Exhibit 1
EXECUTION COPY
KRAFT FOODS INC.
("Company")
Debt Securities
TERMS AGREEMENT
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May 15, 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
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Title:
5 1/4% Notes due 2007 (the "2007 Notes").
6 1/4% Notes due 2012 (the "2012 Notes;" and collectively with the
2007 Notes, the "Notes").
Principal Amount:
In the case of the 2007 Notes, $1,000,000,000.
In the case of the 2012 Notes, $1,500,000,000.
Interest:
In the case of the 2007 Notes, 5 1/4% per annum, from May 20, 2002,
payable semiannually on June 1 and December 1, commencing December 1,
2002, to holders of record on the preceding May 15 or November 15, as
the case may be.
In the case of the 2012 Notes, 6 1/4% per annum, from May 20, 2002,
payable semiannually on June 1 and December 1, commencing December 1,
2002, to holders of record on the preceding May 15 or November 15, as
the case may be.
Maturity:
In the case of the 2007 Notes, June 1, 2007.
In the case of the 2012 Notes, June 1, 2012.
Currency of Denomination:
United States Dollars ($).
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.
Overseas Payment and Transfer Agents:
Luxembourg Paying Agent: X.X. Xxxxxx Bank Luxembourg S.A.
Optional Redemption:
Other than as set forth in the next sentence, the Notes may not be
redeemed prior to maturity. The Company may, at its option, redeem the
Notes in whole, but not in part, as set forth under the caption
"Description of Notes--Redemption for Tax Reasons" in the prospectus
supplement dated the date hereof relating to the Notes.
Conversion Provisions:
None.
Sinking Fund:
None.
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Listing:
Application has been made to list the Notes on the Luxembourg Stock
Exchange.
Delayed Delivery Contracts:
None.
Payment of Additional Amounts:
Section 1010 of the Indenture shall be applicable to the Notes, except
that the term "Holder," when used in Section 1010 of the Indenture,
shall mean the beneficial owner of a Note or any person holding on
behalf or for the account of the beneficial owner of a Note.
Purchase Price:
In the case of the 2007 Notes, 99.125% of principal amount of the 2007
Notes, plus accrued interest, if any, from May 20, 2002.
In the case of the 2012 Notes, 99.510% of principal amount of the 2012
Notes, plus accrued interest, if any, from May 20, 2002.
Expected Reoffering Price:
In the case of the 2007 Notes, 99.475% of principal amount.
In the case of the 2012 Notes, 99.960% of principal amount.
Additional Agreements of the Company:
The Company hereby agrees to use its reasonable efforts to have
the Notes listed, as soon as practicable, and maintained on the
Luxembourg Stock Exchange in accordance with its rules.
Additional Representations and Warranties of the Company:
The Company hereby represents and warrants and agrees with each
Underwriter that 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.
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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 May 20, 2002, 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:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Names and Addresses of the Lead Underwriters:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Selling Restrictions:
(A) 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 except under circumstances that
will result in compliance with the applicable laws and regulations
thereof and that will not impose any obligation on the Company
except as set forth in the Underwriting Agreement and herein.
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(B) Each Underwriter hereby severally represents and agrees that:
(1) it and each of its affiliates have not offered or sold and
will not offer or sell any Notes to persons in the United
Kingdom prior to the expiry of the period of six months from
the issue date of such Notes except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the
purpose of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (as amended) and
Schedule 11 of the Financial Services and Markets Xxx 0000 of
the United Kingdom (the "FSMA");
(2) it and each of its affiliates have complied and will comply
with all applicable provisions of the FSMA with respect to
anything done by it in relation to such Notes in, from or
otherwise involving the United Kingdom; and
(3) it and each of its affiliates will only communicate or cause
to be communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of
such Notes in circumstances in which Section 21(1) of the FSMA
does not apply to the Company.
(C) Each Underwriter hereby severally represents and agrees that:
(1) it and each of its affiliates have not offered or sold and
will not offer or sell, directly or indirectly, in Hong Kong
by means of any document, any Notes other than to persons
whose ordinary business is to buy or sell shares or
debentures, whether as principal or agent, or in circumstances
which do not constitute an offer to the public within the
meaning of the Companies Ordinance (Chap. 32) of Hong Kong;
and
(2) it and each of its affiliates have not issued and will not
issue, directly or indirectly, any invitation or advertisement
relating to the Notes in Hong Kong, except if permitted to do
so under the securities laws of Hong Kong, other than with
respect to Notes intended to be disposed of to persons outside
Hong Kong or to be disposed of in Hong Kong only to persons
whose business involves the acquisition, disposal or holding
of securities, whether as principal or agent.
(D) Each Underwriter hereby severally represents and agrees that it and
each of its affiliates have not offered or sold, and will not offer
or sell, any Notes nor will it circulate or distribute any offering
document or material relating to the Notes, directly or indirectly,
to the public or any member of the public in Singapore other than
(i) to an institutional investor or other person specified in
Section 106C of the Companies Act, Chapter 50 of Singapore (the
"Singapore Companies Act"); (ii) to a sophisticated investor
specified in Section 106D of the Singapore
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Companies Act; or (iii) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provision of the
Singapore Companies Act.
(E) Each Underwriter hereby severally represents and agrees that with
respect to Germany, it and each of its affiliates have not and
will not register or publish in respect of the Notes within the
Federal Republic a selling prospectus (Verkaufsprospekt) within
the meaning of the German Securities Sales Prospectus Act
(Wertpapier-Verkaufprospektgesetz) of December 13, 1990 (as
amended); and it and each of its affiliates have not offered or
sold and will not offer and sell any Notes in the Federal
Republic otherwise than in accordance with the provisions of the
German Securities Sales Prospectus Act.
(F) Each Underwriter hereby severally represents and agrees that (a)
it and each of its affiliates have not offered or sold and will
not offer or sell, directly or indirectly, any of the Notes to
the public in the Republic of France, (b) it and each of its
affiliates have not distributed and will not distribute or cause
to be distributed in the Republic of France the Prospectus or any
other offering material relating to the Notes, except (i) to
qualified investors (investisseurs qualifies) or (ii) a
restricted group of investors (cercle restreint d'investisseurs),
all as defined in article L. 411-2 of the Code monetaire et
financier, in Decret no. 98-880 dated 1st October, 1998 and in
Regulation no. 98-09 of the Commission des Operations de Bourse,
and (c) offers and sales of Notes will be made in the Republic of
France only to such qualified investors or restricted group of
investors.
(G) Each Underwriter hereby severally represents and agrees that it
and each of its affiliates have not offered or sold and will not
offer or sell, directly or indirectly, any of the Notes, in or to
residents of Japan or to any person for re-offering or re-sale,
directly or indirectly, in Japan or to any resident of Japan
except pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan
available thereunder and in compliance with the other relevant
laws of Japan.
(H) Each Underwriter hereby severally represents and agrees that it
and each of its affiliates have not, directly or indirectly,
offered or sold and will not, directly or indirectly, offer or
sell in The Netherlands any Notes other than to persons who trade
or invest in securities in the conduct of a profession or
business (which include banks, stockbrokers, insurance companies,
pension funds, other institutional investors and finance
companies and treasury departments of large enterprises).
(I) Each Underwriter hereby severally represents and agrees that it
and each of its affiliates will not distribute the Notes in
Canada other than on a private placement basis in the provinces
of Ontario and British Columbia, exempt from the requirement that
the Company prepare and file a prospectus with the applicable
securities regulatory authorities and exempt from applicable
dealer registration requirements. Each Underwriter also hereby
severally represents and agrees that sales of the Notes to
residents of the province of Ontario, Canada, will be made only
by dealers that are registered in Ontario, Canada, and will not
be made
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directly by a United States dealer unless such dealer is
appropriately registered in Ontario.
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 and
packaging 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.
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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.
DEUTSCHE BANK SECURITIES INC.
By /s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
Title: Managing Director
By /s/ Xxxxxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Managing Director
XXXXXXX XXXXX XXXXXX INC.
By /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Director
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
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SCHEDULE A
Principal Amount of Principal Amount of
5 1/4% Notes 6 1/4% Notes
due 2007 due 2012
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Underwriter
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Deutsche Bank Securities Inc. $ 320,000,000 $ 480,000,000
Xxxxxxx Xxxxx Barney Inc. 320,000,000 480,000,000
ABN AMRO Bank N.V. 60,000,000 90,000,000
BNP Paribas Securities Corp. 60,000,000 90,000,000
Caboto IntesaBci - SIM S.p.A. 60,000,000 90,000,000
HSBC Securities (USA) Inc. 60,000,000 90,000,000
XX Xxxxx Securities Corporation 60,000,000 90,000,000
Banco Bilbao Vizcaya Argentaria, SA 15,000,000 22,500,000
ING Financial Markets LLC 15,000,000 22,500,000
Xxxxxx X. Xxxxxxx & Company, Inc. 15,000,000 22,500,000
Xxxxxxxx Capital Partners, L.P. 15,000,000 22,500,000
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Total.............................. $1,000,000,000 $1,500,000,000
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