ASSIGNMENT OF XXXXXX'S INTEREST IN LEASES
THIS ASSIGNMENT made as of this 29th day of April, 1998 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Assignment") is between PIERCING PAGODA, INC. ("Assignor"), a Delaware
corporation having its chief executive office at 0000 Xxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000, and CORESTATES BANK, N.A., a national bank with
offices at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 19603, as administrative agent
for the Lenders (hereinafter defined) under that certain Syndicated Loan
Agreement dated March 27, 1997 (as amended, modified, extended, supplemented,
restated and/or replaced from time to time, the "Syndicated Loan Agreement") by
and among Assignor, the lending institutions from time to time parties thereto
(each a "Lender" and collectively, the "Lenders"), and Assignee, as
administrative agent for itself and the other Lenders and as a Lender (in such
capacity, the "Assignee").
W I T N E S S E T H T H A T:
Pursuant to the terms and subject to the conditions set forth in the
Syndicated Loan Agreement and that certain Reimbursement Agreement dated as of
the date hereof (as amended, modified, extended, supplemented, restated and/or
replaced from time to time, the "Reimbursement Agreement") by and among
Assignor, the Lenders and Assignee, as the administrative agent for itself and
the other Lenders. Assignee, on behalf of each Lender (according to such
Xxxxxx's Pro Rata Share [as defined in the Syndicated Loan Agreement]) has
issued for the account of Assignor its irrevocable letter of credit (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
the "Letter of Credit") in an amount equal to Two Million Six Hundred Nineteen
Thousand Nine Hundred Fifty-Four and 25/100 ($2,619,954.25) Dollars to provide
credit enhancement for Assignor's Taxable Variable Rate Demand/Fixed Rate Bonds,
Series of 1998, in the aggregate amount of Two Million Five Hundred Sixty-Five
Thousand ($2,565,000.00) Dollars (as amended, modified, extended, supplemented,
restated and/or replaced from time to time collectively, the "Bonds").
The reimbursement obligation of Assignor to the Lenders is evidenced by
the Letter of Credit and those certain Revolving Loan Notes executed and
delivered by Assignor to the Lenders pursuant to, and as described in, the
Syndicated Loan Agreement. To induce the Lenders, through Assignee as
administrative agent and as issuer of the Letter of Credit, to issue the Letter
of Credit, Assignor is executing and delivering an Open-End Mortgage and
Security Agreement (as amended, modified, extended, supplemented restated and/or
replaced, the "Mortgage") to secure the existing and future debts, liabilities
and obligations of Assignor to the Lenders under the Reimbursement Agreement. As
a future condition to the issuance of the Letter of Credit, and as additional
collateral security for the liabilities and obligations secured by the Mortgage,
Assignee has required the execution and delivery of this Assignment.
NOW, THEREFORE, for value received and intending to be legally bound,
Assignor agrees as follows: 1) As security for the payment of all sums and
performance of all obligations secured by the Mortgage and as security for the
payment and performance of all of Assignor's obligations under the Reimbursement
Agreement, Assignor hereby assigns to Assignee all of its right, title and
interest as lessor in, to and under all leases now or hereafter affecting the
Property, together with all extensions and modifications of any such leases and
all guarantees of lessee's obligations thereunder now or hereafter in force
(said leases, extensions, modifications and guarantees being hereinafter
collectively called the "Lease"). This Assignment includes, without limitation,
the right to receive all rents and other amounts payable under the Lease. Upon
the payment in full of all amounts secured hereby, as evidenced by the recording
or filing of an instrument or instruments of satisfaction or full release of the
Mortgage, this Assignment shall terminate and be of no further force or effect.
2) Assignor represents, warrants and covenants that:
(a) The Lease shall be subordinate in estate, lien, operation and effect to the
Note and the Mortgage.
(b) Assignor has not made and will not make any other
assignment of the Lease.
(c) There are no leases or agreements to lease all or
any part of the Property now in effect.
(d) Assignor will not enter into any leases for all or any part of the Property
without the prior written approval thereof by Assignee. All leases of all or any
part of the Property shall include subordination and attornment provisions
satisfactory to Assignee, and shall be on the form of standard lease approved by
Assignee in writing with no modifications except such modifications as Assignee
may approve in writing prior to the execution and delivery of the respective
lease. No lease of all or any part of the Property shall be materially amended
except any such amendments as Assignee may approve in writing prior to the
execution and delivery of the respective amendments.
(e) Within ninety (90) days after the end of each fiscal year of Assignor,
Assignor will deliver to Assignee an occupancy report stating as of the date of
delivery thereof with respect to each lease of all or any part of the Property
the lessee's name, the date thereof, the premises demised, the term, the rent,
the security deposits, any advance rent payments in excess of one month and any
defaults by the lessee or Assignor in respect thereof.
3) Except as otherwise provided in paragraph 9 hereof, Assignor shall have the
right to collect, but not more than thirty (30) days prior to accrual, all
stated rent and other amounts due to Assignor under the Lease, and to retain,
use and enjoy the same.
4) Assignor will: (a) fulfill or perform every condition and covenant of the
Lease by the lessor to be fulfilled or performed; (b) give to Assignee prompt
notice of the receipt of any notice received by Assignor of a default under the
Lease by Assignor or any lessee, together with a copy of such default notice;
(c) enforce, short of termination of the Lease, the performance or observance of
every covenant and condition of the Lease by any lessee to be performed or
observed; (d) not terminate the Lease or accept a surrender thereof unless
required to do so by the terms of the Lease; (e) not anticipate the rents under
the Lease for more than 30 days prior to accrual; (f) neither waive nor release
any lessee from any obligations or conditions under the Lease; and (g) deliver
to Assignee, upon written demand, a statement specifying the rents and profits
derived or received from the Lease for the period specified in such demand, the
disbursements made for such period and the names of all lessees of the Property,
together with true and correct copies of all leases that have not been delivered
to Assignee previously for which rent is so accounted.
5) Assignor shall, at its sole expense, appear in and defend any action growing
out of or in any manner connected with the Lease or the obligations or
liabilities of the lessor or any lessee or guarantor thereunder.
6) Should Assignor fail to make any payment or to do any act as herein provided,
Assignee may but need not, without notice to or demand on Assignor and without
releasing Assignor from any obligation herein, make or do the same, including
without limitation, appearing in and defending any action purporting to affect
the security hereof or the rights or powers of Assignee, performing any
obligation of the lessor in the Lease contained, and, in exercising any such
powers, paying necessary costs and expenses, including without limitation,
reasonable attorneys' fees. Assignor will pay immediately upon demand all sums
expended by Assignee under the authority hereof, together with interest thereon
at the lower of a rate equal to five percent per annum above the rate of
interest extant under the Note or the highest rate permitted by applicable law,
which sums together with such interest thereon shall be secured hereby.
7) After the occurrence of an Event of Default (as defined in the Reimbursement
Agreement) and so long as an Event of Default is continuing, Assignee, at its
option, without further notice and without regard to the adequacy of the
security for the sums secured hereby, either in person or by agent, with or
without bringing any action or proceeding, may do any one or more of the
following: (a) enter upon, take possession of and operate the Property; (b)
make, enforce, modify and accept the surrender of the Lease or any of them; (c)
obtain and evict lessees; (d) fix and modify rents and other sums payable by any
lessee under the Lease; (e) either with or without taking possession of the
Property, in its own name or in the name of Assignor or both, sue for or
otherwise collect and receive all rents, issues and profits, including those
past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorneys' fees, to the obligations secured
hereby in such order as Assignee may determine; (f) exercise any and all rights
and remedies available to a secured party under the Uniform Commercial Code and
any and all other rights and remedies now or hereafter available at law or in
equity; and (g) do any other acts which Assignee deems proper to protect its
rights hereunder. The net proceeds, if any, received by Assignee from the
Property in excess of the amount necessary to meet all obligations of Assignor
hereunder or secured hereby, including any accelerated indebtedness, shall be
paid over by Assignee to Assignor. The entering upon and taking possession of
the Property, the collection of the rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or waive,
modify or affect any notice of any Event of Default or invalidate any act done
pursuant to such notice. All rights and remedies of Assignee provided herein or
in the Note or the instruments delivered to Assignee in connection with the
Letter of Credit Facility (a) are cumulative and concurrent, (b) may be
exercised independently, successively or together against Assignor or its
properties at the sole discretion of Assignee, (c) shall not be exhausted by any
exercise thereof, but may be exercised as often as occasion therefor may arise,
and (d) shall not be construed to be waived or released by Xxxxxxxx's delay in
exercising, or failure to exercise, them or any of them at any time it may be
entitled to do so.
8) Without the prior written consent of Assignee, Assignor will not cause or
permit the leasehold estate under the Lease to merge with Assignor's
reversionary or equitable interest in the Property.
9) Assignor hereby authorizes Assignee to give written notice of this Assignment
at any time to the lessee or lessees of all or any part of the Property. All
lessees are hereby authorized and directed to pay rent and other sums payable to
Assignor under the Lease directly to Assignee upon receipt from Assignee of a
statement that there has occurred an Event of Default in respect of the
obligations secured hereby, without any further evidence of such Event of
Default.
10) Assignee shall not be obligated to perform or discharge any obligation under
the Lease, and Assignor hereby agrees to indemnify Assignee against and hold it
harmless from any and all liability, loss or damage which it may incur under the
Lease or under or by reason of this Assignment and of and from any and all
claims and demands whatsoever which may be asserted against it by reason of any
alleged obligation or undertaking on its part to perform or discharge any of the
terms of the Lease.
11) Assignor will, upon Xxxxxxxx's request, execute and deliver to Assignee or
otherwise obtain for Assignee's benefit such further assignments and other
documents and do or cause to be done such acts or things as Assignee, in its
sole discretion, may require to perfect, protect or continue this Assignment, to
otherwise effect the transactions contemplated hereby or to vest or confirm any
right or remedy herein granted. Assignor will pay all costs of acknowledging,
recording and filing this Assignment and such other documents in such public
offices as Assignee may require.
12) If any provision hereof is found by a court of competent jurisdiction to be
prohibited or unenforceable, it shall be ineffective only to the extent of such
prohibition or unenforceability, and such prohibition or unenforceability shall
not invalidate the balance of such provision to the extent it is not prohibited
or unenforceable, nor invalidate the other provisions hereof, all of which shall
be liberally construed in favor of Assignee in order to effect the provisions
hereof. 13) Notices hereunder shall be in writing and shall be delivered by
personal service or shall be sent by postage prepaid, registered mail, return
receipt requested or reputable nationally recognized overnight delivery service,
addressed if to Assignee or Assignor, at the respective address set forth in the
heading of this Assignment, or at such other address as the addressee may
designate in writing. Each notice hereunder shall be deemed given on the date it
is delivered in the case of personal service, or the date it is deposited with
the Postal Service or the overnight delivery service in the case of registered
mail or overnight delivery, respectively.
14) This Assignment shall be governed by and construed according to the
substantive laws of the Commonwealth of Pennsylvania, without regard to its
choice of law principles.
15) This Assignment shall inure to the benefit of the successors and assigns of
Assignee and shall bind Assignor's successors and assigns. If Assignor is more
than one person, this Assignment shall be a joint and several obligation of each
person named herein as "Assignor", and each of such persons shall be deemed to
have made the representations and warranties herein set forth.
IN WITNESS WHEREOF, Assignor has duly executed this Assignment the
day and year first above written.
(CORPORATE SEAL) PIERCING PAGODA, INC.
ATTEST:_______________________ By:______________________________
Name: Name:
Title: Title:
COMMONWEALTH OF PENNSYLVANIA :
: ss.
COUNTY OF _________________________ :
On this _____ day of April, 1998, before me, the subscriber, a Notary
Public in and for the Commonwealth of Pennsylvania, personally appeared
______________ _____________________ who acknowledged himself/herself to be the
_______________ of Piercing Pagoda, Inc., a Delaware corporation, and that
he/she, being authorized to do so, executed the foregoing instrument for the
purposes therein contained by signing the name of the corporation as such
officer.
IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal.
[SEAL]
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Notary Public
My commission expires:
PHIL1\106213-3
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