BOND PLACEMENT AGREEMENT
$2,565,000
Piercing Pagoda, Inc.
Taxable Variable Rate Demand/Fixed Rate Bonds
Series of 1998
BOND PLACEMENT AGREEMENT, dated as of April 29, 1998, by and between PIERCING
PAGODA, INC., a Delaware corporation (the "Company") and CORESTATES SECURITIES,
CORP, (the "Placement Agent").
1. Background
A. The Company is issuing its Taxable Variable Rate Demand/Fixed Rate Bonds,
Series of 1998, in the aggregate principal amount of $2,565,000 (the "Bonds")
pursuant to a Trust Indenture dated as of April 29, 1998 (the "Indenture")
between the Company and Dauphin Deposit Bank and Trust Company, as Trustee (the
"Trustee"). The proceeds of the Bonds are being applied to finance a project
(the "Project") consisting of (i) the construction of a new 70,655 square feet
building on 5.3 acres of land at the Company headquarters in Hanover Township,
Northampton County, Pennsylvania for the purpose of expanding the Company's
capabilities to distribute, assemble and warehouse their products and to provide
for office space to carry out the administrative functions of the Company's
business; and (ii) the payment of fees and expenses relating to the issuance of
the Bonds.
B. Concurrently with, and as a condition to the issuance of the Bonds, the
Company will cause to be delivered to the Trustee an irrevocable, direct-pay
Letter of Credit, dated the date of issuance of the Bonds (the "Letter of
Credit") issued by CoreStates Bank, N.A. (the "Bank"). Under the terms of the
Letter of Credit, the Trustee will be entitled to draw up to an amount equal to
the principal of the Bonds plus at least forty-five (45) days' accrued and
unpaid interest thereon (at a maximum rate of 17% per annum for the Bonds, based
on a 365/366 day year, actual number of days elapsed). The Letter of Credit will
be issued pursuant to a Reimbursement Agreement, dated as of April 29, 1998 (the
"Reimbursement Agreement") between the Bank and the Company. The Letter of
Credit will expire pursuant to its terms on April 29, 2003, unless earlier
terminated pursuant to its terms (the "Letter of Credit Termination Date"). The
Bonds mature on May 1, 2013 and are subject to optional, extraordinary,
mandatory and mandatory sinking fund redemption prior to maturity, all as set
forth in the Preliminary Placement Memorandum (as hereinafter defined).
C. The Bonds will be issued pursuant to a resolution adopted by the Company (the
"Resolution") and pursuant to the Indenture.
D. The Bonds will be remarketed in accordance with the applicable provisions of
the Indenture and a Remarketing Agreement, dated as of April 29, 1998 (the
"Remarketing Agreement"), by and between CoreStates Securities, Corp, as
remarketing agent, and the Company.
E. As security for its obligations to the Bank under the Reimbursement
Agreement, the Company will, among other things, grant to the Bank a mortgage
lien on and security interest in its facility located in Hanover Township,
Northampton County, pursuant to an open end mortgage and security agreement
dated the date of original issuance of the Bonds (the "Mortgage").
F. The professional advisors referred to in this Bond
Placement Agreement are:
Bond Counsel King, XxXxxxxx, Xxxxxx, Xxxxxx & Xxxxx
and Placement 000-000 Xxxxx Xxxxx Xxxxxx
Agent Counsel: X.X. Xxx 000
Xxxxxxxxx, XX 00000
Company Counsel: Duane, Morris & Xxxxxxxxx XXX
Xxxxx 000
000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Bank Counsel: Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
2. Placement and Closing. Subject to the terms and conditions and in reliance on
the representations, warranties, agreements and indemnities set forth herein,
(i) the Placement Agent hereby agrees to privately place the Bonds with
qualified purchasers, as agent for the Company; and (ii) the Company hereby
agrees to deliver to such investors, all (but not less than all) of the Bonds as
provided in the Indenture. The aggregate price for the Bonds shall be 100% of
the principal amount thereof plus accrued interest to the date of Closing (as
hereinafter defined), payable in immediately available funds to the order of the
Trustee for the account of the Company. As consideration for its private
placement of the Bonds, the Company shall pay the Placement Agent a fee of in
immediately available moneys on the date of Closing. Closing will be held at the
offices of King, XxXxxxxx, Xxxxxx, Xxxxxx & Xxxxx, at 10:30 a.m. on April 29,
1998, or at such other place and time as may be agreed to by the parties hereto.
The Bonds will be delivered in New York, New York, in fully registered form in
such denominations and registered in such names as shall be requested by the
Placement Agent.
3. Company's Representations. To the best knowledge of the Company after
reasonable investigation (including but not limited to consultation with
counsel, when appropriate) the Company makes the following representations, all
of which will continue to be in effect subsequent to the private placement of
the Bonds:
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) The Company has full legal power to execute and deliver the Indenture, the
Reimbursement Agreement, the Mortgage, the Remarketing Agreement, the Pledge and
Security Agreement, this Bond Placement Agreement, the Reimbursement Documents
(as such term is defined in the Reimbursement Agreement) and any and all other
documents, certificates and agreements executed by the Company in connection
with the issuance of the Bonds and the Letter of Credit (collectively, the
"Company Documents") and to perform its obligations thereunder and hereunder;
(c) The Company has duly authorized the execution and delivery of the Company
Documents and the undertaking of their obligations thereunder and hereunder, and
the taking of all actions as may be required on the part of the Company to carry
out the same; and the making and performance of each such agreement will not
conflict with, nor constitute a breach of or a default under, any provision of
the Articles of Incorporation or By-laws of the Company or any indenture,
agreement or other instrument to which the Company is a party or by which the
Company or any of its properties may be bound, or any constitutional or
statutory provision or order, rule, regulation, decree or ordinance of any
court, government or governmental body to which the Company or any of its
properties are subject;
(d) As of the Closing, the Company Documents will be duly executed and delivered
by the Company, will be in full force and will constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium and similar terms in
effect from time to time affecting the enforcement of creditors' rights
generally.
(e) As of the Closing, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, regulatory agency,
public board or body pending or, to the best knowledge of the Company,
threatened against the Company, nor to the best knowledge of the Company is
there any basis therefor, wherein an unfavorable ruling or finding would
materially and adversely affect the validity or enforceability of the Company
Documents or would materially and adversely affect any of the transactions
contemplated by this Bond Placement Agreement;
(f) The information set forth in the Preliminary Placement Memorandum under the
headings "The Company", "Litigation" and the "Introductory Statement" with
respect to the Company (as hereinafter defined), is true and correct in all
material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(g) The Company has obtained all consents, approvals, authorizations and orders
of governmental or regulatory authorities that are required to be obtained by it
as a condition precedent to the execution by the Company of the Company
Documents. The Company has obtained all consents that are required to be
obtained by it for the performance of its obligations under the Company
Documents.
4. Placement Agent and Representations, Warranties and Covenants. The Placement
Agent makes the following representations, warranties and covenants, all of
which will continue to be in effect subsequent to the purchase and placement of
the Bonds:
(a) The Placement Agent has all requisite power and authority to enter into this
Agreement, consummate the transactions contemplated hereby and to carry on its
business as now constituted;
(b) The Placement Agent has received all necessary information with respect to
the Company, the Bank and the Project in order to place the Bonds and any and
all information relating to the Company or the Bank and their affairs, which the
Placement Agent has requested has been provided to the Placement Agent;
(c) This Agreement has been duly executed and delivered by the Placement Agent
and the information contained in the Memorandum (hereinafter defined) relating
to the Placement Agent does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statement therein not
misleading.
(d) The Placement Agent has received the Company Documents and all other
documents relating to the issuance of the Bonds, including without limitation,
the Trust Indenture and the Letter of Credit and such documents contain terms
reasonably acceptable to, and agreed to by, the Placement Agent;
(e) The Placement Agent is a broker-dealer registered as such under the
Securities Exchange Act of 1934 as amended (the "1934 Act") and under the
Securities laws of the State in which the Bonds will be offered or sold by the
Placement Agent in which such registration is required and is a member in good
standing of the NASD.
(f) The Bonds are being offered in authorized denominations of $100,000 or more
and are being sold to no more than thirty-five (35) persons each of whom the
Placement Agent reasonably believes (i) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the prospective investment and (ii) is not purchasing for more than one
account or with a view to distributing the Bonds.
(g) There is no action, suit, proceeding, inquiry or investigation at law or in
equity, or before or by any court, public body or other governmental authority,
pending or, to the best knowledge and information of the Placement Agent,
threatened against or affecting the Placement Agent, wherein an unfavorable
decision, ruling or finding could materially adversely affect the business or
financial condition of the Placement Agent or could adversely affect the
transactions contemplated by this Agreement, or which in any manner raises any
questions concerning the legality, validity or enforceability of this Agreement
nor to the best knowledge and belief of the Placement Agent is there any basis
therefor; and
(h) The execution, delivery and performance by the Placement Agent of this
Agreement does not and will not violate the certificate of incorporation or
by-laws of the Placement Agent, or any order, injunction, ruling or decree by
which the Placement Agent is bound, and does not and will not constitute a
breach of or a default under any agreement, indenture, mortgage, lease, note or
other obligation, instrument or arrangement to which the Placement Agent is a
party or by which the Placement Agent or any of its property is bound, or
contravene or constitute a violation of any law, rule or regulation to which the
Placement Agent or any of its property is subject, and no approval or other
action by, or filing or registration with any governmental authority or agency
is required in connection therewith which has not been previously obtained or
accomplished. 5. Preliminary Placement Memorandum and Private Placement
Memorandum. Prior to the Closing, the Company shall approve and authorize the
distribution of the Preliminary Placement Memorandum (including all exhibits and
appendices thereto the "Preliminary Placement Memorandum") and the (including
all exhibits and appendices thereto, the "Private Placement Memorandum"), and
shall authorize the use of the Preliminary Placement Memorandum and the Private
Placement Memorandum in connection with the private placement of the Bonds.
6. Company Covenants. The Company covenants to indemnify, hold harmless and
defend the Placement Agent its officers, agents and employees, past, present and
future and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the Securities Act of 1933, as amended (individually,
an "Indemnified Party" and collectively, the ("Indemnified Parties"), to the
full extent permitted by law against any and all losses, claims, damages or
liabilities (including reasonable legal and other expenses of defending any
actions) that they or any of them may incur or have asserted against them caused
by (i) any untrue statement or alleged untrue statement of a material fact in
the Preliminary Placement Memorandum, except for the information contained in
Appendix A and B or any amendments or supplements to the Preliminary Placement
Memorandum ; or (ii) the omission or alleged omission to state therein a
material fact required to be stated in the Preliminary Placement Memorandum
necessary to make the statements therein, in light of the circumstances under
which they are made not misleading or (iii) any breach (or alleged breach) by
the Company of any of its representations or warranties set forth in this Bond
Placement Agreement or directly or indirectly resulting from, arising out of, or
relating to the Project.
7. Actions Brought Against Indemnified Parties. In case any action shall be
brought against any Indemnified Party with respect to which indemnity may be
sought against the Company under the provisions of this Bond Placement
Agreement, such Indemnified Party shall promptly notify the Company in writing,
and the Company shall assume the defense thereof, including the employment of
counsel and the payment of all reasonable expenses. Any Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
sole cost and expense of such Indemnified Party unless (i) the employment of
such counsel has been specifically authorized in writing by the Company; or (ii)
the named parties to any such action (including any impleaded parties) include
both such Indemnified Party and the Company and such Indemnified Party shall
have been advised by its counsel that it is probable that a conflict of interest
between the Company and such Indemnified Party may arise and for this reason it
is not desirable for the same counsel to represent both the Company and the
Indemnified Party (in which case the Company shall not have the right to assume
the defense of such action on behalf of such Indemnified Party); it being
understood, however, that in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, the Company shall not be liable
for the reasonable fees and expenses of more than one separate firm of attorneys
for all such Indemnified Parties, which firm shall be designated in writing by
the Indemnified Parties). The Company shall not be liable for any settlement of
any such action effected without its written consent, but if settled with the
written consent of the Company or if there is a final judgment for the plaintiff
in any such action, the Company agrees to indemnify and hold harmless any
Indemnified Party from and against any loss, cost, expense or liability by
reason of such settlement or judgment, including but not limited to reasonable
attorneys fees. This indemnity includes but is not limited to reimbursement for
expenses reasonably incurred by the Indemnified Party in investigating the claim
and in defending it if the Company declines to assume the defense, provided that
the matter is one for which indemnification is required of the Company under
this Agreement. The indemnity agreements of the Company contained in Section 6
hereof shall survive the delivery and payment of the Bonds.
8. Blue Sky Requirements. The Placement Agent shall, in its sole discretion,
determine the jurisdictions in which the Bonds shall be offered and sold. The
Placement Agent shall use its best efforts to qualify the Bonds for offer, sale
and delivery under the securities or "Blue Sky" laws of each such jurisdiction
to the extent required. The Company shall cooperate with the Placement Agent in
its efforts to qualify the Bonds for such offer, sale and delivery under the
securities or "Blue Sky" laws of such jurisdictions.
9. Conditions of Closing. The obligations of the Placement Agent to privately
place the Bonds on the date of Closing shall be subject, except as specifically
waived in writing by the Placement Agent in its sole discretion to (i) the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof and as of the date of Closing; (ii) the
accuracy in all material respects of the statements of the officers of the
Company made in any certificates or other documents furnished pursuant to the
provisions hereof, and (iii) the performance by the Company of its obligations
to be performed hereunder or otherwise at or prior to the Closing and to the
following additional conditions:
(a) At the Closing, the Resolution shall have been duly adopted by the Company
and shall be in full force and effect and constitute the legal, valid and
binding action of the Company, and the Company Documents, when executed and
delivered by the parties thereto, will constitute legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium and similar terms in
effect from time to time affecting the enforcement of creditors' rights, and
such documents shall not have been amended, modified or supplemented except as
may have been agreed to in writing by the Placement Agent;
(b) At the Closing, there shall not have been any material adverse change in the
business, properties or financial condition of the Bank, as described in the
Preliminary Placement Memorandum or of the Company which in the judgment of the
Placement Agent, makes it inadvisable to proceed with the offer and sale of the
Bonds;
(c) The Letter of Credit shall have been delivered by the Bank;
(d) At the Closing, the Preliminary Placement Memorandum shall not have been
amended, modified or supplemented, except as may have been agreed to in writing
by the Placement Agent;
(e) The Company shall not have defaulted in the performance of any of their
covenants hereunder, under the Indenture or under the Company Documents;
(f) The Placement Agent shall have received:
(i) The Preliminary Placement Memorandum executed by the
Company, including all appendices thereto;
(ii) An opinion of Bond Counsel, addressed to the Placement Agent, also dated
the date of Closing, covering the matters set forth in Exhibit A hereto and any
other matters which may be reasonably requested by the Placement Agent, with
such changes therein as are acceptable to the Placement Agent;
(iii) An opinion of Counsel for the Company, dated the date of Closing and
addressed to the Placement Agent, the Bank and the Trustee, covering the matters
set forth in Exhibit B hereto and any other matters which may be reasonably
requested by the Placement Agent, with such changes therein as are acceptable to
the Company, the Placement Agent, the Bank and the Trustee;
(iv) An opinion of Counsel for the Bank, dated the date of Closing and addressed
to the Placement Agent, the Bank and the Trustee, covering the matters set forth
in Exhibit C hereto, with such changes therein as are acceptable to the
Placement Agent, the Bank, the Trustee and Bond Counsel;
(v) A preference opinion of Counsel for the Bank dated the date of Closing and
addressed to Moody's (herein defined), the Trustee and the Placement Agent in
form satisfactory to the Placement Agent and Moody's;
(vi) A certificate, dated the date of Closing and signed by an authorized
officer of the Company to the effect (A) that the representations and warranties
regarding the Company contained herein are true and correct in all material
respects on and as of the date of Closing with the same effect as if made on the
date of Closing; (B) that no event has occurred since the date of the
Preliminary Placement Memorandum to render any statements therein untrue; (C)
that the information contained in the Preliminary Placement Memorandum does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein in the
light of the circumstances under which they were made, not misleading; (D) that
the Company has complied with all the agreements and satisfied all material
conditions on their part to be performed or satisfied under this Bond Placement
Agreement and the Reimbursement Agreement or otherwise at or prior to the
Closing; and (E) such other matters as Bond Counsel and the Placement Agent may
reasonably request;
(vii) A certificate, dated the date of Closing and signed by an authorized
officer of the Bank to the effect that (A) the Bank is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States of America; (B) the Bank has full legal right, power
and authority to execute and deliver the Reimbursement Agreement and the Letter
of Credit and to perform its obligations thereunder; (C) the Reimbursement
Agreement and the Letter of Credit have been duly authorized, executed and
delivered by the Bank, are in full force and effect as to the Bank on the date
of Closing, and constitute legal, valid and binding obligations of the Bank
enforceable against the Bank in accordance with their respective terms, except
as enforcement may be limited by equitable principles, or by bankruptcy,
insolvency, reorganization, moratorium and liquidation laws and other similar
laws in effect from time to time affecting the enforcement of creditors' rights
generally, as such laws would apply in the event of the bankruptcy, insolvency,
reorganization or liquidation of, or other similar occurrence with respect to
the Bank in the event of any moratorium or similar occurrence affecting the
Bank; (D) to the Bank's knowledge, there is no action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, regulatory
agency, public board or body pending or threatened against the Bank wherein an
unfavorable ruling or finding would adversely affect the validity or
enforceability of the Reimbursement Agreement or the Letter of Credit, or would
materially and adversely affect the ability of the Bank to perform its
obligations thereunder; (E) all of the conditions precedent to the issuance of
the Letter of Credit contained in the Reimbursement Agreement have been
satisfied or waived by the Bank; and (F) to the best of said officer's
knowledge, as of the date of issuance of the Bonds, the information contained
under the heading "The Letter of Credit and the Reimbursement Agreement" and in
Appendix B to the Preliminary Placement Memorandum do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(viii) A letter of Xxxxx'x Investors Services, Inc.
("Moody's") stating that it has issued a rating of "Aa3/VMIG1" on
the Bonds; and
(xi) Such additional documents, instruments, agreements, certificates and
opinions as Bond Counsel and the Placement Agent may reasonably request to
evidence the accuracy of the representations and warranties and compliance with
the covenants set forth herein, including the covenants as to the exemption of
the offering of the Bonds from registration under the Securities Act of 1933, as
amended; and
(g) Between the date hereof and the date of Closing, the market price or
marketability of the Bonds, at the initial offering prices set forth in the
Preliminary Placement Memorandum, shall not have been materially adversely
affected, in the reasonable judgment of the Placement Agent (evidenced by a
written notice to the Company terminating the obligation of the Placement Agent
to privately place the Bonds), by reason of any of the following:
(i) Legislation enacted by or introduced in the Congress of the
United States or reported out of or pending in committee or recommended for
passage by the President of the United States, or a decision rendered by a court
established under Article III of the Constitution of the United States, or an
order, ruling, regulation or official statement (final, temporary or proposed)
issued or made or any other release or announcement by or on behalf of the
Securities and Exchange Commission, or any other governmental agency having
jurisdiction of the subject matter, to the effect that obligations of the
general character of the Bonds are not exempt from qualification under, or other
requirements of, the Trust Indenture Act of 1939, as amended, or that the
issuance, offering or sale of obligations of the general character of the Bonds,
including any or all underlying arrangements as contemplated hereby or by the
Preliminary Placement Memorandum, is or would be in violation of the federal
securities laws as amended and then in effect and the regulations promulgated
thereunder; or
(ii) The declaration of war or engagement in major hostilities by the United
States or the occurrence of any other local, national or international emergency
or calamity relating to the effective operation of the government of or the
financial community in the United States, or a default with respect to the debt
obligations of, or the institution of proceedings under the federal bankruptcy
laws by or against, any state of the United States or agency thereof, the City
of New York, New York, or any city in the United States having a population of
over 1,000,000, the effect of which on the financial markets of the United
States will be such as, in the Placement Agent's judgment, makes it
impracticable for the Placement Agent to place the Bonds; or
(iii) The declaration of a general banking moratorium by federal New York, New
Jersey or Pennsylvania authorities, or the general suspension of trading on any
national securities exchange; or
(iv) Any amendment to the federal, Pennsylvania or New Jersey Constitutions or
action by any federal or state court, legislative body, regulatory body or other
authority materially adversely affecting the validity or enforceability of the
Resolution, the Bonds, the Indenture, the Reimbursement Agreement, the Letter of
Credit or this Bond Placement Agreement, or the ability of the Company or the
Bank to meet their respective covenants under such agreements; or
(v) Any event occurring, or information becoming known which, in the reasonable
judgment of the Placement Agent or the Company makes untrue in any material
respect any statement or information contained in the Preliminary Placement
Memorandum , or has the effect that the Preliminary Placement Memorandum
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
If the Placement Agent terminates its obligation to place the Bonds for any
reason permitted by this Bond Placement Agreement. This Bond Placement Agreement
will terminate without liability on the part of the Company or the Placement
Agent, except for the provisions of Sections 6 as to indemnification of the
Placement Agent.
10. Representation of the Placement Agent. The Placement Agent acknowledges that
each investor has been given or will have been given an opportunity to examine
such material relating to the Bonds and the Bank as is satisfactory to each of
them.
11. Notices and Other Actions. All notices, demands and formal actions hereunder
will be in writing, mailed, telegraphed or delivered to:
The Company:
Piercing Pagoda, Inc.
0000 Xxxxx Xxxxx
X.X. Xxx 00000
Xxxxxx Xxxxxx, XX 00000-0000
The Placement Agent:
CoreStates Securities, Corp
000 Xxxx Xxxxxx, Xxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Sales and Underwriting Department
12. Acknowledgment of Multiple Representation. Each of the parties hereto
acknowledges and confirms that it was advised on or before April 29, 1998 that
King, XxXxxxxx, Xxxxxx, Xxxxxx & Xxxxx would act as Bond Counsel and Counsel to
the Placement Agent in connection with the transaction described in this Bond
Placement Agreement. Each of the parties hereto further acknowledges and
confirms that, upon being so advised, it agreed to such multiple representation.
13. Execution in Counterparts. This Bond Placement Agreement may be executed in
any number of counterparts, all of which shall constitute but one and the same
document, and any parties hereto may execute this Bond Placement Agreement by
signing any such counterparts.
14. Successors. This Bond Placement Agreement will inure to the benefit of and
be binding upon the parties hereto and their successors, and no other person
shall acquire or have any right hereunder or by virtue hereof.
15. Applicable Law. This Bond Placement Agreement shall be governed by and
construed in accordance with the domestic internal laws (but not the law of
conflict of laws) of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company and the Placement Agent, intending to be legally
bound, have caused their duly authorized representatives to execute and deliver
this Bond Placement Agreement as of the date first written above.
Attest: PIERCING PAGODA, INC.
------------------------- -------------------------------
Authorized Officer Chief Financial Officer
Attest: CORESTATES SECURITIES, CORP
-------------------------- -------------------------------
Authorized Officer Senior Vice President
EXHIBIT A
Points to be covered
in Opinion of Bond Counsel
1. The Bonds are exempt from registration under the Securities Act of 1933 as
amended, in connection with the offering and sale of the Bonds and the Indenture
is exempt from qualification under the Trust Indenture Act of 1939, as amended.
2. The description and summaries under the captions entitled "The Bonds" (except
for the information extracted from information provided by DTC), and "The
Indenture" contained in the Preliminary Placement Memorandum fairly summarize
the applicable provisions of the documents or portions of applicable law, as the
case may be, which are purported to be summarized therein.
3. Except as to the possible application of state securities laws, as to which
no opinion need be expressed, no authorization, declaration, approval, consent
or other order of any governmental authority or agency is required to be
obtained by the Company which has not been obtained for the valid authorization,
execution, issuance and sale of the Bonds by the Company and the valid
authorization, execution and delivery of the Bond Placement Agreement and all
other documents executed by the Company in connection with the issuance of the
Bonds.
4. The issuance and sale of the Bonds have been duly authorized by the Company
and such Bonds have been duly executed and delivered by the Company and
authenticated by the Trustee, are valid and binding obligations of the Company
and are entitled to the benefit and security of the Indenture, except as the
rights created thereunder and the enforcement thereof may be limited by
bankruptcy, insolvency or other laws or equitable principles affecting the
enforcement of creditors' rights generally.
EXHIBIT B
Points to be covered in Opinion of Counsel for the Company
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania.
2. The Company has the necessary authority to execute and deliver the Company
Documents, and the undertakings of its obligations thereunder, and the taking of
all actions as may be required on the part of the Company to carry out the same,
and the making and performance of each such agreement will not conflict with,
constitute a breach of or a default under, any provision of the Articles of
Incorporation or By-laws of the Company or, to the best of counsel's knowledge,
any indenture, agreement or other instrument to which the Company is a party or
by which the Company or any of its properties may be bound or any constitutional
or statutory provision or order, rule, regulation, decree or ordinance of any
court, government or governmental body to which the Company or any of its
properties are subject.
3. The Company Documents have been duly authorized, executed, acknowledged and
delivered by the Company, are in full force and effect and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as enforcement may be limited to
equitable principles, or by bankruptcy, insolvency, reorganization, moratorium
and other similar laws or equitable principles in effect from time to time
affecting the enforcement of creditors' rights generally.
4. To the best of counsel's knowledge, no authorization, consent, approval or
review of any court or governmental body or regulatory authority is required for
the authorization, execution and delivery by the Company of, and performance by
the Company of its obligations under, the Company Documents or for any action
taken by the Company in connection with the transactions contemplated thereby,
which has not been obtained or effected.
5. To the best of counsel's knowledge, there is no action, suit, litigation,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, regulatory agency, public board or body pending or, threatened against
the Company, nor to the best of such counsel's knowledge is there any basis
therefor, wherein an unfavorable ruling or finding would materially and
adversely affect (i) the business, properties or financial condition of the
Company; (ii) the validity or enforceability of the Company Documents; or (iii)
any of the transactions contemplated by the undertaking of the Project and the
aforementioned documents.
6. The Company has duly authorized the taking of any and all action necessary to
carry out and give effect to the transactions contemplated to be performed on
its part by the Company Documents and the Preliminary Placement Memorandum.
7. To the best of counsel's knowledge, the Company has all necessary permits,
licenses, certifications and qualifications to conduct its business as it is
presently being conducted, subject to such exceptions which, in the aggregate,
would not have a material adverse effect on the business or operations of the
Company and the Company is not in any material way in breach of or in default
under any applicable law or administrative regulation of the Commonwealth of
Pennsylvania or of the United States or any applicable judgment or decree.
8. To the best of counsel's knowledge, the Company has obtained all approvals
required under applicable federal and state laws (other than securities laws) to
finance the Project.
EXHIBIT C
Points to be covered in the Opinion of Counsel for the Bank
1. The Bank is a national banking association, validly existing and in good
standing under the laws of the United States of America and has full power and
authority to issue and deliver the Letter of Credit and to execute and deliver
the Reimbursement Agreement and to perform its obligations thereunder.
2. The Reimbursement Agreement and the Letter of Credit have been duly
authorized and constitute valid and binding obligations of the Bank, enforceable
against the Bank in accordance with their respective terms, except as the
enforceability thereof may be limited by equitable principles, or by bankruptcy,
insolvency, reorganization, moratorium, liquidation and similar laws in effect
from time to time affecting the enforcement of creditors, rights generally, as
such laws would apply in the event of the bankruptcy, insolvency, reorganization
or liquidation of, or other similar occurrence with respect to, the Bank or in
the event of any moratorium or similar occurrence affecting the Bank.
3. The issuance of the Letter of Credit and the performance by the Bank of its
obligations thereunder (a) require no consents or approvals of, or filing with,
any governmental or other regulatory agencies and (b) do not violate any
existing law, rule, regulation or ordinance.
4. The Letter of Credit constitutes a security issued or guaranteed by a bank
within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended
(the "Securities Act") and, as such, is not required to be registered pursuant
to the Securities Act.
5. Although such counsel has not been engaged by the Bank to review generally,
or to express its opinion with respect to, disclosure materials used in
connection with the offer and sale of the Bonds and expresses no opinion with
respect thereto other than as set forth in this Paragraph 5, such counsel has
reviewed the information relating to the Letter of Credit and the Reimbursement
Agreement in the Preliminary Placement Memorandum (the "Preliminary Placement
Memorandum") set forth under the heading "The Letter of Credit and the
Reimbursement Agreement." Such information sets forth accurate summaries of the
portions of the Letter of Credit and Reimbursement Agreement purported to be
summarized therein.
