EXHIBIT 1(a)
CITIGROUP FUNDING INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
BASIC PROVISIONS
New York, New York
, 2006
Citigroup Funding Inc., a Delaware corporation (the "Company"), may
issue and sell from time to time series of its debt securities registered under
the registration statement referred to in Section 1(a) hereof. Such debt
securities may have varying rankings, designations, denominations, currencies,
interest rates and payment dates, maturities, redemption provisions and selling
prices. The basic provisions set forth herein are intended to be incorporated by
reference in a terms agreement of the type referred to in Section 2 hereof
relating to the specific series of debt securities to be issued and sold by the
Company, the payments on which are guaranteed by Citigroup Inc., a Delaware
corporation (the "Guarantor") pursuant thereto (the "Securities") to the several
underwriters named therein (the "Underwriters"). Unless otherwise specified in
the applicable terms agreement, the Securities will be issued under (i) in the
case of senior debt securities, an indenture dated as of June 1, 2005, among the
Company, the Guarantor and The Bank of New York, as trustee (such trustee or
such other replacement or successor trustee as may be named for such senior debt
securities, the "Senior Debt Trustee") (such indenture, as it may from time to
time be amended or supplemented by one or more indentures supplemental thereto,
the "Senior Debt Indenture"), or (ii) in the case of subordinated debt
securities, an indenture dated as of June 1, 2005, between the Company, the
Guarantor and Deutsche Bank Trust Company Americas (such trustee or such other
replacement or successor trustee as may be named for such subordinated debt
securities, the "Subordinated Debt Trustee," and each of the Subordinated Debt
Trustee and the Senior Debt Trustee, the "Trustee") (such indenture, as it may
from time to time be amended or supplemented by one or more indentures
supplemental thereto, the "Subordinated Debt Indenture" and, together with the
Senior Debt Indenture, the "Indenture"). The terms agreement relating to the
Securities (the "Terms Agreement"), together with the provisions hereof
incorporated therein by reference, is herein referred to as this "Agreement."
Unless otherwise defined herein, terms defined in the Terms Agreement are used
herein as therein defined. The firm or firms designated as the representative or
representatives, as the case may be, of the Underwriters of the Securities in
the Terms Agreement relating thereto will act as the representative or
representatives (the "Representatives"). To the extent there is only one
Underwriter for the sale of the Securities, the term Representatives and the
term Underwriters shall mean the Underwriter.
Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date or the issue date of the Base Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration
Statement, the Base Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement or
the issue date of the Base Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 19 hereof.
1. Representations and Warranties. The Company and the Guarantor,
jointly and severally, represent and warrant to, and agree with, each
Underwriter as set forth below in this Section 1.
(a) The Company and the Guarantor meet the requirements for use of
Form S-3 under the Act and have prepared and filed with the Commission an
automatic shelf registration statement, as defined in Rule 405 (File No.
), including a related base prospectus, for registration under the Act of
the offering and sale of the Securities. Such Registration Statement,
including any amendments thereto filed prior to the Execution Time, became
effective upon filing. The Company and the Guarantor may have filed with
the Commission, as part of an amendment to the Registration Statement or
pursuant to Rule 424(b), one or more preliminary prospectus supplements
relating to the Securities, each of which has previously been furnished to
you. The Company and the Guarantor will file with the Commission a final
prospectus supplement relating to the Securities in accordance with Rule
424(b). As filed, such final prospectus supplement shall contain all
information required by the Act and the rules thereunder, and, except to
the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the Base Prospectus and any Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x). The
initial Effective Date of the Registration Statement was not earlier than
the date three years before the Execution Time.
(b) On each Effective Date, the Registration Statement did, and when
the Final Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date (as defined herein), the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; on each Effective Date
and at the Execution Time, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and on the Effective Date and on
the Closing Date the Indenture did or will comply in all material respects
with the applicable requirements of the Trust Indenture Act and the rules
thereunder; on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement thereto)
will not include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Guarantor make no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the
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Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustees or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto), it being
understood and agreed that the only such information furnished by or on
behalf of any Underwriters consists of the information described as such
in Section 8 hereof.
(c) As of the Execution Time, the Disclosure Package and the
specific terms of the Securities set forth in the Terms Agreement, when
taken together as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package or the Final
Prospectus based upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 8 hereof.
(d) (i) At the time of filing the Registration Statement, (ii) at
the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Sections
13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time
the Company or any person acting on its behalf (within the meaning, for
this clause only, of Rule 163(c)) made any offer relating to the
Securities in reliance on the exemption in Rule 163 and (iv) at the
Execution Time (with such date being used as the determination date for
purposes of this clause (iv)), each of the Company and the Guarantor was
or is (as the case may be) a "well-known seasoned issuer" as defined in
Rule 405. The Company agrees to pay the fees required by the Commission
relating to the Securities within the time required by Rule 456(b)(1)
without regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2)) of the Securities and
(ii) as of the Execution Time (with such date being used as the
determination date for purposes of this clause (ii)), neither the Company
nor the Guarantor was and is an Ineligible Issuer (as defined in Rule
405), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company or the
Guarantor be considered an Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus does not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated therein and
any prospectus supplement deemed to be a part thereof that has not been
superseded or modified. The foregoing two sentences do not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any
Underwriter
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through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in
Section 8 hereof.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Sales of the Securities may be made from time
to time to the Underwriters of the Securities. The obligation of the Company to
issue and sell any of the Securities, the obligation of the Guarantor to
guarantee any of the Securities and the obligation of any Underwriters to
purchase any of the Securities shall be evidenced by the Terms Agreement with
respect to the Securities specified therein. Each Terms Agreement shall specify
the material terms of the offered Securities. The Terms Agreement specifies any
details of the terms of the offering that should be reflected in a
post-effective amendment to the Registration Statement, any Preliminary Final
Prospectus or the Final Prospectus (each as hereafter defined). The obligations
of the Underwriters under each Terms Agreement shall be several and not joint.
If so authorized in the Terms Agreement, the Underwriters may solicit
offers from investors of the types set forth in the Prospectus to purchase
Securities from the Company pursuant to delayed delivery contracts ("Delayed
Delivery Contracts"). Such contracts shall be substantially in the form of
Exhibit A hereto but with such changes therein as the Company may approve.
Securities to be purchased pursuant to Delayed Delivery Contracts are herein
called "Contract Securities." When Delayed Delivery Contracts are authorized in
the Terms Agreement, the Company will enter into a Delayed Delivery Contract in
each case where a sale of Contract Securities arranged through the
Representatives has been approved by the Company but, except as the Company may
otherwise agree, such Delayed Delivery Contracts must be for at least the
minimum amount of Contract Securities set forth in the Terms Agreement, and the
aggregate amount of Contract Securities may not exceed the amount set forth in
the Terms Agreement. The Company will advise you not later than 10:00 AM, New
York City time, on the third full business day preceding the Closing Date (or at
such later time as you may otherwise agree) of the sales of the Contract
Securities which have been so approved. The Underwriters will not have any
responsibility in respect of the validity or performance of Delayed Delivery
Contracts.
If the Delayed Delivery Contracts are executed, valid and fully
performed, the Securities delivered pursuant to them shall be deducted from the
Securities to be purchased by the Underwriters and the aggregate principal
amount of Securities to be purchased by each Underwriter shall be reduced pro
rata in proportion to the principal amount of Securities set forth opposite each
Underwriter's name in the Terms Agreement, except to the extent that the
Representatives determine that such reduction shall be otherwise than in such
proportion and so advise the Company and the Guarantor in writing; provided,
however, that the total principal amount of Securities to be purchased by all
Underwriters shall be the aggregate principal amount set forth in the Terms
Agreement, less the aggregate principal amount of Contract Securities.
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3. Delivery and Payment. Delivery of and payment for the Securities
shall be made on the date and at the time specified in the Terms Agreement or at
such time on such later date not more than three Business Days after such date
as the Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery of and payment for the securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters directly or through the
Representatives of the net purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
It is understood that the Representatives, acting individually and
not in a representative capacity, may (but shall not be obligated to) make
payment to the Company on behalf of any other Underwriter for Securities to be
purchased by such Underwriter. Any such payment by the Representatives shall not
relieve any such Underwriter of any of its obligations hereunder.
The Company shall pay to the Representatives on the Closing Date for
the accounts of the Underwriters any fee, commission or other compensation
specified in the Terms Agreement. Such payment will be made by wire transfer
payable in same-day funds to an account specified by the Representatives.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. The Company and the Guarantor agree with the several
Underwriters that:
(a) Prior to the termination of the offering of the Securities,
neither the Company nor the Guarantor will file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Base Prospectus unless either the
Company or the Guarantor has furnished the Representatives a copy for
their review prior to filing and will not file any such proposed amendment
or supplement to which they reasonably object. The Company and the
Guarantor will cause the Final Prospectus, properly completed, and any
supplement thereto, to be filed in a form approved by the Representatives
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company and the
Guarantor will promptly advise the Representatives (1) when the Final
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (2) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (3) of
any request by the Commission or its staff for any amendment of the
Registration Statement or for any supplement to the Final Prospectus or
for any additional information, (4) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any notice objecting to
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its use or the institution or threatening of any proceeding for that
purpose and (5) of the receipt by the Company or the Guarantor of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening
of any proceeding for such purpose. The Company and the Guarantor will use
their best efforts to prevent the issuance of any such stop order or the
occurrence of any such suspension or objection to the use of the
Registration Statement and, upon such issuance, occurrence or notice of
objection, to obtain as soon as possible the withdrawal of such stop order
or relief from such occurrence or objection, including, if necessary, by
filing an amendment to the Registration Statement or a new registration
statement and using their best efforts to have such amendment or new
registration statement declared effective as soon as practicable.
(b) If, at any time prior to the filing of the Final Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made at
such time not misleading, the Company and the Guarantor will (1) notify
promptly the Representatives so that any use of the Disclosure Package may
cease until it is amended or supplemented; (2) amend or supplement the
Disclosure Package to correct such statement or omission; and (3) supply
any amendment or supplement to the Representatives in such quantities as
the Representatives may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend the Registration Statement, file a new registration
statement or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, including in connection
with use or delivery of the Final Prospectus, the Company and the
Guarantor promptly will (i) notify the Representatives of such event, (ii)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement or new
registration statement which will correct such statement or omission or
effect such compliance, (iii) use their best efforts to have any amendment
to the Registration Statement or new registration statement declared
effective as soon as practicable in order to avoid any disruption in use
of the Final Prospectus and (iv) supply any supplemented Final Prospectus
to the Representatives in such quantities as the Representatives may
reasonably request.
(d) As soon as practicable, but in any event not later than 16
months after the Closing Date, the Guarantor will make generally available
to the Company's security holders and the Representatives an earnings
statement or statements of the Company and the Guarantor covering a period
of at least 12 months beginning after the Closing Date and otherwise
satisfying Section 11(a) of the Act.
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(e) Upon request, the Company and the Guarantor will furnish to the
Representatives and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including exhibits thereto) and to
each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of each Preliminary Final Prospectus, the Final
Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as the Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all documents relating
to the offering that are required to be prepared, furnished or delivered
by it.
(f) The Company and the Guarantor will arrange, if necessary, for
the qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives reasonably may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its review of
the offering; provided that in no event shall the Company or the Guarantor
be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of
the Securities, in any jurisdiction where it is not now so subject.
(g) (i) Each of the Company and the Guarantor agrees that, unless it
has obtained or will obtain, as the case may be, the prior written consent
of the Representatives, and (ii) each Underwriter, severally and not
jointly, agrees with the Company and the Guarantor that, unless it has
obtained or will obtain, as the case may be, the prior written consent of
the Company and the Guarantor, it has not made and will not make any offer
relating to the Securities that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a "free writing prospectus"
(as defined in Rule 405) required to be filed by the Company or the
Guarantor with the Commission or retained by the Company or the Guarantor
under Rule 433; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses, if any, included as a schedule to the applicable Terms
Agreement. Any such free writing prospectus consented to by the
Representatives or the Company and the Guarantor is hereinafter referred
to as a "Permitted Free Writing Prospectus." Each of the Company and the
Guarantor agrees that (x) it has treated and will treat, as the case may
be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus and (y) it has complied and will comply, as the case may be,
with the requirements of Rules 164 and 433 applicable to any Permitted
Free Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
(h) The Company and the Guarantor will not, without the prior
written consent of the Representatives, offer, sell, contract to sell,
pledge, or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of the
Company)
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directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange
Act, any debt securities, including any guarantee of such securities, of
the Company, in each case that are substantially similar to the Securities
or any security convertible into or exchangeable for the Securities or
such substantially similar securities, or publicly announce an intention
to effect any such transaction, during the period beginning the date of
the Terms Agreement and ending the Closing Date.
(i) Each of the Company and the Guarantor will comply with all
applicable securities and other laws, rules and regulations, including,
without limitation, the Sarbanes Oxley Act of 2002, and use its best
efforts to cause the its directors and officers, in their capacities as
such, to comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes Oxley Act of 2002.
(j) Neither the Company nor the Guarantor will take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities, except
that the Company and the Guarantor make no agreement as to the activities
of any Underwriter.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Guarantor contained herein as of the Execution Time and the Closing
Date, to the accuracy of the statements of the Company and the Guarantor made in
any certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantor of their obligations hereunder and to the following
additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been
filed in the manner and within the time period required by Rule 424(b);
and any material required to be filed by the Company or the Guarantor
pursuant to Rule 433(d) under the Act, shall have been filed with the
Commission within the applicable time periods prescribed for such filings
by Rule 433; and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company and the Guarantor shall have requested and caused
counsel for the Company and the Guarantor to have furnished to the
Representatives the opinion, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the Securities,
the Indenture, the Registration Statement, the Disclosure Package, the
Final Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require.
(c) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing
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Date and addressed to the Representatives, with respect to the issuance
and sale of the Securities, the Indenture, the Registration Statement, the
Disclosure Package, the Final Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Company and the Guarantor shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(d) The Company and the Guarantor shall have furnished to the
Representatives a certificate of the Company and the Guarantor, signed by
(1) with respect to the Company - the Chairman, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Company and (2) with
respect to the Guarantor - the Chairman, any Vice Chairman, the President,
any Vice President, the Chief Financial Officer, the Chief Accounting
Officer, the General Counsel, the Controller or any Deputy Controller and
by the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Guarantor, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, the Disclosure Package and any
supplements or amendments thereto, as well as each electronic roadshow
used to offer the Securities, and this Agreement and that:
(i) the representations and warranties of the Company and the
Guarantor in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing Date and
the Company and the Guarantor have complied with all the agreements
and satisfied all the conditions on their part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been
issued and no proceedings for that purpose have been instituted or,
to the knowledge of the Company and the Guarantor, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Guarantor and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Disclosure Package and the Final
Prospectus (exclusive of any supplement thereto).
(e) The Guarantor shall have requested and caused KPMG LLP to have
furnished to the Representatives, at the Closing Date, a customary
"comfort letter" (which may refer to letters previously delivered to the
Representatives), dated as of the Closing Date, that is satisfactory in
content and form to the Representatives.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof)
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and the Final Prospectus (exclusive of any supplement thereto), there
shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any change,
or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of
the Guarantor and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Disclosure Package and the Final
Prospectus (exclusive of any supplement thereto) the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the sole judgment
of the Representatives after consultation with the Company and the
Guarantor, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof), the Disclosure Package and the Final Prospectus (exclusive of
any supplement thereto) and any Issuer Free Writing Prospectus.
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's or the Guarantor's senior
or subordinated debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act) or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not indicate
the direction of the possible change.
(h) Prior to the Closing Date, the Company and the Guarantor shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement with respect to an
offering of Securities, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be reasonably satisfactory in
form and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled with
respect to such offering at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
the Guarantor in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or the Guarantor to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through the Representatives on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
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8. Indemnification and Contribution.
(a) The Company and the Guarantor agree to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents
of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in
any amendment thereof, or in the Base Prospectus, any Preliminary Final
Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Guarantor will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company or the Guarantor by or on behalf of
any Underwriter through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any liability
which the Company and the Guarantor may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company and the Guarantor, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls the Company or the Guarantor
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Guarantor to
each Underwriter, but only with reference to written information relating
to such Underwriter furnished to the Company or the Guarantor by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability that any
Underwriter may otherwise have. The Company and the Guarantor acknowledge
that the statements set forth in the sentence at the bottom of the cover
page regarding delivery of the Securities and, under the heading
"Underwriting" or "Plan of Distribution", (i) the list of Underwriters and
their respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances and (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids
in any Preliminary Final Prospectus and the Final Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Final Prospectus or the
Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in
11
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to
the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights
and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the Guarantor
and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, the Guarantor and one or
more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Guarantor on the one hand and by the Underwriters on the other from
the offering of the Securities; provided, however, that in no case shall
(i) any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is
12
unavailable for any reason, the Company, the Guarantor and the
Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Guarantor on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantor shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by the Company, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of
a material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company and the Guarantor on
the one hand or the Underwriters on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the
Guarantor and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls the Company or the Guarantor, as applicable, within the meaning
of either the Act or the Exchange Act, each officer of the Company or the
Guarantor, as applicable, who shall have signed the Registration Statement
and each director of the Company or the Guarantor, as applicable, shall
have the same rights to contribution as the Company or the Guarantor, as
applicable, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in the Terms Agreement bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in the Terms Agreement,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter, the Company
or the Guarantor. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business
13
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company, the
Guarantor and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
and the Guarantor prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Guarantor's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange, or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives after consultation with the
Company and the Guarantor, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantor or their respective officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company and the Guarantor or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
General Counsel; if sent to the Company, will be mailed, delivered or telefaxed
to Citigroup Funding Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Assistant Treasurer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇); or, if sent to
the Guarantor, will be mailed, delivered or telefaxed to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, Finance and Capital Markets
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. No Fiduciary Duty. The Company and the Guarantor hereby
acknowledge that (i) the purchase and sale of the Securities pursuant to this
Agreement is an arm's-length commercial transaction between the Company and the
Guarantor, on the one hand, and the
14
Underwriters and any affiliate through which it may be acting, on the other,
(ii) the Underwriters are acting as principal and not as an agent or fiduciary
of the Company or the Guarantor and (iii) the Company's engagement of the
Underwriters in connection with the offering and the process leading up to the
offering is as independent contractors and not in any other capacity.
Furthermore, each of the Company and the Guarantor agrees that it is solely
responsible for making its own judgments in connection with the offering
(irrespective of whether any of the Underwriters has advised or is currently
advising the Company or the Guarantor on related or other matters). The Company
and the Guarantor agree that they will not claim that the Underwriters have
rendered advisory services of any nature or respect, or owe an agency, fiduciary
or similar duty to the Company or the Guarantor, in connection with such
transaction or the process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company, the Guarantor and
the Underwriters, or any of them, with respect to the subject matter hereof.
16. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
17. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
18. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
19. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the
rules and regulations of the Commission promulgated thereunder.
"Base Prospectus" shall mean the base prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Disclosure Package" shall mean (i) the Base Prospectus, as amended
and supplemented to the Execution Time, (ii) the Preliminary Prospectus,
if any, used most recently prior to the Execution Time, (iii) the Issuer
Free Writing Prospectuses, if any, attached as an exhibit to the
applicable Terms Agreement, and (iv) any other Free Writing Prospectus
that the parties hereto shall hereafter expressly agree in writing to
treat as part of the Disclosure Package.
15
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto became or
become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time specified in the
applicable Terms Agreement.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Base Prospectus.
"Free Writing Prospectus" shall mean a free writing prospectus, as
defined in Rule 405.
"Guarantee" shall have the meaning set forth in the Base Prospectus
under "Description of Debt Securities - Citigroup Guarantees."
"Issuer Free Writing Prospectus" shall mean an issuer free writing
prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Base Prospectus referred to in paragraph 1(a) above
which is used prior to filing of the Final Prospectus, together with the
Base Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that
is filed with the Commission pursuant to Rule 424(b) and deemed part of
such registration statement pursuant to Rule 430B, as amended on each
Effective Date and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended.
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule
415", "Rule 424", "Rule 430B" and "Rule 433" refer to such rules under the
Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
"Well-Known Seasoned Issuer" shall mean a well-known seasoned
issuer, as defined in Rule 405.
16
EXHIBIT A
CITIGROUP FUNDING INC.
[INSERT SPECIFIC TITLE OF SECURITIES]
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]*
CITIGROUP FUNDING INC.
c/o
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Citigroup
Funding Inc. (hereinafter called the "Company"), and the Company agrees to sell
to the undersigned, as of the date hereof,
[If one delayed closing, insert the following:
for delivery on , 20__ (the "Delivery Date"), $ aggregate principal amount of]
[If two or more delayed closings, insert the following:
for delivery on the dates and in the aggregate principal amount set forth below
(each of which dates is hereinafter referred to as a "Delivery Date"),]
the Company's [insert title of Securities] (the "Securities"), offered by the
Company's Prospectus relating thereto, receipt of a copy of which is hereby
acknowledged, at a purchase price of ___% of the aggregate principal amount
thereof plus accrued interest, if any, and on the further terms and conditions
set forth in this contract.
[If two or more delayed closings, insert the following:
Delivery Date Aggregate Principal Amount
--------------- ---------------
--------------- ---------------]
Delivery of and payment for the Securities shall be made on [the]
[each] Delivery Date. Delivery of the Securities shall be made to the
undersigned against payment of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to an account
specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless the undersigned shall
otherwise instruct.
--------------------
* To be completed when the Terms Agreement is executed by the parties thereto.
17
The obligation of the undersigned to take delivery of, and make
payment for, Securities on [the] [each] Delivery Date shall be subject to the
conditions that (i) investment in the Securities shall not at such Delivery Date
be prohibited under the laws of any jurisdiction in the United States to which
the undersigned is subject, which investment the undersigned represents is not
prohibited on the date hereof, and (ii) the Company shall have delivered to the
Underwriters the aggregate principal amount of the Securities to be purchased by
them pursuant to the Underwriting Agreement referred to in the Prospectus.
Promptly after completion of the sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company and the Guarantor delivered to the Underwriters in connection therewith.
This contract shall inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of this contract and any other
similar contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned when such counterpart is mailed or
delivered.
THIS CONTRACT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
[NAME OF PURCHASER]
By:
--------------------------------------
Name:
Title:
Address:
Accepted as of the above date.
CITIGROUP FUNDING INC.
By:
-------------------------------------------
Name:
Title:
18