned, as Director of Ocular Sciences K.K., do
hereby certify that Masakazu Niwa
is the duly elected, qualified and acting Representative Director of the
Company, and that his signature on the foregoing certificate is his genuine
signature.


 


 


	
   

  	
   

  
	
   

  	
  Steven M. Neil

  
	
   

  	
  Director

  



 
















 


Schedule
2.01(b)


 


OFFICER’S CERTIFICATE OF GUARANTOR


 


I, [Name], [Title]of
Ocular Sciences, Inc. a
              
corporation (the “Company”), do hereby certify that:


 


1.             Attached
hereto as Exhibit A is a true and complete copy of the Certificate of
Incorporation of the Company certified by the
                          
Secretary of State on         ,
                    ,
which has not been amended since                          ;


 


2.             Attached
hereto as Exhibit B is a true and complete copy of the Bylaws of the
Company, as in full force and effect on
                        ,
and at all times since said date, to and including the date hereof;


 


3.             Attached
hereto as Exhibit C is a true and complete copy of the Resolutions of
the Board of Directors of the Company authorizing the execution, delivery and
performance of the Guaranty Agreement dated as of December 26, 2003 by the
Company for the benefit of Wells Fargo HSBC Trade Bank, N.A (the “Guaranty
Agreement”) and the documents related thereto;


 


4.             The
following people are duly elected or appointed, qualified and acting officers
of the Company holding the office set forth opposite each such officers’
respective names below, the signature appearing opposite each such name below
is the genuine signature of such person and each such person is authorized to
execute the Guaranty Agreement and the documents related thereto:


 


	
  NAME

  	
   

  	
  OFFICE

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


IN WITNESS WHEREOF, I have hereunto set my
hand this        day of December, 2003.


 


 




	
   

  	
  [Name]

  
	
   

  	
  [Title]

  






 


I, the undersigned, as [Title] of Ocular
Sciences, Inc., do hereby certify that
             
is the duly elected, qualified and acting President of the Company, and that
his signature on the foregoing certificate is his genuine signature.


 


 




	
   

  	
  [Name]

  
	
   

  	
  [Title]

  






 
















 


Schedule
2.01(c)


 


(DIRECTOR’S/OFFICER’S) CERTIFICATE OF (BORROWER/GUARANTOR)


 


I,
                                      ,
do hereby certify that I am the [Director / Officer] of (Borrower/Guarantor)
(the “Company”), and do further hereby certify pursuant to that certain Credit
Agreement dated as of December 26, 2003 (the “Credit Agreement”) by and between
the Ocular Sciences K.K. and Wells Fargo HSBC Trade Bank N.A. (capitalized
terms used herein without definition shall have the meanings ascribed thereto
in the Credit Agreement), that:


 


[except to the
extent set forth on Annex A hereto,]:


 


(i)            each Loan Document Representation and Warranty is true and
correct in all material aspects at and as of the date hereof and with and
without giving effect to the Loans and the application of the proceeds thereof,
and


 


(ii)           no Default has occurred and is continuing as of the date
hereof or would result from the making of the Loans or from the application of
the proceeds thereof if the Loans were made on the date hereof.


 


This Certificate is given in my capacity
as the [Director / Chief Financial Officer] of the Company.


 


IN WITNESS WHEREOF, I have signed my name
as the [Director / Chief Financial Officer] of the Company this
          day of December 2003.


 




	
   

  	
  [Name]

  
	
   

  	
  [Title]

  






 


I,
                              ,
the [Representative Director / Officer] of [Borrower/Guarantor], do hereby
certify that
                                  
is the duly qualified [Director / Officer] of [Borrower/Guarantor], that the
signature set forth above is his genuine signature and that the statements in
the foregoing certificate are true and correct.


 




	
   

  	
  [Name]

  
	
   

  	
  [Representative Director/

  President]

  






 
















 


Schedule
2.01(d)


 


FORM OF OPINION OF COUNSEL FOR


THE BORROWER AND THE GUARANTOR


 


 


 


See Tab 7


 
















 


Schedule
2.01(e)


 


FORM OF OPINION OF COUNSEL FOR THE BORROWER


 


 


 


See Tab 8


 
















 


Schedule 2.01(f)


 


[Letterhead of Borrower]


 


CERTIFICATE OF NEGOTIATING OFFICER


 


Dated


 


Ocular Sciences K.K. (the “Company”) is
today entering into the Credit Agreement dated as of December 26, 2003 (the
“Credit Agreement”), with Wells Fargo HSBC Trade Bank N.A. (the “Bank”).  Capitalized terms not defined herein shall
have the meaning ascribed to such terms in the Credit Agreement.


 


I am the Director of the Company who was
principally involved in negotiating the Credit Agreement.


 


I hereby confirm that I have read the Loan
Documents and that I understand that they require the Company to waive any
rights it may have to trial by jury and to claim any special, indirect and
consequential damages.  I also understand
that the Loan Documents provide that certain costs, fees and expenses will be
payable by the Borrower upon prepayment of the amounts due thereunder.  I also confirm that I understand that the
Loan Documents embody the entire agreement between the Company and the Bank and
supersede all prior agreements, representations and understandings relating to
the subject matter thereof.


 


I further confirm that I have reviewed my
understanding of the Loan Documents with Messrs.
                                                     
who have acted as lawyers for the Company in the
transaction.


 


Finally, I confirm to you that in the
course of negotiating the Loan Documents I worked principally with Mr./Ms.
                  
and neither he/she nor any other representative of the
Bank, nor the lawyers for the Bank, made any representations to me that are
inconsistent with the terms and provisions of the Loan Documents.


 


 


	
   

  	
   

  
	
   

  	
  Director

  



 
















 


Schedule 3.03


 


SCHEDULE
OF REQUIRED CONSENTS AND


GOVERNMENTAL APPROVALS


 


Application Form for Income Tax Convention
(Relief from Japanese Income Tax on Interest)


 
















 


Schedule 3.04


 


SCHEDULE
OF MATERIAL LITIGATION


 


Borrower is not party to any material
litigation at this time.


 
















 


Schedule 4.04


 


SCHEDULE
OF EXISTING GUARANTIES


 


Borrower has no guaranties outstanding at
this time.


 
















 


Schedule 4.05


 


SCHEDULE
OF EXISTING LIENS


 


	
  Description of Debt

  	
   

  	
  Lender

  
	
  <Operating Lease>

  	
   

  	
   

  
	
  Copier Lease

  	
   

  	
  Ricoh Lease K.K.

  
	
  Computer Equipment

  	
   

  	
  Daiichi Lease K.K.

  
	
  Telephone Equipment

  	
   

  	
  Daiichi Lease K.K.

  
	
  Delivery Equipment in Warehouse (Sagawa)

  	
   

  	
  Daiichi Lease K.K.

  
	
  Car Lease

  	
   

  	
  GE Fleet Service Corporation

  
	
  Car Lease

  	
   

  	
  Toyota Rent-a-lease Tokyo K.K.

  



 
















 


Schedule 4.10


 


SCHEDULE
OF EXISTING INVESTMENTS


 


Borrower has no investments at this time.


 
















 


Schedule 4.11


 


SCHEDULE OF EXISTING INDEBTEDNESS


 


Borrower has no thirty
party indebtedness at this time.


 
















 


Schedule 4.14


 


TRANSACTIONS
WITH AFFILIATES


 


	
  Shareholder

  	
   

  	
  Capital
  Amount

  
	
   

  	
   

  	
   

  
	
  Sidecastle Limited

  	
   

  	
  JPY 10,000,000 (100%)

  



 


 


	
  Lender

  	
   

  	
  Total
  Outstanding as of 11/30/03

  
	
   

  	
   

  	
   

  
	
  Ocular Sciences, Inc

  	
   

  	
  JPY8

  	
  64,094,711

  	
   

  
	
  Precision Lens Manufacturing & Technology, Inc

  	
   

  	
  JPY

  	
  2,182,852,106

  	
   

  



 


Inter-company
Product Purchases


 


	
  Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Ocular Sciences, Inc

  	
   

  	
  1855 Gateway Boulevard, Suite 700 Concord, California 94520 USA

  
	
  Ocular Sciences Limited UK

  	
   

  	
  Unit 10 The Quadrangle Abby Park Industrial Estate Romsey, Hampshire S051
  9AQ United Kingdom

  



 
















 


Schedule 5.01(a)


 


OCULAR SCIENCES K.K.


 


CERTIFICATE AS TO QUARTERLY FINANCIAL STATEMENTS  


 


I,
                             ,
[Director] of Ocular Sciences K.K., a Japanese corporation (the “Borrower”),
hereby certify, pursuant to Section 5.01(a) of the Credit Agreement dated as of
                     ,
20     between the Borrower and Wells Fargo HSBC Trade Bank
N.A. (the “Credit Agreement”) that:


 


1.(a)        The
accompanying unaudited financial statements of the Borrower as at and for the
quarterly accounting period ending
                   ,
20   , are complete and correct and present fairly in all
material respects, in accordance with Generally Accepted Accounting Principles
(except for changes therein or departures therefrom described below that have
been approved in writing by Messrs. , the Borrower’s current independent
certified public accountants), the financial position of the Borrower as at the
end of such quarterly period, and the results of operations for such quarterly
period, and for the elapsed portion of the Fiscal Year ended with the last day
of such quarterly period, in each case on the basis presented and subject only
to normal year-end auditing adjustments and the absence of auditor’s footnotes.


 


(b)           Except
as disclosed or reflected in such financial statements, as at
             ,
the Borrower did not have any Liability, contingent or otherwise, or any
unrealized or anticipated loss, that, singly or in the
aggregate, have had or might have a Materially Adverse Effect on the
Borrower.


 


2.(a)        The changes in and departures from
Generally Accepted Accounting Principles are as follows:


 


All such changes have been approved in
writing by Messrs.                           .


 


(b)           Attached
as Annex A are unaudited financial statements of the Borrower as
at                                 
and for the quarterly accounting period ending
                    ,
200    , which have been prepared in accordance with Generally
Accepted Accounting Principles without giving effect to the changes referred to
in Paragraph 2(a) of this Certificate or any previous Certificate. Such
financial statements are complete and correct and present fairly in all
material respects, in accordance with Generally Accepted Accounting Principles,
the financial position of the Borrower as at the end of such quarterly period,
and the results of operations for such quarterly period, and for the elapsed
portion of the Fiscal Year ending with the last day of such quarterly period,
in each case on the basis presented and subject only to normal year-end
auditing adjustments and the absence of auditor’s footnotes.]*


 










*                 Paragraph (b) should be
included in, and Annex A attached to, the Certificate
only if changes from Generally Accepted Accounting Principles are specified in
Paragraph 2(a) of this or any previous Certificate.


 
















 


3.             There
follow the calculations required to establish whether or not the Borrower was
in compliance with the following Sections of the Agreement:


 


(a)           Section
4.08.


 


(b)           Section
4.09.


 


4.             Based
on an examination sufficient to enable me to make an informed statement, no
Default exists, including, in particular, any such arising under the provisions
of Article 4, except the following:


 


5.             Capitalized
term not defined herein shall have the meaning ascribed to such terms in the
Credit Agreement.


 


[If none such exist, insert “None”; if any do
exist, specify the same by Section, give the date the same occurred, whether it
is continuing, and the steps being taken by the Borrower with respect thereto.]


 


	
  Dated:

  
	
   

  
	
   

  	
  OCULAR SCIENCES K.K.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Director

  



 
















 


Schedule
5.01(b)


 


OCULAR SCIENCES K.K.


 


CERTIFICATE AS TO YEAR-END FINANCIAL STATEMENTS


 


I,
                   ,
a Director of Ocular Sciences K.K., a Japanese corporation (the “Borrower”),
hereby certify, pursuant to Section 5.01(b) of the Credit Agreement dated as of
                           ,
20    between the Borrower and Wells Fargo HSBC Trade Bank N.A.
that:


 


1.(a)        The
accompanying financial statements of the Borrower as at
                            
and for the [Fiscal Year] [12 months] ending
                              ,
20    , are complete and correct and present fairly in all
material respects, in accordance with Generally Accepted Accounting Principles
(except for changes therein or departures therefrom described below, that have
been approved in writing by Messrs.
                 , the Borrower’s current independent certified public accountants),
the financial position of the Borrower as at the end of such fiscal [year]
[period], and the results of operations for such fiscal [year] [period], in
each case on the basis presented.


 


(b)           Except
as disclosed or reflected in such financial statements, as at
                              ,
the Borrower did not have any Liability, contingent or otherwise, or any
unrealized or anticipated loss, that, singly or in the
aggregate, have had or might have a Materially Adverse Effect on the
Borrower.


 


2.(a)        The changes in and departures from
Generally Accepted Accounting Principles are as follows:


 


All such changes have been approved in
writing by Messrs.
                .


 


[(b)          Attached
as Annex A are unaudited financial statements of the Borrower as at
                                    
and for the [Fiscal Year] [12 months] ending
                         ,
20   , which have been prepared in accordance with Generally
Accepted Accounting Principles without giving effect to the changes referred to
in Paragraph 2(a) of this Certificate or any previous Certificate. Such
financial statements are complete and correct and present fairly in all
material respects, in accordance with Generally Accepted Accounting Principles,
the financial position of the Borrower and as at the end of such fiscal [year]
[period], and the results of operations for such fiscal [year] [period], in
each case on the basis presented.]*


 










*                 Paragraph (b) should be included in, and
Annex A attached to, the Certificate only if changes
from Generally Accepted Accounting Principles are specified in Paragraph 2(a)
of this or any previous Certificate.


 
















 


3.             There
follow the calculations required to establish whether or not the Borrower was
in compliance with the following Sections of the Agreement:*


 


(a)           Section
4.08.


 


(b)           Section
4.09.


 


4.             Based
on an examination sufficient to enable me to make an informed statement, no
Default exists, including, in particular, any such arising under the provisions
of Article 4, except the following:


 


[If none such exist, insert “None”; if any do
exist, specify the same by Section, give the date the same occurred, whether it
is continuing, and the steps being taken by the Borrower with respect thereto.]


 


5.             Capitalized
terms not defined herein shall have the meaning ascribed to such terms in  the Credit
Agreement.


 




	
   

  	
  OCULAR SCIENCES K.K.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  






 










*                 The calculations should be made in the same
manner and with the same degree of detail as the calculations set forth in the
certificate delivered by the Borrower pursuant to Section 2.01(h).


 
















 


Schedule
5.02(a)


 


SCHEDULE OF HISTORICAL FINANCIAL INFORMATION


 
















 


EXHIBIT
A


 


OCULAR SCIENCES K.K.


 


PROMISSORY NOTE


 


San Francisco, California


 


                     ,     


 


FOR VALUE RECEIVED, Ocular Sciences K.K. (the
“Borrower”) hereby promises to pay to the order of Wells Fargo HSBC Trade Bank
N.A. (the “Bank”) the principal amount of the Japanese yen equivalent
(determined as provided in the Credit Agreement referred to below) Thirteen
Million Dollars ($15,000,000), or, if less, the principal amount of the Loans
outstanding, on the dates and in the amounts specified in Section 1.04 of the
Credit Agreement referred to below, and to pay interest on such principal
amount on the dates and at the rates specified in Section 1.03 of such Credit
Agreement. All payments due the Bank hereunder shall be made to the Bank at the
place, in the type of money and funds and in the manner specified in Section
1.09 of such Credit Agreement.


 


Each holder hereof is authorized to endorse
on the grid attached hereto, or on a continuation thereof, each Loan and each
payment with respect thereto.


 


Presentment, demand, protest, notice of
dishonor and notice of intent to accelerate are hereby waived by the
undersigned.


 


This Note evidences Loans made under, and is
entitled to the benefits of, the Credit Agreement, dated as of even date
herewith between the Borrower and the Bank, as the same may be amended from
time to time. Reference is made to such Credit Agreement, as so amended, for
provisions relating to the prepayment and the acceleration of the maturity
hereof. This Note is also entitled to the benefits of the Guaranty Agreement,.


 


This Note shall be construed in accordance
with and governed by the law of the State of California (without giving effect
to its choice of law principles).


 


	
   

  	
  OCULAR SCIENCES K.K.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 
















 


GRID


 


PROMISSORY NOTE


 


	
  Date

  	
   

  	
  Amount of Loan

  	
   

  	
  Amount of 

  Principal Paid,

  	
   

  	
  Unpaid Principal 

  Amount of Note

  	
   

  	
  Notation Made 

  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


EXHIBIT
B


 


FORM OF SECOND AMENDMENT


 


TO THE PARENT CREDIT AGREEMENT  


 
















 


EXHIBIT
C


 


FORM OF THIRD AMENDMENT


 


TO THE PARENT CREDIT AGREEMENT