TERMS AGREEMENT
April 13, 1999
TOLL CORP.
TOLL BROTHERS, INC.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
Dear Sirs:
We understand that Toll Corp., a Delaware corporation (the "Issuer"),
proposes to issue and sell $100,000,000 aggregate principal amount of its debt
securities (the "Underwritten Securities"), to be guaranteed by Toll Brothers,
Inc. (the "Guarantor"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, we offer to purchase all of the Underwritten
Securities. The Closing Date shall be April 16, 1999, at 10:00 a.m., at the
offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York.
All of the provisions contained in the Underwriting Agreement Basic
Provisions of the Issuer and the Guarantor (the "Basic Provisions"), a copy of
which you have previously received, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if the Basic Provisions had been set forth in full herein. Terms
defined in the Basic Provisions are used herein as therein defined.
The Underwritten Securities shall have the following terms:
Title: 8% Senior Subordinated Notes due 2009.
Maturity: May 1, 2009.
Interest Rate: 8%.
Interest payment dates: May 1 and November 1 of each year, commencing
November 1, 1999. Interest will accrue from
April 16, 1999.
Interest record dates: April 15 and October 15.
Redemption provisions:
The Underwritten Securities may be redeemed at the option of the
Issuer, in whole or in part, at any time on or after May 1, 2004, at
the redemption prices (together with accrued and unpaid interest) set
forth below, if redeemed during the 12-month period beginning May 1 of
the following years:
Years Percentage
----- ----------
2004............................... 104.000%
2005............................... 102.667%
2006............................... 101.333%
2007 and thereafter................ 100.000%
Purchase Price: 99.147% of the principal amount thereof.
Public Offering: At the market.
Additional Terms:
The Issuer and the Guarantor will be subject to the same covenants
contained in the 8 1/8% Senior Subordinated Notes of the Issuer and as
set forth in the Prospectus Supplement. The Issuer and the Guarantor
will have the right to issue additional Notes and Guarantees of the
same series in an aggregate amount not to exceed $75,000,000.
The Notes and the Guarantee will be subordinated in right of payment
to Senior Indebtedness of the Issuer and Senior Indebtedness of the
Guarantor, respectively, as set forth in the Prospectus Supplement and
the accompanying Prospectus.
For a period of 75 days from the date hereof, each of the Issuer and
the Guarantor agree not to sell or otherwise dispose of any Debt
Securities to the public without the Underwriter's prior written
consent.
The obligations of the Underwriter to purchase and pay for the Notes
are subject to the condition that subsequent to the date of this Terms
Agreement, there shall not have been any decrease in the rating, or
change in outlook, of any of the Guarantor's debt securities by
Moody's Investors Service, Inc. or Standard & Poor's Corporation or
any notice given of any intended or potential decrease in any such
rating or outlook.
The Issuer and the Guarantor agree that the Chief Financial Officer of
the Guarantor will participate, as mutually agreed, in either "road
shows" or conference calls for not more than two days in order to
facilitate the distribution of the Underwritten Securities upon
reasonable request of the Underwriter.
Please accept this offer no later than 11:00 a.m. on April 14, 1999,
by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us.
Very truly yours,
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
----------------------------
Name: Kathleen G. Jennings
Title: Vice President
Accepted
TOLL CORP.
By: /s/ Joel H. Rassman
----------------------------
Name: Joel H. Rassman
Title: Vice President
TOLL BROTHERS, INC.
By: /s/ Joel H. Rassman
----------------------------
Name: Joel H. Rassman
Title: Vice President