OAKLEY, INC.
FIFTH AMENDMENT AND LIMITED WAIVER
TO AMENDED AND RESTATED CREDIT AGREEMENT
This FIFTH AMENDMENT AND LIMITED WAIVER TO AMENDED AND RESTATED CREDIT
AGREEMENT (this "AMENDMENT") is dated as of March __, 1997 and entered into by
and among OAKLEY, INC., a Washington corporation ("COMPANY"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "LENDER" and collectively as "LENDERS") and XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("XXXXX FARGO"), as agent for Lenders (in such capacity,
"AGENT"), and is made with reference to that certain Amended and Restated Credit
Agreement dated as of August 15, 1995, as amended by the First Amendment to
Amended and Restated Credit Agreement, dated as of November 22, 1995, by and
among Company, Lenders and Agent, the Second Amendment to Amended and Restated
Credit Agreement, dated as of October 10, 1996, by and among Company, Lenders
and Agent, the Third Amendment to Amended and Restated Credit Agreement, dated
as of November 25, 1996, by and among Company, Lenders and Agent, and the Fourth
Amendment to Amended and Restated Credit Agreement, dated as of January 29, 1997
(as amended, the "CREDIT AGREEMENT"), by and among Company, Lenders and Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.
RECITALS
Company has requested that Requisite Lenders amend subsections 7.1 and 7.2A
of the Credit Agreement to permit Company to incur Indebtedness (the "BRIDGE
LOAN") under that certain Bridge Loan Agreement attached hereto as Exhibit A,
and to permit Company to incur Indebtedness (the "REAL ESTATE LOAN") as
described in the letter from the Company addressed to Xxxx Xxxxxxxx, dated
March 11, 1997 attached hereto as Exhibit B, each of which is or will be
incurred in connection with the financing of the Company's new corporate
headquarters.
Company has requested that Requisite Lenders waive the provisions of
subsections 7.1 and 8.3 to the extent necessary such that any incurrence of
any Indebtedness prior to the date hereof under the Bridge Loan does not
constitute a breach or an Event of Default under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION MODIFICATIONS TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SUBSECTION 7.1: INDEBTEDNESS.
Subsection 7.1 of the Credit Agreement is hereby amended by
deleting the word "and" appearing after clause (vii). Subsection 7.1 of the
Credit Agreement is amended further by deleting the period (.) appearing at
the end of clause (viii) and substituting the following therefor:
";
(ix) Company may become and remain liable with respect to
Indebtedness incurred to finance the new corporate headquarters of the
Company pursuant to that certain Bridge Loan Agreement (the "BRIDGE
LOAN") in an aggregate principal amount not exceeding $25,000,000;
provided, that all the proceeds of such Bridge Loan shall first be
applied to prepay all or a portion of the Company's outstanding Loans
hereunder; provided further, that such Bridge Loan shall mature upon
the earlier of (a) 120 days after initial funding or (b) repayment of
any and all amounts outstanding under the Bridge Loan with proceeds of
the Real Estate Loan permitted under subsection 7.1(x) hereof; and
(x) Company may become and remain liable with respect to
Indebtedness secured by the new corporate headquarters of the Company
pursuant to that certain real estate facility described in the letter
from the Company addressed to Xxxx Xxxxxxxx, dated March 11, 1997 (the
"REAL ESTATE LOAN"), in an aggregate principal amount not exceeding
$25,000,000; provided, that the proceeds of such Real Estate Loan shall
first be applied to repay any and all amounts outstanding under the
Bridge Loan."
1.2 AMENDMENT TO SUBSECTION 7.2A: LIENS AND RELATED MATTERS.
Subsection 7.2A of the Credit Agreement is hereby amended by
deleting the word "and" appearing after clause (vii). Subsection 7.2 of the
Credit Agreement is amended further by deleting the period (.) appearing at
the end of clause (viii) and substituting the following therefor:
"; and
(ix) Liens arising pursuant to the Real Estate Loan permitted
under subsection 7.1(x); provided, that any such Liens attach only to
the real property, improvements and fixtures attached to such
improvements which comprise the Company's new corporate headquarters."
1.3 LIMITED WAIVER OF SUBSECTIONS 7.1 AND 8.3; BREACH OF CERTAIN COVENANTS.
To the extent Company has incurred Indebtedness under the Bridge Loan prior to
the date hereof, Requisite Lenders hereby waive the provisions of subsections
7.1 and 8.3
of the Credit Agreement to the extent necessary such that the incurrance of
such Indebtedness does not constitute a breach of subsection 7.1 or an Event
of Default under subsection 8.3; provided that nothing in this subsection 1.3
shall be deemed to amend or waive subsections 7.1 (as modified by subsection
1.1 of this Amendment) or 8.3, or to amend or waive the application of
subsections 7.1 or 8.3 of the Credit Agreement to the Company or its
Subsidiaries after giving effect to the Bridge Loan other than to permit the
Company to incur Indebtedness under the Bridge Loan.
SECTION CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIFTH
AMENDMENT EFFECTIVE DATE"):
A. Company shall deliver to Lenders (or to Agent for
Lenders with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) a counterpart of this Amendment executed by a
duly authorized officer of Company and each Credit Support Party (defined
below).
B. On or before the Fifth Amendment Effective Date,
Agent, on behalf of Lenders, shall have received a counterpart of this
Amendment executed by a duly authorized officer of each of Requisite Lenders.
SECTION COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents
and warrants to each Lender that the following statements are true, correct
and complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment, the Bridge Loan
and the Real Estate Loan, and to carry out the transactions contemplated by,
and perform its obligations under, the Credit Agreement as amended by this
Amendment (the "AMENDED AGREEMENT"), the Bridge Loan and the Real Estate Loan.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery
of this Amendment, the Bridge Loan and the Real Estate Loan, and the
performance of the Amended Agreement, the Bridge Loan and the Real Estate Loan
have been duly authorized by all necessary corporate action on the part of
Company.
C. NO CONFLICT. The execution and delivery by Company of
this Amendment, the Bridge Loan and the Real Estate Loan, and the performance
by Company of the Amended Agreement, the Bridge Loan and the Real Estate Loan
do not and will not (i) violate the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries, (ii) violate any provision of
any law or any governmental rule or regulation applicable to Company or any of
its Subsidiaries or any order, judgment or
decree of any court or other agency of government binding on Company or any of
its Subsidiaries, which violation could reasonably be expected to have a
Material Adverse Effect, (iii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries in a manner that
could reasonably be expected to have a Material Adverse Effect, (iv) result in
or require the creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than any Liens created
under (x) any of the Loan Documents in favor of Agent on behalf of Lenders or
(y) the Real Estate Loan as permitted under subsection 7.2A (ix) of the Amended
Agreement), or (v) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of
its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
Company of this Amendment and the performance by Company of the Amended
Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by Company and are the legally
valid and binding obligations of Company, enforceable against Company in
accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment (other than the events or transactions
contemplated under subsection 1.3 hereof) that would constitute an Event of
Default or a Potential Event of Default.
SECTION ACKNOWLEDGEMENT AND CONSENT
Repeat Incorporated, an Arizona corporation ("REPEAT"), and
Barter Optical, Inc., a Washington corporation ("BARTER"), are parties to the
Guaranty, pursuant to which Repeat and Barter have guarantied the Obligations
of Company under the Credit Agreement. Repeat and Barter are collectively
referred to herein as the "CREDIT SUPPORT PARTIES".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment
and consents to the amendment of the Credit Agreement effected pursuant to
this Amendment. Each Credit Support Party hereby confirms that the Guaranty
will continue to guaranty to the fullest extent possible the payment and
performance of all "Guarantied Obligations" (as such term is defined in the
Guaranty), including without limitation the payment and performance of all
such "Guarantied Obligations", in respect of the Obligations of
Company now or hereafter existing under or in respect of the Amended
Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that the
Guaranty shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be
impaired or limited by the execution or effectiveness of this Amendment. Each
Credit Support Party represents and warrants that all representations and
warranties contained in the Amended Agreement and the Guaranty to which it is
a party or otherwise bound are true, correct and complete in all material
respects on and as of the Fifth Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to
the Credit Agreement.
SECTION MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended or waived by this
Amendment, the Credit Agreement and the other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Agent or any Lender under, the Credit Agreement or any of the other
Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs,
fees and expenses as described in subsection 10.2 of the Credit Agreement
incurred by
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
OAKLEY, INC., as the Borrower
By:
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Title:
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XXXXX FARGO BANK, NATIONAL
ASSOCIATION, Individually and as Agent
By:
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Title:
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UNION BANK OF CALIFORNIA, N.A.,
(formerly named Union Bank) as a Lender
By:
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Title:
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Lender
By:
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Title:
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ACKNOWLEDGMENT AND CONSENT
BARTER OPTICAL, INC., as a Credit Support Party
By:
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Title:
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REPEAT INCORPORATED, as a Credit Support Party
By:
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Title:
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