EXHIBIT 10.17
OAKLEY, INC.
SECOND AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"AMENDMENT") is dated as of October 10, 1996 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 (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
A. Company has requested that Requisite Lenders amend subsection 7.3 to
permit Company to enter into certain Joint Venture arrangements as further
described in that certain letter of intent dated August, 1996 (the "Letter of
Intent") among Essilor International Compagnie Generale D'Optique, S.A.,
Essilor of America, Inc., Gentex Optics, Inc., Gentex Corporation and Company
and attached term sheet, copies of which have been distributed to the
Lenders, and also amend subsection 7.8 of the Credit Agreement to permit the
incurrence of up to $46,000,000 of Office Building Capital Expenditures (as
defined in subsection 7.8 and as otherwise provided herein).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
SECTION 1. MODIFICATIONS TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SUBSECTION 7.3: INVESTMENTS; JOINT VENTURES.
Subsection 7.3 of the Credit Agreement is hereby amended by deleting the
word "and" appearing after clause (ix). Subsection 7.3 of the Credit
Agreement is amended further by deleting the period (.) appearing at the end
of clause (x) and substituting the following therefor:
"; and
(xi) Company and its Subsidiaries may enter into the Joint Ventures
described in that certain letter of intent dated August, 1996 among
Essilor International Compagnie Generale D'Optique, S.A., Essilor of
America, Inc., Gentex Optics, Inc., Gentex Corporation and Company and
attached term sheet, copies of which have been
1
distributed to the Lenders (including, without limitation, definitive
legal documentation which Company deems appropriate to give effect to
any such Joint Ventures)."
1.2 AMENDMENT TO SUBSECTION 7.8: CAPITAL EXPENDITURES.
Subsection 7.8 of the Credit Agreement is hereby amended by deleting the
table set forth therein in its entirety and substituting the following
therefore:
Maximum
"Fiscal Year Capital Expenditures
------------ --------------------
1995 $20,000,000
1996 and each Fiscal Year thereafter $16,000,000"
Subsection 7.8 of the Credit Agreement is hereby amended by deleting
reference to "$32,000,000" contained therein and substituting "$46,000,000"
therefor.
SECTION 2. 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 "SECOND
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 Second 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 3. 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 and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement 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 and the performance by Company of the Amended Agreement do not and
will
2
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 any of the Loan Documents in
favor of Agent on behalf of Lenders), 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 that would constitute an Event of Default or a Potential Event of
Default, it being understood that nothing in this Amendment shall permit the
Carbondale acquisition referred to in the Letter of Intent and none of
Company's representations or warranties herein (including under this Section
3F) shall be deemed to refer thereto.
SECTION 4. 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
3
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 Second 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 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) On and after the Second 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.
4
E. COUNTERPARTS; EFFECTIVENESS. 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. This Amendment shall become
effective upon the execution of a counterpart hereof by Requisite Lenders and
each of the other parties hereto and receipt by Company and Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.
[Remainder of page intentionally left blank]
5
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:
-----------------------------------
Title:
--------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Individually and as Agent
By:
-----------------------------------
Title:
--------------------------------
UNION BANK OF CALIFORNIA, N.A.,
(formerly named Union Bank) as a Lender
By:
-----------------------------------
Title:
--------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By:
-----------------------------------
Title:
--------------------------------
ACKNOWLEDGMENT AND CONSENT
BARTER OPTICAL, INC., as a Credit
Support Party
By:
---------------------------------
Title:
------------------------------
REPEAT INCORPORATED, as a Credit
Support Party
By:
---------------------------------
Title:
------------------------------
S-1
