Exhibit 1
KRAFT FOODS INC.
("Company")
DEBT SECURITIES
TERMS AGREEMENT
---------------
October 30, 2001
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. 333-67770)
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:
4 5/8% Notes due 2006 (the "2006 Notes").
5 5/8% Notes due 2011 (the "2011 Notes").
6 1/2% Notes due 2031 (the "2031 Notes;" and collectively with the
2006 Notes and the 2011 Notes, the "Notes").
PRINCIPAL AMOUNT:
In the case of the 2006 Notes, $1,250,000,000.
In the case of the 2011 Notes, $2,000,000,000.
In the case of the 2031 Notes, $750,000,000.
INTEREST:
In the case of the 2006 Notes, 4 5/8% per annum, from November 2,
2001, payable semiannually on May 1 and November 1, commencing May 1,
2002, to holders of record on the preceding April 15 or October 15, as
the case may be.
In the case of the 2011 Notes, 5 5/8% per annum, from November 2,
2001, payable semiannually on May 1 and November 1, commencing May 1,
2002, to holders of record on the preceding April 15 or October 15, as
the case may be.
In the case of the 2031 Notes, 6 1/2% per annum, from November 2,
2001, payable semiannually on May 1 and November 1, commencing May 1,
2002, to holders of record on the preceding April 15 or October 15, as
the case may be.
MATURITY:
In the case of the 2006 Notes, November 1, 2006.
In the case of the 2011 Notes, November 1, 2011.
In the case of the 2031 Notes, November 1, 2031.
CURRENCY OF DENOMINATION:
United States Dollars ($).
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: Chase Manhattan Bank Luxembourg S.A.
OPTIONAL REDEMPTION:
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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.
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 2006 Notes, 99.500% of principal amount of the 2006
Notes, plus accrued interest, if any, from November 2, 2001.
In the case of the 2011 Notes, 99.497% of principal amount of the 2011
Notes, plus accrued interest, if any, from November 2, 2001.
In the case of the 2031 Notes, 98.550% of principal amount of the 2031
Notes, plus accrued interest, if any, from November 2, 2001.
EXPECTED REOFFERING PRICE:
In the case of the 2006 Notes, 99.850% of principal amount.
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In the case of the 2011 Notes, 99.947% of principal amount.
In the case of the 2031 Notes, 99.425% of principal amount.
ADDITIONAL AGREEMENTS OF THE COMPANY:
The Company hereby agrees to use its reasonable best 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.
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 2, 2001, at the offices of Hunton & ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in Federal (same day)
funds.
SETTLEMENT AND TRADING:
Book-Entry Only via DTC.
NAMES AND ADDRESSES OF THE REPRESENTATIVES:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
NAMES AND ADDRESSES OF THE LEAD UNDERWRITERS:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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, including the preliminary
prospectus supplement or prospectus supplement, as the case
may be, 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.
(B) Each Underwriter hereby severally represents and agrees that:
(1) with respect to Notes which have a maturity of one
year or more, it and each of its affiliates have not
offered or sold and will not offer or sell any such
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;
(2) it and each of its affiliates have complied and will
comply with all applicable provisions of the
Financial Services ▇▇▇ ▇▇▇▇ (the "Financial Services
Act") (and, after they come into force, all
applicable provisions of the Financial Services and
Markets ▇▇▇ ▇▇▇▇ (the "FSMA")) with
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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 have only issued or
passed on and will only issue or pass on, in the
United Kingdom, before the repeal of Section 57 of
the Financial Services Act, any document received by
it in connection with the issue of such Notes to a
person who is of a kind described in Article 11(3) of
the Financial Services ▇▇▇ ▇▇▇▇ (Investment
Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise lawfully
be issued or passed on. After the repeal of Section
57 of the Financial Services Act 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 Companies Act; or (iii)
otherwise pursuant to, and in accordance with the conditions
of, any other applicable provision of the Singapore Companies
Act.
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(E) Each Underwriter hereby severally represents and agrees that
with respect to Germany, no selling prospectus
(Verkaufsprospekt) within the meaning of the German Securities
Sales Prospectus Act (Wertpapier-Verkaufprospektgesetz) of
December 13, 1990 (as amended) has been and will be registered
or published in respect of the Notes within the Federal
Republic; 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 supplement 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
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
the distribution of the Notes in Canada is being made on a
private placement basis in the provinces of Ontario and
British Columbia only, 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
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registered in Ontario, Canada, and will not be made 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 (i) Section 4(h) thereof is hereby amended with
respect to the Offered Securities by inserting the following immediately before
the "." at the end thereof:
", for any costs and expenses incurred in printing the Prospectus,
including the preliminary prospectus supplement or prospectus
supplement, as the case may be, for any fees and expenses of the
Trustee, Chase Manhattan Bank Luxembourg S.A. (the "Luxembourg Paying
Agent") and Banque Generale du Luxembourg (the "Listing Agent"), for
any fees and expenses incurred in connection with the listing of the
Notes on the Luxembourg Stock Exchange, for the reasonable fees and
disbursements of counsel for the Trustee, for all fees and
disbursements of counsel and accountants to the Company and for all
reasonable fees and disbursements of counsel to the Underwriters and
all other reasonable out-of-pocket costs and expenses of the
Underwriters; provided, however, that with respect to the reasonable
fees and disbursements of counsel to the Underwriters and all other
reasonable out-of-pocket costs and expenses of the Underwriters, the
costs and expenses incurred in printing and distributing the
Prospectus, including the preliminary prospectus supplement or
prospectus supplement, as the case may be, the fees of the Listing
Agent and the listing fees incurred in connection with the listing of
the Notes on the Luxembourg Stock Exchange, the Company shall only be
required to pay an aggregate amount not to exceed $125,000"
and (ii) 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 & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, 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
8
contained in the fifth, sixth and eleventh paragraphs under the caption
"Underwriting" in the prospectus supplement.
9
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
The foregoing Terms Agreement is hereby
confirmed and accepted as of the date first
above written.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
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SCHEDULE A
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF
4 5/8% NOTES 5 5/8% NOTES 6 1/2% NOTES
DUE 2006 DUE 2011 DUE 2031
------------ ------------- ------------
UNDERWRITER
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▇.▇. ▇▇▇▇▇▇ Securities Inc. $450,000,000 $720,000,000 $270,000,000
▇▇▇▇▇▇ Brothers Inc. 450,000,000 720,000,000 270,000,000
ABN AMRO Incorporated 50,000,000 80,000,000 30,000,000
BNP Paribas Securities Corp. 50,000,000 80,000,000 30,000,000
Deutsche Banc Alex. ▇▇▇▇▇, Inc. 50,000,000 80,000,000 30,000,000
HSBC Securities (USA) Inc. 50,000,000 80,000,000 30,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. 50,000,000 80,000,000 30,000,000
▇▇ ▇▇▇▇▇ Securities Corporation 50,000,000 80,000,000 30,000,000
Banc One Capital Markets, Inc. 12,500,000 20,000,000 7,500,000
▇▇▇▇▇ Capital Markets, Inc. 12,500,000 20,000,000 7,500,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. 12,500,000 20,000,000 7,500,000
The ▇▇▇▇▇▇▇▇ Capital Group, L.P. 12,500,000 20,000,000 7,500,000
-------------- -------------- ------------
Total...................................................... $1,250,000,000 $2,000,000,000 $750,000,000
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