Execution Version
20,000,000 CAPITAL SECURITIES
CITIGROUP CAPITAL XIV
6.875% Enhanced Trust Preferred Securities (Enhanced TRUPS(R))
$25 Liquidation Amount
Guaranteed to the extent set forth in the
Prospectus dated June 26, 2006 by
CITIGROUP INC.
UNDERWRITING AGREEMENT
New York, New York
June 26, 2006
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
RBC Dain Rauscher Inc.,
as Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Citigroup Capital XIV (the "Trust"), a statutory trust organized under
the Statutory Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et seq.),
proposes, upon the terms and conditions set forth herein, to issue and sell
20,000,000 6.875% Enhanced Trust Preferred Securities (Enhanced TRUPS(R)) with
an aggregate liquidation amount equal to $500,000,000 (the "Underwritten
Securities") to the several Underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives. The Trust also proposes to grant the Underwriters an option to
purchase 3,000,000 additional 6.875% Enhanced Trust
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Preferred Securities (Enhanced TRUPS(R)) to cover over-allotments (the "Option
Securities" and, together with the Underwritten Securities, the "Capital
Securities").
The Capital Securities and the Common Securities (as defined herein)
are to be issued pursuant to the terms of an amended and restated declaration of
trust, dated as of June 26, 2006 (the "Declaration"), among Citigroup Inc., a
Delaware corporation (the "Company" and, together with the Trust, the
"Offerors"), as sponsor, the trustees named therein (the "Citigroup Capital
Trustees") and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Declaration is qualified as an indenture under
the Trust Indenture Act. Pursuant to the Declaration, the number of Citigroup
Capital Trustees will initially be five. Three of the Citigroup Capital Trustees
(the "Regular Trustees") will be persons who are employees or officers of the
Company. The fourth Citigroup Capital Trustee will be a financial institution
unaffiliated with the Company that will serve as property trustee under the
Declaration and as indenture trustee with respect to the Capital Securities for
purposes of the Trust Indenture Act (the "Institutional Trustee"). The fifth
Citigroup Capital Trustee will be a financial institution or an affiliate
thereof which maintains a principal place of business in the State of Delaware,
meeting the requirements of the Delaware Act (the "Delaware Trustee").
Initially, JPMorgan Chase Bank, N.A., a New York banking association ("JPMorgan
Chase"), will act as the Institutional Trustee and Chase Manhattan Bank USA,
N.A., a banking association with its principal place of business in the State of
Delaware, will act as the Delaware Trustee until removed or replaced by the
holder of the Common Securities. The Capital Securities will be guaranteed by
the Company on a subordinated basis with respect to distributions and payments
upon liquidation, redemption or otherwise (the "Guarantee") pursuant to the
Capital Securities Guarantee Agreement dated as of June 30, 2006 (the "Guarantee
Agreement") between the Company and JPMorgan Chase, as Trustee (the "Guarantee
Trustee").
The assets of the Trust will consist of 6.875% Junior Subordinated
Deferrable Interest Debentures due June 30, 2066 (the "Subordinated Debentures")
of the Company which will be issued under an indenture, dated as of June 30,
2006 (as supplemented, the "Indenture"), between the Company and JPMorgan Chase,
as Trustee (the "Indenture Trustee"). Under certain circumstances, the
Subordinated Debentures will be distributable to the holders of undivided
beneficial interests in the assets of the Trust. The Capital Securities, the
Guarantee and the Subordinated Debentures are referred to herein as the
"Securities."
The Offerors wish to confirm as follows their agreement with you and
the other several Underwriters listed on Schedule I on whose behalf you are
acting, in connection with the several purchases of the Capital Securities by
the Underwriters. To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. Any reference herein to
the Registration Statement, any Preliminary Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of any Preliminary Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the Final
Prospectus
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shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the issue
date of any Preliminary Prospectus or the Final Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 21 hereof.
1. Registration Statement and Prospectus. The Offerors meet the
requirements for use of Form S-3 under the Act and have prepared and filed with
the Commission an automatic shelf registration statement, as defined in Rule 405
(File No. 333-135163), including a related form of prospectus, for registration
under the Act of the offering and sale of the Securities. Such Registration
Statement, including any amendments thereto filed prior to the date hereof,
became effective upon filing. The Offerors may have filed with the Commission,
as part of an amendment to the Registration Statement or pursuant to Rule
424(b), one or more preliminary prospectuses relating to the Securities, each of
which has previously been furnished to you. The Company will file with the
Commission a final prospectus relating to the Securities in accordance with Rule
424(b). As filed, such final prospectus shall contain all information required
by the Act and the rules thereunder, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the date hereof or,
to the extent not completed by the date hereof, shall contain only such specific
additional information and other changes (beyond that contained in any
preliminary prospectus) as the Company has advised you, prior to the date
hereof, will be included or made therein. The Registration Statement, as of the
date hereof, meets the requirements set forth in Rule 415(a)(1)(x). The initial
Effective Date of the Registration Statement was not earlier than the date three
years before the date hereof.
2. Agreements to Sell and Purchase. (a) The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Offerors herein contained and subject to all the terms and
conditions set forth herein each Underwriter agrees, severally and not jointly,
to purchase from the Trust, at a purchase price of $25 per Capital Security, the
number of Underwritten Securities set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Capital Securities increased
as set forth in Section 10 hereof).
The Company agrees that, in view of the fact that the proceeds of the
sale of the Underwritten Securities will be invested in the Subordinated
Debentures, it shall pay to the Underwriters as compensation ("Underwriters'
Compensation") for their arranging the investment of the proceeds therein, on
the Closing Date (as defined herein), $0.7875 per Underwritten Security.
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Trust hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
3,000,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of the initial public offering, upon written or
facsimile notice by the Representatives to the Trust setting forth the number of
Option Securities as to which the several Underwriters are exercising the option
and the date on which delivery and payment shall occur, which shall not be
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less than three Business Days after the date of the notice of exercise. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as the Representatives, in their
absolute discretion, shall make to eliminate any fractional shares.
3. Terms of Public Offering. The Offerors have been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Capital Securities as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered, and the Declaration, the
Guarantee Agreement and the Indenture have been qualified under the Trust
Indenture Act. The entire proceeds from the sale of the Capital Securities will
be combined with the entire proceeds from the sale by the Trust to the Company
of its common securities (the "Common Securities"), and will be used by the
Trust to purchase an equivalent amount of the Subordinated Debentures.
4. Delivery of the Capital Securities and Payment Therefore. Delivery
to the Underwriters of, and payment for, the Capital Securities shall be made at
the office of Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York,
New York 10006, at 8:30 A.M., New York City time, on June 30, 2006 (the "Closing
Date"). Delivery to the Underwriters of, and payment for, the Optional
Securities (if the option provided for in Section 2(b) hereof is exercised)
shall be made on the date and at the time specified in the notice of exercise of
the option, which shall not be less than three Business Days after the date of
the notice. The place of closing for the Capital Securities and the Closing Date
may be varied by agreement between you and the Company.
Delivery of the Capital Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters directly or through the Representatives of
the net purchase price thereof to or upon the order of the Trust by wire
transfer payable in same-day funds to an account specified by the Trust.
Delivery of the Capital Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
It is understood that the Representatives, acting individually and not
in a representative capacity, may (but shall not be obligated to) make payment
to the Company on behalf of any other Underwriter for Capital Securities to be
purchased by such Underwriter. Any such payment by the Representatives shall not
relieve any such Underwriter of any of its obligations hereunder.
The Company shall pay to the Representatives on the Closing Date for
the accounts of the Underwriters any fee, commission or other compensation
specified herein. Such payment will be made by wire transfer payable in same-day
funds to an account specified by the Representatives.
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5. Agreements of the Offerors. The Offerors jointly and severally
agree with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Offerors will not file any amendment of the Registration Statement or
supplement to any Preliminary Prospectus or the Final Prospectus unless the
Company has furnished the Representatives a copy for their review prior to
filing and will not file any such proposed amendment or supplement to which
they reasonably object. The Offerors will cause the Final Prospectus,
properly completed, and any supplement thereto, to be filed in a form
acceptable to the Representatives with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Final Prospectus, and any supplement thereto, shall have been filed with
the Commission pursuant to Rule 424(b), (2) when, prior to termination of
the offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (3) of any request by the
Commission or its staff for any amendment of the Registration Statement, or
for any supplement to the Final Prospectus or for any additional
information, (4) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any notice
objecting to its use or the institution or threatening of any proceeding
for that purpose and (5) of the receipt by the Offerors of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Offerors will use their respective best
efforts to prevent the issuance of any such stop order or the occurrence of
any such suspension or objection to the use of the Registration Statement
and, upon such issuance, occurrence or notice of objection, to obtain as
soon as possible the withdrawal of such stop order or relief from such
occurrence or objection, including, if necessary, by filing an amendment to
the Registration Statement or a new registration statement and using its
best efforts to have such amendment or new registration statement declared
effective as soon as practicable.
(b) The Offerors will prepare a final term sheet, containing solely a
description of final terms of the Capital Securities and the offering
thereof, in a form acceptable to you (the "Final Term Sheet") and to file
such term sheet pursuant to Rule 433(d) within the time required by such
Rule.
(c) If, at any time prior to the filing of the Final Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in
the light of the circumstances under which they were made at such time not
misleading, the Offerors will (1) notify promptly the Representatives so
that any use of the Disclosure Package may cease until it is amended or
supplemented; (2) amend or supplement the Disclosure Package to correct
such statement or omission; and (3) supply any amendment or supplement to
you in such quantities as you may reasonably request.
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(d) If, at any time when a prospectus relating to the Capital
Securities is required to be delivered under the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule
172), any event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, or if
it shall be necessary to amend the Registration Statement, file a new
registration statement or supplement the Final Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, including
in connection with use or delivery of the Final Prospectus, the Company
promptly will (i) notify the Representatives of such event, (ii) prepare
and file with the Commission, subject to the second sentence of paragraph
(a) of this Section 5, an amendment or supplement or new registration
statement which will correct such statement or omission or effect such
compliance, (iii) use its best efforts to have any amendment to the
Registration Statement or new registration statement declared effective as
soon as practicable in order to avoid any disruption in use of the Final
Prospectus and (iv) supply any supplemented Final Prospectus to the
Representatives in such quantities as the Representatives may reasonably
request.
(e) As soon as practicable, the Offerors will make generally available
to the Trust's security holders and to the Representatives a consolidated
earnings statement or statements of the Company and its subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(f) Upon request, the Offerors will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172), as many copies of any Preliminary
Prospectus, the Final Prospectus and any Issuer Free Writing Prospectus and
any supplement thereto as the Representatives may reasonably request. The
Offerors will pay the expenses of printing or other production of all
documents relating to the offering that are required to be prepared,
furnished or delivered by the Offerors.
(g) The Offerors will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions within the
United States as the Representatives reasonably may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its review of
the offering; provided that in no event shall either of the Offerors be
obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of
the Securities, in any jurisdiction where it is not now so subject.
(h) (i) Each Offeror agrees that, unless it has obtained or will
obtain, as the case may be, the prior written consent of the
Representatives, and (ii) each Underwriter,
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severally and not jointly, agrees with the Offerors that, unless it has
obtained or will obtain, as the case may be, the prior written consent of
the Offerors, it has not made and will not make any offer relating to the
Capital Securities that would constitute an Issuer Free Writing Prospectus
or that would otherwise constitute a "free writing prospectus" (as defined
in Rule 405) required to be filed by the Offerors with the Commission or
retained by the Offerors under Rule 433, other than the Final Term Sheet
described above or other free writing prospectuses containing solely a
description of the final terms of the Capital Securities and the offering
thereof. Any such free writing prospectus consented to by the
Representatives or the Offerors is hereinafter referred to as a "Permitted
Free Writing Prospectus." Each Offeror agrees that (x) it has treated and
will treat, as the case may be, each Permitted Free Writing Prospectus as
an Issuer Free Writing Prospectus and (y) it has complied and will comply,
as the case may be, with the requirements of Rules 164 and 433 applicable
to any Permitted Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and record keeping.
(i) The Offerors will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement
or otherwise) by the Company, the Trust or any affiliate of the Company or
the Trust or any person in privity with the Company, the Trust or any
affiliate of the Company or the Trust) directly or indirectly, including
the filing (or participation in the filing) of a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, any preferred
securities, any preferred stock or any other securities including any
guarantee of such securities (other than a guarantee of securities issued
by Citigroup Funding Inc.), of the Offerors, in each case that are
substantially similar to the Capital Securities or any security convertible
into or exchangeable for the Capital Securities or such substantially
similar securities, or publicly announce an intention to effect any such
transaction, during the period beginning the date of hereof and ending 60
days after the Closing Date.
(j) The Trust will apply the net proceeds from the sale of the Capital
Securities, and the Company will apply the net proceeds from the sale of
the Subordinated Debentures, substantially in accordance with the
description set forth in the Final Prospectus.
(k) The Company will comply with all applicable securities and other
laws, rules and regulations, including, without limitation, the Sarbanes
Oxley Act of 2002, and use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply with such
laws, rules and regulations, including, without limitation, the provisions
of the Sarbanes Oxley Act of 2002.
(l) The Offerors will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of
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either of the Offerors to facilitate the sale or resale of the Capital
Securities, except that the Offerors makes no agreement as to the
activities of any Underwriter.
6. Representations and Warranties of the Offerors. The Offerors
jointly and severally represent and warrant to, and agree with, each Underwriter
that:
(a) On each Effective Date, the Registration Statement did, and when
the Final Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective rules
thereunder; on each Effective Date and on the date hereof, the Registration
Statement did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and on
the Effective Date and on the Closing Date, the Indenture and the
Declaration did or will comply in all material respects with the applicable
requirements of the Trust Indenture Act and the rules thereunder; on the
date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Offerors make no representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Citigroup Capital Trustees or (ii) the information
contained in or omitted from the Registration Statement or the Final
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Offerors by or on behalf of
any Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Final Prospectus (or any supplement
thereto), it being understood and agreed that the only such information
furnished by or on behalf of any Underwriters consists of the information
described as such in Section 7 hereof.
(b) The execution and delivery of, and the performance by the Company
and the Trust of their respective obligations under, this Agreement have
been duly and validly authorized by the Company and the Trust,
respectively, and this Agreement has been duly executed and delivered by
the Company and the Trust.
(c) The Capital Securities have been duly and validly authorized by
the Declaration and, when executed by the Trust and authenticated by the
Institutional Trustee in accordance with the Declaration and delivered to
you against payment therefore in accordance with the terms hereof, will be
validly issued and (subject to Sections 9.8 and 3.10(a)(vi) of the
Declaration) will be fully paid and non-assessable undivided beneficial
interests in the assets of the Trust, will be entitled to the benefits of
the Declaration and will conform in all material respects to all statements
relating thereto contained in the Registration Statement, the Disclosure
Package and the Final Prospectus, and any amendment or supplement thereto;
the issuance of the Capital Securities is not subject to preemptive or
other similar rights; holders of Capital Securities will be entitled
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to the same limitation of personal liability extended to stockholders of
private corporations for profit under the General Corporation Law of the
State of Delaware; and the Capital Securities have been registered under
the Exchange Act and authorization for listing the Capital Securities on
the New York Stock Exchange has been given, subject to notice of official
issuance.
(d) The Declaration has been duly and validly authorized by the
Company and, at the Closing Date, will have been duly executed and
delivered by the Company and the Regular Trustees, and assuming due
execution and delivery by the Institutional Trustee and the Delaware
Trustee, the Declaration will be a valid and legally binding obligation of
the Company and the Regular Trustees, enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); and the Declaration has
been (or will have been) duly qualified under the Trust Indenture Act and
conforms in all material respects to the description thereof in the
Registration Statement, the Disclosure Package and the Final Prospectus,
and any amendment or supplement thereto.
(e) The Guarantee has been duly and validly authorized by the Company
and, at the Closing Date, will have been duly executed and delivered by the
Company, and assuming due execution and delivery by the Guarantee Trustee,
the Guarantee will be a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity); and the Guarantee has been (or will have been) duly
qualified under the Trust Indenture Act and conforms in all material
respects to the description thereof in the Registration Statement, the
Disclosure Package and the Prospectus, and any amendment or supplement
thereto.
(f) The Indenture has been duly and validly authorized by the Company
and, at the Closing Date, will have been duly executed and delivered by the
Company, and assuming due execution and delivery by the Indenture Trustee,
the Indenture will be a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity);
and the Indenture has been (or will have been) duly qualified under the
Trust Indenture Act and conforms in all material respects to the
description thereof in the Registration Statement, the Disclosure Package
and the Final Prospectus, and any amendment or supplement thereto.
(g) The Subordinated Debentures have been duly and validly authorized
by the Company and, when authenticated by the Indenture Trustee in the
manner provided for in the Indenture and issued in accordance with the
Indenture and delivered to the
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Trust against payment therefore as described in the Registration Statement,
the Disclosure Package and the Final Prospectus, and any amendment or
supplement thereto, will be valid and legally binding obligations of the
Company, enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity), and will be in the form contemplated by, and entitled to the
benefits of, the Indenture and conform in all material respects to the
description thereof in the Registration Statement, the Disclosure Package
and the Final Prospectus, and any amendment or supplement thereto.
(h) The Trust has been duly created and is validly existing and in
good standing as a statutory trust under the Delaware Act with the power
and authority to own property and to conduct its business as described in
the Registration Statement and Final Prospectus, and any amendment or
supplement thereto, and to enter into and perform its obligations under
this Agreement, the Capital Securities and the Declaration and is not
required to be authorized to do business in any other jurisdiction; the
Trust is not a party to or otherwise bound by any agreement other than
those described in the Final Prospectus, and any amendment or supplement
thereto; the Trust will be classified as a grantor trust and not as an
association taxable as a corporation for U.S. federal income tax purposes;
and the Trust is and will be treated as a consolidated subsidiary of the
Company pursuant to generally accepted accounting principles.
(i) The Regular Trustees of the Trust are officers of the Company and
have been duly authorized by the Company to execute and deliver the
Declaration.
(j) Neither the Trust nor the Company is now, nor after giving effect
to the transactions contemplated hereby will be, and neither the Trust nor
the Company is controlled by, or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(k) As of the date hereof, the Disclosure Package does not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Disclosure
Package based upon and in conformity with written information furnished to
the Offerors by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 7 hereof.
(l) (i) At the time of filing the Registration Statement, (ii) at the
time of the most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Sections 13
or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the
Offerors or any person acting on their behalf (within the meaning, for this
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clause only, of Rule 163(c)) made any offer relating to the Capital
Securities in reliance on the exemption in Rule 163 and (iv) on the date
hereof (with such date being used as the determination date for purposes of
this clause (iv)), each of the Offerors was or is (as the case may be) a
"well-known seasoned issuer" as defined in Rule 405. The Offerors agree to
pay the fees required by the Commission relating to the Capital Securities
within the time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r).
(m) (i) At the earliest time after the filing of the Registration
Statement that the Offerors or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2)) of the Capital Securities
and (ii) as of the date hereof (with such date being used as the
determination date for purposes of this clause (ii)), neither of the
Offerors was or is an Ineligible Issuer (as defined in Rule 405), without
taking account of any determination by the Commission pursuant to Rule 405
that it is not necessary that the Offerors be considered an Ineligible
Issuers.
(n) Neither any Issuer Free Writing Prospectus nor the Final Term
Sheet includes any information that conflicts with the information
contained in the Registration Statement, including any document
incorporated therein and any prospectus supplement deemed to be a part
thereof that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing
Prospectus nor the Final Term Sheet based upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 7
hereof.
Any certificate signed by any officer of the Company or trustee of the
Trust and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Capital Securities shall be deemed a
representation and warranty by either the Company or the Trust, as the case may
be, as to matters covered thereby, to each Underwriter.
7. Indemnification and Contribution.
(a) Each of the Trust and the Company jointly and severally agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Capital
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus, the Final Prospectus, the Disclosure Package, any
Issuer Free Writing Prospectus, or in any amendment thereof or supplement
thereto, or arise out
11
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that neither
the Company nor the Trust will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Offerors by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which either
the Company or the Trust may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless each of the Company, the Trust, the Company's directors, the
Company's officers and the Regular Trustees who sign the Registration
Statement, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Trust to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Offerors by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to
any liability that any Underwriter may otherwise have. The Offerors
acknowledge that the statements set forth in the last paragraph of the
cover page regarding delivery of the Capital Securities and, under the
heading "Underwriting", (i) the list of Underwriters and their respective
participation in the sale of the Capital Securities, (ii) the sentences
related to concessions and reallowances and (iii) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Prospectus, the Final Prospectus and any Issuer Free Writing
Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary
Prospectus or the Final Prospectus and any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below);
12
provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Trust and the
Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, the Trust and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Trust on the one hand
and by the Underwriters on the other from the offering of the Capital
Securities; provided, however, that in no case shall (i) any Underwriter
(except as may be provided in any agreement among underwriters relating to
the offering of the Capital Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Capital
Securities purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Company, the Trust and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Trust
on the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and the
Trust shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by the Trust, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the
13
omission or alleged omission to state a material fact relates to
information provided by the Company and the Trust on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company, the Trust and the Underwriters
agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 7, each
person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter,
and each person who controls the Company, as applicable, within the meaning
of either the Act or the Exchange Act, each officer of the Company and the
Regular Trustees who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company and the Trust, subject in each case to the applicable terms and
conditions of this paragraph (d).
8. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase the Capital Securities shall be subject to the
accuracy of the representations and warranties on the part of the Offerors
contained herein as of the date hereof and the Closing Date, to the accuracy of
the statements of the Offerors made in any certificates pursuant to the
provisions hereof, to the performance by each of the Offerors of its obligations
hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed
in the manner and within the time period required by Rule 424(b); the Final
Term Sheet contemplated by Section 5(b) hereto, and any other material
required to be filed by the Offerors pursuant to Rule 433(d) under the Act,
shall have been filed with the Commission within the applicable time
periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice
objecting to its use shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Offerors shall have requested and caused Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Offerors, to have furnished to
the Representatives an opinion, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the Capital
Securities, the Indenture, the Subordinated Debentures, the Declaration,
the Registration Statement, the Disclosure Package, the Final Prospectus
(together with any amendment thereto) and other related matters as the
Representatives may reasonably require. Insofar as such opinion involves
factual matters, such counsel may rely, to the extent such counsel deems
proper, upon certificates of officers of the Company, its subsidiaries and
the Trust and certificates of public officials.
14
(c) The Offerors shall have requested and caused Michael S. Zuckert,
General Counsel, Finance and Capital Markets of the Company, to have
furnished to the Representatives an opinion, dated the Closing Date and
addressed to the Representatives, with respect to the issuance and sale of
the Capital Securities, the Indenture, the Subordinated Debentures, the
Declaration, the Registration Statement, the Disclosure Package, the Final
Prospectus (together with any amendment thereto) and other related matters
as the Representatives may reasonably require.
(d) The Offerors shall have requested and caused Skadden, Arps, Slate,
Meagher & Flom LLP, special tax counsel to the Offerors, to have furnished
to the Representatives an opinion, dated the Closing Date and addressed to
the Representatives, with respect to certain United States federal income
tax matter related to the Trust and the Subordinated Debentures and other
related matters as the Representatives may reasonably require.
(e) The Offerors shall have requested and caused Pryor Cashman Sherman
& Flynn LLP, counsel to JPMorgan Chase, to have furnished to the
Representatives an opinion or opinions, dated the Closing Date and
addressed to the Representatives, with respect to the Institutional
Trustee, the Delaware Trustee, the issuance and sale of the Capital
Securities and other related matters as the Representatives may reasonably
require.
(f) The Representatives shall have received from Cleary Gottlieb Steen
& Hamilton LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Capital Securities, the Subordinated
Debentures, the Indenture, the Declaration, the Registration Statement, the
Disclosure Package, the Final Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Offerors shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company and the Trust, signed, in the case of the
Company, by the Chairman, any Vice Chairman, the President, any Vice
President, the Chief Financial Officer, the Chief Accounting Officer, the
General Counsel, the Controller or any Deputy Controller and by the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and, in the case of the Trust, signed by one of
the Regular Trustees, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, the Disclosure Package and any supplements
or amendments thereto, and this Agreement and that:
(i) the representations and warranties of each of the Company and
the Trust in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing Date and
each of the Company and the Trust has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
15
(ii) no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been
issued and no proceedings for that purpose have been instituted or, to
their knowledge, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
including the Trust taken as a whole, or the Trust, as the case may
be, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Disclosure
Package and the Final Prospectus (exclusive of any supplement
thereto).
(h) The Company shall have requested and caused KPMG LLP to have
furnished to the Representatives, on and as of the date hereof and on and
as of the Closing Date, customary "comfort letters" that are satisfactory
in content and form to the Representatives.
(i) Subsequent to the date hereof or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof), any Preliminary Prospectus and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i) any
change or decrease specified in the letter or letters referred to in
paragraph (e) of this Section 8 or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, including the Trust, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Disclosure Package and the Final Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives after consultation with the Company, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Capital Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Disclosure
Package and the Final Prospectus (exclusive of any supplement thereto) and
any Issuer Free Writing Prospectus.
(j) Subsequent to the date hereof, there shall not have been any
decrease in the rating of the Capital Securities or any of the Company's
senior or subordinated debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(k) The Capital Securities shall have been registered under the
Exchange Act and shall have been listed or approved for listing, upon
notice of issuance, on the New York Stock Exchange.
16
(l) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as provided in this Agreement with respect to the
offering of the Capital Securities, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled with respect to such offering at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be given
to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 8 shall be
delivered at the office of Cleary Gottlieb Steen & Hamilton LLP, counsel for the
Underwriters, at One Liberty Plaza, New York, New York 10006, on the Closing
Date.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it and
by the Trust of its and the Trust's respective and joint obligations hereunder:
(i) the preparation, printing or reproduction, and filing with the Commission of
the Registration Statement (including financial statements and exhibits
thereto), any Preliminary Prospectus and the Final Prospectus (including filing
fees), each amendment or supplement to any of them, this Agreement, the
Declaration, the Guarantee, the Indenture and the Statement of Eligibility and
Qualification of each of the Institutional Trustee, the Guarantee Trustee and
the Indenture Trustee; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, any Preliminary Prospectus, the
Final Prospectus, the documents incorporated by reference in the Registration
Statement, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Capital Securities; (iii) the preparation, printing (or reproduction), execution
and delivery of the Declaration, the Guarantee and the Indenture and the
preparation, printing, authentication, issuance and delivery of the Securities,
including any stamp taxes in connection with the original issuance and sale of
the Capital Securities; (iv) the printing (or reproduction) and delivery of this
Agreement and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Capital Securities; (v) the
registration of the Securities under the Exchange Act and the listing of the
Capital Securities on the New York Stock Exchange; (vi) the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing (or reproduction), and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.; (viii) the fees and
expenses of the Institutional Trustee, the Delaware Trustee, the Guarantee
Trustee and the Indenture Trustee; (ix) the fees and expenses associated with
obtaining ratings for the Capital Securities from nationally recognized
statistical rating
17
organizations; (x) the transportation and other expenses incurred by or on
behalf of representatives of the Offerors (other than the Underwriters and their
representatives) in connection with presentations to prospective purchasers of
the Capital Securities; and (xi) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Offerors.
10. Reimbursement of Underwriters' Expenses. If the sale of the
Capital Securities provided for herein is not consummated because any condition
to the obligations of the Offerors set forth in Section 8 hereof is not
satisfied, because of any termination pursuant to Section 11 hereof or because
of any refusal, inability or failure on the part of the Offerors to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through the Representatives on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Capital Securities.
11. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Capital Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
principal amount of Capital Securities set forth opposite their names in
Schedule I hereto bears to the aggregate principal amount of Capital Securities
set forth opposite the names of all the remaining Underwriters) the Capital
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Capital Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Capital Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Capital Securities, and if such nondefaulting Underwriters
do not purchase all the Capital Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Offerors. In the event
of a default by any Underwriter as set forth in this Section 11, the Closing
Date shall be postponed for such period, not exceeding five Business Days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Offerors and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
12. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Offerors prior to delivery of and payment for the Capital Securities, if
at any time prior to such time (i) trading in the Company's Common Stock shall
have been suspended by the Commission or the New York Stock Exchange, or trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities,
18
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives after consultation with the
Offerors, impractical or inadvisable to proceed with the offering or delivery of
the Capital Securities as contemplated by the Final Prospectus (exclusive of any
supplement thereto).
13. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Trust, the Company or its officers or trustees and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Trust or the Company or any of the officers, directors, trustees, employees,
agents or controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 10
hereof shall survive the termination or cancellation of this Agreement.
14. Notices. All communications hereunder will be in writing and
effective only on receipt, and will be mailed, delivered or telefaxed if to
Citigroup Global Markets Inc., as Representatives of the several Underwriters,
to 390 Greenwich Street, 4th Floor, New York, New York 10013 (fax no.: (212)
816-7912) Attention: General Counsel, and if to the Company, or to the Trust
care of the Company, at the office of the Company at 425 Park Avenue, 2nd Floor,
New York, New York 10043, Attention: General Counsel, Finance and Capital
Markets (fax no.: (212) 793-4401).
15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, trustees, employees, agents and controlling persons
referred to in Section 7 hereof, and no other person will have any right or
obligation hereunder.
16. No Fiduciary Duty. The Offerors hereby acknowledge that (i) the
purchase and sale of the Capital Securities pursuant to this Agreement is an
arm's-length commercial transaction between the Company and the Trust, on the
one hand, and the Underwriters and any affiliate through which it may be acting,
on the other, (ii) the Underwriters are acting as principal and not as an agent
or fiduciary of the Offerors and (iii) the Trust's engagement of the
Underwriters in connection with the offering and the process leading up to the
offering is as independent contractors and not in any other capacity.
Furthermore, each Offeror agrees that it is solely responsible for making its
own judgments in connection with the offering (irrespective of whether any of
the Underwriters has advised or is currently advising either Offeror on related
or other matters. Each Offeror agrees that it will not claim that the
Underwriters have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the it, in connection with such transaction
or the process leading thereto.
17. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) among the Offerors and the
Underwriters, or any of them, with respect to the subject matter hereof.
19
18. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
19. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
20. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
21. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Disclosure Package" shall mean (i) the Preliminary Prospectus, if
any, used most recently prior to the date hereof, (ii) the Final Term Sheet
described in Section 5(b) and (iii) any Free Writing Prospectus that the
parties hereto shall hereafter expressly agree in writing to treat as part
of the Disclosure Package.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto became or
become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the date
hereof.
"Free Writing Prospectus" shall mean a free writing prospectus, as
defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free writing
prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement which is used prior to filing of the Final Prospectus.
20
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that is
filed with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430B, as amended on each Effective
Date and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended.
"Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule 415", "Rule
424", "Rule 430B" and "Rule 433" refer to such rules under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
"Well-Known Seasoned Issuer" shall mean a well-known seasoned issuer,
as defined in Rule 405.
21
Please confirm that the foregoing correctly sets forth the agreement
among the Trust, the Company and the several Underwriters.
Very truly yours,
CITIGROUP CAPITAL XIV
By: /s/ Sallie Krawcheck
------------------------------------
Sallie Krawcheck
as Regular Trustee
CITIGROUP INC.
By: /s/ Charles E. Wainhouse
------------------------------------
Name: Charles E. Wainhouse
Title: Assistant Treasurer
22
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
CITIGROUP GLOBAL MARKETS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
RBC DAIN RAUSCHER INC.,
as Representatives of the several Underwriters
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ Jack D. McSpadden, Jr.
---------------------------------
Name: Jack D. McSpadden, Jr.
Title: Managing Director
23
SCHEDULE I
CITIGROUP CAPITAL XIV
6.875% Enhanced Trust Preferred Securities (Enhanced TRUPS(R))
NUMBER OF CAPITAL
UNDERWRITERS SECURITIES
- ------------ -----------------
Citigroup Global Markets Inc..................................... 3,075,027
Merrill Lynch, Pierce, Fenner & Smith Incorporated............... 3,075,000
Morgan Stanley & Co. Incorporated................................ 3,075,000
UBS Securities LLC............................................... 3,075,000
Wachovia Capital Markets, LLC.................................... 3,075,000
Banc of America Securities LLC................................... 500,000
Bear, Stearns & Co. Inc........................................... 500,000
Lehman Brothers Inc.............................................. 500,000
RBC Dain Rauscher Inc............................................ 500,000
ABN AMRO Incorporated............................................ 83,333
Barclays Capital Inc............................................. 83,333
Charles Schwab & Co., Inc........................................ 83,333
Credit Suisse Securities (USA) LLC............................... 83,333
Deutsche Bank Securities Inc..................................... 83,333
Goldman, Sachs & Co.............................................. 83,333
H&R Block Financial Advisors Inc................................. 83,333
HSBC Securities (USA) Inc........................................ 83,333
J.P. Morgan Securities Inc....................................... 83,333
KeyBanc Capital Markets, a division of McDonald Investments Inc.. 83,333
Oppenheimer & Co. Inc............................................ 83,333
Piper Jaffray & Co............................................... 83,333
Raymond James & Associates, Inc.................................. 83,333
TD Ameritrade, Inc............................................... 83,333
Wells Fargo Investments, LLC..................................... 83,333
B.C. Ziegler and Company......................................... 41,666
BB&T Capital Markets, a division of Scott & Stringfellow, Inc.... 41,666
Blaylock & Company, Inc.......................................... 41,666
BNP Paribas Securities Corp...................................... 41,666
C. L. King & Associates, Inc..................................... 41,666
Crowell, Weedon & Co............................................. 41,666
D.A. Davidson & Co............................................... 41,666
Davenport & Company LLC.......................................... 41,666
Doley Securities, LLC............................................ 41,666
Ferris, Baker Watts, Incorporated................................ 41,666
Guzman & Company................................................. 41,666
J.J.B. Hilliard, W.L. Lyons, Inc................................. 41,666
Jackson Securities LLC........................................... 41,666
Janney Montgomery Scott LLC...................................... 41,666
Keefe, Bruyette & Woods, Inc..................................... 41,666
Loop Capital Markets, LLC........................................ 41,666
Melvin Securities, L.L.C......................................... 41,666
Mesirow Financial, Inc........................................... 41,666
Morgan Keegan & Company, Inc..................................... 41,666
Muriel Siebert & Co., Inc........................................ 41,666
Pershing LLC..................................................... 41,666
Robert W. Baird & Co. Incorporated............................... 41,666
Ryan Beck & Co., Inc............................................. 41,666
Samuel A. Ramirez & Co., Inc..................................... 41,666
Sandler, O'Neill & Partners, L.P................................. 41,666
Stifel, Nicolaus & Company, Incorporated......................... 41,666
Stone & Youngberg LLC............................................ 41,666
SunTrust Capital Markets, Inc.................................... 41,666
The Williams Capital Group, L.P.................................. 41,666
Toussaint Capital Partners, LLC.................................. 41,666
Utendahl Capital Partners, L.P................................... 41,666
Wedbush Morgan Securities Inc.................................... 41,666
William Blair & Company, L.L.C................................... 41,666
TOTAL......................................................... 20,000,000
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