FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED LOAN
AGREEMENT AND TWELFTH REPLACEMENT REVOLVING CREDIT NOTE
This Fifth Amendment to Third Amended and Restated Loan Agreement and
Twelfth Replacement Revolving Credit Note ("Fifth Amendment") is made this 17th
day of December, 1996 by and between Piercing Pagoda, Inc. ("Borrower"), a
Delaware corporation having its chief executive office at 0000 Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxx 00000, and Summit Bank, successor-in-interest to First
Valley Bank ("Bank"), a Pennsylvania bank having offices at Xxx Xxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxx 00000.
BACKGROUND
A. Pursuant to the terms and subject to the conditions set forth in that
certain Third Amended and Restated Loan Agreement dated February 13, 1995 by and
between Borrower and Bank (under its former name), as amended pursuant to a
letter agreement dated April 21, 1995 between Borrower and Bank (under its
former name), that certain Amendment to Third Amended and Restated Loan
Agreement dated August 4, 1995 between Borrower and Bank (under its former
name), that certain Second Amendment to Third Amended and Restated Loan
Agreement dated November 21, 1995 between Borrower and Bank (under its former
name), that certain Third Amendment to Third Amended and Restated Loan Agreement
dated September 5, 1996 between Borrower and Bank, and that certain Fourth
Amendment to Third Amended and Restated Loan Agreement dated October 18, 1996
between Borrower and Bank (as amended, the "Loan Agreement") and related
instruments, agreements and documents (collectively, along with the Loan
Agreement, the "Financing Agreements"), Borrower is currently indebted to Bank
for repayment of various loans, advances and extensions of credit made by Bank
from time to time to or for the benefit of Borrower under a certain revolving
credit facility in the sum of up to Sixty Million ($60,000,000.00) Dollars (the
"Revolving Loan"), which indebtedness is evidenced by that certain Twelfth
Replacement Revolving Loan Note dated October 18, 1996 in the principal sum of
Sixty Million ($60,000,000.00) Dollars executed and delivered by Borrower to
Bank (the "Twelfth Replacement Revolving Loan Note").
B. Borrower has requested that Bank extend the maturity date of the
Revolving Loan, and Bank is willing to do so under the terms and subject to the
conditions set forth in this Amendment and in the instruments, agreements and
documents to be executed and/or delivered pursuant to this Amendment.
NOW, THEREFORE, with the foregoing Background deemed incorporated
hereinafter by this reference and hereby made a part hereof, the parties hereto,
intending to be legally bound, hereby further covenant and agree as follows:
SECTION 1. DEFINITIONS.
1.01 Capitalized Terms. All capitalized terms not otherwise defined
in this Amendment shall have the meanings ascribed to such terms in the Loan
Agreement.
SECTION 2. CONFIRMATION OF EXISTING INDEBTEDNESS AND RATIFICATION OF
FINANCING AGREEMENTS.
2.01 Confirmation of Existing Indebtedness. Borrower hereby
unconditionally acknowledges and confirms that: the outstanding principal
balance of Borrower to Bank evidenced by the Twelfth Replacement Revolving Loan
Note is, as of the date hereof, Twenty-Seven Million Five Hundred Forty Nine
Thousand Eight Hundred Seventeen and 05/100 ($27,549,817.05) Dollars; the
aggregate face amount of Letters of Credit issued by Bank or CoreStates Bank,
N.A., successor-in-interest to Meridian Bank for the account of Borrower under
the Revolving Loan is, as of the date hereof, Twenty-Seven Million Three Hundred
Sixty Two Thousand Four Hundred Four and 43/100 ($27,362,404.43) Dollars;
interest on the Obligations has been paid through November 30, 1996; and the
foregoing indebtedness, together with continually accruing interest and related
costs, fees and expenses is, as of the date hereof, owing without claim,
counterclaim, right of recoupment, defense or set-off of any kind or of any
nature whatsoever.
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2.02 Ratification of Financing Agreements.
(A) Borrower hereby unconditionally ratifies and confirms and
reaffirms in all respects and without condition, all of the terms, covenants and
conditions set forth in the Financing Agreements, and agrees that it remains
unconditionally liable to Bank in accordance with the respective terms,
covenants and conditions of such instruments, agreements and documents.
(B) Without limiting the generality of the immediately preceding
Subparagraph 2.02(A), the Borrower hereby unconditionally ratifies and confirms
and reaffirms in all respects and without condition, the provisions of the
Financing Agreements permitting Bank to Confess Judgment against the Borrower.
SECTION 3. AMENDMENTS TO FINANCING AGREEMENTS.
3.01 The Revolving Loan.
(A) The text of Paragraph 1.2.1 of the Loan Agreement is deleted in
its entirety and replaced with the following:
"Revolving Loan Termination Date" means February 28, 1997, unless such
date is extended by Bank and evidenced by a confirming written notice to
Borrower.
3.02 The Twelfth Replacement Revolving Loan Note. The Twelfth Replacement
Revolving Loan Note is hereby amended to provide for the indebtedness evidenced
thereby to be due and payable, without further notice to Borrower, on February
28, 1997, unless such date is extended by Bank and evidenced by a confirming
written notice to Borrower.
SECTION 4. WARRANTIES AND REPRESENTATIONS.
4.01 Reaffirmation of Warranties and Representations. All warranties and
representations set forth in the Loan Agreement and the other Financing
Agreements are hereby reasserted and restated by Borrower as of the date hereof
as if set forth at length herein, except as modified by information previously
provided, in writing, to Bank or acknowledged, in writing, by Bank. Borrower
hereby acknowledges that such warranties and representations, and the warranties
and representations set forth below, are being specifically relied upon by Bank
as a material inducement to Bank to enter into this Fifth Amendment and extend
the maturity of the Revolving Loan.
4.02 Additional Warranties and Representations. To induce Bank to
enter into this Fifth Amendment, Borrower represents and warrants to Bank
that:
(A) Borrower has the power, authority and capacity to enter into and
perform this Fifth Amendment and all related instruments, agreements and
documents, and to incur the Obligations herein and therein provided for, and
Borrower has taken all proper and necessary corporate action to authorize the
execution, delivery and performance of this Fourth Amendment and related
instruments, agreements and documents;
(B) This Fifth Amendment is valid, binding and enforceable against
Borrower in accordance with its terms; and
(C) No consent, approval or authorization of, or filing,
registration or qualification with, any Person is required to be obtained by
Borrower in connection with the execution and delivery of this Fifth Amendment
or any related instrument, agreement or document, or undertaking or performance
of any Obligation hereunder or thereunder.
SECTION 5. CONDITIONS PRECEDENT.
This Fifth Amendment is subject to the following conditions precedent (all
instruments, agreements and documents to be in form and substance satisfactory
to Bank and its counsel):
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5.01 Documents Required for Closing. Borrower shall have duly
executed and/or delivered (or caused to be duly executed and/or delivered) to
Bank the following:
(A) This Amendment and each other instrument, agreement and document to be
executed and/or delivered pursuant to this Amendment and/or the instruments,
agreements and documents referred to in this Amendment;
(B) A certified (as of the date of this Fifth Amendment) copy of
resolutions of Borrower's Board of Directors authorizing the execution, delivery
and performance of this Fifth Amendment and each other document to be executed
and/or delivered pursuant hereto and any other instrument, agreement or document
referred to herein;
(C) A certification that Borrower's certificate of incorporation and
by-laws remain unchanged from Closing;
(D) A certificate (dated the date of this Fifth Amendment) of Borrower's
corporate secretary as to the incumbency and specimen signatures of the officers
of Borrower executing this Fifth Amendment and each other document to be
executed and/or delivered pursuant hereto; and
(E) Such other instruments, agreements and documents as may be required by
Bank and/or its counsel.
SECTION 6. MISCELLANEOUS.
6.01 Integrated Agreement. This Fourth Amendment and all of the
instruments, agreements and documents executed and/or delivered in conjunction
with this Fourth Amendment shall be effective upon the date of execution hereof
and thereof by all parties hereto and thereto, and shall be deemed incorporated
into and made a part of the Loan Agreement and the other Financing Agreements.
All such instruments, agreements and documents, and this Fourth Amendment, shall
be construed as integrated and complementary of each other, and as augmenting
and not restricting Bank's rights, remedies, benefits and security. If, after
applying the foregoing, an inconsistency still exists, the provisions of this
Fourth Amendment shall constitute an amendment thereto and shall govern and
control.
6.02 Expenses of Bank. Borrower will pay, on demand, all reasonable
out-of-pocket expenses, including the reasonable fees and expenses of legal
counsel for Bank, incurred in connection with this Fourth Amendment and all
instruments, agreements and documents executed and/or delivered in connection
with this Fourth Amendment. Subject to Paragraph 2.07 of the Loan Agreement,
Bank may charge any deposit account of Borrower maintained at Bank for all or
any part of any amount due hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to Third Amended and Restated Loan Agreement to be duly executed and exchanged
as of the day and year first above written.
PIERCING PAGODA, INC.,
a Delaware corporation
By:__/s/ Xxxx X. Eureyecko__________
Name: Xxxx X. Xxxxxxxxx
Title: President
Attest:_ /s/ Xxxxxxx X. Lehman_______
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer
(Corporate Seal)
SUMMIT BANK
By: /s/ Xxxxx X. Baus_____
Xxxxx X. Xxxx,
Vice President
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