Exhibit 1
KRAFT FOODS INC.
("Company")
Debt Securities
TERMS AGREEMENT
---------------
November 20, 2002
To: The Representatives of the Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named in
Schedule A hereto for their respective accounts, on and subject to the terms and
conditions of the Underwriting Agreement dated September 1, 2001 and filed as an
exhibit to the Company's registration statement on Form S-3 (No. 333-86478)
relating to debt securities and warrants to purchase debt securities (the
"Underwriting Agreement"), the following securities (the "Offered Securities")
on the following terms:
OFFERED SECURITIES
------------------
Title:
Floating Rate Notes due 2004 (the "Notes").
Principal Amount:
$750,000,000.
Interest:
Three-Month LIBOR (as determined as set forth in the Prospectus
Supplement, dated November 20, 2002 (the "Prospectus Supplement"))
plus 0.20%, payable quarterly in arrears on February 26, May 26,
August 26 and November 26 of each year, beginning on
February 26, 2003, to the persons in whose name the Notes are
registered at the close of business 15 calendar days before the
applicable interest payment date. Interest shall be calculated on the
basis of the actual number of days during the relevant interest period
and a 360-day year. Interest is payable from the date of issue of the
Notes or from the most recent date to which interest on such Note has
been paid or duly provided for, until the principal amount of the Note
is paid or duly made available for payment.
The interest rate will be reset quarterly on February 26, May 26,
August 26 and November 26 of each year (each, an "interest reset
date"). The interest determination dates are quarterly, and will occur
two "London banking days" prior to the applicable interest reset date
(as more fully set forth in the Prospectus Supplement), except that
the first interest determination date will be November 22, 2002 and
will be for the period from the date of issue to the first interest
payment date.
Maturity:
November 26, 2004.
Currency of Denomination:
United States Dollars ($).
Currency of Payment:
United States Dollars ($).
Form and Denomination:
Book-entry form only represented by one or more global securities
deposited with The Depository Trust Company or its designated
custodian, in denominations of $1,000 and $1,000 integral multiples
thereof.
Optional Redemption:
The Notes may not be redeemed prior to maturity.
Conversion Provisions:
None.
Sinking Fund:
None.
2
Listing:
None.
Delayed Delivery Contracts:
None.
Purchase Price:
99.80% of principal amount of the Notes, plus accrued interest, if any,
from November 26, 2002.
Expected Reoffering Price:
100% of principal amount, plus accrued interest, if any, from November
26, 2002.
Additional Agreements of the Company:
Not applicable.
Additional Representations and Warranties of the Company:
The Company hereby represents and warrants and agrees with each
Underwriter that (i) the documents incorporated by reference in the
Registration Statement and the Prospectus on or before the Closing
Date, when they were or are filed with the Commission, conformed or
will conform, as the case may be, in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder and (ii) the
Calculation Agency Agreement, to be dated as of the Closing Date (the
"Calculation Agency Agreement"), between the Company and JPMorgan Chase
Bank, as calculation agent (the "Calculation Agent"), has been duly
authorized, and when the Notes are delivered and paid for pursuant to
this Terms Agreement on the Closing Date, the Calculation Agency
Agreement will have been duly executed and delivered and, assuming due
authorization, execution and delivery thereof by the Calculation Agent,
will constitute the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, to an implied covenant of
fair dealing and to general equity principles.
3
Additional Closing Conditions:
It shall be a condition to the obligations of the several Underwriters
to purchase and pay for the Offered Securities that the opinion of counsel
referred to in Section 5(d) of the Underwriting Agreement shall include an
opinion substantially to the effect of the immediately preceding paragraph.
OTHER MATTERS
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Closing:
10:00 A.M. on November 26, 2002, the fourth business day following the date
hereof, at the offices of Hunton & Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, in Federal (same day) funds.
Settlement and Trading:
Book-Entry Only via DTC.
Names and Addresses of the Representatives:
ABN AMRO Incorporated
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Debt Capital Markets - Consumer Products Group
(For purposes of notices, with a copy to the General Counsel at the above
address)
Names and Addresses of the Lead Underwriters:
ABN AMRO Incorporated
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Debt Capital Markets - Consumer Products Group
(For purposes of notices, with a copy to the General Counsel at the above
address)
Each Underwriter hereby severally represents and agrees that it has
not offered, sold or delivered and it will not offer, sell or deliver, directly
or indirectly, any of the Notes or distribute the Prospectus, or any other
offering material relating to the Notes, in or from any jurisdiction, other than
offers, sales, deliveries and distributions made within the United States under
circumstances that will result in compliance with the applicable United States
laws and regulations and that will not impose any obligation on the Company
except as set forth in the Underwriting Agreement and herein.
The respective principal amounts of the Offered Securities to be
severally purchased by each of the Underwriters are set forth opposite their
names in Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein
by reference, except that (a) Section 4(h) thereof is subject to the letter
agreement entered into on the date hereof between the Company and the
Representatives and (b) Section 5(c)(iii) thereof is hereby amended and restated
in its entirety with respect to the Offered Securities as follows:
"(iii) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any material
disruption in commercial banking or securities settlement or clearance
services, or any setting of minimum prices for trading any securities of
the Company on the New York Stock Exchange, or any suspension of trading of
any securities of the Company on the New York Stock Exchange;".
The Offered Securities will be made available for checking at the
office of Hunton & Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at least
24 hours prior to the Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by the Underwriters for use in the
Prospectus consists of the following information in the Prospectus: the
concession and reallowance figures appearing in the third paragraph under the
caption "Underwriting" in the prospectus supplement and the information
contained in the fifth and sixth paragraphs under the caption "Underwriting" in
the prospectus supplement.
5
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
KRAFT FOODS INC.
By /s/ XXXXX X. XXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
The foregoing Terms Agreement is hereby
confirmed and accepted as of the date
first above written.
ABN AMRO INCORPORATED
By /s/ XXXXX X. XXXXXX
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
XXXXXX BROTHERS INC.
By /s/ XXXXX XXXXX
----------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
6
SCHEDULE A
Principal Amount of
Notes
-----
Underwriter
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ABN AMRO Incorporated .............................. $228,750,000
Xxxxxx Brothers Inc. ............................... 228,750,000
BNP Paribas Securities Corp. ....................... 67,500,000
Deutsche Bank Securities Inc. ...................... 67,500,000
HSBC Securities (USA) Inc. ......................... 67,500,000
XX Xxxxx Securities Corporation .................... 67,500,000
Xxxxxxxx & Partners, L.P. .......................... 7,500,000
Loop Capital Markets, LLC .......................... 7,500,000
Xxxxxx Xxxxxxx & Co., Inc. ......................... 7,500,000
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Total .............................................. $750,000,000
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