TERMS AGREEMENT
January 19, 2001
TOLL CORP.
TOLL BROTHERS, INC.
3103 Philmont Avenue
Huntingdon Valley, PA 19006-4298
Dear Sirs:
We understand that Toll Corp., a Delaware corporation (the
"Issuer"), proposes to issue and sell $200,000,000 aggregate principal amount of
its debt securities (the "Underwritten Securities"), to be guaranteed by Toll
Brothers, Inc., a Delaware corporation (the "Guarantor"). Subject to the terms
and conditions set forth herein or incorporated by reference herein, Banc of
America Securities LLC offers to purchase 83.371% of the Underwritten
Securities, UBS Warburg LLC offers to purchase 15.00% of the Underwritten
Securities and Credit Lyonnais Securities (USA) Inc. offers to purchase 1.629%
of the Underwritten Securities. The parties hereto agree that Banc of America
Securities LLC will be the sole book-running manager and sole lead manager with
respect to the issuance and sale of the Underwritten Securities. The Closing
Date shall be January 25, 2001, 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 1/4% Senior Subordinated Notes
due 2011 (the "Notes").
Maturity: February 1, 2011.
Interest Rate: 8 1/4%.
Interest payment dates: February 1 and August 1 of each
year, commencing August 1, 2001.
Interest will accrue from January
25, 2001.
Interest record dates: January 15 and July 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 February 1, 2006, at the redemption
prices (together with accrued and unpaid interest)
set forth below, if redeemed during the 12-month
period beginning February 1 of the following years:
Years Percentage
----- ----------
2006...................................... 104.125%
2007...................................... 102.750%
2008...................................... 101.375%
2009 and thereafter....................... 100.000%
Purchase Price: 98.465% 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% 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 $100,000,000.
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.
-2-
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 that are
pari passu or subordinate in rights to the
Underwritten Securities to the public without Banc of
America Securities LLC's prior written consent.
The obligations of the Underwriters 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
Underwriters.
-3-
Please accept this offer no later than 3:00 p.m. on January
19, 2001, by signing a copy of this Terms Agreement in the space set forth below
and returning the signed copy to us.
Very truly yours,
BANC OF AMERICA SECURITIES LLC
By: /s/ Adam Goodfriend
----------------------------------
Name: Adam Goodfriend
Title: Managing Director
UBS WARBURG LLC
By: /s/ Richard Smith
----------------------------------
Name: Richard Smith
Title: Managing Director
CREDIT LYONNAIS SECURITIES (USA) INC.
By: /s/ David C. Travis
---------------------------------
Name: David C. Travis
Title: Managing Director
Accepted
TOLL CORP.
By: /s/ Joseph R. Sicree
--------------------------
Name: Joseph R. Sicree
Title: Vice President
TOLL BROTHERS, INC.
By: /s/ Joseph R. Sicree
--------------------------
Name: Joseph R. Sicree
Title: Vice President