OAKLEY, INC.
NINTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This NINTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of September 30, 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 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as current agent for Lenders (in such capacity, "Agent")
and, for purposes of Section 4 hereof, the Consenting Parties (as defined
herein), 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
Second Amendment to Amended and Restated Credit Agreement, dated as of October
10, 1996, the Third Amendment to Amended and Restated Credit Agreement, dated
as of November 25, 1996, the Fourth Amendment to Amended and Restated Credit
Agreement, dated as of January 29, 1997, the Fifth Amendment to Amended and
Restated Credit Agreement, dated as of March 31, 1997, the Sixth Amendment to
Amended and Restated Credit Agreement, dated as of March 31, 1997, the Seventh
Amendment to Amended and Restated Credit Agreement, dated as of May 14, 1997,
and the Eighth Amendment to Amended and Restated Credit Agreement, dated as of
June 27, 1997, each by and among Company, Lenders and Agent (as amended, the
"Credit Agreement"). Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement.
RECITALS
A. Company and Lenders desire to amend the Credit Agreement, as provided
herein.
B. Lenders have agreed to consent to certain activities of Company, as
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 AND CONSENTS.
Section 1.1. AMENDMENTS TO CREDIT AGREEMENT.
(a) Section 7.3 of the Credit Agreement is hereby amended by (i) deleting
the word "and" appearing after clause (xi) thereof, (ii) deleting the period
(.) appearing at the end of clause (xii) thereof and (iii) inserting the
following after clause (xii) thereof:
"; and
(xiii) Company and its Subsidiaries may make Investments in Bazooka, Inc.
for the purpose of financing the development of business of the type described
in those certain resolutions of the Company's board of directors dated June 19,
1997, copies of which have previously been distributed to the Lenders; provided
that the aggregate amount of (a) such Investments described in this clause
(xiii) that may be made prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) accounts receivable of
Company generated from Bazooka, Inc. prior to March 31, 1998 and (c) Contingent
Obligations of Company incurred with respect to obligations of Bazooka, Inc.
shall not exceed $13,000,000."
(b) Section 7.6A is hereby amended by inserting the following at the end
of such section:
"In calculating the ratio described in this Section 7.6A, all expenses and
activity related to Bazooka, Inc. which are described in Section 7.3 (xiii)
shall be excluded."
(c) Section 7.8 of the Credit Agreement is hereby amended by deleting the
entirety of such section and inserting the following in replacement therefor:
"Company shall not permit the aggregate amount of all Office Building
Capital Expenditures incurred by Company and its Subsidiaries prior to June 30,
1997 to exceed $47,000,000."
(d) Schedule 5.1 to the Credit Agreement is hereby supplemented by adding
the following to such schedule:
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Ownership
Jurisdiction of Direct by (Each)
Entity Incorporation Parent(s) Direct Parent
------ --------------- --------- -------------
Bazooka, Inc. Washington Oakley, Inc. 100%
Section 1.2 CONSENT TO SECTION 7.13. Pursuant to Section 7.13(ii) of the
Credit Agreement, the Lenders hereby consent to the Company and its
Subsidiaries engaging in business of the type described in those certain
resolutions of the Company's board of directors dated June 19, 1997, copies of
which have previously been distributed to the Lenders.
SECTION 2. EFFECTIVENESS
Section 1 of this Amendment shall become effective as of September 30,
1997; provided that (a) Company shall deliver to Lenders (or to Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender) copies of this Amendment executed by Company and each Consenting Party
and (b) Agent, on behalf of Lenders shall have received a counterpart of this
Amendment duly executed by the Requisite Lenders. Notwithstanding the
foregoing, the effectiveness of Section 1 of this Amendment may be revoked by
the Lenders if the Lenders have not received, on or prior to December 17, 1997,
a resolution or other appropriate action by the Board of Directors of Company
ratifying the execution, delivery and performance of this Amendment by Company.
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, as of the date on which Company shall deliver to Lenders (or to
Agent for Lenders) copies of this Amendment executed by Company and each
Consenting Party, 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").
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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 and each
Consenting Party.
C. NO CONFLICT. The execution, delivery and performance by Company and
each Consenting Party of this Amendment 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 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, delivery and performance by
Company and each Consenting Party of this Amendment 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 has been duly executed and
delivered by Company and each Consenting Party, as applicable, and is the
legally valid and binding obligation of Company and each Consenting Party,
enforceable against each such Person in accordance with its 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. Upon giving effect to this Amendment, no event
has occurred and is continuing or will result from the consummation of the
transactions con-
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templated by this Amendment that would constitute an Event of Default or a
Potential Event of Default.
SECTION 4. ACKNOWLEDGMENT 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 "Consenting Parties".
Each Consenting 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
Consenting 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 all Notes.
Each Consenting 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 Consenting Party acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Consenting 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 Consenting 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.
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(i) On and after the date hereof, 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. 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.
C. 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 internal counsel with respect to this Amendment and the documents
and transactions contemplated hereby shall be for the account of Company.
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; 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
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers hereunto duly
authorized as of the date first written above.
OAKLEY, INC., as the Borrower
By:__________________________
Title:_______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:__________________________
Title:_______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Lender
By:__________________________
Title:_______________________
UNION BANK OF CALIFORNIA
N.A., (formerly named Union
Bank) as a Lender
By:__________________________
Title:_______________________
ACKNOWLEDGMENT AND CONSENT
--------------------------
BARTER OPTICAL, INC., as a
Consenting Party
By:__________________________
Title:_______________________
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REPEAT INCORPORATED, as a
Consenting Party
By:__________________________
Title:_______________________
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