TERMS AGREEMENT
March 27, 2006
Citigroup Funding Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Treasury Capital Markets
Ladies and Gentlemen:
We understand that Citigroup Funding Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $42,000,000 aggregate principal amount of
its Stock Market Upturn Notes(SM) (Notes) Based Upon the S&P 500(R) Index Due
July 12, 2007 (the "Notes"). The payments due under the Notes will be fully and
unconditionally guaranteed by Citigroup Inc., a Delaware corporation (the
"Guarantor"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, Citigroup Global Markets Inc. (the
"Underwriter") offers to purchase 4,200,000 Notes for an amount equal to
$41,370,000 (98.5% of the aggregate principal amount). The Closing Date shall be
March 30, 2006 at 9:00 a.m. at the offices of Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
LLP, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The Notes shall have the following terms:
Title: Stock Market Upturn Notes(SM) (Notes) Based Upon the S&P 500(R)
Index Due July 12, 2007
Maturity: July 12, 2007
Maturity Payment: Holders of the Notes will be entitled to receive at maturity
the Maturity Payment (as defined in the Prospectus Supplement
dated March 27, 2006 relating to the Notes)
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Interest Rate: The Notes do not bear interest. No payments on the Notes
will be made until maturity
Initial Price To Public: 100% of the principal amount thereof, plus accrued interest
from March 30, 2006 to date of payment and delivery
Redemption Provisions: The Notes are not redeemable by the Company prior to maturity
Trustee: The Bank of New York
Indenture: Indenture, dated as of June 1, 2005
All the provisions contained in the document entitled "Citigroup Funding
Inc. - Debt Securities - Underwriting Agreement Basic Provisions" and dated May
3, 2005 (the "Basic Provisions"), a copy of which you have previously received,
are herein incorporated by reference in their entirety and shall be deemed to be
a part of this Terms Agreement to the same extent as if the Basic Provisions had
been set forth in full herein. Terms defined in the Basic Provisions are used
herein as therein defined.
Basic Provisions varied with respect to this Terms Agreement:
(a) In Section 1, insert the following:
(c) As of 4:00 p.m. on March 27, 2006, the Preliminary Final
Prospectus dated February 17, 2006, including the documents
incorporated by reference therein, and the document listed in
Schedule I hereto, considered together with the amount, the public
offering price, the delivery date and the maturity date of the
Securities, each as set forth on the front cover of the Final
Prospectus, and the starting value of the S&P 500 Index, the maximum
index return and the upside participation rate, as set forth under
the heading "Summary Information - - Q&A" in the Final Prospectus
(except as to the financial statements or other data of a financial
or statistical nature contained therein), does not contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) in Section 5, insert the following:
(i) Each of the Company and the Guarantor represents and
agrees that, unless it has obtained or will obtain, as the case may
be, the prior written
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consent of the Representative, and each of the Underwriters,
severally and not jointly, represents and agrees with the Company
and the Guarantor that, unless it has obtained or will obtain, as
the case may be, the prior written consent of the Company and the
Guarantor, it has not made and will not make any offer relating to
the Securities that would constitute an issuer free writing
prospectus as defined in Rule 433 under the Act ("Issuer Free
Writing Prospectus") or that would otherwise constitute a free
writing prospectus as defined in Rule 405 under the Act ("Free
Writing Prospectus") required to be filed by the Company or the
Guarantor with the Commission or retained by the Company or the
Guarantor under Rule 433 under the Act; provided that the prior
written consent of the parties hereto shall be deemed to have been
given in respect of the Free Writing Prospectus included in Schedule
I hereto.
(c) delete the text of Section 6(b) (including subsections (i) through
(x)) and insert in lieu thereof the following:
(b) The Company and the Guarantor shall have requested and
caused the counsel for the Company and the Guarantor to have
furnished to the Representative an opinion, dated the Closing Date
and addressed to the Representative, to the effect set forth in
Annex A hereto.
(d) in the tenth line of Section 8(a), delete "or the Final Prospectus"
and insert in lieu thereof ", the Final Prospectus or any Issuer Free Writing
Prospectus"
The Underwriter hereby agrees in connection with the underwriting of the
Notes to comply with the requirements set forth in any applicable sections of
Section 2720 to the By-Laws of the National Association of Securities Dealers,
Inc.
Xxxxxxx X. Xxxxxxx, Esq. is General Counsel, Finance and Capital Markets
of the Guarantor and legal counsel to the Company. Xxxxxx Xxxxxxxx Xxxxx &
Xxxxxxxx LLP is counsel to the Underwriter. Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
is special tax counsel to the Company and the Guarantor.
Please accept this offer no later than 9:00 p.m. on March 27, 2006, by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
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"We hereby accept your offer, set forth in the Terms Agreement, dated
March 27, 2006, to purchase the Notes on the terms set forth therein."
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
ACCEPTED:
CITIGROUP FUNDING INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
and Assistant Treasurer
CITIGROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Treasurer
ANNEX A
Form of Company Opinion to the Underwriters
(i) each of the Company and the Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) each of the Company and the Guarantor is duly qualified to do business as
a foreign corporation in good standing in all jurisdictions in which it
owns or leases substantial properties or in which the conduct of its
business requires such qualification and the failure to so qualify would
have a material adverse effect on the Company or the Guarantor, as
applicable;
(iii) the Indenture has been duly authorized, executed and delivered by the
Company and the Guarantor, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantor in accordance with its
terms (subject, as to enforcement, to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally and to general principles of equity regardless
of whether such enforceability is considered in a proceeding in equity or
at law);
(iv) the Securities have been validly authorized and, when duly executed by the
proper officers of the Company, duly authenticated by the Trustee and
delivered as contemplated by the Agreement and by the Indenture, will be
validly issued and outstanding obligations of the Company enforceable in
accordance with their terms and entitled to the benefits of the Indenture
(subject, as to enforcement, to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
conform in all material respects to the description thereof in the
Prospectus and any "issuer free writing prospectus" (as defined in Rule
433 under the Act);
(v) the Guarantee has been duly authorized and constitutes a legal, valid and
binding obligation of the Guarantor enforceable in accordance with its
terms (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);
(vi) the Indenture conforms in all material respects to the description thereof
in the Prospectus;
(vii) the Terms Agreement (including the provisions of this Agreement) has been
duly authorized, executed and delivered by the Company and the Guarantor;
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(viii) no consent, approval, authorization, filing with or order of any court or
governmental agency or body is required for the consummation by the
Company and the Guarantor of the transactions contemplated herein or in
the Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such as may be required under the securities or
blue sky laws of any jurisdiction in connection with the sale of the
Securities;
(ix) The execution, delivery and performance of the Indenture and the Terms
Agreement (including the provisions of this Agreement) and the issuance
and sale of the Securities in compliance with the terms and provisions
thereof, will not result in a breach of any of the terms and provisions
of, or constitute a default under, any of the agreements or instruments
of the Company and the Guarantor, as the case may be, filed by the
Guarantor with the Securities and Exchange Commission as exhibits to the
Registration Statement and to its (i) Annual Report on Form 10-K for the
fiscal year ended December 31, 2005; (ii) Current Reports on Form 8-K
filed from January 13, 2006 to the Closing Date; (iii) registration
statement on Form S-3 (Registration No. 333-117615); (iv) registration
statement on Form S-3 (Registration No. 333-126744); and (v) registration
statement on Form S-3 (Registration No. 333-106510), or result in a
violation of the charter or By-Laws of the Guarantor or any of its
material subsidiaries, including the Company, or any statute, rule,
regulation or order of any governmental agency or body or any court
having jurisdiction over the Guarantor or any of its material
subsidiaries, including the Company, or any of their properties;
provided, however, that no opinion is expressed in this paragraph with
respect to (i) the rights to indemnity and contribution contained in the
Terms Agreement (including the provisions of this Agreement), which may
be limited by federal or state securities laws or the public policy
underlying such laws; or (ii) any state securities or blue sky laws;
(x) such counsel has no reason to believe that as of 4:00 p.m. on the date of
the Terms Agreement, the Preliminary Final Prospectus, subject to
completion, dated February 17, 2006, including the documents incorporated
by reference therein, and the document listed in Schedule I hereto
(except as to the financial statements or other data of a financial or
statistical nature contained therein, as to which no opinion is
expressed), contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and
(xi) the Registration Statement was declared effective under the Act, and, to
the knowledge of such counsel, no stop order suspending its effectiveness
has been issued and no proceedings for that purpose have been instituted
or are pending or have been communicated by the Commission to the Company
as being contemplated by it under the Act. The Registration Statement, as
of its effective date, and the Final Prospectus, as of its date and as of
the Closing Date, comply as to form in all material respects with the
requirements of the Act, the Exchange Act and the Trust Indenture Act and
the applicable rules and regulations thereunder (except as to the
financial statements or other data of a financial or statistical nature
or the Statements of Eligibility (Forms T-1) under the Trust Indenture
Act of the Trustee, as to which no opinion is expressed); and such
counsel has no reason to believe that the Registration Statement, as of
its most recent effective date
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determined pursuant to Rule 430B(f)(2) under the Act, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Final Prospectus, as of its date or on the
Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except as to the
financial statements or other data of a financial or statistical nature,
as to which no opinion is expressed). The description in the Registration
Statement and the Final Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be described in
the Final Prospectus which are not described as required or of any
contracts or documents of a character required to be described in the
Registration Statement or the Final Prospectus or to be filed as exhibits
to the Registration Statement which are not described and filed as
required.
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (ii) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and the Guarantor and public officials. References
to the Final Prospectus in this paragraph (b) shall also include any
supplements thereto at the Closing Date.
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SCHEDULE I
1. Offering Summary dated February 17, 2006, as first filed with the Commission
pursuant to Rule 433 under the Securities Act.
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