FIRST AMENDMENT TO SYNDICATED LOAN AGREEMENT
This First Amendment to Syndicated Loan Agreement ("First
Amendment") is made this twenty-first day of November, 1997 by and
among Piercing Pagoda, Inc. ("Borrower"), a Delaware corporation having
its chief executive office at 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx
00000, the financial institutions now or hereafter parties hereto and
their respective successors and assigns (each a "Lender" and
collectively, the "Lenders"), Summit Bank ("Summit"), a New Jersey bank
having offices at Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000,
and CoreStates Bank, N.A. ("CoreStates"), a national bank having
offices at 000 Xxxx Xxxxxx, FC6-94-3-140, X.X. Xxx 0000, Xxxxxxx,
Xxxxxxxxxxxx 00000. Summit and CoreStates are co-agent for Lenders (in
such capacity, each an "Agent" and collectively, the "Agents"), and
CoreStates as administrative agent and issuing bank for the Lenders (in
such capacity, the "Administrative Agent").
BACKGROUND
A. Pursuant to the terms and subject to the conditions set forth
in that certain Syndicated Loan Agreement dated March 27, 1997 by and
among Borrower, Lenders, Agents and Administrative Agent (the "Loan
Agreement"), Borrower is currently indebted to Lenders for repayment of
various loans, advances and extensions of credit made by Lenders to or
for the benefit of Borrower under a revolving credit facility in the
principal sum of up to Seventy-Five Million ($75,000,000.00) Dollars
(the "Revolving Loan"), which indebtedness is evidenced by those
certain Revolving Loan Notes dated the date of the Loan Agreement
executed and delivered by Borrower to each Lender (in the amount of
each such Lender's Commitment).
B. Borrower has requested that each Lender increase its
Commitment under the Revolving Loan, and the Cash Advance Sublimit
under the Revolving Loan, and the Lenders are willing to do so under
the terms and subject to the conditions set forth in this First
Amendment and the instruments, agreements and documents to be executed
and/or delivered pursuant to this First 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 covenant and
agree as follows:
SECTION 1. DEFINITIONS.
1.01 Capitalized Terms. All capitalized terms not otherwise
defined in this First Amendment shall have the meanings ascribed to
such terms in the Loan Agreement.
SECTION 2. CONFIRMATION OF EXISTING INDEBTEDNESS AND
RATIFICATION OF LOAN DOCUMENTS.
2.01 Confirmation of Existing Indebtedness. Borrower hereby
unconditionally acknowledges and confirms that: the aggregate
outstanding principal balance of Borrower to Lenders evidenced by the
Revolving Loan Notes is, as of the date hereof, Thirty-Two Million
Dollars ($32,000,000) Dollars; the aggregate face amount of Letters of
Credit issued by CoreStates Bank for the account of Borrower under the
Revolving Loan is, as of the date hereof, Xxxxx-Five Million Five
Hundred Ninety-Five Thousand Two Hundred Seventy-Seven and 87/100
($35,595,277.87) Dollars; interest on the Obligations has been paid
through October 31, 1997; 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.
2.02 Ratification of Loan Documents.
(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 Loan Documents, 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), Borrower hereby unconditionally
ratifies and confirms and reaffirms in all respects and without
condition, the provisions of the Loan Documents permitting Lenders to
Confess Judgment against Borrower.
SECTION 3. AMENDMENTS TO FINANCING AGREEMENTS.
3.01 The Revolving Loan.
(A) Paragraph 1.15 of the Loan Agreement is hereby amended
to increase the Cash Advance Sublimit from Forty-Five Million
($45,000,000.00) Dollars to Fifty Million ($50,000,000.00) Dollars;
(B) Paragraph 1.17 of the Loan Agreement is hereby amended
to provide that the aggregate "Commitment" of the Lenders is hereby
increased by the sum of Five Million ($5,000,000.00) Dollars to the sum
of Eighty Million ($80,000,000.00) Dollars, each Lender agreeing to
participate in such increase in accordance with its Pro Rata Share;
(C) Paragraph 1.45 of the Loan Agreement is hereby amended
to increase the Line Limit by the sum of Five Million ($5,000,000.00)
Dollars to the sum of Eighty Million ($80,000,000.00) Dollars; and
(D) Paragraph 1.52 of the Loan Agreement is hereby amended
to redefine the term "Notes" to mean, collectively, the "Replacement
Revolving Loan Notes" (as hereinafter defined).
3.01 The Replacement Revolving Loan Notes. Contemporaneously
herewith, to evidence each Lender's increase in its Commitment (in
accordance with its Pro Rata Share), Borrower shall execute and deliver
to each Lender its Replacement Revolving Loan Note in an amount equal
to each Lender's Commitment (as hereby increased). Each Replacement
Revolving Loan Note shall replace and supersede (but not extinguish any
unpaid Obligations evidenced by) the Revolving Loan Note dated the date
of the Loan Agreement executed and delivered by Borrower to each
Lender.
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 Loan Documents are hereby reasserted and restated by Borrower as
of the date hereof as if set forth at length herein. 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
First Amendment and increase the Line Limit and the Cash Advance
Sublimit under the Revolving Loan.
4.02 Additional Warranties and Representations. To induce Bank to
enter into this First Amendment, Borrower represents and warrants to
Bank that:
(A) Borrower has the power, authority and capacity to enter
into and perform this First 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 First Amendment and related instruments, agreements and
documents;
(B) This First 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 First Amendment or any related instrument, agreement or document,
or undertaking or performance of any Obligation hereunder or
thereunder.
SECTION 5. CONDITIONS PRECEDENT.
This First 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):
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 First Amendment, the Replacement Revolving Loan
Notes, explanations and waivers of rights with respect to the
Replacement Revolving Loan Notes and each other instrument, agreement
and document to be executed and/or delivered pursuant to this First
Amendment and/or the instruments, agreements and documents referred to
in this First Amendment;
(B) A certified (as of the date of this First Amendment)
copy of resolutions of Borrower's Board of Directors authorizing the
execution, delivery and performance of this First 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 certificate (dated the date of this First Amendment)
of Borrower's corporate secretary as to the incumbency and specimen
signatures of the officers of Borrower executing this First Amendment
and each other document to be executed and/or delivered pursuant
hereto;
(D) EARS, Inc., a Delaware corporation, a guarantor and
surety for the Obligations, shall unconditionally reaffirm in writing
its suretyship for the Obligations and consent to this First Amendment;
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 First Amendment and all of the
instruments, agreements and documents executed and/or delivered in
conjunction with this First 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 Loan Documents. All such instruments, agreements and
documents, and this First 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 First
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
First Amendment and all instruments, agreements and documents executed
and/or delivered in connection with this First 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.
6.03 Counterpart Execution. This First Amendment may be executed
in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Syndicated Loan Agreement to be duly executed and
exchanged as of the day and year first above written.
ATTEST: PIERCING PAGODA, INC.
By: /s/ Xxxxxxx X. Lehman____ By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Treasurer Title:
President
[Corporate Seal]
Commitment: $26,665,000.00 SUMMIT BANK, for itself and
as Agent for the Lenders
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
Commitment: $37,335,000.00 CORESTATES BANK, N.A., for
itself and as Agent and Administrative Agent for the Lenders
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Commitment: $16,000,000.00 FIRST UNION NATIONAL BANK
By: /s/ Xxxxx X. Xxx
Name: Xxxxx X. Xxx
Title: Assistant Vice
President
