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Exhibit 10.27
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT dated as of this 14th day of January, 1997, by
and between NEW WEST EYEWORKS, INC., a Delaware corporation ("Borrower"),
and U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION ("Bank") amend that
certain Credit Agreement dated June 10, 1996 as amended on September 16, 1996
and on October 24, 1996, by and between the parties ("Agreement").
WHEREAS, the parties wish to amend the Agreement as provided herein.
For mutual consideration, the parties agree as follows:
A. Lease Financing. Section 5.17 of the Agreement is hereby
stricken.
B. Tangible Net Worth. Section 6.15 of the Agreement is hereby
stricken and replaced with the following:
6.15 Tangible Net Worth. Permit Tangible Net Worth to less than
$1,500,000 as of June 29, 1996, $1,900,000 as of September 28, 1996,
$1,850,000 as of December 28, 1996, and $2,200,000 as of March 29,
1997 and as of the last day of each fiscal quarter of Borrower
thereafter.
C. Capital Ratio. Section 6.16 of the Agreement is hereby stricken and
replaced with the following:
6.16 Capital Ratio. Permit the Capital Ratio to be greater than
5.75:1.00 as of June 29, 1996, 5.50:1.00 as of September 28, 1996,
6.00:1.00 as of December 28, 1996, and 4.50:1.00 as of March 29, 1997,
and as of the last day of each fiscal quarter of Borrower thereafter.
D. Working Capital. Section 6.18 of the Agreement is hereby stricken
and replaced with the following:
6.18 Working Capital. Permit Working Capital to be less than negative
$2,400,000 as of the last day of each fiscal quarter of Borrower
through September 30, 1996, less than negative $2,900,000 as of
December 28, 1996, less than negative $2,900,000 as of December 28,
1996, and less than negative $2,400,000 as of March 29, 1997, and as
of the last day of each fiscal quarter thereafter.
E. Repayment of Promissory Note. Section 6.20 is hereby added to the
Agreement under Article VI, Negative Covenants:
6.20 Repayment of Promissory Note. Repay the principal of that certain
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promissory note dated December 24, 1996 and payable to The Second
National Bank of ▇▇▇▇▇▇ while the Loan is outstanding; except with the
proceeds of the proposed public offering of the Borrower's common
stock.
F. Waiver of Covenant Violations. Bank hereby waives compliance with
Section 6.12 of the Agreement to permit Borrower to amend its Certificate of
Incorporation to increase its authorized common stock upon the approval of the
stockholders of the Borrower. Bank further waives compliance with Section 6.17
of the Agreement for the fiscal year period ending December 28, 1996. Bank also
waives compliance with Section 7.12 of the Agreement for the period through
January 31, 1997. The foregoing waiver shall not preclude the exercise of any
other right, power, or privilege under the Agreement. Further, the foregoing
waiver shall not constitute a waiver of Bank's right to declare a subsequent
similar failure or event to be a Default under the Agreement.
G. Fee. Concurrently with the execution of this Third Amendment,
Borrower shall pay Bank a nonrefundable fee in the amount of Five Thousand and
no/100 Dollars ($5,000.00).
H. Other Terms. Except as specifically amended by this Amendment, all
other terms and conditions of the Agreement shall remain in full force and
effect, and are hereby ratified and affirmed. Defined terms in the Agreement
shall have the same meanings herein. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, TO EXTEND CREDIT, OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by themselves or by their respective officers or agents thereunto
duly authorized.
Borrower: Bank:
NEW WEST EYEWORKS, INC. U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
Vice President Finance and Assistant Vice President
Administration
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