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Exhibit 10.40  

 
 

INDEMNIFICATION AGREEMENT    
    

        This Indemnification Agreement is made as of this 12th day of February 2004, by and between OAKLEY, INC., a Washington corporation (the "Company"),
and Tom Davin ("Indemnified Party"). 

        WHEREAS,
as of the date hereof, the Company has provisions for indemnification of its directors and officers in Article V of its Articles of Incorporation (the "Articles of
Incorporation") and Article VII of its Amended and Restated Bylaws (the "Bylaws") which provide for indemnification of the Company's directors and officers to the fullest extent permitted by
law; 

        WHEREAS,
the indemnification provisions in the Bylaws provide that the right of indemnification is a contract right of the covered parties; 

        WHEREAS,
the Bylaws provide that the Company may maintain, at its expense, insurance to protect itself and any of its directors and officers against liability asserted against such
persons incurred in such capacity whether or not the Company has the power to indemnify such persons against the same liability under Section 23B.08.510 or .520 of the Act (as defined below) or
a successor statute; 

        WHEREAS,
the Company and the Indemnified Party recognize that the officers and directors of publicly owned companies are frequently joined as parties to Proceedings (as defined below)
against their respective companies as a result of their serving in such capacity; and 

        WHEREAS,
in order to induce Indemnified Party to serve or continue to serve the Company, the Company wishes to confirm the contract indemnification rights provided in the Bylaws and
agrees to provide Indemnified Party with the benefits contemplated by this Agreement and to supplement the provisions of this Agreement with directors' and officers' liability insurance maintained by
the Company. 

        NOW,
THEREFORE, in consideration of the promises, conditions, representations and warranties set forth herein, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Indemnified Party hereby agree as follows: 

        1.     Definitions. The following terms, as used herein, shall have the following respective meanings; other capitalized terms
used and not specifically defined in this Section 1 shall have the meanings provided elsewhere in the Agreement and in the Bylaws: 

        (a)   "Act"
means the Washington Business Corporation Act RCW Title 23B, as amended from time to time. 

        (b)   "Adjudication"
shall refer to a final, non-appealable decision by a court of competent jurisdiction. "Adjudged" shall have a correlative meaning. 

        (c)   "Covered
Amount" means any Loss, Fine and Expense, to the extent such Loss, Fine or Expense, in type or amount, is not insured under the D&O Insurance maintained by the
Company from time to time. 

        (d)   "Covered
Act" means any act or omission of the Indemnified Party in his or her capacity as a director, officer, employee, agent, fiduciary or consultant of the Company
alleged by any claimant or any claim against Indemnified Party by reason of him or her serving in such a capacity, or by reason of Indemnified Party serving, at the request of the Company, in such
capacity with another corporation, partnership, employee benefit plan, trust or other enterprise, in all cases, whether such alleged act or omission occurred before or after the date of this
Agreement. 

        (e)   "D&O
Insurance" means the liability insurance which the Company may purchase on behalf of Indemnified Party against liability asserted against or incurred by Indemnified
Party in connection with claims arising from Covered Acts, whether or not the Company would have the power to indemnify the individual against the same liability under Section 23B.08.510 or
23B.08.520 of the Act. 

 

        (f)    "Determination"
means a determination, based on the facts known at the time, made: 

        (i)    by
the Board of Directors by majority vote of a quorum consisting of directors not at the time parties to the Proceeding; 

        (ii)   if
a quorum cannot be obtained under clause (i), by majority vote of a duly designated committee of the Board of Directors, in the manner provided by
Section 23B.08.550(2)(b) of the Act; 

        (iii)  by
special legal counsel, selected in the manner provided by Section 23B.08.550(2)(c) of the Act, in a written opinion; or 

        (iv)  by
a majority of the shareholders of the Company, excluding shares owned or voted under the control of directors who are at the time parties to the Proceeding. 

"Determined"
shall have a correlative meaning. 

        (g)   "Excluded
Claim" means any payment for Losses, Fines or Expenses in connection with any claim relating to or arising out of: 

        (i)    acts
or omissions of the Indemnified Party Adjudged to be intentional misconduct or a knowing violation of law; 

        (ii)   conduct
of the Indemnified Party Adjudged to be in violation of Section 23B.08.310 of the Act; or 

        (iii)  any
transaction with respect to which it was Adjudged that such Indemnified Party personally received a benefit in money, property, or services to which the
Indemnified Party was not legally entitled. 

        (h)   "Expenses"
means any reasonable expenses incurred by Indemnified Party as a result of a claim or claims made against Indemnified Party from Covered Acts, including,
without limitation, reasonable counsel fees and costs of investigative, judicial or administrative proceedings or appeals. 

        (i)    "Fines"
means any fine or penalty including, with respect to an employee benefit plan, any excise tax assessed with respect thereto. 

        (j)    "Losses"
means amounts, as determined by an Adjudication, which the Indemnified Party is legally obligated to pay as a result of a claim or claims arising from Covered
Acts, including, without limitation, Fines, damages and judgments and sums paid in settlement of such claim or claims. 

        (k)   "Proceeding"
means any threatened, pending or completed action, suit, proceeding or investigation, whether civil, criminal or administrative whether formal or informal. 

        2.     Maintenance of D&O Insurance.

        (a)   The
Company hereby covenants and agrees that, so long as Indemnified Party shall continue to serve as a director or executive officer of the Company and thereafter, for
so long as Indemnified Party shall be subject to any possible Proceeding arising from any Covered Act, the Company, subject to Section 2(c), shall maintain in full force and effect D&O
Insurance. 

        (b)   In
all policies of D&O Insurance, Indemnified Party shall be named as an insured in such a manner as to provide Indemnified Party the same rights and benefits, and the
same limitations, as are accorded to the Company's directors or executive officers most favorably insured by such policy. 

        (c)   The
Company shall have no obligation to maintain D&O Insurance if the Company, by majority vote of the Board of Directors, determines in good faith that such insurance
is not 

2

 

reasonably
available, the premium costs for such insurance are disproportionate to the amount of coverage provided, or the coverage provided by such insurance is limited by exclusions so as to provide
an insufficient benefit; provided, however, that such decision shall not adversely affect coverage of
D&O Insurance for periods prior to such decision without the unanimous vote of all directors. 

        3.     Indemnification. The Company shall indemnify Indemnified Party up to the Covered Amount and shall advance any and all
Expenses to Indemnified Party in connection with any Proceeding or any Covered Act, subject, in each case, to the further provisions of this Agreement. This Agreement is made pursuant to and to
effectuate the indemnification provisions set forth in Article V of the Articles of Incorporation and Article VII of the Bylaws. Notwithstanding any other provision of this Agreement,
the Company shall indemnify Indemnified Party to the extent Indemnified Party is successful, on the merits or otherwise, in the defense of any Proceeding to which Indemnified Party was a party because
of being a director, officer, employee, agent, fiduciary or consultant of the Company, against reasonable Expenses incurred by Indemnified Party in connection with the Proceeding. 

        4.     Excluded Coverage. The Company shall have no obligation to indemnify Indemnified Party for any Losses or Expenses which
arise from an Excluded Claim. 

        5.     Indemnification Procedures.

        (a)   Promptly
after receipt by Indemnified Party of notice of the commencement of or the threat of commencement of any Proceeding, Indemnified Party shall, if indemnification
or advancement of Expenses with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement or the threat of commencement thereof. 

        (b)   If,
at the time of the receipt of such notice, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement or the threat of
commencement of such Proceeding to the appropriate insurers in accordance with the procedures set forth in the respective policies in favor of Indemnified Party. The Company shall thereafter take all
necessary or desirable action to cause such insurers to, in accordance with the terms of such policies: (i) advance, to the extent permitted by law, any and all Expenses to Indemnified Party,
(ii) pay, on behalf of Indemnified Party, all amounts (including, without limitation, Losses and Expenses) payable as a result of, or in connection with, such Proceeding and
(iii) reimburse Indemnified Party for all amounts (including, without limitation, Losses and Expenses) paid by Indemnified Party as a result of, or in connection with, such Proceeding. 

        (c)   To
the extent the Company does not, at the time of the commencement of or the threat of commencement of such Proceeding, have applicable D&O Insurance, or if a
Determination is made that any Loss, Fine or Expense of the Indemnified Party arising out of such Proceeding will not be payable under the D&O Insurance then in effect, the Company shall be obligated
to pay the Covered Amount with respect to any Proceeding and to provide counsel satisfactory to Indemnified Party upon the delivery to Indemnified Party of written notice of the Company's election to
do so. After delivery of such notice, the Company will not be liable to Indemnified Party under this Agreement for any legal or other Expenses subsequently incurred by the Indemnified Party in
connection with such defense other than the reasonable Expenses of investigation of Indemnified Party; provided, that Indemnified Party shall have the
right to employ his or her own counsel in connection with the defense of any such Proceeding, the fees and expenses of such counsel incurred after delivery of notice from the Company of its assumption
of such defense to be at the Indemnified Party's sole expense. Notwithstanding the foregoing, if (i) the employment of counsel by Indemnified Party has been previously authorized by the
Company, (ii) Indemnified Party shall have been advised by counsel that there may be a conflict of interest between the Company and Indemnified Party in the conduct of any such defense or
(iii) the Company shall not, in fact, have employed counsel to assume the defense of such 

3

 

Proceeding,
in each such case, the fees and expenses of such counsel retained by Indemnified Party shall be at the expense of the Company. In the event Indemnified Party is entitled to employ counsel
at the Company's expense pursuant to the terms of this Paragraph 5(c), and if so requested in writing by Indemnified Party, the Company shall advance any and all Expenses to Indemnified Party
to the extent permitted by law. 

        (d)   All
payments on account of the Company's indemnification or advancement obligations under Paragraph 5(b) of this Agreement shall be made within sixty
(60) days of Indemnified Party's written request therefor unless a Determination is made that the claims giving rise to Indemnified Party's request are Excluded Claims or otherwise not payable
under this Agreement. All payments on account of the Company's obligations under Paragraph 5(c) of this Agreement shall be made within 20 days of Indemnified Party's written request
therefor, subject to Paragraph 5(e) of this Agreement. 

        (e)   In
the event that (i) a Determination is made that the claims giving rise to Indemnified Party's request are Excluded Claims or otherwise not payable under this
Agreement or (ii) it is Adjudged that the Indemnified Party is not entitled to be indemnified by the Company for Losses or Expenses under this Agreement, the Articles of Incorporation, the
Bylaws or the Act, the Company shall have no obligation to indemnify, or advance any Expenses to Indemnified Party. Further, in either case, Indemnified Party agrees that he or she will reimburse the
Company for all Losses and Expenses paid by the Company and all Expenses advanced by the Company in connection with such Proceeding against Indemnified Party. 

        6.     Settlement. The Company shall have no obligation to indemnify Indemnified Party under this Agreement for any amounts paid
in settlement of any Proceeding effected without the Company's prior written consent. The Company shall not settle any claim in any manner which would impose any loss or expense on Indemnified Party
without Indemnified Party's prior written consent, unless the Company provides a written undertaking to the Indemnified Party to pay for such loss or expense on behalf of the Indemnified Party.
Neither the Company nor Indemnified Party shall unreasonably withhold their consent to any proposed settlement. 

        7.     Rights Not Exclusive. The rights provided hereunder shall be in addition to any other rights to which Indemnified Party
may be entitled under the Articles of Incorporation, the Bylaws, the Act, any agreement or vote of shareholders or directors or otherwise, both as to action in Indemnified Party's official capacity
and as to action in any other capacity, and such rights shall continue after Indemnified Party ceases to serve the Company as a director or officer. 

        8.     Enforcement.

        (a)   Indemnified
Party's rights to indemnification or advancement of Expenses hereunder shall be enforceable by Indemnified Party notwithstanding any adverse Determination.
In any such action, if a prior adverse Determination has been made, the burden of proving that indemnification or advancement of Expenses is required under this Agreement, the Articles of
Incorporation, the Bylaws or the Act shall be on the Indemnified Party. The Company shall have the burden of proving that indemnification or advancement of Expenses is not required under this
Agreement if no prior adverse Determination shall have been made. 

        (b)   In
the event that any action is instituted by Indemnified Party under this Agreement, or to enforce or interpret any of the terms of this Agreement, Indemnified Party
shall be entitled to be paid all court costs and expenses, including reasonable counsel fees, incurred by Indemnified Party with respect to such action, unless the court determines that each of the
material assertions made by Indemnified Party as a basis for such action were not made in good faith or were frivolous. 

4

 

        9.     No Presumptions. For purposes of this Agreement, the termination of any Proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo contendre, or its equivalent, shall not create a presumption that the Indemnified Party did not meet any particular standard of
conduct or have any particular belief or that a court has determined that indemnification or advancement of Expenses by the Company is not permitted hereunder or by applicable law. In addition,
neither the absence of a Determination as to whether Indemnified Party has met any particular standard of conduct or had any particular belief or the existence of a Determination that Indemnified
Party has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnified Party to secure an Adjudication that Indemnified Party should be
indemnified or advanced or reimbursed Expenses hereunder or under applicable law, shall be a defense to Indemnified Party's claim or create a presumption that Indemnified Party has not met any
particular standard of conduct or did not have any particular belief. 

        10.   Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment
to all of the rights of recovery of Indemnified Party, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company to effectively bring suit to enforce such rights. 

        11.   No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with
any Proceeding against Indemnified Party to the extent Indemnified Party has otherwise actually received payment (under any D&O Insurance, the Articles of Incorporation, the Bylaws, the Act or
otherwise) of the amounts which may be paid hereunder. 

        12.   Severability. In the event that any provision of this Agreement is determined by a court of competent jurisdiction to
require the Company to do or to fail to do an act which is in violation of the Articles of Incorporation, the Bylaws or the Act or other applicable law, such provision shall be limited or modified in
its application to the minimum extent necessary to avoid such violation, and, as so limited or modified, such provision and the remainder of this Agreement shall be enforceable in accordance with the
respective terms. 

        13.   Choice of Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of
Washington, without reference to conflicts of law principles therein. 

        14.   Successors and Assigns. This Agreement shall be (i) binding upon all successors and assigns of the Company
(including any transferee of all or substantially all of the Company's assets and any successor by merger or otherwise by operation of law) and (ii) binding on and inure to the benefit of the
heirs, personal representatives and estate of Indemnified Party. Indemnified Party may not assign this Agreement or any of Indemnified Party's rights hereunder without the prior written consent of the
Company. 

        15.   Amendment. No amendment, modification, termination or cancellation of this Agreement shall be effective unless made in a
writing signed by each of the parties hereto. 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx  

5

 

        IN
WITNESS WHEREOF, the Company and Indemnified Party have executed this Indemnification Agreement as of the date first above written. 

	 
	 	 
	 	 

	 	 	OAKLEY, INC.
	

 	
 	

By:	
 	

/s/  LINK NEWCOMB      

	 	 	Name:	 	Link Newcomb

	 	 	Title:	 	COO

	

 	
 	

/s/  TOM DAVIN      
 Tom Davin, Indemnified Party

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INDEMNIFICATION AGREEMENTExhibit
10.11

 

FIRST AMENDMENT

TO CREDIT AGREEMENT

 

This First Amendment to Credit Agreement is entered
into as of March 30, 2003 (the “Amendment”), by and among OCULAR SCIENCES, INC.
(“Borrower”), and COMERICA BANK-CALIFORNIA, a California banking corporation,
as the Agent for the Lenders (“Bank”).

 

RECITALS

 

Borrower, Bank, and Lenders are parties to that
certain Credit Agreement dated as of April 16, 2002, as amended from time to
time (the “Agreement”).  The parties
desire to amend the Agreement in accordance with the terms of this
Amendment.  Borrower, Bank, and Lenders
are also parties to that certain Pledge dated as of April 16, 2002, as amended
from time to time (the “Pledge Agreement”).

 

NOW, THEREFORE, the parties agree as follows:

 

1.             Section 5.1(c) of the Agreement is
hereby amended in its entirety to read as follows:

 

“(c) Minimum Quick Ratio.    Borrower shall not cause, permit or suffer
the Quick Ratio as of each Fiscal Quarter End Date to be less than (i) 0.75 to
1.00 from the Closing Date through December 31, 2002; (ii) 0.65 to 1.00 for the
quarter ending March 31, 2003; (iii) 0.70 to 1.00 for the quarter ending and
June 30, 2003; (iv) 0.80 to 1.00 for the quarters ending September 30, 2003 and
December 31, 2003; and (v) 1.00 to 1.00 thereafter.”

 

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

 

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

 

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

 

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

 

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

 

(a)           this
Amendment, duly executed by Borrower;

 

(b)           an
Affirmation of Guaranty, in the form attached hereto;

 

1

 

(c)           an
amount equal to all Bank Expenses incurred to date; and

 

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

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

 

	
   

  	
  OCULAR SCIENCES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SIDNEY LANDMAN

  	
   

  
	
   

  	
  Name:

  	
  Sidney Landman

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer/Corp. Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
  COMERICA BANK-CALIFORNIA,

  as Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN ESPOSITO

  	
   

  
	
   

  	
  Name:

  	
   John Esposito

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN TRUST COMPANY,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CAROLYN D. GRANT

  	
   

  
	
   

  	
  Name:

  	
  Carolyn D. Grant

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

 

EXHIBIT D-1

 

FORM
OF COMPLIANCE CERTIFICATE

 

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

 

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

 

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

 

2.             No event has occurred and is continuing which
constitutes an Event of Default or a Potential Default.

 

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

 

4.             All Loan Documents are in full force and effect.

 

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

 

[The
remainder of this page left blank intentionally]

 

 

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

 

	
  (i)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  	
   

  	
              :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  	
   

  	
  2.00:1.00

  	
   

  

 

 

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

 

	
  (i)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
   

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

  	
   

  	
              :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ix)

  	
   

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

  	
   

  	
  2.00:1.00

  	
   

  

 

 

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

 

	
  (i)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Item (i) plus
  Item (ii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Item (iv) plus
  Item (v):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

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

  	
   

  	
               :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Closing Date
  through December 31, 2002

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

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

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

  (v) thereafter:

  	
   

  	
  0.75:1.00

  0.65:1.00;

  0.70:1.00

  0.80:1.00

  1.00:1.00

  	
   

  

 

 

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

 

	
  (i)

  	
   

  	
  Base amount:

  	
   

  	
  $

  	
  160,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  70% of Item (ii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  Intangible Assets as of
  the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  Consolidated Total Debt
  as of the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  Subordinated Debt as of
  the Fiscal Quarter End Date:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (x)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (xi)

  	
   

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

  	
   

  	
  Complies:

  

  Yes/No

  	
   

  

 

2

 

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

 

	
  (i)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  	
   

  	
  $

  	
  75,000,000

  	
   

  

 

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

 

 

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

 

	
  OCULAR SCIENCES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

AFFIRMATION OF GUARANTY

 

This AFFIRMATION OF GUARANTY is made as of March 30,
2003, by the undersigned (each, a “Guarantor” and collectively, the
“Guarantors”) for the benefit of Comerica Bank-California (“Bank”).

 

RECITALS

 

Bank and Ocular Sciences, Inc. (“Borrower”) are
parties to that certain Credit Agreement dated as of April 16, 2002, as amended
from time to time (the “Credit Agreement”). 
Guarantors executed for the benefit of Bank an Subsidiary Guaranty dated
as of even date with the Credit Agreement (as amended from time to time, the
“Guaranty”), guarantying Borrower’s obligations under the Credit Agreement,
plus reasonable attorneys’ fees and expenses incurred in enforcing Bank’s
rights under the Guaranty.  Borrower and
Bank propose to enter into an First Amendment to Credit Agreement of even date
herewith (the “Amendment”), which amends the Loan Agreement by, among other
things, amending a financial covenant set forth in the Credit Agreement.  Bank has agreed to enter into the Amendment
provided, among other things, that Guarantors consent to the entry by Borrower
into the Amendment and related documents and agree that the Guaranty will
remain effective.

 

AGREEMENT

 

NOW, THEREFORE, each Guarantor agrees as follows:

 

1.             Guarantor consents to the
execution, delivery and performance by Borrower of the Amendment and the
documents and instruments executed in connection therewith, as well as all
other amendments and modifications to the Credit Agreement. 

 

2.             The Guaranty is and shall remain in
full force and effect with respect to all of Borrower’s Obligations (as defined
in the Credit Agreement) as modified by the Amendment and otherwise.  Guarantor confirms that Guarantor has no
defenses against its obligations under the Guaranty. 

 

3.             Unless otherwise defined, all
capitalized terms in this Affirmation shall be as defined in the Guaranty. 

 

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

 

	
   

  	
  OCULAR SCIENCES PUERTO
  RICO, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SIDNEY LANDMAN

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUNSOFT CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BRAD JONES

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]