Exhibit 1.01
TERMS AGREEMENT
December 17, 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 $30,000,000 aggregate
principal amount of its Equity Linked Securities (ELKS[SM]) (3,000,000 ELKS)
based upon the common stock of American Express Company due December 22, 2003
(the "Securities"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, Xxxxxxx Xxxxx Xxxxxx Inc. (the "Underwriter")
offers to purchase 3,000,000 Securities in the principal amount of $30,000,000
at 97.5% of the principal amount. The Closing Date shall be December 20, 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 Stock of American Express
Company due December 22, 2003
Maturity: December 22, 2003
Coupon: Each ELKS will pay a total coupon of
$0.8044 in cash in two separate
semi-annual installments payable in part
on each of two separate Interest Payment
Dates. The first coupon of $0.4044 will
be composed of $0.0765 of interest and a
partial payment of an option premium in
the amount of
1
$0.3279. The second coupon of $0.4000 will be composed
of $0.0756 of interest and a partial payment of an
option premium in the amount of $0.3244.
Maturity Payment: Holders of the ELKS will be entitled to
receive at maturity the Maturity Payment
(as defined in the Prospectus Supplement
dated December 17, 2002 relating to the
Securities)
Interest Payment Dates: June 22, 2003 and December 22, 2003
Regular Record Dates: June 21, 2003 and December 21, 2003
Initial Price To Public: 100% of the principal amount thereof, plus
accrued interest from December 20, 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
Xxxxxx 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 December 20, 2002 against payment of the purchase price to the Company
by wire transfer in immediately
2
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 December 17, 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:
3
"We hereby accept your offer, set forth in the Terms Agreement, dated
December 17, 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
4
