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[LOGO] BANK OF AMERICA AMENDMENT TO DOCUMENTS
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AMENDMENT NO. 3 TO BUSINESS LOAN AGREEMENT AND WAIVER
This Amendment No. 3 (the "Amendment") dated as of November 6, 1998, is
between BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank")
and THE WET SEAL, INC. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of March 9, 1998, as previously amended (the "Agreement").
B. The Bank and the Borrower desire to further amend the Agreement.
C. The Borrower requests that the Bank waive the provisions of
Paragraph 9.8 of the Agreement to permit the Borrower to repurchase up to 20%
of its shares (the "Stock Repurchase").
AGREEMENT
1. DEFINITIONS. Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the Agreement.
2. AMENDMENTS. The Agreement is hereby amended as follows:
2.1 Paragraph 2.3(b) of the Agreement is amended to read in its
entirety as follows:
"(b) Subject to the provisions of Paragraph 12.12, the Borrower
will repay principal in successive quarterly installments of
Five Hundred Thousand Dollars ($500,000) on the last day of
each January, April, July and October of each year
commencing October 31, 1999. On October 31, 2000, the
Borrower will repay the remaining principal balance plus any
interest then due."
2.2 Article 4 of the Agreement is amended to read in its entirety as
follows:
"4. COLLATERAL
4.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank
under this Agreement will be secured by personal property the
Borrower now owns or will own in the future as listed below. The
collateral is further defined in security agreement(s) executed
by the Borrower. In addition, all personal property collateral
securing this Agreement shall also secure all other present and
future obligations of the Borrower to the Bank (excluding any
consumer credit covered by the federal Truth in Lending law,
unless the Borrower has otherwise agreed in writing). All
personal property collateral securing any other present or future
obligations of the Borrower to the Bank shall also secure this
Agreement.
Stock and other securities as follows: 50 shares of the capital
stock of WSCC. Regulation U of the Board of Governors of the
Federal Reserve System places certain restrictions on loans
secured by margin stock (as defined in the Regulation). The Bank
and the Borrower shall comply with Regulation U. If any of the
collateral is margin stock, the Borrower shall provide to the
Bank a Form U-1 Purpose Statement, confirming that none of the
proceeds of the loan will be used to buy or carry any margin
stock. If the Borrower has any other loan made for the purpose of
buying or carrying margin stock (purpose loan), then the
collateral securing this loan shall not secure the purpose loan,
and the collateral securing the purpose loan shall not secure
this loan.
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For regulatory reasons, the Bank will not accept as collateral
ineligible Securities while they are being underwritten by
NationsBanc Montgomery Securities LLC, or for thirty days
thereafter. NationsBanc Montgomery Securities LLC is a wholly-
owned subsidiary of BankAmerica Corporation, and is a registered
broker-dealer which is permitted to underwrite and deal in
certain Ineligible Securities. "Ineligible Securities" means
securities which may not be underwritten or dealt in by member
banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended."
2.3 A new Paragraph 7.7 is added to the Agreement, which reads in its
entirety as follows:
"7.7 EVIDENCE OF PRIORITY. Evidence that security interests and
liens in favor of the Bank are valid, enforceable, and prior to
all others' rights and interests, except those the Bank consents
to in writing."
2.4 A new Paragraph 11.14 is added to the Agreement, which reads in
its entirety as follows:
"11.14 LIEN PRIORITY. The Bank fails to have an enforceable first
lien (except for any prior liens to which the Bank has consented
in writing) on or security interest in any property given as
security for this Agreement (or any guaranty)."
3. WAIVER. The Borrower desires to repurchase 20% of its shares
effective September 1, 1998. The Stock Repurchase is prohibited by Paragraph
9.8 of the Agreement. The Bank hereby waives the breached covenant for the
sole and express purpose of permitting the Borrower to enter into the Stock
Repurchase as disclosed by the Borrower to the Bank. The waiver only applies
to the breached covenant and does not apply to any other breach that may now
exist or may occur after the date of this waiver with respect to the breached
covenant or any other term, condition, or covenant of the Agreement.
4. EFFECT OF AMENDMENT. Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain in full force and
effect.
This Amendment is executed as of the date stated at the beginning of
this Amendment.
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION THE WET SEAL, INC.
X /s/ Julie R. Weis X /s/ Ann Cadier Kim
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BY: JULIE R. WEIS, VICE PRESIDENT BY: ANN CADIER KIM
VP OF FINANCE
X /s/ Edmond Thomas
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BY: EDMOND THOMAS
PRESIDENT & COO
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