SECOND AMENDMENT TO SYNDICATED LOAN AGREEMENT


      This Second Amendment to Syndicated Loan Agreement ("Second Amendment") is
made  this 2nd day of  September,  1998,  by and  among  Piercing  Pagoda,  Inc.
("PPI"), a Delaware  corporation having its chief executive office at 3910 Adler
Place, Bethlehem,  Pennsylvania 18016, Piercing Pagoda of Florida, Inc. ("PPF"),
a Florida  corporation  having  its chief  executive  office at 1370  Washington
Avenue,  Suite 314,  Miami  Beach,  Florida  33139 (PPI and PPF are  hereinafter
collectively   referred  to  and   obligated  as   "Borrower"),   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 One Bethlehem Plaza, Bethlehem,
Pennsylvania  18018,  and First Union  National Bank  ("FUNB"),  a national bank
having  offices at 123 South Broad  Street,  Philadelphia,  Pennsylvania  19109,
successor by merger to CoreStates Bank, N.A. ("CoreStates"). Summit and FUNB are
co-agent for Lenders (in such capacity,  each an "Agent" and  collectively,  the
"Agents"), and FUNB is administrative agent and issuing bank for the Lenders (in
such capacity, the "Administrative Agent").

BACKGROUND

           Pursuant to the terms and subject to the conditions set forth in that
certain  Syndicated  Loan  Agreement  dated  March 27,  1997 by and  among  PPI,
Lenders,  Agents  and  Administrative  Agent as amended  by that  certain  First
Amendment to Syndicated  Loan  Agreement  dated  November 21, 1997, by and among
such parties (as amended,  the "Loan  Agreement"),  PPI is currently indebted to
Lenders for repayment of various  loans,  advances and extensions of credit made
by Lenders to or for the benefit of PPI under a revolving credit facility in the
principal sum of up to Eighty Million  ($80,000,000.00)  Dollars (the "Revolving
Loan"),  which indebtedness is evidenced by those certain Replacement  Revolving
Loan Notes dated November 21, 1997, executed and delivered by PPI to each Lender
(in the amount of each such Lender's Commitment).

           Effective April 28, 1998, CoreStates was merged into and succeeded by
FUNB.  As a  consequence  of said  merger,  FUNB has  succeeded  to and  assumed
CoreStates'  interest  in and  obligations  under the Loan  Agreement,  the Loan
Documents  and  the  Revolving  Loan,  including  the  Commitment  then  held by
CoreStates.

           PPI has notified  Lenders that it intends to purchase from Richard P.
Russ  ("Russ")  all of the  issued  and  outstanding  capital  stock  of PPF,  a
franchisee of PPI.

           PPI has requested  that: (i) each Lender  approve the  acquisition by
PPI of all of the issued and  outstanding  capital stock of PPF from Russ,  (ii)
FUNB temporarily  increase its Commitment under the Revolving Loan by the amount
of Ten Million  ($10,000,000.00)  Dollars (the "Temporary Commitment Increase"),
(iii) in conjunction with the Temporary  Commitment  Increase,  the Cash Advance
Sublimit  under the  Revolving  Loan be  temporarily  increased  by Ten  Million
($10,000,000.00) Dollars to Sixty Million ($60,000,000.00) Dollars, and (iv) the
Line Limit under the  Revolving  Loan be  temporarily  increased  by Ten Million
($10,000,000.00)  Dollars to Ninety Million  ($90,000,000.00)  Dollars;  and the
Lenders are willing to do so under the terms and subject to the  conditions  set
forth in this Second Amendment and the instruments,  agreements and documents to
be executed and/or delivered pursuant to this Second 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 Second 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 PPI to Lenders evidenced by the Replacement  Revolving Loan
Notes is, as of August 31, 1998,  Sixty-Seven  Million  Three  Hundred  Nineteen
Thousand Thirteen and 55/100 ($67,319,013.55) Dollars; the aggregate face amount
of Letters of Credit issued by the Administrative Agent on behalf of each Lender
for the  Account  of PPI under  the  Revolving  Loan is, as of the date  hereof,
Forty-Two   Million   One  Hundred   Ninteen   Thousand   Thirteen   and  55/100
($42,119,013.55) Dollars; interest on the Obligations has been paid through July
31, 1998; 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
temporarily   increase   the  Cash   Advance   Sublimit   from   Fifty   Million
($50,000,000.00) Dollars to Sixty Million ($60,000,000.00)  Dollars; on November
1, 1998, the Cash Advance Sublimit shall,  without further notice to Borrower or
any other action on the part of Lenders or the Administrative Agent to be taken,
be reduced 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 temporarily  increased
by the sum of Ten Million  ($10,000,000.00) Dollars to the sum of Ninety Million
($90,000,000.00)  Dollars;  on November 1, 1998,  the  aggregate  Commitment  of
Lenders  shall,  without  further  notice to Borrower or any other action on the
part of Lenders or the  Administrative  Agent to be taken,  be reduced to Eighty
Million ($80,000,000.00) Dollars;

           (C) FUNB's  Commitment  shall be increased from  Fifty-Three  Million
Three Hundred Thirty-Five  Thousand  ($53,335,000.00)  Dollars (inclusive of the
Commitment of CoreStates  prior to its merger into FUNB) to Sixty-Three  Million
Three Hundred Thirty-Five Thousand ($63,335,000.00) Dollars;

           (D)  Paragraph  1.45 of the  Loan  Agreement  is  hereby  temporarily
amended to increase  the Line Limit by the sum of Ten  Million  ($10,000,000.00)
Dollars to the sum of Ninety Million  ($90,000,000.00)  Dollars;  on November 1,
1998,  the Line  Limit  shall be  reduced  to  Eighty  Million  ($80,000,000.00)
Dollars; and

           (E)  Paragraph  1.52 of the  Loan  Agreement  is  hereby  amended  to
redefine  the  term  "Notes"  to mean,  collectively,  the  "Second  Replacement
Revolving Loan Notes" (as hereinafter defined).

      3.02  The  Second  Replacement  Revolving  Loan  Notes.  Contemporaneously
herewith,  to  evidence  FUNB's  increase  in  its  Commitment,  the  merger  of
CoreStates into FUNB, the joinder of PPF to the Loan Documents and the Temporary
Commitment  Increase,  Borrower  shall  execute  and  deliver to each Lender its
Second  Replacement  Revolving  Loan  Note in an amount  equal to each  Lender's
Commitment.  Each  Second  Replacement  Revolving  Loan Note shall  replace  and
supersede  (but  not  extinguish  any  unpaid  Obligations   evidenced  by)  the
Replacement Revolving Loan Notes dated November 21, 1997, executed and delivered
by Borrower to each Lender (and CoreStates).

      3.03  Joinder of PPF to Loan  Documents.  In  consideration  of the mutual
covenants  set forth herein,  PPF,  hereby joins in and agrees to be jointly and
severally liable and obligated to Lenders as a Borrower under the Loan Agreement
and the  other  Loan  Documents  and  agrees  to be bound by all the  terms  and
conditions  set  forth  therein.  Effective  as of the  date  hereof,  the  term
"Borrower"  as used in the Loan  Agreement  and the other Loan  Documents  shall
jointly and severally refer to PPI and PPF.

      3.04 Repayment of the Temporary Commitment Increase.  On or before October
31, 1998, Borrower shall repay to FUNB the Temporary Commitment Increase,  or so
much thereof as shall have been advanced by FUNB,  together with all accrued and
unpaid  interest.  Commencing  November  1,  1998,  FUNB's  Commitment  shall be
permanently reduced to Fifty-Three Million Three Hundred  Thirty-Three  Thousand
($53,333,000.00) Dollars.

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 PPI 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 Lenders as a material inducement to Lenders to
enter into this Second  Amendment and increase  aggregate  Commitment,  the Line
Limit and the Cash Advance Sublimit under the Revolving Loan.

      4.02 Additional Warranties and Representations. To induce Lenders to enter
into this Second Amendment,  Borrower further represents and warrants to Lenders
that:

           (A) Borrower has the power,  authority and capacity to enter into and
perform  this Second  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  Second  Amendment  and  related
instruments, agreements and documents;

           (B) This Second Amendment is valid,  binding and enforceable  against
Borrower in accordance with its terms;

           (C) PPI has  acquired  all of the  issued and  outstanding  shares of
stock of PPF  pursuant  to a Stock  Purchase  Agreement  dated  August 31,  1998
between PPI and Russ (the "Stock  Purchase  Agreement")  and all applicable Law;
and

           (D) 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 Second  Amendment  or any
related instrument,  agreement or document, or undertaking or performance of any
Obligation hereunder or thereunder.

SECTION 5. CONDITIONS PRECEDENT.

      This Second  Amendment is subject to the  following  conditions  precedent
(all  instruments,  agreements  and  documents  to  be  in  form  and  substance
satisfactory to each Lender 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
Administrative Agent the following:

           (A) This Second  Amendment,  the Second  Replacement  Revolving  Loan
Notes,  Explanations and Waivers of Rights regarding Confession of Judgment with
respect  to  the  Second  Replacement   Revolving  Loan  Notes  and  each  other
instrument,  agreement and document to be executed and/or delivered  pursuant to
this Second Amendment and/or the instruments,  agreements and documents referred
to in this Second Amendment;

           (B) A  certified  (as of the date of this Second  Amendment)  copy of
resolutions of Borrower's Board of Directors authorizing the execution, delivery
and performance of this Second  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  Second  Amendment)  of
Borrower's  corporate  secretary as to the incumbency and specimen signatures of
the officers of Borrower executing this Second Amendment and each other document
to be executed and/or delivered pursuant hereto;

           (D) Receipt and approval by Lenders of the Stock Purchase  Agreement,
all schedules thereto, and all related instruments, agreements and documents;

           (E) 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 Second Amendment; and

           (F)  Such  other  instruments,  agreements  and  documents  as may be
required by each Lender and/or its counsel.

SECTION 6. MISCELLANEOUS.

      6.01  Integrated   Agreement.   This  Second  Amendment  and  all  of  the
instruments,  agreements and documents  executed and/or delivered in conjunction
with this Second  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 Second Amendment, shall be
construed as integrated and  complementary  of each other, and as augmenting and
not restricting  Lender's  rights,  remedies,  benefits and security.  If, after
applying the foregoing,  an inconsistency  still exists,  the provisions of this
Second  Amendment  shall  constitute  an amendment  thereto and shall govern and
control.

      6.02 Expenses of Lenders and Administrative  Agent.  Borrower will pay, on
demand, all reasonable out-of-pocket expenses, including the reasonable fees and
expenses of legal counsel for each Lender and the Administrative Agent, incurred
in connection  with this Second  Amendment and all  instruments,  agreements and
documents  executed and/or  delivered in connection with this Second  Amendment.
Subject to  Paragraph  2.11(B) of the Loan  Agreement,  any Agent may charge any
deposit account of Borrower  maintained at such Agent for all or any part of any
amount due hereunder.

      6.03 Counterpart  Execution.  This Second 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 Second 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:_____________________________
By:______________________________
      Name:                                     Name:
      Title:                                    Title:

           [Corporate Seal]

ATTEST:                             PIERCING PAGODA OF FLORIDA,
INC.


By:_____________________________
By:______________________________
      Name:                                     Name:
      Title:                                    Title:


           [Corporate Seal]

Commitment: $26,665 ,000.00              

SUMMIT BANK, for itself and as Agent
 for Lenders



By:______________________________
   Name:
   Title:

[Signatures continue on following page.]
[Signatures continued from previous page.]


Commitment: $63,335,000.00                FIRST UNION NATIONAL
BANK, N.A., for itself, as successor to CoreStates Bank, N.A.,
and as Agent and Administrative Agent for Lenders



By:
                                          Name:
                                          Title:



PHIL1\144598-1