EXHIBIT 4(e)
TARGETED GROWTH ENHANCED TERMS SECURITIES
GUARANTEE AGREEMENT
TARGETS TRUST [XXV]
Dated as of July , 2005
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation......................................................... 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act: Application....................................................... 4
Section 2.2 Lists of Holders of Securities......................................................... 4
Section 2.3 Reports by the TARGETS Guarantee Trustee............................................... 5
Section 2.4 Periodic Reports to TARGETS Guarantee Trustee.......................................... 5
Section 2.5 Evidence of Compliance with Conditions Precedent....................................... 5
Section 2.6 Events of Default; Waiver.............................................................. 5
Section 2.7 Events of Default; Notice.............................................................. 5
Section 2.8 Conflicting Interests.................................................................. 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TARGETS GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the TARGETS Guarantee Trustee..................................... 6
Section 3.2 Certain Rights of TARGETS Guarantee Trustee............................................ 8
Section 3.3 Not Responsible for Recitals or Issuance of Guarantee.................................. 9
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
Section 4.1 TARGETS Guarantee Trustee; Eligibility................................................. 10
Section 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees..................... 10
ARTICLE V
GUARANTEE
Section 5.1 Guarantee.............................................................................. 11
Section 5.2 Waiver of Notice and Demand............................................................ 11
Section 5.3 Obligations Not Affected............................................................... 11
Section 5.4 Guarantee of Payment................................................................... 12
Section 5.5 Subrogation............................................................................ 12
Section 5.6 Independent Obligations................................................................ 13
-i-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VI
CITIGROUP GUARANTEE
Section 6.1 Citigroup Guarantee.................................................................... 13
Section 6.2 Waiver of Notice and Demand............................................................ 13
Section 6.3 Obligations Not Affected............................................................... 13
Section 6.4 Address for Payment.................................................................... 13
Section 6.5 Waiver of Defense...................................................................... 14
Section 6.6 Partial Payment........................................................................ 15
Section 6.7 Subrogation............................................................................ 15
ARTICLE VII
RIGHTS OF HOLDERS
Section 7.1 Rights of Holders...................................................................... 15
ARTICLE VIII
TERMINATION
Section 8.1 Termination............................................................................ 16
ARTICLE IX
INDEMNIFICATION
Section 9.1 Exculpation............................................................................ 16
Section 9.2 Indemnification........................................................................ 16
ARTICLE X
MISCELLANEOUS
Section 10.1 Successors and Assigns................................................................. 17
Section 10.2 Amendments............................................................................. 17
Section 10.3 Consolidations and Mergers............................................................. 17
Section 10.4 Notices................................................................................ 17
Section 10.5 Benefit................................................................................ 18
Section 10.6 Governing Law.......................................................................... 18
-ii-
This GUARANTEE AGREEMENT (the "TARGETS Guarantee"), dated as of July
, 2005, is executed and delivered by Citigroup Funding Inc., a Delaware
corporation (together with any successors by way of merger, the "Guarantor"),
Citigroup Inc., a Delaware corporation (together with any successors by way of
merger, "Citigroup"), and JPMorgan Chase Bank, N.A., as trustee (the "TARGETS
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the TARGETS (as defined herein) of TARGETS Trust [XXV], a
Delaware statutory trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of July , 2005, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, Citigroup, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof preferred securities designated the
Targeted Growth Enhanced Terms Securities(R) (the "TARGETS");
WHEREAS, as incentive for the Holders to purchase the TARGETS, each
of the Guarantor and Citigroup desires irrevocably and unconditionally to agree,
to the extent set forth in this TARGETS Guarantee, to pay to the Holders the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
TARGETS, which purchase the Guarantor and Citigroup hereby agree shall benefit
the Guarantor and Citigroup, the Guarantor and Citigroup execute and deliver
this TARGETS Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this TARGETS Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this TARGETS Guarantee but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) A term defined anywhere in this TARGETS Guarantee has the same
meaning throughout;
(c) all references to "the TARGETS Guarantee" or "this TARGETS
Guarantee" are to this TARGETS Guarantee as modified, supplemented or amended
from time to time;
(d) all references in this TARGETS Guarantee to Articles and
Sections are to Articles and Sections of this TARGETS Guarantee, unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this TARGETS Guarantee, unless otherwise defined in this TARGETS
Guarantee or unless the context otherwise requires; and
1
(f) a reference to the singular includes the plural and vice versa.
"Accelerated Maturity Date" has the meaning specified in the
Declaration.
"Accelerated Maturity Payment" has the meaning specified in the
Declaration.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are permitted or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the TARGETS Guarantee
Trustee at which the corporate trust business of the TARGETS Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10004-2477, Attn: Worldwide Securities Services, Global Debt
- TARGETS Trust [XXV].
"Covered Person" means any Holder or beneficial owner of TARGETS.
"Event of Default" means a default by the Guarantor or Citigroup, as
applicable, on any of its payment or other obligations under this TARGETS
Guarantee.
"Forward Contract" means the Forward Contract of the Guarantor
issuable under the Indenture, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TARGETS, to the extent not paid or made
by the Issuer or the Guarantor: (i) any Maturity Payment that is required to be
made in respect of the TARGETS, to the extent the Issuer has funds available
therefor, (ii) any Accelerated Maturity Payment that is required to be made in
respect of the TARGETS, to the extent the Issuer has funds available therefor,
(iii) any Quarterly Distribution that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, (iv) any
distribution of Treasury Proceeds that is required to be made in respect of the
TARGETS, to the extent the Issuer has funds available therefor, and (v) any
other remaining assets of the Issuer payable to the Holders of the TARGETS upon
liquidation of the Issuer.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any TARGETS; provided, however, that in determining
whether the holders of the requisite percentage of TARGETS have given any
request, notice, consent or waiver hereunder,
2
"Holder" shall not include the Guarantor or Citigroup, or any Affiliate of the
Guarantor or Citigroup.
"Indemnified Person" means the TARGETS Guarantee Trustee, any
Affiliate of the TARGETS Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the TARGETS Guarantee Trustee.
"Indenture" means the Indenture dated as of July , 2005, among the
Guarantor, Citigroup and JPMorgan Chase Bank, N.A., as trustee, and any
indenture supplemental thereto pursuant to which the securities representing
interests in a Forward Contract (defined in the Indenture as the "Securities")
are to be issued to the Institutional Trustee of the Issuer.
"Majority of the TARGETS" means, except as provided by the Trust
Indenture Act, a vote by Holder(s), voting separately as a class, holding
TARGETS representing more than 50% of the aggregate beneficial interests
represented by all outstanding TARGETS.
"Maturity Date" has the meaning specified in the Declaration.
"Maturity Payment" has the meaning specified in the Declaration.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this TARGETS Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Quarterly Distribution" has the meaning specified in the
Declaration.
"Responsible Officer" means, with respect to the TARGETS Guarantee
Trustee, any officer within the Corporate Trust Office of the TARGETS Guarantee
Trustee, including any vice president, any assistant vice president, any
assistant secretary, the treasurer, any assistant
3
treasurer, trust officer or other officer of the Corporate Trust Office of the
TARGETS Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and, in any case, that has
direct responsibility for the administration of this TARGETS Guarantee and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor TARGETS Guarantee Trustee" means a successor TARGETS
Guarantee Trustee possessing the qualifications to act as TARGETS Guarantee
Trustee under Section 4.1.
"TARGETS Guarantee Trustee" means JPMorgan Chase Bank, N.A., until a
Successor TARGETS Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this TARGETS Guarantee and thereafter means
each such Successor TARGETS Guarantee Trustee.
"Treasury Proceeds" has the meaning specified in the Indenture.
"Treasury Securities" has the meaning specified in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This TARGETS Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this TARGETS Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this TARGETS
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the TARGETS Guarantee Trustee with a
list, in such form as the TARGETS Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within one Business Day after January 1 and June 30 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the TARGETS Guarantee Trustee; provided that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
TARGETS Guarantee Trustee by the Guarantor. The TARGETS Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
4
(b) The TARGETS Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312 (b) of the Trust Indenture Act.
SECTION 2.3 Reports by the TARGETS Guarantee Trustee
Within 60 days after April 15 of each year, the TARGETS Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The TARGETS Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to TARGETS Guarantee Trustee
The Guarantor and Citigroup shall provide to the TARGETS Guarantee
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor and Citigroup shall provide to the TARGETS Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this TARGETS Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority of TARGETS may, by vote, on behalf of the
Holders of all of the TARGETS, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this TARGETS Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 Events of Default; Notice
(a) The TARGETS Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the TARGETS Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided that the TARGETS Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the TARGETS Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(b) The TARGETS Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the TARGETS Guarantee Trustee shall
have received written
5
notice of such Event of Default or a Responsible Officer of the TARGETS
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
TARGETS Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TARGETS GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the TARGETS Guarantee Trustee
(a) This TARGETS Guarantee shall be held by the TARGETS Guarantee
Trustee for the benefit of the Holders, and the TARGETS Guarantee Trustee shall
not transfer its right, title and interest in this TARGETS Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 7.1(b)
or to a Successor TARGETS Guarantee Trustee on acceptance by such Successor
TARGETS Guarantee Trustee of its appointment to act as Successor TARGETS
Guarantee Trustee. The right, title and interest of the TARGETS Guarantee
Trustee shall automatically vest in any Successor TARGETS Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor TARGETS Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the TARGETS Guarantee Trustee has occurred and is continuing, the TARGETS
Guarantee Trustee shall enforce this TARGETS Guarantee for the benefit of the
Holders of the TARGETS.
(c) The TARGETS Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this TARGETS Guarantee, and no implied covenants shall be read into
this TARGETS Guarantee against the TARGETS Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee shall exercise such of the rights and
powers vested in it by this TARGETS Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this TARGETS Guarantee shall be construed to
relieve the TARGETS Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
6
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the TARGETS Guarantee Trustee
shall be determined solely by the express provisions of this TARGETS
Guarantee, and the TARGETS Guarantee Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in this TARGETS Guarantee, and no implied covenants or obligations
shall be read into this TARGETS Guarantee against the TARGETS Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the TARGETS Guarantee
Trustee, the TARGETS Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the TARGETS
Guarantee Trustee and conforming to the requirements of this TARGETS
Guarantee, but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to the
TARGETS Guarantee Trustee, the TARGETS Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this TARGETS Guarantee;
(ii) the TARGETS Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the TARGETS
Guarantee Trustee, unless it shall be proved that the TARGETS Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the TARGETS Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
of the TARGETS relating to the time, method and place of conducting any
proceeding for any remedy available to the TARGETS Guarantee Trustee, or
exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee;
(iv) no provision of this TARGETS Guarantee shall require the
TARGETS Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the TARGETS
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this TARGETS Guarantee or indemnity, reasonably satisfactory
to the TARGETS Guarantee Trustee, against such risk or liability is not
reasonably assured to it;
(v) the granting of any right to the TARGETS Guarantee Trustee
hereunder shall not, subject to the following, be deemed to impose on the
TARGETS Guarantee Trustee an obligation to exercise such rights subject to
3.1(d)(vi); and
(vi) the TARGETS Guarantee Trustee shall not be obligated to
exercise any remedy or take any action hereunder unless directed to do so
by the holders of a Majority
7
of the TARGETS and shall have no liability for its failure to act pending
receipt by it of any such direction.
This Section 3.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act.
SECTION 3.2 Certain Rights of TARGETS Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The TARGETS Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor or Citigroup contemplated
by this TARGETS Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this TARGETS Guarantee, the
TARGETS Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action hereunder,
the TARGETS Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor or
Citigroup, as applicable.
(iv) The TARGETS Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The TARGETS Guarantee Trustee may consult with counsel, and the
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to the Guarantor
or Citigroup or any of their respective Affiliates and may include any of
its employees. The TARGETS Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this TARGETS
Guarantee from any court of competent jurisdiction.
(vi) The TARGETS Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this TARGETS
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the TARGETS Guarantee Trustee such security and
indemnity, reasonably satisfactory to the TARGETS Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and
the expenses of the TARGETS Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction,
8
including such reasonable advances as may be requested by the TARGETS
Guarantee Trustee; provided that nothing contained in this Section 3.2(a)
(vi) shall be taken to relieve the TARGETS Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this TARGETS Guarantee.
(vii) The TARGETS Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the TARGETS Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The TARGETS Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the TARGETS
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the TARGETS Guarantee Trustee or its agents
hereunder shall bind the Holders of the TARGETS, and the signature of the
TARGETS Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the TARGETS Guarantee Trustee to so act or
as to its compliance with any of the terms and provisions of this TARGETS
Guarantee, both of which shall be conclusively evidenced by the TARGETS
Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this TARGETS Guarantee the
TARGETS Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the TARGETS Guarantee Trustee (i) may request instructions from
the Holders of a Majority of the TARGETS, (ii) may refrain from enforcing
such remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(b) No provision of this TARGETS Guarantee shall be deemed to impose
any duty or obligation on the TARGETS Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the TARGETS
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
TARGETS Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor and Citigroup, and the TARGETS Guarantee Trustee
does not assume any
9
responsibility for their correctness. The TARGETS Guarantee Trustee makes no
representation as to the validity or sufficiency of this TARGETS Guarantee.
ARTICLE IV
TARGETS GUARANTEE TRUSTEE
SECTION 4.1 TARGETS Guarantee Trustee; Eligibility
(a) There shall at all times be a TARGETS Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor or Citigroup; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a) (ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the TARGETS Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the TARGETS Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the TARGETS Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the TARGETS Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of TARGETS Guarantee Trustees
(a) Subject to Section 4.2(b), the TARGETS Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor or Citigroup.
(b) The TARGETS Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor TARGETS Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor TARGETS Guarantee Trustee and delivered to the Guarantor and
Citigroup.
(c) The TARGETS Guarantee Trustee appointed to office shall hold
office until a Successor TARGETS Guarantee Trustee shall have been appointed or
until its removal or resignation. The TARGETS Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the TARGETS Guarantee
10
Trustee and delivered to the Guarantor and Citigroup, which resignation shall
not take effect until a Successor TARGETS Guarantee Trustee has been appointed
and has accepted such appointment by instrument in writing executed by such
Successor TARGETS Guarantee Trustee and delivered to the Guarantor, Citigroup
and the resigning TARGETS Guarantee Trustee.
(d) If no Successor TARGETS Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor and Citigroup of an instrument of
resignation, the resigning TARGETS Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor TARGETS Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor TARGETS Guarantee Trustee.
(e) No TARGETS Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor TARGETS Guarantee Trustee.
(f) Upon termination of this TARGETS Guarantee or removal or
resignation of the TARGETS Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the TARGETS Guarantee Trustee all amounts accrued and
owing to such TARGETS Guarantee Trustee to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this TARGETS
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this TARGETS Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
11
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TARGETS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Maturity Payment, Accelerated Maturity Payment, Quarterly
Distributions, Treasury Proceeds or any other sums payable under the terms of
the TARGETS or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the TARGETS;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TARGETS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the TARGETS;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Guarantee of Payment
This TARGETS Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.5 Subrogation
The Guarantor shall be subrogated to all rights of the Holders of
TARGETS and the TARGETS Guarantee Trustee against the Issuer, as applicable, in
respect of any amounts paid to such Holders by the Guarantor pursuant to the
provisions of this TARGETS Guarantee; provided, however, that the Guarantor
shall not be entitled to enforce, or to receive any payments arising out of or
based upon such right of subrogation until the principal of, interest on and
additional interest, if any, payable in respect of all TARGETS issued under the
Declaration shall have been paid in full.
12
SECTION 5.6 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TARGETS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this TARGETS Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
CITIGROUP GUARANTEE
SECTION 6.1 Citigroup Guarantee
Citigroup does hereby fully and unconditionally guarantee (the
"Citigroup Guarantee") to the Holders the payment of the Guarantee Payments when
due, in accordance with the provisions of this TARGETS Guarantee.
SECTION 6.2 Waiver of Notice and Demand
Citigroup hereby waives notice of acceptance of the Citigroup
Guarantee and of default of performance by the Guarantor, and hereby agrees that
payment under the Citigroup Guarantee shall be subject to no condition other
than the giving of a written request for payment, stating the fact of default of
performance, at the address provided in Section 10.4(c). This Citigroup
Guarantee is a guarantee of payment and not of collection.
SECTION 6.3 Obligations Not Affected
The obligations of Citigroup under the Citigroup Guarantee shall in
no way be impaired by: (1) any extension, amendment, modification or renewal of
the TARGETS; (2) any waiver of any event of default, extension of time or
failure to enforce any of the TARGETS; or (3) any extension, moratorium or other
relief granted to the Issuer or the Guarantor pursuant to any applicable law or
statute.
SECTION 6.4 Address for Payment
Citigroup shall be obligated to make payment under the Citigroup
Guarantee, for the benefit of the Holders, at the same address as the Guarantor
is obligated to make payment.
SECTION 6.5 Waiver of Defense
(a) Subject to clause (b) below, Citigroup hereby agrees that
(i) the Guarantee Payments will be paid strictly in accordance
with the terms of this TARGETS Guarantee, regardless of the value, genuineness,
validity, regularity or enforceability of the TARGETS, and of any law,
regulation or order now or hereafter in effect in
13
any jurisdiction affecting any of such terms or the rights of the TARGETS
Guarantee Trustee with respect thereto, and
(ii) the liability of Citigroup to the extent herein set forth
shall be absolute and unconditional, not subject to any reduction, limitation,
impairment, termination, defense, offset, counterclaim or recoupment whatsoever
(all of which are hereby expressly waived by Citigroup) whether by reason of any
claim of any character whatsoever, including, without limitation, any claim of
waiver, release, surrender, alteration or compromise, or by reason of any
liability at any time to Citigroup or otherwise, whether based upon any
obligations or any other agreement or otherwise, and howsoever arising, whether
out of action or inaction or otherwise and whether resulting from default,
willful misconduct, negligence or otherwise, and without limiting the foregoing,
irrespective of:
(A) any lack of validity or enforceability of any agreement or
instrument relating to the TARGETS;
(B) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the TARGETS, or any other
amendment or waiver of or consent to any departure from any other
agreement relating to any TARGETS;
(C) any increase in, addition to, exchange or release of, or
nonperfection of any lien on or security interest in, any collateral, or
any release or amendment or waiver of or consent to any departure from or
failure to enforce any other guarantee, for all or any of the
indebtedness;
(D) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Issuer and/or the Guarantor in
respect of the TARGETS;
(E) the absence of any action on the part of the TARGETS Guarantee
Trustee to obtain payment of the TARGETS from the Issuer and/or the
Guarantor;
(F) any insolvency, bankruptcy, reorganization or dissolution, or
any similar proceeding of the Guarantor, including, without limitation,
rejection of the TARGETS in such bankruptcy; or
(G) the absence of notice or any delay in any action to enforce any
TARGETS or to exercise any right or remedy against the Issuer, the
Guarantor or Citigroup, whether hereunder, under any TARGETS or any
agreement or any indulgence, compromise or extension granted.
(b) Notwithstanding anything to the contrary in this TARGETS
Guarantee, Citigroup does not waive any defense that would be available to the
Issuer and/or the Guarantor based on, among other things, a breach, default or
misrepresentation by the TARGETS Guarantee Trustee, or failure of any condition
to the Issuer's and/or the Guarantor's obligations under the Declaration or this
TARGETS Guarantee, or the illegality of any provision of the Declaration or this
TARGETS Guarantee.
14
SECTION 6.6 Partial Payment
Citigroup further agrees that, to the extent that the Issuer, the
Guarantor or Citigroup makes a payment or payments to the Holders, which payment
or payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to the
Issuer, the Guarantor or Citigroup or their respective estate, trustee, receiver
or any other party under any federal bankruptcy laws, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
this Citigroup Guarantee and the advances or part thereof which have been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred.
SECTION 6.7 Subrogation
Citigroup shall be subrogated to all rights of the Holders of
TARGETS and the TARGETS Guarantee Trustee against the Issuer and the Guarantor,
as applicable, in respect of any amounts paid to such Holders by Citigroup
pursuant to the provisions of the Citigroup Guarantee; provided, however, that
Citigroup shall not be entitled to enforce, or to receive any payments arising
out of or based upon such right of subrogation until the principal of, interest
on and additional interest, if any, payable in respect of all TARGETS issued
under the Declaration shall have been paid in full.
ARTICLE VII
RIGHTS OF HOLDERS
SECTION 7.1 Rights of Holders
(a) The Holders of a Majority of the TARGETS have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the TARGETS Guarantee Trustee in respect of this TARGETS Guarantee
or exercising any trust or power conferred upon the TARGETS Guarantee Trustee
under this TARGETS Guarantee.
(b) If the TARGETS Guarantee Trustee fails to enforce its rights
under this TARGETS Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor or Citigroup, as applicable, to enforce the
TARGETS Guarantee Trustee's rights under this TARGETS Guarantee, without first
instituting a legal proceeding against the Issuer, the TARGETS Guarantee Trustee
or any other Person or entity.
(c) A Holder of TARGETS may also directly institute a legal
proceeding against the Guarantor or Citigroup, as applicable, to enforce such
Holder's right to receive payment under this TARGETS Guarantee without first (i)
directing the TARGETS Guarantee Trustee to enforce the terms of this TARGETS
Guarantee or (ii) instituting a legal proceeding directly against the Issuer or
any other Person or entity.
15
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination
This TARGETS Guarantee shall terminate upon the earliest to occur of
(i) full payment of the Maturity Payment and the final payment due in respect of
the Treasury Securities, (ii) full payment of the Accelerated Maturity Payment
and the distribution of the Treasury Proceeds on an Accelerated Maturity Date to
the Holders of the TARGETS and the Common Securities as of the Record Date (as
defined in the Indenture) and (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this TARGETS Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid under the TARGETS or under this TARGETS Guarantee.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor, Citigroup or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this TARGETS Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this TARGETS Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and Citigroup, and upon such
information, opinions, reports or statements presented to the Guarantor or
Citigroup by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Guarantor or
Citigroup, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 9.2 Indemnification
The Guarantor and Citigroup jointly and severally agree to indemnify
each Indemnified Person for, and to hold each Indemnified Person harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its
16
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 9.2 shall survive the termination of this TARGETS Guarantee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns
All guarantees and agreements contained in this TARGETS Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
each of the Guarantor and Citigroup and shall inure to the benefit of the
Holders of the TARGETS then outstanding.
SECTION 10.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
TARGETS Guarantee may be amended only with the prior approval of the Holders of
not less than a Majority of the TARGETS. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 10.3 Merger, Consolidation and Sale of Assets
(a) Neither the Guarantor nor Citigroup will consolidate with any
other entity or accept a merger of any other entity into the Guarantor or
Citigroup, as applicable, or permit the Guarantor or Citigroup, as applicable,
to be merged into any other entity, or sell other than for cash or lease all or
substantially all its assets to another entity, or purchase all or substantially
all the assets of another entity, unless (i) either the Guarantor or Citigroup,
as applicable, shall be the continuing entity, or the successor, transferee or
lessee entity (if other than the Guarantor or Citigroup, as applicable) shall
expressly assume, by TARGETS guarantee agreement supplemental hereto
satisfactory to the TARGETS Guarantee Trustee, executed and delivered by such
entity prior to or simultaneously with such consolidation, merger, sale or
lease, the full, irrevocable and unconditional guarantee of the payment of the
Guarantee Payments when due, and the performance and observance of all other
obligations of the Guarantor or Citigroup, as applicable, to the Holders and the
TARGETS Guarantee Trustee under this TARGETS Guarantee, all in accordance with
the terms hereof; and (ii) immediately after such consolidation, merger, sale,
lease or purchase the Guarantor or Citigroup, as applicable, or the successor,
transferee or lessee entity (if other than the Guarantor or Citigroup, as
applicable), would not be in default in the performance of any covenant or
condition of this TARGETS Guarantee. A purchase by a subsidiary of all or
substantially all of the assets of another entity shall not be deemed to be a
purchase of such assets by the Guarantor or Citigroup, as applicable.
(b) Upon any consolidation with or merger into any other entity, or
any sale, conveyance or lease of all or substantially all of the assets of the
Guarantor or Citigroup, as applicable, in accordance with this Section 10.3, the
successor entity formed by such consolidation or into or with which the
Guarantor or Citigroup, as applicable, is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and
17
may exercise every right and power of, the Guarantor or Citigroup, as
applicable, under this TARGETS Guarantee with the same effect as if such
successor entity had been named as the Guarantor or Citigroup, as applicable,
herein, and thereafter, except in the case of a lease, the predecessor Guarantor
or Citigroup, as applicable, shall be relieved of all obligations and covenants
under this TARGETS Guarantee.
SECTION 10.4 Notices
All notices provided for in this TARGETS Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail postage prepaid as follows:
(a) If given to the TARGETS Guarantee Trustee, at the TARGETS
Guarantee Trustee's mailing address set forth below (or such other address as
the TARGETS Guarantee Trustee may give notice of to the Holders)
JPMorgan Chase Bank, N.A.
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Attn: Worldwide Securities Services
Global Debt - TARGETS Trust [XXV]
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders)
Citigroup Funding Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(c) If given to Citigroup, at Citigroup's mailing address set forth
below (or such other address as Citigroup may give notice of to the Holders)
Citigroup Inc.
Office of Corporate Treasury
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
(d) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices provided for in this TARGETS Guarantee shall be deemed
to have been given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
18
SECTION 10.5 Benefit
This TARGETS Guarantee is solely for the benefit of the Holders of
the TARGETS and, subject to Section 3.l(a), is not separately transferable from
the TARGETS.
SECTION 10.6 Governing Law
THIS TARGETS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
19
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
CITIGROUP FUNDING INC.
By: ____________________________________
Name:
Title:
CITIGROUP INC.
By: ____________________________________
Name:
Title:
JPMORGAN CHASE BANK, N.A., as
TARGETS Guarantee Trustee
By: ____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
20