OAKLEY, INC.
TENTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This TENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of March 27, 1998 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, the Consenting Parties (as
defined therein), 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, the Fourth
Amendment to Amended and Restated Credit Agreement, dated as of January 29,
1997, by and among Company, Lenders and Agent, the Fifth Amendment to Amended
and Restated Credit Agreement, dated as of March 31, 1997, by and among
Company, Lenders and Agent, and 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, the Eighth
Amendment to Amended and Restated Credit Agreement, dated as of June 27,
1997, and the Ninth Amendment to Amended and Restated Credit Agreement, dated
as of September 30, 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 further amend the Credit
Agreement as herein provided.
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. MODIFICATION AND WAIVER.
Section 1.1 AMENDMENT TO CREDIT AGREEMENT.
(a) Section 7.3 of the Credit Agreement is hereby amended by
deleting the entirety of clause (xiii) of such section and inserting the
following in replacement therefor:
"(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
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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 June 30,
1998, (b) accounts receivable of Company generated from Bazooka,
Inc. prior to June 30, 1998, and (c) Contingent Obligations of
Company incurred with respect to obligations of Bazooka, Inc. shall
not exceed $13,000,000."
Section 1.2 WAIVER OF SECTION 7.7.
Requisite Lenders hereby waive the provisions of Section 7.7 of the
Credit Agreement to the extent necessary (without regard to any exception or
basket which may be provided for therein) to permit the Company to enter into
and consummate the acquisition of its Canadian distributor from Outdoor Gear
substantially pursuant to the draft Asset Purchase Agreement heretofore
delivered to Lenders (the "Acquisition Transaction"); PROVIDED that nothing
in this subsection 1.2 shall be deemed to amend or waive any Section of the
Credit Agreement after giving effect to the Acquisition Transaction other
than to permit the entry into and consummation of the Acquisition Transaction.
SECTION 2. EFFECTIVENESS
Section 1 of this Amendment shall become effective as of March 27,
1998; 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 1.2 of this Amendment may be revoked
by the Lenders if the Agent for the benefit of the Lenders has not received,
on or prior to April 30, 1998, 65% of the stock of the new acquired Canadian
distributor as security for the Obligations upon such terms and conditions as
Agent may deem appropriate.
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 hereof 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 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)
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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 contemplated by this Amendment that would constitute an
Event of Default or a Potential Event of Default.
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 "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.
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SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(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 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 thereunto duly
authorized as of the date first written above.
OAKLEY, INC., as the Borrower
By:___________________________
Title:__________________________
(signatures continue)
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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:__________________________
REPEAT INCORPORATED, as a
Consenting Party
By:___________________________
Title:__________________________
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