Exhibit 1.01
TERMS AGREEMENT
December 2, 2004
Citigroup Inc.
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Ladies and Gentlemen:
We understand that Citigroup Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $1,000,000,000 aggregate principal amount of its debt
securities (the "Securities"). Subject to the terms and conditions set forth
herein or incorporated by reference herein, we, Citigroup Global Markets Inc.,
Barclays Capital Inc., Bear, Sterns & Co. Inc., Lehman Brothers Inc., UBS
Securities LLC, Blaylock & Partners, L.P., Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, RBC Capital Markets Corporation, SunTrust
Capital Markets, Inc. and Utendahl Capital Partners, L.P., as underwriters (the
"Underwriters"), offer to purchase, severally and not jointly, the principal
amount of the Securities set forth opposite our respective names on the list
attached as Annex A hereto at 98.886% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance. The Closing Date shall be
December 9, 2004, at 8:30 a.m. The closing shall take place at the Corporate Law
offices of the Company located at 425 Park Avenue, New York, New York 10043.
The Securities shall have the following terms:
Title: ............................................. 5.850% Fixed Rate Senior
Notes Due 2034
Maturity: .......................................... December 11, 2034
Interest Rate: ..................................... 5.850% per annum
Interest Payment Dates: ............................ Semi-annually on June 11
and December 11,
commencing June 11, 2005
Initial Price to Public: ........................... 99.761% of the
principal amount
thereof, plus
accrued interest,
if any, from December 9,
2004
Redemption Provisions: ............................. The Securities are not
redeemable by the
Company prior to
maturity, except upon
the occurrence of
certain events involving
United States taxation,
as set forth in the
Prospectus Supplement,
dated December 2, 2004,
to the Prospectus, dated
September 2, 2004
1
Record Date: ....................................... The May 31 or November
30 preceding each
Interest Payment Date
Additional Terms:
The Securities shall be issuable as Registered Securities only. The
Securities will be initially represented by one or more global Securities
registered in the name of The Depository Trust Company ("DTC") or its nominees,
as described in the Prospectus Supplement relating to the Securities. Beneficial
interests in the Securities will be shown on, and transfers thereof will be
effected only through, records maintained by DTC, Euroclear Bank S.A./N.V., as
operator of the Euroclear System, and Clearstream International and their
respective participants. Owners of beneficial interests in the Securities will
be entitled to physical delivery of Securities in certificated form only under
the limited circumstances described in the Prospectus Supplement. Principal and
interest on the Securities shall be payable in United States dollars. The
provisions of Sections 11.03 and 11.04 of the Indenture relating to defeasance
shall apply to the Securities.
All the provisions contained in the document entitled "Primerica
Corporation -- Debt Securities -- Underwriting Agreement -- Basic Provisions"
and dated January 12, 1993 (the "Basic Provisions"), a copy of which you have
previously received, are, except as indicated below, herein incorporated by
reference in their entirety and shall be deemed to be a part of this Terms
Agreement to the same extent as if the Basic Provisions had been set forth in
full herein. Terms defined in the Basic Provisions are used herein as therein
defined.
Basic Provisions varied with respect to this Terms Agreement:
(a) all references to Primerica Corporation shall refer to Citigroup
Inc.;
(b) in the second line of Section 2(a), delete "33-55542), including a
prospectus" and insert in lieu thereof "333-117615), including a
prospectus" and any reference in the Basic Provisions to the "Registration
Statement" shall be deemed to be a reference to such registration statement
on Form S-3;
(c) in the fourth line of the third paragraph of Section 3, delete the
phrase "certified or official bank check or checks in New York Clearing
House (next day)" and insert in lieu thereof "wire transfer of federal or
other same day";
(d) in the fourteenth line of the third paragraph of Section 3, delete
the word "definitive" and insert in lieu thereof "global";
(e) in the fourth line of the fifth paragraph of Section 3, delete the
phrase "certified or official bank check in New York Clearing House (next
day)" and insert in lieu thereof "wire transfer of federal or other same
day";
(f) in the ninth line of Section 6(a), delete "such registration
statement when it became effective, or in the Registration Statement" and
insert in lieu thereof "the Registration Statement";
(g) in the eighth line of Section 6(b), delete "in any part of such
registration statement when it became effective, or in the Registration
Statement" and insert in lieu thereof "the Registration Statement"; and
(h) in the sixth line of Section 10, delete "65 East 55th Street, New
York, New York 10022" and insert in lieu thereof "399 Park Avenue, New
York, New York 10043"
2
The Company agrees to use its best efforts to have the Securities
approved for listing on the Luxembourg Stock Exchange and to maintain such
listing so long as any of the Securities are outstanding, provided, however
that:
(a) if it is impracticable or unduly burdensome, in the good faith
determination of the Company, to maintain such listing due to changes in
listing requirements occurring after the date of the Prospectus Supplement,
or
(b) if the Transparency Directive (as defined in the Prospectus
Supplement) is adopted and is implemented in Luxembourg in a manner that
would require the Company to publish financial information according to
accounting principles or standards that are materially different from
United States generally accepted accounting principles,
the Company may de-list the Securities from the Luxembourg Stock Exchange and
shall use its reasonable best efforts to obtain an alternative admission to
listing, trading and/or quotation of the Securities by another listing
authority, exchange or system within or outside the European Union as it may
decide. If such an alternative admission is not available or is, in the
Company's opinion, unduly burdensome, such an alternative admission will not be
obtained, and the Company shall have no further obligation in respect of any
listing, trading or quotation for the Securities.
The Company further agrees and hereby represents that it has been
informed of the guidance relating to stabilization provided by the Financial
Services Authority, in particular in the section MAR 2 Annex 2G of the Financial
Services Handbook, and has not taken or omitted to take any action and will not
take any action or omit to take any action (such as issuing any press release
relating to any Securities without the Stabilization/FSA legend) which may
result in the loss by any of the Underwriters of the ability to rely on any
stabilization safe harbor provided by the Financial Services Authority under the
Financial Services and Markets Act 2000.
The Underwriters hereby agree in connection with the underwriting of
the Securities to comply with the requirements set forth in any applicable
sections of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
Each Underwriter further agrees and hereby represents that:
(a) it has not offered or sold and, prior to the expiration of the
period of six months from the Closing Date for the issuance of the
Securities, will not offer or sell any Securities to persons in the United
Kingdom, except to those persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments, as principal or
agent, for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom for purposes of the Public Offers of Securities
Regulations 1995;
(b) it has complied and will comply with all applicable provisions of
the Financial Services and Markets Act 2000 ("FSMA") with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;
(c) it has only communicated or caused to be communicated and it will
only communicate or cause to be communicated an invitation or inducement to
engage in investment activity (within the meaning of Section 21 of FSMA)
received by it in connection
3
with the issue or sale of the Securities in circumstances in which Section
21(1) of FSMA does not apply the Company;
(d) it will not offer or sell any Securities directly or indirectly in
Japan or to, or for the benefit of, any Japanese person or to others, for
re-offering or re-sale directly or indirectly in Japan or to any Japanese
person except under circumstances which will result in compliance with all
applicable laws, regulations and guidelines promulgated by the relevant
governmental and regulatory authorities in effect at the relevant time. For
purposes of this paragraph, "Japanese person" means any person resident in
Japan, including any corporation or other entity organized under the laws
of Japan;
(e) it is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect of the sale of
the Securities and that it will comply with the Securities Selling
Prospectus Act (the "SSPA") of the Federal Republic of Germany
(Wertpapier-Verkaufsprospektgesetz). In particular, each Underwriter
represents that it has undertaken not to engage in a public offering
(offentliche Anbieten) in the Federal Republic of Germany with respect to
any Securities otherwise than in accordance with the SSPA and any other act
replacing or supplementing the SSPA and all the other applicable laws and
regulations;
(f) the Securities are being issued and sold outside the Republic of
France and that it has not offered or sold and will not offer or sell,
directly or indirectly, any Securities to the public in the Republic of
France, and that it has not distributed and will not distribute or cause to
be distributed to the public in the Republic of France the Prospectus
Supplement, the Prospectus or any other offering material relating to the
Securities;
(g) it and each of its affiliates has not offered or sold, and it will
not offer or sell, the Securities by means of any document to persons in
Hong Kong other than persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or agent, or otherwise in
circumstances which do not constitute an offer to the public within the
meaning of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of
Hong Kong), and unless permitted to do so under the securities laws of Hong
Kong, no person has issued or had in its possession for the purposes of
issue, and will not issue or have in its possession for the purpose of
issue, any advertisement, document or invitation relating to the Securities
other than with respect to the Securities to be disposed of to persons
outside Hong Kong or only to persons whose business involves the
acquisition, disposal or holding of securities, whether as principal or
agent; and
(h) it acknowledges that the Securities may not be offered, sold,
transferred or delivered in or from The Netherlands as part of their
initial distribution or at any time thereafter directly or indirectly,
other than to individuals or legal entities (which include, but are not
limited to, banks, brokers, dealers or finance companies which are subject
to adequate supervision), institutional investors, insurance companies,
pension funds, central governments and large public international
organizations and large undertakings (through their treasury department)
which are listed on a sufficiently regulated stock exchange, who or which
regularly trade or invest in securities in the conduct of a business or a
profession for their own account, all within the meaning of the Securities
Transactions Supervision Act 1995 (Wet Toezicht Effectenverkeer 1995).
4
In addition to the legal opinions required by Sections 5(c) and 5(d) of
the Basic Provisions, the Underwriters shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special U.S. tax counsel to the
Company, dated the Closing Date, to the effect that although the discussion set
forth in the Prospectus Supplement under the heading "United States Federal
Income Tax Considerations for Non-United States Holders" does not purport to
discuss all possible United States federal income tax consequences of the
purchase, ownership and disposition of the Securities to non-United States
holders of the Securities, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the purchase, ownership and disposition of the Securities to
non-United States holders of the Securities.
John R. Dye, Esq., General Counsel--Capital Markets of the Company, is
counsel to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is special U.S.
tax counsel to the Company. Cleary, Gottlieb, Steen & Hamilton is counsel to the
Underwriters.
Please accept this offer no later than 9:00 p.m. Eastern Time on
December 2, 2004 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us, or by sending us a written
acceptance in the following form:
5
"We hereby accept your offer, set forth in the Terms Agreement, dated
December 2, 2004, to purchase the Securities on the terms set forth therein."
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.,
on behalf of the Underwriters named herein
By: /s/ Jack D. McSpadden Jr.
-------------------------------------------
Name: Jack D. McSpadden Jr.
Title: Managing Director
ACCEPTED:
CITIGROUP INC.
By: /s/ Charles E. Wainhouse
--------------------------------------
Name: Charles E. Wainhouse
Title: Assistant Treasurer
6
ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES
------------------- ------------------------------
Citigroup Global Markets Inc. $ 850,000,000
Barclays Capital Inc. 22,500,000
Bear, Sterns & Co. Inc. 22,500,000
Lehman Brothers Inc. 22,500,000
UBS Securities LLC 22,500,000
Blaylock & Partners, L.P. 10,000,000
Goldman, Sachs & Co. 10,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 10,000,000
RBC Capital Markets Corporation 10,000,000
SunTrust Capital Markets, Inc. 10,000,000
Utendahl Capital Partners, L.P. 10,000,000
--------------
TOTAL $1,000,000,000
==============
7