TERMS AGREEMENT
TERMS
AGREEMENT
|
May
10, 2007
|
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
| Attention: |
Assistant
Treasurer
|
Ladies
and Gentlemen:
We
understand that Citigroup Inc., a Delaware corporation (the “Company”), proposes
to issue and sell C$500,000,000 aggregate principal amount of its subordinated
debt securities (the “Securities”). Subject to the terms and conditions set
forth herein or incorporated by reference herein, we, Xxxxxxx Xxxxx Canada
Inc.,
Citigroup Global Markets Inc., National Bank Financial Inc., RBC Dominion
Securities Inc., and TD Securities Inc., as underwriters (the “Underwriters”),
offer to purchase, severally and not jointly, the principal amount of the
Securities set forth opposite our respective names on the list attached as
Annex
A hereto at 99.488% of the principal amount thereof, plus accrued interest,
if
any from the date of issuance. The
Closing Date shall be May 24, 2007, at 8:30 A.M. New York City Time. The closing
shall take place at the Corporate Law offices of the Company located at 000
Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The
Securities shall have the following terms:
|
Title:
|
5.160%
Fixed Rate / Floating Rate Subordinated Notes due 2027
|
|
Maturity:
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May
24, 2027
|
|
Redemption
Dates:
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May
24, 2022 and any Interest Payment Date thereafter
|
|
Interest
Rate:
|
From
the Closing Date to but excluding the first Redemption Date: 5.160%
per
annum
From
the first Redemption Date to but excluding the Maturity date (unless
otherwise redeemed): One-month CDOR plus 0.80%
|
|
Interest
Payment Dates:
|
From
the Closing Date to and including the first Redemption Date: Semi-annually
in arrears in equal installments on every May 24 and November 24,
commencing November 24, 2007
From
June 24, 2022 to Maturity (unless otherwise redeemed): Monthly on
the 24th
of each month
|
1
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Initial
Price to Public:
|
99.938%
of the principal amount thereof, plus accrued interest, if any, from
May
24, 2007
|
|
Redemption
Provisions:
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The
Securities are redeemable, in whole and not in part, by the Company
on the
first Redemption Date and on any Interest Payment Date thereafter,
as set
forth in the Prospectus Supplement, dated May 10, 2007, and at any
time upon the occurrence of certain events involving United States
taxation, as set forth in the Prospectus, dated March 2,
2006
|
|
Record
Date:
|
From
the Closing Date to and including the first Redemption Date: the
fifteenth
day preceding each Interest Payment Date
From
but excluding the first Redemption Date to Maturity (unless otherwise
redeemed): the fifteenth day preceding each Interest Payment
Date
|
Additional
Terms:
The
Securities shall be issuable as Registered Securities only. The entire issuance
will be credited to the account of CDS Clearing and Depository Services Inc.
(“CDS”), as described in the Prospectus Supplement relating to the Securities
dated May 10, 2007 (the “Prospectus Supplement”). Investors must hold their
positions in the Securities through CDS or Euroclear or Clearstream through
their Canadian subcustodians at CDS. Beneficial interests in the Securities
will
be shown on, and transfers thereof will be effected only through, records
maintained by CDS and its respective participants. Owners of beneficial
interests in the Securities will be entitled to physical delivery of Securities
in certificated form only under the limited circumstances described in the
Prospectus Supplement. Principal and interest on the Securities shall be payable
only in Canadian dollars. The relevant provisions of Article Eleven of the
Indenture relating to defeasance shall apply to the Securities.
All
the
provisions contained in the document entitled “Citigroup Inc. — Debt Securities
— Underwriting Agreement — Basic Provisions” and dated March 2, 2006 (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.
The
Company agrees to use its best efforts to have the Securities approved for
listing on the Luxembourg Stock Exchange and to maintain such listing so long
as
any of the Securities are outstanding, provided, however that:
(a) if
it is
impracticable or unduly burdensome, in the good faith determination of the
Company, to maintain such listing due to changes in listing requirements
occurring after the date of the Prospectus Supplement, or
2
(b) if
the
Transparency Directive (as defined in the Prospectus Supplement) is implemented
in Luxembourg in a manner that would require the Company to publish financial
information according to accounting principles or standards that are materially
different from United States generally accepted accounting principles,
the
Company may de-list the Securities from the Luxembourg Stock Exchange and shall
use its reasonable best efforts to obtain an alternative admission to listing,
trading and/or quotation of the Securities by another listing authority,
exchange or system within or outside the European Union as it may decide. If
such an alternative admission is not available or is, in the Company’s opinion,
unduly burdensome, such an alternative admission will not be obtained, and
the
Company shall have no further obligation in respect of any listing, trading
or
quotation for the Securities.
The
Underwriters hereby agree in connection with the underwriting of the Securities
to comply with the requirements set forth in any applicable sections of Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc.
Each
Underwriter further agrees and hereby represents that:
(a) it
has
only communicated or caused to be communicated and it will only communicate
or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
Xxx 0000 (the “FSMA”) received by it in connection with the issue or sale of the
notes in circumstances in which Section 21(1) of the FSMA does not apply to
Citigroup;
(b) it
has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the notes in, from or otherwise involving
the United Kingdom;
(c) it
will
not offer or sell any Securities directly or indirectly in Japan or to, or
for
the benefit of, any Japanese person or to others, for re-offering or re-sale
directly or indirectly in Japan or to any Japanese person except under
circumstances which will result in compliance with all applicable laws,
regulations and guidelines promulgated by the relevant governmental and
regulatory authorities in effect at the relevant time. For purposes of this
paragraph, “Japanese person” means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan;
(d) it
is
aware of the fact that no securities prospectus (Wertpapierprospekt)
under
the German Securities Prospectus Act (Wertpapierprospektgesetz, the
“Prospectus Act”) has been or will be published in respect of the Securities in
the Federal Republic of Germany and that it will comply with the Prospectus
Act
and all other laws and regulations applicable in the Federal Republic of Germany
governing the issue, offering and sale of the Securities;
(e) no
Securities have been offered or sold and will be offered or sold, directly
or
indirectly, to the public in France except to qualified investors (investisseurs
qualifiés)
and/or
to a limited circle of investors (cercle
restreint d’investisseurs)
acting
for their own account as defined in article L. 411-2 of the French Code
Monétaire et
Financier
and
applicable regulations thereunder; and that the direct or indirect resale to
the
public in France of any Securities acquired by any qualified investors
(investisseurs
qualifiés)
and/or
any investors belonging to a limited circle of investors (cercle
restreint d’investisseurs)
may be
made only as provided by articles L. 412-1 and L. 621-8 of the French
Code
Monétaire et
Financier
and
applicable regulations thereunder; and that none of the Prospectus Supplement,
the Prospectus or any other offering materials relating to the Securities has
been released, issued or distributed to the public in France except to qualified
investors (investisseurs
qualifiés)
and/or
to a limited circle of investors (cercle
restreint d’investisseurs)
mentioned above; and
3
(f) it
and
each of its affiliates has not offered or sold, and it will not offer or sell,
the Securities by means of any document to persons in Hong Kong other than
persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or agent, or otherwise in circumstances which do not
constitute an offer to the public within the meaning of the Hong Kong Companies
Ordinance (Chapter 32 of the Laws of Hong Kong), and unless permitted to do
so
under the securities laws of Hong Kong, no person has issued or had in its
possession for the purposes of issue, and will not issue or have in its
possession for the purpose of issue, any advertisement, document or invitation
relating to the Securities other than with respect to the Securities to be
disposed of to persons outside Hong Kong or only to persons whose business
involves the acquisition, disposal or holding of securities, whether as
principal or agent; and
(g) it
has
not offered or sold, and will not offer or sell, any Securities, directly or
indirectly, in Canada or any province or territory thereof or to, or for the
benefit of, any resident of Canada in contravention of the securities laws
and
regulations of the provinces and territories of Canada and represents that
any
offer of Securities in Canada will be made only pursuant to an exemption from
the requirement to file a prospectus in the province or territory of Canada
in
which such offer is made; and that it has not and it will not distribute or
deliver the Prospectus Supplement, the Prospectus, the Canadian offering
memorandum relating to this offering (the “Canadian Offering Memorandum”) or any
other offering material relating to the Securities in Canada or to any resident
of Canada in contravention of the securities law and regulations of the
provinces and territories of Canada.
In
addition to the legal opinions required by Sections 6(b) and 6(c) of the Basic
Provisions, the Underwriters shall have received an opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special U.S. tax counsel to the Company, dated
the Closing Date, to the effect that although the discussion set forth in the
Prospectus under the heading “United
States Federal Income Tax Considerations” does not purport to discuss all
possible United States federal income tax consequences of the purchase,
ownership and disposition of the Securities to holders of the Securities, such
discussion, to the extent applicable, constitutes, in all material respects,
a
fair and accurate summary of the United States federal income tax consequences
of the purchase, ownership and disposition of the Securities to holders of
the
Securities.
Xxxxxxx
X. Xxxxxxx, Esq., General Counsel, Finance and Capital Markets of the Company,
is counsel to the Company. Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP is
special U.S. tax counsel to the Company. Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
LLP is counsel to the Underwriters.
Please
accept this offer no later than 9:00 p.m. Eastern Time on May 10, 2007 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:
4
“We
hereby accept your offer, set forth in the Terms Agreement, dated May 10, 2007,
to purchase the Securities on the terms set forth therein.”
|
Very
truly yours,
XXXXXXX
XXXXX CANADA INC.,
as
Underwriter
By:
/s/
Xxxxx
Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
Managing
Director
CITIGROUP
GLOBAL MARKETS INC.,
as
Underwriter
By:
/s/
Xxxx X. XxXxxxxxx,
Xx.
Name:
Xxxx X. XxXxxxxxx, Xx.
Title:
Managing
Director
NATIONAL
BANK FINANCIAL INC.,
as
Underwriter
By:
/s/
Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
Managing
Director
RBC
DOMINION SECURITIES INC.,
as
Underwriter
By:
/s/
Xxxxx
Xxxx
Name:
Xxxxx Xxxx
Title:
Managing
Director
|
5
|
TD
SECURITIES INC.,
as
Underwriter
By:
/s/
Xxxxxxx
Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Vice
President and Director
|
ACCEPTED:
By:
/s/
Xxxxxxx X.
Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
Assistant Treasurer
6
ANNEX
A
|
Name
of Underwriter
|
Principal
Amount of Securities
|
|||
| Xxxxxxx Xxxxx Canada Inc. | C$ | 375,000,000 | ||
|
Citigroup
Global Markets Inc.
|
50,000,000
|
|||
|
National
Bank Financial Inc.
|
25,000,000
|
|||
|
RBC
Dominion Securities Inc.
|
25,000,000
|
|||
|
TD
Securities Inc.
|
25,000,000
|
|||
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Total
|
C$ |
500,000,000
|
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7
