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BANK OF AMERICA
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MODIFICATION AGREEMENT
(LONG FORM)
This Modification Agreement ("Agreement") is made as of August 10, 1998,
by OAKLEY, INC., a Washington corporation ("Borrower") and Bank of America
National Trust and Savings Association, a national banking association
("Bank").
FACTUAL BACKGROUND
A. Under a loan agreement dated August 7, 1997 (the "Loan Agreement"),
Bank agreed to make a standing loan (the "Loan") to Borrower. Capitalized terms
used here without definition have the meanings given to them in the Loan
Agreement.
B. The Loan is evidenced by a Note dated August 7, 1997, made payable to
Bank in the stated principal amount of $22,780,000.00. The Note is secured by a
Deed of Trust dated August 7, 1997, executed by Borrower, as trustor to
Equitable Deed Company, a California corporation, as trustee, for the benefit of
Bank, as beneficiary. The Deed of Trust was recorded on August 26, 1997 in the
Official Records of Orange County, California as Instrument No. 19970414714.
The Deed of Trust encumbers certain Property located in Orange County,
California, as more particularly therein described.
C. As used here, the term "Loan Documents" means the Loan Agreement, the
Note, the Deed of Trust, and any other documents executed in connection with the
Loan, including those which evidence, guaranty, secure or modify the Loan, as
any or all of them may have been amended to date. This Agreement is a Loan
Document.
D. As of the date of this Agreement, the outstanding principal balance of
the Loan is $21,640,999.00.
E. Borrower and Bank now wish to modify the Loan as set forth below.
AGREEMENT
Therefore, Borrower and Bank agree as follows:
1. RECITALS. The recitals set forth above in the Factual Background are
true, accurate and correct.
2. REAFFIRMATION OF LOAN. Borrower reaffirms all of its obligations
under the Loan Documents and Borrower acknowledges that it has no claims,
offsets or defenses with respect to the payment of sums due under the Note or
any other Loan Document.
3. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby amended
as follows:
(a) The maturity date of the Loan is extended from September 1, 2002 to
September 1, 2007. All sums owing on the Loan shall be due and payable no later
than this extended maturity date.
(b) The Spread as defined in Section 2.A. of the Promissory Note dated
August 7, 1997 by and between Bank and Borrower is hereby decreased from 1.15%
to 1.00.
(c) Section 2.13 (e) of the Standing Loan Agreement is hereby amended
and restated:
(e) ENTER INTO ANY CONSOLIDATION, MERGER, POOL, JOINT VENTURE, SYNDICATE
OR OTHER COMBINATION, NOTWITHSTANDING THE FOREGOING, BORROWER MAY ENTER INTO ANY
CONSOLIDATION, MERGER, POOL, JOINT VENTURE, SYNDICATE OR OTHER COMBINATION
PERMITTED UNDER THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF
AUGUST 25, 1998, AS AMENDED FROM TIME TO TIME, AMONG BORROWER, THE LENDERS
LISTED THEREIN AND BANK OF AMERICA AS AGENT.
(d) The Deed of Trust is modified to secure payment and performance of the
Loan as amended to date, in addition to all other "Secured Obligations" as
therein defined. The foregoing notwithstanding, certain obligations continue to
be excluded from the Secured Obligations, a provided in the Deed of Trust.
4. CONDITIONS PRECEDENT. Before this Agreement becomes effective and any
party becomes obligated under it, all of the following conditions shall have
been satisfied at Borrower's sole cost and expense in a manner acceptable to
Bank in the exercise of Bank's sole judgment:
(a) Bank shall have received such assurance as Bank may require that the
validity and priority of the Deed of Trust has not been and will not be impaired
by this Agreement or the transactions contemplated by it, including CLTA
Endorsement No. 110.5 to be attached to Title Policy No. 27-44-94-21057 dated
August 26, 1997, issued by Fidelity National Title Insurance Company.
(b) Bank shall have received fully executed and, where appropriate,
acknowledged originals of this Agreement, the attached consent and any other
documents which Bank may require or request in accordance with this Agreement or
the other Loan Documents.
(c) The short form of this Agreement shall have been recorded in the
Official Records of the County of Orange, California, in addition to all other
documents which Bank may require to be recorded.
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(d) Bank shall have received reimbursement, in immediately available
funds, of all costs and expenses incurred by Bank in connection with this
Agreement, including charges for title insurance (including endorsements),
recording, filing and escrow charges, fees for appraisal, architectural and
engineering review, construction services and environmental services, mortgage
taxes, and legal fees and expenses of Bank's counsel. Such costs and expenses
may include the allocated costs for services of Bank's in-house staffs, such as
legal, appraisal, construction services and environmental services.
5. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Bank as follows:
(a) LOAN DOCUMENTS. All representations and warranties made and given by
Borrower in the Loan Documents are true, accurate and correct.
(b) NO DEFAULT. No Event of Default has occurred and is continuing, and
no event has occurred and is continuing which, with notice or the passage of
time or both, would be an Event of Default.
(c) PROPERTY. Borrower lawfully possesses and holds fee simple title to
all of the Property which is real property, and the Deed of Trust is a first and
prior lien on that property. Borrower owns all of the Property which is
personal property free and clear of any reservations of title and conditional
sales contracts, and also of any security interests other than the Deed of
Trust, which is a first and prior lien on such property. There is no financing
statement affecting any Property on file in any public office except for
financing statements in favor of Bank.
6. INCORPORATION. This Agreement shall form a part of each Loan
Document, and all references to a given Loan Document shall mean that document
as hereby modified.
7. NO PREJUDICE; RESERVATION OF RIGHTS. This Agreement shall not
prejudice any rights or remedies of Bank under the Loan Documents. Bank
reserves, without limitation, all rights which it has against any indemnitor,
guarantor, or endorser of the Note.
8. NO IMPAIRMENT. Except as specifically hereby amended, the Loan
Documents shall each remain unaffected by this Agreement and all such documents
shall remain in full force and effect. Nothing in this Agreement shall impair
the lien of the Deed of Trust, which as hereby amended shall remain one deed of
trust with one power of sale, creating a first lien encumbering the Property.
9. PURPOSE AND EFFECT OF BANK'S APPROVAL. Bank's approval of any matter
in connection with the Loan shall be for the sole purpose of protecting Bank's
security and rights. No such approval shall result in a waiver of any default
of Borrower. In no event shall Bank's approval be a representation of any kind
with regard to the matter being approved.
10. DISCLOSURE TO TITLE COMPANY. Without notice to or the consent of
Borrower, Bank may disclose to any title insurance company which insures any
interest of Bank under the Deed of Trust (whether as primary insurer, coinsurer
or reinsurer) any information, data or material in Bank's possession relating to
Borrower, the Loan, the Improvements or the Property.
11. INTEGRATION. The Loan Documents, including this Agreement:
(a) integrate all the terms and conditions mentioned in or incidental to the
Loan Documents; (b) supersede all oral negotiations and prior and other writings
with respect to their subject matter; and (c) are intended by the parties as the
final expression of the agreement with respect to the terms and conditions set
forth in those documents and as the complete and exclusive statement of the
terms agreed to by the parties. If there is any conflict between the terms,
conditions and provisions of this Agreement and those of any other agreement or
instrument, including any of the other Loan Documents, the terms, conditions and
provisions of this Agreement shall prevail.
12. MISCELLANEOUS. This Agreement and any attached consents or exhibits
requiring signatures may be executed in counterparts, and all counterparts shall
constitute but one and the same document. If any court of competent
jurisdiction determines any provision of this Agreement or any of the other Loan
Documents to be invalid, illegal or unenforceable, that portion shall be deemed
severed from the rest, which shall remain in full force and effect as though the
invalid, illegal or unenforceable portion had never been a part of the Loan
Documents. This Agreement shall be governed by the laws of the State of
California, without regard to the choice of law rules of that State. As used
here, the word "include(s)" means "includes(s), without limitation," and the
word "including" means "including, but not limited to.".
IN WITNESS WHEREOF, Bank and Borrower have executed this Agreement as of
the date first above written.
OAKLEY, INC.,
a Washington corporation
By:
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Name: Xxx Xxxxxx
Its: Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
a national banking association
By:
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Name:
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Title:
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