Exhibit 1
TERMS AGREEMENT
November 27, 2001
TOLL CORP.
TOLL BROTHERS, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxx, XX 00000-0000
Dear Sirs:
We understand that Toll Corp., a Delaware corporation (the
"Issuer"), proposes to issue and sell $150,000,000 aggregate principal amount of
a new series of 8.25% Senior Subordinated Notes due 2011, which securities Toll
Brothers, Inc., a Delaware corporation (the "Guarantor"), will guarantee on a
senior subordinated basis (such securities hereinafter referred to as the
"Underwritten Securities"). Subject to the terms and conditions set forth herein
or incorporated by reference herein, each of the following Underwriters offers
to purchase, severally and not jointly, the percentage of the Underwritten
Securities set forth opposite such Underwriter's name:
Banc of America Securities LLC 77.5%
Banc One Capital Markets, Inc. 10.0%
BNP Paribas Securities Corp. 2.5%
Comerica Securities, Inc. 2.5%
Credit Lyonnais Securities (USA) Inc. 2.5%
Xxxxxxx, Xxxxx & Co. 2.5%
SunTrust Capital Markets, Inc. 2.5%
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 November 30, 2001, at
10:00 a.m., at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx.
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: 8.25% Senior Subordinated Notes
due 2011 (the "Notes").
Maturity: December 1, 2011.
Interest Rate: 8.25%.
Interest payment dates: December 1 and
June 1 of each
year, commencing
June 1, 2002.
Interest will
accrue from
November 30, 2001.
Interest record dates: November 15 and May 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 December 1, 2006, at the redemption
prices (together with accrued and unpaid interest)
set forth below, if redeemed during the 12-month
period beginning December 1 of the following years:
Years Percentage
----- ----------
2006.............................. 104.125%
2007.............................. 102.750%
2008.............................. 101.375%
2009 and thereafter............... 100.000%
In addition, at any time, or from time to time, prior
to December 1, 2004, the Issuer may, at its option,
use all or a portion of the net proceeds of one or
more Equity Offerings (as defined below) to redeem up
to 35% of the aggregate principal amount of the
Underwritten Securities (including any Additional
Underwritten Securities (as defined below)) at a
redemption price equal to 108.25% of the aggregate
principal amount of the Underwritten Securities to be
redeemed, plus accrued and unpaid interest, if any,
thereon to the date of redemption; provided that at
least 65% of the Underwritten Securities (including
any Additional Underwritten Securities) remains
outstanding immediately after giving effect to any
such redemption; provided, further, that notice of
any such redemption is mailed within 60 days after
the closing date of the applicable Equity Offering
and in any event not less than 30 nor more than 60
days prior to the applicable redemption date, all in
accordance with the requirements of the Indenture.
-2-
"Equity Offering" means an underwritten public
offering of common stock of the Guarantor pursuant to
a registration statement filed with the Securities
and Exchange Commission in accordance with the
Securities Act of 1933, as amended.
"Additional Underwritten Securities," if any, means
Underwritten Securities issued under the Indenture
after the Closing Date.
Purchase Price: 99.831675% of the principal amount thereof.
Public Offering: At the Market.
Additional Terms:
The Issuer and the Guarantor will be subject to the
same covenants and events of default contained in the
8% Senior Subordinated Notes of the Issuer and as set
forth in the Prospectus Supplement; provided,
however, that each reference to "$2,000,000" in the
events of default of the 8% Senior Subordinated Notes
of the Issuer shall be (a) deleted and (b) replaced
with "$2,000,000 (increasing to $10,000,000 when all
of the indebtedness evidenced by the 8 3/4% Notes,
the 7 3/4% Notes, the 8 1/8% Notes, the 8% Notes and
the 8 1/4% Notes has been repaid)"; provided,
further, that the reference to "$5,000,000" in the
events of default of the 8% Senior Subordinated Notes
of the Issuer shall be (a) deleted and (b) replaced
with "$5,000,000 (increasing to $10,000,000 when all
of the indebtedness evidenced by the 8 3/4% Notes,
the 7 3/4% Notes, the 8 1/8% Notes, the 8% Notes and
the 8 1/4% Notes has been repaid".
-3-
The Issuer and the Guarantor will have the right to
issue an unlimited amount of additional Notes and
Guarantees of the same series.
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.
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.
-4-
Please accept this offer no later than 5:00 p.m. on November
27, 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/ Xxxx X. Xxxx
-------------------------------
Name: Xxxx X. Xxxx
Title: Managing Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Xxxxxx X. XxXxxxx
-------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Managing Director
BNP PARIBAS SECURITIES CORP.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
COMERICA SECURITIES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Managing Director
CREDIT LYONNAIS SECURITIES (USA) INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
-----------------------------
Name: Xxxxxxx, Sachs & Co.
Title:
SUNTRUST CAPITAL MARKETS, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Director
Accepted
TOLL CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
TOLL BROTHERS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
