Exhibit 1.04
Citigroup Inc.
Medium-Term Senior Notes, Series A
Medium-Term Subordinated Notes, Series A
Due Nine Months or More from the Date of Issue
DISTRIBUTION AGREEMENT
December __, 1998
[NAME OF AGENT(S)]
Ladies and Gentlemen:
Citigroup Inc., a Delaware corporation (the "Company"), confirms its
agreement with the Agent (as defined below) with respect to the issue and sale
by the Company of its Medium-Term Senior Notes, Series A (the "Senior Notes")
and its Medium-Term Subordinated Notes, Series A (the "Subordinated Notes" and,
together with the Senior Notes, the "Notes"). The Senior Notes are to be issued
under an Indenture dated as of March 15, 1987, as supplemented by the First
Supplemental Indenture dated as of December 15, 1993, the Second Supplemental
Indenture dated as of January 31, 1991, the Third Supplemental Indenture dated
as of December 9, 1992 and the Fourth Supplemental Indenture dated as of
November 2, 1998 (as so supplemented or as it may from time to time be further
supplemented or amended by one or more indentures supplemental thereto, the
"Senior Debt Indenture"), between the Company and The Bank of New York, as
trustee (the "Senior Debt Trustee"). The Subordinated Notes are to be issued
under an Indenture dated as of July 17, 1998, as supplemented by the First
Supplemental Indenture dated as of December 15, 1998 (as so supplemented or as
it may from time to time be further supplemented or amended by one or more
indentures supplemental thereto, the "Subordinated Debt Indenture" and, together
with the Senior Debt Indenture, the "Indentures"), between the Company and The
First National Bank of Chicago, as trustee (the "Subordinated Debt Trustee" and,
together with the Senior Debt Trustee, the "Trustees"). The Notes will have the
maturities, interest rates (whether fixed or floating), redemption provisions
and other terms set forth in a pricing supplement to the Prospectus referred to
below. The Notes may be denominated in U.S.
dollars, foreign currencies or foreign composite currency units (the "Specified
Currency") as may be specified in the applicable pricing supplement.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes to the Agent acting as
principal at a discount for its own account or for resale to one or more
investors or other dealers and the Company's right to sell Notes directly to
investors on its own behalf or through other agents (provided that any other
agent will execute an agreement with the Company substantially in the form of
Exhibit F hereto and that the Company will notify the Agent of its agreement
with any other agents, dealers or underwriters, but only if such other agents,
dealers or underwriters are appointed for the duration of this Agreement), the
Company hereby appoints the Agent as an agent of the Company for the purpose of
soliciting offers to purchase the Notes. In addition, the Agent may also
purchase Notes as principal and the Company will enter into a Terms Agreement
(referred to below) relating to such sale in accordance with the provisions of
Section l(b) hereof. For the purposes of this Agreement, the term "Agent" shall
refer to [NAME OF AGENT(S)].
1. Solicitations by the Agent of Offers to Purchase; Purchases as
Principal.
(a) Solicitations as Agent. Following the Commencement Date (as
defined below), the Company shall notify the Agent from time to time as to the
commencement of a period during which the Notes may be offered and sold by the
Agent (each period, commencing with such a notification and ending at such time
as the authorization for offers and sales through the Agent shall have been
suspended by the Company or the Agent as provided hereunder, being herein
referred to as an "Offering Period"). On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Agent agrees to use its reasonable best efforts to solicit offers to
purchase the Notes during each Offering Period upon the terms and conditions set
forth in the Prospectus as then amended and supplemented. The Company reserves
the right, in its sole discretion, to suspend solicitation of purchases of the
Notes commencing at any time for any period of time or permanently. Upon receipt
of instructions from the Company, the Agent will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agent that such solicitation may be resumed.
Unless otherwise agreed to, the Company agrees to pay the Agent at
the time of delivery of and payment for the Notes, as consideration for
soliciting the sale of each Note, a commission equal to the percentage set forth
on Schedule 1 hereto of the price to the public of each Note sold by the Company
as the result of a solicitation by
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the Agent. Without the prior approval of the Company, the Agent (acting on an
agency basis) may not reallow any portion of the commission payable pursuant
hereto to dealers or purchasers in connection with the offer and sale of any
Notes.
The Agent is authorized to solicit orders for the Notes only in
principal amounts of $1,000 or any amount in excess thereof which is a multiple
of $1,000 or, in the case of Notes denominated in a Specified Currency other
than U.S. dollars, in the denominations set forth in the applicable pricing
supplement, at a purchase price equal to 100% of the principal amount of the
Notes, unless otherwise mutually agreed upon by the purchaser and the Company
and specified in the applicable pricing supplement. The Agent shall communicate
to the Company, orally or in writing, each reasonable offer or indication of
interest to purchase Notes received by the Agent, as agent. The Company shall
have the sole right to accept offers to purchase the Notes and may reject any
such offer in whole or in part. The Agent shall have the right to reject, in its
discretion reasonably exercised, any offer received by it to purchase the Notes,
in whole or in part, and any such rejection shall not be deemed a breach of its
agreements contained herein. In soliciting offers to purchase the Notes in its
capacity as agent of the Company, the Agent is acting solely as agent for the
Company, and not as principal, and does not assume any obligation toward, or
relationship of agency or trust with, any purchaser of the Notes (other than any
such obligation or relationship which the Agent assumes independently of this
Agreement). The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by the Agent and accepted by the Company, but the Agent shall not have
any liability to the Company in the event any such purchase is not consummated
for any reason. Under no circumstances will the Agent be obligated to purchase
any Notes for its own account except pursuant to subparagraph (b) below.
(b) Purchases as Principal. Each sale of Notes to the Agent as
principal shall be made in accordance with the terms of this Agreement and the
Agent and the Company will enter into a Terms Agreement that will provide for
the sale of such Notes to and the purchase thereof by the Agent. Each "Terms
Agreement" may take the form of an exchange of any form of written
telecommunication or oral communication followed by written confirmation or
telecommunication between the Agent and the Company and shall be with respect to
such information (as applicable) as is specified in Exhibit A hereto.
The Agent's commitment to purchase Notes as principal shall be
deemed to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each
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agreement by the Agent to purchase Notes as principal (whether or not set forth
in a Terms Agreement) shall specify the principal amount of Notes to be
purchased by the Agent pursuant thereto, the maturity date of such Notes, the
price to be paid to the Company for such Notes, the interest rate and interest
rate formula, if any, applicable to such Notes and any other terms of such
Notes. Each such agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent public
accountants of the Company pursuant to Section 4 hereof. A Terms Agreement may
also specify certain provisions relating to the reoffering of such Notes by the
Agent.
Each Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Each date of delivery of and payment for Notes to be
purchased by the Agent as principal or as agent or by any other purchaser is
referred to herein as a "Settlement Date."
Upon the Company's request, the Agent will notify the Company either
orally or in writing (as specified by the Company) of the aggregate principal
amount of Notes held by the Agent as principal purchased pursuant to a Terms
Agreement pursuant to this Agreement.
(c) Procedures. The Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by them
in the Medium-Term Notes Administrative Procedures attached hereto as Exhibit B
(the "Procedures"). The Procedures may be amended only by written agreement of
the Company and the Agent.
(d) Delivery. The documents required to be delivered by Section 4 of
this Agreement shall be delivered at the office of Dewey Ballantine LLP ("Dewey
Ballantine") (or such other counsel reasonably satisfactory to both the Agent
and the Company), counsel for the Agent, 1301 Avenue of the Americas, New York,
NY 10019, on December __, 1998 (the "Commencement Date").
2. Representations and Warranties. The Company represents and warrants to,
and agrees with, the Agent as of the Commencement Date:
(a) Registration Statements (File Nos. 333-42575, 333-51201 and
333-[ ]) in respect of up to $6,000,000,000 aggregate amount of securities of
the Company, including the Notes, have been filed with the Securities and
Exchange Commission (the "Commission"); such registration statements and any
post-effective amendments thereto, in the forms heretofore delivered or to be
delivered to the Agent, excluding exhibits to such registration statements but
including all documents incorporated by reference therein, have been declared
effective by the Commission in such forms; no other document with respect to
such registration statements (other than a document incorporated by reference
therein) has heretofore been filed or transmitted for filing with the
Commission; and no stop order suspending the effectiveness of any
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of such registration statements has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission (any preliminary
prospectus included in the Third Registration Statement (as defined herein) or
filed with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "Act"),
being hereinafter called a "Preliminary Prospectus"); the various parts of any
of the registration statements, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such registration
statement at the time such part of such registration statement became effective
but excluding the Statements of Eligibility under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), pertaining to the Indentures (the
"Forms T-1"), as amended at the time such part became effective, being
hereinafter collectively called (i) in the case of Registration Statement No.
333-42575, the "First Registration Statement," (ii) in the case of Registration
Statement No. 333-51201, the "Second Registration Statement" and (iii) in the
case of Registration Statement No. 333-[ ], the "Third Registration Statement;"
the First Registration Statement, the Second Registration Statement and the
Third Registration Statement being hereinafter from time to time called the
"Registration Statements;" the form of basic prospectus included in the Third
Registration Statement relating to the offering and sale of Debt Securities,
Index Warrants, Preferred Stock, Common Stock and Depositary Shares included in
the Third Registration Statement, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the date of
this Agreement being hereinafter called the "Basic Prospectus;" the form of
prospectus supplement to the Basic Prospectus relating to the offering and sale
of the Notes included in the Third Registration Statement, in the form in which
it has most recently been filed or transmitted for filing, with the Commission
on or prior to the date of this Agreement being hereinafter called the
"Prospectus Supplement;" and the Basic Prospectus, as supplemented by the
Prospectus Supplement, being hereinafter called the "Prospectus;" any reference
herein to any Preliminary Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus, Prospectus Supplement or Prospectus, as the case
may be; any reference to any amendment or supplement to any Preliminary
Prospectus, the Prospectus Supplement or the Prospectus, including any
supplement to the Prospectus that sets forth only the terms of the particular
issue of the Notes (a "Pricing Supplement"), shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus,
Prospectus Supplement or the Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be; any reference to any amendment
to any of the Registration Statements shall be deemed to include any report of
the Company filed pursuant to the Exchange Act after the effective date of such
Registration Statement that is incorporated by reference in such Registration
Statement; and any reference to the Prospectus, as amended or supplemented,
shall be deemed to refer to and include the Prospectus, as amended or
supplemented, in relation to the Notes sold pursuant to this Agreement, in the
form in which it is filed with the
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Commission pursuant to Rule 424(b) under the Act, including any documents
incorporated by reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(c) Each of the Registration Statements and the Prospectus, and any
amendment thereof or supplement thereto, and each of the Indentures, conform or
will conform in all material respects with the applicable requirements of the
Act and the Trust Indenture Act, and the rules and regulations of the Commission
thereunder.
(d) The First Registration Statement and the Second Registration
Statement as of their effective dates did not, and the Third Registration
Statement, as amended as of any time, will not, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading and the
Prospectus, as amended and supplemented as of any such time, did not and will
not include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Third Registration Statement or the Prospectus
or any amendment thereof or supplement thereto in reliance upon, and in
conformity with, information furnished in writing to the Company by or on behalf
of the Agent specifically for use in the Third Registration Statement and the
Prospectus or any amendment thereof or supplement thereto.
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the applicable Indenture and delivered to and
duly paid for by the purchasers thereof, will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms and entitled to the benefits of such Indenture (subject, as to
enforcement, to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether such enforceability is considered in
a proceeding in equity or at law); each of the Indentures has been duly
authorized by the Company and qualified under the Trust Indenture Act; and the
Indentures conform to the descriptions thereof in the Prospectus as amended or
supplemented to relate to such issuance of Notes.
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(f) Since the date of the most recent financial statements included
in the Prospectus, as amended or supplemented, there has not been any material
adverse change in the consolidated financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, which is not disclosed in
the Prospectus, as amended or supplemented.
3. Agreements of the Company. The Company agrees with the Agent that:
(a) At any time during an Offering Period or during the time a
prospectus relating to the Notes is required to be delivered under the Act: (i)
prior to amending or supplementing any of the Registration Statements or the
Prospectus, the Company will furnish the Agent and the Agent's counsel with a
copy of each proposed amendment or supplement (other than an amendment or
supplement to be made pursuant to incorporation by reference of a document filed
under the Exchange Act, or a Pricing Supplement or an amendment or supplement
relating solely to an offering of debt securities other than the Notes) and (ii)
prior to filing any documents under the Exchange Act to be incorporated by
reference into the Prospectus (other than documents relating solely to an
offering of debt securities other than the Notes), the Company will notify the
Agent and the Agent's counsel orally of the general subject matter of such
filing. The Company will promptly cause the Prospectus together with each
amendment thereof or supplement thereto to be mailed or otherwise transmitted to
the Commission for filing pursuant to Rule 424(b) by an appropriate method or
will promptly cause the Prospectus together with each amendment thereof or
supplement thereto to be filed with the Commission pursuant to said Rule. If the
Prospectus is amended or supplemented (other than a Pricing Supplement or an
amendment or supplement relating solely to an offering of debt securities other
than the Notes), the Agent shall be furnished with such information relating to
such filing as it may reasonably request, and the Agent shall not be obligated
to solicit offers to purchase Notes so long as it is not reasonably satisfied
that such amendment or supplement complies in all material respects with the
provisions of the Act and the Exchange Act. At any time during an Offering
Period or during the time a prospectus relating to the Notes is required to be
delivered under the Act, the Company will promptly advise the Agent of (i) the
filing of any amendment or supplement to the Prospectus (other than a Pricing
Supplement or an amendment or supplement relating solely to an offering of debt
securities other than the Notes), (ii) the filing or effectiveness of any
amendment to any of the Registration Statements, (iii) the receipt by the
Company of comments from the Commission relating to, or requests by the
Commission for, any amendment of any of the Registration Statements or any
amendment of or supplement to the Prospectus or for any additional information,
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of any of the Registration Statements or the institution or
threatening of any proceeding for that purpose and (v) the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its reasonable best
efforts to prevent the issuance of any such stop order or notice of suspension
of qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. Upon the Agent's request, the Company will within a reasonable time
inform the Agent of the
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aggregate principal amount of Notes registered under the Registration Statements
remain unissued.
(b) Within the time during which a prospectus relating to the Notes
is required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act, as now and hereafter amended, and by
the rules and regulations of the Commission thereunder, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Notes as contemplated by the provisions hereof and the Prospectus. If during
such period any event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if, in the opinion of the
Company, during such period it is necessary to amend or supplement the
Registration Statement or the Prospectus to comply with the Act, the Company
will promptly notify the Agent to suspend the solicitation of offers to purchase
the Notes in its capacity as Agent and to cease sales of any Notes it may then
own as principal and, to the extent required under the provision in the last
sentence of this subsection (b), the Company will promptly amend or supplement
the Third Registration Statement or the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
If such amendment or supplement, and any documents, certificates, opinions and
letters furnished to the Agent pursuant to subsections (i), (j) and (k) of this
Section 3 in connection with the preparation and filing of such amendment or
supplement are reasonably satisfactory in all respects to the Agent, upon the
filing of such amendment or supplement with the Commission or effectiveness of
an amendment to such Registration Statement, the Agent will resume solicitation
of offers to purchase Notes hereunder. Notwithstanding the foregoing, the
Company shall not be required to comply with the provisions of subsection (b) of
this Section 3 during any period from the time the Agent shall have been
notified to suspend the solicitation of offers to purchase the Notes in its
capacity as Agent (whether under this subparagraph (b) or otherwise under this
Agreement) to the time the Company shall determine that solicitation of offers
to purchase the Notes should be resumed; provided that if the Agent holds any
Notes as principal purchased pursuant to a Terms Agreement or otherwise pursuant
to this Agreement, the Company shall comply with the provisions of subsection
(b) of this Section 3 during the period when a Prospectus is required to be
delivered pursuant to the Act.
(c) The Company will comply, in a timely manner, with all applicable
requirements under the Exchange Act relating to the filing with the Commission
of the Company's reports pursuant to Sections 13(a), 13(c) or 15(d) of the
Exchange Act and, if then applicable, of the Company's proxy statements pursuant
to Section 14 of the Exchange Act.
(d) The Company will use its best efforts to qualify the Notes for
sale under the securities laws of such jurisdictions as the Agent reasonably
designates, to maintain such qualifications in effect so long as required for
the distribution of the Notes and, if requested by the Agent, to arrange for the
determination of the legality of
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the Notes for purchase by institutional investors, except that the Company shall
not be required in connection therewith to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general or unlimited service of process in any jurisdiction where
it is not now so subject.
(e) The Company will furnish to the Agent copies of the Registration
Statements and the Prospectus (including all documents incorporated by reference
therein), and all amendments of and supplements to the Registration Statements
or the Prospectus which are filed with the Commission during the period in which
a prospectus relating to the Notes is required to be delivered under the Act
(including all documents filed by an amendment or supplement with the Commission
during such period which are deemed to be incorporated by reference therein), in
each case in such quantities as the Agent may from time to time reasonably
request.
(f) The Company will make generally available to its security
holders and to the Agent as soon as practicable, but in any event not later than
15 months after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning after
the date upon which any amendment of or supplement to the Prospectus (other than
a Pricing Supplement or an amendment or supplement relating solely to an
offering of debt securities other than the Notes) is filed pursuant to Rule 424
under the Act, which shall satisfy the provisions of Section 11(a) of the Act.
(g) The Company shall, whether or not any sale of Notes is
consummated or this Agreement is terminated, pay all expenses incident to the
performance of its obligations under this Agreement and under any Terms
Agreement, including, without limitation, the fees and disbursements of its
accountants and counsel, the cost of printing (or other production) and delivery
of the Registration Statements and the Prospectus, all amendments thereof and
supplements thereto, the Indentures, and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements (including reasonable fees of counsel) incurred in
connection with the qualification of the Notes for sale and determination of
eligibility for investment of the Notes under the securities or Blue Sky laws of
such jurisdictions as the Agent may designate, the fees and disbursements of the
Trustees, the fees of any agency that rates the Notes, the fees and expenses in
connection with any listing of the Notes on the New York Stock Exchange, Inc.
(the "New York Stock Exchange") or such other securities exchange agreed to in
writing by the Company, the fees and expenses incurred with respect to any
filing with the National Association of Securities Dealers, Inc. and the
reasonable fees and disbursements of Dewey Ballantine, as counsel for the Agent,
or other counsel reasonably satisfactory to both the Agent and the Company, and
such other expenses, including, without limitation, advertising expenses as may
be agreed upon by the Agent and the Company; provided, however, that with
respect to any purchase of Notes by the Agent as principal pursuant to a Terms
Agreement, the fees and disbursements of Dewey Ballantine or other counsel to
the Agent shall not be paid by the Company.
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(h) During the term of this Agreement, the Company shall furnish to
the Agent such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statements, the Prospectus, any amendments thereof or supplements
thereto, the Indentures, the Notes, this Agreement, the Procedures, any Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as the Agent may from time to time reasonably request and shall
promptly notify the Agent orally, followed by written notice of any downgrading,
or of its receipt of any notice of any intended downgrading, in the rating
accorded any of the Company's securities by Moody's Investor Service ("Moody's")
or Standard & Poor's Corporation ("Standard & Poor's") or, if one of them no
longer rates the securities of the Company, another "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
(i) Each time any of the Registration Statements or the Prospectus
is amended or supplemented (other than a Pricing Supplement or an amendment or
supplement relating solely to an offering of debt securities other than the
Notes) and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q, or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, the Company will deliver or cause
to be delivered forthwith to the Agent a certificate of the Company signed by
either Chairman of the Board, the Vice Chairman, the Chief Financial Officer,
the Chief Accounting Officer, the Treasurer, the Deputy Treasurer, the
Controller, or either Co-General Counsel and by the principal financial or
accounting officer of the Company (or another officer or officers acceptable to
the Agent), dated the date of the effectiveness of such amendment or the date of
filing with the Commission of such supplement or document, as the case may be,
in form reasonably satisfactory to the Agent, to the effect that the statements
contained in the certificate referred to in Section 4(b)(iii) hereof that was
last furnished to the Agent (either pursuant to Section 4(b)(iii) or pursuant to
this Section 3(i)) are true and correct at the time of the effectiveness of such
amendment or the time of filing of such supplement or document, as the case may
be, as though made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statements, as amended at the time of
effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such certificate) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
4(b)(iii) hereof, but modified, if necessary, to relate to the Registration
Statements, as amended at the time of the effectiveness of such amendment, and
to the Prospectus, as amended and supplemented at the date of such certificate.
(j) Each time any of the Registration Statements or the Prospectus
is amended or supplemented (other than a Pricing Supplement or an amendment or
supplement relating solely to an offering of debt securities other than the
Notes), and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the
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Prospectus, the Company shall furnish to or cause to be furnished forthwith to
the Agent the written opinion of the General Counsel - Corporate Law of the
Company or other counsel reasonably satisfactory to the Agent dated the date of
the effectiveness of such amendment or the date of filing with the Commission of
such supplement or document, as the case may be, in form reasonably satisfactory
to the Agent, to the effect set forth in Exhibit C hereto. In lieu of such
opinion, counsel last furnishing such an opinion to the Agent may furnish to the
Agent a letter to the effect that the Agent may rely on such last opinion to the
same extent as though it were dated the date of such letter and authorizing
reliance on such last opinion (except that statements in such last opinion will
be deemed to relate to the Registration Statements, as amended at the time of
the effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such letter).
(k) Each time that any of the Registration Statements or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information (other than a Pricing Supplement or any amendment or
supplement relating solely to an offering of debt securities other than the
Notes) and each time an Annual Report on Form 10-K, a Quarterly Report on Form
10-Q or a Report on Form 8-K (but only if the Agent so requests within a
reasonable time after its filing) filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus to set forth financial information
included in or derived from the Company's consolidated financial statements or
accounting records as of the end of the most recent fiscal quarter or fiscal
year, the Company shall cause KPMG Peat Marwick LLP ("KPMG"), its independent
certified public accountants, to furnish forthwith the Agent a letter, within
three business days following the date of the effectiveness of such amendment or
the date of filing of such supplement or document, as the case may be (provided
that, in the event any Settlement Date falls within such three business day
period, such letter will be delivered on or prior to such Settlement Date), in
form satisfactory to the Agent, of the same tenor as the letter referred to in
Section 4(b)(iv) hereof, but modified to relate to the Registration Statements
and Prospectus, as amended and supplemented to the date of such letter, with
such changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the Company;
provided, that, if any of the Registration Statements or the Prospectus is
amended or supplemented solely to include or incorporate by reference financial
information with respect to a fiscal quarter, KPMG may limit the scope of such
letter to the unaudited financial statements included in such amendment or
supplement.
(l) Each acceptance by the Company of an offer for the purchase of
Notes and each sale of Notes to the Agent as principal shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
or made pursuant to this Agreement are true and correct in all material respects
at the time of such acceptance or sale, as the case may be, as though made at
and as of such time, and an undertaking that such representations and warranties
will be true and correct in all material respects at the time of delivery to the
purchaser or his agent, or the Agent, or the Agent as principal, of the Notes
relating to such acceptance, as the case may be, as though made at and as of
such time (and it is understood that such representations and
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warranties shall relate to the Registration Statements and the Prospectus as
amended and supplemented to each such time).
(m) Anything to the contrary in this Section 3 notwithstanding, if,
at the time of any required notice, amendment or supplement to any of the
Registration Statements or the Prospectus, the Company shall have instructed the
Agent to suspend solicitation of offers to purchase the Notes in its capacity as
Agent of the Company and the Agent does not then hold any Notes acquired by it
as principal pursuant to a Terms Agreement, the Company shall not be obligated
to furnish or cause to be furnished to the Agent any notice, certificate,
opinion or letter otherwise required until such time as it shall determine that
solicitation of offers to purchase the Notes should be resumed; and provided
further that, prior to resuming such solicitation the Agent shall be entitled to
receive any such notices, certificates, opinions or letters not previously
furnished, accurate as of the date of such notice, certificate, opinion or
letter.
4. Conditions to the Obligations of the Agent. The Agent's obligations to
solicit offers to purchase Notes as agent of the Company, the Agent's
obligations to purchase Notes as principal pursuant to any Terms Agreement or
otherwise and the obligation of any other purchaser to purchase Notes from the
Company will be subject to the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained, to
the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of the Agent's obligations
to solicit offers to purchase Notes, at the time of such solicitation, and, in
the case of the Agent's or any other purchaser's obligation to purchase Notes,
at the time the Company accepts the offer to purchase such Notes and at the time
of purchase) and (in each case) to the following additional conditions precedent
when and as specified:
(a) On the corresponding Settlement Date:
(i) There shall not have occurred any change in or affecting
particularly the business or properties of the Company and its
subsidiaries from that set forth in the Third Registration Statement, as
amended or supplemented, that, in the Agent's judgment, makes it
impracticable to market the Notes on the terms and in the manner
contemplated in the Prospectus except, in the case of any purchase of
Notes by the Agent as principal, as disclosed to the Agent in writing by
the Company before it accepted the offer to purchase such Notes.
(ii) There shall not have occurred any (A) suspension or
material limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market, (B) declaration of a
general moratorium on commercial banking activities in New York by either
federal or New York state authorities or (C) any outbreak or escalation of
major hostilities in which the
12
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency that, in the
Agent's judgment, is material and adverse and, in the case of any of the
events described in clauses (ii)(A) through (C), such event makes it, in
the Agent's judgment, impracticable to market the Notes on the terms and
in the manner contemplated by the Prospectus, as amended or supplemented,
except, in the case of any purchase of Notes by the Agent as principal,
for any such event occurring before the Company accepted the offer to
purchase such Notes.
(iii) There shall not have been any downgrading, nor any
notice given of any intended downgrading, in the rating accorded any of
the Company's securities by Moody's or Standard & Poor's or, if one of
them no longer rates the securities of the Company, another "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Act, except, in the case of any
purchase of Notes by the Agent as principal, as disclosed to the Agent in
writing by the Company before it accepted the offer to purchase such
Notes.
(b) On the Commencement Date and, if called for by any agreement by
the Agent to purchase Notes as principal, on the corresponding Settlement Date:
(i) The Company shall have furnished to the Agent the opinion
of the General Counsel - Corporate Law of the Company (or other counsel
for the Company reasonably acceptable to the Agent) on the Commencement
Date, and on the Settlement Date will furnish the opinion of the General
Counsel - Corporate Law of the Company (or other counsel for the Company
reasonably acceptable to the Agent) and, if called for by a Terms
Agreement, the opinion of other counsel, dated the Commencement Date or
the Settlement Date, as the case may be, to the effect set forth in
Exhibit C hereto.
(ii) The Agent shall have received from Dewey Ballantine (or
other counsel reasonably acceptable to the Agent and the Company), counsel
for the Agent, an opinion dated the Commencement Date or the Settlement
Date, as the case may be, to the effect set forth in Exhibit D hereto.
(iii) The Company shall have furnished to the Agent a
certificate of the Company, signed by either Chairman of the Board, the
Vice Chairman, the Chief Financial Officer, the Chief Accounting Officer,
the Treasurer, the Deputy Treasurer, the Controller, or either Co-General
Counsel and by the principal financial or accounting officer of the
Company (or another officer or officers acceptable to the Agent), dated
the Commencement Date or the Settlement Date, as the case may be, to the
effect that each signatory of such certificate has carefully examined the
Third Registration Statement, as amended as of the date of such
certificate, the Prospectus, as amended and supplemented as of the date of
such certificate, and this Agreement and that:
13
(A) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and
as of the date of such certificate with the same effect as if made
on the date of such certificate and the Company has complied in all
material respects with all the agreements and satisfied in all
material respects all the conditions on its part to be performed or
satisfied as a condition to the obligations of the Agent under this
Agreement;
(B) no stop order suspending the effectiveness of any of
the Registration Statements has been issued and no proceedings for
that purpose have been instituted or, to their knowledge, have been
threatened; and
(C) since the date of the most recent financial
statements included in the Prospectus, as amended and supplemented,
there has been no material adverse change in the consolidated
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, which is not disclosed in the
Prospectus, as amended or supplemented.
(iv) KPMG, or another nationally recognized independent
accounting firm, shall have furnished to the Agent a letter or letters,
dated the Commencement Date or the Settlement Date, as the case may be, in
form and substance reasonably satisfactory to the Agent, to the effect set
forth in Exhibit E hereto.
(v) The Company shall have furnished to the Agent such
appropriate further information, certificates and documents as the Agent
may reasonably request.
5. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Agent against
any losses, claims, damages or liabilities, joint or several, to which the Agent
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statements when they became effective, the
Prospectus, or any amendment or supplement thereto, or any related Preliminary
Prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and will reimburse the Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made
14
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Agent specifically for use in the preparation
thereof and such indemnity with respect to any preliminary prospectus, the
Prospectus or any preliminary supplemental prospectus, shall not inure to the
benefit of the Agent (or any person controlling the Agent) if the Company shall
have delivered sufficient quantities of the Prospectus, as amended and
supplemented, to the Agent within a reasonable time prior to the earlier of the
delivery of the written confirmation of the sale of such Notes or the delivery
of such Notes to the person asserting such loss, claim, damage, liability or
action for which indemnification is sought, and the Prospectus as so amended and
supplemented (excluding documents incorporated by reference) was not sent or
given to such person by the Agent at or prior to the earlier of the delivery of
the written confirmation of the sale of such Notes or the delivery of such Notes
to such person in any case where such sending or giving of a prospectus is
required by the Act, and the untrue statement or omission of a material fact
contained in such preliminary prospectus, such Prospectus or such preliminary
supplemental prospectus, was corrected in the Prospectus, as so amended and
supplemented, provided to the Agent.
(b) The Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the Registration Statements when they became effective, the Prospectus
or any amendment or supplement thereto, or any related Preliminary Prospectus,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Agent
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall wish, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnified party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such
15
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Agent participating in the offering that
gave rise to such losses, claims, damages or liabilities on the other from the
offering of such Notes, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Agent on the other in connection with the offering of such Notes shall
be deemed to be in the same proportion as the total net proceeds from the
offering of such Notes by the Agent (before deducting expenses) received by the
Company bear to the total commissions received by the Agent in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Agent agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim (which shall be limited as
provided in subsection (c) above if the indemnifying party has assumed the
defense of any such action in accordance with the provisions thereof) which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Notes were offered
and sold to the public by the Agent exceeds the amount of any damages which the
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
subsection (d) of notice of the commencement of any action against such party in
respect of which a claim for contribution may be made against an indemnifying
party under this subsection (d), such indemnified party shall notify the
indemnifying party in
16
writing of the commencement thereof if the notice specified in subsection (c)
above has not been given with respect to such action; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party otherwise than under this subsection (d).
(e) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Agent within the meaning of the Act or the Exchange Act; and the obligations of
the Agent under this Section 5 shall be in addition to any liability which the
Agent may otherwise have and shall extend, upon the same terms and conditions,
to each director of the Company, to each officer of the Company who has signed
the Registration Statements and to each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act.
6. Termination of the Appointment of the Agent. This Agreement may be
terminated at any time by either party hereto upon the giving of written notice
of such termination to the other party hereto. The termination of this Agreement
shall not require termination of any agreement by the Agent to purchase Notes as
principal, and the termination of any such Agreement shall not require
termination of this Agreement. If this Agreement is terminated, neither party
shall have any liability to the other party hereto, except as provided in the
first sentence of the second paragraph of Section 1(a), the last proviso of
Section 3(b), and Sections 3(f), 3(g), 5, 7 and 11 hereof, and except that, if
at the time of termination an offer to purchase any of the Notes has been
accepted by the Company but the time of delivery to the purchaser or its agent
of the Note or Notes relating thereto has not occurred, the Company's
representations and warranties stated in Section 2 and its obligations under
Sections 1(c), 3(a), 3(b), 3(c), 3(e), 3(h), 3(i), 3(j), 3(k), 3(l) and 4 hereof
shall also remain in full force and effect and not be terminated until the
delivery of such Notes.
7. Representations and Indemnities to Survive. With respect to the Agent's
solicitation of offers to purchase Notes as agent of the Company or the Agent's
obligation to purchase Notes as principal pursuant to any Terms Agreement or
otherwise, the respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the Agent set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agent or the Company
or any of the officers, directors or controlling persons referred to in Section
5 hereof, and will survive delivery of and payment for the Notes for a period
extending to the earlier of (i) three years from the corresponding Settlement
Date for such Notes or (ii) the expiration of any applicable statute of
limitations governing such solicitation or purchase of Notes.
8. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Agent, will be mailed, delivered or
transmitted to it by any standard form of telecommunications at:
17
[NAME AND ADDRESS OF AGENT(S)]
[Attention:
Fax: (212) ]
or, if sent to the Company, will be mailed, delivered or transmitted by any
standard form of telecommunications at:
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
[Attention: Treasurer
Reference Medium-Term Note Program
Fax: (212) ]
and
153 East 53rd Street
New York, New York 10043
[Attention:
Fax: (212) ]
Any party to this Agreement may change the address to which notices or
communications to it shall be directed by giving notice in writing to the other
parties hereto.
9. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 5 hereof. Nothing
expressed or implied in this Agreement or any Terms Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 5 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof, except to the extent provided for in Section 4
hereof, are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase. This Agreement and the rights
and obligations of the Agent hereunder may not be assigned without the prior
written consent of the Company.
10. Waivers, Etc. Neither any failure nor delay on the part of any party
to exercise any right, remedy, power or privilege under this Agreement (singly
and
18
collectively referred to as a "Right") shall operate as a waiver of such Right,
nor shall any single or partial exercise of any Right preclude any other or
further exercise of any Right, nor shall any waiver of any Right with respect to
any occurrence be construed as a waiver of any Right with respect to any other
occurrence.
11. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
19
If the foregoing is in accordance with the Agent's understanding of
this agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and the Agent's acceptance shall represent a binding
agreement between the Company and the Agent.
Very truly yours,
CITIGROUP INC.
By
-------------------------------
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first written above.
[NAME OF AGENT(S)]
By:
-----------------------------
Name:
Title:
20
Schedule 1
Citigroup Inc.
Medium-Term Notes
Commission Schedule
Term Commission Rate
---- ---------------
21
EXHIBIT A
CITIGROUP INC.
MEDIUM-TERM NOTES
TERMS AGREEMENT
Dated:
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Attention: [ ]
Re: Distribution Agreement dated December __, 1998 (the
"Distribution Agreement")
Subject to the terms and provisions stated below, the undersigned
agrees to purchase the following principal amount of your (check box):
|_| Medium-Term Senior Notes, Series A: $ ; and/or
|_| Medium-Term Subordinated Notes, Series A: $ .
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
Purchase Price: Interest Rate: Base Rate:
Price to Public: Index Maturity:
Settlement Date and Spread:
time:
A-1
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
Place of delivery: Spread Multiplier:
Original Issue Date: Amortization
Schedule:
Date on which interest
begins to accrue (if dif-
ferent from Original
Issue Date):
Specified Currency: Initial Interest Rate:
Maturity Date: Interest Reset Dates:
Interest Payment Maximum Interest Rate:
Dates:
Regular Record Dates:
A-2
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
Exchange Rate Agent:
Option to receive pay-
ments in specified cur-
rency other than U.S.
Dollars:
Sinking fund:
Total amount OID:
Original yield to matu- Minimum Interest Rate:
rity:
Renewal terms:
Option to elect repay-
ment:
A-3
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
Optional Repayment
Dates:
Optional Repayment
prices:
Optional Interest Rate
Reset:
Optional Reset Dates:
Optional extension of
maturity:
Length of extension
period:
Number of extension
periods:
A-4
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
Final Maturity Date:
Depositary:
Optional Redemption Interest Reset Period:
Date(s):
Initial Redemption Interest payment
Date: Period:
Initial Redemption Calculation Agent:
Percentage:
Annual redemption
percentage decrease:
Other terms:
The provisions of Sections 1(b) and (c) and 2 through 11 of the
Distribution Agreement and the related definitions are incorporated by
reference
A-5
herein and shall be deemed to have the same force and effect as if set
forth in full herein.
Between the date of this Agreement and the Settlement Date with
respect to this Agreement, you will not, without the undersigned's prior
consent, offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company substantially similar to the Medium-Term Senior Notes,
Series A and the Medium-Term Subordinated Notes, Series A (other than (i) the
Notes to be sold pursuant to this Agreement and (ii) commercial paper issued in
the ordinary course of business), except as may otherwise be provided herein.
A-6
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required:
[NAME OF AGENT(S)]
By ______________________________
Name:
Title:
Accepted:
CITIGROUP INC.
By:______________________________
Name:
Title:
A-7
EXHIBIT B
CITIGROUP INC.
Medium-Term Note Administrative Procedures
December __, 1998
The Medium-Term Senior Notes, Series A (the "Senior Notes") and the
Medium-Term Subordinated Notes, Series A (the "Subordinated Notes" and, together
with the Senior Notes, the "Notes") of Citigroup Inc. (the "Company") are to be
offered on a continuing basis. [NAME OF AGENT(S)] has agreed, as agents, to
solicit purchases of the Notes issued in fully registered form. (The term
"Agent" when used in these Administrative Procedures, means [NAME OF AGENT(S)]).
The Agent will not be obligated to purchase Notes for its own account. The Notes
are being sold pursuant to a Distribution Agreement between the Company and the
agents named therein (including the Agent) dated the date hereof (the
"Distribution Agreement"). The Notes have been registered with the Securities
and Exchange Commission (the "Commission"). The Bank of New York ("BONY") is the
trustee under the Indenture, dated as of March 15, 1987, as amended from time to
time, under which the Senior Notes will be issued (the "Senior Debt Indenture").
The First National Bank of Chicago ("First Chicago") is the trustee (together
with Bank of New York, the "Trustees") under the Indenture, dated as of July 17,
1998, as amended from time to time, under which the Subordinated Notes will be
issued (the "Subordinated Debt Indenture" and, together with the Senior Debt
Indenture, the "Indentures"). The Senior Notes will constitute part of the
senior debt of the Company and will rank equally with all other unsecured and
unsubordinated debt of the Company. The Subordinated Notes will be subordinate
and junior in the right of payment to all Senior Indebtedness of the Company, to
the extent and in the manner set forth in the Subordinated Debt Indenture.
The Distribution Agreement provides that Notes may also be purchased
by the Agent acting solely as principal and not as agent. In the event of any
such purchase, the functions of both the Agent and the beneficial owner under
the administrative procedures set forth below shall be performed by the Agent
acting solely as principal, unless otherwise agreed to between the Company and
the Agent acting as principal.
Each Note will be represented by either a Global Security (as
defined hereinafter) or a certificate delivered to the Holder thereof or a
Person designated by such Holder (a "Certificated Note"). Each Global Security
representing Senior Notes will be delivered to BONY, and each Global Security
representing Subordinated Notes will be delivered to First Chicago, each acting
as agent for The Depository Trust Company or any successor depository selected
by the
B-1
Company ("DTC," which term, as used herein, includes any successor depository
selected by the Company), and will be recorded in the book-entry system
maintained by DTC (a "Book-Entry Note"). An owner of a Book-Entry Note will not
be entitled to receive a certificate representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agent and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agent and the Trustees in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustees are to
communicate regarding orders to purchase Notes and the details of their
delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indentures, the
Notes or the Prospectus Supplement relating to the Notes shall be used herein as
therein defined. Notes for which interest is calculated on the basis of a fixed
interest rate, which may be zero, are referred to herein as "Fixed Rate Notes."
Notes for which interest is calculated on the basis of a floating interest rate
are referred to herein as "Floating Rate Notes." The Company will appoint and
enter into agreements with agents (each a "Calculation Agent") to calculate
interest rates on Floating Rate Notes. Unless otherwise specified in a Pricing
Supplement, BONY will be the Calculation Agent for each Senior Note that is a
Floating Rate Note and First Chicago will be the Calculation Agent for each
Subordinated Note that is a Floating Rate Note. To the extent the procedures set
forth below conflict with the provisions of the Notes, the Indentures, DTC's
operating requirements or the Distribution Agreement, the relevant provisions of
the Notes, the Indentures, DTC's operating requirements and the Distribution
Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, BONY and First Chicago
(together, the "DTC Agents") will perform the custodial, document control and
administrative functions described below for the Senior Notes and the
Subordinated Notes, respectively. BONY will perform such functions in accordance
with its respective obligations under a Letter of Representations from the
Company and BONY to DTC dated as of the date hereof and a
B-2
Medium-Term Note Certificate Agreement between BONY and DTC, dated as of
________ __, ____ and as amended to date, and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement system ("SDFS"). First Chicago
will perform such functions in accordance with its respective obligations under
a Letter of Representations from the Company and First Chicago to DTC dated as
of the date hereof and a Certificate Agreement between DTC and First Chicago,
dated as of ________ __, ____ and as amended to date, and its obligations as a
participant in DTC, including DTC's SDFS.
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to
$200,000,000 principal amount of all such
Book-Entry Notes of the same Series that have the
same Original Issue Date, Original Issue Discount
provisions, if any, Interest Payment Dates,
Regular Record Dates, Interest Payment Period,
redemption repayment and extension provisions, if
any, Stated Maturity, and, in the case of Fixed
Rate Notes, interest rate, and amortization
schedule, if any, or, in the case of Floating Rate
Notes, Initial Interest Rate, Base Rate, Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread and/or Spread Multiplier, if any,
Minimum Interest Rate, if any, and Maximum
Interest Rate, if any and, in each case, any other
relevant terms (collectively, the "Terms"). Each
Global Security will be dated and issued as of the
date of its settlement. Each Global Security will
bear an Original Issue Date, which will be (i)
with respect to an original Global Security (or
any portion thereof), the Original Issue Date
specified in such Global Security and (ii)
following a consolidation of Global Securities,
with respect to the Global Security resulting from
such consolidation, the most recent Interest
Payment Date to which interest has been paid or
duly provided for on the predecessor Global
Securities, regardless of the date of
authentication of such resulting Global Security.
No Global Security will represent (i) both Fixed
Rate and Floating Rate Book-Entry Notes or (ii)
any Certificated Note or (iii) both Senior Notes
and Subordinated Notes.
B-3
Identification Numbers: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the reservation of two
series of CUSIP numbers, one for Senior Notes and
one for Subordinated Notes, each of which series
consists of approximately 900 CUSIP numbers and
relates to Global Securities representing
Book-Entry Notes and book-entry medium-term notes
issued by the Company with other Series
designations. The DTC Agents, the Company and DTC
have obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers. The
DTC Agents will assign CUSIP numbers to Global
Securities as described below under Settlement
Procedure "B." DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
DTC Agents have assigned to Global Securities.
Each DTC Agent will notify the Company at any time
when fewer than 100 of the reserved CUSIP numbers
remain unassigned to Global Securities, and, if it
deems necessary, the Company will reserve
additional CUSIP numbers for assignment to Global
Securities. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such
additional CUSIP numbers to either or both DTC
Agents, as needed, and to DTC.
Registration: Global Securities will be issued only in fully
registered form without coupons. Each Global
Security will be registered in the name of CEDE &
CO., as nominee for DTC, on the securities
register for the Notes (the "Securities Register")
maintained under the applicable Indenture. The
beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by
such owner) will designate one or more
participants in DTC (with respect to such
Book-Entry Note, the "Participants") to act as
agent or agents for such owner in connection with
the book-entry system maintained by DTC, and DTC
will
B-4
record in book-entry form, in accordance with
instructions provided by such Participants, a
credit balance with respect to such beneficial
owner in such Book-Entry Note in the account of
such Participants. The ownership interest of such
beneficial owner (or such participant) in such
Book-Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
behalf of beneficial transferors and transferees
of such Note.
Exchanges: Each DTC Agent may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of
consolidation (a copy of which shall be attached
to the resulting Global Security described below)
specifying (i) the CUSIP numbers of two or more
outstanding Global Securities that represent (A)
Fixed Rate Book-Entry Notes of the same Series and
having the same Terms and for which interest has
been paid to the same date or (B) Floating Rate
Book-Entry Notes of the same Series and having the
same Terms and for which interest has been paid to
the same date, (ii) a date, occurring at least
thirty days after such written notice is delivered
and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on which
such Global Securities shall be exchanged for a
single replacement Global Security and (iii) a new
CUSIP number to be assigned to such replacement
Global Security. Upon receipt of such a notice,
DTC will send to its participants (including the
DTC Agent for such replacement Global Security) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to
the specified exchange date, such DTC Agent will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and such
new CUSIP
B-5
number and stating that, as of such exchange date,
the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the
specified exchange date, such DTC Agent will
exchange such Global Securities for a single
Global Security bearing the new CUSIP number and a
new Original Issue Date, which shall be the last
date to which interest has been paid on the
underlying Book-Entry Notes, and the CUSIP numbers
of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. Upon
such exchange, the DTC Agent will mark the
predecessor Global Security "canceled," make
appropriate entries in the DTC Agent's records and
destroy such canceled Global Security in
accordance with the terms of the applicable
Indenture and deliver a certificate of destruction
to the Company. Notwithstanding the foregoing, if
the Global Securities to be exchanged exceed
$200,000,000 in aggregate principal amount, one
Global Security will be authenticated and issued
to represent each $200,000,000 of principal amount
of the exchanged Global Securities and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date nine
months or more after the issue date for such Note.
A Floating Rate Book-Entry Note will mature only
on an Interest Payment Date for such Note. Any
Note denominated in Japanese yen will mature on a
date not less than one year from the Original
Issue Date (as defined below) for such Note. Any
Note denominated in Pounds Sterling will mature on
a date not less than one year, nor more than five
years, after its Original Issue Date.
Denominations: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. If
Book-Entry Notes are denominated in a
B-6
Specified Currency other than U.S. dollars, the
denominations of such Notes will be determined
pursuant to the provisions of the applicable
Pricing Supplement. Global Securities will be
denominated in principal amounts not in excess of
$200,000,000 (or the equivalent thereof). If one
or more Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000 (or the
equivalent thereof) would, but for the preceding
sentence, be represented by a single Global
Security, then one Global Security will be
authenticated and issued to represent each
$200,000,000 principal amount (or the equivalent
thereof) of such Book-Entry Note or Notes and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In such a
case, each of the Global Securities representing
such Book-Entry Note or Notes shall be assigned
the same CUSIP number.
Notice of Redemption Dates: Each DTC Agent will, with respect to the Notes for
which it is the Trustee, give notice to DTC prior
to each Redemption Date (as specified in the Note)
if any at the time and in the manner set forth in
the applicable Letter of Representations.
Interest: General. Unless otherwise indicated in the
applicable Pricing Supplement, interest, if any,
on each Book-Entry Note will accrue from the
Original Issue Date (or such other date on which
interest otherwise begins to accrue (if different
than the Original Issue Date) of the Global
Security representing such Book-Entry Note for the
first interest period or the last date to which
interest has been paid, if any, for each
subsequent interest period, on the Global Security
representing such Book-Entry Note, and will be
calculated and paid in the manner and on the
Interest Payment Dates described in such
Book-Entry Note and in the Prospectus (as defined
in the Distribution Agreement), as supplemented by
the applicable Pricing Supplement. Each payment of
interest on a Book-Entry Note will include
interest accrued
B-7
to but excluding the Interest Payment Date;
provided, that in the case of Floating Rate Notes
that reset daily or weekly, interest payments will
include interest accrued to but excluding the next
preceding Regular Record Date, except that at
stated Maturity, the interest payable will include
interest accrued to, but excluding, the Maturity.
Interest payable at the Maturity of a Book-Entry
Note will be payable to the Person to whom the
principal of such Note is payable. Standard &
Poor's Corporation will use the information
received in the pending deposit message described
under Settlement Procedure "C" below in order to
include the amount of any interest payable and
certain other information regarding the related
Global Security in the appropriate (daily or
weekly) bond report published by Standard & Poor's
Corporation.
Regular Record Dates. The Regular Record Date with
respect to any Interest Payment Date for a
Floating Rate Note, Fixed Rate Note or Indexed
Rate Note shall be the date (whether or not a
Business Day) fifteen calendar days immediately
preceding such Interest Payment Date.
Payments of Principal and
Interest: Payment of Interest Only. Promptly after each
Regular Record Date, the DTC Agent for each Global
Security will deliver to the Company and DTC a
written notice setting forth, by CUSIP number, the
amount of interest to be paid on each Global
Security on the following Interest Payment Date
(other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. DTC
will confirm the amount payable on each Global
Security on such Interest Payment Date by
reference to the appropriate (daily or weekly)
bond reports published by Standard & Poor's
Corporation. The Company will pay to the Trustee
for the Notes represented by such Global Security
the total amount of interest due on such Interest
Payment Date (other than at Maturity), and such
Trustee will pay such amount to DTC, at the times
and in the manner set forth below
B-8
under "Manner of Payment." If any Interest Payment
Date for a Book-Entry Note is not a Business Day,
the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue as a result of such delayed payment.
Payments at Maturity or Upon Redemption. On or
about the first Business Day of each month, each
DTC Agent will, with respect to the Global
Securities for which it acts as DTC Agent, deliver
to the Company, DTC and the applicable Trustee a
written list of principal and interest to be paid
on each Global Security maturing either at
Maturity or on a Redemption Date in the following
month. The DTC Agent for each Global Security, the
Company and DTC will confirm the amounts of such
principal and interest payments with respect to
each such Global Security on or about the fifth
Business Day preceding the Maturity Date or
Redemption Date of such Global Security. On or
before such Maturity or Redemption, the Company
will pay to the Trustee for the Notes represented
by such Global Security the principal amount of
such Global Security, together with interest due
at such Maturity. Such Trustee will pay such
amount to DTC at the times and in the manner set
forth below under "Manner of Payment." If any
Maturity of a Global Security representing
Book-Entry Notes is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Maturity Date or Redemption Date.
Promptly after payment to DTC of the principal and
interest due on the Maturity Date or Redemption
Date of such Global Security, the Trustee for such
Global Security will cancel and destroy such
Global Security in accordance with the applicable
Indenture and deliver a certificate of destruction
to the Company.
Manner of Payment. The total amount of any
principal and interest due on Global Securities
B-9
on any Interest Payment Date or at Maturity or
upon redemption shall be paid by the Company to
the Trustee for the Notes represented by such
Global Security in immediately available funds no
later than 9:30 A.M. (New York City time) on such
date. The Company will make such payment on such
Global Securities by instructing such Trustee to
withdraw funds from an account maintained by the
Company with the DTC Agent for the Notes
represented by such Global Securities. The Company
will confirm any such instructions in writing to
such Trustee. Prior to 10 A.M. (New York City
time) on the date of Maturity or as soon as
possible thereafter, such Trustee will pay by
separate wire transfer (using Fedwire message
entry instructions in a form previously specified
by DTC) to an account at the Federal Reserve BONY
previously specified by DTC, in funds available
for immediate use by DTC, each payment of
principal (together with interest thereon) due on
a Global Security on such Maturity Date or
Redemption Date. On each Interest Payment Date
(other than at Maturity), interest payments shall
be made to DTC, in same day funds, in accordance
with existing arrangements between the relevant
DTC Agent and DTC. On each such date, DTC will
pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds
available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Securities are recorded
in the book-entry system maintained by DTC. None
of the Company (as issuer or as paying agent), the
Trustee or such DTC Agent shall have any direct
responsibility or liability for the payment by DTC
to such Participants of the principal of and
interest on the Book-Entry Notes.
If an issue of Notes is denominated in a currency
other than the U.S. dollar, the Company will make
payments of principal and any interest in the
currency in which the Notes
B-10
are denominated (the "foreign currency") or in
U.S. dollars. DTC has elected to have all such
payments of principal and interest in U.S. dollars
unless notified by any of its Participants through
which an interest in the Notes is held that it
elects, in accordance with and to the extent
permitted by the applicable Pricing Supplement and
the Note, to receive such payment of principal or
interest in the foreign currency. On or prior to
the third Business Day after the record date for
payment of interest and twelve days prior to the
date for payment of principal, such Participant
shall notify DTC of (i) its election to receive
all, or the specified portion, of such payment in
the foreign currency and (ii) its instructions for
wire transfer of such payment to a foreign
currency account.
DTC will notify the applicable Trustee on or prior
to the fifth Business Day after the record date
for payment of interest and ten days prior to the
date for payment of principal of the portion of
such payment to be received in the foreign
currency and the applicable wire transfer
instructions, and the applicable Trustee shall use
such instructions to pay the Participants
directly. If DTC does not so notify the applicable
Trustee, it is understood that only U.S. dollar
payments are to be made. The applicable Trustee
shall notify DTC on or prior to the second
Business Day prior to payment date of the
conversion rate to be used and the resulting U.S.
dollar amount to be paid per $1,000 face amount.
In the event that the applicable Trustee's
quotation to convert the foreign currency into
U.S. dollars is not available, the applicable
Trustee shall notify DTC's Dividend Department
that the entire payment is to be made in the
foreign currency. In such event, DTC will ask its
Participants for payment instructions and forward
such instructions to the applicable Trustee and
the applicable Trustee shall use such instructions
to pay the Participants directly.
Withholding Taxes. The amount of any taxes
B-11
required under applicable law to be withheld from
any interest payment on a Book-Entry Note will be
determined and withheld by the Participant,
indirect participant in DTC or other Person
responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Procedures upon Company's Company Notice to Trustee regarding Exercise of
Exercise of Optional Optional Reset. Not less than 45 or more than 60
Reset or Optional days before an Optional Reset Date as set forth in
Extension of Maturity: a Book-Entry Note, the Company will notify the
Trustee for such Book-Entry Note whether it is
exercising its option to reset the interest rate
or Spread or Spread Multiplier, as the case may
be, for such Book-Entry Note, and if so, (i) the
new interest rate or Spread or Spread Multiplier,
as the case may be, for such Book-Entry Note
during the period from such Optional Reset Date to
the next Optional Reset Date as set forth in such
Book-Entry Note or, if there is no such next
Optional Reset Date, to the Stated Maturity of
such Book-Entry Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for
redemption of such Book-Entry Note during such
Subsequent Interest Period, including the date or
dates on which or the period or periods during
which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Book-Entry Note, to extend the Stated Maturity of
such Note, it will so notify the Trustee for such
Book-Entry Note no less than 45 or more than 60
days before the Stated Maturity of such Book-Entry
Note, and will further indicate (i) the new Stated
Maturity; (ii) the interest rate or Spread or
Spread Multiplier, as the case may be, applicable
to the extension period; and (iii) the provisions,
if any, for redemption of such Book-Entry Note
during such extension period, including the date
or dates on which or the period or
B-12
periods during which such redemption may occur
during such extension period.
Trustee Notice to DTC regarding Company's Exercise
of Optional Extension or Reset. Upon receipt of
notice from the Company regarding the Company's
exercise of either an optional extension of
maturity or an optional reset, the Trustee for
the Book-Entry Note will hand-deliver a notice
to DTC not less than 40 days before the Optional
Reset Date (in which case a "Reset Notice") or
the Stated Maturity (in which case an
"Extension Notice"), as the case may be, which
Reset Notice or Extension Notice shall identify
such Book-Entry Note by CUSIP number and shall
contain the information required by the terms
of the Book-Entry Note.
Trustee Notice to Company regarding Option to be
Repaid. If, after receipt of either a Reset Notice
or an Extension Notice, DTC exercises the option
for repayment by tendering the Global Security
representing the Book-Entry Note to be repaid as
set forth in such Note, the Trustee for such
Book-Entry Note shall give notice to the Company
not less than 22 days before the Optional Reset
Date or the old Stated Maturity, as the case may
be, of the principal amount of Book-Entry Notes to
be repaid on such Optional Reset Date or old
Stated Maturity, as the case may be.
Company Notice regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the interest rate or Spread or Spread
Multiplier provided for in the Reset Notice and
establish a higher interest rate or Spread or
Spread Multiplier for an Optional Reset Period or
extension period, as the case may be, it shall,
not less than 20 days before such Optional Reset
Date or old Stated Maturity, so notify the Trustee
for the affected Book-Entry Note. The Trustee will
immediately thereafter notify DTC of the new
interest rate or Spread or Spread Multiplier
applicable to such Book-Entry Note.
Trustee Notice to Company regarding DTC Revocation
of Option to be Repaid. If, after DTC has tendered
any Book-Entry Notes for repayment pursuant to an
Extension Notice or an Reset Notice, DTC then
revokes such tender for repayment, the Trustee for
such
B-13
Book-Entry Notes shall give notice to the Company
not less than five days prior to the Stated
Maturity or Optional Reset Date, as the case may
be, of such revocation and of the principal amount
of Book-Entry Notes for which tender for repayment
has been revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has been
extended, and on or before any Optional Reset
Date, the Company shall deposit with such Trustee
an amount of money sufficient to pay the principal
amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may
be, for all the Book-Entry Notes or portions
thereof for which such Trustee serves as Trustee
and which are to be repaid on such old Stated
Maturity or Optional Reset Date, as the case may
be. Such Trustee will use such money to repay such
Book-Entry Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company's Company Notice to Trustee regarding Exercise of
Exercise of Optional Optional Redemption. At least 45 days prior to the
Redemption: date on which it intends to redeem a Book-Entry
Note, the Company will notify the Trustee for such
Book-Entry Note that it is exercising such option
with respect to such Book-Entry Note on such date.
Trustee Notice to DTC regarding Company's Exercise
of Optional Redemption. After receipt of notice
that the Company is exercising its option to
redeem a Book-Entry Note, the Trustee will, at
least 30 days before the Redemption Date for such
Book-Entry Note, hand deliver to DTC a notice
identifying such Book-Entry Note by CUSIP number
and informing DTC of the Company's exercise of
such option with respect to such Book-Entry Note.
Deposit of Redemption Price. On or before any
Redemption Date, the Company shall deposit with
such Trustee an amount of money sufficient to pay
the redemption price, plus
B-14
interest accrued to such Redemption Date, for all
the Book-Entry Notes or portions thereof for which
such Trustee serves as Trustee and which are to be
repaid on such Redemption Date. Such Trustee will
use such money to repay such Book-Entry Notes
pursuant to the terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid.
and Interest Upon Exercise Upon receipt of notice of exercise of the option
of Optional Repayment for repayment and the Global Securities
(Except Pursuant to Company's representing the Book-Entry Notes so to be repaid
Exercise of Optional as set forth in such Notes, the Trustee for such
Reset or Optional Extension): Book-Entry Notes shall (unless such notice was
received pursuant to the Company's exercise of an
optional reset or an optional extension of
maturity, in each of which cases the relevant
procedures set forth above are to be followed)
give notice to the Company not less than 20 days
prior to each Optional Repayment Date of such
Optional Repayment Date and of the principal
amount of Book-Entry Notes to be repaid on such
Optional Repayment Date.
Deposit of Repayment Price. On or prior to any
Optional Repayment Date, the Company shall deposit
with such Trustee an amount of money sufficient to
pay the optional repayment price, and accrued
interest thereon to such date, of all the
Book-Entry Notes or portions thereof which are to
be repaid on such date. Such Trustee will use such
money to repay such Book-Entry Notes pursuant to
the terms set forth in such Notes.
Procedure for Rate Setting The Company and the Agent will discuss from time
and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by, Book-Entry Notes that may be sold as a
result of the solicitation of orders by the Agent.
If the Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which
the Agent is to solicit orders (the setting of
such prices and rates to be referred to herein as
"posting") or if the Company decides to change
prices or rates
B-15
previously posted by it, it will promptly advise
the Agent of the prices and rates to be posted.
Acceptance and Rejection Unless otherwise instructed by the Company, the
of Orders: Agent will advise the Company promptly by
telephone of all orders to purchase Book-Entry
Notes received by the Agent, other than those
rejected by it in whole or in part in the
reasonable exercise of its discretion. Unless
otherwise agreed by the Company and the Agent, the
Company has the right to accept orders to purchase
Book-Entry Notes and may reject any such orders in
whole or in part.
Preparation of Pricing If any order to purchase a Book-Entry Note is
Supplement: accepted by or on behalf of the Company, the
Company will prepare a pricing supplement (a
"Pricing Supplement") reflecting the terms of such
Book-Entry Note, will file ten copies thereof with
the Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act, will
deliver such number of copies thereof to the Agent
as the Agent shall request and will, on the
Agent's behalf, file five copies of such Pricing
Supplement with the National Association of
Securities Dealers, Inc. (the "NASD"). The Agent
will cause a Prospectus and such Pricing
Supplement to be delivered to the purchaser of
such Book-Entry Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements and the Prospectuses
to which they are attached (other than those
retained for files), will be destroyed.
Copies of the appropriate number of Pricing
Supplements shall be delivered to the Agent at the
following address by 11:00 A.M., New York City
time, on the Business Day following the acceptance
of an offer by or on behalf of the Company:
to [
B-16
] (with a copy transmitted by telecopy to [
], Attention: [ ], at [ ].
Suspension of Subject to the Company's representations,
Solicitation; warranties and covenants contained in the
Amendment or Distribution Agreement, the Company may
Supplement: instruct the Agent to suspend at any time,
for any period of time or permanently, for
any period of time or permanently, the
solicitation of orders to purchase Book-Entry
Notes. Upon receipt of such instructions, the
Agent will forthwith suspend solicitation until
such time as the Company has advised it such
solicitation may be resumed.
In the event that at the time the Company suspends
solicitation of purchases there shall be any
orders outstanding for settlement, the Company
will promptly advise the Agent, the Trustees and
the DTC Agents whether such orders may be settled
and whether copies of the Prospectus as in effect
at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered
in connection with the settlement of such orders.
The Company will have the sole responsibility for
such decision and for any arrangements that may be
made in the event that the Company determines that
such orders may not be settled or that copies of
such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement
relating to a Book-Entry Note must accompany or
precede the earliest of any written offer of such
Book-Entry Note, confirmation of the purchase of
such Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes is
received by the Agent between the time an order
for a Book-Entry Note is placed and the time
written confirmation thereof is sent by the Agent
to a customer or his agent, such confirmation
shall be accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect when
the order was placed. The Agent will deliver a
Prospectus and Pricing Supplement as herein
described with respect to each Book-Entry Note
sold by it. The Company will make such delivery if
such Book-Entry Note is sold directly by the
Company to a purchaser (other than the
B-17
Agent).
Confirmation: For each order to purchase a Book-Entry Note
solicited by the Agent and accepted by or on
behalf of the Company, the Agent will issue a
confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above
and delivery and payment instructions.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry Note
and the authentication and issuance of the Global
Security representing such Book-Entry Note shall
constitute "settlement" with respect to such
Book-Entry Note, and the date of such settlement,
the "Settlement Date." All orders accepted by the
Company will be settled on the third Business Day
next succeeding the date of acceptance pursuant to
the timetable for settlement set forth below
unless the Company and the purchaser agree to
settlement on another day which shall be no
earlier than the Business Day next succeeding the
date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company to or through
the Agent, except pursuant to a Terms Agreement,
shall be as follows:
A. The Agent will advise the Company by telephone
(or by facsimile or other acceptable written
means) that such Note is a Book-Entry Note and
of the following settlement information:
1. Principal or face amount.
2. Series.
3. Stated Maturity.
4. In the case of a Fixed Rate Book-Entry
Note, the interest rate and reset, redemption,
repayment and extension provisions (if any) or, in
the case of a
B-18
Floating Rate Book-Entry Note, the Base Rate,
Initial Interest Rate (if known at such time),
Interest Reset Period, Interest Reset Dates, Index
Maturity, Spread and/or Spread Multiplier (if
any), Minimum Interest Rate (if any), Maximum
Interest Rate (if any) and reset, redemption,
repayment and extension provisions (if any).
5. Interest Payment Dates and the Interest
Payment Period.
6. Amortization provisions, if any.
7. Settlement date and Issue Date, if
different.
8. Specified currency.
9. Denominated currency, Indexed Currency,
Base Exchange Rate, and the Determination Date, if
applicable.
10. Price.
11. Agent's commission, determined as provided
in the Distribution Agreement.
12. Whether such Book-Entry Note is an OID
Note and, if so, the total amount of OID, the
yield to maturity and the initial accrual period
OID.
13. Any other terms necessary to describe the
Book-Entry Note.
B. The Company will advise the relevant DTC Agent
by telephone (confirmed in writing at any time
on the same date), written telecommunication
or electronic transmission of the information
set forth in Settlement Procedure "A" above.
Each such communication by the Company shall
constitute a representation and warranty by
the Company to the DTC Agent for such Note,
the Trustee for such Note and the Agent that
(i) such Note is then, and at
B-19
the time of issuance and sale thereof will be,
duly authorized for issuance and sale by the
Company and (ii) such Note, and the Global
Security representing such Note, will conform
with the terms of the Indenture for such Note.
The DTC Agent will then assign a CUSIP number
to the Global Security representing such
Book-Entry Note and notify the Agent and the
Company by telephone (confirmed in writing at
any time on the same date), written
telecommunication or electronic transmission
of such CUSIP number as soon as practicable.
C. Such DTC Agent will enter a pending deposit
message through DTC's Participant Terminal
System providing the following settlement
information to DTC Standard & Poor's
Corporation, Interactive Data Corporation, the
Agent and, upon request, the Trustee for such
Notes:
1. The information set forth in Settlement
Procedure "A."
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. The Initial Interest Payment Date for such
Book-Entry Note, number of days by which such date
succeeds the related Regular Record Date and
amount of interest payable on such Interest
Payment Date.
4. The Interest Payment Period.
5. The CUSIP number of the Global Security
representing such Book-Entry Note.
6. The participant account numbers maintained
by DTC on behalf of the Trustee and the Agent.
B-20
7. Whether such Global Security will represent
any other Book-Entry Note (to the extent known at
such time).
D. To the extent the Company has not already done
so, the Company will deliver to the Trustee
for such Notes a Global Security in a form
that has been approved by the Company, the
Agent and the Trustee.
E. The Trustee will complete such Book-Entry
Note, stamp the appropriate legend, as
instructed by DTC, if not already set forth
thereon, and authenticate the Global Security
representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to such
DTC Agent's participant account at DTC.
G. Such DTC Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such
Book-Entry Note to such DTC Agent's
participant account and credit such Book-Entry
Note to the Agent's participant account and
(ii) debit the Agent's settlement account and
credit such DTC Agent's settlement account for
an amount equal to the price of such
Book-Entry Note less the Agent's commission.
The entry of such a deliver order shall
constitute a representation and warranty by
such DTC Agent to DTC that (i) the Global
Security representing such Book-Entry Note has
been issued and authenticated and (ii) such
DTC Agent is holding such Global Security
pursuant to the Medium Term Note Certificate
Agreement between such DTC Agent and DTC.
H. Unless the Agent is purchasing such Note as
principal, the Agent will enter
B-21
an SDFS deliver order through DTC's
Participant Terminal System instructing DTC
(i) to debit such Book-Entry Note to the
Agent's participant account and credit such
Book-Entry Note to the participant accounts of
the Participants with respect to such
Book-Entry Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of the Agent for
an amount equal to the price of such
Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
J. Such DTC Agent will, upon receipt of funds
from the Agent in accordance with Settlement
Procedure "G," credit to an account of the
Company maintained at such DTC Agent funds
available for immediate use in the amount
transferred to such DTC Agent in accordance
with Settlement Procedure "G."
K. Unless the Agent is purchasing such Book-Entry
Note as principal, the Agent will confirm the
purchase of such Book-Entry Note to the
purchaser either by transmitting to the
Participants with respect to such Book-Entry
Note a confirmation order or orders through
DTC's institutional delivery system or by
mailing a written confirmation to such
purchaser.
L. Monthly, each DTC Agent will send to the
Company a statement setting forth the
principal amount of Registered Notes
Outstanding as of the date of such statement
and setting forth a brief description of any
sales of which the
B-22
Company has advised such DTC Agent but which
have not yet been settled.
Settlement Procedures For sales by the Company of Book-Entry Notes
Timetable: solicited by the Agent and accepted by the Company
(except pursuant to a Terms Agreement) for
settlement on the first Business Day after the
sale date, Settlement Procedures "A" through "K"
set forth above shall be completed as soon as
possible but not later than the respective times
(New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures
"A," "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M., 12:00
Noon and 2:00 P.M., respectively on the first
Business Day after the sale date. If the Initial
Interest Rate for a Floating Rate Book-Entry Note
has not been determined at the time that
Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon
as such rate has been determined but no later than
12:00 Noon and 2:00 P.M., respectively, on the
Business Day before the settlement date.
Settlement Procedure "I" is subject to extension
in accordance with any extension of Fedwire
closing deadlines and in the other events
specified in SDFS operating procedures in effect
on the settlement date.
B-23
If settlement of a Book-Entry Note is
rescheduled or canceled, the DTC Agent for such
Book-Entry Notes after receiving notice from the
Company or the Agent, will deliver to DTC,
through DTC's Participant Terminal System, a
cancellation message to such effect by no later
than 2:00 P.M. on the Business Day immediately
preceding the scheduled settlement date.
Failure to Settle: If settlement of a Book-Entry Note is
rescheduled and the DTC Agent for such Note
has not entered an SDFS deliver order with
respect to a Book-Entry Note pursuant to
Settlement Procedure "G," after receiving notice
from the Company or the Agent, such DTC Agent
shall deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Book-Entry Note to such DTC Agent's participant
account. DTC will process the withdrawal message,
provided that such DTC Agent's participant account
contains a principal amount of the Global Security
representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, the Trustee for the Notes represented by
such Global Security will mark such Global
Security "canceled," make appropriate entries in
such Trustee's records and destroy the canceled
Global Security in accordance with the applicable
Indenture and deliver a certificate of destruction
to the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not
all, of the Book-Entry Notes represented by a
Global Security, the DTC Agent for such Book-Entry
Notes will exchange such Global Security for two
Global Securities, one of which shall represent
such Book-Entry Notes and shall be canceled
immediately after issuance and the other of which
shall represent the other Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants
B-24
with respect to such Note by the beneficial
purchaser thereof (or a Person, including an
indirect participant in DTC, acting on behalf of
such purchaser), such Participants and, in turn,
the Presenting Agent may enter SDFS deliver orders
through DTC's Participant Terminal System
reversing the orders entered pursuant to
Settlement Procedures "H" and "G," respectively.
Thereafter, the DTC Agent for such Book-Entry Note
will deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than a default by the Agent in
the performance of its obligations hereunder and
under the Distribution Agreement, then the Company
will reimburse the Agent for the loss of the use
of the funds during the period when they were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the DTC
Agent for such Book-Entry Note or Notes will
provide, in accordance with Settlement Procedures
"E" and "G," for the authentication and issuance
of a Global Security representing the other
Book-Entry Notes to have been represented by such
Global Security and will make appropriate entries
in its records.
Trustees Not to Risk Funds: Nothing herein shall be deemed to require either
Trustee to risk or expend its own funds in
connection with any payment to the Company, DTC,
the Agent or the purchaser, it being understood by
all parties that payments made by either Trustee
to the Company, DTC, the Agent or the purchaser
shall be made only to the extent that funds are
provided to such Trustee for such purpose.
B-25
Authenticity of Signatures: The Company will cause each of the Trustees to
furnish the Agent from time to time with the
specimen signatures of each of such Trustee's
officers, employees or agents who has been
authorized by such Trustee to authenticate
Book-Entry Notes, but the Agent will not have any
obligation or liability to the Company or the
Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company or the Trustee on any Book-Entry Note.
Payment of Expenses: The Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that month
that are reimbursable to it pursuant to the terms
of the Distribution Agreement. The Company will
remit payment to the Agent currently on a monthly
basis.
Advertising The Company will determine with the Agent the
Costs: amount of advertising that may be appropriate in
soliciting offers to purchase the Book-Entry
Notes. Advertising expenses will be paid by the
Company.
B-26
PART II
Administrative Procedures for Certificated Notes
Each Trustee will serve as registrar and transfer agent in
connection with the Certificated Notes for which it serves as Trustee.
Issuance: Each Certificated Note will be dated and issued as
of the date of its authentication by the
applicable Trustee. Each Certificated Note will
bear an Original Issue Date, which will be (i)
with respect to an original Certificated Note (or
any portion thereof), its original issuance date
(which will be the settlement date) and (ii) with
respect to any Certificated Note (or portion
thereof) issued subsequently upon transfer or
exchange of a Certificated Note or in lieu of a
destroyed, lost or stolen Certificated Note, the
Original Issue Date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Maturities: Each Certificated Note will mature on a date nine
months or more after the issue date for such Note.
A Floating Rate Certificated Note will mature only
on an Interest Payment Date for such Note. Any
Note denominated in Japanese yen will mature on a
date not less than one year from the Original
Issue Date (as defined below) for such Note. Any
Note denominated in Pounds Sterling will mature on
a date not less than one year, nor more than five
years, after its Original Issue Date.
Currency: The Specified Currency for a Certificated Note
shall be as set forth therein and in the
applicable Pricing Supplement.
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a minimum of
$1,000 or any amount in excess thereof that is an
integral multiple of $1,000. The authorized
denominations of Certificated Notes
B-27
denominated in a Specified Currency other than
U.S. dollars shall be determined as set forth in
the applicable Pricing Supplement.
Interest: General. Unless otherwise indicated in the
applicable Pricing Supplement, interest, if any,
on each Certificated Note will accrue from the
Original Issue Date (or such other date on which
interest otherwise begins to accrue (if different
from the Original Issue Date)) of such Note for
the first interest period or the last date to
which interest has been paid, if any, for each
subsequent interest period, on such Note, and will
be calculated and paid in the manner and on the
dates described in such Note and in the
Prospectus, as supplemented by the applicable
Pricing Supplement. Unless otherwise specified
therein, each payment of interest on a
Certificated Note will include interest accrued to
but excluding the Interest Payment Date (provided
that, in the case of Certificated Notes which
reset daily or weekly, interest payments will
include accrued interest to and including the next
preceding Regular Record Date), except that at
Stated Maturity, the interest payable will include
interest accrued to, but excluding, the stated
Maturity (other than a Maturity of a Fixed Rate
Certificated Note occurring on the 31st day of a
month, in which case such payment of interest will
include interest accrued to but excluding the 30th
day of such month).
Regular Record Dates. The Regular Record Dates
with respect to any Interest Payment Date for a
Fixed Rate Note, Floating Rate Note or Indexed
Rate Note shall be the date (whether or not a
Business Day) fifteen calendar days immediately
preceding such Interest Payment Date.
Payments of Interest: The applicable Trustee will pay the principal
amount of each Certificated Note at Maturity or
upon redemption upon presentation and surrender of
such Note to such Trustee. Such payment, together
with payment of interest due at Maturity or upon
redemption of such Note,
B-28
will be made in funds available for immediate use
by such Trustee and in turn by the holder of such
Note. Certificated Notes presented to such Trustee
at Maturity or upon redemption for payment will be
canceled and destroyed by such Trustee, and a
certificate of destruction will be delivered to
the Company. All interest payments on a
Certificated Note (other than interest due at
Maturity or upon redemption) will be made by check
drawn on such Trustee (or another person appointed
by such Trustee) and mailed by such Trustee to the
person entitled thereto as provided in such Note
and the applicable Indenture; provided, however,
that any holder of $10,000,000 or more of Notes
having the same Interest Payment Dates will, upon
written request prior to the Regular Record Date
in respect of an Interest Payment Date, be
entitled to receive payment by wire transfer of
immediately available funds. Following each
Regular Record Date, such Trustee will furnish the
Company with a list of interest payments to be
made on the following Interest Payment Date for
each Certificated Note and in total for all
Certificated Notes. Interest at Maturity or upon
redemption will be payable to the person to whom
the payment of principal is payable. Such Trustee
will provide monthly to the Company lists of
principal and interest, to the extent
ascertainable, to be paid on Certificated Notes
maturing or to be redeemed in the next month.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from
any interest payment on a Certificated Note will
be determined and withheld by such Trustee.
The Company will be responsible for withholding
taxes on interest paid on Certificated Notes as
required by applicable law.
B-29
If any Interest Payment Date for or the Maturity
of a Certificated Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on account of such delayed payment.
Procedure for Rate Setting and Posting:
Procedure for Rate The Company and the Agent will discuss from time
Setting and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by, Notes that may be sold as a result of
the solicitation of orders by the Agent. If the
Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agent is to
solicit orders (the setting of such prices and
rates to be referred to herein as "posting") or if
the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agent of the prices and rates to be posted.
Acceptance and Rejection Unless otherwise instructed by the Company, the
of Orders: Agent will advise the Company promptly by
telephone of all orders to purchase Certificated
Notes received by the Agent, other than those
rejected by it in whole or in part in the
reasonable exercise of its discretion. Unless
otherwise agreed by the Company and the Agent, the
Company has the sole right to accept orders to
purchase Certificated Notes and may reject any
such orders in whole or in part. Before accepting
any order to purchase a Certificated Note to be
settled in less than three Business Days, the
Company shall verify that the Trustee for such
Certificated Note will have adequate time to
prepare and authenticate such Note.
Preparation of Pricing If any order to purchase a Certificated Note is
Supplement: accepted by or on behalf of the Company, the
Company will prepare a Pricing Supplement
reflecting the terms of such Certificated Note,
will file ten copies thereof with the Commission
in accordance with the applicable paragraph of
Rule 424(b) under the Act, will deliver such
number of copies thereof to the Agent as the Agent
shall request and will, on the Agent's behalf,
file five copies of the Pricing Supplement with
the NASD. The Agent will cause a Prospectus and
Pricing Supplement to be delivered to the
purchaser of such Certificated Note.
Copies of the appropriate number of Pricing
Supplements shall be delivered to the Agent at
B-30
the following addresses by 11:00 A.M., New York
City time, on the Business Day following the
acceptance of an offer by or on behalf of the
Company: [ ].
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements and the
Prospectuses to which they are attached (other
than those retained for files), will be destroyed.
Suspension of Solicitation; Subject to the Company's representations,
Amendment or Supplement: warranties and covenants contained in the
Distribution Agreement, the Company may instruct
the Agent to suspend at any time for any period of
time or permanently, the solicitation of orders to
purchase Certificated Notes. Upon receipt of such
instructions, the Agent will forthwith suspend
solicitation until such time as the Company has
advised it that such solicitation may be resumed.
In the event that at the time the Company suspends
solicitation of purchases there shall be any
orders outstanding for settlement, the Company
will promptly advise the Agent and the Trustees
whether such orders may be settled and whether
copies of the Prospectus as in effect at the time
of the suspension, together with the appropriate
Pricing Supplement, may be delivered in connection
with the settlement of such orders. The Company
will have the sole responsibility for such
decision and for any arrangements that may be made
in the event that the Company determines that such
orders may not be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement
relating to a Certificated Note must accompany or
precede the earliest of any written offer of such
Certificated Note, confirmation of the purchase of
such Certificated Note and payment for such
Certificated Note by its purchaser. If notice of
B-31
a change in the terms of the Certificated Notes is
received by the Agent between the time an order
for a Certificated Note is placed and the time
written confirmation thereof is sent by the Agent
to a customer or his agent, such confirmation
shall be accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect when
the order was placed. The Agent will deliver a
Prospectus and Pricing Supplement as herein
described with respect to each Certificated Note
sold by it. The Company will make such delivery if
such Certificated Note is sold directly by the
Company to a purchaser (other than the Agent).
Confirmation: For each order to purchase a Certificated Note
solicited by the Agent and accepted by or on
behalf of the Company, the Agent will issue a
confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above
and delivery and payment instructions.
Settlement: The receipt by the Company of immediately
available funds in exchange for an authenticated
Certificated Note delivered to the Agent and the
Agent's delivery of such Certificated Note against
receipt of immediately available funds shall, with
respect to such Certificated Note, constitute
"settlement." All orders accepted by the Company
will be settled on the fifth Business Day next
succeeding the date of acceptance pursuant to the
timetable for settlement set forth below, unless
the Company and the purchaser agree to settlement
on another day which shall be no earlier than the
next Business Day following the date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company to or
through the Agent, as agent (except pursuant to a
Terms Agreement), shall be as follows:
A. The Agent will advise the Company by telephone
(or by facsimile transmission or other
acceptable written means) that such
B-32
Note is a Certificated Note and of the
following settlement information, in time for
the Trustee for such Certificated Note to
prepare and authenticate the required Note:
1. Name in which such Certificated Note is to
be registered ("Registered Owner").
2. Address of the Registered Owner and address
for payment of principal and interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal or face amount.
5. Series.
6. Stated Maturity.
7. In the case of a Fixed Rate Certificated
Note, the Interest Rate and reset provisions (if
any) or, in the case of a Floating Rate
Certificated Note, the Base Rate, Initial Interest
Rate (if known at such time), Interest Reset
Period, Interest Reset Dates, Index Maturity,
Spread and/or Spread Multiplier (if any), Minimum
Interest Rate (if any), Maximum Interest Rate (if
any) and reset provisions (if any).
8. Interest Payment Dates and the Interest
Payment Period.
9. Specified Currency.
10. Denominated Currency, Indexed Currency,
Base Exchange Rate and the Determination Date, if
applicable.
11. Redemption, repayment, amortization or
extension provisions, if any.
12. Settlement Date.
13. Price (including currency).
B-33
14. Agent's commission, if any, determined as
provided in the Distribution Agreement.
15. Whether such Certificated Note is an OID
Note, and, if so, the total amount of OID and the
yield to maturity.
16. Any other terms necessary to describe the
Certificated Note.
B. The Company will advise the relevant Trustee
by telephone (confirmed in writing at any time
on the sale date), written telecommunication
or electronic transmission of the information
set forth in Settlement Procedure "A" above
and the name of the Presenting Agent.
C. The Company will deliver to the relevant
Trustee a pre-printed four-ply packet for such
Certificated Note, which packet will contain
the following documents in forms that have
been approved by the Company, the Agent and
the Trustee:
1. Certificated Note with customer
confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Certificated
Note and will authenticate such Certificated
Note and deliver it (with the confirmation)
and Stubs One and Two to the Agent, and the
Agent will acknowledge receipt of the Note by
stamping or otherwise marking Stub One and
returning it to the Trustee. Such delivery
will be made only against such acknowledgment
of receipt and evidence that instructions have
been given by the Agent for payment to such
account as the
B-34
Company shall have specified in funds
available for immediate use, of an amount
equal to the price of such Certificated Note
less the Agent's commission. In the event that
the instructions given by the Agent for
payment to the account of the Company are
revoked, the Company will as promptly as
possible wire transfer to the account of the
Agent an amount of immediately available funds
equal to the amount of such payment made.
E. Unless the Agent purchased the Note as
principal, the Agent will deliver such
Certificated Note (with the confirmation) to
the customer against payment in immediately
payable funds. The Agent will obtain the
acknowledgment of receipt of such Certificated
Note by retaining Stub Two.
F. The Trustee will send Stub Three to the
Company by first-class mail.
Settlement For orders of Certificated Notes solicited by the
Procedures Agent, as agent, and accepted by the Company,
Timetable: Settlement Procedures "A" through "F" set forth
above shall be completed on or before the
respective times (New York City time) set forth
below:
Settlement
Procedure Time
--------- ----
A 2:00 P.M. on the day before
settlement
B On the day two Business Days
before settlement date.
C 2:15 P.M. two Business Days
before settlement
D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Procedures upon Company Notice to Trustee regarding Exercise of
Company's Exercise Optional Reset. Not less than 45 or more than 60
of Optional Reset days before an Optional Reset Date as
or Extension of
Maturity:
B-35
set forth in a Certificated Note, the Company will
notify the Trustee for such Certificated Note
whether it is exercising its option to reset the
interest rate or Spread or Spread Multiplier, as
the case may be, for such Certificated Note, and
if so, (i) the new interest rate or Spread or
Spread Multiplier, as the case may be, for such
Certificated Note during the period from such
Optional Reset Date to the next Optional Reset
Date as set forth in such Certificated Note or, if
there is no such next Optional Reset Date, to the
Stated Maturity of such Certificated Note (the
"Subsequent Interest Period"); and (ii) the
provisions, if any, for redemption of such
Certificated Note during such Subsequent Interest
Period, including the date or dates on which or
the period or periods during which such redemption
may occur during such Subsequent Interest Period.
Company Notice to Trustee regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Certificated Note, to extend the Stated Maturity
of such Note, it will so notify the Trustee for
such Certificated Note not less than 45 or more
than 60 days before the Stated Maturity of such
Certificated Note, and will further indicate (i)
the new Stated Maturity; (ii) the interest rate or
Spread or Spread Multiplier, as the case may be,
applicable to the extension period; and (iii) the
provisions, if any, for redemption of such
Certificated Note during such extension period,
including the date or dates on which or the period
or periods during which such redemption may occur
during such extension period.
Trustee Notice to Holders regarding Company's
Exercise of Optional Extension or Reset. Upon
receipt of notice from the Company regarding the
Company's exercise of either an optional
extension of maturity or an optional reset,
the Trustee for the Certificated Note will
mail a notice, first class, postage prepaid,
to the Holder of the Certificated Note not
less than 40 days before the Optional Reset
Date (in which case a "Reset Notice") or
the Stated Maturity (in which case an
"Extension Notice"), as the case may be, which
Reset Notice or Extension Notice shall contain
the information required by the terms of the
Certificated Note.
Trustee Notice to Company regarding Option to be
Repaid. If, after receipt of either a Reset
Notice or an Extension Notice, any Holder of a
Certificated Note exercises the option for
repayment by tendering the Certificated Note to be
repaid as set forth in the Certificated Note, the
Trustee for such Certificated Note shall
B-36
give notice to the Company not less than 22 days
before the Optional Reset Date or the old Stated
Maturity, as the case may be, of the principal
amount of Book-Entry Notes to be repaid on such
Optional Reset Date or old Stated Maturity, as the
case may be.
Company Notice regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the interest rate or Spread or Spread
Multiplier and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset
Period or extension period, as the case may be, it
shall, not less than 20 days before such Optional
Reset Date or old Stated Maturity, so notify the
Trustee for the affected Certificated Note. The
Trustee will immediately thereafter notify the
Holder of such Certificated Note, by first class
mail, postage prepaid, of the new higher interest
rate or Spread or Spread Multiplier applicable to
such Certificated Note.
Trustee Notice to Company regarding Holder
Revocation of Option to be Repaid. If, after the
Holder of a Certificated Note has tendered such
Note for repayment pursuant to an Extension Notice
or a Reset Notice, such Holder revokes such tender
for repayment, the Trustee for such Certificated
Note shall give notice to the Company not less
than five days prior to the Stated Maturity or
Optional Reset Date, as the case may be, of such
revocation and of the principal amount of
Certificated Notes for which tender for repayment
has been revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has
B-37
been extended, and on or before any Optional Reset
Date, the Company shall deposit with such Trustee
an amount of money sufficient to pay the principal
amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may
be, for all the Certificated Notes or portions
thereof for which such Trustee serves as Trustee
and which are to be repaid on such old Stated
Maturity or Optional Reset Date, as the case may
be. Such Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company's Company Notice to Trustee regarding Exercise of
Exercise of Optional Optional Redemption. At least 45 days prior to the
Redemption: date on which it intends to redeem a Certificated
Note, the Company will notify the Trustee for such
Certificated Note that it is exercising such
option with respect to such Note on such date.
Trustee Notice to Holders regarding Company's
Exercise of Optional Redemption. After receipt of
notice that the Company is exercising its option
to redeem a Certificated Note, the Trustee for
such Certificated Note will, at least 30 days
before the Redemption Date for such Certificated
Note, mail a notice, first class, postage prepaid,
to the Holder of such Certificated Note, informing
such Holder of the Company's exercise of such
option with respect to such Certificated Note.
Payments of Principal and Trustee Notice to Company of Option to be Repaid.
Interest Upon Exercise Upon receipt of notice of exercise of the option
of Optional Repayment (Except for repayment and the Certificated Notes to be
Pursuant to Company's repaid as set forth in such Notes, the Trustee for
Exercise of Optional Reset such Certificated Notes shall (unless such notice
or Optional Extension): was received pursuant to the Company's exercise of
an optional reset or an optional extension of
maturity, in each of which cases the relevant
procedures set forth above shall be followed) give
notice to the Company not less than 20 days prior
to each Optional Repayment Date of such Optional
Repayment Date and of the principal amount of
B-38
Certificated Notes to be repaid on such Optional
Repayment Date.
Failure to Settle: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the Agent
will notify the Company and the applicable Trustee
by telephone and return such Note to the
applicable Trustee. Upon receipt of such notice,
the Company will immediately wire transfer to the
account of the Agent an amount equal to the amount
previously credited thereto in respect of such
Note. Such wire transfer will be made on the
Settlement Date, if possible, and in any event not
later than the Business Day following the
settlement date. If the failure shall have
occurred for any reason other than a default by
the Agent in the performance of its obligations
hereunder and under the Distribution Agreement
with the Company, then the Company will reimburse
the Agent or the applicable Trustee, as
appropriate, on an equitable basis for its loss of
the use of the funds during the period when they
were credited to the account of the Company.
Immediately upon receipt of the Certificated Note
in respect of which such failure occurred, the
applicable Trustee will mark such Note "canceled,"
make appropriate entries in the applicable
Trustee's records and send such Note to the
Company.
Trustees Not to Risk Funds: Nothing herein shall be deemed to require either
Trustee to risk or expend its own funds in
connection with any payment to the Company, the
Agent or the purchaser, it being understood by all
parties that payments made by either Trustee to
the Company, the Agent or the purchaser shall be
made only to the extent that funds are provided to
such Trustee for such purpose.
Authenticity of The Company will cause each Trustee to furnish
Signatures: the Agent from time to time with the
specimen signatures of each of such Trustee's
officers, employees or agents who has been
authorized by such Trustee to authenticate
Certificated Notes, but the Agent will not have
any obligation or liability to the Company
or a Trustee in respect of the authenticity of
the signature of any officer, employee or
agent of the Company or a Trustee on any
Certificated Note.
B-39
Payment of Expenses: The Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by the Agent during that
month that are reimbursable to it pursuant to the
terms of the Distribution Agreement. The Company
will remit payment to the Agent currently on a
monthly basis.
Advertising Costs: The Company will determine with the Agent the
amount of advertising that may be appropriate in
soliciting orders to purchase the Certificated
Notes. Advertising expenses will be paid by the
Company.
B-40
Exhibit C
Opinion of the General Counsel of the Company
C-1
Exhibit D
Opinion of Counsel for the Agent
D-1
Exhibit E
Letter from Accountants
E-1
Exhibit F
Medium-Term Senior Notes, Series A
Medium-Term Subordinated Notes, Series A
----------------------
Additional Selling Agents Agreement
----------------------
New York, New York
Dated as of December__, 1998
[The Agent(s) Named in Schedule I Hereto]
Ladies and Gentlemen:
Reference is made to the Distribution Agreement (including the exhibits
thereto), dated as of December__, 1998 (the "Distribution Agreement") between
Citigroup Inc., a Delaware corporation ("Citigroup"), relating to the issue and
sale from time to time of Citigroup's Medium-Term Senior Notes, Series A (the
"Senior Notes") and Citigroup's Medium-Term Subordinated Notes, Series A (the
"Subordinated Notes" and, together with the Senior Notes, the "Notes"). The
Distribution Agreement has been attached hereto as Annex A.
WHEREAS, Citigroup is permitted under the terms of the Distribution
Agreement to enter into agreements similar to the Distribution Agreement with
other parties; and
WHEREAS, the Agent(s) named in Schedule I hereto (the "Agent(s)") and
Citigroup wish to enter into an agreement, similar to the Distribution
Agreement, appointing each Agent as an additional selling agent with respect to
the Notes;
F-1
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, Citigroup hereby agrees that each Agent shall become an additional
Agent with respect to the Notes and each Agent named herein hereby agrees to
become an Agent with respect to the Notes and to be bound by the terms and
conditions of the Distribution Agreement, which terms and conditions are
hereby incorporated by reference herein, except that the term "Agent" therein
shall instead mean each Agent named herein and no other person shall be
deemed to be an Agent under this Agreement.
Unless sooner terminated in accordance with Section 6 of the Distribution
Agreement as incorporated by reference herein or unless otherwise mutually
agreed by the parties hereto in writing, this Agreement shall terminate on
___________ __, ____. No such termination shall affect any accrued obligations
under this Agreement. The respective indemnities, agreements, representations,
warranties and other statements of the Agent(s) and Citigroup and its officers
set forth in, or made pursuant to, this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of the Agent(s) or Citigroup or any of the officers,
directors or controlling persons referred to in Section 5 of the Distribution
Agreement as incorporated by reference herein, and will survive delivery of any
payment for any Notes sold by Citigroup. The provisions of Sections 3(g) and 5
of the Distribution Agreement as incorporated by reference herein shall survive
the termination of this Agreement.
This Agreement may be signed in counterparts, each of which shall be
deemed an original, which taken together, shall constitute one and the same
instrument.
F-2
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter, including Annex A, and your acceptance shall represent a binding
agreement between you and Citigroup in accordance with its terms.
Very truly yours,
CITIGROUP
By:
Name:
Title:
The foregoing Agreement
is hereby confirmed and accepted
as of the date first above written.
[ ]
By:
Name:
Title:
[ ]
By:
Name:
Title:
F-3
Schedule I
Agent(s)
F-4
Annex A
Distribution Agreement
F-5