Exhibit 1.01
CITIGROUP FUNDING INC.
Medium-Term Notes, Series A and Series B
Euro-Medium-Term Notes, Series A and Series B
GLOBAL SELLING AGENCY AGREEMENT
June 1, 2005
New York, New York
Citigroup Global Markets Inc.
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(the "U.S. Agent")
Citigroup Global Markets Limited
Citigroup Centre
Canada Square
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(the "International Agent")
Ladies and Gentlemen:
Citigroup Funding Inc., a Delaware corporation (the "Company") and
Citigroup Inc., a Delaware corporation (the "Guarantor"), confirm their
agreement with each of you with respect to the issue and sale by the Company of
up to U.S.$10,000,000,000 (or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies) aggregate principal
amount of its Medium-Term Notes, Series A and Series B, in registered form (the
"Medium-Term Notes") and Euro-Medium-Term Notes, Series A and Series B, in
bearer form (the "Euro Medium-Term Notes"; and together with the Medium-Term
Notes, the "Notes"), which Notes are fully and unconditionally guaranteed (the
"Guarantee") by the Guarantor. It is understood that the Company may from time
to time authorize the issuance and sale of additional amounts of the Notes and
that such Notes may be issued and sold pursuant to the terms of this Agreement,
all as though the issuance and sale of such Notes were authorized by the Company
as of the date hereof. The Notes may be denominated in U.S. dollars, foreign
currencies or composite currencies (the "Specified Currency") as may be
specified in the applicable Pricing Supplement (as defined herein) relating to
any particular issue of Notes.
The Notes, Series A, will be issued under an indenture (the "Senior
Debt Indenture"), dated as of June 1, 2005, among the Company, the Guarantor,
and JPMorgan Chase Bank, N.A., as trustee. The Notes, Series B, will be issued
under an indenture (the "Subordinated Debt Indenture," and, together with the
Senior Debt Indenture, the "Indentures"), dated as of June 1, 2005, among the
Company, the Guarantor, and Deutsche Bank Trust Company Americas, as trustee
(together with JPMorgan Chase Bank, N.A., the "Trustees"). Unless otherwise
specifically provided for and set forth in a supplement to the Prospectus
referred to below, the Medium-Term Notes will be issued in minimum denominations
of
U.S.$1,000 (or the approximate equivalent thereof in the Specified Currency) and
in denominations exceeding such amount by integral multiples of U.S.$1,000 (or
the approximate equivalent thereof in the Specified Currency) and will be issued
only in fully registered form, and the Euro Medium-Term Notes will be issued in
minimum denominations of U.S.$10,000 (or the approximate equivalent thereof in
the Specified Currency) and in denominations exceeding such amount by integral
multiples of U.S.$1,000 (or the approximate equivalent thereof in the Specified
Currency) and will be issued only in bearer form, and the Notes will have the
interest rates, maturities, redemption provisions and other terms set forth in
the applicable Pricing Supplement (as defined herein).
The Medium-Term Notes will be issued, and the terms thereof
established, in accordance with the Indentures and the Medium-Term Notes
Administrative Procedures attached hereto as Exhibit A (the "U.S. Procedures")
(unless a Terms Agreement (as defined in Section 2(b)) modifies or otherwise
supersedes such U.S. Procedures with respect to the Medium-Term Notes issued
pursuant to such Terms Agreement). The U.S. Procedures may only be amended by
written agreement of the Company, the Guarantor and the U.S. Agent after notice
to, and with the approval of, the Trustees. The Euro Medium-Term Notes will be
issued, and the terms thereof established, in accordance with the Indentures and
the Euro Medium-Term Notes Administrative Procedures attached hereto as Exhibit
B (the "Euro Procedures") (unless a Terms Agreement modifies or otherwise
supersedes such Euro Procedures with respect to the Euro Medium-Term Notes
issued pursuant to such Terms Agreement). The Euro Procedures may only be
amended by written agreement of the Company, the Guarantor and the International
Agent after notice to, and with the approval of, the Trustees.
For purposes of this Agreement, the term "Agent" shall refer to
either one of you and to any additional agents appointed as a party to this
Agreement pursuant to Section 2(b) hereof, and the terms "U.S. Agent" and
"International Agent" shall refer to such of you as are indicated on the cover
page of this Agreement and any such additional Agents appointed as such pursuant
to Section 2(c) hereof, each acting solely in its capacity as agent for the
Company pursuant to Section 2(a) and not as principal; the term "Purchaser"
shall refer to one of you acting solely as principal pursuant to Section 2(b)
and not as agent; and the term "you" shall refer to you and any other Agent
collectively, whether at any time any one of you is acting in both such
capacities or in either such capacity. In acting under this Agreement, in
whatever capacity, each of you is acting individually and not jointly.
1. Representations and Warranties. The Company and the Guarantor
jointly and severally represent and warrant to, and agree with, each of you as
set forth below in this Section 1.
(a) Registration Statement (File No. 333-122925) in respect of
U.S.$10,000,000,000 aggregate principal amount of securities of the Company,
including the Notes, has been filed with the Securities and Exchange Commission
(the "Commission"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to each of
you, excluding exhibits to such registration statement but including all
documents incorporated by reference therein, have been declared effective by the
Commission in such forms; no other document with respect to such registration
statement (other than a document incorporated by reference therein) has
heretofore been filed or transmitted for
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filing with the Commission; and no stop order suspending the effectiveness of
the registration statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary prospectus
included in the Registration Statement (as defined herein) or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"), being
hereinafter called a "Preliminary Prospectus"); the various parts of the
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such registration
statement at the time such part of such registration statement became effective
but excluding the Statements of Eligibility under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), pertaining to the Indentures, each
as amended at the time such part became effective, being hereinafter
collectively called the "Registration Statement"; the form of basic prospectus
relating to the offering and sale of Debt Securities and Index Warrants included
in the Registration Statement, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the date of
this Agreement being hereinafter from time to time called the "Base Prospectus";
the supplement to the Prospectus relating to the Medium-Term Notes and the plan
of distribution thereof being hereinafter called the "U.S. Prospectus
Supplement"; the supplement to Prospectus relating to the Euro Medium-Term Notes
and the plan of distribution thereof being hereinafter called the "Euro
Prospectus Supplement" and, together with the U.S. Prospectus Supplement, the
"Prospectus Supplements"; and the Base Prospectus (including the U.S. Prospectus
Supplement or the Euro Prospectus Supplement, as the case may be) being
hereinafter called the "Prospectus". Any reference herein to the Prospectus, a
Preliminary Prospectus or any Prospectus Supplement shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Prospectus, Preliminary
Prospectus or Prospectus Supplement, as the case may be; any reference to any
amendment or supplement to any Prospectus, Preliminary Prospectus or Prospectus
Supplement, including any supplement to the Prospectus that sets forth only the
terms of a particular issue of the Notes (a "Pricing Supplement"), shall be
deemed to refer to and include any documents filed after the date of such
Prospectus, Preliminary Prospectus or Prospectus Supplement, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Prospectus or Prospectus Supplement, as the
case may be; any reference to any amendment to the Registration Statement shall
be deemed to include any report of the Guarantor filed pursuant to the Exchange
Act after the effective date of the Registration Statement that is incorporated
by reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to and include the
Prospectus as amended or supplemented in relation to the Notes sold pursuant to
this Agreement, in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder;
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(c) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto, and the Indentures, conform or will
conform in all material respects with the applicable requirements of the Act and
the Trust Indenture Act, and the rules and regulations of the Commission
thereunder;
(d) The Registration Statement as of its effective date did not
and, as amended as of any time, 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 the Prospectus, as amended and supplemented as of any such time,
did not and will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading; provided,
however, that neither the Company nor the Guarantor makes any representations or
warranties as to the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto in
reliance upon, and in conformity with, information furnished in writing to the
Company or the Guarantor by or on behalf of any Agent specifically for use in
the Registration Statement and the Prospectus or any amendment thereof or
supplement thereto;
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the Indentures and delivered to and duly paid
for by the purchasers thereof, will constitute valid and binding obligations of
the Company, enforceable in accordance with their respective terms and entitled
to the benefits of the Indentures (subject, as to enforcement, to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law); the Indentures have been duly authorized by the Company and
qualified under the Trust Indenture Act; and the Indentures conform to the
descriptions thereof in the Prospectus as amended or supplemented to relate to
such issuance of Notes;
(f) The Guarantees have been duly authorized and, when the Notes
have been executed, authenticated and delivered by the Guarantor in accordance
with the Indentures, will constitute valid and binding obligations of the
Guarantor, enforceable in accordance with their terms and entitled to the
benefits of the Indentures; and
(g) Since the date of the most recent financial statements
included in the Prospectus, as amended or supplemented, there has not been any
material adverse change in the consolidated financial condition or results of
operations of the Guarantor and its subsidiaries, taken as a whole, which is not
disclosed in the Prospectus, as amended or supplemented.
2. Appointment of Agents. (a) Subject to the terms and conditions
stated herein and subject to the reservation by the Company of the right to sell
Notes to any of you acting as principal at a discount for its own account or for
resale to one or more investors or other dealers and the Company's right to sell
Notes directly to investors on its own behalf or through other agents, the
Company hereby appoints and authorizes the U.S. Agent and the International
Agent to act as its agents to solicit offers for the purchase of all or part of
the Medium-Term Notes and Euro Medium-Term Notes, respectively, from the
Company; provided, however, that only the International Agent may solicit offers
for the purchase of Euro Medium-Term Notes.
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Following the Commencement Date (referred to below), the Company
shall notify each Agent from time to time as to the commencement of a period
during which the Notes may be offered and sold by the Agents (each period,
commencing with such a notification and ending at such time as the authorization
for offers and sales through the Agents shall have been suspended by the Company
or the Agents as provided hereunder, being herein referred to as an "Offering
Period"). The initial Offering Period shall begin on June 1, 2005 (the
"Commencement Date"). On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the U.S. Agent and
the International Agent agrees, as agent of the Company, to use its reasonable
best efforts to solicit offers to purchase Medium-Term Notes and Euro
Medium-Term Notes, respectively, from the Company upon the terms and conditions
set forth in the applicable Prospectus (and any supplement thereto) and in the
U.S. or Euro Procedures, as applicable. Each Agent shall communicate to the
Company, orally or in writing, each reasonable offer or indication of interest
to purchase Notes received by such Agent as Agent. The Company shall have the
sole right to accept offers to purchase the Notes and may reject any such offer
in whole or in part. Each Agent shall have the right to reject, in its
discretion reasonably exercised, any offer received by it to purchase the Notes,
in whole or in part, and any such rejection shall not be deemed a breach of its
agreements contained herein. In soliciting offers to purchase the Notes in its
capacity as agent of the Company, each Agent is acting solely as agent for the
Company, and not as principal, and does not assume any obligation toward or
relationship of agency or trust with any purchaser of the Notes (other than any
such obligation or relationship which the Agent assumes independently of this
Agreement). Each Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the
identity of any purchaser or have any liability to the Company in the event any
such purchase is not consummated for any reason. Except as provided in Section
2(b), under no circumstances will any Agent be obligated to purchase any Notes
for its own account. It is understood and agreed, however, that any of you may
purchase Notes as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct
the U.S. Agent and the International Agent to suspend at any time, for any
period of time or permanently, the solicitation of offers to purchase Notes.
Upon receipt of instructions from the Company, the U.S. Agent and the
International Agent (or either or both of them, as the case may be) will
forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised them that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, on the Settlement
Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage specified
in Schedule I hereto of the aggregate principal amount of the Notes sold by the
Company. Such commission shall be payable as specified in the U.S. or Euro
Procedures, as applicable. Without the prior approval of the Company, no Agent
(acting on an agency basis) may reallow any portion of the commission payable
pursuant hereto to dealers or purchasers in connection with the offer and sale
of any Notes.
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Subject to the provisions of this Section and to the U.S. or Euro
Procedures, as applicable, offers for the purchase of Notes may be solicited by
an Agent as agent for the Company at such time and in such amounts as such Agent
shall deem advisable. The Company may from time to time offer Notes for sale
otherwise than through an Agent; provided, however, that so long as this
Agreement is in effect the Company shall not solicit or accept offers to
purchase Notes through any agent other than an Agent.
If the Company defaults in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company and the Guarantor shall
indemnify and hold each of you harmless against any loss, claim or damage
arising from or as a result of such default by the Company.
(b) Subject to the terms and conditions stated herein, whenever
the Company and any of you determine that the Company shall sell Notes directly
to any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral or written
agreement) is herein referred to as a "Terms Agreement". Each Terms Agreement
shall describe the Notes to be purchased by the Purchaser pursuant thereto and
shall specify the aggregate principal amount of such Notes, the price to be paid
to the Company for such Notes, the maturity date of such Notes, the rate at
which interest will be paid on such Notes, the dates on which interest will be
paid on such Notes and the record date with respect to each such payment of
interest, such other terms of the Notes as are applicable, the Settlement Date
for the purchase of such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any requirements for the delivery of
opinions of counsel, certificates from the Company, the Guarantor or their
respective officers or a letter from the Guarantor's independent registered
public accountants as described in Section 5(b). A Terms Agreement may also
specify certain provisions relating to the reoffering of such Notes by the
Agent. Any written Terms Agreement may be in the form attached hereto as Exhibit
C. The Purchaser's commitment to purchase Notes shall be deemed to have been
made on the basis of the representations and warranties of the Company and the
Guarantor herein contained and shall be subject to the terms and conditions
herein set forth.
Each date of delivery of and payment for Notes to be purchased by
any of you as principal or as agent or by any other purchaser is referred to
herein as a "Settlement Date". Delivery of the certificates for Notes sold to
the Purchaser pursuant to a Terms Agreement shall be made not later than the
Settlement Date agreed to in such Terms Agreement, against payment of funds to
the Company in the net amount due to the Company for such Notes by the method
and in the form set forth in the U.S. or Euro Procedures, as applicable, unless
otherwise agreed to between the Company and the Purchaser in such Terms
Agreement.
Unless otherwise agreed to between the Company and the Purchaser in
a Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
from time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes
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purchased, a Purchaser may use a selling or dealer group and may reallow to any
broker or dealer any portion of the discount or commission payable pursuant
hereto.
(c) Additional Agents. Notwithstanding paragraph 2(a) above, the
Company may from time to time appoint one or more additional financial
institutions experienced in the distribution of securities as a U.S. Agent or
International Agent under this Agreement, for the duration of this Agreement
(subject to Section 7 hereof) or on an issue by issue basis, pursuant to a
letter (an "Agent Accession Confirmation") substantially in the form of Exhibit
D or Exhibit F to this Agreement, as appropriate, provided that any such
additional party shall have first requested appointment as such upon the terms
and conditions of this Agreement in writing to the Company pursuant to a letter
(an "Agent Accession Letter") substantially in the form of Exhibit E or Exhibit
G to this Agreement, as appropriate, whereupon it shall, subject to the terms
and conditions of this Agreement, the relevant Agent Accession Letter and the
relevant Agent Accession Confirmation, become a party to this Agreement as a
U.S. Agent, or an International Agent, as specified in the relevant Agent
Accession Letter, vested with all the authority, rights and powers and subject
to all the duties and obligations of an Agent as if originally named as an Agent
hereunder. The Company shall promptly notify the Guarantor, the Trustees and the
other Agents of any such appointment, but only in the event that any such
additional Agent is appointed for the duration of this Agreement.
3. Offering and Sale of Notes. The U.S. Agent, the International
Agent and the Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the U.S. or Euro Procedures, as
the case may be.
In connection with any offering of Euro Medium-Term Notes, the
International Agent may act as stabilizing agent (the "Stabilizing Agent"), and
as Stabilizing Agent may over-allot or effect transactions which stabilize or
maintain the market price of the Euro Medium-Term Notes at a level which might
not otherwise prevail. Such stabilizing, if commenced, may be discontinued at
any time. The Stabilizing Agent, whose identity shall be disclosed in the
applicable supplement to the Prospectus relating to such offering of Euro
Medium-Term Notes, shall comply with all applicable laws.
4. Agreements. (A) The Company and the Guarantor agree with each of
you that:
(a) At any time during an Offering Period or during the time a
prospectus relating to the Notes is required to be delivered under the Act,
prior to amending or supplementing either Registration Statement or the
Prospectus, the Company and the Guarantor will furnish each Agent and such
Agent's counsel with a copy of each proposed amendment or supplement (other than
an amendment or supplement to be made pursuant to incorporation by reference of
a document filed under the Exchange Act, or a Pricing Supplement or an amendment
or supplement relating solely to an offering of securities other than the
Notes). The Company and the Guarantor will promptly cause the Prospectus
together with each amendment thereof or supplement thereto to be mailed or
otherwise transmitted to the Commission for filing pursuant to Rule 424(b) by an
appropriate method or will promptly cause the Prospectus together with each
amendment thereof or supplement thereto to be filed with the Commission pursuant
to said Rule. If the Prospectus is amended or supplemented (other than by a
Pricing Supplement or
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an amendment or supplement relating solely to an offering of securities other
than the Notes), each Agent shall be furnished with such information relating to
such filing as it may reasonably request, and no Agent shall be obligated to
solicit offers to purchase Notes so long as it is not reasonably satisfied that
such amendment or supplement complies in all material respects with the
provisions of the Act and the Exchange Act. At any time during an Offering
Period or during the time a prospectus relating to the Notes is required to be
delivered under the Act, the Company and the Guarantor will promptly advise each
Agent of (i) the filing of any amendment or supplement to the Prospectus (other
than a Pricing Supplement or an amendment or supplement relating solely to an
offering of securities other than the Notes), (ii) the filing or effectiveness
of any amendment to the Registration Statement, (iii) the receipt by the Company
or the Guarantor of comments from the Commission relating to or requests by the
Commission for any amendment of the Registration Statement or any amendment of
or supplement to the Prospectus or for any additional information, (iv) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose, and (v) the receipt by the Company or the Guarantor of any
notification with respect to the suspension of the qualification of the Notes
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company and the Guarantor will use their reasonable best
efforts to prevent the issuance of any such stop order or notice of suspension
of qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. Upon any Agent's request, the Company and the Guarantor will within a
reasonable time inform such Agent of the aggregate principal amount of Notes
registered under the Registration Statement that remain unissued.
(b) Within the time during which a prospectus relating to the
Notes is required to be delivered under the Act, the Company and the Guarantor
will comply with all requirements imposed upon them by the Act, as now and
hereafter amended, and by the rules and regulations of the Commission
thereunder, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Notes as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if, in the opinion of the Company and the
Guarantor, during such period it is necessary to amend or supplement the
Registration Statement or the Prospectus to comply with the Act, the Company
promptly will notify each Agent to suspend the solicitation of offers to
purchase the Notes in its capacity as Agent and to cease sales of any Notes it
may then own as principal and, to the extent required under the provision in the
last sentence of this subsection (b), the Company and the Guarantor promptly
will amend or supplement the Registration Statement or the Prospectus (at the
expense of the Company and the Guarantor) so as to correct such statement or
omission or effect such compliance. If such amendment or supplement, and any
documents, certificates, opinions and letters furnished to each Agent pursuant
to subsections (i), (j) and (k) of this Section 4(A) in connection with the
preparation and filing of such amendment or supplement, are reasonably
satisfactory in all respects to such Agent, upon the filing of such amendment or
supplement with the Commission or effectiveness of an amendment to the
Registration Statement, such Agent will resume solicitation of offers to
purchase Notes hereunder. Notwithstanding the foregoing, neither the Company nor
the Guarantor shall be required to comply with the provisions of subsection (b)
of this Section 4(A) during any period from the time any Agent shall have been
notified to suspend the solicitation of
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offers to purchase the Notes in its capacity as Agent (whether under this
subsection (b) or otherwise under this Agreement) to the time the Company shall
determine that solicitation of offers to purchase the Notes should be resumed;
provided that if any such Agent holds any Notes as principal purchased pursuant
to a Terms Agreement or otherwise pursuant to this Agreement, the Company and
the Guarantor shall comply with the provisions of subsection (b) of this Section
4(A) during the period when a Prospectus is required to be delivered pursuant to
the Act.
(c) The Guarantor will comply, in a timely manner, with all
applicable requirements under the Exchange Act relating to the filing with the
Commission of the Guarantor's reports pursuant to Section 13(a), 13(c) or 15(d)
of the Exchange Act and, if then applicable, of the Guarantor's proxy statements
pursuant to Section 14 of the Exchange Act.
(d) The Company and the Guarantor will use their best efforts to
qualify the Notes for sale under the securities laws of such jurisdictions as
any Agent reasonably designates, to maintain such qualifications in effect so
long as required for the distribution of the Notes and, if requested by such
Agent, to arrange for the determination of the legality of the Notes for
purchase by institutional investors, except that neither the Company nor the
Guarantor shall be required in connection therewith to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to general or unlimited service of process in any jurisdiction
where it is not now so subject.
(e) The Company and the Guarantor will furnish to each Agent
copies of the Registration Statement and the Prospectus (including all documents
incorporated by reference therein), and all amendments of and supplements to the
Registration Statement or the Prospectus which are filed with the Commission
during the period in which a prospectus relating to the Notes is required to be
delivered under the Act (including all documents filed by an amendment or
supplement with the Commission during such period which are deemed to be
incorporated by reference therein), in each case in such quantities as such
Agent may from time to time reasonably request.
(f) So long as any of the Notes are outstanding, the Guarantor
agrees to furnish to each Agent, upon its reasonable request, as soon as
available, all reports and financial statements filed by or on behalf of the
Guarantor with the Commission or any national securities exchange. The Guarantor
shall be deemed to have furnished such information to such Agent if (i) such
reports and financial statements are generally available on, and can be printed
and/or downloaded from, the Securities and Exchange Commission's internet
website, ▇▇▇.▇▇▇.▇▇▇ (or any other website of which the Guarantor notifies such
Agent), and (ii) such Agent has been notified by the Guarantor that such reports
and financial statements have been filed with the Securities and Exchange
Commission.
(g) The Company and the Guarantor shall, whether or not any sale
of Notes is consummated or this Agreement is terminated, pay all expenses
incident to the performance of their obligations under this Agreement and under
any Terms Agreement, including, without limitation, the fees and disbursements
of its accountants and counsel, the cost of printing (or other production) and
delivery of the Registration Statement and the Prospectus, all amendments
thereof and supplements thereto, the Indentures, and all other documents
relating to the offering, the cost of preparing, printing, packaging and
delivering the Notes, the fees and disbursements
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(including reasonable fees of counsel) incurred in connection with the
qualification of the Notes for sale and determination of eligibility for
investment of the Notes under the securities or blue sky laws of such
jurisdictions as the Agent may designate, the fees and disbursements of the
Trustees, the fees of any agency that rates the Notes, the fees and expenses in
connection with any listing of the Notes on the Luxembourg Stock Exchange or
such other securities exchange agreed to in writing by the Company, the fees and
expenses incurred with respect to any filing with the National Association of
Securities Dealers, Inc. and the reasonable fees and disbursements of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel for the Agents, or other counsel
reasonably satisfactory to each of the Agents, the Company and the Guarantor,
and such other expenses, including, without limitation, advertising expenses as
may be agreed upon by the Agents, the Company and the Guarantor; provided,
however, that with respect to any purchase of Notes by one of you as principal
pursuant to a Terms Agreement, the fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or other counsel to you shall not be paid by either the
Company or the Guarantor.
(h) During the term of this Agreement, the Company and the
Guarantor shall furnish to each Agent such relevant documents and certificates
of officers of the Company and the Guarantor relating to the business,
operations and affairs of the Company and the Guarantor, the Registration
Statement, the Prospectus, any amendments thereof or supplements thereto, the
Indentures, the Notes, this Agreement, the Procedures, any Terms Agreement and
the performance by the Company and the Guarantor of their obligations hereunder
or thereunder as any Agent may from time to time reasonably request, and the
Company and the Guarantor shall promptly notify each Agent orally, followed by
written notice, of any downgrading or of the receipt by either of them of any
notice of any intended downgrading in the rating accorded any securities of
either the Company or the Guarantor by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Services or, if one of them no longer rates the
securities of either the Company or the Guarantor, another "nationally
recognized statistical rating organization", as such term is defined for
purposes of Rule 436(g) (2) under the Act.
(i) Each time the Registration Statement or the Prospectus is
amended or supplemented (other than by a Pricing Supplement, an amendment or
supplement relating solely to an offering of securities other than the Notes, or
an amendment or supplement made pursuant to the incorporation by reference of a
document filed under the Exchange Act), if requested by any Agent, the Company
and the Guarantor will deliver or cause to be delivered forthwith to such Agent
a certificate of the Company and the Guarantor, signed by (A) on behalf of the
Company, the Chairman, the President or any Vice President and by the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Assistant
Secretary and, (B) on behalf of the Guarantor, the Chairman, any Vice Chairman,
any Vice President, the principal financial officer, the General Counsel, the
Controller, any Deputy Controller or the principal accounting officer and by the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or
another officer or officers acceptable to the Purchasing Agent), dated the date
of the effectiveness of such amendment or the date of filing with the Commission
of such supplement or document, as the case may be, in form reasonably
satisfactory to such Agent, to the effect that the statements contained in the
certificate referred to in Section 5(b) (iii) that was last furnished to such
Agent (either pursuant to Section 5(b) (iii) or pursuant to this Section
4(A)(i)) are true and correct at the time of the effectiveness of such amendment
or the time of filing of such supplement or document, as the case may be, as
though made at and as of such time (except that
10
such statements shall be deemed to relate to the Registration Statement, as
amended at the time of effectiveness of such amendment, and to the Prospectus,
as amended and supplemented at the date of such certificate) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
Section 5(b) (iii) but modified, if necessary, to relate to the Registration
Statement, as amended at the time of the effectiveness of such amendment, and to
the Prospectus, as amended and supplemented at the date of such certificate.
(j) Each time the Registration Statement or the Prospectus is
amended or supplemented (other than by a Pricing Supplement, an amendment or
supplement relating solely to an offering of securities other than the Notes, or
an amendment or supplement made pursuant to the incorporation by reference of a
document filed under the Exchange Act), if requested by either Agent, the
Company and the Guarantor shall furnish to or cause to be furnished forthwith to
such Agent the written opinion of the General Counsel -- Capital Markets of the
Guarantor, or other counsel for the Company and/or the Guarantor reasonably
satisfactory to such Agent, dated the date of the effectiveness of such
amendment or the date of filing with the Commission of such supplement or
document, as the case may be, in form reasonably satisfactory to such Agent, to
the effect set forth in Exhibit C hereto. In lieu of such opinion, counsel last
furnishing such an opinion to such Agent may furnish to such Agent a letter to
the effect that such Agent may rely on such last opinion to the same extent as
though it were dated the date of such letter and authorizing reliance on such
last opinion (except that statements in such last opinion will be deemed to
relate to the Registration Statement, as amended at the time of the
effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such letter).
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information (other than by a Pricing Supplement, an amendment or supplement
relating solely to an offering of securities other than the Notes, or an
amendment or supplement made pursuant to the incorporation by reference of a
document filed under the Exchange Act), if requested by either Agent, the
Guarantor shall cause KPMG LLP, Independent Registered Public Accounting Firm,
forthwith to furnish such Agent a letter, dated the date of the effectiveness of
such amendment or the date of filing of such supplement or document, as the case
may be, in form satisfactory to such Agent, of the same tenor as the letter
referred to in Section 5(b)(iv) hereof but modified to relate to the
Registration Statement and Prospectus, as amended and supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Guarantor; provided, however, that if the Registration Statement or the
Prospectus is amended or supplemented solely to include or incorporate by
reference financial information with respect to a fiscal quarter, KPMG LLP may
limit the scope of such letter to the unaudited financial statements included in
such amendment or supplement.
(l) Each acceptance by the Company of an offer for the purchase of
Notes and each sale of Notes to any of you as principal shall be deemed to be an
affirmation that the representations and warranties of the Company and the
Guarantor contained in or made pursuant to this Agreement are true and correct
in all material respects at the time of such acceptance or sale, as the case may
be, as though made at and as of such time, and an undertaking that such
representations and warranties will be true and correct in all material respects
at the time of delivery to the purchaser or his agent, or an Agent, or any of
you acting as principal, of the Notes
11
relating to such acceptance, as the case may be, as though made at and as of
such time (and it is understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus as amended and
supplemented to each such time).
(m) Anything to the contrary in this Section 4 notwithstanding,
if, at the time of any required notice, amendment or supplement to the
Registration Statement or the Prospectus, the Company shall have instructed the
Agents to suspend solicitation of offers to purchase the Notes in each Agent's
capacity as Agent of the Company and any Agent does not then hold any Notes
acquired by it as principal pursuant to a Terms Agreement, neither the Company
nor the Guarantor shall be obligated to furnish or cause to be furnished any
notice, certificate, opinion or letter otherwise required until such time as it
shall determine that solicitation of offers to purchase the Notes should be
resumed; and provided, further, that, prior to resuming such solicitation the
Agents shall be entitled to receive any such notices, certificates, opinions or
letters not previously furnished, accurate as of the date of such notice,
certificate, opinion or letter.
(n) The Company, the Guarantor and their respective affiliates
will comply with the provisions of U.S. Treasury Regulations
1.163-5(c)(2)(i)(D)(1) and (2).
(o) If any issue of Euro Medium-Term Notes is to be listed on the
Luxembourg Stock Exchange, as specified in the applicable Pricing Supplement,
the Company and the Guarantor will use their best efforts to obtain the listing
of such issue of Euro Medium-Term Notes on the Luxembourg Stock Exchange, to
furnish to such Exchange all documents, information and undertakings that may be
reasonably necessary in order to effect such listing, and to cause such listing
to be continued so long as any of the Euro Medium-Term Notes of such issue
remain outstanding.
(p) The Company, the Guarantor or their respective designated
agent(s) shall submit such reports or information as may be required from time
to time by applicable law, regulations and guidelines promulgated by Japanese
governmental and regulatory authorities in respect of the issue and purchase of
Notes denominated in Japanese yen.
(B) Each Agent represents to and agrees with the Company and the
Guarantor that:
(a) Except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and during
the restricted period will not offer or sell, Euro Medium-Term Notes to a person
who is within the United States or its possessions or to a United States person,
and (ii) it has not delivered and will not deliver within the United States or
its possessions definitive Euro Medium-Term Notes that are sold during the
restricted period.
(b) It has and throughout the restricted period will have in
effect procedures reasonably designed to ensure that its employees or agents who
are directly engaged in selling Euro Medium-Term Notes are aware that such Euro
Medium-Term Notes may not be offered or sold during the restricted period to a
person who is within the United States or its possessions or to a United States
person, except as permitted by the D Rules.
12
(c) If it is a United States person, it represents that it is
acquiring the Euro Medium-Term Notes for purposes of resale in connection with
their original issuance, and if it retains Euro Medium-Term Notes for its own
account, it will only do so in accordance with the requirements of U.S. Treas.
Reg. Section 1.163-5(c)(2)(i)(D)(6).
(d) With respect to each of its affiliates that acquires Euro
Medium-Term Notes from it for the purpose of offering or selling such Euro
Medium-Term Notes during the restricted period, it repeats and confirms the
representations and agreements contained in Sections 4(B)(a), (b) and (c) on
such affiliate's behalf.
(e) It has not entered and will not enter into any contractual
arrangement with respect to the distribution or delivery of Euro Medium-Term
Notes, except with their affiliates or with the prior written consent of the
Company and the Guarantor.
Terms used in this Section 4(B) have the meanings given to them by
the U.S. Internal Revenue Code and regulations thereunder, including the D
Rules. For these purposes, the "restricted period" with respect to a Euro
Medium-Term Note generally ends upon the expiration of the 40-day period
beginning on the issue date of such Euro Medium-Term Note, unless the
International Agent holds such Euro Medium-Term Note as part of an unsold
allotment or subscription, in which case the "restricted period" continues for
so long as the International Agent holds such Euro Medium-Term Note.
(f) It has not offered or sold and, prior to the expiration of the
period of six months from the date of issue of any Notes having a maturity of
one year or greater, will not offer or sell any Notes to persons in the United
Kingdom, except to those persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments, as principal or agent,
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
for purposes of the Public Offers of Securities Regulations 1995.
(g) It has complied and will comply with all applicable provisions
of the Financial Services and Markets ▇▇▇ ▇▇▇▇ ("FSMA") with respect to anything
done by it in relation to the Notes in, from or otherwise involving the United
Kingdom.
(h) It has only communicated or caused to be communicated and it
will only communicate or cause to be communicated an invitation or inducement to
engage in investment activity (within the meaning of Section 21 of FSMA)
received by it in connection with the issue or sale of the Notes in
circumstances in which Section 21(1) of FSMA does not apply to either the
Company or the Guarantor.
(i) It will not offer or sell any Notes directly or indirectly in
Japan or to, or for the benefit of, any Japanese person or to others, for
re-offering or re-sale directly or indirectly in Japan or to any Japanese person
except under circumstances which will result in compliance with all applicable
laws, regulations and guidelines promulgated by the relevant governmental and
regulatory authorities in effect at the relevant time. For purposes of this
paragraph, "Japanese person" means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan.
13
5. Conditions to the Obligations of the Agents. Each Agent's
obligations to solicit offers to purchase Notes as agent of the Company, any of
your obligations to purchase Notes as principal pursuant to any Terms Agreement
or otherwise and the obligation of any other Purchaser to purchase Notes from
the Company will be subject to the accuracy in all material respects of the
representations and warranties on the part of the Company and the Guarantor
herein contained, to the accuracy of the statements of the officers of the
Company and the Guarantor made in each certificate furnished pursuant to the
provisions hereof and to the performance and observance by the Company and the
Guarantor of all covenants and agreements herein contained on their part to be
performed and observed (in the case of any Agent's obligations to solicit offers
to purchase Notes, at the time of such solicitation, and, in the case of any
Purchaser's obligation to purchase Notes, at the time the Company accepts the
offer to purchase such Notes and at the time of purchase) and (in each case) to
the following additional conditions precedent when and as specified:
(a) On the corresponding Settlement Date:
(i) There shall not have occurred any change in or affecting
particularly the business or properties of the Company, the Guarantor and
their respective affiliates from that set forth in the Registration
Statement, as amended or supplemented, that, in the Agent's judgment,
makes it impracticable to market the Notes on the terms and in the manner
contemplated in the Prospectus except, in the case of any purchase of
Notes by any Agent as principal, as disclosed to such Agent in writing by
the Company and the Guarantor before the Company accepted the offer to
purchase such Notes.
(ii) (A) With respect to the Medium-Term Notes: There shall
not have occurred any (x) suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of either the Company or the Guarantor on any exchange
(whether U.S. or foreign) or in the over-the-counter market, (y)
declaration of a general moratorium on commercial banking activities in
New York by either federal or New York state authorities or exchange
controls shall have been imposed by the United States or by any country
the currency of which will be used to make any payment in respect of the
Notes or (z) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency that, in the
Agent's judgment, is material and adverse and, in the case of any of the
events described in clauses (ii)(A)(x) through (z), such event makes it,
in the Agent's judgment, impracticable to market the Notes on the terms
and in the manner contemplated by the Prospectus, as amended or
supplemented, except, in the case of any purchase of Notes by any Agent as
principal, for any such event occurring before the Company accepted the
offer to purchase such Notes.
(B) With respect to the Euro Medium-Term Notes: There
shall not have occurred any (x) suspension or material limitation of
trading in securities generally on the New York Stock Exchange, London
Stock Exchange or Luxembourg Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company or the Guarantor on any exchange
14
(whether U.S. or foreign) or in the over-the-counter market, (y)
declaration of a general moratorium on commercial banking activities in
New York by either federal or New York state authorities or by bank
regulatory authorities in London or Luxembourg, or exchange controls shall
have been imposed by the United States or by any country the currency of
which will be used to make any payment in respect of the Notes or (z) any
outbreak or escalation of major hostilities in which the United States or
the United Kingdom is involved, any declaration of war by Congress or
Parliament or any other substantial national or international calamity or
emergency that, in the Agent's judgment, is material and adverse and, in
the case of any of the events described in clauses (ii)(B)(x) through (z),
such event makes it, in the Agent's judgment, impracticable to market the
Notes on the terms and in the manner contemplated by the Prospectus, as
amended or supplemented, except, in the case of any purchase of Notes by
any Agent as principal, for any such event occurring before the Company
accepted the offer to purchase such Notes.
(iii) There shall not have been any downgrading, nor any
notice given of any intended downgrading, in the rating accorded any
securities of either the Company or the Guarantor by ▇▇▇▇▇'▇ Investor
Service or Standard & Poor's Ratings Services or, if one of them no longer
rates the securities of either the Company or the Guarantor, another
"nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g) (2) under the Act, except, in the case
of any purchase of Notes by any Agent as principal, as disclosed to the
Agent in writing by the Company and the Guarantor before the Company
accepted the offer to purchase such Notes.
(b) On the Commencement Date and, if called for by any agreement
by any Agent to purchase Notes as principal, on the corresponding Settlement
Date:
(i) The Company and the Guarantor shall have furnished to
each Agent the opinion of the General Counsel -- Capital Markets of the
Guarantor (or other counsel for the Company and/or the Guarantor
reasonably acceptable to the Agent) on the Commencement Date, and, on the
Settlement Date will furnish the opinion of the General Counsel -- Capital
Markets of the Guarantor (or other counsel for the Company and/or the
Guarantor reasonably acceptable to such Agent) and, if called for by a
Terms Agreement, the opinion of other counsel, dated the Commencement Date
or the Settlement Date, as the case may be, to the effect set forth in
Exhibit H hereto.
(ii) Each Agent shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Agents (or other counsel reasonably
acceptable to such Agent, the Company and the Guarantor), an opinion dated
the Commencement Date or the Settlement Date, as the case may be, to the
effect set forth in Exhibit I hereto.
(iii) The Company and the Guarantor shall have furnished to
the Agent a certificate of the Company and the Guarantor, signed by (A) on
behalf of the Company, the Chairman, the President or any Vice President
and by the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Assistant Secretary and, (B) on behalf of the Guarantor,
the Chairman, any Vice Chairman, any Vice President, the principal
financial officer, the General Counsel, the Controller, any Deputy
Controller or the principal accounting officer and by the Treasurer, any
Assistant Treasurer, the Secretary
15
or any Assistant Secretary (or another officer or officers acceptable to
such Agent), dated the Commencement Date or the Settlement Date, as the
case may be, to the effect that each signatory of such certificate has
carefully examined the Registration Statement, as amended as of the date
of such certificate, the Prospectus, as amended and supplemented as of the
date of such certificate, and this Agreement and that:
(A) the representations and warranties of the Company
and the Guarantor in this Agreement are true and correct in
all material respects on and as of the date of such
certificate with the same effect as if made on the date of
such certificate and the Company and the Guarantor have
complied in all material respects with all the agreements and
satisfied in all material respects all the conditions on their
part to be performed or satisfied as a condition to the
obligations of such Agent under this Agreement;
(B) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to their knowledge, have
been threatened or communicated; and
(C) since the date of the most recent financial
statements included in the Prospectus, as amended and
supplemented, there has been no material adverse change in the
consolidated financial condition or results of operations of
the Guarantor and its subsidiaries, taken as a whole, which is
not disclosed in the Prospectus, as amended or supplemented.
(iv) KPMG LLP or another nationally recognized independent
registered public accounting firm shall have furnished to each Agent a
letter or letters, dated the Commencement Date or the Settlement Date, as
the case may be, in form and substance reasonably satisfactory to such
Agent, to the effect set forth in Exhibit J and Exhibit K hereto.
(v) The Company and the Guarantor shall have furnished to
each Agent such appropriate further information, certificates and
documents as such Agent may reasonably request.
6. Indemnification and Contribution. (a) The Company and the
Guarantor will indemnify and hold harmless each of you against any losses,
claims, damages or liabilities, joint or several, to which each of you may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement when it became effective, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
Prospectus, 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 will reimburse each of you for
any legal or other expenses reasonably incurred by you in connection with
investigating or defending against such loss, claim damage, liability or action;
provided, however, that (i) neither the Company nor the
16
Guarantor shall be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an 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 of you specifically for use in
the preparation thereof, and (ii) such indemnity with respect to any Preliminary
Prospectus, the Prospectus or any preliminary supplemental prospectus, shall not
inure to the benefit of any of you (or any person controlling you) if the
Company and the Guarantor shall have delivered sufficient quantities of the
Prospectus, as amended and supplemented, to you within a reasonable time prior
to the earlier of the delivery of the written confirmation of the sale of such
Notes or the delivery of such Notes to the person asserting such loss, claim,
damage, liability or action for which indemnification is sought, and the
Prospectus as so amended and supplemented (excluding documents incorporated by
reference) was not sent or given to such person by you at or prior to the
earlier of the delivery of the written confirmation of the sale of such Notes or
the delivery of such Notes to such person in any case where such sending or
giving of a prospectus is required by the Act, and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus, such
Prospectus or such preliminary supplemental prospectus, was corrected in the
Prospectus, as so amended and supplemented, provided to you.
(b) Each Agent will indemnify and hold harmless the Company and
the Guarantor against any losses, claims, damages or liabilities to which either
the Company or the Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any part of the Registration Statement
when it became effective, the Prospectus, or any amendment or supplement
thereto, or any related Preliminary Prospectus, 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made therein in
reliance upon and in conformity with written information furnished to the
Company or the Guarantor by or on behalf of any Agent specifically for use in
the preparation thereof, and will reimburse the Company and the Guarantor for
any legal or other expenses reasonably incurred by either of them in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which the indemnifying party may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnified party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall
17
not be liable to such indemnified party under such subsection for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Guarantor on the one hand and by each of you on the other
from the offering of the Notes from which such losses, claims, damages or
liabilities arose, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantor on the one hand and by each of you on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantor
on the one hand and by each of you on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Notes from
which such losses, claims, damages or liabilities arose (before deducting
expenses) received by the Company bear to the total commissions received by each
of you in connection with such offering. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantor or by any of you
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Guarantor and each of you agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocation (even if you were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim (which shall be limited as provided in subsection (c) above if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), none of you shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes sold by the Company from which such losses, claims,
damages or liabilities arose pursuant to offers solicited by you were offered to
the public exceeds the amount of any damages which you have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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. The Agents'
obligations in this subsection (d) to contribute shall be several in proportion
to their respective underwriting obligations and not joint. Promptly after
receipt by an indemnified party under this subsection (d) of the notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this subsection
(d), such indemnified party shall notify the
18
indemnifying party in writing of the commencement thereof if the notice
specified in subsection (c) above has not been given with respect to such
action; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under this subsection (d).
(e) The obligations of the Company and the Guarantor under this
Section 6 shall be in addition to any liability which the Company and the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any of you within the meaning
of the Act or the Exchange Act; and the obligations of each of you under this
Section 6 shall be in addition to any liability which you may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Company and the Guarantor (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of either the
Company or the Guarantor), to each officer of the Company and the Guarantor who
has signed the Registration Statement and to each person, if any, who controls
the Company or the Guarantor within the meaning of the Act or the Exchange Act.
7. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 7. This Agreement may be terminated by
either the Company and the Guarantor as to any Agent, or by any Agent, insofar
as this Agreement relates to such Agent, by giving written notice of such
termination to such Agent or the Company and the Guarantor, as the case may be.
The termination of this Agreement shall not require termination of any agreement
by any of you to purchase Notes as principal, and the termination of any such
Agreement shall not require termination of this Agreement. If this Agreement is
terminated, neither the Company and the Guarantor, on the one hand, nor any
Agent, on the other hand, shall have any liability to each other, except as
provided in the first sentence of the fourth paragraph of Section 2(a), the last
proviso of Section 4(A)(b), and Sections 4(A)(g), 4(A)(h), 6, 8 and 11, and
except that, if at the time of termination an offer to purchase any of the Notes
has been accepted by the Company but the time of delivery to the purchaser or
its agent of the Note or Notes relating thereto has not occurred, the
representations and warranties of the Company and the Guarantor stated in
Section 2 and the Company's obligations under the U.S. Procedures and the Euro
Procedures, and in Sections 2(c), 4(A)(a), 4(A)(b), 4(A)(c), 4(A)(e), 4(A)(i),
4(A)(j), 4(A)(k), 4(A)(1), 4(A)(m), 4(A)(o), 4(A)(q), 4(A)(r) and 5 shall also
remain in full force and effect and not be terminated until the delivery of such
Notes.
8. Representations and Indemnities to Survive. With respect to any
Agent's solicitation of offers to purchase Notes as agent of the Company or any
of your obligation to purchase Notes as principal pursuant to any Terms
Agreement or otherwise, the respective agreements, representations, warranties,
indemnities and other statements of the Company and the Guarantor or their
officers and of any of you 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 you, the Company, the Guarantor or any of the officers, directors or
controlling persons referred to in Section 6 hereof, and will survive delivery
of and payment for the Notes for a period extending to the earlier of (i) three
years from the corresponding Settlement Date for such Notes or (ii) the
expiration of any applicable statute of limitations governing such solicitation
or purchase of Notes.
19
9. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to an Agent, will be mailed, delivered
or telegraphed and confirmed to such Agent, at the address specified in Schedule
I hereto; or, if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it at Citigroup Funding Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer; and if sent to the Guarantor,
will be mailed, delivered or telegraphed and confirmed to it at Citigroup Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel
-- Capital Markets.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 6 hereof. Nothing
expressed or implied in this Agreement or any Terms Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof except to the extent provided for in Section 5
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No Purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase. This Agreement and the rights
and obligations of any of you hereunder may not be assigned without the prior
written consent of the Company and the Guarantor.
11. Waivers, Etc. Neither any failure nor delay on the part of any
party to exercise any right, remedy, power or privilege under this Agreement
(singly and collectively referred to as a "Right") shall operate as a waiver of
such Right, nor shall any single or partial exercise of any Right preclude any
other or further exercise of any Right, nor shall any waiver of any Right with
respect to any occurrence be construed as a waiver of any Right with respect to
any other occurrence.
12. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Guarantor and you.
Very truly yours,
CITIGROUP FUNDING INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Assistant Treasurer
CITIGROUP INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof:
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
CITIGROUP GLOBAL MARKETS LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
21
EXHIBIT A
CITIGROUP FUNDING INC.
Medium-Term Notes, Series A and Series B, Administrative Procedures
June 1, 2005
The Medium-Term Notes, Series A (the "Series A Notes") and
Medium-Term Notes, Series B (the "Series B Notes," and, together with the Series
A Notes, the "Notes") of Citigroup Funding Inc. (the "Company"), fully and
unconditionally guaranteed by (the "Guarantee") Citigroup Inc. (the
"Guarantor"), are to be offered on a continuing basis. Citigroup Global Markets
Inc. has agreed, as agent, to solicit purchases of Notes issued in fully
registered form. (The term "Agent" when used in these Administrative Procedures,
means Citigroup Global Markets Inc.) The Agent will not be obligated to purchase
Notes for its own account. The Notes are being sold pursuant to a Global Selling
Agency Agreement among the Company, the Guarantor, and the agents named therein
(including the Agent) dated the date hereof (the "Agency Agreement"). The Notes
have been registered with the Securities and Exchange Commission (the
"Commission"). JPMorgan Chase Bank, N.A. is the trustee under the Indenture,
dated as of June 1, 2005, under which the Series A Notes will be issued (the
"Senior Debt Indenture"). Deutsche Bank Trust Company Americas is the trustee
(together with JPMorgan Chase Bank, N.A., the "Trustees") under the Indenture,
dated as of June 1, 2005, under which the Series B Notes will be issued (the
"Subordinated Debt Indenture," and, together with the Senior Debt Indenture, the
"Indentures"). The Series A Notes will constitute part of the senior debt of the
Company and will rank equally with all other unsecured and unsubordinated debt
of the Company. The Guarantee of the Series A Notes will constitute part of the
senior debt of the Guarantor and will rank equally with all other unsecured and
unsubordinated debt of the Guarantor. The Series B Notes will be subordinate and
junior in the right of payment to all Citigroup Funding Senior Indebtedness, to
the extent and in the manner set forth in the Subordinated Debt Indenture. The
Guarantee of the Series B Notes will be subordinate and junior in the right of
payment to all Citigroup Senior Indebtedness, to the extent and in the manner
set forth in the Subordinated Debt Indenture.
The Agency Agreement provides that Notes may also be purchased by
the Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by the Agent acting
solely as principal, unless otherwise agreed to between the Company, the
Guarantor and the Agent acting as principal.
Each Note will be represented by either a Global Security (as
defined hereinafter) or a certificate delivered to the Holder thereof or a
Person designated by such Holder (a "Certificated Note"). Each Global Security
representing Series A Notes will be delivered to Citibank, N.A., and each Global
Security representing Series B Notes will be delivered to Deutsche Bank Trust
Company Americas, each acting as agent for The Depository Trust Company or any
successor depositary selected by the Company ("DTC", which term, as used herein,
includes any successor depositary selected by the Company), and will be recorded
in the
A-1
book-entry system maintained by DTC (a "Book-Entry Note"). An owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agent and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agent and the Trustees in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustees are to
communicate regarding orders to purchase Notes and the details of their
delivery. The term "Trustees" as used in these procedures means the Trustees and
any other agents appointed by the Trustees or the Company.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indentures, the
Agency Agreement, the Notes or the Prospectus Supplement relating to the Notes
shall be used herein as therein defined. Notes for which interest is calculated
on the basis of a fixed interest rate, which may be zero, are referred to herein
as "Fixed Rate Notes". Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating Rate Notes". To the
extent the procedures set forth below conflict with the provisions of the Notes,
the Indentures, DTC's operating requirements or the Agency Agreement, the
relevant provisions of the Notes, the Indentures, DTC's operating requirements
and the Agency Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, Citibank, N.A. and
Deutsche Bank Trust Company Americas (together, the "DTC Agents") will perform
the custodial, document control and administrative functions described below for
the Series A Notes and the Series B Notes, respectively. Citibank, N.A. will
perform such functions in accordance with its respective obligations under a
Letter of Representations from the Company and Citibank, N.A. to DTC dated as of
the date hereof and a Medium-Term Note Certificate Agreement between Citibank,
N.A. and DTC, dated as of October 31, 1988 and as amended to date, and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
system ("SDFS"). Deutsche Bank Trust Company Americas will perform such
functions in accordance with its respective obligations under a Letter of
Representations from the Company and Deutsche Bank Trust Company Americas to DTC
dated as of the date hereof and a Certificate Agreement between DTC and Deutsche
Bank Trust Company Americas, dated as of December 5, 1997 and as amended to
date, and its obligations as a participant in DTC, including DTC's SDFS.
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Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Company will issue a single global security in
fully registered form without coupons (a "Global
Security") representing up to U.S $500,000,000
principal amount of all such Book-Entry Notes of the
same Series that have the same Original Issue Date,
Original Issue Discount provisions, if any, Interest
Payment Dates, Regular Record Dates, Interest Payment
Period, redemption repayment and extension provisions,
if any, Stated Maturity, and, in the case of Fixed
Rate Notes, interest rate, and amortization schedule,
if any, or, in the case of Floating Rate Notes,
Initial Interest Rate, Base Rate, Index Maturity,
Interest Reset Period, Interest Reset Dates, Spread
and/or Spread Multiplier, if any, Minimum Interest
Rate, if any, and Maximum Interest Rate, if any and,
in each case, any other relevant terms (collectively,
the "Terms"). Each Global Security will be dated and
issued as of the date of its settlement. Each Global
Security will bear an Original Issue Date, which will
be (i) with respect to an original Global Security (or
any portion thereof), the Original Issue Date
specified in such Global Security and (ii) following a
consolidation of Global Securities, with respect to
the Global Security resulting from such consolidation,
the most recent Interest Payment Date to which
interest has been paid or duly provided for on the
predecessor Global Securities, regardless of the date
of authentication of such resulting Global Security.
No Global Security will represent (i) both Fixed Rate
and Floating Rate Book-Entry Notes, (ii) any
Certificated Note, or (iii) both Series A Notes and
Series B Notes.
Identification Numbers: The Company has arranged with the CUSIP Service Bureau
of Standard & Poor's Ratings Services (the "CUSIP
Service Bureau") for the reservation of two Series of
CUSIP numbers, one for Series A Notes and one for
Series B Notes, each of which series consists of
approximately 900 CUSIP numbers and relates to Global
Securities representing Book-Entry Notes and
book-entry medium-term notes issued by the Company
with other Series designations. The DTC Agents, the
Company and DTC have obtained from the CUSIP Service
Bureau a written list of such reserved CUSIP numbers.
The DTC Agents will assign CUSIP numbers to Global
Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the DTC
Agents have assigned to Global Securities. Each DTC
Agent will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain
unassigned to Global Securities, and, if it deems
necessary, the Company will reserve additional CUSIP
numbers for assignment to Global Securities. Upon
obtaining such additional CUSIP numbers, the Company
shall deliver a list of such additional CUSIP numbers
to either or both DTC Agents, as needed, and to DTC.
A-3
Registration: Global Securities will be issued only in fully
registered form without coupons. Each Global Security
will be registered in the name of CEDE & CO., as
nominee for DTC, on the securities register for the
Notes (the "Securities Register") maintained under the
Indentures. The beneficial owner of a Book-Entry Note
(or one or more indirect participants in DTC
designated by such owner) will designate one or more
participants in DTC (with respect to such Book-Entry
Note, the "Participants") to act as agent or agents
for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such beneficial owner in such Book-Entry
Note in the account of such Participants. The
ownership interest of such beneficial owner (or such
participant) in such Book-Entry Note will be recorded
through the records of such Participants or through
the separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Note.
Exchanges: Each DTC Agent may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of
consolidation (a copy of which shall be attached to
the resulting Global Security described below)
specifying (i) the CUSIP numbers of two or more
outstanding Global Securities that represent (A) Fixed
Rate Book-Entry Notes of the same Series and having
the same Terms and for which interest has been paid to
the same date or (B) Floating Rate Book-Entry Notes of
the same Series and having the same Terms and for
which interest has been paid to the same date, (ii) a
date, occurring at least thirty days after such
written notice is delivered and at least thirty days
before the next Interest Payment Date for such
Book-Entry Notes, on which such Global Securities
shall be exchanged for a single replacement Global
Security and (iii) a new CUSIP number to be assigned
to such replacement Global Security. Upon receipt of
such a notice, DTC will send to its participants
(including the DTC Agent for such replacement Global
Security) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, such DTC Agent
will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and such new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, such DTC Agent will exchange such
Global Securities for a single Global Security bearing
the new CUSIP number and a new Original Issue Date,
which shall be the last date to which interest has
been paid on the underlying
A-4
Book-Entry Notes, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with
CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. Upon such exchange, the DTC
Agent will ▇▇▇▇ the predecessor Global Security
"canceled", make appropriate entries in the DTC
Agent's records and destroy such canceled Global
Security in accordance with the terms of the Indenture
and deliver a certificate of destruction to the
Company. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed U.S $500,000,000 in
aggregate principal amount, one Global Security will
be authenticated and issued to represent each U.S.
$500,000,000 of principal amount of the exchanged
Global Securities and an additional Global Security
will be authenticated and issued to represent any
remaining principal amount of such Global Securities
(see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a date nine months
or more after the issue date for such Note, except in
the case of indexed Notes, for which the maturity may
be shorter. A Floating Rate Book-Entry Note will
mature only on an Interest Payment Date for such Note.
Any Note denominated in Japanese yen will mature on a
date not less than one year from the Original Issue
Date (as defined below) for such Note. Any Note
denominated in Pounds Sterling will mature on a date
not less than one year, nor more than five years,
after its Original Issue Date.
Denominations: Book-Entry Notes will be issued in principal amounts
of U.S.$1,000 or any amount in excess thereof that is
an integral multiple of U.S.$1,000. If Book-Entry
Notes are denominated in a Specified Currency other
than U.S. dollars, the denominations of such Notes
will be determined pursuant to the provisions of the
applicable Pricing Supplement. Global Securities will
be denominated in principal amounts not in excess of
U.S.$500,000,000 (or the equivalent thereof). If one
or more Book-Entry Notes having an aggregate principal
amount in excess of U.S.$500,000,000 (or the
equivalent thereof) would, but for the preceding
sentence, be represented by a single Global Security,
then one Global Security will be authenticated and
issued to represent each U.S.$500,000,000 principal
amount (or the equivalent thereof) of such Book-Entry
Note or Notes and an additional Global Security will
be authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities
representing such Book-Entry Note or Notes shall be
assigned the same CUSIP number.
A-5
Notice of Redemption Each DTC Agent will, with respect to the Notes for
Dates: which it is Trustee, give notice to DTC prior to each
Redemption Date (as specified in the Note) if any at
the time and in the manner set forth in the Letter.
Interest: General. Unless otherwise indicated in the applicable
Pricing Supplement, interest, if any, on each
Book-Entry Note will accrue from the Original Issue
Date (or such other date on which interest otherwise
begins to accrue, if different than the Original Issue
Date) of the Global Security representing such
Book-Entry Note for the first interest period or the
last date to which interest has been paid, if any, for
each subsequent interest period, on the Global
Security representing such Book-Entry Note, and will
be calculated and paid in the manner and on the
Interest Payment Dates described in such Book-Entry
Note and in the Prospectus (as defined in the Agency
Agreement), as supplemented by the applicable Pricing
Supplement. Each payment of interest on a Book-Entry
Note will include interest accrued to but excluding
the Interest Payment Date; provided that in the case
of Floating Rate Notes that reset daily or weekly,
interest payments will include interest accrued to but
excluding the next preceding Regular Record Date,
except that at stated Maturity, the interest payable
will include interest accrued to, but excluding, the
Maturity. Interest payable at the Maturity of a
Book-Entry Note will be payable to the Person to whom
the principal of such Note is payable. Standard &
Poor's Ratings Services will use the information
received in the pending deposit message described
under Settlement Procedure "C" below in order to
include the amount of any interest payable and certain
other information regarding the related Global
Security in the appropriate (daily or weekly) bond
report published by Standard & Poor's Ratings
Services.
Regular Record Dates. The Regular Record Date with
respect to any Interest Payment Date for a
Floating-Rate Note, Fixed Rate Note or Indexed Rate
Note shall be the date (whether or not a Business Day)
fifteen calendar days immediately preceding such
Interest Payment Date.
Payments of Principal Payment of Interest Only. Promptly after each Regular
and Interest: Record Date, the DTC Agent for each Global Security
will deliver to the Company and DTC a written notice
setting forth, by CUSIP number, the amount of interest
to be paid on each Global Security on the following
Interest Payment Date (other than an Interest Payment
Date coinciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable on each
Global Security on such Interest Payment Date by
reference to the appropriate (daily or weekly) bond
reports published by Standard & Poor's Ratings
Services. The Company will pay to the Trustee for the
Notes represented by such
A-6
Global Security the total amount of interest due on
such Interest Payment Date (other than at Maturity),
and such Trustee will pay such amount to DTC at the
times and in the manner set forth below under "Manner
of Payment". If any Interest Payment Date for a
Book-Entry Note is not a Business Day, the payment due
on such day shall be made on the next succeeding
Business Day and no interest shall accrue as a result
of such delayed payment.
Payments at Maturity or Upon Redemption. On or about
the first Business Day of each month, each DTC Agent
will, with respect to the Global Securities for which
it acts as DTC Agent, deliver to the Company, DTC and
the applicable Trustee a written list of principal and
interest to be paid on each Global Security maturing
either at Maturity or on a Redemption Date in the
following month. The DTC Agent for each Global
Security, the Company and DTC will confirm the amounts
of such principal and interest payments with respect
to each such Global Security on or about the fifth
Business Day preceding the Maturity Date or Redemption
Date of such Global Security. On or before such
Maturity or Redemption, the Company will pay to the
Trustee for the Notes represented by such Global
Security the principal amount of such Global Security,
together with interest due at such Maturity. Such
Trustee will pay such amount to DTC at the times and
in the manner set forth below under "Manner of
Payment". If any Maturity of a Global Security
representing Book-Entry Notes is not a Business Day,
the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue
on such payment for the period from and after such
Maturity Date or Redemption Date. Promptly after
payment to DTC of the principal and interest due on
the Maturity Date or on the Redemption Date of such
Global Security, the Trustee for such Global Security
will cancel and destroy such Global Security in
accordance with the applicable Indenture and deliver a
certificate of destruction to the Company.
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any Interest
Payment Date or at Maturity or upon redemption shall
be paid by the Company to the Trustee for the Notes
represented by such Global Security in immediately
available funds no later than 9:30 A.M. (New York City
time) on such date. The Company will make such payment
on such Global Securities by instructing such Trustee
to withdraw funds from an account maintained by the
Company with the DTC Agent for the Notes represented
by such Global Securities. The Company will confirm
any such instructions in writing to such Trustee.
Prior to 10:00 A.M. (New York City time) on the
Maturity Date or as soon as possible thereafter, such
Trustee will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously
A-7
specified by DTC) to an account at the Federal Reserve
Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of
principal (together with interest thereon) due on a
Global Security on such Maturity Date or Redemption
Date. On each Interest Payment Date (other than at
Maturity), interest payments shall be made to DTC, in
same day funds, in accordance with existing
arrangements between the relevant DTC Agent and DTC.
On each such date, DTC will pay, in accordance with
its SDFS operating procedures then in effect, such
amounts in funds available for immediate use to the
respective Participants in whose names the Book-Entry
Notes represented by such Global Securities are
recorded in the book-entry system maintained by DTC.
None of the Company (as issuer or as paying agent),
the Guarantor, the Trustee or such DTC Agent shall
have any direct responsibility or liability for the
payment by DTC to such Participants of the principal
of and interest on the Book-Entry Notes. If an issue
of Notes is denominated in a currency other than the
U.S. dollar, the Company will make payments of
principal and any interest in the currency in which
the Notes are denominated (the "foreign currency") or
in U.S. dollars. DTC has elected to have all such
payments of principal and interest in U.S. dollars
unless notified by any of its Participants through
which an interest in the Notes is held that it elects,
in accordance with and to the extent permitted by the
applicable Pricing Supplement and the Note, to receive
such payment of principal or interest in the foreign
currency. On or prior to the third Business Day after
the record date for payment of interest and twelve
days prior to the date for payment of principal, such
Participant shall notify DTC of (i) its election to
receive all, or the specified portion, of such payment
in the foreign currency and (ii) its instructions for
wire transfer of such payment to a foreign currency
account.
DTC will notify the applicable Trustee on or prior to
the fifth
A-8
Business Day after the record date for payment of
interest and ten days prior to the date for payment of
principal of the portion of such payment to be
received in the foreign currency and the applicable
wire transfer instructions, and the applicable Trustee
shall use such instructions to pay the Participants
directly. If DTC does not so notify the applicable
Trustee, it is understood that only U.S. dollar
payments are to be made. The applicable Trustee shall
notify DTC on or prior to the second Business Day
prior to payment date of the conversion rate to be
used and the resulting U.S. dollar amount to be paid
per U.S.$1,000 face amount. In the event that the
applicable Trustee's quotation to convert the foreign
currency into U.S. dollars is not available, the
applicable Trustee shall notify DTC's Dividend
Department that the entire payment is to be made in
the foreign currency. In such event, DTC will ask its
Participants for payment instructions and forward such
instructions to the applicable Trustee and the
applicable Trustee shall use such instructions to pay
the Participants directly.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding
payments and materials directly to the beneficial
owner of such Note.
Procedures upon Company Notice to Trustee regarding Exercise of
Company's Exercise of Optional Reset. Not less than 45 or more than 60 days
Optional Reset or before an Optional Reset Date as set forth in a
Optional Extension of Book-Entry Note, the Company will notify the Trustee
Maturity: for such Book-Entry Note whether it is exercising its
option to reset the interest rate or Spread or Spread
Multiplier, as the case may be, for such Book-Entry
Note, and if so, (i) the new interest rate or Spread
or Spread Multiplier, as the case may be, for such
Book-Entry Note during the period from such Optional
Reset Date to the next Optional Reset Date as set
forth in such Book-Entry Note or, if there is no such
next Optional Reset Date, to the Stated Maturity of
such Book-Entry Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for
redemption of such Book-Entry Note during such
Subsequent Interest Period, including the date or
dates on which or the period or periods during which
such redemption may occur during such Subsequent
Interest Period.
Company Notice to Trustee regarding Exercise of
Optional Extension of Maturity. If the Company elects
to exercise an option, as set forth in a Book-Entry
Note, to extend the Stated Maturity of such Note, it
will so notify the Trustee for such Book-Entry Note no
less than 45 or more than 60 days before the Stated
Maturity of such Book-Entry
A-9
Note, and will further indicate (i) the new Stated
Maturity; (ii) the interest rate or Spread or Spread
Multiplier, as the case may be, applicable to the
extension period; and (iii) the provisions, if any,
for redemption of such Book-Entry Note during such
extension period, including the date or dates on which
or the period or periods during which such redemption
may occur during such extension period.
Trustee Notice to DTC regarding Company's Exercise of
Optional Extension or Reset. Upon receipt of notice
from the Company regarding the Company's exercise of
either an optional extension of maturity or an
optional reset, the Trustee for the Book-Entry Note
will hand-deliver a notice to DTC not less than 40
days before the Optional Reset Date (in which case a
"Reset Notice") or the Stated Maturity (in which case
an "Extension Notice"), as the case may be, which
Reset Notice or Extension Notice shall identify such
Book-Entry Note by CUSIP number and shall contain the
information required by the terms of the Book-Entry
Note.
Trustee Notice to Company regarding Option to be
Repaid. If, after receipt of either a Reset Notice or
an Extension Notice, DTC exercises the option for
repayment by tendering the Global Security
representing the Book-Entry Note to be repaid as set
forth in such Note, the Trustee for such Book-Entry
Note shall give notice to the Company not less than 22
days before the Optional Reset Date or the old Stated
Maturity, as the case may be, of the principal amount
of Book-Entry Notes to be repaid on such Optional
Reset Date or old Stated Maturity, as the case may be.
Company Notice regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects to
revoke the interest rate or Spread or Spread
Multiplier provided for in the Reset Notice and
establish a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or extension
period, as the case may be, it shall, not less than 20
days before such Optional Reset Date or old Stated
Maturity, so notify the Trustee for the affected
Book-Entry Note. Such Trustee will immediately
thereafter notify DTC of the new interest rate or
Spread or Spread Multiplier applicable to such
Book-Entry Note.
Trustee Notice to Company regarding DTC Revocation of
Option to be Repaid. If, after DTC has tendered any
Book-Entry Notes for repayment pursuant to an
Extension Notice or an Optional Reset Notice, DTC then
revokes such tender for repayment, the Trustee for
such Book-Entry Notes shall give notice to the Company
not less than five days prior to the Stated Maturity
or Optional Reset Date, as the case may be, of such
revocation and of the principal amount of
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Book-Entry Notes for which tender for repayment has
been revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has been extended,
and on or before any Optional Reset Date, the Company
shall deposit with the applicable Trustee an amount of
money sufficient to pay the principal amount, plus
interest accrued to such old Stated Maturity or
Optional Reset Date, as the case may be, for all the
Book-Entry Notes or portions thereof for which such
Trustee serves as Trustee and which are to be repaid
on such old Stated Maturity or Optional Reset Date, as
the case may be. Such Trustee will use such money to
repay such Book-Entry Notes pursuant to the terms set
forth in such Notes.
Procedures upon Company Notice to Trustee regarding Company's Exercise
Company Notice to of Optional Redemption. At least 45 days prior to the
Trustee regarding date on which it intends to redeem a Book-Entry Note,
Company's Exercise of the Company will notify the Trustee for such
Optional Redemption: Book-Entry Note that it is exercising such option with
respect to such Book-Entry Note on such date.
Trustee Notice to DTC regarding Company's Exercise of
Optional Redemption. After receipt of notice that the
Company is exercising its option to redeem a
Book-Entry Note, the Trustee for such Book-Entry Note
will, at least 30 days before the redemption date for
such Book-Entry Note, hand deliver to DTC a notice
identifying such Book-Entry Note by CUSIP number and
informing DTC of the Company's exercise of such option
with respect to such Book-Entry Note.
Deposit of Redemption Price. On or before any
redemption date, the Company shall deposit with the
applicable Trustee an amount of money sufficient to
pay the redemption price, plus interest accrued to
such redemption date, for all the Book-Entry Notes or
portions thereof for which such Trustee serves as
Trustee and which are to be repaid on such redemption
date. Such Trustee will use such money to repay such
Book-Entry Notes pursuant to the terms set forth in
such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid. Upon
and Interest Upon receipt of notice of exercise of the option for
Exercise of Optional repayment and the Global Securities representing the
Repayment (Except Book-Entry Notes so to be repaid as set forth in such
Pursuant to Company's Notes, the Trustee for such Book-Entry Notes shall
Exercise of Optional (unless such notice was received pursuant to the
Reset or Optional Company's exercise of an optional reset or an optional
Extension): extension of maturity, in each of which cases the
relevant procedures set forth above are to be
followed) give notice to the Company not less than 20
days prior to each Optional Repayment Date of such
Optional Repayment Date and of the principal amount of
Book-Entry Notes to be repaid on such
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Optional Repayment Date.
Deposit of Repayment Price. On or prior to any
Optional Repayment Date, the Company shall deposit
with the applicable Trustee an amount of money
sufficient to pay the optional repayment price, and
accrued interest thereon to such date, of all the
Book-Entry Notes or portions thereof which are to be
repaid on such date. Such Trustee will use such money
to repay such Book-Entry Notes pursuant to the terms
set forth in such Notes.
Procedure for Rate The Company and the Agent will discuss from time to
Setting and Posting: time the aggregate principal amount of, the issuance
price of, and the interest rates to be borne by,
Book-Entry Notes that may be sold as a result of the
solicitation of orders by the Agent. If the Company
decides to set prices of, and rates borne by, any
Book-Entry Notes in respect of which the Agent is to
solicit orders (the setting of such prices and rates
to be referred to herein as "posting") or if the
Company decides to change prices or rates previously
posted by it, it will promptly advise the Agent of the
prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company, the Agent
Rejection of Orders: will advise the Company promptly by telephone of all
orders to purchase Book-Entry Notes received by the
Agent, other than those rejected by it in whole or in
part in the reasonable exercise of its discretion.
Unless otherwise agreed by the Company and the Agent,
the Company has the right to accept orders to purchase
Book-Entry Notes and may reject any such orders in
whole or in part.
Preparation of Pricing If any order to purchase a Book-Entry Note is accepted
Supplement: by or on behalf of the Company, the Company will
prepare a pricing supplement (a "Pricing Supplement")
reflecting the terms of such Book-Entry Note, will
file ten copies thereof with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act, will deliver such number of
copies thereof to the Agent as the Agent shall request
and will, on the Agent's behalf, file five copies of
such Pricing Supplement with the National Association
of Securities Dealers, Inc. (the "NASD"). The Agent
will cause a Prospectus and such Pricing Supplement to
be delivered to the purchaser of such Book-Entry Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing Supplement
to the Prospectuses prior to their use. Outdated
Pricing Supplements and the Prospectuses to which they
are attached (other than those retained for files)
will be destroyed.
Copies of the appropriate number of Pricing
Supplements shall be delivered to the Agent at the
following address by 11:00 A.M. (New
▇-▇▇
▇▇▇▇ ▇▇▇▇ time) on the Business Day following
the acceptance of an offer by or on behalf of
the Company: to Citigroup Global Markets
Inc., Prospectus Department, Brooklyn Army
Terminal, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, with a copy to
Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
MTN Program Manager.
Suspension of Subject to the representations, warranties
Solicitation; and covenants of the Company and the
Amendment or Guarantor contained in the Agency Agreement,
Supplement: the Company may instruct the Agent to suspend
at any time, for any period of time or
permanently, the solicitation of orders to
purchase Book-Entry Notes. Upon receipt of
such instructions, the Agent will forthwith
suspend solicitation until such time as the
Company has advised it that such solicitation
may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly advise
the Agent, the Trustees and the DTC Agents
whether such orders may be settled and
whether copies of the Prospectus as in effect
at the time of the suspension, together with
the appropriate Pricing Supplement, may be
delivered in connection with the settlement
of such orders. The Company will have the
sole responsibility for such decision and for
any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the Prospectus and a Pricing
Supplement relating to a Book-Entry Note must
accompany or precede the earliest of any
written offer of such Book-Entry Note,
confirmation of the purchase of such
Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice
of a change in the terms of the Book-Entry
Notes is received by the Agent between the
time an order for a Book-Entry Note is placed
and the time written confirmation thereof is
sent by the Agent to a customer or his agent,
such confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting
forth the terms in effect when the order was
placed. The Agent will deliver a Prospectus
and Pricing Supplement as herein described
with respect to each Book-Entry Note sold by
it. The Company will make such delivery if
such Book-Entry Note is sold directly by the
Company to a purchaser (other than the
Agent).
Confirmation: For each order to purchase a Book-Entry Note
solicited by the Agent and accepted by or on
behalf of the Company, the Agent will issue a
confirmation to the purchaser, with a copy to
the Company, setting forth the details set
forth above and delivery and payment
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instructions.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such
Book-Entry Note shall constitute "settlement"
with respect to such Book-Entry Note, and the
date of such settlement, the "Settlement
Date". All orders accepted by the Company
will be settled on the third Business Day
next succeeding the date of acceptance
pursuant to the timetable for settlement set
forth below unless the Company and the
purchaser agree to settlement on another day
which shall be no earlier than the Business
Day succeeding the date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company to or
through the Agent, except pursuant to a Terms
Agreement, shall be as follows:
A. The Agent will advise the Company by
telephone (or by facsimile or other
acceptable written means) that such Note is a
Book-Entry Note and of the following
settlement information:
1. Principal or face amount.
2. Series.
3. Stated Maturity.
4. In the case of a Fixed Rate
Book-Entry Note, the interest rate
and reset, redemption, repayment
and extension provisions (if any)
or, in the case of a Floating Rate
Book-Entry Note, the Base Rate,
Initial Interest Rate (if known at
such time) Interest Reset Period,
Interest Reset Dates, Index
Maturity, Spread and/or Spread
Multiplier (if any), Minimum
Interest Rate (if any), Maximum
Interest Rate (if any) and reset,
redemption, repayment and extension
provisions (if any).
5. Interest Payment Dates and the
Interest Payment Period.
6. Amortization provisions, if any.
7. Settlement date and Issue Date, if
different.
8. Specified currency.
A-14
9. Denominated currency, Indexed
Currency, Base Exchange Rate, and
the Determination Date, if
applicable.
10. Price.
11. Agent's commission, determined as
provided in the Agency Agreement.
12. Whether, in the case of Series A
Notes, the Notes will have a
Survivor's Option.
13. Whether such Book-Entry Note is an
OID Note and, if so, the total
amount of OID, the yield to
maturity and the initial accrual
period OID.
14. Any other terms necessary to
describe the Book-Entry Note.
B. The Company will advise the relevant DTC
Agent by telephone (confirmed in writing at
any time on the same date), written
telecommunication or electronic transmission
of the information set forth in Settlement
Procedure "A" above. Each such communication
by the Company shall constitute a
representation and warranty by the Company to
the DTC Agent for such Note, the Trustee for
such Note and the Agent that (i) such Note is
then, and at the time of issuance and sale
thereof will be, duly authorized for issuance
and sale by the Company and (ii) such Note,
and the Global Security representing such
Note, will conform with the terms of the
Indenture for such Note. The DTC Agent will
then assign a CUSIP number to the Global
Security representing such Book-Entry Note
and notify the Agent and the Company by
telephone (confirmed in writing at any time
on the same date), written telecommunication
or electronic transmission of such CUSIP
number as soon as practicable.
C. Such DTC Agent will enter a pending deposit
message through DTC's Participant Terminal
System providing the following settlement
information to DTC, Standard & Poor's Ratings
Services, Interactive Data Corporation, the
Agent and, upon request, the Trustee for such
Notes:
1. The information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate
Book-Entry Note or a
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Floating Rate Book-Entry Note.
3. The Initial Interest Payment Date
for such Book-Entry Note, number of
days by which such date succeeds
the related Regular Record Date and
amount of interest payable on such
Interest Payment Date.
4. The Interest Payment Period.
5. The CUSIP number of the Global
Security representing such
Book-Entry Note.
6. The participant account numbers
maintained by DTC on behalf of such
Trustee and such Agent.
7. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. To the extent the Company has not already
done so, the Company will deliver to the
Trustee for such Notes a Global Security in a
form that has been approved by the Company,
the Agent and such Trustee.
E. Such Trustee will complete such Book-Entry
Note, stamp the appropriate legend, as
instructed by DTC, if not already set forth
thereon, and authenticate the Global Security
representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to such
DTC Agent's participant account at DTC.
G. Such DTC Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such
Book-Entry Note to such DTC Agent's
participant account and credit such
Book-Entry Note to the Agent's participant
account and (ii) debit the Agent's settlement
account and credit such DTC Agent's
settlement account for an amount equal to the
price of such Book-Entry Note less the
Agent's commission. The entry of such a
deliver order shall constitute a
representation and warranty by such DTC Agent
to DTC that (i) the Global Security
representing such Book-Entry Note has been
issued and authenticated and (ii) such DTC
Agent is holding such Global Security
pursuant to the Medium Term Note Certificate
Agreement between such DTC Agent and DTC.
A-16
H. Unless the Agent is purchasing such Note as
principal, the Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Book-Entry Note to the Agent's
participant account and credit such
Book-Entry Note to the participant accounts
of the Participants with respect to such
Book-Entry Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of the Agent
for an amount equal to the price of such
Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
J. Such DTC Agent will, upon receipt of funds
from the Agent in accordance with Settlement
Procedure "G", credit to an account of the
Company maintained at such DTC Agent funds
available for immediate use in the amount
transferred to such DTC Agent in accordance
with Settlement Procedure "G".
K. Unless the Agent is purchasing such
Book-Entry Note as principal, the Agent will
confirm the purchase of such Book-Entry Note
to the purchaser either by transmitting to
the Participants with respect to such
Book-Entry Note a confirmation order or
orders through DTC's institutional delivery
system or by mailing a written confirmation
to such purchaser.
L. Monthly, each DTC Agent will send to the
Company a statement setting forth the
principal amount of Registered Notes
Outstanding as of the date of such statement
and setting forth a brief description of any
sales of which the Company has advised such
DTC Agent but which have not yet been
settled.
Settlement Procedures For sales by the Company of Book-Entry Notes
Timetable: solicited by the Agent and accepted by the
Company (except pursuant to a Terms
Agreement) for settlement on the first
Business Day after the sale date, Settlement
Procedures "A" through "K" set forth above
shall be completed as soon as possible but
not later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
A-17
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no later
than 11:00 A.M., 12:00 Noon and 2:00 P.M.,
respectively, on the first Business Day after
the sale date. If the Initial Interest Rate
for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement
Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as
soon as such rate has been determined but no
later than 12:00 Noon and 2:00 P.M.,
respectively, on the Business Day before the
settlement date. Settlement Procedure "I" is
subject to extension in accordance with any
extension of Fedwire closing deadlines and in
the other events specified in SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the DTC Agent for
such Book-Entry Note, after receiving notice
from the Company or the Agent, will deliver
to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect
by no later than 2:00 P.M. on the Business
Day immediately preceding the scheduled
settlement date.
Failure to Settle: If settlement of a Book-Entry Note is
rescheduled and the DTC Agent for such
Book-Entry Note has not entered an SDFS
deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "G",
after receiving notice from the Company or
the Agent, such DTC Agent shall deliver to
DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal
message instructing DTC to debit such
Book-Entry Note to such DTC Agent's
participant account. DTC will process the
withdrawal message, provided that such DTC
Agent's participant account contains a
principal amount of the Global Security
representing such Book-Entry Note that is at
least equal to the principal amount to be
debited. If a withdrawal message is processed
with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee
for the Notes represented by such Global
Security will ▇▇▇▇ such Global Security
"canceled", make appropriate entries in its
records and destroy such canceled Global
Security in accordance with the applicable
Indenture and deliver a certificate of
destruction to the
A-18
Company. The CUSIP number assigned to such
Global Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled
and not immediately reassigned.
If a withdrawal message is processed with
respect to one or more, but not all, of the
Book-Entry Notes represented by a Global
Security, the DTC Agent for such Book-Entry
Notes will exchange such Global Security for
two Global Securities, one of which shall
represent such Book-Entry Notes and shall be
canceled immediately after issuance and the
other of which shall represent the other
Book-Entry Notes previously represented by
the surrendered Global Security and shall
bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note
is not timely paid to the Participants with
respect to such Book-Entry Note by the
beneficial purchaser thereof (or a Person,
including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through
DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement
Procedures "H" and "G", respectively.
Thereafter, the DTC Agent for such Book-Entry
Note will deliver the withdrawal message and
take the related actions described in the
preceding paragraph. If such failure shall
have occurred for any reason other than a
default by the Agent in the performance of
its obligations hereunder and under the
Agency Agreement, then the Company will
reimburse the Agent for the loss of the use
of the funds during the period when they were
credited to the account of the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating procedures
then in effect. In the event of a failure to
settle with respect to one or more, but not
all, of the Book-Entry Notes to have been
represented by a Global Security, the DTC
Agent for such Book-Entry Note or Notes will
provide, in accordance with Settlement
Procedures "E" and "G", for the
authentication and issuance of a Global
Security representing the other Book-Entry
Notes to have been represented by such Global
Security and will make appropriate entries in
its records.
Trustees Not to Risk Nothing herein shall be deemed to require
Funds: either Trustee to risk or expend its own
funds in connection with any payment to the
Company, DTC, the Agent or the purchaser, it
being understood by all parties that payments
made by either Trustee to the Company, DTC,
the Agent or the purchaser shall be made only
to the extent that funds are provided to such
Trustee for such purpose.
Authenticity of The Company will cause each of the Trustees
to furnish the Agent
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Signatures: from time to time with the specimen
signatures of each of such Trustee's
officers, employees or agents who has been
authorized by such Trustee to authenticate
Book-Entry Notes, but the Agent will not have
any obligation or liability to the Company or
the Trustee in respect of the authenticity of
the signature of any officer, employee or
agent of the Company or such Trustee on any
Book-Entry Note.
Payment of Expenses: The Agent shall forward to the Company, on a
monthly basis, a statement of the
out-of-pocket expenses incurred by such Agent
during that month that are reimbursable to it
pursuant to the terms of the Agency
Agreement. The Company will remit payment to
the Agent currently on a monthly basis.
Advertising Costs: The Company will determine with
the Agents the amount of advertising
that may be appropriate in soliciting
offers to purchase the Book-Entry Notes.
Advertising expenses will be paid by the
Company.
PART II
Administrative Procedures for Certificated Notes
Each Trustee will serve as registrar and transfer agent in
connection with the Certificated Notes for which it serves as Trustee.
Issuance: Each Certificated Note will be dated and
issued as of the date of its authentication
by the applicable Trustee. Each Certificated
Note will bear an Original Issue Date, which
will be (i) with respect to an original
Certificated Note (or any portion thereof),
its original issuance date (which will be the
settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed,
lost or stolen Certificated Note, the
Original Issue Date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Maturities: Each Certificated Note will mature on a date
nine months or more after the issue date for
such Note, except in the case of indexed
Notes, for which the maturity may be shorter.
A Floating Rate Certificated Note will mature
only on an Interest Payment Date for such
Note. Any Note denominated in Japanese yen
will mature on a date not less than one year
from the Original Issue Date (as defined
below) for such Note. Any Note denominated in
Pounds Sterling will mature on a date not
less than one year, nor more than five years,
A-20
after its Original Date.
Currency: The Specified Currency for a Certificated
Note shall be as set forth therein and in the
applicable Pricing Supplement.
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a minimum
of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. The
authorized denominations of Certificated
Notes denominated in a Specified Currency
other than U.S. dollars shall be determined
as set forth in the applicable Pricing
Supplement.
Interest: General. Unless otherwise indicated in the
applicable Pricing Supplement, interest, if
any, on each Certificated Note will accrue
from the Original Issue Date (or such other
date on which interest otherwise begins to
accrue (if different from the Original Issue
Date)) of such Note for the first interest
period or the last date to which interest has
been paid, if any, for each subsequent
interest period, on such Note, and will be
calculated and paid in the manner and on the
dates described in such Note and in the
Prospectus, as supplemented by the applicable
Pricing Supplement. Unless otherwise
specified therein, each payment of interest
on a Certificated Note will include interest
accrued to but excluding the Interest Payment
Date (provided that, in the case of
Certificated Notes which reset daily or
weekly, interest payments will include
accrued interest to and including the next
preceding Regular Record Date), except that
at stated Maturity, the interest payable will
include interest accrued to, but excluding,
the stated Maturity (other than a Maturity of
a Fixed Rate Certificated Note occurring on
the 31st day of a month, in which case such
payment of interest will include interest
accrued to but excluding the 30th day of such
month or the last day of the month in the
case of February).
Regular Record Dates. The Regular Record
Dates with respect to any Interest Payment
Date for a Fixed Rate Note, Floating Rate
Note or Indexed Rate Note shall be the date
(whether or not a Business Day) fifteen
calendar days immediately preceding such
Interest Payment Date.
Payments of Interest: The applicable Trustee will pay the principal
amount of each Certificated Note at Maturity
or upon redemption upon presentation and
surrender of such Note. Such payment,
together with payment of interest due at
Maturity or upon redemption of such Note,
will be made in funds available for immediate
use by such Trustee or paying agent and in
turn by the holder of such Note. Certificated
Notes presented to such Trustee or paying
agent at Maturity or upon redemption for
payment will be canceled and destroyed by
such Trustee or paying agent, and a
certificate of destruction will be
A-21
delivered to the Company. All interest payments on a
Certificated Note (other than interest due at
Maturity or upon redemption) will be made by check
drawn on such Trustee and mailed by such Trustee to
the person entitled thereto as provided in such Note
and the Indenture; provided, however, that the
holder of U.S.$10,000,000 or more of Notes having
the same Interest Payment Dates will, upon written
request prior to the Regular Record Date in respect
of an Interest Payment Date, be entitled to receive
payment by wire transfer of immediately available
funds. Following each Regular Record Date, such
Trustee or paying agent will furnish the Company
with a list of interest payments to be made on the
following Interest Payment Date for each
Certificated Note and in total for all Certificated
Notes. Interest at Maturity or upon redemption will
be payable to the person to whom the payment of
principal is payable. Such Trustee or paying agent
will provide monthly to the Company lists of
principal and interest, to the extent ascertainable,
to be paid on Certificated Notes maturing or to be
redeemed in the next month.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Certificated Note will be
determined and withheld by the applicable Trustee.
The Company will be responsible for withholding
taxes on interest paid on Certificated Notes as
required by applicable law.
If any interest Payment Date for or the Maturity of
a Certificated Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue
on account of such delayed payment.
Procedure for Rate The Company and the Agent will discuss from
Setting and Posting: time to time the aggregate principal amount
of, the issuance price of, and the interest rates to
be borne by, Notes that may be sold as a result of
the solicitation of orders by the Agent If the
Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agent is to
solicit orders (the setting of such prices and rates
to be referred to herein as "posting") or if the
Company decides to change prices or rates previously
posted by it, it will promptly advise the Agent of
the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company,
Rejection of Orders: the Agent will advise the Company promptly by
telephone of all orders to purchase Certificated
Notes received by the Agent, other than those
rejected by it in whole or in part in the reasonable
exercise of its discretion. Unless otherwise agreed
by the Company and the Agent, the Company has the
sole right to accept orders to purchase Certificated
Notes and may reject any such orders in whole or in
part. Before accepting any order to purchase a
Certificated Note to be settled in
A-22
less than three Business Days, the Company shall
verify that the Trustee for such Certificated Note
will have adequate time to prepare and authenticate
such Note.
Preparation of Pricing If any order to purchase a Certificated Note
Supplement: is accepted by or on behalf of the Company,
the Company will prepare a Pricing Supplement
reflecting the terms of such Certificated
Note, will file ten copies thereof with the
Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act, will
deliver such number of copies thereof to the
Agent as the Agent shall request and will, on
the Agent's behalf, file five copies of the
Pricing Supplement with the NASD. The Agent
will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser
of such Certificated Note.
Copies of the appropriate number of
Pricing Supplements shall be delivered
to the Agent at the following addresses
by 11:00 A.M. (New York City time) on
the Business Day following the
acceptance of an offer by or on behalf
of the Company: to Citigroup Global
Markets Inc., Prospectus Department,
Brooklyn Army Terminal, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, with a
copy to Citigroup Global Markets Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention: MTN Program Manager.
In each instance that a Pricing
Supplement is prepared, the Presenting
Agent will affix the Pricing Supplement
to Prospectuses prior to their use.
Outdated Pricing Supplements and the
Prospectuses to which they are attached
(other than those retained for files)
will be destroyed.
Suspension of Subject to the representations, warranties
Solicitation; and covenants of the Company and the
Amendment or Guarantor contained in the Agency Agreement,
Supplement: the Company may instruct the Agent to suspend
at any time for any period of time or
permanently, the solicitation of orders to
purchase Certificated Notes. Upon receipt of
such instructions, the Agent will forthwith
suspend solicitation until such time as the
Company has advised them that such
solicitation may be resumed.
In the event that at the time the
Company suspends solicitation of
purchases there shall be any orders
outstanding for settlement, the Company
will promptly advise the Agent and the
Trustee for such Certificated Notes
whether such orders may be settled and
whether copies of the Prospectus as in
effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in
connection with the settlement of such
orders. The Company will have the sole
responsibility for such decision and for
any arrangements that may be made in the
event that the Company determines that
such orders may not be settled or that
copies of such
A-23
Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the Prospectus and a Pricing
Supplement relating to a Certificated Note
must accompany or precede the earliest of any
written offer of such Certificated Note,
confirmation of the purchase of such
Certificated Note and payment for such
Certificated Note by its purchaser. If notice
of a change in the terms of the Certificated
Notes is received by the Agent between the
time an order for a Certificated Note is
placed and the time written confirmation
thereof is sent by the Agent to a customer or
his agent, such confirmation shall be
accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect
when the order was placed. The Agent will
deliver a Prospectus and Pricing Supplement
as herein described with respect to each
Certificated Note sold by it. The Company
will make such delivery if such Certificated
Note is sold directly by the Company to a
purchaser (other than the Agent).
Confirmation: For each order to purchase a
Certificated Note solicited by the Agent
and accepted by or on behalf of the
Company, the Agent will issue a
confirmation to the purchaser, with a
copy to the Company, setting forth the
details set forth above and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered to
the Agent and the Agent's delivery of such
Certificated Note against receipt of
immediately available funds shall, with
respect to such Certificated Note, constitute
"settlement". All orders accepted by the
Company will be settled on the fifth Business
Day next succeeding the date of acceptance
pursuant to the timetable for settlement set
forth below, unless the Company and the
purchaser agree to settlement on another day
which shall be no earlier than the next
Business Day following the date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company to or
through the Agent, as agent (except pursuant
to a Terms Agreement), shall be as follows:
A. The Agent will advise the Company by
telephone or by facsimile transmission or
other acceptable written means) that such
Note is a Certificated Note and of the
following settlement information, in time for
the Trustee for such Certificated Note to
prepare and authenticate the required Note:
1. Name in which such Certificated
Note is to be registered
("Registered Owner").
A-24
2. Address of the Registered Owner and
address for payment of principal
and interest.
3. Taxpayer identification number of
the Registered Owner (if
available).
4. Principal or face amount.
5. Series.
6. Stated Maturity.
7. In the case of a Fixed Rate
Certificated Note, the Interest
Rate and reset provisions (if any)
or, in the case of a Floating Rate
Certificated Note, the Base Rate,
Initial Interest Rate (if known at
such time), Interest Reset Period,
Interest Reset Dates, Index
Maturity, Spread and/or Spread
Multiplier (if any), Minimum
Interest Rate (if any), Maximum
Interest Rate (if any) and reset
provisions (if any).
8. Interest Payment Dates and the
Interest Payment Period.
9. Specified Currency.
10. Denominated Currency, Indexed
Currency, Base Exchange Rate and
the Determination Date, if
applicable.
11. Redemption, repayment, amortization
or extension provisions, if any.
12. Settlement date.
13. Price (including currency).
14. Agent's commission, if any,
determined as provided in the
Agency Agreement.
15. Whether such Certificated Note an
OID Note, and, if so, the total
amount of OID and the yield to
maturity.
16. Any other terms necessary to
describe the Certificated Note.
B. The Company will advise the relevant Trustee
by telephone, (confirmed in writing at any
time on the sale date) written
telecommunication or electronic transmission
of the
A-25
information set forth in Settlement Procedure
"A" above and the name of the Presenting
Agent.
C. The Company will deliver to the relevant
Trustee a pre-printed four-ply packet for
such Certificated Note, which packet will
contain the following documents in forms that
have been approved by Company, the Agents and
the Trustee:
1. Certificated Note with customer
confirmation.
2. Stub One -- For Trustee.
3. Stub Two -- For Agent.
4. Stub Three -- For the Company.
D. The relevant Trustee will complete such
Certificated Note and will authenticate such
Certificated Note and deliver it (with the
confirmation) and Stubs One and Two to the
Agent, and the Agent will acknowledge receipt
of the Note by stamping or otherwise marking
Stub One and returning it to such Trustee.
Such delivery will be made only against such
acknowledgment of receipt and evidence that
instructions have been given by the Agent for
payment to such account as the Company shall
have specified in funds available for
immediate use, of an amount equal to the
price of such Certificated Note less the
Agent's commission. In the event that the
instructions given by the Agent for payment
to the account of the Company are revoked,
the Company will as promptly as possible wire
transfer to the account of the Agent an
amount of immediately available funds equal
to the amount of such payment made.
E. Unless the Agent purchased the Note as
Principal, the Agent will deliver such
Certificated Note (with the confirmation) to
the customer against payment in immediately
payable funds. The Agent will obtain the
acknowledgment of receipt of such
Certificated Note by retaining Stub Two.
F. The relevant Trustee will send Stub Three to
the Company by first-class mail.
Settlement Procedures For orders of Certificated Notes solicited by
Timetable: the Agent, as agent, and accepted by the
Company, Settlement Procedures "A" through
"F" set forth above shall be completed on or
before the respective times (New York City
time) set forth below:
A-26
Settlement
Procedure Time
---------- ----
A 2:00 P.M. on the day before settlement
B On the day two Business Days before settlement date.
C 2:15 P.M. two Business Days before settlement
D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Procedures upon Company Notice to Trustee regarding Exercise
Company's Exercise of of Optional Reset. Not less than 45 or more
Optional Reset or than 60 days before an Optional Reset Date as
Optional Extension of set forth in a Certificated Note, the Company
Maturity: will notify the Trustee for such Certificated
Note whether it is exercising its option to
reset the interest rate or Spread or Spread
Multiplier, as the case may be, for such
Certificated Note, and if so, (i) the new
interest rate or Spread or Spread Multiplier,
as the case may be, for such Certificated
Note during the period from such Optional
Reset Date to the next Optional Reset Date as
set forth in such Certificated Note or, if
there is no such next Optional Reset Date, to
the Stated Maturity of such Certificated Note
(the "Subsequent Interest Period"); and (ii)
the provisions, if any, for redemption of
such Certificated Note during such Subsequent
Interest Period, including the date or dates
on which or the period or periods during
which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Certificated Note, to extend the Stated Maturity of
such Note, it will so notify the Trustee for such
Certificated Note not less than 45 or more than 60
days before the Stated Maturity of such Certificated
Note, and will further indicate (i) the new Stated
Maturity; (ii) the interest rate or Spread or Spread
Multiplier, as the case may be, applicable to the
extension period; and (iii) the provisions, if any,
for redemption of such Certificated Note during such
extension period, including the date or dates on
which or the period or periods during which such
redemption may occur during such extension period.
Trustee Notice to Holders regarding Company's
Exercise of Optional Extension or Reset. Upon
receipt of notice from the Company regarding the
Company's exercise of either an optional extension
of maturity or an optional reset, the Trustee for
the Certificated Note will mail a notice, first
class, postage prepaid, to the Holder of such
Certificated Note not less than 40 days before the
Optional Reset Date (in which case a "Reset Notice")
or the Stated Maturity (in
A-27
which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall
contain the information required by the terms of the
Certificated Note.
Trustee Notice to Company regarding Option to be
Repaid. If, after receipt of either a Reset Notice
or an Extension Notice, any Holder of a Certificated
Note exercises the option for repayment by tendering
the Certificated Note to be repaid as set forth in
such Note, the Trustee for such Certificated Note
shall give notice to the Company not less than 22
days before the Optional Reset Date or the old
Stated Maturity, as the case may be, of the
principal amount of Certificated Notes to be repaid
on such Optional Reset Date or old Stated Maturity,
as the case may be.
Company Notice regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the interest rate or Spread or Spread
Multiplier provided for in the Reset Notice and
establish a higher interest rate or Spread or Spread
Multiplier for an Optional Reset Period or extension
period, as the case may be, it shall, not less than
20 days before such Optional Reset Date or old
Stated Maturity, so notify the Trustee for the
affected Certificated Note. The Trustee will
immediately thereafter notify the Holder of such
Certificated Note, by first class mail, postage
prepaid, of the new interest rate or Spread or
Spread Multiplier applicable to such Certificated
Note.
Trustee Notice to Company regarding Holder
Revocation of Option to be Repaid. If, after the
Holder of a Certificated Note has tendered such Note
for repayment pursuant to an Extension Notice or an
Optional Reset Notice, such Holder then revokes such
tender for repayment, the Trustee for such
Certificated Note shall give notice to the Company
not less than five days prior to the Stated Maturity
or Optional Reset Date, as the case may be, of such
revocation and of the principal amount of
Certificated Notes for which tender for repayment
has been revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has been
extended, and on or before any Optional Reset Date,
the Company shall deposit with such Trustee an
amount of money sufficient to pay the principal
amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may be,
for all the Certificated Notes or portions thereof
for which such Trustee serves as Trustee and which
are to be repaid on such old Stated Maturity or
Optional Reset Date, as the case may be. Such
Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth
in such Notes.
A-28
Procedures upon Company Notice to Trustee regarding Exercise of
Company's Exercise of Optional Redemption. At least 45 days prior
Optional Redemption: to the date on which it intends to redeem a
Certificated Note, the Company will notify
the Trustee for such Certificated Note that
it is exercising such option with respect to
such Note on such date.
Trustee Notice to Holders regarding Company's
Exercise of Optional Redemption. After receipt of
notice that the Company is exercising its option to
redeem a Certificated Note, the Trustee for such
Certificated Note will, at least 30 days before the
redemption date for such Certificated Note, mail a
notice, first class, postage prepaid, to the Holder
of such Certificated Note, informing such Holder of
the Company's exercise of such option with respect
to such Certificated Note.
Payments of Principal Trustee Notice to Company of Option to be
and Interest Upon Repaid. Upon receipt of notice of exercise of
Exercise of Optional the option for repayment and the Certificated
Repayment (Except Notes to be repaid as set forth in such
Pursuant to Company's Notes, the Trustee for such Certificated
Exercise of Optional Notes shall (unless such notice was received
Reset or Optional pursuant to the Company's exercise of an
Extension): optional reset or an optional extension of
maturity, in each of which cases the relevant
procedures set forth above shall be followed)
give notice to the Company not less than 20
days prior to each Optional Repayment Date of
such Optional Repayment Date and of the
principal amount of Certificated Notes to be
repaid on such Optional Repayment Date.
Failure to Settle: If a purchaser fails to accept delivery of
and make payment for any Certificated Note,
the Agent will notify the Company and the
applicable Trustee by telephone and return
such Note to the applicable Trustee. Upon
receipt of such notice, the Company will
immediately wire transfer to the account of
the Agent an amount equal to the amount
previously credited thereto in respect of
such Note. Such wire transfer will be made on
the settlement date, if possible, and in any
event not later than the Business Day
following the settlement date. If the failure
shall have occurred for any reason other than
a default by the Agent in the performance of
its obligations hereunder and under the
Agency Agreement with the Company, then the
Company will reimburse the Agent or the
applicable Trustee, as appropriate, on an
equitable basis for its loss of the use of
the funds during the period when they were
credited to the account of the Company.
Immediately upon receipt of the Certificated
Note in respect of which such failure
occurred, the applicable Trustee will ▇▇▇▇
such Note "canceled", make appropriate
entries in the applicable Trustee's records
and send such Note to the Company.
Trustees Not to Risk Nothing herein shall be deemed to require
either Trustee to risk or expend its own
funds in connection with any payment to the
A-29
Funds: Company, the Agent or the purchaser, it
being understood by all parties that payments
made by either Trustee to the Company, the
Agent or the purchaser shall be made only to
the extent that funds are provided to such
Trustee for such purpose.
Authenticity of The Company will cause each Trustee to
Signatures: furnish the Agent from time to time with the
specimen signatures of each of such Trustee's
officers, employees or agents who has been
authorized by such Trustee to authenticate
Certificated Notes, but the Agent will not
have any obligation or liability to the
Company or a Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or a Trustee
on any Certificated Note.
Payment of Expenses: The Agent shall forward to the Company, on a
monthly basis, a statement of the
out-of-pocket expenses incurred by the Agent
during that month that are reimbursable to it
pursuant to the terms of the Agency
Agreement. The Company will remit payment to
the Agent currently on a monthly basis.
Advertising Costs: The Company will determine with the Agent the
amount of advertising that may be appropriate
in soliciting orders to purchase the
Certificated Notes. Advertising expenses will
be paid by the Company.
A-30
EXHIBIT B
CITIGROUP FUNDING INC.
Euro Medium-Term Note Administrative Procedures
(For Medium Term Notes, Series A and Series B, in Bearer Form)
June 1, 2005
The Medium-Term Notes, Series A (the "Series A Notes") and the
Medium-Term Notes, Series B (the "Series B Notes," and, together with the Series
A Notes, the "Notes") of Citigroup Funding Inc. (the "Company"), fully and
unconditionally guaranteed by (the "Guarantee") Citigroup Inc. (the
"Guarantor"), are to be offered on a continuing basis. Citigroup Global Markets
Limited has agreed to act as agent in the solicitation of Notes issuable in
bearer form (the "Bearer Notes"), which will be represented by Global Securities
that may be exchanged for individual Bearer Notes. (The term "Agent" as used in
these Administrative Procedures means Citigroup Global Markets Limited). The
Agent will not be obligated to purchase Notes for its own account. The Bearer
Notes are being sold pursuant to a Global Selling Agency Agreement among the
Company, the Guarantor, and the agents named therein (including the Agent) dated
the date hereof (the "Agency Agreement"). The Notes have been registered with
the Securities and Exchange Commission (the "Commission"). JPMorgan Chase Bank,
N.A. is the trustee under the Indenture, dated as of June 1, 2005, covering the
Series A Notes (the "Senior Debt Indenture"). Deutsche Bank Trust Company
Americas is the trustee (together with JPMorgan Chase Bank, N.A., the
"Trustees") under the Indenture, dated as of June 1, 2005, covering the Series B
Notes (the "Subordinated Debt Indenture," and, together with the Senior Debt
Indenture, the "Indentures"). The Series A Notes will constitute part of the
senior debt of the Company and will rank equally with all other unsecured and
unsubordinated debt of the Company. The Guarantee of the Series A Notes will
constitute part of the senior debt of the Guarantor and will rank equally with
all other unsecured and unsubordinated debt of the Guarantor. The Series B Notes
will be subordinate and junior in the right of payment to all Citigroup Funding
Senior Indebtedness, to the extent and in the manner set forth in the
Subordinated Debt Indenture. The Guarantee of the Series B Notes will be
subordinate and junior in the right of payment to all Citigroup Senior
Indebtedness, to the extent and in the manner set forth in the Subordinated Debt
Indenture.
The Agency Agreement provides that Notes may also be purchased by the
Agent acting solely as principal and not as agent. In the event of any such
purchase, the Agent acting solely as principal shall perform the functions of
both the Agent and the beneficial owner under the administrative procedures set
forth below, unless otherwise agreed to between the Company and the Agent acting
as principal.
The Company has appointed the principal office of Citibank, N.A. in
London as principal paying agent for the payment of the principal of and
interest on the Series A Bearer Notes and has appointed the principal office of
Deutsche Bank U.K. in London as principal paying agent (together, the "Principal
Paying Agents") for the payment of the principal of and interest on the Series B
Bearer Notes. The Company has appointed Kredietbank S.A. Luxembourgeoise in
Luxembourg as an additional paying agent for the Series A Notes and has
appointed Deutsche Bank Luxembourg, S.A. as an additional paying agent for the
Series B Notes (each, a "Paying Agent").
B-1
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agent and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agent and the Trustees in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustees are to
communicate regarding orders to purchase Bearer Notes and the details of their
delivery.
If the Notes are to be listed on the Luxembourg Stock Exchange, the
Company will advise the Principal Paying Agents and the Agent as to the entity
it has appointed as listing agent (the "Listing Agent"), which will coordinate
with the Principal Paying Agents and the Agent on a regular basis for the
purpose of providing the Luxembourg Stock Exchange with such information
regarding Bearer Notes issued and outstanding as such Exchange may require.
Administrative procedures and specific terms of the offering are
explained below. Unless otherwise defined herein, terms defined in the
Indentures, the Prospectus or the Notes shall be used as therein defined. To the
extent the procedures set forth below conflict with the provisions of the Bearer
Notes, the Indentures or the Agency Agreement, the relevant provisions of the
Bearer Notes, the Indentures and the Agency Agreement shall control.
Maturities: Each Bearer Note will mature on a date nine
months or more after the settlement date for
such Note, except in the case of indexed
Notes, for which the maturity may be shorter.
A Floating Rate Bearer Note will mature only
on an Interest Payment Date for such Bearer
Note. Any Note denominated in Japanese yen
will mature on a date not less than one year
from the Original Issue Date (as defined
below) for such Note. Any Note denominated in
Pounds Sterling will mature on a date not
less than one year, nor more than five years,
after its Original Issue Date.
Currency: The Specified Currency for a Certificated
Note shall be as set forth therein and in the
applicable Pricing Supplement.
Denominations: The denomination of any Bearer Note
denominated in U.S. dollars will be a minimum
of U.S.$10,000 or any larger amount that is
an integral multiple of U.S.$1,000. The
authorized denominations of Bearer Notes
denominated in any other currency will be set
forth in such Bearer Notes.
Bearer Form: Bearer Notes will be issued only in bearer form.
Date of Issuance: Each Bearer Note will be dated and issued as
of its original issue date by the Principal
Paying Agent for such Bearer Note. Each
Bearer Note will bear an Original Issue Date,
which will be (i) with respect to a temporary
Global Security (or any portion thereof), the
date of its original issue as specified in
such Global Security and (ii) with respect to
any Permanent Global Security or individual
Bearer Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Bearer Note or in lieu of a destroyed, lost
or stolen Bearer Note, the Original Issue
Date of the predecessor Bearer Note,
regardless of the
B-2
date of authentication of such subsequently issued
Bearer Note.
Temporary Global Until the 40th day following the date of
Securities; Definitive issuance of a Bearer Note (the "Exchange
Global Securities; and Date") and until Final Certification (as
Individual Bearer Notes: defined below) with respect to such Bearer
Note has occurred, such Bearer Note, together
with all other Bearer Notes that have the
same rank, Original Issue Date, currency of
denomination, redemption and repayment
provisions, Stated Maturity and either fixed
interest rate (in the case of Fixed Rate
Notes) or Base Rate, Initial Interest Rate,
interest reset period, Interest Payment
Dates, Minimum Interest Rate, Maximum
Interest Rate, Spread or Spread Multiplier
and Index Maturity (in the case of Floating
Rate Notes) (all such Bearer Notes herein
referred to collectively as a "Tranche"),
will be represented by a single temporary
Global Security in bearer form without
interest coupons. The Company shall execute,
and the Principal Paying Agent for the Bearer
Notes represented by such temporary Global
Security shall authenticate, such temporary
Global Security upon the same conditions and
in substantially the same manner, and with
the same effect, as a Permanent Global
Security. On or prior to the Closing Date
(which should also be the Original Issue
Date), with respect to such Bearer Notes, the
Principal Paying Agent for such Bearer Notes
shall deposit the temporary Global Security
with a common depositary (the "Depositary")
for Clearstream International,
("Clearstream") and Euroclear Bank S.A./N.V.,
as operator of the Euroclear System
("Euroclear"), in the manner specified below
under "Details for Settlement". The interest
of each beneficial owner of such temporary
Global Security will be credited to the
appropriate account with Clearstream or
Euroclear, as specified below under "Details
for Settlement".
On or after the Exchange Date and provided that
Final Certification (as described below) has
occurred, the interest of the beneficial owner of
such Bearer Note in the temporary Global Security
shall be canceled and such Bearer Note, together
with all other Bearer Notes of the Tranche as to
which Final Certification has occurred, shall
thereafter be represented by a Permanent Global
Security in bearer form without interest coupons
held in London by the Depositary. The interest of
the beneficial owner of such Bearer Note in such
Permanent Global Security will be credited to the
appropriate account with Clearstream or Euroclear.
The beneficial owner of an interest in a Permanent
Global Security may, at any time, upon 30 days'
notice to the Principal Paying Agent for the Bearer
Notes represented by such Permanent Global Security,
given by such beneficial owner through either
Clearstream or Euroclear, as the case may be,
exchange its beneficial interest in such Permanent
Global Security for one or more individual Bearer
Notes (with coupons attached, if appropriate) equal
in aggregate principal
B-3
amount to such beneficial interest. To effect such
exchange, the interest of the beneficial owner of
such Bearer Note in such Permanent Global Security
shall be canceled and one or more individual Bearer
Notes shall be issued to such beneficial owner,
through Euroclear or Clearstream, as the case may
be.
In all events, Bearer Notes will be delivered
by the Principal Paying Agents only outside
the United States.
Final Certification: Final Certification with respect to a
temporary Global Security shall mean the
delivery by Euroclear or Clearstream, as the
case may be, to the Principal Paying Agent
for the Bearer Notes represented by such
temporary Global Security of a signed
certificate (a "Clearance System
Certificate") in the form set forth in
Appendix 1 hereto with respect to the Bearer
Notes, dated no earlier than the Exchange
Date for such Bearer Notes or, if an interest
payment on the Bearer Notes shall be due
prior to the Exchange Date, dated no earlier
than such Interest Payment Date, to the
effect that Euroclear or Clearstream, as the
case may be, has received certificates
("Certificates of Non-U.S. Beneficial
Ownership") in the form set forth in Appendix
2 hereto with respect to each of such Bearer
Notes, dated no earlier than ten days before
such Exchange Date or Interest Payment Date,
as the case may be, signed by the account
holders appearing on its records as entitled
to such Bearer Notes, to the effect that such
Bearer Notes (i) are not beneficially owned
by United States persons and have not been
acquired by or on behalf of United States
persons, (ii) are owned by United States
persons that are (a) foreign branches of
United States financial institutions
purchasing for their own account or for
resale or (b) United States persons who
acquired the Bearer Notes through foreign
branches of U.S. financial institutions and
who hold the Bearer Notes through such U.S.
financial institutions (and in either case
(a) or (b), each such financial institution
has agreed that it will comply with the
requirements of Section 165(j)(3)(A), (B) or
(C) of the Internal Revenue Code of 1986 and
the regulations thereunder), or (iii) are
owned by United States or foreign financial
institutions for purposes of resale during
the restricted period, in which event such
financial institutions (whether or not also
described in clause (i) or (ii)) shall have
certified that they have not acquired the
Bearer Notes for purposes of resale directly
or indirectly to a United States person or to
a person within the United States or its
possessions.
Payments of Principal: Upon presentation of a Note, the Principal
Paying Agent for such Bearer Note will pay
the principal amount of such Note and the
final installment of interest at Maturity in
immediately available funds. Notes presented
to the Principal Paying Agent for such Bearer
Notes at Maturity for payment will be
canceled in accordance with the
B-4
Indenture under which such Bearer Notes have been
issued.
Interest Payments: Interest on each Bearer Note will accrue from
the Original Issue Date of such Bearer Note
and will be calculated and paid in the manner
described in such Bearer Note and the
Prospectus, each as defined in the Agency
Agreement, as supplemented by the applicable
Pricing Supplement; provided, however, that
interest in respect of any portion of a
temporary Global Security for which Final
Certification has not been made shall not be
paid until Final Certification is received in
respect of that portion.
Payments of Principal Upon receipt of Bearer Notes to be repaid as
and Interest Upon set forth in such Notes, the Trustee or
Exercise of Optional Principal Paying Agent for such Notes shall
Repayment: give notice to the Company not less than 20
calendar days prior to each Optional
Repayment Date of such Optional Repayment
Date and of the principal amount of Bearer
Notes to be repaid on such Optional Repayment
Date.
On or prior to any Optional Repayment Date, the
Company shall deposit with such Trustee or such
Principal Paying Agent an amount of money sufficient
to pay the Optional Repayment Price, and accrued
interest thereon to such date, of all the Notes or
portions thereof which are to be repaid on such
date. Such Trustee or such Principal Paying Agent
will use such money to repay such Notes pursuant to
the terms set forth in such Notes.
Procedure for Rate The Company and the Agent will discuss from
Setting and Posting: time to time the aggregate principal amount
of, the issuance price of, and the interest
rates to be borne by, Bearer Notes that may
be sold as a result of the solicitation of
orders by the Agent. If the Company decides
to set prices of, and rates borne by, any
Bearer Notes in respect of which the Agent is
to solicit orders (the setting of such prices
and rates to be referred to herein as
"posting") or if the Company decides to
change prices or rates previously posted by
it, it will promptly advise the Agent of the
prices and rates to be posted.
Acceptance of Orders: If the Company posts prices and rates as
provided above, the Agent as agent for and on
behalf of the Company shall promptly accept
orders received by it to purchase Bearer
Notes at the prices and rates so posted,
subject to (1) any instructions from the
Company received by the Agent concerning the
aggregate principal amount of Bearer Notes to
be sold at the prices and rates so posted or
the period during which such posted prices
and rates are to be in effect, (2) any
instructions from the Company received by the
Agent changing or revoking any posted prices
and rates, (3) compliance with the securities
laws of the United States and all other
jurisdictions and with the selling
restrictions contained in the Agency
Agreement and
B-5
(4) the Agent's right to reject any such offer as
provided below.
If the Company does not post prices and rates
and the Agent receives an order to purchase
Bearer Notes, or, if while posted prices and
rates are in effect, the Agent receives an
order to purchase Bearer Notes on terms other
than those posted by the Company, the Agent
will promptly advise the Company by telephone
of any such order other than orders rejected
by the Agent as provided below. The Company
will have the sole right to accept any such
order to purchase Bearer Notes and may reject
any such order in whole or in part.
The Agent may, in its discretion reasonably
exercised, reject any order to purchase Bearer Notes
received by it in whole or in part.
Preparation of Pricing If any order to purchase a Bearer Note is
Supplement: accepted by or on behalf of the Company, the
Company, with the approval of the Agent, will
prepare a pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Bearer Note, will file ten copies thereof
with the Commission in accordance with the
applicable paragraph of Rule 424(b) under the
Act, will supply such copies thereof to the
Agent as the Agent may request, will supply
one copy to the Principal Paying Agent for
such Bearer Note and will, on the Agent's
behalf, file five copies of such Pricing
Supplement with the National Association of
Securities Dealers, Inc. (the "NASD"). The
Principal Paying Agent for such Bearer Note
will cause such Pricing Supplement to be
delivered to the Trustee for such Bearer
Note, to each additional Paying Agent for
such Bearer Note outside the United States
and to the Listing Agent. The Agent will
cause a Pricing Supplement to be delivered to
the purchaser of the Bearer Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix copies of the
Pricing Supplement to Prospectuses prior to
their use. Outdated Pricing Supplements, and
the Prospectuses to which they are attached
(other than those retained for files), will
be destroyed.
Suspension of The Company reserves the right, in its sole
Solicitation; discretion, to instruct the Agent to suspend
Amendment or at any time, for any period of time or
Supplement: permanently, the solicitation of orders to
purchase Bearer Notes. Upon receipt of such
instructions, the Agent will forthwith
suspend solicitation of orders to purchase
Bearer Notes from the Company until such time
as the Company has advised it that such
solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly advise
the Agent and each of the Principal Paying
Agents whether such orders may be settled and
whether copies of the Prospectus as in effect
at the time of the suspension,
B-6
together with the appropriate Pricing Supplement,
may be delivered in connection with the settlement
of such orders. The Company will have the sole
responsibility for such decision and for any
arrangements that may be made in the event that the
Company determines that such orders may not be
settled or that copies of such Prospectus may not be
so delivered. If the Company and the Guarantor
decide to amend or supplement the Registration
Statement (as defined in the Agency Agreement) or
the Prospectus (except for an amendment or
supplement relating to an offering of Securities
other than the Notes or to an offering of Warrants
or providing solely for the specification of or a
change in the maturity dates, the interest rates,
the issuance prices or other terms of any Notes),
they promptly will advise the Agent and the Trustees
and will furnish the Agent and the Trustees with the
proposed amendment or supplement and with such
certificates and opinions as are required, all in
accordance with the terms of the Agency Agreement.
The Company and the Guarantor will file with the
Commission any supplement to the Prospectus relating
to the Bearer Notes, provide the Agent with copies
of any such supplement, and confirm to the Agent
that such supplement has been filed with the
Commission pursuant to the applicable paragraph of
Rule 424(b).
Delivery of Prospectus: A copy of the Prospectus and a Pricing
Supplement relating to a Bearer Note must
accompany or precede any written offer of
such Note, confirmation of the purchase of
such Note and payment for such Note by its
purchaser. If notice of a change in the terms
of the Bearer Notes is received by the Agent
between the time an order for a Bearer Note
is placed and the time written confirmation
thereof is sent by the Agent to a customer or
his agent, such confirmation shall be
accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect
when the order was placed. Subject to the
second preceding paragraph, the Agent will
deliver a Prospectus and Pricing Supplement
as herein described with respect to each
Bearer Note sold by it. The Principal Paying
Agent for such Bearer Note will make such
delivery if such Note is sold directly by the
Company to a purchaser (other than the
Agent).
Confirmation: For each order to purchase a Bearer Note
solicited by the Agent and accepted by or on
behalf of the Company, the Agent will issue a
confirmation to the purchaser, with a copy to
the Company, setting forth the details set
forth below, delivery and payment
instructions and the language required by the
U.S. Treasury Regulations.
Settlement: Subject to Section 5 of the Agency Agreement,
the Closing Date with respect to any order to
purchase Bearer Notes accepted by or on
behalf of the Company will be the third day
next succeeding the date of acceptance, or if
such day is a day on which commercial banks
in New York City or London or Clearstream or
Euroclear are required
B-7
or authorized to be closed, the next succeeding day
on which commercial banks in New York City and
London and Euroclear and Clearstream are not
required or authorized to be closed (a "Business
Day") unless otherwise agreed by the purchaser and
the Company and shall be specified upon acceptance
of such offer.
Details for Settlement: For each offer to purchase a Bearer Note that
is accepted by or on behalf of the Company,
the Agent will provide (unless provided by
the purchaser directly to the Company) by
telephone the following information to the
Company:
1. Principal or face amount.
2. Series.
3. Stated Maturity.
4. In the case of a Fixed Rate Book-Entry Note,
the interest rate and reset, redemption,
repayment and extension provisions (if any)
or, in the case of a Floating Rate Book-Entry
Note, the Base Rate, Initial Interest Rate
(if known at such time) Interest Reset
Period, Interest Reset Dates, Index Maturity,
Spread and/or Spread Multiplier (if any),
Minimum Interest Rate (if any), Maximum
Interest Rate (if any) and reset, redemption,
repayment and extension provisions (if any).
5. Interest Payment Dates and the Interest
Payment Period.
6. Amortization provisions, if any.
7. Settlement date and Issue Date, if different.
8. Specified currency.
9. Denominated currency, Indexed Currency, Base
Exchange Rate, and the Determination Date, if
applicable.
10. Price.
11. Agent's commission, determined as provided in
the Agency Agreement.
12. Whether such Book-Entry Note is an OID Note
and, if so, the total amount of OID, the
yield to maturity and the initial accrual
period OID.
13. Any other terms necessary to describe the
Book-Entry Note.
B-8
14. Agent's account number at Clearstream or
Euroclear.
The Agent will advise the Company and the Principal
Paying Agent for such Bearer Note of the foregoing
information (unless provided by the purchaser
directly to the Company) for each offer to purchase
a Bearer Note solicited by the Agent and accepted by
the Company in time for the Principal Paying Agent
for such Bearer Note to prepare and authenticate the
temporary Global Security and deliver it at least
one day prior to settlement to the Depositary in
London. The Principal Paying Agent for such Bearer
Note will instruct Euroclear or Clearstream, as the
case may be, to credit such Bearer Note to the
distribution account of such Principal Paying Agent
with Euroclear or Clearstream, as the case may be,
for onward credit to the account of the Agent
against payment. Concurrently therewith and in
consideration thereof, the Agent for such Bearer
Note will give instructions to Euroclear or
Clearstream, as the case may be, to credit the
account of the Principal Paying Agent for such
Bearer Note against delivery of such Bearer Note
with an amount equal to the initial public offering
price of such Bearer Note, less the applicable
commission determined as provided in Section 2 of
the Agency Agreement. The Principal Paying Agent for
such Bearer Note will remit all such funds received
to the designated account of the Company. The
Principal Paying Agent for such Bearer Note will
notify the Agent of both the Euroclear and
Clearstream Reference Numbers for such Bearer Note
and will notify the Listing Agent of the issuance of
such Bearer Note. Before accepting any order to
purchase a Bearer Note to be settled in less than
three Business Days, the Company shall verify that
the Principal Paying Agent for such Bearer Note will
have adequate time to prepare and authenticate the
temporary Global Security that will represent such
Bearer Note.
The Agent will provide appropriate documentation to
the Principal Paying Agent for such Bearer Note,
including the information necessary for the
preparation and authentication of the temporary
Global Security that will represent such Bearer
Note. Prior to preparing such temporary Global
Security for delivery (but in any case no later than
10:00 A.M. (London time) on the Business Day next
preceding the Closing Date therefor), the Principal
Paying Agent for such Bearer Note will confirm
receipt of such instruction to the Agent by
telephone.
Bearer Note Deliveries Upon receipt of appropriate documentation and
and Cash Payment: instructions with respect to the Bearer Notes
constituting a Tranche, the Company will
cause the Principal Paying Agent for such
Bearer Notes to prepare and authenticate a
temporary Global Security representing such
Tranche and to insert thereon (1) the rank,
(2) the principal amount of such Tranche, (3)
the Original Issue Date, (4) the Stated
Maturity, (5) the interest rate (in the case
of a Fixed-Rate Note) and redemption
B-9
and repayment provisions (if any) or the Base
Rate, Initial Interest Rate, Index Maturity,
Spread or Spread Multiplier, Minimum Interest
Rate and Maximum Interest Rate (in the case
of a Floating Rate Note) and redemption and
repayment provisions (if any) and (6) any
other terms required to be inserted thereon.
On the Closing Date, the Principal Paying
Agent for the Bearer Notes represented by
such Tranche will credit such Bearer Note to
its distribution account with Clearstream or
Euroclear and the Agent will make payment to
such Principal Paying Agent against delivery
of such Bearer Note, through Euroclear or
Clearstream, as the case may be, in
immediately available funds, in an amount
equal to the issuance price of such Bearer
Note less the Agent's commission. The
Principal Paying Agent for such Bearer Note
will remit all such funds received to the
designated account of the Company. Such
payment shall be made by the Agent only upon
prior receipt by the Agent of immediately
available funds from or on behalf of the
purchaser unless the Agent decides, at its
option, to advance its own funds for such
payment against subsequent receipt of funds
from the purchaser.
Failure to Settle: If on the relevant Issue Date the Agent does
not pay the subscription price due from it in
respect of any Note (the "Defaulted Note")
and, as a result, the Defaulted Note remains
in the distribution account of the Principal
Paying Agent for such Note with Euroclear or
Clearstream after such Issue Date (rather
than being credited to the Agent's account
against payment), such Principal Paying Agent
will continue to hold the Defaulted Note to
the order of the Company.
If such Principal Paying Agent pays an amount
(the "Advance") to the Company on the basis
that a payment (the "Payment") has been, or
will be, received from the relevant Agent and
if the Payment has not been, or is not,
received by such Principal Paying Agent on
the date such Principal Paying Agent pays the
Company, the Company shall upon being
requested to do so repay to such Principal
Paying Agent the Advance and shall pay
interest (on a 360 days basis) sufficient to
cover any overdraft costs incurred by such
Principal Paying Agent, as certified by such
Principal Paying Agent, until the earlier of
repayment in full of the Advance and receipt
in full by such Principal Paying Agent of the
Payment.
If the Agent, at its own option, has advanced
its own funds for payment against subsequent
receipt of funds from the purchaser, and if
the purchaser shall fail to make payment for
the Bearer Note on the Closing Date therefor,
the Agent will promptly notify the Principal
Paying Agent for such Bearer Note, the
Depositary and the Company by telephone,
promptly confirmed in writing (but no later
than the next Business Day). In such event
the Agent shall instruct Euroclear or
Clearstream, as the case may be, to transfer
such Defaulted Note to
B-10
the distribution account of the Principal Paying
Agent for such Bearer Note who will continue to hold
the Defaulted Note to the order of the Company. Upon
(i) confirmation from such Principal Paying Agent in
writing (which may be by telex or telecopy) that
such Principal Paying Agent is holding the Defaulted
Note for the account of the Company, and (ii)
confirmation from the Agent in writing (which may be
given by telex or telecopy) that the Agent has not
received payment from the purchaser (the matters
referred to in clauses (i) and (ii) are referred to
hereinafter as the "Confirmations"), the Company
will promptly pay to the Agent an amount in
immediately available funds equal to the amount
previously paid by the Agent in respect of such
Bearer Note. Such payment will be made not later
than the Business Day following the date of receipt
of the Confirmations. The Principal Paying Agent for
such Bearer Note and the Depositary will make such
revisions to the temporary Global Security
representing such Bearer Note as are necessary to
reflect the cancellation of such portion of such
Global Security.
If a purchaser shall fail to make payment for such
Bearer Note for any reason other than the failure of
the Agent to provide the necessary information to
the Company as described above for settlement or to
provide a confirmation to the purchaser within a
reasonable period of time as described above or
otherwise to satisfy its obligation hereunder or in
the Agency Agreement, and if the Agent shall have
otherwise complied with its obligations hereunder
and in the Agency Agreement, the Company will
reimburse the Agent on an equitable basis for its
loss of the use of funds during the period when they
were credited to the account of the Company.
Principal Paying Agents Nothing herein shall be deemed to require
Not to Risk Funds: Principal Paying Agent expend its own funds
in connection with any payment to the
Company, or the Agent or the purchaser, it
being understood by all parties that payments
made by the Principal Paying Agents to the
Company, or the Agent or a purchaser shall be
made only to the extent that funds are
provided to the Principal Paying Agents for
such purpose.
Authenticity of The Company will cause each Principal Paying
Signatures: Agent to furnish the Agent from time to time
with the specimen signatures of each of such
Principal Paying Agent's officers, employees
or agents who has been authorized by such
Principal Paying Agent to authenticate Bearer
Notes (including Global Securities
representing Bearer Notes), but the Agent
will have no obligation or liability to the
Company or to either Principal Paying Agent
in respect of the authenticity of the
signature of any officer, employee or agent
of the Company or either Principal Paying
Agent on any Bearer Note.
Payment of Expenses: The Agent shall forward to the Company, on a
monthly basis, a statement of the
out-of-pocket expenses incurred by the Agent
during
B-11
that month that are reimbursable to it pursuant to
the terms of the Agency Agreement. The Company will
remit payment to the Agent currently on a monthly
basis.
Advertising Costs: The Company will determine with the Agent the
amount of advertising that may be appropriate
in soliciting orders to purchase the Bearer
Notes. Advertising expenses will be paid by
the Company.
B-12
APPENDIX 1
[FORM OF CERTIFICATION TO BE GIVEN
BY EUROCLEAR OR CLEARSTREAM]
CERTIFICATION
Citigroup Funding Inc.
Medium Term Notes, Series [A] [B]
(the "Notes")
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Medium-Term Note Administrative Procedures
attached to the Selling Agency Agreement relating to the Notes, as of the date
hereof, $10,000,000,000 principal amount of the above-captioned Notes (i) is
owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States persons"), (ii) is owned by United States persons that
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution has agreed, on its own behalf or through its agent,
that we may advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) is owned by United
States or foreign financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), which United States or foreign financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Notes for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Note excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as the date hereof.
B-Appendix 1-1
We understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Dated: ______________, 200_(1)
Yours faithfully,
[EUROCLEAR BANK, S.A./N.V.,
as operator of the Euroclear System]
or
[CLEARSTREAM, International.]
By
----------
(1) [The earlier of the Exchange Date and the first Interest Payment Date on
the applicable Notes.]
B-Appendix 1-2
APPENDIX 2
[FORM OF CERTIFICATION TO BE GIVEN
BY AN ACCOUNT HOLDER OF EUROCLEAR OR CLEARSTREAM]
CERTIFICATION
Citigroup Funding Inc.
Medium Term Notes, Series [A] [B]
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Notes (the "Notes") held by you for our account (i)
are owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Notes through foreign branches of United
States financial institutions and who hold the Notes through such United States
financial institutions on the date hereof (and in either case (a) or (b), each
such United States financial institution hereby agrees, on its own behalf or
through its agent, that you may advise the Issuer or the Issuer's agent that it
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the
Notes is a United States or foreign financial institution described in clause
(iii) above (whether or not also described in clause (i) or (ii)) this is to
further certify that such financial institution has not acquired the Notes for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Notes in
accordance with your Operating Procedures if any applicable statement herein is
not correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certification excepts and does not relate to $ principal amount
of the Notes as to which we are not able to certify and as to which we
understand exchange and delivery of definitive Notes (or, if relevant, exercise
of any rights or collection of any interest) cannot be made until we do so
certify.
B-Appendix 2-1
We understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Dated: _________________, 20__
[To be dated no earlier than
the 10th day before the earlier
of the Exchange Date and the
first Interest Payment Date
on the Notes]
[Name of Account Holder]
By: ________________________
(Authorized Signatory)
Name:
Title:
B-Appendix 2-2
EXHIBIT C
FORM OF TERMS AGREEMENT
Attention: Subject in all respects to the terms and conditions contained in the
Global Selling Agency Agreement dated June 1, 2005 (the "Global Selling Agency
Agreement"), among Citigroup Global Markets Inc., Citigroup Global Markets
Limited, Citigroup Funding Inc. and Citigroup Inc., the undersigned agrees to
purchase the following Notes of Citigroup Funding Inc.:
Principal Amount: Issue Price:
Purchaser: Original Issue Date:
Initial Interest Rate: Stated Maturity:
Reoffering Rate:
Reoffering Price:
[ ] Varying prices from time to time related to prevailing prices at the
time of resale
[ ] Fixed price of __% of Principal Amount
Specified Currency (If other than U.S. dollars):
Survivor's Option:
Authorized Denominations:
(If other than as set forth in the Prospectus Supplement)
Dual Currency Note: [ ] Yes (see attached) [ ] No
Optional Payment Currency:
Designated Exchange Rate:
Base Rate: [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ]
LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate [ ]
Treasury Rate Constant Maturity [ ] Prime Rate [ ]
Eleventh District Cost of Funds Rate [ ] Euribor [ ] Other (see attached)
Index Maturity:
Interest Reset Period or Interest Reset Dates:
Interest Payment Dates: Accrue to Pay: [ ] Yes [ ] No
Indexed Principal Note: [ ] Yes (see attached) [ ] No
Floating Rate: [ ] Indexed Interest Rate: [ ] (see attached) Spread Multiplier:
Spread (+/-):
Spread Reset [ ] The Spread or Spread Multiplier may not be changed prior to
Stated Maturity.
[ ] The Spread or Spread Multiplier may be changed prior to Stated
Maturity (see attached).
C-1
Optional Reset Dates (if applicable):
Maximum Interest Rate: Minimum Interest Rate:
Inverse Floating Rate Note: [ ] Yes (see attached) [ ] No
Initial Fixed Interest Rate: Reset Fixed Reference Rate:
Floating Rate / Fixed Rate Note: [ ] Yes (see attached) [ ] No
Amortizing Note: [ ] Yes [ ] No
Amortization Schedule:
Optional Redemption: [ ] Yes [ ] No
Optional Redemption Dates:
Redemption Prices:
Bond Yield to Maturity: Bond Yield to Call:
Optional Repayment: [ ] Yes [ ] No
Optional Repayment Dates: Optional Repayment Prices:
Optional Extension of Stated Maturity: [ ] Yes [ ] No
Final Maturity:
Discount Note: [ ] Yes [ ] No
Total Amount of OID: Yield to Maturity:
Renewable Note: [ ] Yes (see attached) [ ] No
Special Election Interval (if applicable):
Amount (if less than entire principal amount) as to which election
may be exercised:
Place of Delivery of Notes:
Method of Payment for the Notes:
Requirements for delivery, if any, of opinions of counsel, certificates from the
Company and the Guarantor or their respective officers or a letter from the
Guarantor's independent registered public accountants:
Other terms:
The provisions of the Global Selling Agency Agreement and the related
definitions are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.
C-2
Between the date of this Agreement and the Settlement Date with
respect to this Agreement, you will not, without the undersigned's prior
consent, offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company substantially similar to the Medium-Term Notes (other
than (i) the Medium-Term Notes to be sold pursuant to this Agreement and (ii)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided herein.
Date:
[Purchaser]
By:__________________________
Accepted: CITIGROUP FUNDING INC.
By:_________________________
C-3
EXHIBIT D
FORM OF AGENT ACCESSION CONFIRMATION - PROGRAM
To: [Name and address of new Agent]
[date]
Citigroup Funding Inc.
U.S.$[ ] Series A and Series B Medium-Term Note Program
Ladies and Gentlemen:
We refer to the Global Selling Agency Agreement dated as of __, 20__ (which
agreement, as amended from time to time, is herein referred to as the "Agency
Agreement") entered into in respect of the above Medium-Term Note Program and
hereby acknowledge receipt of your Agent Accession Letter to us dated [ ].
In accordance with Section 2(c) of the Agency Agreement we hereby confirm that,
with effect from the date hereof, you shall become a party to, and a[n] [U.S.
Agent] [International Agent] under, the Agency Agreement, vested with all the
authority, rights and powers, and subject to all the duties and obligations of
a[n] [U.S.] [International] Agent as if originally named as such under the
Agency Agreement.
Yours faithfully,
CITIGROUP FUNDING INC.
By:_____________________________________
Name:
Title:
cc: Principal Paying Agents
Trustees
Existing Agents
Guarantor
D-1
EXHIBIT E
FORM OF AGENT ACCESSION LETTER - PROGRAM
To: Citigroup Funding Inc.
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[date]
Citigroup Funding Inc.
U.S.$10,000,000,000 Series A and Series B Medium-Term Note Program
Ladies and Gentlemen:
We refer to the Global Selling Agency Agreement dated as of June 1, 2005,
entered into in respect of the above Medium-Term Note Program and made among
Citigroup Funding Inc. (the "Company"), Citigroup Inc. and the Agents party
thereto (which agreement, as amended from time to time, is herein referred to as
the "Agency Agreement").
We confirm that we are in receipt of the documents referenced below (except to
the extent we have waived delivery of such documents):
-- a copy of the Agency Agreement;
-- a copy of all documents referred to in Section 5 of the Agency Agreement;
and
-- a letter in a form approved by ourselves from each of the legal advisers
referred to in Section 5 of the Agency Agreement addressed to ourselves
and giving us the full benefit of the existing legal opinions as of the
date of such existing legal opinions, and have found them to our
satisfaction.
For the purposes of Section 9 of the Agency Agreement our notice details are as
follows: (insert name, address, telephone, telecopy, telex and attention).
In consideration of the Company appointing us as a[n] [U.S.] [International]
Agent under the Agency Agreement, we hereby undertake, for the benefit of the
Company, the Guarantor and each of the other Agents, that we will perform and
comply with all the duties and obligations expressed to be assumed by a[n]
[U.S.] [International] Agent under or pursuant to the Agency Agreement. We also
undertake to deliver to The Depository Trust Company of New York such pricing
letters as it may reasonably require from us in connection with the offer and
sale of the Notes.
E-1
This letter is governed by, and shall be construed in accordance with, the laws
of the State of New York.
Yours faithfully,
[Name of new Agent]
By: ____________________________________
Name:
Title:
cc: Principal Paying Agents
Trustees
Existing Agents
Guarantor
E-2
EXHIBIT F
FORM OF AGENT ACCESSION CONFIRMATION - NOTE ISSUE
To: [Name and address of new Agent]
[date]
Citigroup Funding Inc.
U.S.$10,000,000,000 Series A and Series B Medium-Term Note Program
Ladies and Gentlemen:
We refer to the Global Selling Agency Agreement dated as of June 1, 2005 (which
agreement, as amended from time to time, is herein referred to as the "Agency
Agreement") entered into in respect of the above Medium-Term Note Program and
hereby acknowledge receipt of your Agent Accession Letter to us dated [ ].
In accordance with Section 2(c) of the Agency Agreement we hereby confirm that,
with effect from the date hereof solely in respect of the issue of [ ] Notes due
[ ] (the "Issue"), you shall become a party to, and a[n] [U.S.] [International]
Agent under, the Agency Agreement, vested with all the authority, rights and
powers, and subject to all duties and obligations of a[n] [U.S.] [International]
Agent in relation to the Issue as if originally named as such under the Agency
Agreement.
Such appointment is limited to the Issue and is not for any other issue of Notes
of the Company pursuant to the Agency Agreement and such appointment will
terminate upon issue of the Notes comprising the Issue but without prejudice to
any rights, duties or obligations which have arisen prior to such termination.
Yours faithfully,
CITIGROUP FUNDING INC.
By: ________________________________
Name:
Title:
cc: Principal Paying Agents
Trustees
Guarantor
F-1
EXHIBIT G
FORM OF AGENT ACCESSION LETTER - NOTE ISSUE
Citigroup Funding Inc.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.$10,000,000,000 Series A and Series B
Medium-Term Note Program
Ladies and Gentlemen:
We refer to the Global Selling Agency Agreement dated as of June 1, 2005,
entered into in respect of the above Medium-Term Note Program and made among the
Company, Citigroup Inc. and the Agents party thereto (which agreement, as
amended from time to time, is herein referred to as the "Global Selling Agency
Agreement").
We confirm that we are in receipt of the documents referenced below (except to
the extent that we have waived delivery of such documents):
-- a copy of the Agency Agreement; and
-- a copy of all documents referred to in Section 5 of the Agency Agreement
and have found them to our satisfaction.
For the purposes of Section 9 of the Agency Agreement our notice details are as
follows: (insert name, address, telephone, telecopy, telex and attention).
In consideration of the Company appointing us as a[n] [U.S.] [International]
Agent solely in respect of the issue of [ ] Notes due [ ] (the "Issue") under
the Agency Agreement, we hereby undertake, for the benefit of the Company, the
Guarantor and each of the other Agents, that in relation to the Issue we will
perform and comply with all the duties and obligations expressed to be assumed
by a[n] [U.S.] [International] Agent under or pursuant to the Agency Agreement.
We acknowledge that such appointment is limited to the Issue and is not for any
other issue of Notes of the Company pursuant to the Agency Agreement and that
such appointment will terminate upon issue of the Notes comprising the Issue but
without prejudice to any rights, duties or obligations which have arisen prior
to such termination.
G-1
This letter is governed by, and shall be construed in accordance with, the laws
of the State of New York.
Yours faithfully,
[Name of new Agent]
By: ____________________________________
Title:
cc: Principal Paying Agents
Trustees
Guarantor
G-2
EXHIBITS H-K
FORMS OF OPINIONS, CERTIFICATES AND COMFORT LETTERS