EXHIBIT 1.05
Citigroup Inc.
Medium-Term Senior Notes, Series G
Medium-Term Subordinated Notes, Series G
Due Nine Months or More from the Date of Issue
DISTRIBUTION AGREEMENT
_____ , 2003
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Citigroup Inc., a Delaware corporation (the "Company"), confirms its
agreement with the Agent (as defined below) with respect to the issue and sale
by the Company of its Medium-Term Senior Notes, Series G, Due Nine Months or
More from the Date of Issue (the "Senior Notes") and its Medium-Term
Subordinated Notes, Series G, Due Nine Months or More from the Date of Issue
(the "Subordinated Notes" and, together with the Senior Notes, the "Notes"). The
Senior Notes are to be issued under an Indenture dated as of March 15, 1987, as
supplemented by the First Supplemental Indenture dated as of December 15, 1988,
the Second Supplemental Indenture dated as of January 31, 1991, the Third
Supplemental Indenture dated as of December 9, 1992 and the Fourth Supplemental
Indenture dated as of November 2, 1998 (as so supplemented or as it may from
time to time be further supplemented or amended by one or more indentures
supplemental thereto, the "Senior Debt Indenture"), between the Company and The
Bank of New York, as trustee (the "Senior Debt Trustee"). The Subordinated Notes
are to be issued under an Indenture dated as of April 12, 2001 (as it may from
time to time be supplemented or amended by one or more indentures supplemental
thereto, the "Subordinated Debt Indenture" and, together with the Senior Debt
Indenture, the "Indentures"), between the Company and Bank One Trust Company,
N.A., as trustee (the "Subordinated Debt Trustee" and, together with the Senior
Debt Trustee, the "Trustees"). The Notes will have the maturities, interest
rates (whether fixed or floating), redemption provisions and other terms set
forth in pricing supplements to the Prospectus referred to below. The Notes may
be denominated in U.S. dollars, foreign currencies or foreign
composite currency units (the "Specified Currency") as may be specified in the
applicable pricing supplement.
Subject to the terms and conditions stated herein and subject
to the reservation by the Company of the right to sell Notes to the Agent 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 (provided that any other
agent will execute an agreement with the Company substantially in the form of
Exhibit F hereto and that the Company will notify the Agent of its agreement
with any other agents, dealers or underwriters, but only if such other agents,
dealers or underwriters are appointed for the duration of this Agreement), the
Company hereby appoints the Agent as an agent of the Company for the purpose of
soliciting offers to purchase the Notes. In addition, the Agent may also
purchase Notes as principal and the Company will enter into a Terms Agreement
(referred to below) relating to such sale in accordance with the provisions of
Section l(b) hereof. For the purposes of this Agreement, the term "Agent" shall
refer to Citigroup Global Markets Inc.
1. Solicitations by the Agent of Offers to Purchase; Purchases as
Principal.
(a) Solicitations as Agent. Following the Commencement
Date (as defined below), the Company shall notify the Agent from time to time as
to the commencement of a period during which the Notes may be offered and sold
by the Agent (each period, commencing with such a notification and ending at
such time as the authorization for offers and sales through the Agent shall have
been suspended by the Company or the Agent as provided hereunder, being herein
referred to as an "Offering Period"). On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Agent agrees to use its reasonable best efforts to solicit offers to
purchase the Notes during each Offering Period upon the terms and conditions set
forth in the Prospectus as then amended and supplemented. The Company reserves
the right, in its sole discretion, to suspend solicitation of purchases of the
Notes commencing at any time for any period of time or permanently. Upon receipt
of instructions from the Company, the Agent will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agent that such solicitation may be resumed.
Unless otherwise agreed to, the Company agrees to pay the
Agent at the time of delivery of and payment for the Notes, as consideration for
soliciting the sale of each Note, a commission equal to the percentage set forth
on Schedule 1 hereto of the price to the public of each Note sold by the Company
as the result of a solicitation by the Agent. Without the prior approval of the
Company, the Agent (acting on an agency basis) may not reallow any portion of
the commission payable pursuant hereto to dealers or purchasers in connection
with the offer and sale of any Notes.
The Agent is authorized to solicit orders for the Notes only
in principal amounts of $1,000 or any amount in excess thereof which is a
multiple of $1,000 or, in the case of Notes denominated in a Specified Currency
other than U.S. dollars, in the denominations set forth in the applicable
pricing supplement, at a purchase price mutually agreed upon by the purchaser
and the Company and specified in the applicable
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pricing supplement. The Agent shall communicate to the Company, orally or in
writing, each reasonable offer or indication of interest to purchase Notes
received by the 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.
The 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, the 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). The Agent
shall make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been solicited by the Agent and
accepted by the Company, but the Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason. Under
no circumstances will the Agent be obligated to purchase any Notes for its own
account except pursuant to subparagraph (b) below.
(b) Purchases as Principal. Each sale of Notes to the
Agent as principal shall be made in accordance with the terms of this Agreement
and the Agent and the Company will enter into a Terms Agreement that will
provide for the sale of such Notes to and the purchase thereof by the Agent.
Each "Terms Agreement" may take the form of an exchange of any form of written
telecommunication or oral communication followed by written confirmation or
telecommunication between the Agent and the Company and shall be with respect to
such information (as applicable) as is specified in Exhibit A hereto.
The Agent's commitment to purchase Notes as principal shall be
deemed to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each agreement by the Agent to purchase Notes as principal
(whether or not set forth in a Terms Agreement) shall specify the principal
amount of Notes to be purchased by the Agent pursuant thereto, the maturity date
of such Notes, the price to be paid to the Company for such Notes, the interest
rate and interest rate formula, if any, applicable to such Notes and any other
terms of such Notes. Each such agreement shall also specify any requirements for
officers' certificates, opinions of counsel and letters from the independent
public accountants of the Company pursuant to Section 4 hereof. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Notes by the Agent.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. Each date of delivery of and payment for
Notes to be purchased by the Agent as principal or as agent or by any other
purchaser is referred to herein as a "Settlement Date."
Upon the Company's request, the Agent will notify the Company
either orally or in writing (as specified by the Company) of the aggregate
principal amount of
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Notes held by the Agent as principal purchased pursuant to a Terms Agreement
pursuant to this Agreement.
(c) Procedures. The Agent and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Medium-Term Notes Administrative Procedures attached
hereto as Exhibit B (the "Procedures"). The Procedures may be amended only by
written agreement of the Company and the Agent.
(d) Delivery. The documents required to be delivered by
Section 4 of this Agreement shall be delivered at the office of Skadden, Arps,
Slate Meagher & Flom LLP ("Skadden, Arps") (or such other counsel reasonably
satisfactory to both the Agent and the Company), Four Times Square, New York, NY
10036-6522, on _____ , 2003 (the "Commencement Date").
2. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Agent as of the Commencement Date:
(a) A registration statement on Form S-3 (File No. 333-
), has been filed with and declared effective by the Securities and Exchange
Commission (the "Commission") on ____, 2003, in respect of up to $ _____
aggregate amount of securities of the Company, including the Notes (of which
$____ remains available for issuance and sale as of the date hereof). Such
registration statement and any post-effective amendments thereto, in the forms
heretofore delivered or to be delivered to the Agent, excluding exhibits to such
registration statement but including all documents incorporated by reference
therein, has been declared effective by the Commission in such form. No other
document with respect to such registration statement (other than a document
incorporated by reference therein) has heretofore been filed or transmitted for
filing with the Commission; and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission. The various parts of such
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 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 (the "Forms T-1"), as amended at
the time such part became effective, are being hereinafter collectively called
the "Registration Statement." Any preliminary prospectus included in the
Registration Statement 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"), is hereinafter called a "Preliminary Prospectus." The form
of basic prospectus included in the Registration Statement relating to the
offering and sale of Debt Securities, Index Warrants, Preferred Stock,
Depositary Shares and Common Stock in the form in which it has most recently
been filed, or transmitted for filing with the Commission on or
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prior to the date of this Agreement, is being hereinafter called the "Basic
Prospectus." The form of prospectus supplement to the Basic Prospectus relating
to the offering and sale of the Notes 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, is being hereinafter
called the "Prospectus Supplement." The Basic Prospectus, as supplemented by the
Prospectus Supplement, is being hereinafter called the "Prospectus." Any
reference herein to any Preliminary Prospectus, the Prospectus Supplement or the
Prospectus 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 Preliminary Prospectus, Prospectus Supplement or Prospectus, as the case
may be. Any reference to any amendment or supplement to any Preliminary
Prospectus, the Prospectus Supplement or the Prospectus, 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 Preliminary Prospectus,
Prospectus Supplement or the Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be. Any reference to any amendment
to the Registration Statement shall be deemed to include any report of the
Company filed pursuant to the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the Registration
Statement. 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.
(c) Each of the Registration Statement and the
Prospectus, and any amendment thereof or supplement thereto, and each of 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 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 the Company makes
no representations or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus or any amendment thereof or
supplement
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thereto in reliance upon, and in conformity with, information furnished in
writing to the Company by or on behalf of the Agent specifically for use in the
Registration Statement or 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 applicable Indenture 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 applicable Indenture
(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); each of the
Indentures has 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) 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 Company and its subsidiaries, taken as a whole,
which is not disclosed in the Prospectus, as amended or supplemented.
3. Agreements of the Company. The Company agrees with the Agent
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 the Registration Statement or the
Prospectus, the Company will furnish the Agent and the 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
will promptly cause the Prospectus together with each amendment thereof or
supplement thereto to be 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 a Pricing Supplement or an amendment or supplement relating solely
to an offering of securities other than the Notes), the Agent shall be furnished
with such information relating to such filing as it may reasonably request, and
the Agent shall not 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 will promptly
advise the 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
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Company 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 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
will use its 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 the Agent's request, the Company will
within a reasonable time inform the 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 will comply
with all requirements imposed upon it 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, during such period it is
necessary to amend or supplement the Registration Statement or the Prospectus to
comply with the Act, the Company will promptly notify the 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 will promptly amend or supplement the Registration Statement or the
Prospectus (at the expense of the Company) 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 the Agent pursuant to
subsections (i), (j) and (k) of this Section 3 in connection with the
preparation and filing of such amendment or supplement are reasonably
satisfactory in all respects to the Agent, upon the filing of such amendment or
supplement with the Commission or effectiveness of an amendment to the
Registration Statement, the Agent will resume solicitation of offers to purchase
Notes hereunder. Notwithstanding the foregoing, the Company shall not be
required to comply with the provisions of subsection (b) of this Section 3
during any period from the time the Agent shall have been notified to suspend
the solicitation of offers to purchase the Notes in its capacity as Agent
(whether under this subparagraph (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 the Agent holds any Notes as principal
purchased pursuant to a Terms Agreement or otherwise pursuant to this Agreement,
the Company shall comply with the provisions of subsection (b) of this Section 3
during the period when a Prospectus is required to be delivered pursuant to the
Act.
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(c) The Company will comply, in a timely manner, with all
applicable requirements under the Exchange Act relating to the filing with the
Commission of the Company's reports pursuant to Sections 13(a), 13(c) or 15(d)
of the Exchange Act and, if then applicable, of the Company's proxy statements
pursuant to Section 14 of the Exchange Act.
(d) The Company will use its best efforts to qualify the
Notes for sale under the securities laws of such jurisdictions as the Agent
reasonably designates, to maintain such qualifications in effect so long as
required for the distribution of the Notes and, if requested by the Agent, to
arrange for the determination of the legality of the Notes for purchase by
institutional investors, except that the Company shall not 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 will furnish to the 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 the Agent may from time
to time reasonably request.
(f) The Company will make generally available to its
security holders and to the Agent as soon as practicable, but in any event not
later than 15 months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month period
beginning after the date upon which any amendment of 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) is filed
pursuant to Rule 424 under the Act, which shall satisfy the provisions of
Section 11(a) of the Act.
(g) The Company shall, whether or not any sale of Notes
is consummated or this Agreement is terminated, pay all expenses incident to the
performance of its 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 (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 New York Stock Exchange, Inc.
(the "New York Stock Exchange") or such other securities exchange agreed to in
writing by the Company, the
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fees and expenses incurred with respect to any filing with the National
Association of Securities Dealers, Inc. and the reasonable fees and
disbursements of Cleary, Gottlieb, Steen & Hamilton ("Cleary Gottlieb"), as
counsel for the Agent, or other counsel reasonably satisfactory to both the
Agent and the Company, and such other expenses, including, without limitation,
advertising expenses as may be agreed upon by the Agent and the Company;
provided, however, that with respect to any purchase of Notes by the Agent as
principal pursuant to a Terms Agreement, the fees and disbursements of Cleary
Gottlieb or other counsel to the Agent relating to such purchase shall be paid
by the Agent and shall not be paid by the Company.
(h) During the term of this Agreement, the Company shall
furnish to the Agent such relevant documents and certificates of officers of the
Company relating to the business, operations and affairs of the Company, 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 of its obligations hereunder or
thereunder as the Agent may from time to time reasonably request and shall
promptly notify the Agent orally, followed by written notice of any downgrading,
or of its receipt of any notice of any intended downgrading, in the rating
accorded any of the Company's securities by Moody's Investor Service ("Moody's")
or Standard & Poor's Corporation ("Standard & Poor's") or, if one of them no
longer rates the securities of the Company, 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 (a) Pricing Supplement, (b) an
amendment or supplement relating solely to an offering of securities other than
the Notes or (c) an amendment or supplement made pursuant to the incorporation
by reference of a document filed under the Exchange Act), if requested by the
Agent, the Company will deliver or cause to be delivered forthwith to the Agent
a certificate of the Company signed by the Chairman of the Board, any Vice
Chairman, the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, Deputy Treasurer, or any Assistant Treasurer and by the Controller or
the principal financial or accounting officer of the Company (or another officer
or officers acceptable to the 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 the Agent, to
the effect that the statements contained in the certificate referred to in
Section 4(b)(iii) hereof that was last furnished to the Agent (either pursuant
to Section 4(b)(iii) or pursuant to this Section 3(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 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 4(b)(iii) hereof, 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.
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(j) Each time the Registration Statement or the
Prospectus is amended or supplemented (other than (a) a Pricing Supplement, (b)
an amendment or supplement relating solely to an offering of securities other
than the Notes or (c) an amendment or supplement made pursuant to the
incorporation by reference of a document under the Exchange Act), if requested
by the Agent, the Company shall furnish to or cause to be furnished forthwith to
the Agent the written opinion of the General Counsel-Capital Markets of the
Company or other counsel reasonably satisfactory to the 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 the Agent, to the effect set forth in Exhibit C hereto. In lieu of such
opinion, counsel last furnishing such an opinion to the Agent may furnish to the
Agent a letter to the effect that the 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 (a) a Pricing Supplement, (b) any amendment or
supplement relating solely to an offering of securities other than the Notes or
(c) an amendment or supplement made pursuant to the incorporation by reference
of a document under the Exchange Act), if requested by the Agent, the Company
shall cause KPMG LLP ("KPMG"), its independent certified public accountants, to
furnish forthwith the Agent a letter, within three business days following the
date of the effectiveness of such amendment or the date of filing of such
supplement or document, as the case may be (provided that, in the event any
Settlement Date falls within such three business day period, such letter will be
delivered on or prior to such Settlement Date), in form satisfactory to the
Agent, of the same tenor as the letter referred to in Section 4(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 Company; provided, 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 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 the Agent as principal shall be
deemed to be an affirmation that the representations and warranties of the
Company 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 the Agent, or the
Agent as principal, of the Notes 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
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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 3
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 Agent to suspend solicitation of offers to purchase the Notes in
its capacity as Agent of the Company and the Agent does not then hold any Notes
acquired by it as principal pursuant to a Terms Agreement, the Company shall not
be obligated to furnish or cause to be furnished to the Agent 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 Agent 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.
4. Conditions to the Obligations of the Agent. The Agent's
obligations to solicit offers to purchase Notes as agent of the Company, the
Agent's 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 herein
contained, to the accuracy of the statements of the Company's officers made in
each certificate furnished pursuant to the provisions hereof and to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed (in the case of the Agent's
obligations to solicit offers to purchase Notes, at the time of such
solicitation, and, in the case of the Agent's or any other 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 and
its subsidiaries 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 the Agent as principal, as disclosed to the Agent in writing
by the Company before it accepted the offer to purchase such Notes.
(ii) There shall not have occurred any (A)
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 the Company on the New York Stock Exchange, (B)
declaration of a general moratorium on commercial banking activities in
New York by either federal or New York state authorities or (C) any
outbreak or escalation of major hostilities in which the United States
is involved,
11
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) through (C), 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 the 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 of the Company's securities by Moody's or Standard &
Poor's or, if one of them no longer rates the securities of the
Company, 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 the
Agent as principal, as disclosed to the Agent in writing by the Company
before it accepted the offer to purchase such Notes.
(b) On the Commencement Date and, if called for by any
agreement by the Agent to purchase Notes as principal, on the corresponding
Settlement Date:
(i) The Company shall have furnished to the
Agent the opinion of the General Counsel-Capital Markets of the Company
(or other counsel for the Company 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 Company (or other
counsel for the Company reasonably acceptable to the 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 C hereto.
(ii) The Agent shall have received from Cleary
Gottlieb (or other counsel reasonably acceptable to the Agent and the
Company), counsel for the Agent, an opinion dated the Commencement Date
or the Settlement Date, as the case may be, to the effect set forth in
Exhibit D hereto.
(iii) The Company shall have furnished to the
Agent a certificate of the Company, signed by the Chairman of the
Board, any Vice Chairman, the Chief Financial Officer, the Chief
Accounting Officer, the Treasurer, the Deputy Treasurer, or any
Assistant Treasurer and by the Controller or the principal financial or
accounting officer of the Company (or another officer or officers
acceptable to the Agent), dated the Commencement Date or the Settlement
Date, as the case may be, to the effect that each signatory of such
certificate, to the best of his or her knowledge, after reasonable
investigation, certifies that:
(A) the representations and warranties
of the Company in this Agreement are true and correct in all
material respects on and as of
12
the date of such certificate with the same effect as if made
on the date of such certificate and the Company has complied
in all material respects with all the agreements and satisfied
in all material respects all the conditions on its part to be
performed or satisfied as a condition to the obligations of
the 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; 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 Company and its subsidiaries, taken as a whole, which
is not disclosed in the Prospectus, as amended or
supplemented.
(iv) KPMG, or another nationally recognized
independent accounting firm, shall have furnished to the 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 the
Agent, to the effect set forth in Exhibit E hereto.
(v) The Company shall have furnished to the
Agent such appropriate further information, certificates and documents
as the Agent may reasonably request.
5. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the
Agent against any losses, claims, damages or liabilities, joint or several, to
which the Agent 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
the Agent for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon 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 by or on behalf of the Agent
specifically for use in the preparation thereof and such indemnity with respect
to any preliminary prospectus, the Prospectus or any preliminary supplemental
prospectus,
13
shall not inure to the benefit of the Agent (or any person controlling the
Agent) if the Company shall have delivered sufficient quantities of the
Prospectus, as amended and supplemented, to the Agent 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 the Agent 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 the Agent.
(b) The Agent will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
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 such part 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 by or on behalf
of the Agent specifically for use in the preparation thereof, and will reimburse
the Company for any legal or other expenses reasonably incurred by the Company
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 it from any liability which it 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 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.
14
(d) If the indemnification provided for in this Section 5
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the 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 on the one hand and the Agent participating in the offering that
gave rise to such losses, claims, damages or liabilities on the other from the
offering of such Notes, 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 on the one hand and the Agent 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 on the one hand
and the Agent on the other in connection with the offering of such Notes shall
be deemed to be in the same proportion as the total net proceeds from the
offering of such Notes by the Agent (before deducting expenses) received by the
Company bear to the total commissions received by the Agent in respect thereof.
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 relates to information
supplied by the Company or the Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Agent agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation 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), the Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Notes were offered
and sold to the public by the Agent exceeds the amount of any damages which the
Agent has 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. Promptly after receipt by an indemnified party under this
subsection (d) of 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
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).
15
(e) The obligations of the Company under this Section 5
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Agent within the meaning of the Act or the Exchange Act; and the
obligations of the Agent under this Section 5 shall be in addition to any
liability which the Agent may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act or the Exchange Act.
6. Termination of the Appointment of the Agent. This Agreement
may be terminated at any time by either party hereto upon the giving of written
notice of such termination to the other party hereto. The termination of this
Agreement shall not require termination of any agreement by the Agent 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
party shall have any liability to the other party hereto, except as provided in
the first sentence of the second paragraph of Section 1(a), the last proviso of
Section 3(b), and Sections 3(f), 3(g), 5, 7 and 11 hereof, 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 Company's
representations and warranties stated in Section 2 and its obligations under
Sections 1(c), 3(a), 3(b), 3(c), 3(e), 3(h), 3(i), 3(j), 3(k), 3(l) and 4 hereof
shall also remain in full force and effect in favor of such purchaser or agent
and not be terminated until the delivery of such Notes.
7. Representations and Indemnities to Survive. With respect to
the Agent's solicitation of offers to purchase Notes as agent of the Company or
the Agent's 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 or its officers and of the Agent
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 the Agent or the
Company or any of the officers, directors or controlling persons referred to in
Section 5 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.
8. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Agent, will be mailed, delivered
or transmitted to it by any standard form of telecommunications at:
Citigroup Global Markets Inc.
388 Greenwich St.
New York, NY 10013
Attention: Medium-Term Note Department
Fax: (212) 816-0949
16
or, if sent to the Company, will be mailed, delivered or transmitted by any
standard form of telecommunications at:
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Attention: Treasury
Reference Medium-Term Note Program, Series G
Fax: (212) 793-5629
and
425 Park Avenue
New York, New York 10022
Attention: General Counsel-Capital Markets
Reference Medium-Term Note Program
Fax: (212) 793-8121
Any party to this Agreement may change the address to which notices or
communications to it shall be directed by giving notice in writing to the other
parties hereto.
9. 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 5 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 5 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 4
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 the Agent hereunder may not be assigned without the prior
written consent of the Company.
10. 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.
17
11. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
18
If the foregoing is in accordance with the Agent's understanding of this
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and the Agent's acceptance shall represent a binding agreement
between the Company and the Agent.
Very truly yours,
CITIGROUP INC.
By: _________________________________
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first written above.
CITIGROUP GLOBAL MARKETS INC.
By: ____________________
Name:
Title:
Schedule 1
Citigroup Inc.
Medium-Term Notes
Commission Schedule
Unless otherwise agreed at the time of trade, Citigroup agrees
to pay each Selling Agent a commission equal to the following percentage of the
principal amount of Notes sold to purchasers solicited by such Selling Agent:
Term Commission Rate
- ---- ---------------
S 1-1
Exhibit A
CITIGROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES G
MEDIUM-TERM SUBORDINATED NOTES, SERIES G
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
TERMS AGREEMENT
Dated:_____, 2003
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Attention: Treasurer
Re: Distribution Agreement dated ___, 2003
(the "Distribution Agreement")
Subject to the terms and provisions stated below, the
undersigned agrees to purchase the following principal amount of your (check
box):
[ ] Medium-Term Senior Notes, Series G, Due Nine Months or
More from the Date of Issue: $________; and/or
[ ] Medium-Term Subordinated Notes, Series G, Due Nine Months
or More from the Date of Issue: $_____________.
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
- -------------- --------------------- ------------------------
Purchase Price: Interest Rate: Base Rate:
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
-------------- --------------------- ------------------------
Price to Public: Index Maturity:
Settlement Date and time: Spread:
Place of delivery: Spread Multiplier:
Original Issue Date: Amortization
Schedule:
Date on which interest
begins to accrue (if
different from Original
Issue Date):
Specified Currency: Initial Interest Rate:
A-2
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
-------------- --------------------- ------------------------
Maturity Date: Interest Reset Dates:
Interest Payment Dates: Maximum Interest Rate:
Regular Record Dates:
Exchange Rate Agent:
Option to receive
payments in specified
currency other than U.S.
Dollars:
Sinking fund:
A-3
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
-------------- --------------------- ------------------------
Total amount OID:
Original yield to Minimum Interest Rate:
maturity:
Renewal terms:
Option to elect
repayment:
Optional Repayment
Dates:
Optional Repayment
prices:
A-4
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
-------------- --------------------- ------------------------
Optional Interest Rate
Reset:
Optional Reset Dates:
Optional extension of
maturity:
Length of extension
period:
Number of extension
periods:
Final Maturity Date:
A-5
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
-------------- --------------------- ------------------------
Depositary:
Optional Redemption Interest Reset Period:
Date(s):
Initial Redemption
Date: Interest payment
Period:
Initial Redemption Calculation Agent:
Percentage:
Annual redemption
percentage decrease:
Other terms:
The provisions of Sections 1(b) and (c) and 2 through 11 of
the Distribution 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.
A-6
[Insert only if Agent is acting as principal: 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 Senior Notes, Series G, Due Nine Months or More from the Date
of Issue and the Medium-Term Subordinated Notes, Series G, Due Nine Months or
More from the Date of Issue (other than (i) the 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.]
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required:
A-7
CITIGROUP GLOBAL MARKETS INC.
By __________________________
Name:
Title:
Accepted:
CITIGROUP INC.
By ________________________
Name:
Title:
Exhibit B
CITIGROUP INC.
Medium-Term Notes Administrative Procedures
____________, 2003
The Medium-Term Senior Notes, Series G, Due Nine Months or
More from the Date of Issue (the "Senior Notes") and the Medium-Term
Subordinated Notes, Series G, Due Nine Months or More from the Date of Issue
(the "Subordinated Notes" and, together with the Senior Notes, the "Notes") of
Citigroup Inc. (the "Company") are to be offered on a continuing basis.
Citigroup Global Markets Inc. has agreed, as agent, to solicit purchases of the
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 Distribution Agreement between the Company and the agents named
therein (including the Agent) dated the date hereof (the "Distribution
Agreement"). The Notes have been registered with the Securities and Exchange
Commission (the "Commission"). The Bank of New York ("BONY") is the trustee
under the Indenture, dated as of March 15, 1987, as amended from time to time,
under which the Senior Notes will be issued (the "Senior Debt Indenture"). Bank
One Trust Company, N.A. ("Bank One") is the trustee (together with BONY, the
"Trustees") under the Indenture, dated as of April 12, 2001, as amended from
time to time, under which the Subordinated Notes will be issued (the
"Subordinated Debt Indenture" and, together with the Senior Debt Indenture, the
"Indentures"). The Senior 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 Subordinated Notes will be subordinate and junior in the
right of payment to all Senior Indebtedness of the Company, to the extent and in
the manner set forth in the Subordinated Debt Indenture.
The Distribution 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
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 Senior Notes and each Global Security representing Subordinated
Notes will be delivered to Citibank, N.A. ("Citibank") acting as agent for The
Depository Trust Company or any successor depository selected by the Company
("DTC," which term, as used herein, includes any successor depository selected
by the Company), and will be recorded in the 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.
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, Citibank 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.
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
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." The Company will appoint and
enter into agreements with agents (each a "Calculation Agent") to calculate
interest rates on Floating Rate Notes. Unless otherwise specified in a Pricing
Supplement, Citibank will be the Calculation Agent for each Senior Note that is
a Floating Rate Note and each Subordinated Note that is a Floating Rate Note. To
the extent the procedures set forth below conflict with the provisions of the
Notes, the Indentures, DTC's operating requirements or the Distribution
Agreement, the relevant provisions of the Notes, the Indentures, DTC's operating
requirements and the Distribution Agreement shall control. The Company has
appointed Citibank to act as paying agent.
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 (in such
capacity, the "DTC Agent") will perform the custodial, document control and
administrative functions described below for the Senior Notes and the
Subordinated Notes, respectively. Citibank will perform such functions in
accordance with its respective obligations under a Letter of Representations
from the Company and Citibank to DTC dated as of _____, 2003 and a Medium-Term
Note Certificate Agreement between Citibank and DTC, dated as of October 31,
1988, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
B-2
Notes, the Company will issue a single global
security in fully registered form without coupons (a
"Global Security") representing up to $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 or (ii) any Certificated Note or
(iii) both Senior Notes and Subordinated Notes.
Identification Numbers: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of two series
of CUSIP numbers, one for Senior Notes and one for
Subordinated Notes, each of which series consists of
approximately 900 CUSIP numbers and relates to
Global Securities representing Book-Entry Notes and
book-entry
B-3
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. The
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.
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 applicable Indenture. 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.
B-4
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: The 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 Book-Entry
Notes, and the CUSIP numbers of the exchanged Global
Securities will, in accordance with CUSIP Service
Bureau
B-5
procedures, be canceled and not immediately
reassigned. Upon such exchange, the DTC Agent will
mark 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 applicable
Indenture and deliver a certificate of destruction
to the Company. Notwithstanding the foregoing, if
the Global Securities to be exchanged exceed
$500,000,000 in aggregate principal amount, one
Global Security will be authenticated and issued to
represent each $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. A
Floating Rate Book-Entry Note will mature only on an
Interest Payment Date for such Note.
Denominations: Book-Entry Notes will be issued in principal amounts
of $1,000 or any amount in excess thereof that is an
integral multiple of $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 $500,000,000 (or the equivalent thereof).
If one or more Book-Entry Notes having an aggregate
principal amount in excess of $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
$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
B-6
representing such Book-Entry Note or Notes shall be
assigned the same CUSIP number.
Notice of Redemption Dates: The DTC Agent will, with respect to the Notes, 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 applicable Letter of
Representations.
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 Distribution
Agreement), as supplemented by the applicable
Pricing Supplement. Unless otherwise specified, 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 Corporation 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
Corporation.
B-7
Regular Record Dates. Unless otherwise
indicated in the applicable Pricing
Supplement, the Regular Record Date with
respect to any Interest Payment Date (i) for
a Floating Rate Note shall be the Business
Day immediately preceding such Interest
Payment Date and (ii) for a 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 and Interest: Payment of Interest Only. Promptly after
each Regular 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 Corporation.
The Company will pay to Citibank for the
Notes represented by such Global Security
the total amount of interest due on such
Interest Payment Date (other than at
Maturity), and Citibank 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. In the case of a Floating Rate Note
that is a LIBOR note or a EURIBOR note (each
as described in the Prospectus), if
postponement to the next business day would
cause the interest payment date to be in the
next succeeding calendar month, the Interest
Payment Date will instead be the immediately
preceding Business Day.
Payments at Maturity or Upon Redemption. On
or about the first Business Day of each
month, the DTC Agent will, with respect to
the Global
B-8
Securities for which it acts as DTC Agent,
deliver to the Company, DTC and the 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 Citibank for the Notes
represented by such Global Security the
principal amount or redemption price of such
Global Security, together with interest due
at such Maturity or redemption in the manner
set forth below under "Manner of Payment."
Citibank 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 or
redemption price due on the Maturity Date or
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, if requested, deliver a certificate of
destruction to the Company.
Manner of Payment. The total amount of any
principal and interest or redemption price
due on Global Securities on any Interest
Payment Date or at Maturity or upon
redemption or repayment shall be paid by the
Company to Citibank 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 Citibank to
withdraw funds from an account maintained by
B-9
the Company with the DTC Agent for the Notes
represented by such Global Securities. The
Company will confirm any such instructions
in writing to Citibank. Prior to 10 A.M.
(New York City time) on the date of Maturity
or as soon as possible thereafter, Citibank
will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account
at the Federal Reserve 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), Citibank 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
B-10
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 Citibank on or prior to the
fifth 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 Citibank shall
use such instructions to pay the
Participants directly. If DTC does not so
notify Citibank, it is understood that only
U.S. dollar payments are to be made.
Citibank 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
$1,000 face amount. In the event that
Citibank's quotation to convert the foreign
currency into U.S. dollars is not available,
Citibank 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 Citibank and Citibank 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 or principal or redemption
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's Company Notice to the Trustee regarding
Exercise of Optional Reset or Exercise of Optional Reset. Not less than 45
Optional Extension of Maturity: or more than 60 days before an Optional
Reset Date as set forth in a Book-Entry
Note, the Company will notify the Trustee
for such Book-Entry Note whether it is
exercising its option to reset the
B-11
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 the 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 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 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
B-12
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.
The 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 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 Book-Entry Notes for
which tender for repayment has been revoked.
B-13
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
Citibank 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. Citibank 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 Exercise
Company's Exercise of Optional Redemption. At least 45 days
of Optional Redemption: prior to the date on which it intends to
redeem a Book-Entry Note, the Company will
notify the Trustee for such Book-Entry Note
that it is exercising such option with
respect to such Book-Entry Note on such date
and the redemption price of such Book-Entry
Notes.
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 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 Citibank 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 each Trustee serves as
Trustee and which are to be repaid on such
Redemption Date. Citibank will use such
money to repay such Book-Entry Notes
pursuant to the terms set forth in such
Notes.
B-14
Payments of Principal Trustee Notice to Company of Option to be
and Interest Upon Repaid. Upon receipt of notice of exercise
Exercise of Optional of the option for repayment and the Global
Repayment (Except Securities representing the Book-Entry Notes
Pursuant to so to be repaid as set forth in such Notes,
Company's Exercise the Trustee for such Book-Entry Notes shall
of Optional Reset or (unless such notice was received pursuant to
Optional Extension): the Company's exercise of an optional reset
or an optional 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 Optional Repayment Date.
Deposit of Repayment Price. On or prior to
any Optional Repayment Date, the Company
shall deposit with Citibank 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. Citibank 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
Setting and Posting: time to 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 Rejection of Unless otherwise instructed by the Company,
Orders: the Agent 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
B-15
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
Supplement: is accepted 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 one copy thereof by
electronic submission 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. If required, the Agent
will file 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 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
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., Brooklyn Army Terminal,
140 58th Street, 8th Floor, Brooklyn, New
York 11220 (with a copy transmitted by
telecopy to (718) 765-6734, Attention:
Annabelle Avila).
Suspension of Solicitation; Subject to the Company's representations,
Amendment or Supplement: warranties and covenants contained in the
Distribution Agreement, 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
B-16
forthwith suspend solicitation until such
time as the Company has advised it 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
B-17
and delivery and payment 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 next
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
B-18
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 Distribution 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.
(a) The Company will advise the
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
B-19
electronic transmission of such CUSIP number
as soon as practicable.
B. 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 Corporation,
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 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 the Trustee
and the Agent.
7. Whether such Global Security will
represent any other Book-Entry Note (to the
extent known at such time).
C. 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
the Trustee.
D. The Trustee will complete such
Book-Entry Note, stamp the appropriate
legend, as instructed by DTC, if not
already set forth
B-20
thereon, and authenticate the Global
Security representing such Book-Entry
Note.
E. DTC will credit such Book-Entry Note to
such DTC Agent's participant account at
DTC.
F. 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.
G. 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.
H. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "F" and "G" will
be
B-21
settled in accordance with SDFS
operating procedures in effect on the
settlement date.
I. Such DTC Agent will, upon receipt of
funds from the Agent in accordance with
Settlement Procedure "F," 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 "F."
J. 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.
K. Monthly, the 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 Timetable: For sales by the Company of Book-Entry Notes
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
B-22
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
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 Notes 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 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
B-23
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 mark such Global
Security "canceled," make appropriate
entries in such Trustee's records and
destroy the canceled Global Security in
accordance with the applicable Indenture
and, if requested, deliver a certificate of
destruction to the 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 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 "G" and "F," 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
B-24
than a default by the Agent in the
performance of its obligations hereunder and
under the Distribution 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, which have not failed to settle, to
have been represented by such Global
Security and will make appropriate entries
in its records.
Authenticity of Signatures: 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 the 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 Distribution 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 offers to purchase
the Book-Entry Notes. Advertising expenses
will be paid by the Company.
B-25
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. A Floating Rate Certificated Note
will mature only on an Interest Payment Date
for such Note.
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
B-26
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).
Regular Record Dates. Unless otherwise
indicated in the applicable Pricing
Supplement, the Regular Record Date with
respect to any Interest Payment Date (i) for
a Floating Rate Note shall be the Business
Day immediately preceding such Interest
Payment Date and (ii) for a 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 Citibank will pay the principal amount of
Interest: each Certificated Note at Maturity or upon
redemption upon presentation and surrender
of such Note to Citibank. 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 Citibank
B-27
and in turn by the holder of such Note.
Certificated Notes presented to Citibank at
Maturity or upon redemption for payment will
be canceled and destroyed by Citibank, and a
certificate of destruction will be 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 Citibank (or another
person appointed by Citibank) and mailed by
Citibank to the person entitled thereto as
provided in such Note and the applicable
Indenture; provided, however, that any
holder of $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,
Citibank 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. Citibank 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
Citibank.
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
B-28
Day and no interest shall accrue on account
of such delayed payment. In the case of a
Floating Rate Note that is a LIBOR note or a
EURIBOR note (each as described in the
Prospectus), if postponement to the next
business day would cause the interest
payment date to be in the next succeeding
calendar month, the Interest Payment Date
will instead be the immediately preceding
Business Day.
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 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 one copy
thereof by electronic
B-29
submission 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. If required, the Agent will
file 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: Citigroup Global
Markets Inc., Brooklyn Army Terminal, 140
58th Street, 8th Floor, Brooklyn, New York
11220 (with a copy transmitted by telecopy
to (718) 765-6734, Attention: Annabelle
Avila).
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 Company's representations,
Solicitation; warranties and covenants contained in the
Amendment or Distribution Agreement, the Company may
Supplement: 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 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 the Trustees whether such
orders may be settled and whether copies of
the Prospectus as
B-30
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 A copy of the Prospectus and a Pricing
Prospectus: 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
B-31
"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 Settlement Procedures with regard to each
Procedures: 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").
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
B-32
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 Distribution
Agreement.
15. Whether such Certificated Note
is 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 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 the Company, the Agent
and the Trustee:
B-33
1. Certificated Note with customer
confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
D. The 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 the
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.
B-34
F. The Trustee will send Stub Three to
the Company by first-class mail.
Settlement For orders of Certificated Notes solicited
Procedures by the Agent, as agent, and accepted by the
Timetable: 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:
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 Optional Reset. Not less than 45 or more
of Optional Reset than 60 days before an Optional Reset Date
or Extension of as set forth in a Certificated Note, the
Maturity: Company 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.
B-35
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 the
Certificated Note 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 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 the Certificated 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
B-36
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 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 higher 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 a Reset Notice, such
Holder 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
Citibank 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 each Trustee serves as
Trustee and which are to be repaid on such
old Stated Maturity or Optional Reset Date,
as the case may be. Citibank will use such
money to repay such Certificated Notes
pursuant to the terms set
B-37
forth in such Notes.
Procedures upon Company Notice to Trustee regarding Exercise
Company's Exercise of Optional Redemption. At least 45 days
of Optional prior to the date on which it intends to
Redemption: 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 and Trustee Notice to Company of Option to be
Interest Upon Exercise of Repaid. Upon receipt of notice of exercise
Optional Repayment (Except of the option for repayment and the
Pursuant to Company's Exercise Certificated Notes to be repaid as set forth
of Optional Reset or Optional in such Notes, the Trustee for such
Extension): Certificated Notes shall (unless such notice
was received pursuant to the Company's
exercise of an 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
B-38
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 Distribution 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 mark such Note
"canceled," make appropriate entries in the
applicable Trustee's records and send such
Note to the Company.
Authenticity of The Agent will not have any obligation or
Signatures: 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 Distribution
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.
B-39
Exhibit C
Opinion of the General Counsel-Capital Markets of the Company
The General Counsel-Capital Markets (or other counsel for the Company
reasonably acceptable to the Agent) will furnish pursuant to Section 4(b)(i) of
the Distribution Agreement the following opinions, in substantially the form set
forth below (subject to the limitations, assumptions, qualifications and
exceptions set forth therein)(capitalized terms used but not defined herein
shall have the meaning contained in the Distribution Agreement):
1. The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus;
2. The Company is duly qualified to do business as a foreign
corporation in good standing in all jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business requires such
qualification and the failure to so qualify would have a material adverse effect
on the Company;
3. Each Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act and
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement, to applicable
bankruptcy, reorganization, insolvency, moratorium and 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, and subject further, as to enforcement, to any limitations as
a result of (x) requirements that a claim with respect to any Notes denominated
other than in U.S. dollars (or a foreign currency or foreign currency unit
judgment in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or (y)
governmental authority to limit, delay or prohibit the making of payments in
foreign currency or currency units or payments outside the United States);
4. The Notes have been validly authorized and, when duly executed by
the proper officers of the Company, duly authenticated by the Trustees and
delivered as contemplated by the Distribution Agreement and by the Indentures,
will be validly issued and outstanding obligations of the Company enforceable in
accordance with their 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, and subject
further, as to enforcement, to any limitations as a result of (x) requirements
that a claim with respect to any Notes denominated other than in U.S. dollars
(or a foreign currency or foreign currency unit judgment in respect of such
claim) be converted into U.S. dollars at a rate
C-1
of exchange prevailing on a date determined pursuant to applicable law or (y)
governmental authority to limit, delay or prohibit the making of payments in
foreign currency or currency units or payments outside the United States) and
conform in all material respects to the description thereof in the Prospectus
dated _____, 2003 and the Prospectus Supplement dated _____, 2003 (together, the
"Prospectus");
5. Each Indenture conforms in all material respects to the descriptions
thereof in the Prospectus;
6. The Distribution Agreement has been duly authorized, executed and
delivered by the Company;
7. No consent, approval, authorization or order of any court or
governmental agency, authority or body is required for the consummation by the
Company of the transactions contemplated by the Distribution Agreement or in the
Indentures, except such as have been obtained under the Act and the Trust
Indenture Act and such as may be required under the securities or Blue Sky laws
of any jurisdiction in connection with the sale of the Notes;
8. The execution, delivery and performance of the Indentures and the
Distribution Agreement will not, and the issuance and sale of the Notes in
compliance with the terms and provisions thereof, if they were issued on the
date hereof, would not, result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule, regulation
or order of any governmental agency or body or any court having jurisdiction
over the Company or any material subsidiary of the Company or any of their
properties or any agreement or instrument known to such counsel to which the
Company or any material subsidiary of the Company is a party or by which the
Company or any such material subsidiary is bound or to which any of the
properties of the Company or any such material subsidiary is subject, or the
charter or By-Laws of the Company or of any such material subsidiary except that
no opinion is expressed in this paragraph 8 with respect to (i) the rights to
indemnity and contribution contained in the Distribution Agreement which may be
limited by federal or state securities laws or the public policy underlying such
laws or (ii) any state securities or Blue Sky laws; and
9. The Company's Registration Statement on Form S-3 (Registration No.
333-, the "Registration Statement") was declared effective under the Act, and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or have been communicated
by the Securities and Exchange Commission to the Company as being contemplated
by it under the Act. The Registration Statement, as of its effective date, and
the Prospectus as of the date of the Prospectus Supplement and as of the date
hereof, comply as to form in all material respects with the requirements of the
Act, the Exchange Act and the Trust Indenture Act and the applicable rules and
regulations thereunder (except as to the financial statements or other data of a
financial or statistical nature or the Statements of Eligibility (Forms T-1)
under the Trust Indenture Act of the Trustee, as to which no opinion is
expressed); such counsel has no reason to
C-2
believe that the Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Prospectus Supplement
or as of the date hereof, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (except as to the financial statements or other data of a
financial or statistical nature, as to which no opinion is expressed). The
descriptions in the Registration Statement and the Prospectus of statutes, legal
and governmental proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be described in the
Registration Statement or Prospectus which are not described as required or of
any contracts or documents of a character required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which are
not described and filed as required; except that such counsel does not express
any opinion as to the financial statements or other data of a financial or
statistical nature contained in the Registration Statement or the Prospectus.
While such counsel has not independently verified and does not assume any
responsibility for the accuracy, completeness or fairness of the statements,
except as expressly referred to in the immediately preceding sentence, contained
in the Registration Statement or the Prospectus, the foregoing opinion in the
second and third sentences in this paragraph 9 is based upon such counsel's
review and discussion with members of the Company's legal staff who participated
in the preparation of the Registration Statement and the Prospectus (including
any documents annexed thereto or incorporated by reference therein) and any
amendments and supplements thereto, review and discussion of the contents
thereof (including any such annexed or incorporated documents) and the knowledge
such counsel has gained in his/her capacity as General Counsel--Capital Markets
to the Company, but without any independent check or verification on such
counsel's part.
C-3
Exhibit D
Opinion of Counsel for the Agent
Cleary, Gottlieb, Steen & Hamilton (or other counsel for the Company
reasonably acceptable to the Agent and the Company), counsel for the Agent, will
furnish pursuant to Section 4(b)(ii) of the Distribution Agreement the following
opinions, in substantially the form set forth below (subject to the limitations,
assumptions, qualifications and exceptions set forth therein) (capitalized terms
used but not defined herein shall have the meaning contained in the Distribution
Agreement):
1. The execution and delivery of each of the Indentures
have been duly authorized by all necessary corporate action of the Company, and
each of the Indentures has been duly executed and delivered by the Company, and
qualified under the Trust Indenture Act of 1939, as amended, and each of the
Indentures is a valid, binding and enforceable agreement of the Company.
2. The execution and delivery of the Notes, assuming
each of the Notes matures nine months or more from its date of issue, have been
duly authorized by all necessary corporate action of the Company, and the Notes
have been duly authorized for issuance and sale pursuant to the Distribution
Agreement and, when duly executed and authenticated in accordance with the
provisions of the applicable Indenture and delivered and paid for pursuant to
the Distribution Agreement, will be the valid, binding and enforceable
obligations of the Company, entitled to the benefits of the applicable
Indenture.
3. The execution and delivery of the Distribution
Agreement have been duly authorized by all necessary corporate action of the
Company, and the Distribution Agreement has been duly executed and delivered by
the Company.
4. No information has come to our attention that causes
us to believe that the Registration Statement, including the documents
incorporated by reference therein (except the financial statements and schedules
and other financial and statistical data included therein, as to which we
express no view), at the time it became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
5. No information has come to our attention that causes
us to believe that the Prospectus, including the documents incorporated by
reference therein (except the financial statements and schedules and other
financial and statistical data included therein, as to which we express no
view), as of the date of the Prospectus Supplement or hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
D-1
Exhibit E
Letter from Accountants
E-1
Exhibit F
MEDIUM-TERM SENIOR NOTES, SERIES G
MEDIUM-TERM SUBORDINATED NOTES, SERIES G
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
-------------
ADDITIONAL AGENTS AGREEMENT
-------------
New York, New York
Dated as of
The Agent(s) Named in Schedule I Hereto
Ladies and Gentlemen:
Reference is made to the Distribution Agreement (including the exhibits
thereto), dated as of ____ , 2003 (the "Distribution Agreement") between
Citigroup Inc., a Delaware corporation ("Citigroup"), and Citigroup Global
Markets Inc., as Agent, relating to the issue and sale from time to time of
Citigroup's Medium-Term Senior Notes, Series G, Due Nine Months or More from the
Date of Issue (the "Senior Notes") and Citigroup's Medium-Term Subordinated
Notes, Series G, Due Nine Months or More from the Date of Issue (the
"Subordinated Notes" and, together with the Senior Notes, the "Notes"). The
Distribution Agreement has been attached hereto as Annex A.
WHEREAS, Citigroup is permitted under the terms of the Distribution
Agreement to enter into agreements similar to the Distribution Agreement with
other parties; and
WHEREAS, the Agent(s) named in Schedule I hereto (the "Agent(s)") and
Citigroup wish to enter into an agreement, similar to the Distribution
Agreement, appointing each Agent as an additional selling agent with respect to
the Notes;
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, Citigroup hereby agrees that each Agent shall become an additional Agent
with respect to the Notes and each Agent named herein hereby agrees to become an
Agent with respect to the Notes and to be bound by the terms and conditions of
the Distribution Agreement, which terms and conditions are hereby incorporated
by reference herein, except that the term "Agent" therein shall instead mean
each Agent named herein and no other person shall be deemed to be an Agent under
this Agreement.
Unless sooner terminated in accordance with Section 6 of the
Distribution Agreement as incorporated by reference herein or unless otherwise
mutually agreed by the parties hereto in writing, this Agreement shall terminate
on __________, ____. No such termination shall affect any accrued obligations
under this Agreement. The respective indemnities, agreements, representations,
warranties and other statements of the Agent(s) and Citigroup and its officers
set forth in, or made pursuant to, this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of the Agent(s) or Citigroup or any of the officers,
directors or controlling persons referred to in Section 5 of the Distribution
Agreement as incorporated by reference herein, and will survive delivery of any
payment for any Notes sold by Citigroup. The provisions of Sections 3(g) and 5
of the Distribution Agreement as incorporated by reference herein shall survive
the termination of this Agreement.
F-2
This Agreement may be signed in counterparts, each of which shall be
deemed an original, which taken together, shall constitute one and the same
instrument.
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, including Annex A, and your acceptance shall represent a binding
agreement between you and Citigroup in accordance with its terms.
Very truly yours,
CITIGROUP INC.
By: ________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
[ ]
By:
Name:
Title:
[ ]
By:
Name:
Title:
Schedule I
Agent(s)
F-4
Annex A
Form of Distribution Agreement
F-5