FOURTH AMENDMENT TO THIRD AMENDED
AND RESTATED LOAN AGREEMENT
This Fourth Amendment to Third Amended and Restated Loan Agreement ("Fourth
Amendment") is made this 18th day of October, 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), as amended by that certain Second Amendment to Third Amended and Restated
Loan Agreement dated November 21, 1995 between Borrower and Bank (under its
former name), and as amended by that certain Third Amendment to Third Amended
and Restated Loan Agreement dated September 5, 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 Fifty Million ($50,000,000.00) Dollars (the "Revolving Loan"), which
indebtedness is evidenced by that certain Eleventh Replacement Revolving Loan
Note dated September 5, 1996 in the principal sum of Fifty Million
($50,000,000.00) Dollars executed and delivered by Borrower to Bank (under its
former name) (the "Eleventh Replacement Revolving Loan Note").
B. Borrower has requested that Bank (a) increase the amount of the
Revolving Loan, (b) extend the maturity date of the Revolving Loan and (c)
otherwise amend and modify certain of the other terms and conditions set forth
in the Loan Agreement and the other Financing Agreements, 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 Fourth 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 Eleventh Replacement Revolving Loan Note is, as of the
date hereof, Twenty-Two Million Three Hundred Twenty-Four Thousand Seven Hundred
Seven and 42/100 ($22,324,707.42) Dollars; the aggregate face amount of Letters
of Credit issued by Bank or
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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-Five Million
Two Hundred Sixty-Two Thousand Four Hundred Four and 43/100($25,262,404.43)
Dollars; interest on the Obligations has been paid through October 15, 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.
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.
(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 December 31, 1996, unless such
date is extended by Bank and evidenced by a confirming written notice
to Borrower.
3.01 The Revolving Loan.
(A) For the period from the date of this Fourth Amendment through
Revolving Loan Termination Date, the Line Limit shall be Sixty Million
($60,000,000.00) Dollars and the Cash Advance Sublimit shall be Thirty-Six
Million ($36,000,000.00) Dollars.
3.02 The Twelfth Replacement Revolving Loan Note. Contemporaneously
herewith, Borrower shall execute and deliver to Bank its note in the principal
sum of Sixty Million ($60,000,000.00) Dollars (the "Twelfth Replacement
Revolving Loan Note") to evidence Borrower's Obligations to repay Bank, on the
Revolving Loan Termination Date, with interest at the applicable Rate set forth
at Paragraph 2.08 of the Loan Agreement, for all loans, advances and extensions
of credit made or to be made by Bank to or for the benefit of Borrower under the
Revolving Loan, all as more fully described in the Twelfth Replacement Revolving
Loan Note, the terms, covenants and conditions of which are hereby deemed
incorporated herein by this reference and made a part hereof. The term "Note" is
hereby amended to mean and include the Twelfth Replacement Revolving Loan Note.
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 Fourth Amendment and
increase the amount of the Revolving Loan.
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4.02 Additional Warranties and Representations. To induce Bank to enter
into this Fourth Amendment, Borrower represents and warrants to Bank that:
(A) Borrower has the power, authority and capacity to enter into and
perform this Fourth Amendment, the Twelfth Replacement Revolving Loan Note 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, the Twelfth Replacement Revolving Loan Note and related
instruments, agreements and documents;
(B) This Fourth Amendment is, and the Twelfth Replacement Revolving
Loan Note when delivered will be, valid, binding and enforceable against
Borrower in accordance with their respective 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 Fourth Amendment, the Twelfth
Replacement Revolving Loan Note or any related instrument, agreement or
document, or undertaking or performance of any Obligation hereunder or
thereunder.
SECTION 5. CONDITIONS PRECEDENT.
This Fourth 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) The Twelfth Replacement Revolving Loan Note 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 Fourth Amendment) copy of
resolutions of Borrower's Board of Directors authorizing the execution, delivery
and performance of this Fourth Amendment, the Twelfth Replacement Revolving Loan
Note 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 Fourth Amendment) of
Borrower's corporate secretary as to the incumbency and specimen signatures of
the officers of Borrower executing this Fourth Amendment, the Twelfth
Replacement Revolving Loan Note and each other document to be executed and/or
delivered pursuant hereto or thereto; 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
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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. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President,
Attest: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer
(Corporate Seal)
SUMMIT BANK
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
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