Exhibit 1.01
TERMS AGREEMENT
December 19, 2005
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 $2,000,000,000 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 Stearns & Co. Inc., Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Guzman & Company, Lehman Brothers
Inc., Samuel A. Ramirez & Co., Inc., UBS Securities LLC, and The Williams
Capital Group, 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 99.825%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance. The Closing Date shall be December 27, 2005, 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: .................................. Floating Rate Senior Notes Due 2008
Maturity: ............................... December 26, 2008
Interest Rate: .......................... Three-month LIBOR (Telerate) plus
0.04%, determined as set forth in
the Prospectus Supplement, dated
December 19, 2005, to the
Prospectus, dated September 2, 2004
Interest Payment Dates: ................. Quarterly on the 27th of March,
June, September and December,
commencing March 27, 2006
Initial Price to Public: ................ 100% of the principal amount
thereof, plus accrued interest from
December 27, 2005
Redemption Provisions: .................. The Securities are not redeemable by
the Company prior to maturity,
except upon the occurrence of
certain events involving United
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States taxation, as set forth in the
Prospectus Supplement, dated
December 19, 2005, to the
Prospectus, dated September 2, 2004
Record Date: ............................ The business day 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 Section 2, insert the following:
(d) As of 3:45pm (Eastern Time) on December 19, 2005, the prospectus dated
September 2, 2004 relating to the Registration Statement, including the
documents incorporated by reference therein, considered together with the price
to public, underwriting discount and delivery date on the front cover of the
Prospectus Supplement and the statements under the heading "Description of
Notes" in the Prospectus Supplement (except as to the financial statements or
other data of a financial or statistical nature contained therein, as to which
no opinion is expressed), did not contain any untrue statement of a material
fact or did not omit to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or
omissions from the foregoing documents based upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
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(d) 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";
(e) in the fourteenth line of the third paragraph of Section 3, delete the
word "definitive" and insert in lieu thereof "global";
(f) 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";
(g) in Section 4, insert the following:
(k) The Company will prepare a final term sheet, containing solely a
description of the final terms of the Securities and the offering thereof,
in a form approved by the Representatives and will file such term sheet
pursuant to Rule 433(d) under the Act within the time required by such
Rule.
(l) The Company agrees that, unless it has obtained or will obtain, as
the case may be, the prior written consent of the Representatives, and each
Underwriter, severally and not jointly, agrees with the Company that,
unless it has obtained or will obtain, as the case may be, the prior
written consent of the Company, it has not made and will not make any offer
relating to the Securities that would constitute an "issuer free writing
prospectus" (as defined in Rule 433 under the Act) or that would otherwise
constitute a "free writing prospectus" (as defined in Rule 405 under the
Act) required to be filed by the Company with the Commission or retained by
the Company under Rule 433 under the Act, other than the final term sheet
prepared and filed pursuant to Section 4(k) hereto.;
(h) delete the text of Section 5(c) (including subsections (i) through
(viii)) and Section 5(d) (including subsections (i) through (iii)) and insert in
lieu thereof the following:
(c) The Company shall have furnished to you the opinion of counsel of
the Company, dated the Closing Date and addressed to the Representatives,
to the effect set forth in Annex B hereto.
(d) Reserved.
(i) in the eighth line of Section 5(f), insert ", any "issuer free writing
prospectus" (as defined in Rule 433 under the Act)," between "Prospectus" and
"and this Agreement";
(j) in Section 5(f), delete subsection (iii) in its entirety and insert in
lieu thereof "Reserved";
(k) 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";
(l) in the eleventh line of Section 6(a), insert "or any "issuer free
writing prospectus" (as defined in Rule 433 under the Act) or the information
contained in the final term sheet required to be prepared and filed pursuant to
Section 4(k) hereto" between "Prospectus," and "or any";
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(m) 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";
(n) in the eleventh line of Section 6(b), insert "or any "issuer free
writing prospectus" (as defined in Rule 433 under the Act) or the information
contained in the final term sheet required to be prepared and filed pursuant to
Section 4(k) hereto" between "Prospectus," and "or any"; and
(o) 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".
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 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 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 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 the Financial Services
and Markets Act 2000 (the "FSMA") received by it in connection with the issue or
sale of the Securities in circumstances in which Section 21(1) of the FSMA does
not apply to the Company;
(b) it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Securities in, from
or otherwise involving the United Kingdom;
(c) 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
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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;
(d) it is aware of the fact that no securities prospectus
(Wertpapierprospekt) under the German Securities Prospectus Act
(Wertpapierprospektgesetz, the "Prospectus Act") has been or will be published
in respect of the Securities in the Federal Republic of Germany and that it will
comply with the Prospectus Act and all other laws and regulations applicable in
the Federal Republic of Germany governing the issue, offering and sale of the
Securities;
(e) no Securities have been offered or sold and will be offered or sold,
directly or indirectly, to the public in France except to qualified investors
(investisseurs qualifies) and/or to a limited circle of investors (cercle
restreint d'investisseurs) acting for their own account as defined in article L.
411-2 of the French Code Monetaire et Financier and applicable regulations
thereunder; and that the direct or indirect resale to the public in France of
any Securities acquired by any qualified investors (investisseurs qualifies)
and/or any investors belonging to a limited circle of investors (cercle
restreint d'investisseurs) may be made only as provided by articles L. 412-1 and
L. 621-8 of the French Code Monetaire et Financier and applicable regulations
thereunder; and that none of the Prospectus Supplement, the Prospectus or any
other offering materials relating to the Securities has been released, issued or
distributed to the public in France except to qualified investors (investisseurs
qualifies) and/or to a limited circle of investors (cercle restreint
d'investisseurs) mentioned above; and
(f) 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.
In addition to the legal opinions required by Sections 5(c) and 5(e) 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.
Michael S. Zuckert, Esq., General Counsel, Finance and Capital Markets of
the Company, is counsel to the Company. Skadden, Arps, Slate, Meagher & Flom LLP
is special
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U.S. tax counsel to the Company. Cleary Gottlieb Steen & Hamilton LLP is counsel
to the Underwriters.
Please accept this offer no later than 9:00 p.m. Eastern Time on December
19, 2005 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:
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"We hereby accept your offer, set forth in the Terms Agreement, dated
December 19, 2005, 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
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ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF SECURITIES
- ------------------- ------------------------------
Citigroup Global Markets Inc. $1,700,000,000
Barclays Capital Inc. 50,000,000
Bear, Stearns & Co. Inc. 50,000,000
Goldman, Sachs & Co. 50,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 50,000,000
Guzman & Company 20,000,000
Lehman Brothers Inc. 20,000,000
Samuel A. Ramirez & Co., Inc. 20,000,000
UBS Securities LLC 20,000,000
The Williams Capital Group, L.P. 20,000,000
--------------
TOTAL $2,000,000,000
==============
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ANNEX B
Form of Company Opinion to the Underwriters
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) 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;
(iii) the 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);
(iv) the Securities have been validly authorized and, when duly
executed by the proper officers of the Company, duly authenticated by
the Trustee and delivered as contemplated by the Underwriting
Agreement and by the Indenture, will be validly issued and outstanding
obligations of the Company enforceable in accordance with their terms
and entitled to the benefits of the 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) and
conform in all material respects to the description thereof in the
Prospectus and any "issuer free writing prospectus" (as defined in
Rule 433 under the Act);
(v) the Indenture conforms in all material respects to the
description thereof in the Prospectus;
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(vii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by the
Underwriting Agreement or in the Indenture, 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 Securities;
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(viii) the execution, delivery and performance of the Indenture
and the Underwriting Agreement and the issuance and sale of the
Securities in compliance with the terms and provisions thereof, will
not result in a breach of any of the terms and provisions of, or
constitute a default under, any of the agreements or instruments of
the Company filed by the Company with the Securities and Exchange
Commission as exhibits to the Registration Statement and to its (i)
Annual Report on Form 10-K for the fiscal year ended December 31,
2004, (ii) Quarterly Reports on Form 10-Q for the quarters ended March
31, 2005, June 30, 2005 and September 30, 2005; (iii) Current Reports
on Form 8-K filed from January 14, 2005 to the Closing Date; (iv) the
registration statement on Form S-3 (Registration No. 333-122925); (v)
registration statement on Form S-3 (Registration No. 333-126744); and
(vi) registration statement on Form S-3 (Registration No. 333-106510),
or result in a violation of the charter or By-Laws of the Company or
any of its material subsidiaries or any statute, rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its material subsidiaries or
any of their properties; provided, however, that no opinion is
expressed in this paragraph with respect to (i) the rights to
indemnity and contribution contained in the Underwriting 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;
(ix) such counsel has no reason to believe that as of [__]pm
(Eastern Time) on the date of the Terms Agreement, December 19, 2005,
the prospectus dated September 2, 2004 relating to the Registration
Statement, including the documents incorporated by reference therein,
considered together with the price to public, underwriting discount
and delivery date on the front cover of the Prospectus Supplement and
the statements under the heading "Description of Notes" in the
Prospectus Supplement (except as to the financial statements or other
data of a financial or statistical nature contained therein, as to
which no opinion is expressed), contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of circumstances under
which they were made, not misleading; and
(x) the Registration Statement was declared effective under the
Act, and, to the knowledge of such counsel, no notice that would
prevent the use of the Registration Statement has been issued, no stop
order suspending its effectiveness has been issued and no proceedings
for that purpose have been instituted or are pending or have been
communicated by the Commission to the Company as being contemplated by
it under the Act. The Registration Statement, as of its effective
date, and the prospectus filed as part of the Registration Statement
and the Prospectus Supplement, 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); and such counsel has no reason to believe
that the Registration Statement, as of its most recent effective date
determined pursuant to Rule 430B(f)(2), contained any
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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 Supplement, as of its
date and on the Closing Date, included or includes any untrue
statement of a material fact or omitted or omits 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 need be
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
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
In rendering such opinion, such counsel may rely (i) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (ii) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
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