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
May 6, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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, Due Nine Months or
More from the Date of Issue (the "Senior Notes") and its Medium-Term
Subordinated Notes, Series A, Due Nine Months or More from the Date of Issue
(the "Subordinated Notes" and, together with the Senior Notes, the "Notes"). The
Senior Notes are to be issued under an Indenture dated as of March 15, 1987, as
supplemented by the First Supplemental Indenture dated as of December 15, 1988,
the Second Supplemental Indenture dated as of January 31, 1991, the Third
Supplemental Indenture dated as of December 9, 1992 and the Fourth Supplemental
Indenture dated as of November 2, 1998 (as so supplemented or as it may from
time to time be further supplemented or amended by one or more indentures
supplemental thereto, the "Senior Debt Indenture"), between the Company and The
Bank of New York, as trustee (the "Senior Debt Trustee"). The Subordinated Notes
are to be issued under an Indenture dated as of July 17, 1998, as supplemented
by the First Supplemental Indenture dated as of December 15, 1998 and the Second
Supplemental Indenture dated as of January 21, 1999 (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 Xxxxxxx Xxxxx Xxxxxx Inc.
1. SOLICITATIONS BY THE AGENT OF OFFERS TO PURCHASE; PURCHASES AS
PRINCIPAL.
(a) Solicitations as Agent. Following the Commencement Date
(as defined below), the Company shall notify the Agent from time to time as to
the commencement of a period during which the Notes may be offered and sold by
the Agent (each period, commencing with such a notification and ending at such
time as the authorization for offers and sales through the Agent shall have been
suspended by the Company or the Agent as provided hereunder, being herein
referred to as an "Offering Period"). On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Agent agrees to use its reasonable best efforts to solicit offers to
purchase the Notes during each Offering Period upon the terms and conditions set
forth in the Prospectus as then amended and supplemented. The Company reserves
the right, in its sole discretion, to suspend solicitation of purchases of the
Notes commencing at any time for any
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period of time or permanently. Upon receipt of instructions from the Company,
the Agent will forthwith suspend solicitation of purchases from the Company
until such time as the Company has advised the Agent that such solicitation may
be resumed.
Unless otherwise agreed to, the Company agrees to pay the Agent at the time
of delivery of and payment for the Notes, as consideration for soliciting the
sale of each Note, a commission equal to the percentage set forth on Schedule 1
hereto of the price to the public of each Note sold by the Company as the result
of a solicitation by the Agent. Without the prior approval of the Company, the
Agent (acting on an agency basis) may not reallow any portion of the commission
payable pursuant hereto to dealers or purchasers in connection with the offer
and sale of any Notes.
The Agent is authorized to solicit orders for the Notes only in principal
amounts of $1,000 or any amount in excess thereof which is a multiple of $1,000
or, in the case of Notes denominated in a Specified Currency other than U.S.
dollars, in the denominations set forth in the applicable pricing supplement, at
a purchase price 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
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telecommunication between the Agent and the Company and shall be with respect to
such information (as applicable) as is specified in Exhibit A hereto.
The Agent's commitment to purchase Notes as principal shall be deemed to
have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each agreement by the Agent to purchase Notes as principal (whether or
not set forth in a Terms Agreement) shall specify the principal amount of Notes
to be purchased by the Agent pursuant thereto, the maturity date of such Notes,
the price to be paid to the Company for such Notes, the interest rate and
interest rate formula, if any, applicable to such Notes and any other terms of
such Notes. Each such agreement shall also specify any requirements for
officers' certificates, opinions of counsel and letters from the independent
public accountants of the Company pursuant to Section 4 hereof. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Notes by the Agent.
Each Terms Agreement shall specify the time and place of delivery of and
payment for such Notes. Each date of delivery of and payment for Notes to be
purchased by the Agent as principal or as agent or by any other purchaser is
referred to herein as a "Settlement Date."
Upon the Company's request, the Agent will notify the Company either orally
or in writing (as specified by the Company) of the aggregate principal amount of
Notes held by the Agent as principal purchased pursuant to a Terms Agreement
pursuant to this Agreement.
(c) PROCEDURES. The Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by them in the
Medium-Term Notes Administrative Procedures attached hereto as Exhibit B (the
"Procedures"). The Procedures may be amended only by written agreement of the
Company and the Agent.
(d) DELIVERY. The documents required to be delivered by Section 4 of
this Agreement shall be delivered at the office of Skadden, Arps, Slate
Xxxxxxx & Xxxx LLP ("Skadden, Arps") (or such other counsel reasonably
satisfactory to both the Agent and the Company), 000 Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000, on May 6, 1999 (the "Commencement Date").
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
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warrants to, and agrees with, the Agent as of the Commencement Date:
(a) The Registration Statement (File No. 333-68949) declared effective by
the Securities and Exchange Commission (the "Commission") on March 8, 1999, in
respect of up to $6,000,000,000 aggregate amount of securities of the Company,
including the Notes, (of which $3,900,000,000 remains available for issuance and
sale as of the date hereof) has been filed with the Commission. Such
Registration Statement and any post-effective amendments thereto, in the forms
heretofore delivered or to be delivered to the Agent, excluding exhibits to such
Registration Statement but including all documents incorporated by reference
therein, has been declared effective by the Commission in such form. No other
document with respect to such Registration Statement (other than a document
incorporated by reference therein) has heretofore been filed or transmitted for
filing with the Commission; and no stop order suspending the effectiveness of
such Registration Statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary prospectus
included in the 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 the
Registration Statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Registration
Statement at the time such part became effective but excluding the Statements of
Eligibility under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), pertaining to the Indentures (the "Forms T-1"), as amended at
the time such part became effective, are being hereinafter collectively called
the "Registration Statement." The form of basic prospectus included in the
Registration Statement relating to the offering and sale of Debt Securities,
Index Warrants, Preferred Stock, Common Stock and Depositary Shares, in the form
in which it has most recently been filed, or transmitted for filing with the
Commission on or prior to the date of this Agreement, is being hereinafter
called the "Basic Prospectus." The form of prospectus supplement to the Basic
Prospectus relating to the offering and sale of the Notes included in the
Registration Statement, in the form in which it has most recently been filed or
transmitted for filing with the Commission on or prior to the date of this
Agreement, is being hereinafter called the "Prospectus Supplement." The Basic
Prospectus, as supplemented by the Prospectus Supplement, is being hereinafter
called the "Prospectus." Any reference herein to any Preliminary Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the applicable form
under the Act, as of the date of such Preliminary Prospectus, Prospectus
Supplement or Prospectus, as the case may be. Any reference to any amendment or
supplement to any Preliminary Prospectus, the Prospectus Supplement or the
Prospectus, including any supplement to the Prospectus that sets forth only the
terms of 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
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incorporated by reference in such Preliminary Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be. Any reference to any amendment
to the Registration Statement shall be deemed to include any report of the
Company filed pursuant to the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the Registration
Statement. Any reference to the Prospectus, as amended or supplemented, shall be
deemed to refer to and include the Prospectus, as amended or supplemented, in
relation to the Notes sold pursuant to this Agreement, in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the Act, including
any documents incorporated by reference therein as of the date of such filing.
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(c) Each of the Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto, and each of the Indentures, conform or
will conform in all material respects with the applicable requirements of the
Act and the Trust Indenture Act, and the rules and regulations of the Commission
thereunder.
(d) The Registration Statement, as amended as of any time, did not and will
not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading and the Prospectus, as amended and
supplemented as of any such time, did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon, and in conformity with, information
furnished in writing to the Company by or on behalf of the Agent specifically
for use in the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto.
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the applicable Indenture and delivered to and
duly
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paid for by the purchasers thereof, will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms and entitled to the benefits of the applicable Indenture (subject, as to
enforcement, to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether such enforceability is considered in
a proceeding in equity or at law); each of the Indentures has been duly
authorized by the Company and qualified under the Trust Indenture Act; and the
Indentures conform to the descriptions thereof in the Prospectus as amended or
supplemented to relate to such issuance of Notes.
(f) Since the date of the most recent financial statements included in the
Prospectus, as amended or supplemented, there has not been any material adverse
change in the consolidated financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, which is not disclosed in the
Prospectus, as amended or supplemented.
3. AGREEMENTS OF THE COMPANY. The Company agrees with the Agent that:
(a) At any time during an Offering Period or during the time a
prospectus relating to the Notes is required to be delivered under the Act,
prior to amending or supplementing the Registration Statement or the Prospectus,
the Company will furnish the Agent and the Agent's counsel with a copy of each
proposed amendment or supplement (other than an amendment or supplement to be
made pursuant to incorporation by reference of a document filed under the
Exchange Act, or a Pricing Supplement or an amendment or supplement relating
solely to an offering of debt securities other than the Notes). The Company will
promptly cause the Prospectus together with each amendment thereof or supplement
thereto to be transmitted to the Commission for filing pursuant to Rule 424(b)
by an appropriate method or will promptly cause the Prospectus together with
each amendment thereof or supplement thereto to be filed with the Commission
pursuant to said Rule. If the Prospectus is amended or supplemented (other than
a Pricing Supplement or an amendment or supplement relating solely to an
offering of 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 the Registration Statement,
(iii) the receipt by the Company of comments from the Commission relating to, or
requests by the Commission for, any amendment of the Registration Statement or
any amendment of or supplement to the Prospectus or for any additional
information, (iv)
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the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its reasonable best efforts to prevent the
issuance of any such stop order or notice of suspension of qualification and, if
issued, to obtain as soon as possible the withdrawal thereof. Upon the Agent's
request, the Company will within a reasonable time inform the Agent of the
aggregate principal amount of Notes registered under the Registration Statement
that remain unissued.
(b) Within the time during which a prospectus relating to the Notes is
required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act, as now and hereafter amended, and by
the rules and regulations of the Commission thereunder, as from time to time
in force, so far as necessary to permit the continuance of sales of or
dealings in the Notes as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if, in the opinion of the Company, during such period it is
necessary to amend or supplement the Registration Statement or the Prospectus
to comply with the Act, the Company will promptly notify the Agent to suspend
the solicitation of offers to purchase the Notes in its capacity as Agent and
to cease sales of any Notes it may then own as principal and, to the extent
required under the provision in the last sentence of this subsection (b), the
Company will promptly amend or supplement the Registration Statement or the
Prospectus (at the expense of the Company) so as to correct such statement or
omission or effect such compliance. If such amendment or supplement, and any
documents, certificates, opinions and letters furnished to the Agent pursuant
to subsections (i), (j) and (k) of this Section 3 in connection with the
preparation and filing of such amendment or supplement are reasonably
satisfactory in all respects to the Agent, upon the filing of such amendment
or supplement with the Commission or effectiveness of an amendment to the
Registration Statement, the Agent will resume solicitation of offers to
purchase Notes hereunder. Notwithstanding the foregoing, the Company shall
not be required to comply with the provisions of subsection (b) of this
Section 3 during any period from the time the Agent shall have been notified
to suspend the solicitation of offers to purchase the Notes in its capacity
as Agent (whether under this subparagraph (b) or otherwise under this
Agreement) to the time the Company shall determine that solicitation of
offers to purchase the Notes should be resumed; PROVIDED that if the Agent
holds any Notes as principal purchased pursuant to a Terms Agreement or
otherwise pursuant to this Agreement, the Company shall comply with the
provisions of subsection (b) of this Section 3 during the period when a
Prospectus is required to be delivered pursuant to the Act.
(c) The Company will comply, in a timely manner, with all
8
applicable requirements under the Exchange Act relating to the filing with the
Commission of the Company's reports pursuant to Sections 13(a), 13(c) or 15(d)
of the Exchange Act and, if then applicable, of the Company's proxy statements
pursuant to Section 14 of the Exchange Act.
(d) The Company will use its best efforts to qualify the Notes for sale
under the securities laws of such jurisdictions as the Agent reasonably
designates, to maintain such qualifications in effect so long as required for
the distribution of the Notes and, if requested by the Agent, to arrange for the
determination of the legality of the Notes for purchase by institutional
investors, except that the Company shall not be required in connection therewith
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) The Company will furnish to the Agent copies of the Registration
Statement and the Prospectus (including all documents incorporated by reference
therein), and all amendments of and supplements to the Registration Statement or
the Prospectus which are filed with the Commission during the period in which a
prospectus relating to the Notes is required to be delivered under the Act
(including all documents filed by an amendment or supplement with the Commission
during such period which are deemed to be incorporated by reference therein), in
each case in such quantities as the Agent may from time to time reasonably
request.
(f) The Company will make generally available to its security holders and
to the Agent as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited) covering a 12-month period beginning after the date
upon which any amendment of or supplement to the Prospectus (other than a
Pricing Supplement or an amendment or supplement relating solely to an offering
of 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
Statement and the Prospectus, all amendments thereof and supplements thereto,
the Indentures, and all other documents relating to the offering, the cost of
preparing, printing, packaging and delivering the Notes, the fees and
disbursements (including reasonable fees of counsel) incurred in connection with
the qualification of the Notes for sale and determination of eligibility for
investment of the Notes under the securities or Blue Sky laws of such
jurisdictions as the Agent may designate, the fees and disbursements of the
Trustees, the fees of any agency that rates the Notes, the fees and expenses in
connection with any listing of the Notes on
9
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 Xxxxx Xxxxxxxxxx LLP
("Xxxxx Xxxxxxxxxx"), 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 Xxxxx Xxxxxxxxxx or other counsel to the Agent shall not be
paid by the Company.
(h) During the term of this Agreement, the Company shall furnish to the
Agent such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, any amendments thereof or supplements
thereto, the Indentures, the Notes, this Agreement, the Procedures, any Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as the Agent may from time to time reasonably request and shall
promptly notify the Agent orally, followed by written notice of any downgrading,
or of its receipt of any notice of any intended downgrading, in the rating
accorded any of the Company's securities by Xxxxx'x Investor Service ("Moody's")
or Standard & Poor's Corporation ("Standard & Poor's") or, if one of them no
longer rates the securities of the Company, another "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
(i) Each time the Registration Statement or the Prospectus is amended or
supplemented (other than (a) a Pricing Supplement, (b) an amendment or
supplement relating solely to an offering of debt securities other than the
Notes or (c) an amendment or supplement made pursuant to the incorporation by
reference of a document filed under the Exchange Act), 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, any 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 Statement, as amended at the time of
effectiveness of such amendment, and to the Prospectus, as amended and
supplemented at the date of such certificate) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
4(b)(iii) hereof,
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but modified, if necessary, to relate to the Registration Statement, as amended
at the time of the effectiveness of such amendment, and to the Prospectus, as
amended and supplemented at the date of such certificate.
(j) Each time the Registration Statement or the Prospectus is amended or
supplemented (other than (a) a Pricing Supplement, (b) an amendment or
supplement relating solely to an offering of debt securities other than the
Notes or (c) an amendment or supplement made pursuant to the incorporation by
reference of a document under the Exchange Act), 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 Statement, as amended at the time of the effectiveness of such
amendment, and to the Prospectus, as amended and supplemented at the date of
such letter).
(k) Each time that the Registration Statement or the Prospectus is amended
or supplemented to set forth amended or supplemental financial information
(other than (a) a Pricing Supplement, (b) any amendment or supplement relating
solely to an offering of debt securities other than the Notes or (c) an
amendment or supplement made pursuant to the incorporation by reference of a
document under the Exchange Act), the Company shall cause KPMG LLP ("KPMG"), its
independent certified public accountants, to furnish forthwith the Agent a
letter, within three business days following the date of the effectiveness of
such amendment or the date of filing of such supplement or document, as the case
may be (PROVIDED that, in the event any Settlement Date falls within such three
business day period, such letter will be delivered on or prior to such
Settlement Date), in form satisfactory to the Agent, of the same tenor as the
letter referred to in Section 4(b)(iv) hereof, but modified to relate to the
Registration Statement and Prospectus, as amended and supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company; PROVIDED, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
financial information with respect to a fiscal quarter, KPMG may limit the scope
of such letter to the unaudited financial statements included in such amendment
or supplement.
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(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 warranties shall
relate to the Registration Statement and the Prospectus as amended and
supplemented to each such time).
(m) Anything to the contrary in this Section 3 notwithstanding, if, at the
time of any required notice, amendment or supplement to the Registration
Statement or the Prospectus, the Company shall have instructed the Agent to
suspend solicitation of offers to purchase the Notes in its capacity as Agent of
the Company and the Agent does not then hold any Notes acquired by it as
principal pursuant to a Terms Agreement, the Company shall not be obligated to
furnish or cause to be furnished to the Agent any notice, certificate, opinion
or letter otherwise required until such time as it shall determine that
solicitation of offers to purchase the Notes should be resumed; and PROVIDED
FURTHER that, prior to resuming such solicitation the Agent shall be entitled to
receive any such notices, certificates, opinions or letters not previously
furnished, accurate as of the date of such notice, certificate, opinion or
letter.
4. CONDITIONS TO THE OBLIGATIONS OF THE AGENT. The Agent's obligations to
solicit offers to purchase Notes as agent of the Company, the Agent's
obligations to purchase Notes as principal pursuant to any Terms Agreement or
otherwise and the obligation of any other purchaser to purchase Notes from the
Company will be subject to the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained, to
the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of the Agent's obligations
to solicit offers to purchase Notes, at the time of such solicitation, and, in
the case of the Agent's or any other purchaser's obligation to purchase Notes,
at the time the Company accepts the offer to purchase such Notes and at the time
of purchase) and (in each case) to the following additional conditions precedent
when and as specified:
(a) On the corresponding Settlement Date:
(i) There shall not have occurred any change in or affecting
particularly the business or properties of the Company and its subsidiaries
from that set forth in the Registration Statement, as amended or
supplemented, that, in the Agent's judgment, makes it impracticable to
market
12
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 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 Xxxxx'x 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 Xxxxx Xxxxxxxxxx
13
LLP (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, any 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, to the best of his or her knowledge, after
reasonable investigation, certifies that:
(A) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date of such certificate with the same effect as if made on the
date of such certificate and the Company has complied in all material
respects with all the agreements and satisfied in all material
respects all the conditions on its part to be performed or satisfied
as a condition to the obligations of the Agent under this Agreement;
(B) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to their knowledge, have been
threatened; and
(C) since the date of the most recent financial statements
included in the Prospectus, as amended and supplemented, there has
been no material adverse change in the consolidated financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, which is not disclosed in the
Prospectus, as amended or supplemented.
(iv) KPMG, or another nationally recognized independent accounting
firm, shall have furnished to the Agent a letter or letters, dated the
Commencement Date or the Settlement Date, as the case may be, in form and
substance reasonably satisfactory to the Agent, to the effect set forth in
Exhibit E hereto.
(v) The Company shall have furnished to the Agent such appropriate
further information, certificates and documents as the Agent may reasonably
request.
14
5. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless the Agent against any
losses, claims, damages or liabilities, joint or several, to which the Agent
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement when it became
effective, the Prospectus, or any amendment or supplement thereto, or any
related Preliminary Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading and
will reimburse the Agent for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of the Agent specifically for use in the preparation thereof and
such indemnity with respect to any preliminary prospectus, the Prospectus or
any preliminary supplemental prospectus, shall not inure to the benefit of
the Agent (or any person controlling the Agent) if the Company shall have
delivered sufficient quantities of the Prospectus, as amended and
supplemented, to the Agent within a reasonable time prior to the earlier of
the delivery of the written confirmation of the sale of such Notes or the
delivery of such Notes to the person asserting such loss, claim, damage,
liability or action for which indemnification is sought, and the Prospectus
as so amended and supplemented (excluding documents incorporated by
reference) was not sent or given to such person by the Agent at or prior to
the earlier of the delivery of the written confirmation of the sale of such
Notes or the delivery of such Notes to such person in any case where such
sending or giving of a prospectus is required by the Act, and the untrue
statement or omission of a material fact contained in such preliminary
prospectus, such Prospectus or such preliminary supplemental prospectus, was
corrected in the Prospectus, as so amended and supplemented, provided to the
Agent.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the Registration Statement when such part became effective, the
Prospectus or any amendment or supplement thereto, or any related Preliminary
Prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not
15
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Agent specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnified party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(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
16
fact relates to information supplied by the Company or the Agent and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the Agent
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were to be determined by PRO RATA allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim (which
shall be limited as provided in subsection (c) above if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), the Agent shall not be required to contribute
any amount in excess of the amount by which the total price at which the Notes
were offered and sold to the public by the Agent exceeds the amount of any
damages which the Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Promptly after receipt by an indemnified
party under this subsection (d) of notice of the commencement of any action
against such party in respect of which a claim for contribution may be made
against an indemnifying party under this subsection (d), such indemnified party
shall notify the indemnifying party in writing of the commencement thereof if
the notice specified in subsection (c) above has not been given with respect to
such action; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under this subsection (d).
(e) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Agent within the meaning of the Act or the Exchange Act; and the obligations of
the Agent under this Section 5 shall be in addition to any liability which the
Agent may otherwise have and shall extend, upon the same terms and conditions,
to each director of the Company, to each officer of the Company who has signed
the Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act.
6. TERMINATION OF THE APPOINTMENT OF THE AGENT. This Agreement may be
terminated at any time by either party hereto upon the giving of written notice
of such termination to the other party hereto. The termination of this Agreement
shall not require termination of any agreement by the Agent to purchase Notes as
17
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:
Xxxxxxx Xxxxx Xxxxxx Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Medium Term Note Department
Fax: (000) 000-0000
or, if sent to the Company, will be mailed, delivered or transmitted by any
standard form of telecommunications at:
Citigroup Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Deputy Treasurer
Reference Medium-Term Note Program
Fax: (000) 000-0000
and
18
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel - Corporate Law
Reference Medium-Term Note Program
Fax: (000) 000-0000
Any party to this Agreement may change the address to which notices or
communications to it shall be directed by giving notice in writing to the
other parties hereto.
9. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 5 hereof. Nothing
expressed or implied in this Agreement or any Terms Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Section 5 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Terms Agreement or any provision herein or
therein contained. This Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof, except to the extent provided for in Section 4
hereof, are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase. This Agreement and the rights
and obligations of the Agent hereunder may not be assigned without the prior
written consent of the Company.
10. WAIVERS, ETC. Neither any failure nor delay on the part of any
party to exercise any right, remedy, power or privilege under this Agreement
(singly and collectively referred to as a "Right") shall operate as a waiver of
such Right, nor shall any single or partial exercise of any Right preclude any
other or further exercise of any Right, nor shall any waiver of any Right with
respect to any occurrence be construed as a waiver of any Right with respect to
any other occurrence.
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 /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Deputy Treasurer
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first written above.
XXXXXXX XXXXX XXXXXX INC.
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
20
Exhibit A
CITIGROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES A
MEDIUM-TERM SUBORDINATED NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE
TERMS AGREEMENT
Dated:
Citigroup Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Deputy Treasurer
Re: Distribution Agreement dated May 6, 1999
(the "Distribution Agreement")
----------------------------------------
Subject to the terms and provisions stated below, the undersigned
agrees to purchase the following principal amount of your (check box):
o Medium-Term Senior Notes, Series A, Due Nine Months or More from the
Date of Issue: $ ; and/or
o Medium-Term Subordinated Notes, Series A, Due Nine Months or
More from the Date of Issue: $ .
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
Purchase Price: Interest Rate: Base Rate:
A-1
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
Price to Public: Index Maturity:
Settlement Date and Spread:
time:
Place of delivery: Spread Multiplier:
Original Issue Date: Amortization
Schedule:
Date on which interest
begins to accrue (if
different from Original
Issue Date):
Specified Currency: Initial Interest Rate:
Maturity Date: Interest Reset Dates:
A-2
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
Interest Payment Maximum Interest Rate:
Dates:
Regular Record
Dates:
Exchange Rate Agent:
Option to receive
payments in specified
currency other than
U.S. Dollars:
Sinking fund:
Total amount OID:
Original yield to Minimum Interest Rate:
maturity:
A-3
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
Renewal terms:
Option to elect
repayment:
Optional Repayment
Dates:
Optional Repayment
prices:
Optional Interest Rate
Reset:
Optional Reset Dates:
A-4
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
Optional extension of
maturity:
Length of extension
period:
Number of extension
periods:
Final Maturity Date:
Depositary:
Optional Redemption Interest Reset Period:
Date(s):
A-5
For All Notes: For Fixed Rate Notes: For Floating Rate Notes:
------------------------- ------------------------ ------------------------
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
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, Due
Nine Months or More from the Date of Issue and the Medium-Term Subordinated
Notes, Series A, Due Nine Months or More from the Date of Issue (other than (i)
the Notes to be sold pursuant to this Agreement and (ii) commercial paper issued
in the ordinary course of business), except as may otherwise be provided herein.
The following information, opinions, certificates, letters and documents
referred to in Section 4 of the Distribution Agreement will be required:
A-6
XXXXXXX XXXXX XXXXXX INC.
By
----------------------------------
Name:
Title:
Accepted:
CITIGROUP INC.
By
----------------------------
Name:
Title:
A-7
EXHIBIT B
CITIGROUP INC.
MEDIUM-TERM NOTES ADMINISTRATIVE PROCEDURES
May 6, 1999
The Medium-Term Senior Notes, Series A, Due Nine Months or More from the
Date of Issue (the "Senior Notes") and the Medium-Term Subordinated Notes,
Series A, Due Nine Months or More from the Date of Issue (the "Subordinated
Notes" and, together with the Senior Notes, the "Notes") of Citigroup Inc. (the
"Company") are to be offered on a continuing basis. Xxxxxxx Xxxxx Xxxxxx Inc.
has agreed, as agent, to solicit purchases of the Notes issued in fully
registered form. (The term "Agent" when used in these Administrative Procedures,
means Xxxxxxx Xxxxx Xxxxxx Inc.). The Agent will not be obligated to purchase
Notes for its own account. The Notes are being sold pursuant to a Distribution
Agreement between the Company and the agents named therein (including the Agent)
dated the date hereof (the "Distribution Agreement"). The Notes have been
registered with the Securities and Exchange Commission (the "Commission"). The
Bank of New York ("BONY") is the trustee under the Indenture, dated as of March
15, 1987, as amended from time to time, under which the Senior Notes will be
issued (the "Senior Debt Indenture"). The First National Bank of Chicago ("First
Chicago") is the trustee (together with XXXX, 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
B-1
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 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
B-2
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 Medium-Term Note
Certificate Agreement between BONY and DTC, dated as of August 17, 1989 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
May 26, 1989, 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
B-3
predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No Global
Security will represent (i) both Fixed Rate and Floating
Rate Book-Entry Notes or (ii) any Certificated Note or (iii)
both Senior Notes and Subordinated Notes.
IDENTIFICATION
NUMBERS: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of two series of CUSIP
numbers, one for Senior Notes and one for Subordinated
Notes, each of which series consists of approximately 900
CUSIP numbers and relates to Global Securities representing
Book-Entry Notes and book-entry 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.
B-4
REGISTRATION: Global Securities will be issued only in fully registered
form without coupons. Each Global Security will be
registered in the name of CEDE & CO., as nominee for DTC, on
the securities register for the Notes (the "Securities
Register") maintained under the applicable Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect to
such Book-Entry Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such
beneficial owner in such Book-Entry Note in the account of
such Participants. The ownership interest of such beneficial
owner (or such participant) in such Book-Entry Note will be
recorded through the records of such Participants or through
the separate records of such Participants and one or more
indirect participants in DTC.
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
B-5
having the same Terms and for which interest has been paid
to the same date or (B) Floating Rate Book-Entry Notes of
the same Series and having the same Terms and for which
interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written notice is
delivered and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single replacement
Global Security and (iii) a new CUSIP number to be assigned
to such replacement Global Security. Upon receipt of such a
notice, DTC will send to its participants (including the DTC
Agent for such replacement Global Security) a written
reorganization notice to the effect that such exchange will
occur on such date. Prior to the specified exchange date,
such DTC Agent will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange date and such new
CUSIP number and stating that, as of such exchange date, the
CUSIP numbers of the Global Securities to be exchanged will
no longer be valid. On the specified exchange date, such
DTC Agent will exchange such Global Securities for a single
Global Security bearing the new CUSIP number and a new
Original Issue Date, which shall be the last date to which
interest has been paid on the underlying Book-Entry Notes,
and the CUSIP numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau 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).
B-6
MATURITIES: Each Book-Entry Note will mature on a date nine months or
more after the issue date for such Note. A Floating Rate
Book-Entry Note will mature only on an Interest Payment Date
for such Note.
DENOMINATIONS: Book-Entry Notes will be issued in principal amounts of
$1,000 or any amount in excess thereof that is an integral
multiple of $1,000. If Book-Entry Notes are denominated in a
Specified Currency other than U.S. dollars, the
denominations of such Notes will be determined pursuant to
the provisions of the applicable Pricing Supplement. Global
Securities will be denominated in principal amounts not in
excess of $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
B-7
different than the Original Issue Date)) of the Global
Security representing such Book-Entry Note for the first
interest period or the last date to which interest has been
paid, if any, for each subsequent interest period, on the
Global Security representing such Book-Entry Note, and will
be calculated and paid in the manner and on the Interest
Payment Dates described in such Book-Entry Note and in the
Prospectus (as defined in the Distribution Agreement), as
supplemented by the applicable Pricing Supplement. Unless
otherwise specified, each payment of interest on a
Book-Entry Note will include interest accrued to but
excluding the Interest Payment Date; PROVIDED, that in the
case of Floating Rate Notes that reset daily or weekly,
interest payments will include interest accrued to but
excluding the next preceding Regular Record Date, except
that at stated Maturity, the interest payable will include
interest accrued to, but excluding, the Maturity. Interest
payable at the Maturity of a Book-Entry Note will be payable
to the Person to whom the principal of such Note is payable.
Standard & Poor's Corporation will use the information
received in the pending deposit message described under
Settlement Procedure "C" below in order to include the
amount of any interest payable and certain other information
regarding the related Global Security in the appropriate
(daily or weekly) bond report published by Standard & Poor's
Corporation.
B-8
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 under "Manner of Payment." If any Interest
Payment Date for a Book-Entry Note is not a Business Day,
the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue as a
result of such delayed payment. In the case of a Floating
Rate Note that is a LIBOR note (as described in the
Prospectus), if postponement to the next business day would
cause the interest payment date to be in the next succeeding
cal endar month, the Interest Payment Date will instead be
the immediately preceding Business Day.
PAYMENTS AT MATURITY OR UPON REDEMPTION. On or about the
first Business Day of each
B-9
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 or redemption price of such
Global Security, together with interest due at such Maturity
or redemption in the manner set forth below under "Manner of
Payment." 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
or redemption price due on the Maturity Date or Redemption
Date of such Global Security, the Trustee for such Global
Security will cancel and destroy such Global Security in
accordance with the applicable Indenture and, if requested,
deliver a certificate of destruction to the Company.
B-10
MANNER OF PAYMENT. The total amount of any principal and
interest or redemption price due on Global Securities on any
Interest Payment Date or at Maturity or upon redemption or
repayment shall be paid by the Company to 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 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
B-11
Notes.
If an issue of Notes is denominated in a currency other
than the U.S. dollar, the Company will make payments of
principal and any interest in the currency in which the
Notes are denominated (the "foreign currency") or in U.S.
dollars. DTC has elected to have all such payments of
principal and interest in U.S. dollars unless notified by
any of its Participants through which an interest in the
Notes is held that it elects, in accordance with and to the
extent permitted by the applicable Pricing Supplement and
the Note, to receive such payment of principal or interest
in the foreign currency. On or prior to the third Business
Day after the record date for payment of interest and
twelve days prior to the date for payment of 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
B-12
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 required under
applicable law to be withheld from any interest or principal
or redemption payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the beneficial
owner of such Note.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
COMPANY'S EXERCISE RESET. Not less than 45 or more than 60 days before an
OF OPTIONAL RESET Optional Reset Date as set forth in a Book-Entry Note, the
OR OPTIONAL Company will notify the Trustee for such Book-Entry Note
EXTENSION OF whether it is exercising its option to reset the interest
MATURITY: 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.
B-13
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 periods during which such redemption
may occur during such extension period.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S EXERCISE OF
OPTIONAL EXTENSION OR RESET. Upon receipt of notice from the
Company regarding the Company's exercise of either an
optional extension of maturity or an optional reset, the
Trustee for the Book-Entry Note will deliver a notice to DTC
not less than 40 days before the Optional Reset Date (in
which case a "Reset Notice") or the Stated Maturity (in
which case an "Extension Notice"), as the case may be, which
Reset Notice or Extension Notice shall identify 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.
B-14
COMPANY NOTICE REGARDING NEW INTEREST RATE OR NEW SPREAD OR
SPREAD MULTIPLIER. If the Company elects to revoke the
interest rate or Spread or Spread Multiplier provided for in
the Reset Notice and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset Period or
extension period, as the case may be, it shall, not less
than 20 days before such Optional Reset Date or old Stated
Maturity, so notify the Trustee for the affected Book-Entry
Note. The Trustee will immediately thereafter notify DTC of
the new interest rate or Spread or Spread Multiplier
applicable to such Book-Entry Note.
TRUSTEE NOTICE TO COMPANY REGARDING DTC REVOCATION OF OPTION
TO BE REPAID. If, after DTC has tendered any Book-Entry
Notes for repayment pursuant to an Extension Notice or an
Reset Notice, DTC then revokes such tender for repayment,
the Trustee for such Book-Entry Notes shall give notice to
the Company not less than five days prior to the Stated
Maturity or Optional Reset Date, as the case may be, of such
revocation and of the principal amount of Book-Entry Notes
for which tender for repayment has been revoked.
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.
B-15
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF
COMPANY'S EXERCISE OPTIONAL REDEMPTION. At least 45 days prior to the date on
OF OPTIONAL which it intends to redeem a Book-Entry Note, the Company
REDEMPTION: will notify the Trustee for such Book-Entry Note that it is
exercising such option with respect to such Book-Entry Note
on such date and the redemption price of such Book-Entry
Notes.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S EXERCISE OF
OPTIONAL REDEMPTION. After receipt of notice that the
Company is exercising its option to redeem a Book-Entry
Note, the Trustee will, at least 30 days before the
Redemption Date for such Book-Entry Note, hand deliver to
DTC a notice identifying such Book-Entry Note by CUSIP
number and informing DTC of the Company's exercise of such
option with respect to such Book-Entry Note.
DEPOSIT OF REDEMPTION PRICE. On or before any Redemption
Date, the Company shall deposit with such Trustee an amount
of money sufficient to pay the redemption price, plus
interest accrued to such Redemption Date, for all the
Book-Entry Notes or portions thereof for which 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 TRUSTEE NOTICE TO COMPANY OF OPTION TO BE REPAID. Upon
PRINCIPAL AND receipt of notice of exercise of the option for repayment
INTEREST UPON and the Global Securities representing the Book-Entry Notes
EXERCISE OF so to be repaid as set forth in such Notes, the Trustee for
OPTIONAL REPAYMENT such Book-Entry Notes shall (unless such notice was
(EXCEPT PURSUANT TO received pursuant to the Company's exercise of an optional
COMPANY'S EXERCISE reset or an optional extension of maturity, in each of which
OF OPTIONAL RESET cases the relevant procedures set forth above are to be
OR OPTIONAL followed) give notice to the
EXTENSION):
B-16
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 The Company and the Agent will discuss from time to time the
SETTING AND POSTING:aggregate principal amount of, the issuance price of, and
the interest rates to be borne by, Book-Entry Notes that may
be sold as a result of the solicitation of orders by the
Agent. If the Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which the Agent
is to solicit orders (the setting of such prices and rates
to be referred to herein as "posting") or if the Company
decides to change prices or rates previously posted by it,
it will promptly advise the Agent of the prices and rates to
be posted.
ACCEPTANCE AND Unless otherwise instructed by the Company, the Agent will
REJECTION OF advise the Company promptly by telephone of all orders to
ORDERS: 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
B-17
orders to purchase Book-Entry Notes and may reject any such
orders in whole or in part.
PREPARATION If any order to purchase a Book-Entry Note is accepted by or
OF PRICING on behalf of the Company, the Company will prepare a pricing
SUPPLEMENT: supplement (a "Pricing Supplement") reflecting the terms of
such Book-Entry Note, will file one copy thereof by
electronic submission with the Commission in accordance with
the applicable paragraph of Rule 424(b) under the Act, will
deliver such number of copies thereof to the Agent as the
Agent shall request and will, on the Agent's behalf, file
three 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 Xxxxxxx Xxxxx Xxxxxx Inc., 0 Xxxxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (with a copy transmitted by
telecopy to (000) 000-0000, Attention: Medium Term Note
Department).
B-18
SUSPENSION OF Subject to the Company's representations, warranties and
SOLICITATION; covenants contained in the Distribution Agreement, the
AMENDMENT Company may instruct the Agent to suspend at any time, for
OR SUPPLEMENT: 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 A copy of the Prospectus and a Pricing Supplement relating
PROSPECTUS: 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
B-19
placed. The Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each
Book-Entry Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold directly by the
Company to a purchaser (other than the Agent).
CONFIRMATION: For each order to purchase a Book-Entry Note solicited by
the Agent and accepted by or on behalf of the Company, the
Agent will issue a confirmation to the purchaser, with a
copy to the Company, setting forth the details set forth
above 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 Settlement Procedures with regard to each Book-Entry Note
PROCEDURES: 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.
B-20
2. Series.
3. Stated Maturity.
4. In the case of a Fixed Rate Book-Entry Note, the
interest rate and reset, redemption, repayment
and extension provisions (if any) or, in the
case of a Floating Rate Book-Entry Note, the
Base Rate, Initial Interest Rate (if known at
such time), Interest Reset Period, Interest
Reset Dates, Index Maturity, Spread and/or
Spread Multiplier (if any), Minimum Interest
Rate (if any), Maximum Interest Rate (if any)
and reset, redemption, repayment and extension
provisions (if any).
5. Interest Payment Dates and the Interest 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-21
(a) 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 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.
B. Such DTC Agent will enter a pending deposit message through DTC's
Participant Terminal System providing the following settlement
information to DTC Standard & Poor's Corporation, Interactive Data
Corporation, the Agent and, upon request, the Trustee for such Notes:
1. The information set forth in Settlement Procedure "A."
2. Identification as a Fixed Rate Book-Entry Note or a Floating
Rate Book-Entry Note.
3. The Initial Interest Payment Date for such Book-Entry Note,
number of days by which such date succeeds the related Regular
Record Date and amount of interest payable on such Interest
Payment Date.
B-22
4. The Interest Payment Period.
5. The CUSIP number of the Global Security representing such
Book-Entry Note.
6. The participant account numbers maintained by DTC on behalf
of the Trustee and the Agent.
7. Whether such Global Security will represent any other
Book-Entry Note (to the extent known at such time).
C. To the extent the Company has not already done so, the Company
will deliver to the Trustee for such Notes a Global Security in
a form that has been approved by the Company, the Agent and the
Trustee.
D. The Trustee will complete such Book-Entry Note, stamp the
appropriate legend, as instructed by DTC, if not already set
forth thereon, and authenticate the Global Security representing
such Book-Entry Note.
E. DTC will credit such Book-Entry Note to such DTC Agent's
participant account at DTC.
F. Such DTC Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such
Book-Entry Note to such DTC Agent's participant account and
credit such Book-Entry Note to the Agent's participant account
and (ii) debit the Agent's settlement account and credit such
DTC Agent's settlement account for an amount equal to the price
of such Book-Entry Note
B-23
less the Agent's commission. The entry of such a deliver order
shall constitute a representation and warranty by such DTC
Agent to DTC that (i) the Global Security representing such
Book-Entry Note has been issued and authenticated and (ii) such
DTC Agent is holding such Global Security pursuant to the Medium
Term Note Certificate Agreement between such DTC Agent and DTC.
G. Unless the Agent is purchasing such Note as principal, the Agent
will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Book-Entry
Note to the Agent's participant account and credit such
Book-Entry Note to the participant accounts of the Participants
with respect to such Book-Entry Note and (ii) to debit the
settlement accounts of such Participants and credit the
settlement account of the Agent for an amount equal to the price
of such Book-Entry Note.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be settled
in accordance with SDFS operating procedures in effect on the
settlement date.
X. Xxxx DTC Agent will, upon receipt of funds from the Agent in
accordance with Settlement Procedure "G," credit to an account
of
B-24
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."
J. Unless the Agent is purchasing such Book-Entry Note as
principal, the Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Note a con
firmation order or orders through DTC's institutional delivery
system or by mailing a written confirmation to such purchaser.
K. 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 Company has advised
such DTC Agent but which have not yet been settled.
SETTLEMENT For sales by the Company of Book-Entry Notes solicited by the
PROCEDURES Agent and accepted by the Company (except pursuant to a Terms
TIMETABLE: 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
B-25
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 proce dures in effect on the
settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled,
the DTC Agent for such Book-Entry Notes after receiving notice
from the Company or the Agent, will deliver to DTC, through
DTC's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 P.M. on the Business Day
immediately preceding the scheduled settlement date.
FAILURE TO If settlement of a Book-Entry Note is rescheduled and the DTC
SETTLE: 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
B-26
participant account contains a principal amount of the Global
Security representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a withdrawal
message is processed with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee for the Notes
represented by such Global Security will mark such Global
Security "canceled," make appropriate entries in such Trustee's
records and destroy the canceled Global Security in accordance
with the applicable Indenture and, if requested, deliver a
certificate of destruction to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed with respect
to one or more, but not all, of the Book-Entry Notes represented
by a Global Security, the DTC Agent for such Book-Entry Notes
will exchange such Global Security for two Global Securities,
one of which shall represent such Book-Entry Notes and shall be
canceled immediately after issuance and the other of which
shall represent the other Book-Entry Notes previously
represented by the surrendered Global Security and shall bear
the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely paid
to the Participants with respect to such Note by the beneficial
purchaser thereof (or a Person, including an indirect
participant in DTC, acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may enter SDFS
deliver
B-27
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.
TRUSTEES NOT Notwithstanding the foregoing, upon any failure to settle with
TO RISK FUNDS: respect to a Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating procedures then in effect. In
the event of a failure to settle with respect to one or more,
but not all, of the Book-Entry Notes to have been represented by
a Global Security, the DTC Agent for such Book-Entry Note or
Notes will provide, in accordance with Settlement Procedures
"E" and "G," for the authentication and issuance of a Global
Security representing the other Book-Entry Notes, which have not
failed to settle, to have been represented by such Global
Security and will make appropriate entries in its records.
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
B-28
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.
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
COSTS: The Company will determine with the Agent the amount of
advertising that may be appropriate in soliciting offers to
purchase the Book-Entry Notes. Advertising expenses will be paid
by the Company.
B-29
PART II
ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Each Trustee will serve as registrar and transfer agent in connection
with the Certificated Notes for which it serves as Trustee.
ISSUANCE: Each Certificated Note will be dated and issued as of the date
of its authentication by the applicable Trustee. Each
Certificated Note will bear an Original Issue Date, which will
be (i) with respect to an original Certificated Note (or any
portion thereof), its original issuance date (which will be the
settlement date) and (ii) with respect to any Certificated Note
(or portion thereof) issued subsequently upon transfer or
exchange of a Certificated Note or in lieu of a destroyed, lost
or stolen Certificated Note, the Original Issue Date of the
predecessor Certificated Note, regardless of the date of
authentication of such subsequently issued Certificated Note.
REGISTRATION: Certificated Notes will be issued only in fully registered
form without coupons.
MATURITIES: Each Certificated Note will mature on a date nine months or
more after the issue date for such Note. A Floating Rate
Certificated Note will mature only on an Interest Payment Date
for such Note.
CURRENCY: The Specified Currency for a Certificated Note shall be as set
forth therein and in the applicable Pricing Supplement.
DENOMINATIONS: The denomination of any Certificated Note denominated in U.S.
dollars will be a minimum of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000. The authorized
denominations of Certificated Notes de nominated 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
B-30
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.
B-31
PAYMENTS OF The applicable Trustee will pay the principal amount of each
INTEREST: 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, 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
B-32
Trustee.
The Company will be responsible for withholding taxes on
interest paid on Certificated Notes as required by applicable
law.
PROCEDURE FOR If any Interest Payment Date for or the Maturity of a
RATE SETTING Certificated Note is not a Business Day, the payment due on such
AND POSTING: day shall be made on the next succeeding Business Day and no
interest shall accrue on account of such delayed payment. In
the case of a Floating Rate Note that is a LIBOR note (as
described in the Prospectus), if postponement to the next
business day would cause the interest payment date to be in the
next succeeding calendar month, the Interest Payment Date will
instead be the immediately preceding Business Day.
ACCEPTANCE AND The Company and the Agent will discuss from time to time the
REJECTION OF aggregate principal amount of, the issuance price of, and the
ORDERS: 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.
PREPARATION OF Unless otherwise instructed by the Company, the Agent will
PRICING advise the Company promptly by telephone of all orders to
SUPPLEMENT: purchase Certificated Notes received by the Agent, other than
those rejected by it in whole or in part in the
B-33
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.
If any order to purchase a Certificated Note is accepted by or
on behalf of the Company, the Company will prepare a Pricing
Supplement reflecting the terms of such Certificated Note, will
file one copy thereof by electronic submission with the
Commission in accordance with the applicable paragraph of Rule
424(b) under the Act, will deliver such number of copies thereof
to the Agent as the Agent shall request and will, on the Agent's
behalf, file three 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 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: Xxxxxxx Xxxxx Xxxxxx
Inc., 0 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (with a
copy transmitted by telecopy to (212)
B-34
783-2274, Attention: Medium Term Note Department).
SUSPENSION OF In each instance that a Pricing Supplement is prepared, the
SOLICITATION; Presenting Agent will affix the Pricing Supplement to
AMENDMENT OR Prospectuses prior to their use. Outdated Pricing Supplements
SUPPLEMENT: and the Prospectuses to which they are attached (other than
those retained for files), will be destroyed.
Subject to the Company's representations, 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.
B-35
DELIVERY OF A copy of the Prospectus and a Pricing Supplement relating to a
PROSPECTUS: Certificated Note must accompany or precede the earliest of any
written offer of such Certificated Note, confirmation of the
purchase of such Certificated Note and payment for such
Certificated Note by its purchaser. If notice of a change in
the terms of the Certificated Notes is received by the Agent
between the time an order for a Certificated Note is placed and
the time written confirmation thereof is sent by the Agent to a
customer or his agent, such confirmation shall be accompanied
by a Prospectus and Pricing Supplement setting forth the terms
in effect when the order was placed. The Agent will deliver a
Prospectus and Pricing Supplement as herein described with
respect to each Certificated Note sold by it. The Company will
make such delivery if such Certificated Note is sold directly by
the Company to a purchaser (other than the Agent).
CONFIRMATION: For each order to purchase a Certificated Note solicited
by the Agent and accepted by or on behalf of the Company, the
Agent will issue a confirmation to the purchaser, with a copy to
the Company, setting forth the details set forth above and
delivery and payment instructions.
SETTLEMENT: The receipt by the Company of immediately available funds in
exchange for an authenticated Certificated Note delivered to
the Agent and the Agent's delivery of such Certificated Note
against receipt of immediately available funds shall, with
respect to such Certificated Note, constitute "settlement." All
orders accepted by the Company will be settled on the fifth
Business Day next succeeding the date of acceptance pursuant to
the timetable for settlement set forth below, unless the
Company and the purchaser agree to settlement on another day
which shall be no earlier than the next Business Day following
the date of sale.
SETTLEMENT Settlement Procedures with regard to each Certificated Note
PROCEDURES: sold by the Company to or through the Agent, as agent (except
pursuant to
B-36
a Terms Agreement), shall be as follows:
A. The Agent will advise the Company by telephone (or by
facsimile transmission or other acceptable written
means) that such Note is a Certificated Note and of the
following settlement information, in time for the
Trustee for such Certificated Note to prepare and
authenticate the required Note:
1. Name in which such Certificated Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and address for
payment of principal and interest.
3. Taxpayer identification number of the Registered
Owner (if available).
4. Principal or face amount.
5. Series.
6. Stated Maturity.
7. In the case of a Fixed Rate Certificated Note, the
Interest Rate and reset provisions (if any) or, in the case of
a Floating Rate Certificated Note, the Base Rate, Initial
Interest Rate (if known at such time), Interest Reset Period,
Interest Reset Dates, Index Maturity, Spread and/or Spread
Multiplier (if any), Minimum Interest Rate (if any), Maximum
Interest Rate (if any) and reset provisions (if any).
8. Interest Payment Dates and the Interest Payment
Period.
9. Specified Currency.
10. Denominated Currency, Indexed Currency, Base
Exchange Rate and the Determination Date, if applicable.
11. Redemption, repayment, amortization or extension
provisions, if any.
12. Settlement Date.
13. Price (including currency).
14. Agent's commission, if any, determined as provided
in the Distribution Agreement.
15. Whether such Certificated Note is an OID Note, and,
if so, the total amount of OID and the yield to maturity.
16. Any other terms necessary to describe the
Certificated Note.
B-37
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 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.
B-38
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 Agent, as
PROCEDURES agent, and accepted by the Company, Settlement Procedures "A"
TIMETABLE: 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 COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL RESET.
UPON COMPANY'S Not less than 45 or more than 60 days before an Optional Reset
EXERCISE OF Date as set forth in a Certificated Note, the Company will
OPTIONAL RESET notify the Trustee for such Certificated Note whether it is
OR EXTENSION exercising its option to reset the interest rate or Spread or
OF MATURITY: 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
B-39
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
B-40
Company's exercise of either an optional extension of maturity
or an optional reset, the Trustee for the Certificated Note will
mail a notice, first class, postage prepaid, to the Holder of
the Certificated Note not less than 40 days before the Optional
Reset Date (in which case a "Reset Notice") or the Stated
Maturity (in which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall contain the
information required by the terms of the Certificated Note.
TRUSTEE NOTICE TO COMPANY REGARDING OPTION TO BE REPAID. If,
after receipt of either a Reset Notice or an Extension Notice,
any Holder of a Certificated Note exercises the option for
repayment by tendering the Certificated Note to be repaid as set
forth in the Certificated Note, the Trustee for such
Certificated Note shall give notice to the Company not less than
22 days before the Optional Reset Date, or the old Stated
Maturity, as the case may be, of the principal amount of
Certificated Notes to be repaid on such Optional Reset Date or
old 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
B-41
immediately thereafter notify the Holder of such Certificated
Note, by first class mail, postage prepaid, of the new higher
interest rate or Spread or Spread Multiplier applicable to such
Certificated Note.
TRUSTEE NOTICE TO COMPANY REGARDING HOLDER REVOCATION OF OPTION
TO BE REPAID. If, after the Holder of a Certificated Note has
tendered such Note for repayment pursuant to an Extension Notice
or a Reset Notice, such Holder revokes such tender for
repayment, the Trustee for such Certificated Note shall give
notice to the Company not less than five days prior to the
Stated Maturity or Optional Reset Date, as the case may be, of
such revocation and of the principal amount of Certificated
Notes for which tender for repayment has been revoked.
DEPOSIT OF REPAYMENT PRICE. On or before any old Stated Maturity
where the Maturity has been extended, and on or before any
Optional Reset Date, the Company shall deposit with 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.
B-42
PROCEDURES UPON COMPANY'S COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF
EXERCISE OF OPTIONAL OPTIONAL REDEMPTION. At least 45 days prior to
REDEMPTION: the 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
INTEREST UPON EXERCISE OF REPAID. Upon receipt of notice of exercise of
OPTIONAL REPAYMENT (EXCEPT the option for repayment and the Certificated
PURSUANT TO COMPANY'S Notes to be repaid as set forth in such Notes,
EXERCISE OF OPTIONAL RESET OR the Trustee for such Certificated Notes shall
OPTIONAL EXTENSION): (unless such notice was received pursuant to the
Company's exercise of an optional reset or an
optional extension of maturity, in each of which
cases the relevant procedures set forth above
shall be followed) give notice to the Company
not less than 20 days prior to each Optional
Repayment Date of such Optional Repayment Date
and of the principal amount of Certificated
Notes to be repaid on such Optional Repayment
Date.
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
Agent will notify the Company and the applicable
Trustee by telephone and return such Note to
the applicable Trustee. Upon receipt of such
notice, the Company will immediately wire
transfer to the account of the Agent an amount
equal to the amount previously credited
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thereto in respect of such Note. Such wire
transfer will be made on the Settlement Date, if
possible, and in any event not later than the
Business Day following the settlement date. If
the failure shall have occurred for any reason
other than a default by the Agent in the
performance of its obligations hereunder and
under the Distribution Agreement with the
Company, then the Company will reimburse the
Agent or the applicable Trustee, as appropriate,
on an equitable basis for its loss of the use
of the funds during the period when they were
credited to the account of the Company.
Immediately upon receipt of the Certificated
Note in respect of which such failure occurred,
the applicable Trustee will mark such Note
"canceled," make appropriate entries in the
applicable Trustee's records and send such Note
to the Company.
AUTHENTICITY OF Nothing herein shall be deemed to require either
SIGNATURES: 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.
The Company will cause each Trustee 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 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
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Note.
PAYMENT OF EXPENSES: The Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by the Agent during that month
that are reimbursable to it pursuant to the
terms of the Distribution Agreement. The Company
will remit payment to the Agent currently on a
monthly basis.
ADVERTISING COSTS: The Company will determine with the
Agent the amount of advertising that may be
appropriate in soliciting orders to purchase
the Certificated Notes. Advertising expenses
will be paid by the Company.
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