Exhibit 1.2
XxXxxxxxx & Company, Incorporated
Medium Term Notes
TERMS AGREEMENT
January 26, 2001
Xxxxxxx, Sachs & Co.
Banc of America Securities LLC
Credit Suisse First Boston Corporation
SunTrust Equitable Securities, Inc.
Wachovia Securities, Inc.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XxXxxxxxx & Company, Incorporated (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement, dated
January 23, 2001 (the "Distribution Agreement"), between the Company on the one
hand and Xxxxxxx, Xxxxx & Co. ("Goldman") on the other, to issue and sell to
Goldman, Banc of America Securities LLC, Credit Suisse First Boston Corporation,
SunTrust Equitable Securities, Inc. and Wachovia Securities, Inc. (each an
"Agent", collectively, the "Additional Agents" and, together with Goldman, the
"Agents" ) the securities specified in the Schedules hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement (except to
the extent that such provisions apply to Securities (as defined in the
Distribution Agreement) other than the Purchased Securities) is incorporated
herein by reference in its entirety, and shall be deemed to be part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Distribution Agreement shall
make any party hereto an agent of the Company or make such party subject to the
provisions therein relating to Securities (other than the Purchased Securities)
from the Company, solely by virtue of its execution of this Terms Agreement.
Each of the representations and warranties set forth in the Distribution
Agreement shall be deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in Section 1 of the
Distribution Agreement which makes reference to the Prospectus (as therein
defined) shall be deemed to be a representation and warranty as of the date of
the Distribution Agreement in relation to the Prospectus, and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement (as defined in the
Distribution Agreement), or a supplement to the Prospectus, as the case may be,
relating to the Purchased Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission (as
defined in the Distribution Agreement).
The Company hereby appoints each of the Additional Agents as an agent
under the Distribution Agreement in connection with the purchase as principal by
it of the amount of the Purchased Securities set forth opposite its name below.
The Company agrees that, with respect to the Purchased Securities, each
Additional Agent, as the Company's agent, shall be entitled to the benefit of
the representations and warranties, agreements and indemnities (including
contribution) by the Company in favor of Goldman set forth in the Distribution
Agreement to the same extent as if each of the Additional Agents were named
agents thereunder.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Agents and each of the Agents severally agrees to purchase
from the Company the Purchased Securities, at the time and place and at the
purchase price set forth in the Schedules hereto and in the respective principal
amount set forth below opposite its name:
Principal amount purchased
Name of each Agent by each Agent
------------------ ---------------------------
6.4% Notes due 6.8% Notes due
February 1, 2006 February 1, 2008
Xxxxxxx, Sachs & Co. $85,500,000 $85,500,000
Banc of America Securities LLC $37,500,000 $37,500,000
Credit Suisse First Boston Corporation $9,000,000 $9,000,000
SunTrust Equitable Securities, Inc. $9,000,000 $9,000,000
Wachovia Securities, Inc. $9,000,000 $9,000,000
Total $150,000,000 $150,000,000
If any Agent shall default in its obligation to purchase the
Purchased Securities which it has agreed to purchase hereunder (a "Defaulting
Agent"), Goldman may in its discretion arrange for itself or another party or
other parties to purchase such Purchased Securities on the terms contained
herein. If within thirty-six hours after such default, Goldman does not arrange
for the purchase of such Purchased Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to Goldman to purchase such Purchased
Securities on such terms. In the event that, within the respective prescribed
periods, Goldman notifies the Company that it has so arranged for the purchase
of such Purchased Securities, or the Company notifies Goldman that it has so
arranged for the purchase of such Purchased Securities, Goldman or the Company
shall have the right to postpone the Time of Delivery (as defined in the
Distribution Agreement) for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in Xxxxxxx'x opinion may thereby be made necessary. The
terms Agent or Agents, as used in this Terms Agreement, shall include any person
substituted under this Terms Agreement with like effect as if such person had
originally been a party to this Terms Agreement with respect to such Purchased
Securities.
If, after giving effect to any arrangements for the purchase of the
Purchased Securities of a Defaulting Agent by Goldman and the Company as
provided above, the aggregate principal amount of
such Purchased Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Purchased Securities, then the
Company shall have the right to require each non-defaulting Agent to purchase
the principal amount of Purchased Securities which such Agent agreed to purchase
hereunder and, in addition, to require each non-defaulting Agent to purchase its
pro rata share (based on the principal amount of Purchased Securities which such
Agent agreed to purchase hereunder) of the Purchased Securities of such
Defaulting Agent or Agents for which such arrangements have not been made; but
nothing herein shall relieve a Defaulting Agent from liability for its default.
If, after giving effect to any arrangements for the purchase of
the Purchased Securities of a Defaulting Agent or Agents by Goldman and the
Company as provided above, the aggregate principal amount of Purchased
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Purchased Securities, or if the Company shall not
exercise the right described above to require the non-defaulting Agent to
purchase Purchased Securities of a Defaulting Agent or Agents, then this Terms
Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Agent or the Company, except for the expenses to be borne by the
Company and Goldman as provided in the Distribution Agreement; but nothing
herein shall relieve a Defaulting Agent from liability for its default.
If the foregoing is in accordance with your understanding, please sign
and return to us 5 counterparts hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
XxXxxxxxx & Company, Incorporated
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Vice President & Controller
Accepted:
/s/ Xxxxxxx, Sachs & Co.
------------------------------------------
(Xxxxxxx, Xxxxx & Co.)
/s/
------------------------------------------
(Banc of America Securities LLC)
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
(Credit Suisse First Boston Corporation)
Xxxxxx X. Xxxxxxx
Director
/s/ Xxxxx Xxxxxxx
------------------------------------------
(SunTrust Equitable Securities, Inc.)
Xxxxx Xxxxxxx
Managing Director
/s/
------------------------------------------
(Wachovia Securities, Inc.)
Schedule A
$150,000,000
XxXXXXXXX & COMPANY, INCORPORATED
MEDIUM-TERM NOTES - FIXED RATE
CUSIP NO. 57978X AA 3
---------------
TERMS OF NOTES
Aggregate Principal Amount: $150,000,000 Optional Redemption: /X/ Yes / / No
- Initial Redemption Date: *
Interest Rate: 6.40% - Initial Redemption Percentage:
- Annual Redemption Percentage Reduction:
Original Issue Date: January 31, 2001
Optional Repayment: / / Yes /X/ No
Stated Maturity Date: February 1, 2006 - Optional Repayment Date(s):
- Optional Repayment Price: _____%
Interest Payment Dates: February 1 and August 1,
commencing on August 1, 2001 Original Issue Discount: / / Yes /X/ No
- Total Amount of OID:
Original Issue Price: 99.801% - Yield to Maturity:
- Initial Accrual Period:
Net Proceeds to Issuer after Underwriting
Discount: $148,801,500 Form: /X/ Book-Entry / / Certificated
Specified Currency: U.S. Dollars Defeasance: /X/ Yes / / No
Exchange Rate Agent: None Covenant Defeasance : /X/ Yes / / No
Option to Receive Payments in Specified Currency other Sinking Fund: / / Yes /X/ No
than U.S. Dollars: None
Other Provisions: *See the redemption
Minimum Denomination (Applicable if Specified Currency provisions on the reverse hereof.
is other than U.S. Dollars): N/A
Underwriting: See "Underwriters" on the
reverse hereof.
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
By wire transfer to a bank account specified by the Company in
immediately available funds
INDENTURE:
Indenture, dated as of December 5, 2000, between the Company and
SunTrust Bank, as Trustee
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
(1) The opinion or opinions of counsel to the Agent referred to in
Section 4(h).
(2) The opinions of counsel to the Company referred to in Section 4(i).
(3) The accountants' letter referred to in Section 4(j).
(4) The officers' certificate referred to in Section 4(k).
REDEMPTION OF NOTES:
The Notes will be subject to redemption at the option of XxXxxxxxx &
Company, Incorporated (the "Company") at any time, in whole or from time to time
in part, at the Make-Whole Price (as defined below), on notice given no more
than 60 nor less than 30 calendar days prior to the date of redemption.
"Make-Whole Price" means an amount equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed and (ii) as determined by an
Independent Investment Banker (as defined below), the sum of the present values
of the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined below) plus 15 basis points, plus, in the case of both (i) and
(ii), accrued and unpaid interest to the date of redemption. Unless the Company
defaults in payment of the Make-Whole Price, on and after the date of
redemption, interest will cease to accrue on the Notes to be redeemed.
"Business Day" means any day that is not a Saturday or Sunday and that
is neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of five Reference Treasury Dealer Quotations for
such date of redemption, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations, or (ii) if the Trustee (as defined below)
obtains fewer than five such Reference Treasury Dealer Quotations, the average
of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) Xxxxxxx, Sachs & Co. and Banc of
America Securities LLC and their respective successors; provided, however, that
if any of the foregoing shall not be a primary U.S. government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer; and (ii) any two other Primary
Treasury Dealers the Company selects.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
"Treasury Rate" means, with respect to any date of redemption, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication that is published weekly by
the Board of Governors of the Federal Reserve System and that establishes yields
on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the stated maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined, and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption. The Treasury Rate shall be
calculated on the third Business Day preceding the date of redemption.
A-2
Notwithstanding Section 11.4 of the Indenture, dated as of December 5,
2000, between the Company and SunTrust Bank, as trustee (the "Trustee"), the
notice of redemption with respect to the foregoing redemption need not set forth
the Make-Whole Price but only the manner of calculation thereof. The Company
shall notify the Trustee of the Make-Whole Price with respect to any redemption
promptly after the calculation thereof, and the Trustee shall not be responsible
for such calculation.
UNDERWRITING:
Under the terms and subject to the conditions contained in the Distribution
Agreement dated January 23, 2001 and a Terms Agreement dated January 26, 2001,
the underwriters named below have severally agreed to purchase from us the
following principal amount of the Notes:
Underwriters Principal Amount of the Notes
------------ -----------------------------
Xxxxxxx, Xxxxx & Co............................................................. $85,500,000
Bank of America Securities LLC.................................................. 37,500,000
Credit Suisse First Boston Corporation.......................................... 9,000,000
SunTrust Equitable Securities, Inc.............................................. 9,000,000
Wachovia Securities, Inc........................................................ 9,000,000
------------
Total........................................................................... $150,000,000
The following table summarizes the discount to be received by the underwriters,
and the proceeds we will receive, in connection with the sale of the Notes:
Per Note Total
-------- -----
Public Offering Price.......................................... 99.801% $ 149,701,500
Underwriting Discount.......................................... 0.600% $ 900,000
Proceeds to the Company (before expenses)...................... 99.201% $ 148,801,500
A-3
Schedule B
$150,000,000
XXXXXXXXX & COMPANY, INCORPORATED
MEDIUM-TERM NOTES - FIXED RATE
CUSIP NO. 57978X AB 1
---------------
TERMS OF NOTES
Aggregate Principal Amount: $150,000,000 Optional Redemption: /X/ Yes / / No
- Initial Redemption Date: *
Interest Rate: 6.80% - Initial Redemption Percentage:
- Annual Redemption Percentage Reduction:
Original Issue Date: January 31, 2001
Optional Repayment: / / Yes /X/ No
Stated Maturity Date: February 1, 2008 - Optional Repayment Date(s):
- Optional Repayment Price: _____%
Interest Payment Dates: February 1 and August 1,
commencing on August 1, 2001 Original Issue Discount: / / Yes /X/ No
- Total Amount of OID:
Original Issue Price: 99.961% - Yield to Maturity:
- Initial Accrual Period:
Net Proceeds to Issuer after Underwriting
Discount: $149,004,000 Form: /X/ Book-Entry / / Certificated
Specified Currency: U.S. Dollars Defeasance: /X/ Yes / / No
Exchange Rate Agent: None Covenant Defeasance : /X/ Yes / / No
Option to Receive Payments in Specified Currency other Sinking Fund: / / Yes /X/ No
than U.S. Dollars: None
Other Provisions: *See the redemption
Minimum Denomination (Applicable if Specified Currency provisions on the reverse hereof.
is other than U.S. Dollars): N/A
Underwriting: See "Underwriters" on the
reverse hereof.
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
By wire transfer to a bank account specified by the Company in
immediately available funds
INDENTURE:
Indenture, dated as of December 5, 2000, between the Company and
SunTrust Bank, as Trustee
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
(1) The opinion or opinions of counsel to the Agent referred to in
Section 4(h).
(2) The opinions of counsel to the Company referred to in Section 4(i).
(3) The accountants' letter referred to in Section 4(j).
(4) The officers' certificate referred to in Section 4(k).
REDEMPTION OF NOTES:
The Notes will be subject to redemption at the option of XxXxxxxxx &
Company, Incorporated (the "Company") at any time, in whole or from time to time
in part, at the Make-Whole Price (as defined below), on notice given no more
than 60 nor less than 30 calendar days prior to the date of redemption.
"Make-Whole Price" means an amount equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed and (ii) as determined by an
Independent Investment Banker (as defined below), the sum of the present values
of the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined below) plus 15 basis points, plus, in the case of both (i) and
(ii), accrued and unpaid interest to the date of redemption. Unless the Company
defaults in payment of the Make-Whole Price, on and after the date of
redemption, interest will cease to accrue on the Notes to be redeemed.
"Business Day" means any day that is not a Saturday or Sunday and that
is neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of five Reference Treasury Dealer Quotations for
such date of redemption, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations, or (ii) if the Trustee (as defined below)
obtains fewer than five such Reference Treasury Dealer Quotations, the average
of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) Xxxxxxx, Sachs & Co. and Banc of
America Securities LLC and their respective successors; provided, however, that
if any of the foregoing shall not be a primary U.S. government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer; and (ii) any two other Primary
Treasury Dealers the Company selects.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
"Treasury Rate" means, with respect to any date of redemption, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication that is published weekly by
the Board of Governors of the Federal Reserve System and that establishes yields
on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the stated maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined, and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption. The Treasury Rate
B-2
shall be calculated on the third Business Day preceding the date of redemption.
Notwithstanding Section 11.4 of the Indenture, dated as of December 5,
2000, between the Company and SunTrust Bank, as trustee (the "Trustee"), the
notice of redemption with respect to the foregoing redemption need not set forth
the Make-Whole Price but only the manner of calculation thereof. The Company
shall notify the Trustee of the Make-Whole Price with respect to any redemption
promptly after the calculation thereof, and the Trustee shall not be responsible
for such calculation.
UNDERWRITING:
Under the terms and subject to the conditions contained in the Distribution
Agreement dated January 23, 2001 and a Terms Agreement dated January 26, 2001,
the underwriters named below have severally agreed to purchase from us the
following principal amount of the Notes:
Underwriters Principal Amount of the Notes
------------ -----------------------------
Xxxxxxx, Xxxxx & Co............................................................. $85,500,000
Bank of America Securities LLC.................................................. 37,500,000
Credit Suisse First Boston Corporation.......................................... 9,000,000
SunTrust Equitable Securities, Inc.............................................. 9,000,000
Wachovia Securities, Inc........................................................ 9,000,000
------------
Total........................................................................... $150,000,000
The following table summarizes the discount to be received by the underwriters,
and the proceeds we will receive, in connection with the sale of the Notes:
Per Note Total
-------- -----
Public Offering Price............................................ 99.961% $ 149,941,500
Underwriting Discount............................................ 0.625% $ 937,500
Proceeds to the Company (before expenses)........................ 99.336% $ 149,004,000
B-3
