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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) August 19, 1997
NEW WEST EYEWORKS, INC.
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(Exact name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-12740 34-1589514
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(Commission File Number) (I.R.S. Employer Identification No.)
2104 West Southern Avenue, Tempe, Arizona 85282
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(Address of Principal Executive Office) (Zip Code)
(602)438-1330
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On August 19, 1997, New West Eyeworks, Inc. (the "Company") entered into
a loan agreement with a major national bank pursuant to which the Company
received a $3.0 million revolving line of credit (the "Revolving Credit
Facility") and a $2.0 million term loan (the "Term Credit Facility" and
together with the Revolving Credit Facility, the "Credit Facility"). With
respect to the Term Credit Facility, the Company may request advances until
August 1, 1998, at which time the outstanding principal balance will be
amortized over a 48 month period.
Interest will be due and payable monthly and will accrue under the
Revolving Credit Facility on the principal balance outstanding from time to
time at a variable rate equal to the lending bank's prime rate (the "Prime
Rate") plus 0.125% per annum or, at the Company's option, a rate equal to the
then current London Interbank Offered Rate ("LIBOR") for the term selected by
the Company plus 2.35% per annum. The Revolving Credit Facility matures on
August 1, 1999.
Under the Term Credit Facility, interest will accrue on the principal
balance outstanding at a variable rate equal to the Prime Rate plus 0.5% per
annum or, at the Company's option, a rate equal to LIBOR for the term selected
by the Company plus 2.75% per annum. Interest only on the Term Credit Facility
will be payable until August 1, 1998, after which time the Company will be
required to make equal monthly payments consisting of principal and interest
amortized over a period of 48 months. The interest rate under the Term Credit
Facility will continue to fluctuate, but the monthly payments after August 1,
1998 will remain the same. As a result, the Term Credit Facility may
negatively amortize. Any accrued but unpaid interest will be due along with
the principal balance on the maturity date of the Term Credit Facility, August
1, 2002.
The Revolving Credit Facility is secured by the Company's accounts
receivable, inventory and general intangibles. The Term Credit Facility is
secured by substantially all of the Company's furniture, fixtures and
equipment. The Credit Facility contains financial and other covenants with
respect to the Company that, among other matters, restrict the creation of
certain liens, restrict capital expenditures and require the maintenance of
certain minimum net worth and interest rate coverage. The Company is currently
in compliance with the covenants set forth in the Credit Facility.
The proceeds of the Credit Facility will be used by the Company for store
expansion, as well as for working capital and general corporate purposes.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 -- Revolving Note dated August 1, 1997
Exhibit 99.2 -- Term Note dated as of August 1, 1997
Exhibit 99.3 -- Press Release by the Company dated September 4,
1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEW WEST EYEWORKS, INC.
(Registrant)
Date: September 4, 1997 By: /s/ Darius J. DiTallo
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(Signature)
Darius J. DiTallo
Vice-President Finance/Administration
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Exhibit Index
Exhibit 99.1 -- Revolving Note dated as of August 1, 1997
Exhibit 99.2 -- Term Note dated as of August 1, 1997
Exhibit 99.3 -- Press Release by the Company dated September 4,
1997
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EXHIBIT 99.1
KEYBANK LOGO
Loan Number: 387236-1009501
REVOLVING NOTE
(Prime/LIBOR)
Date: August 1, 1997
Principal Amount: $3,000,000.00
Interest Rate: Variable Rate or LIBO Fixed Rate
Maturity Date: August 1, 1999
Borrower: NEW WEST EYEWORKS, INC.
1. PROMISE TO PAY. NEW WEST EYEWORKS, INC. ("Borrower") promises to pay
to KEYBANK NATIONAL ASSOCIATION, Seattle Metro Office, 700 Fifth Avenue, 48th
Floor, WA-31-10-4871, Seattle, WA. 98111 ("Lender"), or order, in lawful money
of the United States of America, the principal amount set forth above or so
much as may be outstanding, together with interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated from the date
of each advance until repayment of each advance.
2. PAYMENT. Borrower will pay this loan on demand, or if no demand is
made, on the Maturity Date set forth above. In addition, Borrower will pay
regular monthly payments of accrued unpaid interest, beginning September 1,
1997 and continuing on the same day of each month after that. Interest on this
Note is computed on a 365/360 simple interest basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, times the
outstanding principal balance, times the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges.
3. INTEREST RATE. This Note shall bear interest at the Variable Rate,
unless Borrower elects to have an Advance bear interest at a LIBO Fixed Rate,
as described below. Advances may bear interest at different rates.
(a) Variable Rate. Unless Borrower elects to have an advance bear
interest at a Fixed Libo Rate, amounts outstanding hereunder shall bear
interest from the date of advance at a floating rate equal to the Prime Rate
plus one eighth percent (0.125%) (the "Variable Rate"). "Prime Rate" means the
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floating commercial loan rate announced from time to time by Lender as its
"prime rate", and is not necessarily the lowest rate offered by Lender.
Changes in the Variable Rate will be effective on the date the Prime Rate
changes.
(b) LIBO Fixed Rate. Borrower may elect to have one or more
advances (each a "Fixed Rate Advance") bear interest for a term of 30, 60, 90,
120, or 180 days (the "Advance Period") at a fixed rate of interest equal to
the then-current LIBO Quote for the requested Advance Period, plus Two Hundred
and Thirty Five One Hundredths Percent (2.35%)(the "LIBO Fixed Rate"). "LIBO
Quote" means a rate calculated by Lender acting in good faith, which Lender
determines with reference to, but which may be different from, its LIBOR or
Eurodollar based costs of funds, on the date of the advance request for the
Advance Period selected by Borrower. The formula used by Lender in determining
the LIBO Quote is within its discretion and may be changed from time to time.
Borrower may not select an Advance Period that extends beyond the Maturity Date
of the Note. Upon expiration of the applicable Advance Period, Borrower may
elect to roll the advance to a new LIBO Fixed Rate, to pay the advance off, or
have the advance bear interest thereafter at the Variable Rate. If Borrower
fails to elect any of these options, the advance will thereafter bear interest
at the Variable Rate until Borrower selects a new LIBO Fixed Rate.
(c) Restrictions. The initial Fixed Rate Advance shall be a minimum
amount of One Million Dollars ($1,000,000.00), thereafter at Two Hundred and
Fifty Thousand Dollars ($250,000.00). Borrower may not have more than three
Fixed Rate Advances outstanding at any particular time.
4. PREPAYMENT. Borrower agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. This Note evidences a revolving
line, which may be borrowed, repaid, and re-borrowed from time until maturity
or earlier termination. Principal payments shall first be applied to reduce
principal bearing interest at the Variable Rate, then to Fixed Rate Advances.
If Borrower prepays a Fixed Rate Advance prior to the last day of the
applicable Advance Period, Borrower shall also pay a Prepayment Premium,
calculated as set forth below. Lender will be entitled to receive the
Prepayment Premium regardless of whether prepayment is voluntary or
involuntary, (including a demand on the Note at a time when Borrower is in
default hereunder) but not in the event of a demand by Lender prior to the
stated Termination Date in the absence of default under this Note. Borrower
acknowledges that Lender may or may not, in any particular case, match-fund a
Fixed Rate Advance and Borrower agrees that Lender will be entitled to receive
the Prepayment Premium irrespective of match-funding. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments of accrued unpaid interest. Rather,
they will reduce the principal balance due.
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5. LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 2.000% of the regularly scheduled payment or $10.00, whichever is
greater.
6. DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b) Borrower fails
to comply with or to perform when due any other term, obligation, covenant, or
condition contained in this Note or any agreement related to this Note, or in
any other agreement or loan Borrower has with Lender. (c) Any representation
or statement made or furnished to Lender by Borrower or on Borrower's behalf is
false or misleading in any material respect, either now or at the time made or
furnished. (d) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to
take any of Borrower's property on or in which Lender has a lien or security
interest. (f) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired. If any default, other than a default in payment, is
curable and if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it may be cured
(and no event of default will have occurred) if Borrower, after receiving
written notice from Lender demanding cure of such default: (a) cures the
default within fifteen (15) days; or (b) if the cure requires more than fifteen
(15) days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance
as soon as reasonably practical.
7. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower must pay that amount. Upon default,
including failure to pay upon final maturity, Lender, at its option, may also
increase the interest rate on this Note to a floating rate equal to the Prime
Rate plus 2.00% per annum. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower also will pay Lender that amount.
This includes, subject to any limits under applicable law, court costs,
Lender's attorneys' fees and Lender's reasonable legal expenses whether or not
there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
This Note has been delivered to and accepted by Lender in the State of
Washington. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of King County, State of Washington.
This Note shall be governed by and construed in accordance with the laws of the
State of Washington.
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8. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
9. LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested orally by Borrower or as provided in
this paragraph. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's office shown
above. The following party or parties are authorized as provided in this
paragraph to request advances under the line of credit until Lender receives
from Borrower at Lender's address shown above written notice of revocation of
their authority: Barry J. Feld, President/CEO, Darius J. Ditallo, V.P.
Finance/Admin.. Borrower authorizes Lender to debit Borrower's account number
471631003426 for the required interest payments and any other sums owed under
this Note. Borrower shall keep sufficient collected balances in the Account to
ensure that funds will be available to cover each payment when due. Borrower
agrees to be liable for all sums either advanced in accordance with the
instructions of an authorized person or credited to any of Borrower's accounts
with Lender. The unpaid principal balance owing on this Note at any time may
be evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to advance
funds under this Note if: (a) Borrower or any guarantor is in default under
the terms of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender.
10. PREPAYMENT PREMIUM. If for any reason Borrower shall prepay all or a
portion of the principal amount of any Fixed Rate Advance prior to the
expiration of the applicable Advance Period, Borrower shall also pay Lender a
Prepayment Premium. The Prepayment Premium will be equal to the present value,
at the time of prepayment (the "Prepayment Date"), of the excess of (i) the
interest that would have been payable on the amount prepaid at the interest
rate applicable to the Advance(s) from the Prepayment Date to the expiration
date of the Advance Period applicable to such Advance, over (ii) the interest
that would be chargeable on a note equal to the amount prepaid at a New Rate.
The "New Rate" shall be equal to the United States Treasury Security yield on a
security with a current remaining term to maturity the same as the Advance at
the Prepayment Date, plus the comparable interest rate spread as the Advance
had to the United States Treasury Security yield with the same maturity. The
present value shall be computed using 1/12th of the New Rate as the monthly
discount rate. If there is no U.S. Treasury Security with a comparable
maturity, Lender will determine the appropriate yield by interpolating between
maturities.
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11. SWAP PROVISIONS. If Borrower and Lender are entering or subsequently
enter into an interest rate swap agreement related to this Note (a "Swap"),
then the following provisions shall apply: This Note shall be deemed to be
modified so that interest will accrue during the period of time the Swap is in
effect at a Fixed Rate equal to the rate designated in the Confirmation issued
by Lender applicable to such Swap, and calculated in accordance with the
procedures and quotation sources used in connection with the Swap. Upon a
termination of the Swap that does not constitute a default under this Note, the
interest and payment provisions under this Note shall, at Lender's sole and
exclusive option, revert to what they would have been absent the Swap. If this
Note is prepaid, then Lender shall have the right in its sole and absolute
discretion to terminate the Swap upon or at any time after such prepayment. In
addition to any premium that may be due under this Note upon prepayment,
Borrower will pay any amounts that may be due to Lender upon Early Termination
(as defined in the 1991 ISDA Definitions published by the International Swap
Dealers Association, Inc.) of the Swap.
12. ADDITIONAL PROVISIONS. Any advance that Lender in its sole
discretion may permit after the final payment date provided in this Note will
be due on demand and otherwise subject to the terms of this Note. If there is
a statutory change in state or federal law (including without limitation, a
change related to required reserves under applicable bank regulatory law or a
change in any provision of the Internal Revenue Code), or any regulation or
interpretation issued thereunder, that lowers Lender's effective yield on this
Note, Lender shall notify Borrower in writing of the change, and Borrower shall
pay as additional interest on this Note, the amount necessary to compensate
Lender for the amount by which Lender's effective yield was reduced.
13. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights and remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, each waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made.
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ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
KEYBANK NATIONAL ASSOCIATION BORROWER:
NEW WEST EYEWORKS, INC.
/s/ Michael P. Righi BY:
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Authorized Officer
/s/ Barry J. Feld
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BARRY J. FELD, PRESIDENT/CEO
/s/ Darius J. DiTallo
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DARIUS J. DITALLO,V.P. FINANCE/ADMIN
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EXHIBIT 99.2
KEY BANK LOGO
Loan Number: 387236-2009701
TERM NOTE
(Prime/LIBOR)
Date: August 1, 1997
Principal Amount: $2,000,000.00
Interest Rate: Variable Rate or LIBO Fixed Rate
Maturity Date: August 1, 2002
Borrower: NEW WEST EYEWORKS, INC.
1. PROMISE TO PAY. NEW WEST EYEWORKS, INC. ("Borrower") promises to pay
to KEYBANK NATIONAL ASSOCIATION, Seattle Metro office, 700 Fifth Avenue, 48th
Floor, Seattle, WA. 98111 ("Lender"), or order, in lawful money of the United
States of America, the principal amount set forth above, together with interest
on the unpaid outstanding principal balance from the date funds are actually
disbursed until paid in full.
2. PAYMENT. Borrower will pay 12 consecutive monthly interest only
payments, beginning September 1, 1997 with interest calculated on the unpaid
principal balance as provided in this Note. Beginning on September 1, 1998,
and on the first of each month thereafter until the Maturity Date, Borrower
will make equal payments consisting of principal and interest to fully amortize
over 48 months with the outstanding balance at the interest rate in effect on
August 1, 1998. If on August 1, 1998, Borrower has more than one Advance
outstanding, the monthly payment will be the sum of the monthly payments for
each Advance calculated on the basis of the 48 month amortization. Interest
will continue to fluctuate as provided in this Note, but the monthly payment
will not change after August 1, 1998. As a result, the Note may negatively
amortize. Borrower's final payment will be due on August 1, 2002. Final
payment will be for all principal and accrued interest not yet paid, together
with any other unpaid amounts under this Note. Interest on this Note is
computed on a 365/360 simple interest basis; that is, by applying the ratio of
the annual interest rate over a year of 360 days, times the outstanding
principal balance, times the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing. Unless otherwise agreed
or required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.
3. INTEREST RATE. This Note shall bear interest at the Variable Rate,
unless Borrower elects to have an Advance bear interest at a LIBO Fixed Rate,
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as described below. Advances may bear interest at different rates.
(a) Variable Rate. Unless Borrower elects to have an advance bear
interest at a LIBO Fixed Rate, amounts outstanding hereunder shall bear
interest from the date of advance at a floating rate equal to the Prime Rate
plus one half percent percent (0.500%) (the "Variable Rate"). "Prime Rate"
means the floating commercial loan rate announced from time to time by Bank as
its "prime rate", and is not necessarily the lowest rate offered by Lender.
Changes in the Variable Rate will be effective on the date the Prime Rate
changes.
(b) LIBO Fixed Rate. Borrower may elect to have one or more
advances (each a "Fixed Rate Advance") bear interest for a term of 30, 60, 90,
120, or 180 days, (the "Advance Period") at a fixed rate of interest equal to
the then-current LIBO Quote for the requested Advance Period, plus two hundred
seventy five one hundreths percent (2.750%)(the "LIBO Fixed Rate"). "LIBO
Quote" means a rate calculated by Lender acting in good faith, which Bank
determines with reference to, but which may be different from, its LIBOR or
Eurodollar based costs of funds, on the date of the advance request for the
Advance Period selected by Borrower. The formula used by Bank in determining
the LIBO Quote is within its discretion and may be changed from time to time.
Borrower may not select an Advance Period that extends beyond the Maturity Date
of the Note. Upon expiration of the applicable Advance Period, Borrower may
elect to roll the advance to a new LIBO Fixed Rate, or have the advance bear
interest thereafter at the Variable Rate. If Borrower fails to elect any of
these options, the advance will thereafter bear interest at the Variable Rate
until Borrower selects a new LIBO Fixed Rate.
(c) Restrictions. Each Fixed Rate Advance shall be in the minimum
amount of One Million Dollars($1,000,000.00), thereafter at Two Hundred and
Fifty Thousand Dollars ($250,000.00). Borrower may not have more than three
Fixed Rate Advances outstanding at any particular time.
4. PREPAYMENT. Borrower agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. Principal payments shall first
be applied to reduce principal bearing interest at the Variable Rate, then to
Fixed Rate Advances. If Borrower prepays a Fixed Rate Advance prior to the
last day of the applicable Advance Period, Borrower shall also pay a Prepayment
Premium, calculated as set forth below. Lender will be entitled to receive
the Prepayment Premium regardless of whether prepayment is voluntary or
involuntary, (including acceleration of the Note upon Borrower's default).
Borrower acknowledges that Lender may or may not, in any particular case,
match-fund a Fixed Rate Advance, and Borrower agrees that Lender will be
entitled to receive the Prepayment Premium irrespective of match-funding.
Early payments will not, unless agreed to by Lender in writing, relieve
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Borrower of Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance due.
5. LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 2.000% of the regularly scheduled payment or $10.00, whichever is
greater.
6. DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b) Borrower fails
to comply with or to perform when due any other term, obligation, covenant, or
condition contained in this Note or any agreement related to this Note, or in
any other agreement or loan Borrower has with Lender. (c) Any representation
or statement made or furnished to Lender by Borrower or on Borrower's behalf is
false or misleading in any material respect, either now or at the time made or
furnished. (d) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to
take any of Borrower's property on or in which Lender has a lien or security
interest. (f) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired. If any default, other than a default in payment, is
curable and if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it may be cured
(and no event of default will have occurred) if Borrower, after receiving
written notice from Lender demanding cure of such default: (a) cures the
default within fifteen (15) days; or (b) if the cure requires more than fifteen
(15) days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance
as soon as reasonably practical.
7. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower must pay that amount. Upon default,
including failure to pay upon final maturity, Lender, at its option, may also
increase the interest rate on this Note to a floating rate equal to the Prime
Rate plus 2.00% per annum. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower also will pay Lender that amount.
This includes, subject to any limits under applicable law, court costs,
Lender's reasonable attorneys' fees and Lender's legal expenses whether or not
there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
This Note has been delivered to and accepted by Lender in the State of
Washington. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of King County, State of Washington.
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This Note shall be governed by and construed in accordance with the laws of the
State of Washington.
8. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
9. PREPAYMENT PREMIUM. If for any reason Borrower shall prepay all or a
portion of a Fixed Rate Advance prior to the last day of the applicable Advance
Period, Borrower shall also pay Lender a Prepayment Premium. The Prepayment
Premium will be equal to the present value, at the time of prepayment (the
"Prepayment Date"), of the excess of (i) the interest that would have been
payable on the amount prepaid at the interest rate applicable to the principal
amount being prepaid from the Prepayment Date to the last day of the applicable
Advance Period, over (ii) the interest that would be chargeable on a note equal
to the amount prepaid at a New Rate. The "New Rate" shall be equal to the
United States Treasury Security yield on a security with a current remaining
term to maturity the same as the remaining Advance Period at the Prepayment
Date, plus the comparable interest rate spread as the applicable interest rate
had to the United States Treasury Security yield with the same maturity. The
present value shall be computed using 1/12th of the New Rate as the monthly
discount rate. If there is no U.S. Treasury Security with a comparable
maturity, Lender will determine the appropriate yield by interpolating between
maturities.
10. SWAP PROVISIONS. If Borrower and Lender are entering or
subsequently enter into an interest rate swap agreement related to this Note (a
"Swap"), then the following provisions shall apply: This Note shall be deemed
to be modified so that (i) interest will accrue during the period of time the
Swap is in effect at a Fixed Rate equal to the rate designated in the
Confirmation issued by Lender applicable to such Swap, and calculated in
accordance with the procedures and quotation sources used in connection with
the Swap, and (ii) Borrower shall make principal payments under this Note as
set forth in an amortization schedule generated by Lender in connection with
the Swap. Upon a termination of the Swap that does not constitute a default
under this Note, interest and payment provisions under this Note shall, at
Lender's sole and exclusive option, revert to what they would have been absent
the Swap. If this Note is prepaid, then Lender shall have the right in its
sole and absolute discretion to terminate the Swap upon or at any time after
such prepayment. In addition to any premium that may be due under this Note
upon prepayment, Borrower will pay any amounts that may be due to Lender upon
Early Termination (as defined in the 1991 ISDA Definitions published by the
International Swap Dealers Association, Inc.) of the Swap.
11. ADDITIONAL PROVISIONS. If there is a statutory change in state or
federal law (including without limitation, a change related to required
reserves under applicable bank regulatory law or a change in any provision of
<PAGE>
<PAGE> 5
the Internal Revenue Code), or any regulation or interpretation issued
thereunder, that lowers Lender's effective yield on this Note, Lender shall
notify Borrower in writing of the change, and Borrower shall pay as additional
interest on this Note, the amount necessary to compensate Lender for the amount
by which Lender's effective yield was reduced.
12. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights and remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, each waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
KEYBANK NATIONAL ASSOCIATION
BORROWER:
/s/ Michael P. Righi NEW WEST EYEWORKS, INC.
- ---------------------------- By:
Authorized Officer
/s/ Barry J. Feld
-----------------------------------
BARRY J. FELD, PRESIDENT/CEO
/s/ Darius J. DiTallo
-----------------------------------
DARIUS J. DITALLO,V.P FINANCE/ADMIN
<PAGE>
EXHIBIT 99.3
NEW WEST EYEWORKS ANNOUNCES NEW BANKING
RELATIONSHIP
TEMPE, Arizona (September 4, 1997) New West Eyeworks, Inc. (NASDAQ: "NEWI"
and PSE: "NWE") today announced that it has negotiated a multi-year $5 million
credit facility with KeyBank located in Seattle, Washington. The rates on the
new facility compare very favorably with the previous $2 million revolving line
of credit, reflecting the increased financial strength of the organization.
The facility will be used by New West Eyeworks for store expansion as well as
for working capital and general corporate purposes.
The new facility will improve New West's liquidity and provide additional
funding to enter new markets and to fill in existing markets with additional
store locations," commented Ronald E. Weinberg, Chairman of New West Eyeworks,
Inc.
"We are pleased to enter into this relationship with KeyBank, which will allow
us to take advantage of attractive terms on retail space being offered by mall
and shopping center owners in several markets," noted Barry Feld, President and
Chief Executive Officer of New West Eyeworks, Inc. "The availability of funds
under our new bank credit agreement, when combined with the remaining proceeds
from the secondary stock offering (completed in February 1997), anticipated
earnings and lease financing, should allow New West to achieve its desired
growth objectives."
New West Eyeworks, Inc. is a leading retailer of specialty eyewear and
currently operates 154 stores in twelve Western and Midwestern states. The
Company's merchandising strategy centers around a signature $59 price point for
a wide selection of quality, brand-name eyeglasses (frame and lenses). New West
also sells brand-name contact lenses and non-prescription sunglasses and offers
customers on-site eye examinations by independent optometrist. New West stores
operate under the Vista Optical brand name except for the stores in Arizona and
Utah which use the Lee Optical brand name. The Company's optical laboratories
and distribution facilities are located in Tempe, Arizona and near Portland,
Oregon.
This press release includes forward-looking statements. Actual results might
differ materially from those projected in the forward-looking statements.
Reference is made to the Company's filings with the Securities and Exchange
Commission, including the Company's annual report for 1996 on Form 10-K and
quarterly report for the quarter ended June 28, 1997 on Form 10-Q, for a
description of factors that could cause results to differ materially from those
in the forward-looking statements.
For further information, please contact:
Ronald E. Weinberg, Chairman of the Board (216) 861-4540
Or
Barry Feld, President and CEO (602) 438-1330
