CITIGROUP INC. AND THE BANK OF NEW YORK (as successor-in-interest to JPMorgan Chase Bank, N.A.) Trustee SECOND SUPPLEMENTAL INDENTURE Dated as of March 6, 2007 Supplemental to Indenture dated as of September 15, 2006 providing for the issuance of...
EXHIBIT
2.7
AND
THE
BANK
OF NEW YORK
(as
successor-in-interest to JPMorgan Chase Bank, N.A.)
Trustee
SECOND
SUPPLEMENTAL INDENTURE
Dated
as
of March 6, 2007
Supplemental
to Indenture dated as of September 15, 2006
providing
for the issuance of
Junior
Subordinated Deferrable Interest Debentures
SECOND
SUPPLEMENTAL INDENTURE, dated as of March 6, 2007 (the "Second Supplemental
Indenture"), between CITIGROUP INC., a Delaware corporation (the "Company"),
and
THE BANK OF NEW YORK, a national banking association (as successor-in-interest
to JPMorgan Chase Bank, N.A.), as trustee (the "Trustee"), under the Indenture
dated as of September 15, 2006 (as supplemented, the "Indenture"). Capitalized
terms used but not defined herein shall have the meanings ascribed thereto
under
the Indenture.
WHEREAS,
pursuant to Section 9.01(7) of the Indenture, the Company and the Trustee may
enter into a supplemental indenture to cure any ambiguity, to correct or
supplement any provision in the Indenture which may be inconsistent with any
other provision in the Indenture, or to make any other provisions with respect
to matters or questions arising under the Indenture, provided
such
action shall not adversely affect the interests of the Holders of Securities
of
any series in any material respect;
WHEREAS,
the Company and the Trustee desire to enter into this Second Supplemental
Indenture;
NOW,
THEREFORE, the Company covenants and agrees with the Trustee as
follows:
ARTICLE
ONE
The
modifications in this Article One shall have no effect upon any series of
Securities Outstanding on the date hereof but shall be applicable only to
Securities issued after the date hereof.
Section
1.01. Section
1.1 shall be amended by deleting the definition of "Market Disruption Event"
in
its entirely and substituting therefor the following:
""Market
Disruption Event," means the occurrence or existence of any of the following
events or circumstances:
(1) the
Company would be required to obtain the consent or approval of its shareholders
or a regulatory body (including, without limitation, any securities exchange
but
excluding the Federal Reserve) or governmental authority to issue or sell shares
of its common stock and such consent or approval has not yet been obtained
even
though the Company has used commercially reasonable efforts to obtain the
required consent or approval;
(2) trading
in securities generally on the principal exchange on which the Company's
securities are listed and traded (as of the date hereof, the New York Stock
Exchange) shall have been suspended or materially disrupted or minimum prices
shall have been established on any such exchange or market by the Commission,
by
the relevant exchange or any other regulatory body or by governmental authority
having jurisdiction;
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(3) an
event
occurs and is continuing as a result of which the offering document for such
offer and sale of securities would, in the reasonable judgment of the Company,
contain an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein not
misleading and either (1) the disclosure of that event at such time, in the
reasonable judgment of the Company, would have a material adverse effect on
the
Company's business or (2) the disclosure relates to a previously undisclosed
proposed or pending material development or business transaction, and the
Company has a bona fide business reason for keeping the same confidential or
the
disclosure of which would impede the Company's ability to consummate such
transaction, provided that no single suspension period contemplated by this
paragraph (iii) may exceed 90 consecutive days and multiple suspension periods
contemplated by this paragraph (iii) may not exceed an aggregate of 180 days
in
any 360-day period;
(4) the
Company reasonably believes that the offering document for such offer and sale
of securities would not be in compliance with a rule or regulation of the
Commission (for reasons other than those referred to in paragraph (iii) above)
and the Company is unable to comply with such rule or regulation or such
compliance is impracticable, provided that no single suspension contemplated
by
this paragraph (iv) may exceed 90 consecutive days and multiple suspension
periods contemplated by this paragraph (iv) may not exceed an aggregate of
180
days in any 360-day period;
(5) there
is
an adverse change in general domestic or international economic, political
or
financial conditions, including without limitation as a result of terrorist
activities, or the effect of international conditions on the financial markets
in the United States and such adverse change materially disrupts or otherwise
has a material adverse effect on the issuance, sale or trading of the Company's
common stock;
(6) a
material disruption shall have occurred in commercial banking or securities
settlement or clearing services in the United States; or
(7) a
banking
moratorium shall have been declared by federal or state authorities of the
United States."
Section
1.02. Section
1.1 shall be amended by deleting the definition of "New Equity Amount" in its
entirely and substituting therefor the following:
""New
Equity Amount" means, at any date, (i) the net cash proceeds (after
underwriters’ or placement agents’ fees, commissions or discounts and other
expenses relating to the issuances), plus (ii) the fair market value of
property, other than cash (based on the Current Stock Market Price of common
stock issued or delivered for such property), received by the Company during
the
180-day period immediately prior to such date in arm's length transactions,
from
the issuance or sale of shares of (A) the Company's common stock, including
treasury shares and shares of common stock sold pursuant to the Company's
dividend reinvestment plan and employee benefit plans and (B) the Company's
Qualified Warrants."
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Section
1.03. Section
1.1 shall be amended by deleting the definition of "Qualified Warrants" in
its
entirely and substituting therefor the following:
""Qualified
Warrants" means warrants for the Company's common stock that (1) have an
exercise price greater than the Current Stock Market Price of the Company's
common stock on their date of issuance, and (2) the Company is not entitled
to
redeem for cash and the holders are not entitled to require the Company to
repurchase for cash in any circumstances."
Section
1.04. Section
2.3 shall be amended by deleting the eighth paragraph of such section in its
entirety and substituting therefor the following:
"The
Company shall have the right at any time during the term of the Securities
and
from time to time to extend the interest payment period of such Securities
for
up to 40 consecutive quarters (an "Extended Interest Payment Period"), at the
end of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Securities to
the
extent that payment of such interest is enforceable under applicable law);
provided,
that no
such Extended Interest Payment Period shall extend beyond the maturity of the
Securities; and provided
further
that
during any such Extended Interest Payment Period (a) the Company and any
subsidiary of the Company shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) purchases, redemptions
or
other acquisitions of shares of capital stock of the Company in connection
with
any employment contract, benefit plan or other similar arrangement with or
for
the benefit of employees, officers, directors or consultants, (ii) purchases
of
shares of common stock of the Company pursuant to a contractually binding
requirement to buy stock existing prior to the commencement of the Extended
Interest Payment Period, including under a contractually binding stock
repurchase plan, (iii) as a result of an exchange or conversion of any class
or
series of the Company's capital stock for any other class or series of the
Company's capital stock, (iv) the purchase of fractional interests in shares
of
the Company's capital stock pursuant to the conversion or exchange provisions
of
such capital stock or the security being converted or exchanged) or (v) the
purchase of capital stock of the Company in connection with the distribution
thereof), and (b) the Company and any subsidiary of the Company will not make
any payment of interest, principal or premium on, or repay, purchase or redeem,
any debt securities or guarantees issued by the Company that rank pari passu
with or junior to the Securities (other than (i) any payment of current or
Deferred Interest on securities that rank pari passu with the Securities that
is
made pro rata to the amounts due on such securities (including the Securities),
provided that any such payments of Deferred Interest are made in accordance
with
Section 13.5(d) of the Indenture or (ii) any payments of Deferred Interest
on
securities that rank pari passu with the Securities that, if not made, would
give rise to an event of default permitting acceleration of such securities.
The
foregoing, however, will not apply to any stock dividends paid by the Company
where the dividend stock is the same stock as that on which the dividend is
being paid. Before the termination of any such Extended Interest Payment Period,
the Company may further extend such Extended
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Interest
Payment Period, provided
that
such Extended Interest Payment Period together with all such previous and
further extensions thereof shall not exceed 40 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment
of
all accrued and unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period. The Company may pay current
interest at any time with cash from any source."
Section
1.05. Section
8.3 shall be amended by deleting such section in its entirety and substituting
therefor the following:
"If
the
Company is involved in a business combination where, immediately after the
consummation of such business combination, more than 50% of the surviving
entity’s voting stock is owned by the shareholders of the other party to the
business combination, then:
(1) any
Deferred Interest on the Securities as of the date of consummation of the
business combination shall not be subject to the requirements of
Section 13.4 and Section 13.5 to the extent that the applicable
Extended Interest Payment Period is terminated on the next Interest Payment
Date
following the date of consummation of the business combination (or, if later,
at
any time within 90 days following the date of such consummation);
and
(2) the
Company’s covenant not to, and to not permit its subsidiaries to, purchase any
of its common stock for a one year period following the end of an Extended
Interest Payment Period that lasts longer than one year as described in Section
13.3 will not apply to any Extended Interest Payment Period that is terminated
on the next Interest Payment Date following the date of consummation of the
business combination (or, if later, at any time within 90 days following the
date of such consummation)."
Section
1.06. Section
13.3 shall be amended by deleting such section in its entirety and substituting
therefor the following:
"If
with
respect to any series of Securities (i) the Company shall exercise its right
to
defer payments of interest thereon as provided in Section 13.1 or (ii) there
shall have occurred any Default, then (a) the Company and any subsidiary of
the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payment with respect
thereto (other than (i) purchases, redemptions or other acquisitions of shares
of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants, (ii) purchases of shares of common stock
of
the Company pursuant to a contractually binding requirement to buy stock
existing prior to the commencement of the extension period, including under
a
contractually binding stock repurchase plan, (iii) as a result of an exchange
or
conversion of any class or series of the Company's capital stock for any other
class or series of the Company's capital stock, (iv) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or
exchange provisions of such
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capital
stock or the security being converted or exchanged, or (v) purchase of the
Company's capital stock in connection with the distribution thereof); and (b)
the Company and any subsidiary of the Company will not make any payment of
interest, principal or premium on, or repay, purchase or redeem, any debt
securities or guarantees issued by the Company that rank pari passu with or
junior to the Securities (other than (i) any payment of current or Deferred
Interest on securities that rank pari passu with the Securities that is made
pro
rata to the amounts due on such securities (including the Securities), provided
that any such payments of Deferred Interest are made in accordance with Section
13.5(d) or (ii) any payments of Deferred Interest on securities that rank pari
passu with the Securities that, if not made, would give rise to an event of
default permitting acceleration of such securities), provided,
however,
that
the Company may declare and pay a stock dividend where the dividend stock is
the
same stock as that on which the dividend is being paid. If any Extended Interest
Payment Period lasts longer than one year, unless required to do so by the
Federal Reserve and subject to the exceptions listed in clauses (a) and (b)
of
this Section 13.3, the Company will not, and will not permit any subsidiary
to
purchase any of its common stock for a one-year period following the payment
of
all Deferred Interest with the New Equity Amount."
Section
1.07. Section
13.5 shall be amended by deleting paragraphs (b) and (d) in their entirety
and
substituting therefor the following:
"(b) As
used
in this Section 13.5, the term “commercially reasonable efforts” means
commercially reasonable efforts on the part of the Company to complete the
sale
of shares of its common stock, including treasury shares, to third parties
that
are not subsidiaries of the Company. The Company will not be considered to
have
used its commercially reasonable efforts to effect a sale of stock if it
determines not to pursue or complete such sale solely due to pricing or dilution
considerations."
"(d) Following
the earlier of (i) the Fifth Deferral Anniversary and (ii) the date of any
payment of current interest during an Extended Interest Payment Period, the
Company shall apply the net proceeds received by it from sales of shares of
its
common stock, including sales of treasury shares, to the payment of all amounts
owing in respect of Deferred Interest, with net proceeds to be paid promptly
after receipt until all amounts owing in respect of Deferred Interest have
been
paid in full. In the event that net proceeds received by the Company from one
or
more sales of shares of its common stock following such Fifth Deferral
Anniversary are not sufficient to satisfy the full amount of Deferred Interest,
such net proceeds will be paid to the holders of the Securities in chronological
order; provided, that if the Company has outstanding at such time any debt
securities ranking pari passu with the Securities under the terms of which
the
Company is obligated to sell shares of its common stock and apply the net
proceeds to payment of deferred interest on such pari passu securities and
the
Company at such time is required to apply such proceeds to pay deferred interest
on such pari passu securities, then on any date and for any period the amount
of
net proceeds received by the Company from such sales and available for payment
of such deferred interest shall be applied on a pro rata basis to the amounts
due on each series of such securities (including the Securities) up to any
APM
Maximum Obligation, Share Cap Amount or other similar limit then applicable
to
such series. Notwithstanding the above, the Company shall not be obligated
to
sell
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common
stock or to apply such net proceeds or any portion thereof to the payment of
Deferred Interest during the occurrence and continuation of Market Disruption
Event or a Supervisory Event."
ARTICLE
TWO
Miscellaneous
Section
2.01 The
Trustee accepts the modifications to Section 1.1, Section 2.3, Section 8.3,
Section 13.3 and Section 13.5 of the Indenture set forth in this Second
Supplemental Indenture upon the terms and conditions set forth in the Indenture.
The Trustee shall not be responsible or accountable in any manner whatsoever
for
or in respect of, and makes no representation with respect to, the validity
or
sufficiency of this Second Supplemental Indenture or the due execution hereof
by
the Company and shall not be responsible in any manner whatsoever for or in
respect of the correctness of the recitals and statements contained herein,
all
of which recitals and statements are made solely by the Company.
Section
2.02 Except
as
hereby expressly modified, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions thereof shall remain
in
full force and effect. This Second Supplemental Indenture shall take effect
on
the date hereof.
Section
2.03 This
Second Supplemental Indenture may be executed in any number of counterparts,
each of which shall be deemed to be an original for all purposes; but such
counterparts shall together be deemed to constitute but one and the same
instrument.
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IN
WITNESS WHEREOF, each of CITIGROUP INC. and THE BANK OF NEW YORK, as Trustee,
has caused this Second Supplemental Indenture to be signed and acknowledged
by
one of its officers thereunto duly authorized, and its corporate seal to be
affixed hereto, and the same to be attested by the signature of its Secretary
or
one of its Assistant Secretaries, all as of March 6, 2007.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxx
Title:
Assistant Treasurer
Attest:
By:
/s/
Xxxxxxx X. Xxxxxxx
Corporate
Seal
THE
BANK
OF NEW YORK, as Trustee
By:
/s/
Xxxxx X.
Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
Attest:
By:
/s/ Xxxxxxxx Xxxxxxx
Corporate
Seal
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