Exhibit 10.1
Toll Brothers Finance Corp.
$250,000,000
5.950% Senior Notes Due 2013
Guaranteed on a Senior Basis by Toll Brothers, Inc. and
Certain of Its Subsidiaries
Purchase Agreement
New York, New York
August 26, 2003
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Toll Brothers Finance Corp., a corporation organized under the
laws of Delaware (the "Issuer"), proposes to issue and sell to Citigroup Global
Markets Inc. (the "Initial Purchaser") $250,000,000 principal amount of its
5.950% Senior Notes Due September 15, 2013 (the "Notes"). The Notes are to be
issued under an indenture dated as of November 15, 2002, as supplemented by the
First Supplemental Indenture, dated as of May 1, 2003 (the "Indenture") among
the Issuer, the guarantors named therein (individually a "Guarantor" and
collectively, the "Guarantors"), including Toll Brothers, Inc. (the "Company"),
and Bank One Trust Company, NA, as trustee (the "Trustee"). The Notes are, and
the notes exchanged therefor pursuant to the Registration Rights Agreement (as
defined herein) will be, fully and unconditionally guaranteed (the "Guarantees,"
and together with the Notes, the "Securities") by the Guarantors to be named in
the Indenture. The Securities will have the benefit of a registration rights
agreement (the "Registration Rights Agreement") dated as of September 3, 2003
among the Issuer, the Company and the Initial Purchaser, pursuant to which the
Company has agreed to register the Securities under the Act subject to the terms
and conditions specified in the Registration Rights Agreement. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate. Certain terms used herein are defined in Section 15 hereof.
The sale of the Securities to the Initial Purchaser will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Issuer and
the Guarantors have prepared a final offering memorandum, dated August 26, 2003
(as amended or supplemented at the Execution Time, including any information
incorporated by reference therein, the "Final Memorandum"). The Final Memorandum
sets forth certain information concerning the Issuer, the Guarantors and the
Securities. The Issuer and the Guarantors hereby confirm that they have
authorized the use of the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchaser. Unless stated to the contrary, any references herein to the terms
"amend," "amendment" or "supplement" with respect to the Final Memorandum shall
be deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time which is incorporated by reference therein.
1. Representations and Warranties. Each of the Issuer and the
Company represents and warrants to the Initial Purchaser as set forth below in
this Section 1.
(a) At the Execution Time, on the Closing Date and on any
settlement date, the Final Memorandum did not, and will not (and any
amendment or supplement thereto, at the date thereof, at the Closing
Date and on any settlement date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Issuer and the Company make no representation or
warranty as to the information contained in or omitted from the Final
Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Issuer
and the Company by or on behalf of the Initial Purchaser specifically
for inclusion therein.
(b) The documents incorporated by reference in the Final
Memorandum, when they became effective or were filed with the
Commission, as the case may be, under the Exchange Act, conformed, and
any documents so filed and incorporated by reference after the date of
this Agreement and on or prior to the Closing Date will conform, when
they are filed with the Commission, in all material respects to the
requirements of the Act and the Exchange Act, as applicable.
(c) Since the respective dates as of which information is
given in the Final Memorandum, except as otherwise specifically stated
therein, (a) there has been no material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Change"), and (b) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(d) Neither the Issuer and the Company, nor any of their
respective Affiliates, nor any person acting on its or their behalf
has, directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(e) Neither the Issuer and the Company, nor any of their
respective Affiliates, nor any person acting on its or their behalf has
engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
-2-
(f) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(g) Neither the Issuer nor the Company is, and after giving
effect to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Final Memorandum neither
will be, an "investment company" within the meaning of the Investment
Company Act, without taking account of any exemption arising out of the
number of holders of the Issuer or the Company's securities.
(h) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(i) Neither the Issuer nor the Company has paid or agreed to
pay to any person any compensation for soliciting another to purchase
any securities of the Issuer or the Company (except as contemplated by
this Agreement).
(j) None of the Issuer, the Guarantors or their respective
Affiliates has taken, directly or indirectly, any action designed to
cause or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the
Issuer or the Company to facilitate the sale or resale of the
Securities.
(k) The information prepared and provided by the Issuer and/or
Company pursuant to Section 5(g) hereof will not, at the date thereof,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(l) Each of the Company and its subsidiaries has been duly
incorporated (if a corporation) or formed (if a partnership, limited
liability corporation or trust) and is validly existing as a
corporation, partnership, limited liability company or trust, as the
case may be, in good standing (if applicable) under the laws of its
jurisdiction of incorporation or formation, as the case may be (except
where the failure to be in good standing would not result, individually
or in the aggregate, in a Material Adverse Change). Each of the Company
and its subsidiaries has full corporate or other organizational power
and authority to own or lease, as the case may be (except where the
failure to be in good standing would not result, individually or in the
aggregate, in a Material Adverse Change), and to operate its properties
and conduct its business as described in the Final Memorandum, and is
duly qualified to do business as a foreign corporation, partnership,
limited liability company or trust, as the case may be, and is in good
standing (if applicable) under the laws of each jurisdiction which
requires such qualification (except where the failure to so qualify
would not result, individually or in the aggregate, in a Material
Adverse Change).
(m) All the outstanding shares of capital stock or outstanding
interests of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Final Memorandum, all outstanding shares
of capital stock or outstanding interests of such subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
-3-
(n) This Agreement has been duly authorized, executed and
delivered by the Issuer and the Guarantors; the Indenture has been duly
authorized and, assuming due authorization, execution and delivery
thereof by the Trustee, when executed and delivered by the Issuer and
the Guarantors, will constitute a legal, valid, binding instrument
enforceable against the Issuer and the Guarantors in accordance with
its terms (except that (a) the enforcement thereof may be subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity and (b) the enforceability of
provisions imposing liquidated damages, penalties or an increase in
interest rate upon the occurrence of certain events may be limited in
certain circumstances; such clauses (a) and (b) collectively being
referred to as "Enforceability Limitations"); the Securities have been
duly authorized, and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by
the Initial Purchaser, will have been duly executed and delivered by
the Issuer and the Guarantors and will constitute the legal, valid and
binding obligations of the Issuer and the Guarantors, and be entitled
to the benefits of the Indenture (subject to the Enforceability
Limitations); and the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Issuer and the
Guarantors, will constitute the legal, valid, binding and enforceable
instrument of the Issuer and the Guarantors (subject, (i) to the
Enforceability Limitations and (ii) as to indemnification and
contribution, that any right to indemnity and contribution may be
limited by applicable law or public policy considerations with respect
thereto).
(o) No consent, approval, authorization or order of or filing
with any court or governmental agency or body is required in connection
with the transactions contemplated herein or in the Indenture or the
Registration Rights Agreement, except such as will be obtained under
the Act and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Initial Purchaser in the
manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement.
(p) None of the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issue and sale of
the Securities, or the consummation of any other of the transactions
herein or therein contemplated, nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, (i) the
charter, by-laws or other organizational documents of the Company or
any of its subsidiaries; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
respective properties (except in the cases of clauses (ii) and (iii)
for such conflicts, breaches, violations, liens, charges or
encumbrances that would not result, individually or in the aggregate,
in a Material Adverse Change).
-4-
(q) The consolidated historical financial statements and
schedules of the Company and its consolidated and consolidating
subsidiaries incorporated by reference in the Final Memorandum present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein);
the selected financial data set forth under the caption "Selected
Consolidated Financial Information and Operating Data" in the Final
Memorandum fairly present, on the basis stated in the Final Memorandum,
the information included therein.
(r) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture or the Registration Rights
Agreement, or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Change, except
as set forth, incorporated by reference in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(s) Each of the Company and its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations
as presently conducted.
(t) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or by-laws; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as
applicable (except in the cases of clauses (ii) and (iii) for such
violations or defaults that would not result, individually or in the
aggregate, in a Material Adverse Change).
(u) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Memorandum,
are independent public accountants with respect to the Company within
the meaning of the Act and the applicable published rules and
regulations thereunder.
(v) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not result, individually or in the aggregate, in a Material
Adverse Change), whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto)
and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
would not result, individually or in the aggregate, in a Material
Adverse Change, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement
thereto).
-5-
(w) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or, to the best knowledge of
the Company, is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries' principal suppliers, contractors or customers,
which problem, dispute or labor disturbance could result, individually
or in the aggregate, in a Material Adverse Change, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(x) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause, which denials or defenses if
resolved adversely to the Company would result, individually or in the
aggregate, in a Material Adverse Change; neither the Company nor any
such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not result, individually or in the
aggregate, in a Material Adverse Change, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto).
(y) Except for minimum capital requirements of law or
contract, no Guarantor is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or
from transferring any of such Guarantor's property or assets to the
Company or any other Guarantor, except as described in or contemplated
by the Final Memorandum (exclusive of any amendment or supplement
thereto).
-6-
(z) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses (except where the failure to
possess such licenses, certificates, permits or other authorizations
would not result, individually or in the aggregate, a Material Adverse
Change) and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, if the subject of
an unfavorable decision, ruling or finding, would result, individually
or in the aggregate, in a Material Adverse Change, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(aa) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that, in reference
to the Company and its subsidiaries on a consolidated basis, (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(bb) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply in all material respects with any
provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated in connection therewith, including Section 402
related to loans and Sections 302 and 906 related to certifications.
Any certificate signed by any officer of the Issuer and the
Guarantors and delivered to the Initial Purchaser or counsel for the Initial
Purchaser in connection with the offering of the Securities shall be deemed a
representation and warranty by the Issuer and the Guarantors, as to matters
covered thereby, to the Initial Purchaser.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Issuer agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees
to purchase from the Issuer, at a purchase price of 98.5158% of the principal
amount thereof, plus accrued interest, if any, from September 3, 2003 to the
Closing Date, the entire principal amount of Notes, which Notes shall be
endorsed with the Guarantees.
(b) Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on September 3,
2003, or at such time on such later date (not later than September 10, 2003) as
the Initial Purchaser shall designate, which date and time may be postponed by
agreement between the Initial Purchaser and the Issuer and the Company (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Initial
Purchaser for its account against payment of the purchase price thereof to or
upon the order of the Issuer and the Company by wire transfer payable in
same-day funds to the account specified by the Issuer and the Company. Delivery
of the Securities shall be made through the facilities of The Depository Trust
Company unless the Initial Purchaser shall otherwise instruct.
-7-
3. Offering by Initial Purchaser. The Initial Purchaser
represents and warrants to and agrees with the Issuer and the Company that:
(a) It is an "accredited investor" as that term is defined in
Regulation D under the Act.
(b) It has not offered or sold, and will not offer or sell,
any Securities except to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that,
in connection with each such sale, it has taken or will take reasonable
steps to ensure that the purchaser of such Securities is aware that
such sale is being made in reliance on Rule 144A. In the case of a
non-bank purchaser of a Security acting as a fiduciary for one or more
third parties, in connection with an offer and sale to such purchaser
pursuant, such party or parties shall be a qualified institutional
buyer(s).
(c) No sale of the Securities to any one purchaser will be for
less than U.S. $100,000 principal amount. If the purchaser is a
non-bank fiduciary acting on behalf of others, each person for whom it
is acting must purchase at least $100,000 principal amount of the
Securities.
(d) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
4. Agreements. Each of the Issuer and the Company agrees with
the Initial Purchaser that:
(a) The Issuer and the Company will furnish to the Initial
Purchaser and to counsel for the Initial Purchaser, without charge,
during the period referred to in paragraph (c) below, as many copies of
the Final Memorandum and any amendments and supplements thereto as they
may reasonably request.
(b) The Issuer and the Guarantors will not amend or supplement
the Final Memorandum, other than by filing documents under the Exchange
Act that are incorporated by reference therein, without the prior
written consent of the Initial Purchaser, which consent shall not be
unreasonably withheld or delayed; provided, however, that, prior to the
completion of the distribution of the Securities by the Initial
Purchaser (as determined by the Initial Purchaser), the Company will
not file any document under the Exchange Act that is incorporated by
reference in the Final Memorandum unless, prior to such proposed
filing, the Company has furnished the Initial Purchaser with a copy of
such document for its review and consent to such filing, which consent
shall not be unreasonably withheld or delayed. The Company will
promptly advise the Initial Purchaser when any document filed under the
Exchange Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Commission prior to the completion of
the sale of the securities by the Initial Purchaser (as determined by
the Initial Purchaser).
-8-
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchaser (as determined by the Initial
Purchaser), any event occurs as a result of which the Final Memorandum,
as then amended or supplemented, would include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Issuer and the Guarantors promptly (i) will notify the Initial
Purchaser of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 4, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the Initial Purchaser and counsel for the Initial
Purchaser without charge in such quantities as they may reasonably
request.
(d) The Issuer and the Guarantors will use their best efforts,
in cooperation with the Initial Purchaser, to arrange, if necessary,
for the qualification of the Securities for sale by the Initial
Purchaser under the laws of such jurisdictions as the Initial Purchaser
may designate and will maintain such qualifications in effect so long
as required for the sale of the Securities; provided that in no event
shall the Issuer and the Guarantors be obligated to qualify to do
business in any jurisdiction where they are not now so qualified or to
take any action that would subject them to service of process in suits,
other than those arising out of the offering or sale of the Securities,
in any jurisdiction where they are not now so subject. The Issuer and
the Company will promptly advise the Initial Purchaser of the receipt
by the Issuer or any of the Guarantors of any notification with respect
to the suspension of the qualification of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(e) Neither the Issuer nor the Company will resell any
Securities that have been acquired by either of them; the Issuer and
the Company will not permit any of their respective Affiliates to
resell any Securities that have been acquired by any of them until the
completion of the Exchange Offer (as defined in the Registration Rights
Agreement).
(f) None of the Company, the Guarantors, or any of their
respective Affiliates, nor any person acting on its or their behalf
will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(g) None of the Company, the Guarantors, or any of their
respective Affiliates, nor any person acting on its or their behalf
will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
-9-
(i) The Issuer and the Guarantors will cooperate with the
Initial Purchaser and use its and their best efforts to permit the
Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(j) Neither the Issuer nor any of the Guarantors will for a
period of ten business days following the Closing Date, without the
prior written consent of Citigroup, offer, sell or contract to sell, or
otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Issuer or the Guarantors or any of
their respective Affiliates or any person in privity with the Issuer or
the Guarantors or any of their respective Affiliates), directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Issuer or the Guarantors (other than the Securities).
Notwithstanding anything in this Section to the contrary, the Company
directly or indirectly through a subsidiary, may (i) make borrowings
under the Bank Credit Facilities (as defined in the Indenture) pursuant
to the terms and conditions of such agreement, (ii) enter into purchase
money mortgage transactions, (iii) obtain letters of credit and (iv)
enter into such other commercial lending transactions consistent with
the Company's business.
(k) The Issuer and the Guarantors will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Issuer and the Guarantors to facilitate the sale or
resale of the Securities.
(l) The Issuer and the Company agree to pay all expenses
incident to the performance of their obligations under this Agreement,
including (i) the costs of the preparation and printing of the Final
Memorandum and each amendment or supplement thereto, (ii) the costs of
printing and distributing to the Initial Purchaser and any selected
dealers the Final Memorandum, and all amendments or supplements
thereto, as provided in this Agreement, (iii) the costs of typing,
printing and reproducing this Agreement, the Indenture and the
Registration Rights Agreement, (iv) the fees paid to rating agencies in
connection with the rating of the Securities, (v) the fees and expenses
of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(d) hereof and of preparing,
printing, reproducing and distributing a Blue Sky Memorandum (including
the reasonable fees and disbursements of counsel for the Initial
Purchaser in connection therewith), (vi) the fees and disbursements of
the counsel and accountants for the Issuer and the Guarantors, (vii)
the fees of the Trustee, and (viii) the cost of printing and engraving
certificates representing the Securities.
5. Conditions to the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase the Securities shall be subject
to the accuracy of the representations and warranties on the part of the Issuer
and the Guarantors contained herein at the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Issuer and the Guarantors made in any certificates pursuant to
the provisions hereof, to the performance by the Issuer and the Guarantors of
their respective obligations hereunder and to the following additional
conditions:
-10-
(a) The Issuer and the Company shall have requested and caused
(1) the General Counsel of the Company to furnish to the Initial
Purchaser his opinion, dated the Closing Date and addressed to the
Initial Purchaser, to the effect that:
(i) each of the Issuer, the Company and the
subsidiaries listed in Schedule I hereto (the "Subsidiaries"
or in the singular the "Subsidiary") have been duly
incorporated (if a corporation) or formed (if a partnership or
limited liability corporation) and is validly existing as a
corporation, partnership or limited liability company, as the
case may be, in good standing (if applicable) (based solely
upon review of certificates issued by a governmental agency,
authority or body or, in the absence of such certificates, to
the knowledge of such counsel) under the laws of its
jurisdiction of incorporation or formation, as the case may be
(except where the failure to be in good standing would not
have, individually or in the aggregate, a material adverse
effect on the condition (financial or otherwise) or earnings
of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect")), with full corporate
or other organizational power and authority to own or lease,
as the case may be, and to operate its properties and conduct
its business as described in the Final Memorandum, and is duly
qualified (based solely upon review of certificates issued by
a governmental agency, authority or body or, in the absence of
such certificates, to the knowledge of such counsel) to do
business as a foreign corporation, partnership or limited
liability company, as the case may be, and is in good standing
(if applicable) under the laws of each jurisdiction which
requires such qualification (except where the failure to so
qualify would not have, individually or in the aggregate, a
Material Adverse Effect);
(ii) all the outstanding shares of capital stock or
outstanding interests of the Issuer and the Company and, to
the knowledge of such counsel, each Subsidiary has been duly
and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock or
outstanding interests of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and, to his
knowledge, any other security interests, claims, liens or
encumbrances;
(iii) the Indenture has been duly authorized by all
necessary corporate and shareholder action on the part of the
Issuer and the Guarantors and has been duly executed and
delivered by the Issuer and the Guarantors, and (assuming due
authorization, execution and delivery by the Trustee)
constitutes a legal, valid and binding instrument enforceable
against the Issuer and the Guarantors in accordance with its
-11-
terms (except that (a) the enforcement thereof may be subject
to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
from time to time in effect and to general principles of
equity, and (b) the enforceability of provisions imposing
liquidated damages, penalties or an increase in interest rate
upon the occurence of certain events may be limited in certain
circumstances; such clauses (a) and (b) collectively being
referred to as ("Enforceability Limitations"); the Securities
have been duly and validly authorized by all necessary
corporate and shareholder action on behalf of the Issuer and
the Guarantors and, when duly executed and authenticated in
accordance with the provisions of the Indenture (assuming due
authorization, execution and delivery by the Trustee) and
delivered through the facilities of The Depository Trust
Company and paid for by the Initial Purchaser under this
Agreement, will constitute legal, valid, binding and
enforceable obligations of the Issuer and the Guarantors
entitled to the benefits of the Indenture (subject to the
Enforceability Limitations); the Registration Rights Agreement
has been duly authorized by all necessary corporate and
shareholder action on behalf of the Issuer and the Guarantors
and has been duly executed and delivered by the Issuer and the
Guarantors and (assuming the due authorization, execution and
delivery by the Initial Purchaser) constitutes the legal,
valid, binding and enforceable instrument of the Issuer and
the Guarantors (except (a) as to the Enforceability
Limitations and (b) that any rights to indemnity and
contribution may be limited by applicable public policy
considerations with respect thereto);
(iv) there is no pending or, to the knowledge of such
counsel, threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of the Subsidiaries
that is not adequately disclosed in the Final Memorandum,
except in each case for such proceedings that, if the subject
of an unfavorable decision, ruling or finding, would not have,
individually or in the aggregate, a Material Adverse Effect;
(v) each of the Issuer and Guarantors have all
requisite corporate or other organizational power and
authority and has taken all requisite corporate or other
organizational action, and has received and is in compliance
with all governmental, judicial and other authorizations,
approvals and orders, if any, necessary to enter into and
perform this Agreement, the Indenture, the Registration Rights
Agreement and the Securities, to the extent a party thereto,
and, to the knowledge of such counsel, no consent, approval,
authorization or order of or filing with any court or
governmental agency or body is required for the performance by
the Issuer or the Guarantors of their respective obligations
under this Agreement, the Indenture, the Registration Rights
Agreement and the Securities, except such as will be obtained
under the Act and the Trust Indenture Act and such as may be
required under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Securities, by the Initial Purchaser (as to which I express no
opinion) in the manner contemplated in this Agreement, the
Final Memorandum and the Registration Rights Agreement; and
-12-
(vi) none of the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the issue and sale of Securities, or the
consummation of any other of the transactions therein
contemplated, nor the fulfillment of the terms thereof, will
conflict with, result in a breach or violation of or
constitute a default under (1) the charter or by-laws of the
Issuer, the Company or the Subsidiaries; (2) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Issuer, the
Company or any of the Subsidiaries is a party or bound and is
known to such counsel; or (3) to the knowledge of such
counsel, any statute, law, rule, regulation, judgment, order
or decree applicable to the Issuer, the Company or any of the
Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the Issuer, the Company or any of the
Subsidiaries (except in the cases of clauses (2) and (3) for
such conflicts, breaches, defaults or violations that would
not have, individually or in the aggregate, a Material Adverse
Effect).
(2) Wolf, Block, Xxxxxx and Xxxxx Xxxxx LLP, counsel for the
Issuer and the Guarantors, to furnish to the Initial Purchaser their
opinion, dated the Closing Date and addressed to the Initial Purchaser,
to the effect that:
(i) each of the Issuer and the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Final Memorandum;
(ii) the Company's authorized capital stock is as set
forth in the Final Memorandum;
(iii) the Indenture has been duly authorized by all
necessary corporate and shareholder action on behalf of the
Company and the Issuer and has been duly executed and
delivered by the Company and the Issuer, and (assuming due
authorization, execution and delivery by the Trustee)
constitutes a legal, valid and binding instrument enforceable
against the Issuer and the Company in accordance with its
terms (subject to the Enforceability Limitations); the
Securities have been duly and validly authorized by all
necessary corporate and shareholder action on behalf of the
Issuer and the Company and, when duly executed and
authenticated in accordance with the provisions of the
Indenture (assuming due authorization, execution and delivery
by the Trustee) and delivered through the facilities of The
Depository Trust Company and paid for by the Initial Purchaser
under this Agreement, will constitute legal, valid, binding
and enforceable obligations of the Issuer and the Company
(subject to the Enforceability Limitations); the Registration
Rights Agreement has been duly authorized by all necessary
corporate and shareholder action on behalf of the Company and
the Issuer and has been duly executed and delivered by the
Company and the Issuer and (assuming the due authorization,
execution and delivery by the Initial Purchaser) constitutes
the legal, valid, binding and enforceable instrument of the
Issuer and the Company (except (a) as to the Enforceability
Limitations and (b) that any rights to indemnity and
contribution may be limited by applicable law or public policy
considerations with respect thereto); and the Securities, the
Indenture and the Registration Rights Agreement conform in all
material respects to the descriptions thereof in the Final
Memorandum;
-13-
(iv) based solely upon review of certificates
executed by an officer or officers of the Issuer and the
Company and to the extent of the actual knowledge of such
counsel, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Issuer, the
Company or any of the Subsidiaries that is not adequately
disclosed in the Final Memorandum (including any documents
incorporated therein by reference, taken as a whole), except
in each case for such proceedings that, if the subject of an
unfavorable decision, ruling or finding, would not have,
individually or in the aggregate, a Material Adverse Effect;
and the information in the Final Memorandum under the heading
"United States Federal Income Tax Considerations," insofar as
such information constitutes matters of law, summaries of
legal matters or legal conclusions, has been reviewed by such
counsel and is correct in all material respects;
(v) this Agreement has been duly authorized, executed
and delivered by each of the Issuer and the Gurantors;
(vi) each of the Issuer and the Company has all
requisite corporate power and authority and has taken all
requisite corporate action to enter into and perform this
Agreement, the Indenture, the Registration Rights Agreement
and the Securities, and no consent, approval, authorization or
order of or filing (other than as contemplated by the
Registration Rights Agreement) with any court or governmental
agency or body is required for the performance by the Issuer
or the Company of its obligations under this Agreement, the
Indenture, the Registration Rights Agreement and the
Securities, except such as will be obtained under the Act and
the Trust Indenture Act and such as may be required under the
blue sky or securities laws of any jurisdiction in connection
with the purchase and sale of the Securities by the Initial
Purchaser (as to which such counsel may express no opinion) in
the manner contemplated in this Agreement, the Final
Memorandum and the Registration Rights Agreement;
(vii) none of the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the issue and sale of the Securities, or the
consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof
or thereof, will conflict with, result in a breach or
violation of or constitute a default under (1) the certificate
of incorporation or by-laws of the Issuer or the Company; (2)
the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Issuer, the Company or any of the Subsidiaries is a party or
bound and which is known to such counsel; or (3) to the
knowledge of such counsel, any statute, law, rule, regulation,
judgment, order or decree applicable to the Issuer, the
Company or any of the Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Issuer, the
Company or any of the Subsidiaries (except in the cases of
clauses (2) and (3) for such conflicts, breaches, defaults or
violations that would not have, individually or in the
aggregate, a Material Adverse Effect);
-14-
(viii) assuming the accuracy of the representations
and warranties and compliance with the agreements contained
herein, no registration of the Securities under the Act, and
no qualification of an indenture under the Trust Indenture
Act, are required for the offer and sale by the Initial
Purchaser of the Securities in the manner contemplated by this
Agreement; and
(ix) none of the Issuer or the Guarantors is and,
after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in
the Final Memorandum, none will be an "investment company" as
defined in the Investment Company Act without taking account
of any exemption arising out of the number of holders of the
Issuer's or the Guarantors' securities.
We have participated in discussions with representatives of
the Initial Purchaser, officers and other representatives of the Issuer
and the Company and representatives of the independent certified public
accountants of the Issuer and the Company, at which discussions the
contents of the Final Memorandum and related matters were discussed.
Given the limitations inherent in the role of outside counsel and the
character of determinations involved in the preparation of the Final
Memorandum, we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except and only to the
extent as set forth in the opinion paragraphs (ii), (iii) and (iv)
above). On the basis of the foregoing, no facts have come to our
attention that lead us to believe that the Final Memorandum, as of its
date, or as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
in light of the circumstances under which they were made therein not
misleading; provided that we do not express any comment with respect to
the financial statements, including the notes thereto and supporting
schedules, or any other financial or statistical or accounting data set
forth or referred to in or derived from the internal records of the
Issuer, the Company and its subsidiaries, incorporated or included in
the Final Memorandum.
(b) The Initial Purchaser shall have received from Xxxxxx
Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchaser, such opinion
or opinions, dated the Closing Date and addressed to the Initial
Purchaser, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Rights Agreement, the Final Memorandum (as
amended or supplemented at the Closing Date) (it being understood that
such counsel need not express any comment with respect to the financial
statements, including the notes thereto, or any other financial data
that is found in or derived from the internal accounting or other
records of the Company and its subsidiaries set forth or referred to in
the Final Memorandum) and other related matters as the Initial
Purchaser may reasonably require, and the Issuer and the Guarantors
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
-15-
(c) the Issuer and the Company shall have furnished to the
Initial Purchaser a certificate of the Issuer and the Company, signed
by the President or an Executive or Senior Vice President and the
principal financial or accounting officer of each of the Issuer and the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment
or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Issuer
and the Guarantors in this Agreement are true and correct in
all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date, and each of the
Issuer and the Guarantors has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), there has been no Material
Adverse Change, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(d) At the Closing Date, the Company shall have requested and
caused Ernst & Young LLP to furnish to the Initial Purchaser a letter,
dated as of the Closing Date, in form and substance satisfactory to the
Initial Purchaser, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the applicable
rules and regulations thereunder, that they have performed a review of
the unaudited interim financial information of the Company for the
nine-month period ended July 31, 2003 and as at July 31, 2003
(i) in their opinion the audited financial statements
and financial statement schedules incorporated in the Final
Memorandum and reported on by them comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the nine-month period ended July 31, 2003 and
as at July 31, 2003 as indicated in their report incorporated
in the Final Memorandum; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, the board directors and all
committees of the board of directors of the Company and its
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to October 31, 2002 nothing came to
their attention which caused them to believe that:
-16-
(1) any unaudited consolidated financial
statements incorporated in the Final Memorandum do
not comply in form in all material respects with
applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Final Memorandum; or
(2) with respect to the period subsequent to
July 31, 2003, at a specified date not more than five
days prior to the date of the letter, there were any
decreases in the capital stock or there were any
increases in the long-term debt of the Company and
its subsidiaries or any decreases in the total
consolidated assets of the Company and its
subsidiaries as compared with the amounts shown on
the July 31, 2003 consolidated balance sheet
incorporated in the Final Memorandum, or for the
period from August 1, 2003 to such specified date
there were any decreases, as compared with the same
period in the preceding year, in income before income
taxes, in consolidated net revenues or income before
income taxes or in total or per share amounts of net
income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Initial Purchaser; or
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum, including the information set forth under the
captions "Selected Consolidated Financial Information and
Operating Data" in the Final Memorandum, the information
included or incorporated in Items 1, 2, 6, 7 and 11 of the
Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 2002, as amended, incorporated in the Final
Memorandum and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's
Quarterly Reports on Form 10-Q, incorporated for the fiscal
quarters ended April 30, 2003 and January 31, 2003 in the
Final Memorandum and the information included in the Company's
Current Reports on Form 8-K filed with the Commission on
November 15, 2002, November 18, 2002, November 22, 2002,
November 27, 2002, March 26, 2003, March 28, 2003, May 8,
2003, May 28, 2003, July 1, 2003, August 6, 2003, August 15,
2003 and August 26, 2003 agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation.
-17-
References to the Final Memorandum in this Section 5(d)
include any amendment or supplement thereto at the date of the
applicable letter.
(e) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of
any amendment or supplement thereto), there shall not have been (i) any
change or decrease specified in the letter referred to in paragraph (d)
of this Section 5; or (ii) any Material Adverse Change, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto), the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of
the Initial Purchaser, so material and adverse as to make it
impractical or inadvisable to market the Securities as contemplated by
the Final Memorandum (exclusive of any amendment or supplement
thereto).
(f) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the debt securities of Toll
Corp. by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act) or any notice
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(g) Prior to the Closing Date, the Issuer and the Guarantors
shall have furnished to the Initial Purchaser such further information,
certificates and documents as the Initial Purchaser may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and counsel for the
Initial Purchaser, this Agreement and all obligations of the Initial Purchaser
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Initial Purchaser. Notice of such cancellation shall be given to the Issuer and
the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 5 will
be delivered at the office of counsel for the Initial Purchaser, at 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.
6. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchaser set forth in this Section 8 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Initial Purchaser, the Issuer and the Company will reimburse the
Initial Purchaser on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
-18-
7. Indemnification and Contribution. (a) Each of the Issuer
and the Guarantors agrees to indemnify and hold harmless the Initial Purchaser,
the directors, officers, employees and agents of the Initial Purchaser and each
person who controls the Initial Purchaser within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Final
Memorandum (or in any supplement or amendment thereto) or any information
provided by the Issuer or any of the Guarantors to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein 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, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Issuer and the
Guarantors will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the Issuer
or any of the Guarantors by or on behalf of the Initial Purchaser specifically
for inclusion therein. This indemnity agreement will be in addition to any
liability which the Issuer and the Guarantors may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the each of the Issuer and the Guarantors, each of its directors, each
of its officers, and each person who controls the Issuer and the Guarantors
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Issuer and the Guarantors to the Initial
Purchaser, but only with reference to written information relating to the
Initial Purchaser furnished to the Issuer and the Guarantors by or on behalf of
the Initial Purchaser through the Initial Purchaser specifically for inclusion
in the Final Memorandum (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability which the Initial
Purchaser may otherwise have. The Issuer and the Guarantors acknowledge that the
statements set forth in the last paragraph of the cover page regarding the
delivery of the Securities and paragraph 6 under the heading "Plan of
Distribution" in the Final Memorandum, constitute the only information furnished
in writing by or on behalf of the Initial Purchaser for inclusion in the Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
-19-
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party. An
indemnifying party may participate in its own expense in the defense of any
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses or more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuer and the Guarantors and the Initial
Purchaser agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Issuer or the Guarantors and the Initial Purchaser may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and by the Initial Purchaser on the other from the
offering of the Securities; provided, however, that in no case shall the Initial
Purchaser be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by the Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Issuer and the Guarantors and the Initial
Purchaser shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Issuer and the
Guarantors on the one hand and of the Initial Purchaser on the other in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Issuer and the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by it, and benefits
received by the Initial Purchaser shall be deemed to be equal to the total
purchase discounts and commissions in each case set forth on the cover of the
Final Memorandum. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information provided by the Issuer and the Guarantors on the one hand or the
Initial Purchaser on the other, the intent of the parties and their relative
knowledge, information and opportunity to correct or prevent such untrue
statement or omission. The Issuer and the Guarantors and the Initial Purchaser
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
-20-
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls the
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of the Initial Purchaser shall have
the same rights to contribution as the Initial Purchaser, and each person who
controls any of the Issuer and the Guarantors within the meaning of either the
Act or the Exchange Act and each officer and director of the Issuer and the
Guarantors shall have the same rights to contribution as the Issuer and the
Guarantors, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Initial Purchaser, by notice given to the
Issuer and the Company prior to delivery of and payment for the Securities, if
at any time prior to such time (i) trading in the Company's Common Stock shall
have been suspended by the Commission or the New York Stock Exchange or trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange, or the NASDAQ National Market shall have been suspended or limited or
minimum prices shall have been established on such exchanges or the NASDAQ
National Market; (ii) a banking moratorium shall have been declared either by
Federal or New York State authorities; (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the Initial
Purchaser, impracticable or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto); or (iv) since the respective dates as of which
information is given in the Final Memorandum, there has been a Material Adverse
Change.
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Issuer and the Guarantors or their respective officers and of the Initial
Purchaser set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Initial Purchaser or the Issuer and the Guarantors or any of the officers,
directors or controlling persons referred to in Section 7 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 6
and 7 hereof shall survive the termination or cancellation of this Agreement.
10. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (212)
000-0000) and confirmed to the General Counsel, Citigroup at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; or, if sent to the
Issuer and the Company, will be mailed, delivered or telefaxed to Toll Brothers
Finance Corp./Toll Brothers, Inc. Chairman of the Board and Chief Executive
Officer (fax no.: 000-000-0000) and confirmed to it 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Chairman of
the Board and Chief Executive Officer.
11. Successors. This Agreement is binding upon the parties
hereto and their respective successors and will inure to the benefit of the
officers and directors and controlling persons referred to in Section 7 hereof,
and, except as expressly set forth in Section 4(h) hereof, no other person will
have any right or obligation hereunder.
-21-
12. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
14. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
15. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Regulation D" shall mean Regulation D under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
-22-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
among the Issuer, the Company and the Initial Purchaser.
Very truly yours,
TOLL BROTHERS FINANCE CORP.,
As Issuer
By:
--------------------------
Name:
Title:
TOLL BROTHERS, INC.,
As a Guarantor
By:
--------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CITIGROUP GLOBAL MARKETS INC.
By:
--------------------------
Name:
Title:
S-1
SCHEDULE I
SUBSIDIARY STATE/DATE FORMED
---------- -----------------
Corporations
------------
Toll Holdings, Inc. DE-08/01/89
Amwell Chase, Inc. DE-03/23/89
BBCC Investments, Inc. PA-08/12/00
Bunker Hill Estates, Inc. DE-11/21/88
Chesterbrooke, Inc. DE-08/24/87
Connecticut Land Corp. DE-11/10/88
Daylesford Development Corp. DE-12/02/87
Eastern States Engineering, Inc. DE-10/22/86
Fairway Valley, Inc. DE-10/22/86
First Brandywine Finance Corp. DE-06/30/93
First Brandywine Investment Corp. II DE-06/28/93
First Brandywine Investment Corp. III DE-08/31/95
First Huntingdon Finance Corp. DE-07/14/87
Franklin Farms G.P., Inc. DE-09/30/87
MA Limited Land Corporation DE-08/08/88
Maple Point, Inc. DE-03/20/89
Maryland Limited Land Corporation DE-11/25/87
Xxxxxxxx Farm, Inc. PA-06/30/86
Springfield Chase, Inc. DE-12/22/88
Stewarts Crossing, Inc. DE-02/17/89
TB Proprietary Corp. DE-07/14/87
TB Proprietary LP, Inc. DE-10/31/00
Tenby Xxxx, Inc. DE-04/02/92
Toll AZ GP Corp. DE-07/26/95
Toll Bros., Inc. PA-06/30/86
Toll Bros., Inc. DE-01/01/90
Toll Bros. of Tennessee, Inc. DE-11/12/98
Toll Brothers Real Estate, Inc. PA-03/13/86
Toll Corp. DE-07/14/87
Toll Finance Corp. DE-09/08/99
Toll Land Corp. No. 6 PA-06/30/86
Toll Land Corp. No. 10 DE-03/20/89
Toll Land Corp. No. 20 DE-03/20/89
Toll Land Corp. No. 43 DE-06/30/93
Toll Land Corp. No. 45 DE-06/30/93
Toll Land Corp. No. 46 DE-06/30/93
Toll Land Corp. No. 47 DE-06/30/93
Toll Land Corp. No. 48 DE-08/28/96
Toll Land Corp. No. 49 DE-08/28/96
Toll Land Corp. No. 50 DE-08/28/96
Toll Land Corp. No. 51 DE-09/10/97
SUBSIDIARY STATE/DATE FORMED
---------- -----------------
Toll Land Corp. No. 52 DE-09/10/97
Toll Land Corp. No. 53 DE-10/01/98
Toll Land Corp. No. 55 DE-10/01/98
Toll Land Corp. No. 56 DE-10/01/98
Toll Land Corp. No. 58 DE-10/23/01
Toll Land Corp. No. 59 DE-10/23/01
Toll Land Corp. No. 60 DE-10/23/01
Toll Management AZ Corp. DE-10/30/98
Toll Management VA Corp. DE-10/30/98
Toll NJX-I Corp. DE-11/05/01
Toll NJX-II Corp. DE-11/05/01
Toll PA GP Corp. PA-05/19/92
Toll PA II GP Corp. PA-01/29/02
Toll Philmont Corporation DE-09/16/88
Toll Realty Holdings Corp. I DE 03/11/98
Toll Realty Holdings Corp. II DE-03/11/98
Toll Realty Holdings Corp. III DE-03/11/98
Toll TX GP Corp. DE-11/01/94
Toll VA GP Corp. DE-03/20/89
Toll VA Member Two, Inc. DE-10/30/98
Toll Wood Corporation DE-11/09/88
Valley Forge Conservation Holding GP Corp. PA-03/18/02
Xxxxxx Xxxxx, Inc. DE-07/01/88
Windsor Development Corp. PA-07/31/86
Limited Partnerships
Xxxxx Xxxxx, L.P. PA-02/15/94
Audubon Ridge, L.P. PA-12/30/91
BBCC Golf, L.P. PA-02/25/92
BBCC Investments, LP PA-08/12/00
Beaumont Chase, L.P. PA-06/24/97
Belmont Land, L.P. VA-02/01/95
Blue Bell Country Club, L.P. PA-12/18/91
Brandywine River Estates, L.P. PA-12/21/95
Bridle Estates, L.P. PA-04/30/96
Broad Run Associates, L.P. PA-10/16/98
Buckingham Xxxxx, X.X. PA-06/09/92
Bucks County Country Club, L.P. PA-01/23/97
Cobblestones at Thornbury, L.P. PA-03/17/94
Cold Spring Xxxx, X.X. PA-10/20/92
Xxxxxxx-Toll Limited Partnership NV-10/16/97
Concord Chase, L.P. PA-04/24/97
Dolington Estates, L.P. PA-03/17/94
Dominion Country Club, L.P. VA-12/01/98
Edmunds-Toll Limited Partnership AZ-07/28/95
-3-
SUBSIDIARY STATE/DATE FORMED
---------- -----------------
Estates at Autumnwood, L.P. DE-11/06/92
First Brandywine Partners, L.P. DE-10/30/98
Greens at Waynesborough, L.P. PA-09/27/93
Hockessin Xxxxx, X.X. DE-01/16/98
Knolls of Birmingham, L.P. PA-07/19/96
Lakeridge, L.P. PA-09/27/93
Loudoun Valley Associates, L.P. VA-12/16/99
Marshallton Chase, L.P. PA-07/00/00
Xxxx Xxxx Estates, L.P. PA-05/04/94
Northampton Crest, L.P. PA-09/05/97
Northampton Preserve, L.P. PA-05/07/97
Providence Xxxx, X.X. PA-01/28/92
River Crossing, L.P. PA-04/30/96
Rose Hollow Crossing Associates PA-12/16/80
Rose Tree Manor, L.P. PA-09/10/92
South Riding Partners, L.P. VA-10/03/96
Springton Pointe, L.P. PA-05/04/95
Stone Mill Estates, L.P. PA-08/31/99
Xxxxxx Xxxx Estates, L.P. PA-01/30/97
Swedesford Xxxxx, X.X. PA-12/11/97
TB Proprietary, L.P. DE-10/31/00
Xxxxx Xxxx, X.X. DE-04/02/92
Thornbury Xxxxx, X.X. PA-12/05/91
Toll CA II, L.P. CA-11/21/95
Toll CA III, L.P. CA-01/04/01
Toll Land XXVII Limited Partnership DE-02/16/99
Toll MI II Limited Partnership MI-04/19/99
Toll Naval Associates PA-07/01/86
Toll PA, L.P. PA-11/01/95
Toll PA II, L.P. PA-11/02/00
Toll PA III, L.P. PA-10/12/01
Toll PA IV, L.P. PA-10/12/01
Toll PA V, L.P. PA-01/29/02
Toll PA VI, L.P. PA-03/25/02
Toll PA VII, L.P. PA-10/16/02
Toll Reston Associates, L.P. DE-09/08/99
Uwchlan Xxxxx, X.X. PA-02/28/96
Valley Forge Conservation Holding, L.P. PA-03/25/02
Valley Forge Xxxxx, X.X. PA-09/10/92
Village Partners, L.P. PA-01/08/03
Xxxxxxx Xxxxxx, X.X. PA-02/05/98
Xxxxxxx Xxxxx, X.X. PA-03/05/96
Whiteland Xxxxx, X.X. PA-09/27/95
Willowdale Crossing, L.P. PA-08/21/96
Wrightstown Xxxx, X.X. PA-12/06/95
-4-
SUBSIDIARY STATE/DATE FORMED
---------- -----------------
Yardley Estates, L.P. PA-06/24/92
Limited Liability Companies
---------------------------
C.B.A.Z. Holding Company LLC DE-10/30/98
First Brandywine LLC I DE-10/28/99
First Brandywine LLC II DE-10/28/99
RiverCrest Sewer Company, LLC PA-04/22//02
Toll DE X, LLC DE-03/26/02
Toll Equipment, L.L.C. DE-01/19/00
Toll Reston Associates, L.L.C. DE-09/08/99
Toll Technology Investments, L.L.C. DE-03/24/00
Toll Turf Management, L.L.C. DE-05/15/00
Toll Turf Management, L.L.C. PA-06/05/00
Toll VA L.L.C. DE-10/30/98
Town Suites LLC PA-05/24/01
Toll Brothers Realty Pennsylvania, L.L.C. DE-01/7/99
Toll Realty Operating VIC LLC PA-03/12/98
Toll Realty Operating VIP LLC PA-03/12/98
Toll Trust Parallel LLC DE-12/27/01
-5-
