EXHIBIT 1.01
TERMS AGREEMENT
August 14, 2002
Xxxxxxx Xxxxx Xxxxxx Holdings Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
Dear Sirs:
We understand that Xxxxxxx Xxxxx Barney Holdings Inc., a New York
corporation (the "Company"), proposes to issue and sell $16,500,000 aggregate
principal amount of its Equity Linked Securities (ELKS(SM)) (1,650,000 ELKS)
based upon the common stocks of Applied Materials, Inc., General Electric
Company, The Home Depot, Inc., X.X. Xxxxxx Xxxxx & Co. and Pfizer Inc. due
August 20, 2003 (the "Securities"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, Xxxxxxx Xxxxx Barney Inc. (the
"Underwriter") offers to purchase 1,650,000 Securities in the principal amount
of $16,500,000 at 97.5% of the principal amount. The Closing Date shall be
August 19, 2002 at 9:00 a.m. at the offices of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The Securities shall have the following terms:
Title: Equity Linked Securities (ELKS(SM)) based
upon the Common Stocks of Applied Materials,
Inc., General Electric Company, The Home
Depot, Inc., X.X. Xxxxxx Xxxxx & Co. and
Pfizer Inc. due August 20, 2003
Maturity: August 20, 2003
Coupon: Each ELKS will pay a total coupon of $1.6044
in cash in two separate semi-annual
installments payable in part on each of two
separate Interest Payment Dates. The first
coupon of $0.8044 will
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be composed of $0.0873 of interest and a
partial payment of an option premium in the
amount of $0.7171. The second coupon of
$0.8000 will be composed of $0.0869 of
interest and a partial payment of an option
premium in the amount of $0.7131.
Maturity Payment: Holders of the ELKS will be entitled to
receive at maturity the Maturity Payment (as
defined in the Prospectus Supplement dated
August 14, 2002 relating to the Securities)
Interest Payment Dates: February 20, 2003 and August 20, 2003
Regular Record Dates: February 19, 2003 and August 19, 2003
Initial Price To Public: 100% of the principal amount thereof, plus
accrued interest from August 19, 2002 to
date of payment and delivery
Redemption Provisions: The Securities are not redeemable by the
Company prior to maturity.
Trustee: The Bank of New York
Indenture: Indenture, dated as of October 27, 1993, as
amended from time to time
All the provisions contained in the document entitled "Xxxxxxx Xxxxx
Barney Holdings Inc. - Debt Securities - Underwriting Agreement Basic
Provisions" and dated December 1, 1997 (the "Basic Provisions"), a copy of which
you have previously received, are, except as indicated below, 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.
Basic Provisions varied with respect to this Terms Agreement:
(A) Notwithstanding the provisions set forth in Section 3 of the Basic
Provisions, the Company and the Underwriter hereby agree that the
Securities will be in the form of Book-Entry Notes and shall be
delivered on August 19, 2002 against
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payment of the purchase price to the Company by wire transfer in
immediately available funds to such accounts with such financial
institutions as the Company may direct.
(B) Paragraph 4(j) of the Basic Provisions shall be amended and restated as
follows: "The Company will not, without the consent of Xxxxxxx Xxxxx
Barney Inc., offer, sell, contract to offer or sell or otherwise
dispose of any securities, including any backup undertaking for such
securities, of the Company, in each case that are substantially similar
to the Securities or any security convertible into or exchangeable for
the ELKS or such substantially similar securities, during the period
beginning the date of the Terms Agreement and ending the Closing Date."
(C) Paragraph 5(g) of the Basic Provisions shall be amended and restated as
follows: "You shall have received on the Closing Date letters from
PricewaterhouseCoopers LLP and KPMG LLP covering the matters set forth
in Exhibit II hereto, with respect to the Registration Statement and
the Prospectus at the time of the Terms Agreement."
The Underwriter hereby agrees in connection with the underwriting of
the Securities to comply with the requirements set forth in any applicable
sections of Section 2720 to the By-Laws of the National Association of
Securities Dealers, Inc.
Xxxxx Xxxxx, Esq., is counsel to the Company. Cleary, Gottlieb, Xxxxx &
Xxxxxxxx is counsel to the Underwriter. Cleary, Gottlieb, Xxxxx & Xxxxxxxx is
special tax counsel to the Company.
Please accept this offer no later than 9:00 p.m. on August 14, 2002, by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
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"We hereby accept your offer, set forth in the Terms Agreement, dated
August 14, 2002, to purchase the Securities on the terms set forth therein."
Very truly yours,
XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Director
ACCEPTED:
XXXXXXX XXXXX XXXXXX HOLDINGS INC.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Executive Vice President and Treasurer
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